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.
Also noteworthy, this biotech's stock offers investors nearly threebagger return potential. It is trading now at about $8.86 per share, and ROTH's target price on it is $26 per share.
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, the active compound of which is berdazimer sodium. 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 tarting 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.
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