National Editor

Sydney, Australia-based Novogen Ltd.'s oncology subsidiary, Marshall Edwards Inc., registered for an initial public offering of 2 million stock units in the price range of $4.50 to $6.50, which at the upper end would raise $13 million.

Each unit consists of one share of stock and a warrant to purchase one share. Up to 1.5 million of the units will be offered by subscription to holders of Novogen American Depository Receipts in the U.S., as well as U.S. holders of Novogen shares and holders of Marshall Edwards (MEI) stock as of a date yet to be determined by the latter's board of directors.

After the offering, the company would have about 54 million shares outstanding, not including the 2 million shares underlying the warrants and about 2.5 million shares issuable under previously issued warrants. Novogen would own about 91 percent of MEI, which was incorporated in Wilmington, Del.

The company has applied for a Nasdaq SmallCap listing under the symbol "MSHL". Novogen is not participating in the offering.

Janney Montgomery Scott LLC, of Philadelphia, will be the underwriter with respect to 500,000 common stock units and any common stock units not purchased in the subscription program. Janney has an option to buy another 300,000 units to cover overallotments.

MEI is in a quiet period as required by the SEC, but in a prospectus said it plans to use about $1.1 million of the proceeds to begin Phase II trials of the multiple signal transduction regulator phenoxodiol as a monotherapy in several indications: early-stage prostate cancer; squamous cell carcinoma of the cervix, vagina and vulva; and possibly other tumors, such as breast cancer where diagnosis of early stage disease is available.

In June, the FDA approved an investigational new drug application to begin the Phase II trial of oral phenoxodiol in women with SCC. Researchers will begin the trial at Yale University School of Medicine in New Haven, Conn., having earlier reported promising results with no drug-related side effects from a Phase II study of intravenous phenoxodiol in advanced ovarian cancer.

Phenoxodiol is a small molecule in the isoflavene family that specifically targets the protein sphingosine kinase to block cancer cells' division and migration, and induces them to die. It can be dosed orally, intravenously, or through the skin, and both of the first two routes of administration are in development.

Another $4.2 million of the IPO proceeds would be used to start Phase II trials of the drug in combinational therapy with standard cancer drugs for late-stage, chemo-resistant ovarian cancer, and possibly other tumors, such as renal cancer. A year ago, MEI started Phase II trials with phenoxodiol in patients with leukemia at the Royal North Shore Hospital in Sydney.

The rest of the proceeds would be used for general corporate purposes, including potential payments to Novogen under the terms of the license agreement, the prospectus said.

Parent company Novogen makes and sells dietary supplements. Its isoflavone products include Promesil for menopausal women, Rimostil for post-menopausal women and Trinovin for prostate health. The firm disclosed its plan for an oncology subsidiary IPO two years ago, shortly after the spin-off was created. (See BioWorld Today, June 4, 2001.)

In May, Novogen started a Phase II trial of Glucoprime, a carbohydrate-based skin ulcer-repair compound. The trial will be conducted at three sites in Australia. The company has an international business in research and development of drugs from its phenolic technology platform, with work ongoing in the U.S. and Australia.

Novogen's stock (NASDAQ:NVGN) closed Friday at $18.80, up 55 cents.