KZIA Kazia Therapeutics Ltd

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2007

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from                      to                     

Commission file number 0-29962

Novogen Limited

ACN 063 259 754

(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant’s name into English)

New South Wales, Australia
(Jurisdiction of incorporation or organization)

140 Wicks Road, North Ryde, New South Wales 2113, Australia
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
None
Securities registered or to be registered pursuant to Section 12(g) of the Act.
Ordinary Shares*
American Depositary Shares, each representing five Ordinary Shares

*

Not for trading, but only in connection with the registration of American Depositary Shares.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
Not Applicable

The number of outstanding Ordinary Shares of the issuer as at June 30, 2007 was 97,594,261.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o       No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o       No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ       No o

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer or non-accelerated filer.

Large accelerated filer o       Accelerated filer þ       Non-accelerated filer o

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o       Item 18 þ

If this is an annual report, indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o       No þ

 

 

TABLE OF CONTENTS

Forward Looking Statements			1
PART I
ITEM 1. Identity of Directors, Senior Management and Advisors			3
ITEM 2. Offer Statistics and Expected Timetable			3
ITEM 3. Key Information			3
ITEM 4. Information on the Company			16
ITEM 4A Unresolved Staff Comments			32
ITEM 5. Operating and Financial Review and Prospects			32
ITEM 6. Directors, Senior Management and Employees			44
ITEM 7. Major Shareholders and Related Party Transactions			61
ITEM 8. Financial Information			63
ITEM 9. Offer and Listing Details			64
ITEM 10. Additional Information			66
ITEM 11. Quantitative and Qualitative Disclosures about Market Risk			71
ITEM 12. Description of Securities other than Equity Securities			71
PART II
ITEM 13. Defaults, Dividend Arrearages and Delinquencies			72
ITEM 14. Material Modifications to the Rights of Security Holders and the Use of Proceeds			72
ITEM 15T. Controls and Procedures			72
ITEM 16. Reserved			73
ITEM 16A. Audit Committee Financial Expert			73
ITEM 16B Code of Ethics			73
ITEM 16C Principal Accountant Fees and Services			73
ITEM 16D Exemptions from the Listing Standards for Audit Committees			75
ITEM 16E Purchases of Equity Securities by the Issuer and Affiliated Purchases			75

PART III
ITEM 17. Financial Statements – Not Applicable			76
ITEM 18. Financial Statements			76
ITEM 19. Exhibits			76

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Annual Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “should”, “plan”, “expect”, and similar expressions, as they relate to Novogen Limited (“Novogen”, the “Company” or the “Group”), are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those described in “Risk Factors” and elsewhere in this Form 20-F, including, among other things:

	•		our inability to obtain any additional required financing or financing available to us on acceptable terms;
	•		the failure to locate, hire, assimilate and retain qualified personnel;
	•		our failure to successfully commercialize our products;
	•		costs and delays in the development and/or receipt of U.S. Food and Drug Administration (“FDA”) or other required governmental approvals, or the failure to obtain such approvals, for our products;
	•		uncertainties in clinical trial results;
	•		our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products;
	•		competition and competitive factors;
	•		our inability to enforce our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business;
	•		our inability to operate our business without infringing the patents and proprietary rights of others;
	•		the failure of any product candidate to gain market acceptance;
	•		general economic conditions;
	•		government regulation generally and the receipt of regulatory approvals;
	•		changes in industry practice; and
	•		one-time events.

These risks are not exhaustive. Other sections of the Annual Report on Form 20-F may include additional factors which could adversely impact the Company’s business and financial performance. Moreover, the Company operates in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can the Company assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward looking statements as predictions of future events. The

Company cannot assure you that the events and circumstances reflected in the forward looking statements will be achieved or occur. Although the Company believes that the expectations reflected in the forward looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements.

PART I

Note: Sales revenue reported under U.S. GAAP has been adjusted to reflect the impact of certain promotional expenditures in accordance with EITF Issue 01-9 Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products). Prior year’s financial statements have been reclassified where appropriate. Certain trade promotion expenditures are charged to marketing and selling expenses under AIFRS. These expenses are for co-operative advertising whereby the Company pays for the retailers’ promotion of the Company’s products. This would typically take the form of payments for advertisments in retailers cataloges, magazines, and instore product promotions. The payment of co-operative advertising is usually made in the form of an agreed amount taken off invoice or by direct payment. Under U.S. GAAP these amounts are treated as a discount to sales hence reducing the reported sales figures. See Note 24 to the Consolidated Financial Statements for the reconciliation to U.S. GAAP. Under AIFRS interest income is included in other income and is a component of total revenue. Under U.S. GAAP interest income is excluded from other operating revenue and total revenue.

No dividends have been declared by the Company in the fiscal years included in this Annual Report.

The Company publishes its Consolidated Financial Statements expressed in Australian dollars. In this Annual Report, references to “US dollars” or “US$” are to the currency of the United States of America (“U.S.”) and references to “Australian dollars” or “A$” are to the currency of Australia. For the convenience of the reader, this Annual Report contains translations of certain Australian dollar amounts into U.S. dollars at specified rates. These translations should not be construed as representations that the Australian dollar amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise stated, the translations of Australian dollars into U.S. dollars have been made at the rate of US$0.8491 = A$1.00, the noon market buying rate in New York City for cable transfers in Australian Dollars as certified for customs purposes by the Federal Reserve Bank of New York (the noon buying rate) on June 29, 2007.

The noon buying rate on November 30, 2007 was US$0.8848 = A$1.00

Exchange Rates for the six months to November 2007
A$ versus US$

Risk Factors

The following risk factors, in addition to the other information and financial data contained in this Annual Report, should be considered carefully in evaluating the Company and its business. The risks described below and elsewhere in this Annual Report are not intended to be an exhaustive list of the general or specific risks involved, but merely identify certain risks that are now foreseen by the Company. It must be recognized that other risks, not now foreseen, might become significant in the future and that the risks which are now foreseen might affect the Company to a greater extent than is now foreseen or in a manner not now contemplated.

The Company will need additional funds in order to finance its future operations and the clinical development program. The actual amount of funds that we will need will be determined by a number of factors, some of which are beyond our control.

The Company’s funding requirements have been, and will continue to be, significant. The Company anticipates that its existing cash resources will be adequate to fund the Company’s operating requirements through the next 12 months based upon the Company’s current business plan.

The Company’s 71.9% owned U.S. subsidiary company Marshall Edwards, Inc. (“Marshall Edwards”) will need additional funds to complete the Ovature Phase III clinical trial for phenoxodiol known as “OVATURE” and to progress the clinical trial program for the drug compounds triphendiol (formally NV-196) and NV-143.

The Company’s operating requirements may vary materially from those now planned due to a number of factors. These factors include the success of the Company’s research and development efforts, the ability of the Company to satisfy applicable regulatory requirements, the extent of the Company’s ability to produce its products in a cost-effective manner, the rate at which the Company can introduce its products into new markets, the market acceptance and competitive position of the Company’s products and the level of expenditure required to expand the Company’s production facilities should it need to do so.

