Oral Health Company NovaMin Receives $2.4M Of $4.4M Series B Round
Dow Jones VentureWire
Oral Health Company NovaMin Receives $2.4M Of $4.4M Series B RoundBy Lisa Lacy
NovaMin Technology Inc., which is focused on active ingredients for oral health, said it closed $2.4 million in the first tranche of a Series B financing, its first institutional round.
New investor Intersouth Partners led the round that closed on April 11. A second tranche of $2 million will close in about a year based upon certain milestones, according to President and Chief Executive Randy Scott.
Founded in 2002 as a spinout of USBiomaterials Corp. - which develops products to restore tissue structure and function - NovaMin was a fully-owned subsidiary for a number of years, said Intersouth Partner Garheng Kong. USBiomaterials converted some loans in the Series B round, he added.
NovaMin had previously raised about $2 million in two seed financings in 2003 and 2004 from USBiomaterials as well as individuals.
Kong said NovaMin considered a venture round over the past year or two but did not fund-raise in the traditional sense as it "had a mothership that could help support it."
Both USBiomaterials and Intersouth now hold "a pretty meaningful percentage" in the company which Kong estimated to be about one-third each.
USBiomaterials sold its bone regeneration technology to NovaBone Products LLC in 2002. "This is the same compound we've adapted for oral healthcare use," Scott said.
Proceeds will be used for clinical research to validate NovaMin's technology as well as for marketing activity around some recently-launched products, including a prescription product for tooth sensitivity marketed to dentists as well as a home treatment for tooth sensitivity, Scott said.
While Novamin's first product features the material adapted for use in both prescription and over the counter daily oral care products for tooth sensitivity, the active ingredient also has applications in remineralization for certain types of cavities as well as a third application in gingivitis based upon antimicrobial activity.
Scott said NovaMin has a pilot study in gingivitis as well as a root decay application in preclinical development.
"Our ultimate goal is to become a standard ingredient in toothpaste," Scott said.
Kong likened NovaMin's active ingredient to chief products from companies like The NutraSweet Co. or Intel Corp. "NovaMin will be branded to the same degree hopefully in other over the counter oral healthcare products."
NovaMin began rolling out a prescription product for tooth sensitivity to dentists earlier this year as well as an over the counter toothpaste that was launched in the fourth quarter of last year. As a result, the company will generate "a handful of millions this year," Kong said.
As the cycle time for a novel chemical entity is shorter than the traditional Food and Drug Administration path, additional indications will roll out in the next 18 to 24 months. Eventually, Kong said, NovaMin will look to partner with the likes of The Procter & Gamble Co. or Johnson & Johnson Inc. to help roll out consumer products.
"The issue here is can you find the right partner for each product you'd like NovaMin to be in," Kong said. "If you get a Crest or a Colgate to adopt it like NutraSweet did with Diet Coke, it's an opportunity for a significant market."
No additional rounds are planned unless NovaMin decides to pursue many additional products or not to partner the currently available products, Kong said.
Both Kong and Chris Hegele of Intersouth join the board as a result of the financing. The NovaMin board also includes Bannus Hudson, chief executive of Beverages & More Inc.; and Arthur Wotiz, chief executive of NovaBone.
The Alachua, Florida-based company has 12 employees.