Biotech Reports Positive Preclinical COVID-19 Study Results

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Source: Streetwise Reports   06/16/2021

In a June 10 research note, ROTH Capital Partners analyst Jonathan Aschoff reported that Novan Inc.'s (NOVN:NASDAQ) preclinical study of the antiviral SB019 in SARS-CoV-2-infected hamsters showed positive results.

"Novan will likely explore a further development program with U.S. Food and Drug Administration (FDA) buy-in for SB019 as a potential intranasal treatment option for COVID-19," Aschoff wrote.

Aschoff described the design and presented the results of the in vivo SB019 study. Uninfected golden Syrian hamsters were exposed to ones infected with SARS-CoV-2. All of the animals were administered, once daily, one of several low doses of SB019, which has berdazimer sodium as the active compound. The study objective was to reduce viral burden and/or deter virus spread. The results were compared to those of placebo controls.

As for SB019's safety, the hamsters tolerated it well; no adverse events were observed.

"We note the consistency of highly favorable safety with berdazimer sodium across all of Novan's development programs," Aschoff wrote.

Regarding efficacy, the study showed that SB019 reduced viral burden in the hamsters to a statistically significant (p<0.0001) degree of greater than 99.99%. Further, following total treatment, more than half of the initially uninfected hamsters lacked any detectable pulmonary virus. Two independent studies demonstrated that SB019 prevented the viral infection from moving into the lungs after transmission.

Based on these new results, Aschoff indicated, Novan is conducting dose ranging studies to determine an ideal sSB019 starting dose and treatment regimen for humans. Looking forward, Novan may advance the antiviral itself or with a partner. The company likely will move forward with development of SB019 as a potential COVID-19 treatment, in the form of an intranasal rinse (like that achieved with a Neti pot). To do so, the company will have to complete toxicology studies and either obtain financing or secure a partner.

"The positive results should allow Novan to file an investigational new drug application and potentially begin clinical trials in H2/21," Aschoff wrote.

Finally, Aschoff noted that the most significant catalyst to date for Novan's stock is on the horizon, and that is release of data from the Phase 3 study of SB206, a topical antiviral gel, for the skin infection molluscum contagiosum.

ROTH rates Novan Buy and has a target price on it of $26 per share. The stock is trading now at about $8.86 per share.

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Disclosures from ROTH Capital Partners, Novan, Inc., Company Note, June 10, 2021

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: ROTH makes a market in shares of Novan, Inc. and as such, buys and sells from customers on a principal basis.
Shares of Novan, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

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ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

( Companies Mentioned: NOVN:NASDAQ, )

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