In a year when many smaller biotechs have had to ditch their public offerings entirely, Novan may count itself lucky it can go for an IPO at all, despite having to settle for a lower amount.
Last month the Durham, NC-based company announced plans to gun for a $60 million IPO but now, in its latest SEC filing, the biotech said it was going for $45 million.
It will do this by offering 3.75 million shares at a price range of $11 to $13 and, at the midpoint of its proposed range, would have a market value of $181 million. It plans to list on the Nasdaq under the symbol $NOVN.
The 10-year-old dermatology-focused company is using its nitric oxide platform for a host of skin diseases, including acne, warts and certain fungal infections, as well as psoriasis and dermatitis.
“We are rapidly advancing programs in five dermatological conditions with significant unmet medical need,” it said in its filing. “These are some of the most prevalent diseases in dermatology and together represent a large market opportunity with a patient population surpassing 150 million Americans and 1.5 billion individuals globally.”
The biotech said it has chosen to focus on dermatology “because nitric oxide’s multiple mechanisms of action converge in the largest organ of the body, the skin.”
It explained: “All of the major cell types that comprise the three layers of the skin are capable of producing nitric oxide at different rates, and these cells play an important part in organizing the skin’s unique ability to repair itself and maintain barrier function. Our platform allows us the ability to tune the release profile of nitric oxide and trigger its wide range of beneficial effects when host systems fail or are overwhelmed by invading microorganisms.”
The biotech says that its platform is “well suited to disrupt the large and growing dermatology market,” which IMS Health estimates to be worth around $28 billion in the U.S. each year.
Despite the size of this market, new innovations in medical dermatology “have been largely stagnant for decades,” the biotech believes, noting that the widespread use of antibiotics and retinoids to treat acne vulgaris “has been unchanged for over 30 years and, in our view, has failed to balance efficacy, tolerability and growing concerns over antibiotic resistance in a single product.”
The company sees its nitric oxide platform as being able to “address the limitations of the current treatment landscape and therefore position us to redefine the standard of care in dermatology.”
The biotech is expected to price during the week of Sept. 19.