The Company will need additional capital to fund its future operations. There can be no assurance that additional financing will be available when needed on terms acceptable to the Company, or at all. If additional funds are raised by issuing equity securities, further dilution to existing shareholders will result and future investors may be granted rights superior to those of existing shareholders. Insufficient funds may prevent the Company from implementing its business strategy or may require the Company to limit its operations significantly.

The Company has incurred operating losses since its inception, and is likely to incur operating losses for the foreseeable future.

The Company has incurred net losses of A$146,147,000 since its inception, including net losses of A$24,296,000, A$17,913,000 and A$12,684,000 for the years ended June 30, 2007, 2006, and 2005, respectively. The Company anticipates that it will incur operating losses and negative cash flow for the foreseeable future.

If the data from the Company’s clinical trial program do not demonstrate the safety and efficacy of the phenolic drug candidates to the satisfaction of the FDA and other regulatory authorities, the Company will not receive approval to market its drug candidates in the U.S. or other jurisdictions.

Phenolic drug development is an entirely novel and unproven field of pharmaceutical drug development and there is limited scientific understanding of phenolic technology on which the Company’s drug program is based. There can be no assurance that any of the compounds under development by the Company will prove to be sufficiently efficacious, safe, and cost-effective to be commercially viable. The commercialization process of the products currently undergoing clinical trials includes the anti-cancer drug candidates phenoxodiol and triphendiol (formally NV-196) being developed by the Company’s subsidiary Marshall Edwards, Inc., NV-27, the Company’s cardiovascular drug candidate and NV-52 the Company’s anti-inflammatory drug candidate in the U.S. and Australia. The commercialization process of the foregoing drug candidates may be delayed if the FDA or another regulatory authority requires the expansion in the size and scope of any clinical trial. It may take many years to complete the testing and failure can occur at any stage in the process. Negative or inconclusive results or adverse medical events during a clinical trial could cause the Company to delay or terminate development efforts.

In 2004, the FDA granted phenoxodiol fast track status for patients with recurrent late stage ovarian cancer that is resistant or refractory to platinums and taxanes. More recently, we completed a Special Protocol Assessment (“SPA”) where the FDA reviewed and agreed with the design of a Phase III study of phenoxodiol in combination with carboplatin in women with platinum-resistant ovarian cancer (ovarian cancer that does not respond to platinum based anti-cancer agents such as cisplatin). If the FDA concludes, using agreed clinical endpoints, that the data from our pivotal clinical trial have failed to demonstrate the safety and effectiveness of phenoxodiol to the satisfaction of the FDA, we will not receive FDA approval to market phenoxodiol in the United States. We cannot assure you that the results of our Phase III trial will be successful. In addition, phenoxodiol received Fast Track Status from the FDA to facilitate development as a therapy for prostate cancer.

Any failure in the clinical trial program could impair the commercial prospects of the Company’s phenolic drug program.

Clinical trials have a high risk of failure. A number of companies have suffered significant setbacks in advanced clinical trials even after achieving promising results in earlier trials.

If the Company experiences delays in the testing or approval process or if further clinical trials or clinical trials involving a larger number of patients are required, the commercial prospects of the drugs under development could be impaired.

If the Company does not receive marketing approval for its phenolic drug candidates, or regulatory approval is withdrawn for the Company’s dietary supplements, the Company will not be able to commercialize its products and product candidates.

Marketing approval is needed in order to commercialize the Company’s phenolic drug candidates. The Company may never receive marketing approval for any of its phenolic drug candidates. If the Company does receive marketing approval, such approval will be limited to those disease states and conditions for which phenolic drug candidates have been proven to be safe and effective.

In order for the Company to market its products in the U.S., Europe, Australia, Canada, Japan and certain other foreign jurisdictions, the Company must obtain required marketing approvals or clearances and otherwise comply with extensive regulations regarding safety, manufacturing processes and quality. There can be no assurance that the Company will be able to obtain or maintain regulatory approvals or clearances in such jurisdictions or that it will not be required to incur significant costs in obtaining or maintaining its foreign regulatory approvals or clearances.

The FDA and other governmental approvals that may be granted to the Company will be subject to continual review, and later discovery of previously unknown problems may result in withdrawal of products from the market.

Moreover, if and when any FDA or other governmental approval is obtained, the marketing and manufacture of the Company’s products will remain subject to extensive regulatory requirements administered by the FDA and other regulatory bodies. Failure to comply with these regulatory requirements may, among other things, result in fines, suspensions or withdrawal of marketing approvals, operating restrictions and criminal prosecution.

The Company has no direct control over the cost of red clover isoflavone extract or the formulation and packaging of its dietary supplement products. The Company will be relying on third parties to manufacture commercial quantities of pharmaceutical drug candidates.

The Company relies on third parties to supply its active raw materials (isoflavones), manufacture and package its dietary supplement products to satisfy performance and quality standards, and dedicate sufficient production capacity to meet demand and delivery times. The Company will also rely on third parties to manufacture commercial quantities of its pharmaceutical drug candidates as well as drug supplies for larger scale

clinical trials. There can be no assurance that third party manufacturers will devote the resources necessary to meet demand for the Company’s products. Any failure or delay in the supply of isoflavones would adversely affect the Company’s ability to deliver products on a timely and competitive basis.

In addition, the manufacturing facilities of the Company’s products are subject to periodic inspection by regulatory authorities for compliance with Current Good Manufacturing Practice (cGMP). There can be no assurance that these authorities will not, during the course of an inspection of existing or future facilities, identify what they consider to be deficiencies in cGMP or other requirements and request, or seek, remedial action. Failure to comply with such regulations or delay in attaining compliance may adversely affect the Company’s manufacturing activities and could result in, among other actions, warning letters, injunctions, civil penalties, refusal to grant approvals or clearances of future or pending product submissions, fines, recalls or seizure of products, total or partial suspensions of production and criminal prosecution. If any of the foregoing events occur, the Company’s products may not be available to supply the market demand and the Company’s sales revenues may be adversely affected.

The Company’s success is largely dependent on its ability to obtain patent protection and preserve trade secrets, which cannot be guaranteed.

The Company’s success is dependent to a significant degree on whether it can obtain patents, maintain trade secret protection and operate without infringing on the proprietary rights of third parties. If it were determined that the Company was infringing upon any third party patent, the Company could be required to pay damages, alter its products or processes, obtain licenses or to cease certain operations. If the Company is required to obtain any licenses, there can be no assurance that the Company will be able to do so on commercially favorable terms, if at all. The Company’s failure to obtain a license for any technology that it may require to commercialize its products could have a material adverse effect on the Company’s business, financial condition and results of operations.

Litigation relating to patent infringement could result in substantial costs to, and diversion of effort by, the Company, and may also be necessary to enforce any patents issued or licensed to the Company or to determine the scope and validity of third party proprietary rights. The Company is currently involved in a number of litigation proceedings against companies which were infringing certain of the Company’s patents related to dietary supplements.

