Novan, a US-based dermatology product developer that counts life sciences company Malin among its investors, raised $45.1m when it floated on Nasdaq yesterday.
The initial public offering involved Novan issuing 4.1 million shares, more than the 3.75 million originally planned, but which were priced at the bottom of the $11 to $13 range.
Novan is developing dermatology treatments based on its nitric oxide platform, and it intends to put $29m of the proceeds into advancing its lead candidate, a topical gel treatment for acne called SB204, to the point where it can submit a new drug application.
An additional $3m will be used to fund phase 2 trials for two more product candidates: a gel treatment for viral skin infections called SB206 and a topical treatment for fungal infections of the skin and nails known as SB208.
Novan had raised about $103m in funding since it was spun out of University of North Carolina at Chapel Hill in 2006, with Malin taking part in a $50m round in March 2015, which was followed by $30.4m in funding in December, according to a regulatory filing.
Malin held a 16.25% stake in Novan prior to the IPO. Other notable shareholders are Novan’s former chairman, F. Neal Hunter, who owned a 13.8% stake, and company co-founder Mark Schoenfisch, who held 7.4%.
Existing shareholders had expressed interest in buying $25m of the shares issued in the IPO, according to a securities filing, though the identity of those investors was not disclosed.
Piper Jaffray is book-running manager for the IPO, while JMP Securities and Wedbush PacGrow are co-managers. They have the 30-day option to buy another 615,000 shares, which would increase the size of the offering to approximately $51.9m.
Novan’s shares opened at $14.40 on its first day of trading yesterday and had climbed to $18.10 by close.