Morrisville-based Novan is cutting 20 percent of its work force, reassigning its CEO, and “accelerates broadening the application of the science” behind the company’s drug portfolio. The firm also says board member Bob Ingram will be taking a more active role and warns that it will need more capital.
Novan (Nasdaq: NOVN) disclosed all the moves and changes before the markets opened Monday. Sharea traded up a penny at $4.87 in late-morning trading,
“To be exceedingly clear, the Company will require additional capital in order to proceed on broadening the potential application of the science (nitric oxide) and the underlying technology, and specifically to initiate and complete the planned phase 2 trials in both psoriasis and atopic dermatitis,” Novan declared in the far-reaching announcement.
The job cuts are part of an effort by Novan “to be disciplined with regard to cash utilization.”
Novan says it believes the firm’s “cash on hand is sufficient to fund operations at least through the end of 2017.”
Novan reported some $30 million in cash and other assets as of March 31.
In its recent financial report, Novan reported first quarter expenses of $11.3 million.
Novan, whose chief medical officer left the company last month, also reassigned CEO Nate Stasko as president and chief scientific officer.
“In this role, Nate will help the company deepen its understanding of the possibilities of nitric oxide and its potential therapeutic application across patient needs,” the company said. “Nate will continue to be a central and highly valued member of the Novan team and remain integral to its future.”
Taking over as CEO on an interim basis is Kelly Martin, a non-executive director for the firm’s board.
“In this role, Kelly will work closely with Nate and other Novan leaders in order to accelerate progress in positioning the Company in a manner that allows the science to further mature and develop,” Novan said. “Extending the business runway and broadening the therapeutic application of the underlying drug technology platform (nitric oxide) are the two primary areas of focus.”
Also, Ingram, a veteran life science executive and investor, will move to executive chairman of the board from chair.
“In this role, Bob will devote additional time and effort to Novan,” the company said.