If competitors of the Company that claim technology also claimed by the Company prepare and file patent applications in the U.S., the Company may have to participate in interference proceedings in the U.S. Patent and Trademark office to determine priority of invention, which could result in substantial cost to, and diversion of effort by, the Company, even if the eventual outcome is favorable to the Company.

Any such litigation or interference proceedings, regardless of outcome, could be expensive and time consuming. Litigation could subject the Company to significant liabilities to third parties, requiring disputed rights to be licensed from third parties to the Company or requiring the Company to cease using certain technologies and, consequently, could have a material adverse effect on the Company’s business, financial condition and results of operations.

In addition to patent protection, the Company relies on trade secrets and proprietary technological expertise. There can be no assurance that others will not independently develop or acquire substantially equivalent technologies, or otherwise gain access to the Company’s trade secrets or technological expertise or disclose such trade secrets. There can be no assurance that the Company can ultimately protect its right to such un-patented trade secrets and technological expertise. The Company relies, in part, on confidentiality agreements with its marketing partners, employees, advisors, vendors and consultants to protect its trade secrets and proprietary technological expertise. There can be no assurance that these agreements will not be breached, that the Company will have adequate remedies for any breach or that the Company’s un-patented trade secrets and proprietary technological expertise will not otherwise become known or independently discovered by competitors.

The Company’s commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective or less expensive than the Company’s products.

In developing its technology and products, the Company competes with many domestic and foreign competitors in various rapidly evolving and technologically advanced fields, including pharmaceutical, biotechnology and biopharmaceutical companies.

Many of the Company’s competitors and potential competitors have substantially greater financial, technological, research and development, marketing and personnel resources than the Company. There can be no assurance that the Company’s competitors will not succeed in developing alternate technologies and products that are more effective, easier to use or more economical than those which have been developed by the Company or that would render the Company’s technologies and products obsolete and non-competitive in these fields. These competitors may also have greater experience in developing products, conducting clinical trials, obtaining regulatory approvals or clearances and manufacturing and marketing such products or technologies. Certain of these competitors may obtain patent protection, approval or clearance earlier than the Company, which could adversely affect the Company’s business, financial condition and results of operations. Furthermore, the Company will also be competing with respect to manufacturing efficiency and marketing capabilities, areas in which it currently has limited experience.

The Company’s commercial opportunities will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive.

Revenue is affected by fluctuations in currency exchange rates.

Fluctuations in currency exchange rates may adversely affect the demand for the Company’s products by increasing the price of the Company’s products in the currency of the countries in which the products are sold.

The Company’s consolidated financial statements are presented in Australian dollars. In fiscal 2007, the Company’s revenue generated was approximately 9% in U.S. dollars and approximately 53% in Australian dollars with the balance of revenue in Pounds Sterling, Euros and Canadian dollars. Fluctuations in the rates of exchange between the U.S. dollar and other foreign currencies may negatively impact the Company’s financial condition and results of operations. As the Company expands its presence into the U.S. and other international markets, the Company expects the percentage of both its revenues and expenditures denominated in non-Australian dollars to increase, with particular emphasis on U.S. dollars.

The Company depends on a number of key personnel to provide the strategic direction of its research and development programs and other corporate activities. If the Company is unable to procure the services of key personnel in the future, the Company’s research and development programs could be delayed.

The Company is highly dependent upon the principal members of its management and scientific staff. In addition, the Company believes that its future success in developing marketable products and achieving a competitive position will depend to a significant extent on whether it can attract and retain additional qualified management and scientific personnel. Competition for such personnel is intense, and there can be no assurance that the Company will be able to continue to attract and retain such personnel. The loss of the services of one or more of the management or scientific staff, or the inability to attract and retain additional personnel and develop expertise as needed, could have a material adverse effect on the Company’s results of operations and financial condition. The Company maintains key person life insurance for Mr. Christopher Naughton the Company’s Managing Director and Professor Alan Husband the Company’s Director of Research and Development, currently set at A$2,226,000 each. In addition, the Company also maintains key person life insurance for all members of the executive team and other key staff. The policies for these personnel range between A$1,000,000 and A$1,600,000. The proceeds of such policies are payable to the Company.

The Company may not be able to establish or maintain the strategic partnerships necessary to market and distribute its dietary supplement products.

The Company relies on its own marketing staff for the marketing and sale of its current and proposed dietary supplement products in Australia, Canada, the U.K. and the Netherlands. The Company presently has limited marketing and sales staff. Achieving market acceptance for the Company’s products will require extensive and substantial efforts by experienced personnel as well as expenditure of significant funds. There can

be no assurance that the Company will be able to establish sufficient marketing, distribution and sales capabilities necessary to achieve market penetration in these geographical areas. The Company announced in October 2006 that it had licensed the U.S. rights to market Promensil™ (“Promensil”) and Trinovin brands to Natrol, Inc.

In other markets, the Company intends to appoint licensees and/or marketing partners who will be responsible in large part for sales, marketing and distribution. While the Company will endeavor to appoint licensees and/or marketing partners with proven abilities in these areas, the amount and timing of resources, which may be devoted to the performance of their contractual responsibilities by these partners, are not within the control of the Company. There can be no assurance that such marketing partners will perform their obligations as expected, pay any additional option or license fees to the Company or market any products under any agreement. There can be no assurance that the Company will derive any revenue from such arrangements. Moreover, the other contracting parties may have rights of termination under certain of the agreements. Exercise of such termination rights by such other parties may have an adverse effect on the Company’s business, financial condition and results of operations. There can be no assurance that the interests of the Company will continue to coincide with those of its partners or that such partners will not develop independently, or with third parties, products or technologies which could compete with the Company’s products, or that disagreements over rights or technologies or other proprietary interests will not occur. To the extent that the Company chooses not to, or is unable to, enter into future agreements, the Company would experience increased capital requirements to undertake the marketing or sale of its current or future products. There can be no assurance that the Company will be able to market or sell its technology or its current or future products independently in the absence of such agreements.

The Company faces the risk of product liability claims and may not be able to obtain adequate insurance.

The Company’s business exposes it to the risk of product liability claims. This risk is inherent in the manufacturing, testing and marketing of human therapeutic products. The Company has product liability insurance coverage of up to approximately A$20 million. Although the Company believes that this amount of insurance coverage is appropriate for its business at this time, the insurance coverage is subject to deductibles and coverage limitations, and the market for such insurance is becoming more restrictive. The Company may not be able to obtain or maintain adequate protection against potential liabilities. If the Company is unable to sufficiently insure against potential product liability claims, it will be exposed to significant liabilities, which may materially and adversely affect the business development and commercialization efforts.

Enforceability of civil liabilities under the federal securities laws against the Company’s officers and directors may be difficult.

