KZA 1.59% 62.0¢ kazia therapeutics limited

Novogen

  1. 5,769 Posts.
    Website:
    http://www.novogen.com.au/

    Chart:
    http://www.equitycafe.com.au/graphxchange/abc/chart/charts2.exe?s=NRT-XAO-XJO&p=w&n=1000&t=c


    NOVOGEN LIMITED 2002-05-22 ASX-SIGNAL-G

    HOMEX - Sydney

    +++++++++++++++++++++++++
    Dear Shareholders,

    There have been many exciting advances within Novogen over the last
    few months. This letter is to notify you of an important corporate
    development that has been brought about because of the success of the
    Company's ongoing drug development program.

    The Company's phenolic drug development program has advanced to the
    point where the Company now is involved in developing human clinical
    drug trials across the three therapeutic areas of oncology (cancer),
    cardiovascular, and dermatology. This is an exciting and rapidly
    growing program of development that over the next few years we expect
    will see the Company involved in a significant number of clinical
    trials around the world across a broad range of drugs.

    We regard the opportunity facing Novogen as unique, in the sense that
    we have a technology platform that already is proving to be a
    valuable source of drugs that is bringing a breakthrough approach to
    the problem of treatment of some of our most serious degenerative
    diseases. For some years now, laboratory studies have suggested the
    potential therapeutic value of the Novogen technology - the human
    studies now being conducted are confirming that potential.

    As a result of its pipeline of new drugs under development, Novogen
    has become, a recognised player in the global race to develop major
    new drugs and is at the forefront in a number of key areas such as
    the development of drugs to treat cancer and heart disease.

    The Company's oncology drug program is the most advanced and the most
    comprehensive of the different therapeutic areas we are currently
    pursuing. Phenoxodiol now is undergoing 5 clinical studies in
    Australia and the US, an extensive program that reflects the
    international interest in this promising new drug. The drug now is
    poised to enter the next important stage of its development - Phase
    IIb. In this next phase, phenoxodiol will be used in patients with
    specific types of cancer and will be used in a way that will test the
    drug's ability to treat the cancers. For this phase we have selected
    cancers of the prostate, kidney and ovary as the specific types.

    Behind phenoxodiol, however, is an anti-cancer drug development
    program that has identified a family of drugs with unique activity -
    the ability to kill specific types of cancer. This brings a new and
    innovative approach to the treatment of human cancers and represents
    a major advance in the search for new anti-cancer drugs.

    All of this rapid advancement in the oncology drug program has
    brought the need for Novogen to expedite plans for financing the
    ongoing and expanding human clinical trials, and to adjust its
    corporate structure to facilitate the eventual commercial program
    that will bring phenoxodiol to market.

    I am pleased to now be able to bring you up to date with a
    significant corporate development. This is the stock market listing
    of Novogen's anti-cancer drug subsidiary - Marshall Edwards Inc.

    WHAT IS MARSHALL EDWARDS INC?

    Marshall Edwards Inc (often known as MEI) is a US-registered company
    established by Novogen to provide a commercial vehicle for its
    anti-cancer drug technology.

    The Company's first and foremost anti-cancer drug, phenoxodiol, has
    been licensed into MEI. Also, MEI has been granted the option rights
    to any or all other oncology drugs that it selects from the Novogen
    research portfolio.

    WHERE IS MEI LISTED?

    MEI is now publicly quoted on the Alternate Investment Market of the
    London Stock Exchange. MEI shares are now available for trading in
    the UK, and can be bought and sold through stockbrokers who deal in
    international shares. As the number of shareholders increases over
    time, MEI may decide also to list on other international stock
    exchanges.

    What is the relationship between Novogen and MEI?

    Novogen is the majority shareholder in MEI. After the recent placement
    of 4.8% of MEI stock at US$4 per share raising US$10.1 million (A$
    18.3 million), Novogen retains 95.2% ownership of MEI.

    MEI is a fully independent company, but Novogen Directors and
    executives will contribute significantly to the Company's day-to-day
    operations and strategic planning.

    WHO ARE THE NEW SHAREHOLDERS?

    The share placement was done with North American, European and
    Australian institutions and private investors.

    These shareholders who invested under this initial private placement
    which coincided with the stock market listing of MEI also have in
    option to purchase an equivalent further shareholding in MEI for
    another US$10.1 million within the next 18 months.

    The UK advisor and broker to MEI which managed the listing (KBC Peel
    Hunt Ltd) has an option to buy up to half a percent of MEI to
    facilitate liquidity in the trading of shares on the AIM, over the
    next 12 months. The broker options are at the same exercise price as
    the investor options. if the broker options and the investor options
    are exercised in full, and for which MEI would receive further
    payments, then at that time Novogen would retain over 90% of MEL

    It is a requirement of the AIM rules that Novogen does not sell any
    of its holding in MEI during the twelve months after listing, and so
    unless MEI were to issue new stock, Novogen will hold a not less than
    90% share of MEI for at least the next year.

