– Novan and Evening Post Group enter into a loan payoff and termination agreement, fully satisfying the promissory note and all related obligations –
– Novan saves $11.1 million in principal and future interest payments with this agreement –
– Novan’s commercial operations, comprised of EPI Health, now no longer subject to any liens –
DURHAM, N.C., July 19, 2022 (GLOBE NEWSWIRE) -- Novan, Inc. (“the Company” or “Novan”) (Nasdaq: NOVN), today announced that it had reached agreement with Evening Post Group, LLC (“EPG”) regarding payment, satisfaction and termination of its secured promissory note and security agreement associated with the March 11, 2022 acquisition of EPI Health. Novan and EPG agreed that, upon EPG’s receipt of $10.0 million, which Novan subsequently paid, all outstanding indebtedness and obligations of Novan under the promissory note are fully satisfied, and accordingly, the promissory note and related security agreements are terminated.
“We are pleased to announce that the satisfaction of Novan’s only outstanding debt, at a substantive 39% discount, and by avoiding $4.6 million in future interest payments represents a tremendous opportunity for us,” commented Paula Brown Stafford, President and Chief Executive Officer of Novan. “The termination and release not only provide $11.1 million of savings to our shareholders, but importantly unencumbers our EPI Health commercial asset portfolio which allows us to explore a broader range of potential financing and partnering options for Novan.”
Using cash generated through the sales of its commercial products, as well as existing cash on hand (other than from the proceeds from Novan’s June 2022 registered direct offering), Novan has paid EPG in full satisfaction of all outstanding indebtedness and obligations under the promissory note. The liens on the membership interests and assets of EPI Health, which had previously secured the promissory note, were terminated, and no obligations related to the securities agreement remain outstanding.
EPG President and CEO Terry Hurley added, “EPI Health has progressed well thus far under new leadership, and we hope that our support demonstrates our excitement for Novan going forward. While we have strategically moved away from the pharmaceutical industry and turned our focus and resources to other opportunities, we wish EPI Health and Novan the best.”
Novan, Inc. is a medical dermatology company primarily focused on researching, developing, and commercializing innovative therapeutic products for skin diseases. Our goal is to deliver safe and efficacious therapies to patients, including developing product candidates where there are unmet medical needs. We are developing SB206 (berdazimer gel, 10.3%) as a topical prescription gel for the treatment of viral skin infections, with current emphasis on molluscum contagiosum.
Novan recently completed the acquisition of EPI Health. EPI Health equips the company with a robust commercial infrastructure across sales, marketing, and communications, as well as fully dedicated market access and pharmacy relation teams. Following the acquisition, the company employs approximately 100 staff, including sales personnel currently covering 42 territories, and promotes products for plaque psoriasis, rosacea, acne and dermatoses. Novan also has a pipeline of potential product candidates using our proprietary nitric oxide-based technology platform, NITRICIL™, to generate new treatments for multiple indications.
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “believe,” “expect,” “target,” “anticipate,” “may,” “plan,” “potential,” “will,” and similar expressions, and are based on the Company’s current beliefs and expectations. These forward-looking statements include, but are not limited to, statements related to the Company’s pharmaceutical development of nitric oxide-releasing product candidates, such as berdazimer 10.3% gel (SB206) for molluscum contagiosum, the timing of regulatory filings, the Company’s ability to realize the benefits of the EPI Health acquisition and the availability of potential financing options. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the Company’s expectations, including, but not limited to, risks related to the acquisition of EPI Health; risks related to the regulatory approval process, which is lengthy, time-consuming and inherently unpredictable, including the risk that the FDA will not agree with the Company’s approach to a potential NDA submission, that the Company’s product candidates may not be approved or that additional studies may be required for approval or other delays may occur, that the Company may not have sufficient quantities of drug substance and/or drug product to support regulatory submissions and that the Company may not obtain funding sufficient to extend its cash runway beyond the fourth quarter of 2022 or to complete the regulatory or development process; the Company’s limited experience as a company in obtaining regulatory approvals and commercializing pharmaceutical products; risks and uncertainties in the Company’s ongoing or future product development activities and preclinical studies, which may not prove successful in demonstrating proof-of concept, or may show adverse toxicological findings, and even if successful may not necessarily predict that subsequent clinical trials will show the requisite safety and efficacy of the Company’s product candidates; any operational or other disruptions as a result of the COVID-19 pandemic; the Company’s ability to obtain additional funding or enter into strategic or other business relationships necessary or useful for the further development or commercialization of the Company’s product candidates and the operation of its business on terms that are acceptable to the Company or at all; and other risks and uncertainties described in the Company’s annual report filed with the Securities and Exchange Commission on Form 10-K for the twelve months ended December 31, 2021, and in the Company’s subsequent filings with the Securities and Exchange Commission. Such forward-looking statements speak only as of the date of this press release, and the Company disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by law.
INVESTOR AND MEDIA CONTACT:
JTC Team, LLC