The Company is a public company limited by shares and is registered and operates under the Australian Corporations Act 2001. All of the Company’s directors and officers

named in this Annual Report reside outside the U.S. Substantially all or a substantial portion of the assets of those persons are located outside the U.S. As a result, it may not be possible to affect service on such persons in the U.S. or to enforce, in foreign courts, judgments against such persons obtained in U.S. courts and predicated on the civil liability provisions of the federal securities laws of the U.S. Furthermore, substantially all of the directly owned assets of the Company are outside the U.S., and, as such, any judgment obtained in the U.S. against the Company may not be collectible within the U.S. There is doubt as to the enforceability in the Commonwealth of Australia, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon federal or state securities laws of the U.S., especially in the case of enforcement of judgments of U.S. courts where the defendant has not been properly served in Australia.

The trading price of the shares of the Company’s common stock and American Depository Receipts (“ADRs”) could decline in value if the trading price of the shares of common stock of its listed subsidiary company, Marshall Edwards declines.

Novogen currently owns 71.9% of its subsidiary Marshall Edwards, whose shares are traded on the Nasdaq Global Market. If the trading price of MEI’s shares declines or its business does not achieve its objectives or its product development program is delayed, it could have an adverse affect on Novogen’s share price.

The trading price of the shares of the Company’s common stock and ADRs is highly volatile. Your investment could decline in value and the Company may incur significant costs from class action litigation.

The trading price of the Company’s common stock and ADRs is highly volatile in response to various factors, many of which are beyond the Company’s control, including:

	•		announcements of technological innovations by the Company and its competitors;
	•		new products introduced or announced by the Company or its competitors;
	•		changes in financial estimates by securities analysts;
	•		actual or anticipated variations in operating results;
	•		expiration or termination of licenses, research contracts or other collaboration agreements;
	•		conditions or trends in the regulatory climate in the biotechnology, pharmaceutical and genomics industries;
	•		changes in the market values of similar companies;
	•		the liquidity of any market for the Company’s securities; and
	•		additional sales by the Company of its shares.

In addition, equity markets in general and the market for biotechnology and life sciences companies in particular, have experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the

companies traded in those markets. In addition, changes in economic conditions in Australia, the United States, Europe, or globally, could impact on the Company’s ability to grow profitably. Adverse economic changes are outside the Company’s control and may result in material adverse impacts on the Company’s business or results of operations. These broad market and industry factors may materially affect the market price of the Company’s shares of common stock and ADRs regardless of its development and operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. Such litigation, if instituted against the Company, could cause it to incur substantial costs and divert management’s attention and resources.

Item 4. Information on the Company

History and development of the Company

Novogen Limited, a company limited by shares, was incorporated in March 1994 under the jurisdiction of the laws of New South Wales, Australia. Novogen has its registered office at 140 Wicks Rd, North Ryde, New South Wales 2113. Its telephone number and other contact details are: Phone 61-2-9878-0088; Fax 61-2-9878-0055; and website, www.novogen.com (the information contained in the website does not form part of the Annual Report). The Company’s Ordinary Shares are listed on the Australian Stock Exchange (“ASX”) under the symbol “NRT” and its ADRs, each representing five ordinary shares, trade on the Nasdaq Global Market under the symbol “NVGN”. The Company’s agent in the U.S. for ADR’s is the Bank of New York, 620 Avenue of the Americas, 6 ^th floor New York, N.Y.

Capital expenditures

The Company made no major investments of a capital nature during fiscal 2007. Future facilities will be developed where appropriate, however, current capacity at the pilot plant at North Ryde NSW is sufficient to meet demand for the short to medium term. In October 2007, the Company announced that it had sold its isoflavone extraction plant located at Wyong NSW.

Business overview

Nature of the Business

The Company is a pharmaceutical company involved in the discovery, development, manufacture and marketing of products based on the emerging field of isoflavonoid technology. The Company’s product development program embraces both a novel range of pharmaceuticals based on a range of phenolic compounds in humans and dietary supplements based on plant compounds known as isoflavones. A key element of the Company’s strategy is to leverage revenue generated from sales of the Company’s dietary supplements in an effort to develop novel proprietary pharmaceuticals based on phenolic compounds.

Dietary supplements

The Company launched its first dietary supplement product, Promensil, in September 1997 in Australia. Subsequently, the Company has established 100% owned subsidiary companies in the U.S., Canada, the U.K. and the Netherlands to market and distribute its range of dietary supplements. The Company has also entered into agency agreements to distribute its dietary supplements in Singapore and South Africa, Indonesia, Austria and Italy. In October 2006, the Company announced that it had licensed the U.S. rights to market Promensil and Trinovin brands to Natrol, Inc.

Promensil and Trinovin are “dietary supplements” that deliver standardized levels of all four isoflavones — daidzein, genistein, formononetin and biochanin. Promensil and

Trinovin are listed with the appropriate regulatory bodies in the countries in which they are sold.

The following table is an analysis of revenue from sales and other sources during the past three fiscal years by categories of activity and by geographical market. Other revenue consists principally of interest income, grants received and royalty receipts. See Note 2 to the Consolidated Financial Statements.

Revenue

The Group earned gross revenues for the year ended June 30, 2007 of A$17.3 million versus A$17.4 million in the previous corresponding period, a decrease of A$0.1 million. The decrease in revenue was due to decrease in consumer product sales partially offset by increase in other revenue. Sales of the Company’s consumer products decreased by A$2.8 million or 21%, from A$13.5 million for the previous year to A$10.7 million for the year ended June 30, 2007. The decrease in consumer product sales was mainly due to the licensing of the U.S. consumer products to Natrol, Inc. Other revenue increased by A$2.6 million to A$6.6 million verses A$3.9 million for the previous corresponding period. The increase in other revenue was mainly due to licence fees received from Natrol, Inc., litigation settlements amounts received from Sante Naturelle and Chattem, Inc. for licenses and settlement of patent infringements relating to consumer products in Canada and the U.S. and sale of red clover inventories which were in excess of our production requirements. Interest revenues also increased reflecting higher interest rates achieved on invested cash balances.

Consumer product sales

Sales in Australasia (including exports) for the year ended June 30, 2007 were A$4.5 million, a decrease of A$0.7 million or 13% from A$5.2 million for the previous year due to de-stocking in the wholesaler supply channels and a decline in the size of the menopause treatment market. Sales revenue in the U.S. was A$1.4 million for the four months ending October 2006 (U.S. consumer products were licensed to Natrol, Inc. from the end of October 2006) down from A$3.4 million for the twelve month period to June 30, last year. Canada sales for the year ended June 30, 2007 declined by A$0.6 million to A$1.7 million down from A$2.3 million for the previous 12 month period, due to significant inventory reduction in the two leading retail chains in Canada. Sales revenue in Europe increased by A$0.5 million to A$3.1 million for the twelve month period to June 30, 2007 up from A$2.6 million for the same period last year. European growth was driven by retail expansion and new products introduced into the U.K. market.

During the year ending June 30, 2007, the Company expanded its consumer business with the introduction of Promensil into Italy and Switzerland. Novogen’s marketing strategy of developing consumer health brands through consumer campaigns, continual health care professional communications and retail expansion will continue. Promensil is a market leading brand in most countries it which it competes and future growth is expected to be achieved through leveraging the Promensil brand into new markets.

