BioTuesdays

Cantor starts Novan at OW; PT $30

Cantor Fitzgerald initiated coverage of Novan (NASDAQ:NOVN) with an “overweight” rating and $30 price target. The stock closed at $9.10 on July 8.

Novan is a clinical-stage biotechnology company focused on leveraging its proprietary nitric oxide-based technology platform, NITRICIL, to develop therapies to treat a range of diseases with significant unmet needs.

The company’s key pipeline asset is SB206, which is in development for the treatment of molluscum contagiosum, an often benign, mild skin disease characterized by lesions anywhere on the body.

Analyst Jennifer Kim writes that SB206 has the potential to be the first FDA-approved, topical antiviral gel for the at-home treatment of molluscum contagiosum. 

Novan’s other pipeline assets include SB019 (COVID-19), NVN4100 (microbial indications in companion animals) and SB204 (acne vulgaris).

“We think that the peak sales potential for lead pipeline asset, SB206, is underappreciated, and expect upwards earnings estimate revisions, driven by pipeline advancements, to potentially move the stock higher,” Ms. Kim said. 

Ms. Kim outlined potential catalysts that include availability of all Phase 3 B-SIMPLE4 safety data for SB206 in the third quarter of 2021; updates around the commercialization strategy for SB206; updates around key earlier pipeline assets; and a potential NDA filing for SB206, no later than the third quarter of 2022. 

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