Quinnova Pharmaceuticals raises $17.4 million through Series B financing

Safeguard Scientifics, Inc. (NYSE:SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced it led a $17.4 million Series B financing round for Quinnova Pharmaceuticals, Inc., with participation from existing investors Thomas, McNerney & Partners and H.I.G. BioVentures. Quinnova will use the proceeds to fund a Phase III clinical trial for an NDA product, expand its sales and marketing capabilities, facilitate the company’s other NDA and medical device clinical trials, and fund research and development initiatives to bring new products to market.

Quinnova is a specialty pharmaceutical company that develops and markets novel topical delivery platforms-based prescription dermatology drugs. The company’s FDA-approved Proderm Technology™ Delivery System (“Proderm”) addresses the need for improved cost-effective treatment options, while simultaneously enhancing efficacy and patient compliance in skin disorders, such as dermatitis, fungal infection, psoriasis and acne. Easily applied and rapidly absorbed, Proderm’s activity is based on its ability to ‘Protect – Repair – Hydrate’ the natural skin barrier. It protects from external irritants by forming an invisible membrane and facilitates the repair of the natural skin barrier by providing essential nourishment to the skin in the form of free fatty acids. Proderm Technology™ is fragrance-free, non-comedogenic, non-alcohol and non-greasy. Quinnova currently has several prescription medications on the market, including its FDA-approved NEOSALUS brand of foam and cream, which are available through dermatologists, podiatrists and pediatricians. Because of its flexibility Proderm presents an excellent platform for future product development in a variety of indications.

“Quinnova is an expansion-stage company that has been generating revenues since 2007,” said James A. Datin, Executive Vice President and Managing Director of the Life Sciences Group at Safeguard Scientifics, who joined Quinnova’s Board of Directors. “A specialty pharmaceutical company with low regulatory risk, growing market penetration and a strong pipeline of products, Quinnova is serving a growing dermatological market that calls for effective, life-long treatments. In addition, Quinnova’s focus on new, improved drug delivery platforms is consistent with the FDA’s initiative to provide cost effective medications that improve patient compliance and reduce the overall cost of healthcare. We’re pleased to add Quinnova to our holdings.”

The U.S. therapeutic dermatology market—encompassing disorders and diseases of the skin, mucous membrane, hair and nails—is presently valued at $6.4 billion annually. It is expected to grow to $8.9 billion by 2013 due to the often chronic nature of skin diseases. Dermatologists and podiatrists are generally dissatisfied with current treatment options citing poor efficacy and low patient compliance.

“Delivery platforms currently available for therapeutic dermatological treatments are frequently not well accepted by doctors or patients,” says Jeffrey S. Day, Founder, President and CEO of Quinnova Pharmaceuticals. “Many topical preparations are poorly appreciated because of local irritation, odor, and challenging application methods, often leaving a greasy residue. Others are alcohol-based, which can sting or dry the skin. Proderm, on the other hand, allows the medication to be absorbed to where it needs to be, while cosmetically appealing to patients. We look forward to working with the team at Safeguard Scientifics to develop and leverage new applications for Proderm.”