Novan Announces Comprehensive Evaluation of Strategic and Financial Alternatives

• Engages H.C. Wainwright & Co. as strategic and financial advisor
• NITRICIL™ nitric oxide technology platform has enabled multiple early and late-stage pipeline opportunities in dermatology, women’s health and GI disorders

MORRISVILLE, N.C., April 20, 2020 (GLOBE NEWSWIRE) -- Novan, Inc. (“the Company” or “Novan”) (Nasdaq:NOVN) today announced that it has engaged H.C. Wainwright & Co., LLC (“H.C. Wainwright & Co.”) to assist the Company in exploring and evaluating a range of strategic and financial alternatives, intended to maximize shareholder value.

The Company has advanced several late stage development programs in the field of dermatology, including the Company’s lead product candidate, SB206, that is in Phase 3 clinical trials for molluscum contagiosum (“molluscum”), a primarily pediatric contagious skin infection. In addition, Novan has initiated several early stage programs in women’s health and gastrointestinal (“GI”) disorders. Novan’s development programs were created from the Company’s proprietary NITRICIL™ technology platform. This proprietary technology has been utilized in more than 3,400 subjects and patients, providing the Company with clinical efficacy and safety data, demonstrating anti-viral, bacterial, fungal and inflammatory properties.

The Company believes that its clinical and preclinical data, technology platform and market potential, will provide for a range of opportunities in order to maximize shareholder value:

• SB206 (molluscum): April 1, 2020 verbal guidance provided from the U.S. Food and Drug Administration (“FDA”) indicating that the FDA will consider one additional pivotal trial (“B-SIMPLE4”), that, if successful, can be supported by the previously completed B-SIMPLE2 trial in a future New Drug Application (“NDA”). Management remains focused on SB206, Novan’s lead product candidate for the treatment of molluscum, as a key value driver for the Company.
• SB206 (external genital warts): positioned to initiate Phase 3 pivotal trials following positive Phase 2 results in the fourth quarter of 2016, and an end of Phase 2 meeting with the FDA in the second quarter of 2017.
• SB204 (acne vulgaris): positioned to initiate one additional pivotal Phase 3 trial in moderate-to-severe acne patients. In the first quarter of 2017, announced statistically significant results compared to vehicle on all three co-primary endpoints in NI-AC302.
• SB414 (atopic dermatitis): positioned to initiate a Phase 2 clinical program given the successful downregulation of key biomarkers, favorable tolerability and lack of systemic exposure in a Phase 1b study with SB414 2%, announced in the third quarter of 2018.
• SB208 (tinea pedis and onychomycosis): positioned to initiate a Phase 2 trial in onychomycosis following positive results in a Phase 2 study of tinea pedis and a Phase 1 study in nail growth, announced in the second quarter of 2017 and the second quarter of 2018, respectively.
• WH504 and WH602 (high-risk HPV, cervical intraepithelial neoplasia): since August 2019, awarded a total of $2.3 million in grants from the National Institutes of Health (“NIH”) and U.S. Department of Defense’s (“DoD”) Congressionally Directed Medical Research Programs (“CDMRP”) in order to advance formulation development of nitric oxide-containing intravaginal gel (WH602) and non-gel (WH504) product candidates.
• GI disorders: berdazimer sodium demonstrated statistically significant improvements in disease activity (i.e., reduced disease activity index scores), as compared to vehicle in a dextran sulfate sodium (DSS)-induced acute colitis mouse model during the fourth quarter of 2019.
• Coronaviridae family: initiated a work order in March 2020 to complete in vitro assessment of the Company’s NITRICIL™ technology, berdazimer sodium, against species within the Coronaviridae family, including SARS-CoV-2, the virus that causes COVID-19.
• New Chemical Entity (“NCE”) development: the Company has the ability to rapidly generate NCEs and drug delivery capabilities, utilizing our NITRICIL™ nitric oxide technology platform, for discovery, research and development across segments such as animal health and ophthalmology, among additional therapeutic areas.