Product Research and Development.

Anti-inflammatory drug development

In August 2006, the Company announced that its investigational anti-inflammatory compound NV-52 had entered its second human clinical study in Australia. NV-52 is being developed to target inflammatory bowel disease. The study evaluated the compound’s safety and tested the ability of the drug to change certain inflammatory

markers in the blood. Both Phase I clinical studies in healthy volunteers have been completed.

Cancer drug development

The Company has established a subsidiary company, Marshall Edwards to develop and commercialize its anti-cancer drug candidates. Marshall Edwards is listed on the Nasdaq Global Market under the symbol MSHL. Novogen currently owns 71.9% of Marshall Edwards.

Phenoxodiol

The Group’s lead anti-cancer drug, phenoxodiol, continued its clinical development program through Marshall Edwards. Phenoxodiol is currently being evaluated as a therapy for late stage chemo resistant ovarian, prostate and cervical cancers.

In May 2006, Marshall Edwards received a SPA from the FDA on a pivotal Phase III study of phenoxodiol as a chemo-sensitizing agent in combination with carboplatin in women with platinum-resistant ovarian cancer. The SPA process allows for FDA evaluation of a clinical trial protocol that will form the basis of an efficacy claim for a marketing application, and provides an agreement that the study design, including number of patients, clinical endpoints and analyses are acceptable to the FDA. As a Fast Track product, phenoxodiol will be eligible to apply for accelerated approval and priority review by the FDA of the future marketing application for this indication.

During fiscal year 2007, Marshall Edwards made progress in the clinical development of phenoxodiol including:

	•		In September 2006, Marshall Edwards announced the results of a preclinical study conducted at Purdue University which suggests that phenoxodiol may be effective in the treatment of prostate cancer through its ability to target the 75 alpha protein, an isoform of tumor-associated NADH oxidase (or tNOX), which appears to be the particular tNOX isoform found in prostate cancer patients. This study provides further support that a surface oxidase is a target for phenoxodiol.
	•		In November 2006, Marshall Edwards announced that the first patient in Australia commenced treatment in the Phase III Ovarian Tumor Response (OVATURE) clinical trial. The OVATURE trial is being conducted under a SPA agreement pursuant to which the FDA in the U.S. reviewed and agreed with the study design of the pivotal Phase III study of phenoxodiol in combination with carboplatin for women with platinum-resistant ovarian cancer.
	•		In May 2007, Marshall Edwards announced the enrolment of the first patient in the U.S. to the OVATURE trial.
	•		In August 2007 Marshall Edwards announced the enrolment of the first patient in Europe to the OVATURE trial.

•

In October 2007, Marshall Edwards announced that the Yale Cancer Center had commenced recruiting 60 men for a clinical trial investigating phenoxodiol as a potential first line therapy for prostate cancer. The trial is to be funded by Yale Cancer Center. The trial is designed to measure reduction in Prostate Specific Antigen levels and to generate safety data.

Wound healing

In May 1999, the Company established its U.S. subsidiary Glycotex, Inc. to provide a commercial vehicle for Novogen’s glucan technology. This technology is being developed for a wide range of wound healing applications.

Novogen currently owns 81.3% of Glycotex Inc.

Source and Availability of Raw Materials

Isoflavones

Recently, the Company entered into a contract with a third party supplier of isoflavones to supply quality isoflavones for use in consumer products. As provided in the supply agreement, the prices may be increased by no more than the increase in the published Consumer Price Index for Sydney over the preceding twelve months. The Company also uses contract formulators and packers in Australia to tablet and pack the final product.

In May 2007, the Company announced that it had decommissioned the existing isoflavone extraction facility at Wyong NSW. In October 2007, the Company announced that it had sold the property realizing A$4.0 million gross proceeds.

Phenolic Compounds

Some of the synthetic phenolic compounds used in the Company’s pre-clinical and clinical trials are currently being manufactured at the pilot facility located at North Ryde. The facility manufactures small quantities of new compounds for the cancer and cardiovascular program as well as anti-inflammatory compounds. The facility will provide sufficient product for pre-clinical and initial clinical trial purposes. The Company has taken the strategic decision not to manufacture compounds for larger clinical trials or commercial scale Active Pharmaceutical Ingredients (API) for its drug candidates, including phenoxodiol and triphendiol (formally NV-196) as these can be more economically supplied by third parties with particular expertise in this area. The contract facilities that have been identified are registered with the FDA as drug manufacturing establishments, have a track record of large scale API manufacture and have already invested in capital and equipment.

Marshall Edwards Pty Limited, a subsidiary of Marshall Edwards, has entered into contracts with third parties to develop a scalable manufacturing method to ensure that sufficient quantities of phenoxodiol can be manufactured in compliance with cGMP

(Current Good Manufacturing Practices) and to complete the analytical and stability work necessary for a New Drug Application (“NDA”) submission. An NDA will be submitted to the FDA if the Phase III OVATURE clinical trial is successful. The FDA’s approval of the NDA is required to market phenoxodiol. The Company will need to arrange similar contracts in the future to secure the supply of other drug compounds.

Marketing Channels

The Company is currently marketing dietary supplement products for people whose intake of isoflavones is inadequate.

The marketing strategy is for the Company to continue to be responsible for the direct marketing of its current and proposed dietary supplement products in Australia, New Zealand, Canada the UK and the Netherlands. The Company will rely on distributors and other third parties for the sale of the Company’s dietary supplements in other countries and regions. The Company has entered into agency distribution agreements in Singapore, South Africa, Austria, Ireland, Italy and Switzerland and licensed the U.S. rights to Promensil and Trinovin to Natrol,Inc.

Patent Protection

The first and most important area of the intellectual property (“IP”) of the Company is the Company’s discovery that isoflavonoid-derived phenolic compounds have biological activity. This is the basis of the Company’s drug discovery and development program. A number of these phenolic compounds have been identified by the Company as offering significant commercial potential as new pharmaceuticals and these are currently under development. The Company has multiple PCT (Patent Cooperation Treaty) applications pending relating to these compounds and a wide range of therapeutic indications.

The second area of IP is the proprietary technology that allows the method of extraction of all four principal estrogenic isoflavones found in the human diet. This technology has allowed the development of Promensil and Trinovin, which are supplement products that deliver standardized levels of all four isoflavones — daidzein, genistein, formononetin and biochanin.

The Company pursues an aggressive patent application filing strategy, filing PCT patent applications which can be used to pursue patent protection in member countries with significant markets for our products. All current patent applications are filed in the name of, or assigned to either Novogen Inc., Novogen’s wholly-owned U.S. subsidiary, or Novogen Research Pty Ltd, one of Novogen’s wholly-owned Australian subsidiaries.

