Date: Apr 12, 2013 Author: Lauren K. Ohnesorge Source: bizjournals (
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DURHAM -- Fresh off an $11 million private equity investment round, Durham startup Novan Therapeutics has two big pluses pushing it toward the next phase in clinical testing for its acne treatment -- cash and experience.
The company, which came out of discoveries made at UNC-Chapel Hill in 2008, has attracted the attention of some big Triangle players, namely industry veteran Bob Ingram and Cree Inc. co-founder Neal Hunter. And it's ready, says CEO and founding scientist Nate Stasko, to take the next step -- Phase 2 human trials.
"We're fueled by passion," he says. "Everything we do stems from nitric oxide."
Don't confuse the platform compound with nitrous oxide, that loopy laughing gas. Nitric oxide, long studied as a potential cancer-fighting agent, among other applications, is something the body already uses to fight infection.
"Your body is making nitric oxide every second every day," Stasko explains.
But it's not making enough of it to do what researchers think it's capable of. The substance is highly reactive and, as a gas, it's impossible to chemically store. So, scientists have had trouble harnessing its potential. Until now.
"We discovered we could stably store nitric oxide," he says.
And that's important, because Novan's leaders say they have discovered ways to store enough of it to make a difference. They say they also figured out how to target it toward drug delivery, enabling control over the compound.
Still, while Stasko and team knew they had a medical compound, they weren't sure where to focus their efforts. On cancer? On cardiology?
"We knew nitric oxide is antimicrobial," Stasko says, adding that $7.5 million in government grants supported efforts to develop treatments for wounds. But Stasko and team wanted more.
They soon discovered something else about their compound -- that nitric oxide could help control sebum, oils produced by the skin. That pointed them to acne. Roche-developed Accutane is a comparable acne medicine, Stasko says, in that it too produces sebum. And it skyrocketed to $800 million in sales in the 1990s, but, as an oral drug, it had undesirable side effects.
What Novan is shooting for is a nitric oxide-based topical treatment for acne with few side effects. And, unlike with antibiotics, the chance of resistance is minimal. After all, the human body has been battling bacteria with nitric oxide for thousands of years and has yet to encounter resistance.
To date, Novan has raised more than $20 million from private-equity investors. No small reason for that is the pedigree of its board, including Hunter, the chairman. "(Novan) technology can impact so many different therapeutic areas," says Hunter, who adds that he was looking for a new challenge when he heard the Novan pitch.
He says it's not typical for a company to get so much funding without venture capital, but it's the way he likes to launch companies.
"I think VCs, they're not necessarily looking for quick exits, but everyone is going to look at, what is the exit?," he says. The "gestation period needs to be a little longer" for Novan, and that's something the company's investors understand.
Ingram, former chairman and CEO of Glaxo Wellcome and a Novan board member, was pulled into the fold by Hunter. He says the fact that the company has been able to attract so much private capital is "a credit to the quality of their science."
"When I saw the dramatic impact it had, particularly as a dermatology application on conditions like acne, I was very impressed," Ingram says.
Also on the board are John Palmour, chief technology officer of Cree; Mark Schoenfisch, a Novan co-founder and professor of chemistry at UNC-Chapel Hill; and Stasko
New treatment options in acne "would be welcome," wrote pediatric dermatologist Dr. Craig Burkhart, assistant professor at UNC-Chapel Hill, in an email.
