Novan Surges 71% – Secures Non-Dilutive Financing from Largest Shareholder That Allows It to Advance Studies

Novan (NOVN) soared more than 71% after the company said it secured up to $35 million in non-dilutive capital from Reedy Creek Investments LLC to advance Novan’s late-stage dermatology assets.

Of that total, it said $25 million is available immediately and $10 million is contingent upon achieving positive Phase 3 clinical trial results for molluscum contagiosum. Novan will now be able to immediately initiate the pivotal Phase 3 molluscum program and start recruiting patients in May.

Reedy Creek is currently Novan’s largest shareholder, holding approximately 15% of the company’s shares outstanding. Reedy Creek will receive 10%, 20% and 20% of any North American economics, including upfront payments, milestones and royalties, received by Novan associated with SB206, to treat molluscum contagiosum, SB414 to treat atopic dermatitis and SB204 to treat acne vulgaris, respectively. Reedy Creek will receive 25% of upfront payments or milestone payments received by Novan until such time as Reedy Creek has received payments equal to the total funding amount provided by Reedy Creek ($25 million or $35 million).

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