Novan Stock (NASDAQ:NOVN) is a name that we have covered on and off here at Insider Financial. We first covered it back in 2017 when Novan stock dropped from $18 to $4 on data release from its lead drug at the time SB104. We alerted our subscribers to play the bounce, but since that time Novan stock has been a dog with fleas as you can see from the chart.
However, we think now the low is in and that Novan stock is due for a triple-digit run. Major resistance is at the $1 level. A break above $1 and there’s nothing but blue skies for Novan stock. As we take a closer look, we are just one press release away from NASDAQ:NOVN exploding higher.
About Novan Stock
Novan, Inc., a clinical development-stage biotechnology company, focuses on the development and commercialization of nitric oxide-based therapies to treat dermatological and oncovirus-mediated diseases. Its clinical stage product candidates include SB206, a topical anti-viral gel, which is in Phase III pivotal trials for the treatment of patients with external genital warts, and Phase III clinical trial for the treatment of molluscum contagiosum; and SB204, a topical monotherapy that is in Phase III pivotal clinical trials for the treatment of acne vulgaris.
The company also develops SB414, a topical cream, which has completed Phase Ib trial for the treatment of inflammatory skin diseases, such as psoriasis and atopic dermatitis; and SB208, a topical anti-fungal gel that is in Phase II proof-of-concept trial for the treatment of athlete’s foot and fungal nail infections. In addition, it develops SB207, a product candidate for additional anti-viral programs.
The company has a license agreement with Sato Pharmaceutical Co., Ltd.; and a strategic alliance with Orion Corporation. Novan, Inc. was founded in 2006 and is headquartered in Morrisville, North Carolina.
Why The Big Drop In Novan Stock In January?
Novan stock has a big gap to close up to $3. The stock got clobbered after trial data regarding its main drug candidate SB206 – a treatment of molluscum contagiosum, a viral skin infection, failed to achieve statistically significant results for the primary endpoint of the trial – which was the clearance of molluscum at week 12 of treatment. Despite failing to achieve significant goals, the company touted the drugs “near statistical significance” and positive portions of both trials as evidence that the drug does have a measurable improvement in patients.
Next Steps For Novan Stock
At the end of April, Novan received meeting minutes from the April 1, 2020 Type C meeting with the FDA regarding SB206 for the treatment of molluscum contagiosum. Based on guidance the Company received during the meeting and subsequently contained within the meeting minutes, Novan is preparing to conduct one additional pivotal trial (“B-SIMPLE4”), which, if successful, could be supported by the previously completed B-SIMPLE2 trial in a future New Drug Application (“NDA”). In addition, the FDA provided guidance with regard to the study design for B-SIMPLE4 and expectations for a future NDA submission.
Novan has begun the planning and start-up phase for B-SIMPLE4. The company is targeting enrolling the first patient for B-SIMPLE4 in September 2020, and if the trial is initiated on this timetable, the Company would expect top-line efficacy results late in the second quarter of 2021. Novan will need to raise some additional funding for B-SIMPLE4 and is also waiting for the COVID-19 pandemic to subside before enrolling patients.
Currently trading with a market cap of just $49 million, Novan stock offers a compelling risk/reward setup at current levels. With the shorts starting to scramble and cover, a perfect storm looks to be brewing to send Novan stock over the critical $1 level. Above there and we will look to close the gap at $3. Buckle your seat belts and get ready.
Good luck to all (except the shorts)!
We will be updating our subscribers as soon as we know more. For the latest updates on NASDAQ:NOVN, sign up today!
Disclosure: We have no position in NASDAQ:NOVN and have not been compensated for this article.