Given the opportunities enabled by Novan’s NITRCIL™ technology platform, the Company believes that in conjunction with H.C. Wainwright & Co. it is well-positioned to advance a strategic and financial review process intended to maximize shareholder value.

“Despite the challenging business environment, our team has worked diligently, over the past sixty-days to gain FDA regulatory clarity regarding a path forward for SB206 in the molluscum indication and secure additional capital from the equity markets,” commented Paula Brown Stafford, Novan’s President and Chief Executive Officer. Ms. Stafford further commented, “With these milestones accomplished and the broader opportunities enabled by Novan’s NITRCIL™ technology platform, the Board of Directors and senior management are now committed to working closely with H.C. Wainwright & Co. in order to explore Novan’s strategic and financial alternatives, with the goal to advance our nitric-oxide based technology platform for the benefit of patients and maximize value for our shareholders and other stakeholders of our Company.”

The Company has not stated a definitive timeline for completion of the evaluation process and there can be no assurance that the evaluation process will result in Novan pursuing any strategic or financial alternatives, or that a strategic of financial alternative, if any, would be completed successfully or at all. Novan does not intend to discuss or disclose developments with respect to this process until the evaluation process has been completed, or the Novan Board of Directors has concluded that disclosure is appropriate or required.

About Novan

Novan, Inc. is a clinical development-stage biotechnology company focused on leveraging nitric oxide’s naturally occurring anti-microbial and immunomodulatory mechanisms of action to treat a range of diseases with significant unmet needs. We believe that our ability to deploy nitric oxide in a solid form, on demand and in localized formulations allows us the potential to improve patient outcomes in a variety of dermatology, women’s health and gastrointestinal diseases.

Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to, statements related to potential strategic or financial transactions involving the Company, pharmaceutical development of our nitric oxide-releasing product candidates and our intention to advance development of certain product candidates and the timing and contents of potential regulatory submissions. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from our expectations, including, but not limited to, risks and uncertainties related to our ability to complete any strategic alternatives and/or obtain additional funding necessary to continue our business and the further development of our product candidates, including to enable or complete the B-SIMPLE4 trial, on a timely basis, or at all; risks and uncertainties as to the terms, timing, structure, value, benefits and costs of any strategic or financial transaction, and our ability to complete one at all; risks and uncertainties related to the impact of this announcement on the Company’s securities, its employees and its third-party partners; risks and uncertainties in our ongoing or future product development activities and preclinical studies, which may not prove successful in demonstrating proof-of concept, or may show adverse toxicological findings, and even if successful may not necessarily predict that subsequent clinical trials will show the requisite safety and efficacy of our product candidates; risks and uncertainties in the clinical development process, including, among others, length, expense, ability to enroll patients, reliance on third parties, potential for delays and that results of earlier research and preclinical or clinical trials may not be predictive of results, conclusions or interpretations of later research activities or additional trials; risks related to the regulatory approval process, which is lengthy, time-consuming and inherently unpredictable, including the risk that our product candidates may not be approved or that additional studies may be required for approval or other delays may occur and that we may not obtain funding sufficient to complete the regulatory or development process; the risk that disruptions at the FDA and other agencies could cause such agencies to cancel or postpone meetings or otherwise impact the ability of such agencies to provide regulatory guidance or feedback or timely review and process our regulatory submissions, all of which could have a material adverse effect on our business; the risk that the B-SIMPLE4 Phase 3 trial will be delayed or postponed and that results will not be received timely or will not achieve significance sufficient to support an NDA; risks related to the manufacture of clinical trial materials; any operational or other disruptions as a result of the COVID-19 pandemic, including any delays or disruptions to our evaluation of strategic alternatives or the conduct of the B-SIMPLE4 trial; and other risks and uncertainties described in our annual report filed with the SEC on Form 10-K for the twelve months ended December 31, 2019, and in our subsequent filings with the SEC. These forward-looking statements speak only as of the date of this press release, and Novan disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by law.

CONTACT:

(Investors & Media)
Cole Ikkala
Director, Investor Relations, Communications & Business Development
cikkala@novan.com