Shares of Novan, the Durham pharmaceutical startup, rose 65 percent in the company’s first day of trading Wednesday, marking a successful initial public offering.
Novan closed at $18.10 Wednesday, rising $7.10 a share after being priced Tuesday evening for offer at $11 – at the low end of the company’s estimate. It trades on the Nasdaq under the ticker NOVN.
The 63-employee company raised $45 million, before fees and commissions, and its underwriters have a 30-day option to buy an additional 615,000 shares at the initial public offering price. The offering is expected to close on Sept. 26.
Novan CEO Nate Stasko considers the IPO a success, even though in retrospect the shares could have been priced higher.
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“This has been a very unpredictable market for biotechs all year long,” Stasko said Wednesday after the markets closed.
Novan had reported in a filing with the Securities and Exchange Commission earlier this month that it was aiming to price its shares between $11 and $13.
The skin products company has no products on the market and is developing dermatological products to treat five conditions, including acne, genital warts and toenail fungus.
The majority of the IPO proceeds will be used to finance Novan’s lead drug, SB204, a skin gel for acne that’s in Phase 3 clinical testing. The company expects to report clinical trial results early next year and plans to file a submission for regulatory approval in late 2017.
Also in the pipeline is SB206, a topical gel to treat genital warts. Novan expects to report results of a Phase 2 clinical trial in the fourth quarter of this year.
Novan launched in 2006 as a spin-out from UNC-Chapel Hill. It is backed by prominent Triangle executives, including former GlaxoWellcome CEO Robert Ingram, former Goodyear Tire CEO Robert Keegan and F. Neal Hunter, the former CEO and co-founder of CREE, the Durham LED lighting company.