The Company believes that the protection of its intellectual property is fundamental to the success of its businesses. During the year the Company commenced a number of patent infringement litigation proceedings against companies which were in breach of certain patents. The Company has received A$1,026,000 in settlements resulting from actions resolved in Canada and the U.S in fiscal 2007. The Company is continuing to

prosecute its IP rights and in June announced that the Vienna Commercial Court had upheld a provisional injunction against an Austrian company, APOtrend. The Company has provided a guarantee to the value of 250,000 Euros with the Vienna Commercial Court to confirm its commitment to the ongoing enforcement process.

During the year 10 patents were granted over the Company’s intellectual property. These patents contain claims encompassing dietary isoflavone supplements, isoflavone formulations and uses, synthetic drug compounds and uses, and a novel food product and are listed below.

Turkey

Patent # TR200102367B		Therapeutic methods and compositions involving isoflavones

Hong Kong

Patent # HK1053119		Food product and process

These grants bring the number of Company patents granted in the U.S. and other countries to 73.

In April 2006, the Company announced that it had been granted patent claims in the United States to pharmaceutical compositions of the anti-cancer drug candidate phenoxodiol. The granted claims in the U.S. are to pharmaceutical compositions and unit dose forms of various substituted isoflav-3-enes (including phenoxodiol). The period of exclusivity is anticipated to be at least until 2017, with up to a five year patent term extension to 2022 potentially available under U.S. legislation known as the Hatch-Waxman Act.

Trademark Protection

The Company also seeks IP protection through trademark registration of product names and corporate logos. The Company has an active program of registering all product trademarks in significant markets.

Licensing Arrangements

In 1997, the Company granted an exclusive license for the use of soy under three Novogen patent applications to Dupont Protein Technologies, Inc. (“DTI”) and DTI’s subsequent joint venture with Solae LLC (formerly know as Bunge). During fiscal 2005, this licence was transferred to Archer Daniels Midland Company (ADM). Under the terms of the transfer, ADM assumes the rights and obligations formally held by Solae LLC, including the obligation for royalty and milestone payments under the terms of the licence. In fiscal 2007, the Company received A$1.7 million royalty in connection with its licence agreement with Solae LLC (licence transferred to ADM). In fiscal 2006, the Company received A$1.2 million from ADM and A$0.5 million from Melbrosin International GmbH & Co (“Melbrosin”). In fiscal 2007, the Company received payment of A$2.1 million in litigation settlements and licence fees from Sante Naturelle, Chattem, Inc. and Natrol, Inc. See “Item 5. Operating and Financial Review and Prospects – Operating Results – Fiscal 2007 v. Fiscal 2006.”

Australian Government

The activities of the Company are subject to numerous Australian laws and regulations, including those described below.

The Australian Corporations Law is the main body of law governing companies incorporated in Australia, such as Novogen and its Australian subsidiaries. The Australian Securities and Investments Commission is an Australian Government organization which administratively enforces legislation covering matters such as directors’ duties and responsibilities, preparation of accounts, auditor control, issue and transfer of shares, control of shareholders’ meetings, rights of minority interests, amendments to capital structure, preparation and filing of public documents such as annual reports, changes in directors and changes to capital.

The Australian Stock Exchange imposes listing rules on all listed companies, such as Novogen. The rules cover issues such as continuous and immediate disclosure to the market of relevant information, periodic financial reporting and the prior approval of reports to shareholders.

The Company believes that it materially complies with the foregoing Australian laws and regulations pertaining to public and private companies.

The Company’s products and manufacturing facilities also are regulated by various Australian federal and state authorities. The Company’s manufacturing facilities hold the

appropriate licenses concerning hazardous chemical use and the manufacture of health products.

Australian Regulatory Requirements rements’

The Therapeutic Goods Act 1989, or 1989 Act, sets out the legal requirements for the import, export, manufacture and supply of pharmaceutical products in Australia. The 1989 Act requires that all pharmaceutical products to be imported into, supplied in, manufactured in or exported from Australia be included in the Australian Register of Therapeutic Goods, or ARTG, unless specifically exempted under the Act.

In order to ensure that a product can be included in the ARTG, a sponsoring company must make an application to the Therapeutic Goods Administration, or TGA. The application usually consists of a form accompanied by data (based on the European Union requirements) to support the quality, safety and efficacy of the drug and payment of a fee. Application details are available on the TGA website http://www.tga.gov.au.

The first phase of evaluation, known as the Application Entry Process, is usually a short period during which an application is assessed on an administrative level to ensure that it complies with the basic guidelines. The TGA must decide within at least 40 working days whether it will accept the application for evaluation.

Once an application is accepted for evaluation, aspects of the data provided are allocated to evaluators within the different relevant sections, who prepare evaluation reports. Following evaluation, the chemistry and quality control aspects of a product may be referred to a sub-committee of the Australian Drug and Evaluation Committee, or ADEC, to review the relevant evaluation reports. The evaluation reports (along with any resolutions of the ADEC sub-committee) are then sent to the sponsoring company who has the opportunity to comment on the views expressed within the evaluation report, provide corrections and to submit supplementary data to address any issues raised in the evaluation reports.

Once the evaluations are complete, the TGA prepares a summary document on the key issues on which advice will be sought from the ADEC. This summary is sent to the sponsoring company which is able to submit a response to the ADEC dealing with issues raised in the summary and those not previously addressed in the evaluation report. The ADEC provides independent advice on the quality, risk-benefit, effectiveness and access of the drug and conduct medical and scientific evaluations of the application. The ADEC’s resolutions are provided to the sponsoring company 5 working days after the ADEC meeting.

The TGA takes into account the advice of the ADEC in reaching a decision to approve or reject a product. Any approval for registration on the ARTG may have conditions associated with it.

From the time that the TGA accepts the initial application for evaluation, the TGA must complete the evaluation and make a decision on the registration of the product within at least 255 working days. The TGA also has a system of priority evaluation for products that meet certain criteria, including where the product is a new chemical entity that it is not otherwise available on the market as an approved product, and is for the treatment of a serious, life-threatening illness for which other therapies are either ineffective or not available.

U.S. Regulatory Requirements

The FDA, and comparable regulatory agencies in other countries, regulate and impose substantial requirements upon the research, development, pre-clinical and clinical testing, labeling, manufacture, quality control, storage, approval, advertising, promotion, marketing, distribution and export of pharmaceutical products including biologics, as well as significant reporting and record-keeping obligations. State governments may also impose obligations in these areas.

In the U.S., pharmaceutical products are regulated by the FDA under the Federal Food Drug and Cosmetic Act or FDCA and other laws including in the case of biologics, the Public Health Service Act. We believe, but cannot be certain, that our products will be regulated as drugs by the FDA. The process required by the FDA before drugs may be marketed in the United States generally involves the following:

	•		pre-clinical laboratory evaluations, including formulation and stability testing, and animal tests performed under the FDA’s Good Laboratory Practices regulations to assess potential safety and effectiveness;
	•		submission and approval of an Investigational New Drug Application (“IND”), including results of pre-clinical tests, manufacturing information and protocols for clinical tests, which must become effective before clinical trials may begin in the U.S.;
	•		obtaining approval of Institutional Review Boards to administer the products to human subjects in clinical trials;
	•		adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for the product’s intended use;
	•		development of manufacturing processes which conform to FDA current Good Manufacturing Practices, or cGMPs, as confirmed by FDA inspection;
	•		submission of pre-clinical and clinical studies results, and chemistry, manufacturing and controls information on the product to the FDA in a NDA; and
	•		FDA review and approval of an NDA, prior to any commercial sale or shipment of a product.