    WHY HAS MEI BEEN ESTABLISHED?

    There are two main reasons for having a separate anti-cancer company
    within our group structure.

    First, it allows for the direct funding of the oncology drug program
    by investors who wish to invest purely in an anti-cancer drug
    company. This separate investment focus and project-specific
    financing is in the interests of all Novogen shareholders as it
    significantly reduces the cost of funding to the Novogen Group.

    Second, when commercialisation plans call for a licensing
    arrangement with a larger pharmaceutical company, there is often a
    part of the arrangement that involves an equity transfer or equity
    participation in the licensor company. The establishment of a company
    such as MEI allows for such an arrangement without prejudicing the
    ability of Novogen to enter into similar arrangements with other
    companies in any of its other areas of therapeutic drug development.

    WHAT DOES IT MEAN TO ME AS A NOVOGEN SHAREHOLDER?

    Novogen shareholders benefit in a number of ways:

    First, the funds raised recently by MEI to progress its drug
    development program have been raised at a premium, meaning that the
    eventual share dilution effect has been considerably lessened for
    Novogen shareholders;

    Second, by transferring the cost of funding the phenoxodiol program
    to MEI, this enables Novogen to put the necessary resources into the
    development of its other extensive drug pipeline, and hence
    accelerate the value of this intellectual property;

    Third, success with phenoxodiol will entitle Novogen to receive
    milestone payments and royalties on sales of the drug. Novogen also
    will receive part of any fees paid to MEI under any further licence
    arrangements. Novogen also will manufacture phenoxodiol and sell the
    drug to MEI on a commercial basis.

    THE SUMMARY OF THE NOVOGEN LISTED CORPORATE STRUCTURE IS NOW AS
    FOLLOWS:

    * Novogen Limited has a listing on both the Australian Stock Exchange
    (under the symbol "NRT") and on the NASDAQ market in the US (under
    the symbol "NVGN").

    * Marshall Edwards Inc (MEI) is listed on the Alternate Investment
    Market (AIM) of the London Stock Exchange (under symbol "MSH").

    * Novogen owns 95.2% of MEI. The other 4.8% of MEI is owned by other
    shareholders who have invested US$ 10.1 million to purchase that 4.8%
    share of the company.

    At Novogen we are very pleased with the positive outcome of the
    establishment and listing of MEI, and of the increasing recognition
    of the inherent value of the Novogen anti-cancer program and
    phenoxodiol in particular.

    ALSO THIS WEEK, MORE POSITIVE INFORMATION ABOUT PHENOXODIOL HAS BEEN
    RELEASED.

    The results of the eighteen patients who received phenoxodiol in the
    Australian trial conducted at St George Hospital in Sydney, were made
    public at the American Society of Clinical Oncology conference in
    Orlando USA. This clinical trial, in which patients with rapidly
    growing, terminal cancer received one injection of phenoxodiol each
    week for six weeks, was conducted principally to determine the safety
    of the drug, and the outcome was that the drug had none of the usual
    side-effects normally associated with chemotherapy. A secondary
    outcome was to gain some preliminary evidence of those tumours that
    might respond to phenoxodiol. This was measured on the basis of
    patients showing no evidence of disease progression after 6 weeks The
    results were that 7 of the 18 patients continued treatment for at
    least 12 weeks, with 2 continuing treatment for periods up to 24
    weeks with evidence of stabilisation of their tumours. Given the
    advanced state of these tumours and the fact that they had become
    resistant to all other forms of chemotherapy, this is a highly
    encouraging outcome.

    These results are consistent with the results from the trial at the
    Cleveland Clinic in the US presented in April at the 93rd Annual
    Meeting of the American Association for Cancer Research. In that
    trial terminal cancer patients were continuously infused with the
    drug. In the first ten patients, an equally favourable safety profile
    was recorded and six out of ten terminal cancer patients experienced
    disease stabilisation.

    The favourable toxicity profile and the significant results in
    disease stabilisation, auger very well for the ongoing phenoxodiol
    human clinical trial program.

    With phenoxodiol and with the other equally exciting Novogen drug
    compounds in human clinical trials, we anticipate making a
    significant impact on the treatment options that are available across
    a broad range of therapeutic areas.

    These are exciting developments, and we look forward to the ongoing
    increase in the value of the Company's intellectual property and to
    bringing the drug programs to the stage of commercialisation, for the
    benefit of all out shareholders and future patients.

    C Naughton
    MANAGING DIRECTOR


 
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