Pharmaceutical company Novan has laid off 20 percent of its workforce and reassigned its chief executive officer to a new role, as the company looks to reverse its slumping finances and broaden the uses for its technology.
Nathan Stasko – who took the company public last year with a $51.9 million initial public offering – was removed as chief executive officer and made chief scientific officer, the company said Monday.
The announcement comes as the drug developer faces shrinking cash reserves. The company said in a release that it has enough cash on hand to fund operations through the end of 2017 – but added it would need more to move its pipeline of products through the U.S. Food and Drug Administration’s regulatory process.
Novan, which is developing several dermatology treatments using nitric oxide, has seen its share price plummet since it went public in 2016. Novan moved its headquarters to Morrisville from Durham shortly after going public.
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The company’s stock price fell nearly 78 percent in January after one of its acne drugs posted mixed results in clinical trials.
Its share price has never recovered.
Novan plans to meet with the FDA in the third quarter of 2017 to seek clarity on its acne drug’s path forward in the regulatory process.
The 20-percent workforce reduction is meant to preserve cash while the company navigates the approval process and seeks more uses for its nitric oxide technology. The firm had roughly 60 employees as of April.
“This action will accomplish three things: reduce near term operating costs and preserve cash on our balance sheet, enable refined focus around key projects, and align necessary skills to near term tasks and activities,” the company said in a release.
Kelly Martin will assume the role of CEO on an interim basis, the company said. Bob Ingram, the current chairman of the Novan’s board of directors, will now serve as the executive chairman of the board.
In May, Novan’s chief medical officer also resigned.