Novogen Restructures, Board to Take Pay Cuts

Published: Aug 14, 2017

Novogen Restructures, Board to Take Pay Cuts August 14, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Sydney, Australia – Novogen updated investors on its strategic review of operations today. On June 8, 2017, Iain Ross was appointed as chairman, which triggered the review by the board and management team.

In June, the company had also announced that it was cutting the size of its board of directors. Two non-executive directors stepped down, leaving the board with three non-executive directors, Iain Ross, Bryce Carmine and Steven Coffey, and one executive director, James Garner, chief executive officer. The directors have also offered to cut their fees, which will provide the company additional savings.

Since June, the company has identified areas where it can save about $1.8 million in savings annually, mostly by cuts in consultant expenses, optimizing the intellectual property portfolio, managing occupancy expenses and what it calls a modest reduction in headcount.

In April, the company announced the termination of its ATM-3507 (Anisina) preclinical program, with a resulting round of layoffs. Anisina was being developed as a cancer treatment, but the company’s internal Scientific Committee of the Board of Directors decided the preclinical data wasn’t strong enough to support clinical trials.

The two remaining clinical programs, GDC-0084 in glioblastoma multiforme, and TRXE-002-01 (Cantrixil) in ovarian cancer, were to continue development. In addition, its CRC-P grant for next-generation ATM was not affected. The grant was for $3 million for three years from the Cooperative Research Centre Project (CRC-P) to develop a next-generation anti-tropomysoin program, specific to its Anisina drug. It is a separate and distinct program from the preclinical ATM-3507 program.

Another change made was on August 11, the company instructed its Depository Holder, BNY Mellon, “not to direct unvoted proxies from American Depository Receipts (ADRs) in future general meetings of shareholders.”

This was in response to shareholders’ concerns over the practice. Although the company indicated it always acted in good faith and utilized independent legal advice, it recognized shareholders’ concerns and responded accordingly.

Also, on May 31, the NASDAQ informed the company that it needed to ensure its share price stayed above $1, per NASDAQ Listing Rules. As a result, Novogen announced on July 4 that it had changed the ratio ADRs consolidate underlying Australian shares from 24:1 to 100:1. Although that did not change the total number of shares issued, it increased the number of ASX shares consolidated into each ADR by a factor of four, which was consistent with the increase in price of the ADRs on the NASDAQ.

Iain Ross stated, “Recent efforts have significantly improved the efficiency of Novogen as a business, and will allow us to better devote our resources to delivering on the substantial value that resides in our pipelines. The company has listened carefully to the feedback of shareholders, and has shown its commitment to delivering shareholder value in accordance with the best principles of corporate governance.”

The company’s lead program is now GDC-0084, a small molecule inhibitor of the PI3K/AKT/mTOR pathway, in glioblastoma multiforme. The compound was licensed from Genentech in 2016. The company plans to launch Phase II trials this year. Its second clinical program, TRXE-002-01 (Cantrixil) began a Phase I trial in ovarian cancer in December 2016.

Novogen is currently trading for $3.32.

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