The testing and approval process requires substantial time, effort, and financial resources, and we cannot be certain that any approval will be granted on a timely basis, if at all.

The results of the pre-clinical studies, together with initial specified manufacturing information, the proposed clinical trial protocol, and information about the participating investigators are submitted to the FDA as part of an IND, which must become effective before we may begin human clinical trials in the U.S. Additionally, an independent Institutional Review Board must review and approve each study protocol and oversee the conduct of the trial. An IND becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day period, raises concerns or questions about the conduct of the trials or information in the IND and imposes a clinical hold. If the FDA imposes a clinical hold, the IND sponsor must resolve the FDA’s concerns before clinical trials can begin. Pre-clinical tests and studies can take several years to complete, and there is no guarantee that an IND we submit based on such tests and studies will become effective within any specific time period, if at all.

Human clinical trials are typically conducted in three sequential phases that may overlap.

•   Phase I: The drug is initially introduced into healthy human subjects or patients and tested for safety and dosage tolerance. Absorption, metabolism, distribution, and excretion testing is generally performed at this stage.

•   Phase II: The drug is studied in controlled, exploratory therapeutic trials in a limited number of subjects with the disease or medical condition for which the new drug is intended to be used in order to identify possible adverse effects and safety risks, to determine the preliminary or potential efficacy of the product for specific targeted diseases or medical conditions, and to determine dosage tolerance and the optimal effective dose.

•   Phase III: When Phase II studies demonstrate that a specific dosage range of the drug is likely to be effective and the drug has an acceptable safety profile, controlled, large-scale therapeutic Phase III trials are undertaken at multiple study sites to demonstrate clinical efficacy and to further test for safety in an expanded patient population.

We cannot be certain that we will successfully complete Phase I, Phase II, or Phase III testing of our products within any specific time period, if at all. Furthermore, the FDA, the Institutional Review Board or we may suspend or terminate clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

Results of pre-clinical studies and clinical trials, as well as detailed information about the manufacturing process, quality control methods, and product composition, among other things, are submitted to the FDA as part of an NDA seeking approval to market and commercially distribute the product on the basis of a determination that the product is

safe and effective for its intended use. Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless cGMP compliance is satisfactory. If applicable regulatory criteria are not satisfied, the FDA may deny the NDA or require additional testing or information. As a condition of approval, the FDA also may require post-marketing testing or surveillance to monitor the product’s safety or efficacy. Even after an NDA is approved, the FDA may impose additional obligations or restrictions (such as labeling changes), or even suspend or withdraw a product approval on the basis of data that arise after the product reaches the market, or if compliance with regulatory standards is not maintained. We cannot be certain that any NDA we submit will be approved by the FDA on a timely basis, if at all. Also, any such approval may limit the indicated uses for which the product may be marketed. Any refusal to approve, delay in approval, suspension or withdrawal of approval, or restrictions on indicated uses could have a material adverse impact on our business prospects.

Each NDA must be accompanied by a user fee, pursuant to the requirements of the Prescription Drug User Fee Act, or PDUFA, and its amendments. According to the FDA’s fee schedule, effective on October 1, 2006 for the fiscal year 2007, the user fee for an application requiring clinical data, such as an NDA, is US$896,200. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual product fee for prescription drugs and biologics (US$49,750) and an annual establishment fee (US$313,100) on facilities used to manufacture prescription drugs and biologics. A written request can be submitted for a waiver for the application fee for the first human drug application that is filed by a small business, but there are no small business waivers for product or establishment fees. We are not at the stage of development with our products where we are subject to these fees, but they are significant expenditures that will be incurred in the future and must be paid at the time of application submissions to FDA.

Satisfaction of FDA requirements typically takes several years. The actual time required varies substantially, based upon the type, complexity, and novelty of the pharmaceutical product, among other things. Government regulation imposes costly and time-consuming requirements and restrictions throughout the product life cycle and may delay product marketing for a considerable period of time, limit product marketing or prevent marketing altogether. Success in pre-clinical or early stage clinical trials does not ensure success in later stage clinical trials. Data obtained from pre-clinical and clinical activities are not always conclusive and may be susceptible to varying interpretations that could delay, limit, or prevent marketing approval. Even if a product receives marketing approval, the approval is limited to specific clinical indications. Further, even after marketing approval is obtained, the discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.

After product approval, there are continuing significant regulatory requirements imposed by the FDA, including record-keeping requirements, obligations to report adverse side effects in patients using the products and restrictions on advertising and promotional

activities. Quality control and manufacturing procedures must continue to conform to cGMPs and the FDA periodically inspects facilities to assess cGMP compliance. Additionally, post-approval changes in ingredient composition, manufacturing processes or facilities, product labeling, or other areas may require submission of an NDA Supplement to the FDA for review and approval. New indications will require additional clinical tests and submission of an NDA Supplement. Failure to comply with FDA regulatory requirements may result in an enforcement action by the FDA, including warning letters, product recalls, suspension or revocation of product approval, seizure of product to prevent distribution, impositions of injunctions prohibiting product manufacture or distribution and civil and criminal penalties. Maintaining compliance is costly and time-consuming. We cannot be certain that we, or our present or future suppliers or third-party manufacturers, will be able to comply with all FDA regulatory requirements. The potential consequences of noncompliance could have a material adverse impact on our business prospects.

The FDA’s policies may change, and additional governmental regulations may be enacted that could delay, limit, or prevent regulatory approval of our products or affect our ability to manufacture, market, or distribute our products after approval. Moreover, increased attention to the containment of healthcare costs in the U.S. and in foreign markets could result in new government regulations that could have a material adverse effect on our business. Our failure to obtain coverage, an adequate level of reimbursement, or acceptable prices for our future products could diminish any revenues we may be able to generate. Our ability to commercialize future products will depend in part on the extent to which coverage and reimbursement for the products will be available from government and health administration authorities, private health insurers and other third-party payers. European Union, the U.S. government and other third-party payers are increasingly attempting to contain healthcare costs by consideration of new laws and regulations limiting both coverage and the level of reimbursement for new drugs. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the U.S. or abroad.

Our activities also may be subject to state laws and regulations that affect our ability to develop and sell our products. We are also subject to numerous federal, state, and local laws relating to such matters as safe working conditions, clinical, laboratory, and manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future, and the failure to comply may have a material adverse impact on our business prospects.

