NasdaqGM:NOVN

Stock Analysis Report

Executive Summary

Novan, Inc., a clinical-stage biotechnology company, focuses on the development and commercialization of nitric oxide-based therapies to treat dermatological and oncovirus-mediated diseases.


Snowflake Analysis

Limited growth with weak fundamentals.

Share Price & News

How has Novan's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NOVN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.9%

NOVN

-4.0%

US Pharmaceuticals

-7.6%

US Market


1 Year Return

-63.4%

NOVN

1.0%

US Pharmaceuticals

10.2%

US Market

Return vs Industry: NOVN underperformed the US Pharmaceuticals industry which returned 2% over the past year.

Return vs Market: NOVN underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

NOVNIndustryMarket
7 Day-11.9%-4.0%-7.6%
30 Day-32.0%-5.0%-4.5%
90 Day-77.4%1.3%-0.6%
1 Year-63.4%-63.4%3.5%1.0%12.5%10.2%
3 Year-92.4%-92.4%20.1%11.5%37.1%28.3%
5 Yearn/a22.9%9.4%60.8%43.2%

Price Volatility Vs. Market

How volatile is Novan's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Novan undervalued compared to its fair value and its price relative to the market?


In this section, we usually try to help investors determine whether Novan is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Novan has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

Future Growth

How is Novan forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

9.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOVN is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: NOVN is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: NOVN is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: NOVN's revenue (57.4% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: NOVN's revenue (57.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NOVN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Novan performed over the past 5 years?

6.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NOVN is currently unprofitable.

Growing Profit Margin: NOVN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NOVN is unprofitable, but has reduced losses over the past 5 years at a rate of 6.1% per year.

Accelerating Growth: Unable to compare NOVN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NOVN is unprofitable, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (2.4%).


Return on Equity

High ROE: NOVN's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Novan's financial position?


Financial Position Analysis

Short Term Liabilities: NOVN has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: NOVN has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: NOVN has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: NOVN's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: NOVN has a high level of physical assets or inventory.

Debt Coverage by Assets: NOVN has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NOVN has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: NOVN has less than a year of cash runway if free cash flow continues to reduce at historical rates of -2.7% each year


Next Steps

Dividend

What is Novan's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%4.0%industryaverage2.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate NOVN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NOVN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NOVN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NOVN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NOVN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Paula Stafford (54yo)

US$790,725

Compensation

Ms. Paula Brown Stafford serves as Chief Executive Officer at Novan, Inc. since February 2, 2020. Ms. Stafford served as President and Chief Operating Officer at Novan, Inc. since January 2, 2019 until Feb ...


CEO Compensation Analysis

Compensation vs Market: Paula's total compensation ($USD454.93K) is about average for companies of similar size in the US market ($USD524.26K).

Compensation vs Earnings: Paula's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Robert Ingram
Executive Chairman4yrsUS$111.80k0.64% $78.5k
Paula Stafford
CEO & Director0yrsUS$790.73k0.30% $37.3k
John Gay
VP of Finance1.1yrsUS$309.37k0.056% $6.9k
Andrew Novak
VP of Accounting & Business Operations and Chief Accounting Officer1.8yrsno data0.025% $3.1k
Carri Geer
Senior VP & CTO1.1yrsno datano data
Cole Ikkala
Director of Investor Relations0yrsno datano data
Stanley Hollenbach
Senior Vice President of Research & Development2.9yrsno datano data
Elizabeth Messersmith
Senior VP & Chief Development Officer1.8yrsno datano data
William Hodges
Consultant2.1yrsno datano data

1.8yrs

Average Tenure

59yo

Average Age

Experienced Management: NOVN's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Robert Ingram
Executive Chairman4yrsUS$111.80k0.64% $78.5k
Paula Stafford
CEO & Director0yrsUS$790.73k0.30% $37.3k
Robert Keegan
Independent Director4yrsUS$99.30k0.24% $29.1k
John Palmour
Independent Director10.1yrsUS$89.30k2.13% $262.7k
Lawrence Eichenfield
Chairman of Advisory Board0yrsno datano data
Brian Berman
Member of Advisory Board0yrsno datano data
W. Geer
Lead Independent Director2.7yrsUS$118.05k0.059% $7.3k
Machelle Sanders
Independent Director2.4yrsUS$89.05kno data
Lisa Beck
Member of Advisory Board0yrsno datano data
James Rosso
Member of Advisory Board0yrsno datano data

3.3yrs

Average Tenure

61yo

Average Age

Experienced Board: NOVN's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Novan, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Novan, Inc.
  • Ticker: NOVN
  • Exchange: NasdaqGM
  • Founded: 2006
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$12.348m
  • Shares outstanding: 27.43m
  • Website: https://www.novan.com

Number of Employees


Location

  • Novan, Inc.
  • 4105 Hopson Road
  • Morrisville
  • North Carolina
  • 27560
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NOVNNasdaqGM (Nasdaq Global Market)YesCommon StockUSUSDSep 2016
6LUDB (Deutsche Boerse AG)YesCommon StockDEEURSep 2016

Biography

Novan, Inc., a clinical-stage biotechnology company, focuses on the development and commercialization of nitric oxide-based therapies to treat dermatological and oncovirus-mediated diseases. Its clinical stage product candidates include SB204, a topical monotherapy that is in Phase III pivotal clinical trials for the treatment of acne vulgaris; and SB206, a topical antiviral gel, which is in Phase III pivotal trials for the treatment of patients with external genital warts, and Phase II clinical trial for the treatment of molluscum contagiosum. The company’s clinical stage product candidates comprise SB208, a topical antifungal gel that is in Phase II proof-of-concept trial for the treatment of athlete’s foot and fungal nail infections; and SB414, a topical cream, which is in Phase Ib trial for the treatment of inflammatory skin diseases, such as psoriasis and atopic dermatitis. It has a license agreement with Sato Pharmaceutical Co., Ltd.; and a strategic alliance with Orion Corporation. Novan, Inc. was founded in 2006 and is headquartered in Morrisville, North Carolina. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 02:03
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.