The FDCA includes provisions designed to facilitate and expedite the development and review of drugs and biological products intended for treatment of serious or life-threatening conditions that demonstrate the potential to address unmet medical needs for such conditions. These provisions set forth a procedure for designation of a drug as a “Fast Track product.” The Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. A product designated as

Fast Track is ordinarily eligible for additional programs for expediting development and review, but products that are not in Fast Track drug development programs may also be able to take advantage of these programs. These programs include priority review of NDAs and accelerated approval. Drug approval under the accelerated approval regulations may be based on evidence of clinical effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. A postmarketing clinical study will be required to verify clinical benefit, and other restrictions to assure safe use may be imposed.

Under the Drug Price Competition and Patent Term Restoration Act of 1984, a sponsor may obtain marketing exclusivity for a period of time following FDA approval of certain drug applications, regardless of patent status, if the drug is a new chemical entity or if new clinical studies were required to support the marketing application for the drug. This marketing exclusivity prevents a third party from obtaining FDA approval for an identical or nearly identical drug under an Abbreviated New Drug Application or a “505(b)(2) New Drug Application.” The statute also allows a patent owner to obtain an extension of applicable patent terms for a period equal to one-half the period of time elapsed between the filing of an IND and the filing of the corresponding NDA plus the period of time between the filing of the NDA and FDA approval, with a five year maximum patent extension. We cannot be certain that Novogen will be able to take advantage of either the patent term extension or marketing exclusivity provisions of these laws.

The Best Pharmaceuticals for Children Act (BPCA), signed into law on January 4, 2002, was reauthorized and amended by the FDA Amendments Act of 2007 (FDAAA). The reauthorization of BPCA provides an additional six months of patent protection to NDA applicants that conduct acceptable pediatric studies of new and currently-marketed drug products for which pediatric information would be beneficial, as identified by FDA in a Pediatric Written Request. The Pediatric Research Equity Act (PREA), signed into law on December 3, 2003, also was reauthorized and amended by FDAAA. The reauthorization of PREA requires that most applications for drugs and biologics include a pediatric assessment (unless waived or deferred) to ensure the drugs’ and biologics’ safety and effectiveness in children. Such pediatric assessment must contain data, gathered using appropriate formulations for each age group for which the assessment is required, that are adequate to assess the safety and effectiveness of the drug or the biological product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the drug or the biological product is safe and effective. The pediatric assessments can only be deferred provided there is a timeline for the completion of such studies. FDA may waive (partially or fully) the pediatric assessment requirement for several reasons, including if the applicant can demonstrate that reasonable attempts to produce a pediatric formulation necessary for that age group have failed.

European Union Regulatory Requirements

Outside the U.S., our ability to market our products will also be contingent upon receiving marketing authorizations from the appropriate regulatory authorities and

compliance with applicable post-approval regulatory requirements. Although the specific requirements and restrictions vary from country to country, as a general matter, foreign regulatory systems include risks similar to those associated with FDA regulation, described above. Under European Union (“EU”) regulatory systems, marketing authorizations may be submitted either under a centralized or a national procedure. Under the centralized procedure, a single application to the European Medicines Agency (EMEA) leads to an approval granted by the European Commission which permits the marketing of the product throughout the EU. The centralized procedure is mandatory for certain classes of medicinal products, but optional for others. For example, all medicinal products developed by certain biotechnological means, and those developed for cancer and other specified diseases and disorders, must be authorized via the centralized procedure. We assume that the centralized procedure will apply to our products that are developed by means of a biotechnology process. The national procedure is used for products that are not required to be authorized by the centralized procedure. Under the national procedure, an application for a marketing authorization is submitted to the competent authority of one member state of the EU. The holders of a national marketing authorization may submit further applications to the competent authorities of the remaining member states via either the decentralized or mutual recognition procedure. The decentralized procedure enables applicants to submit an identical application to the competent authorities of all member states where approval is sought at the same time as the first application, while under the mutual recognition procedure, products are authorized initially in one member state, and other member states where approval is sought are then requested to recognize the original authorization based upon an assessment report prepared by the original authorizing competent authority. Both the decentralized and mutual recognition procedures should take no longer than 90 days, but if one member state makes an objection, which under the legislation can only be based on a possible risk to human health, the application will be automatically referred to the Committee for Medicinal Products for Human Use (CHMP) of the EMEA. If a referral for arbitration is made, the procedure is suspended. However, member states that have already approved the application may, at the request of the applicant, authorize the product in question without waiting for the result of the arbitration. Such authorizations will be without prejudice to the outcome of the arbitration. For all other concerned member states, the opinion of the CHMP, which is binding, could support or reject the objection or alternatively could reach a compromise position acceptable to all EU countries concerned. The arbitration procedure may take an additional year before a final decision is reached and may require the delivery of additional data.

As with FDA approval, we may not be able to secure regulatory approvals in Europe in a timely manner, if at all. Additionally, as in the U.S., post-approval regulatory requirements, such as those regarding product manufacture, marketing, or distribution, would apply to any product that is approved in Europe, and failure to comply with such obligations could have a material adverse effect on our ability to successfully commercialize any product.

The conduct of clinical trials in the EU is governed by the European Clinical Trials Directive (2001/20/EC), which was implemented in May 2004. This Directive governs

how regulatory bodies in member states control clinical trials. No clinical trial may be started without a clinical trial authorization granted by the national competent authority and favorable ethics approval.

Accordingly, there is a marked degree of change and uncertainty both in the regulation of clinical trials and in respect of marketing authorizations which face us for our products in Europe.

Dietary Supplements

The Company’s products, Promensil and Trinovin are classified as “dietary supplements”. “Dietary supplements”, although subject to the FDCA, are treated differently than pharmaceuticals and are the subject of legislation known as the Dietary Supplement Health and Education Act of 1994 (the “Dietary Supplement Act”). The Dietary Supplement Act defines dietary supplements, and regulates claims and labeling of dietary supplements. Under the Dietary Supplement Act, a company is responsible for determining that the dietary supplements it manufactures or distributes are safe and that any representations or claims made about them are substantiated by adequate evidence to show that they are not false or misleading. The FDA has published a proposed rule for cGMP regulations for dietary supplements. The Company believes that Promensil and Trinovin comply with the claims, labeling and other rules relating to dietary supplements. In October 2006, the Company licensed its dietary supplements products in the U.S. to Natrol, Inc.

Organizational Structure

Corporate Structure
Novogen Limited is a company limited by shares and is incorporated and domiciled in Australia. Novogen Limited and its controlled entities “Novogen” or “Group” have prepared a consolidated financial report incorporating the entities that Novogen Limited controlled during fiscal 2007, which included the following controlled entities:

Property, Plants and Equipment

The Company’s major isoflavone extraction manufacturing plant was located in Wyong in New South Wales. This plant was used to manufacture the active raw material used in the Company’s dietary supplement products. The Company owned the land and buildings at Wyong site which covers an area of approximately 3.37 hectares. The Company also owned the equipment used in the extraction process and laboratories. In May 2007 the Company announced that it had entered into new arrangements for the worldwide supply of isoflavones used in its consumer dietary supplement products. As a result, the extraction facility located at Wyong NSW was decommissioned and the property sold. The sale of the Wyong facility was concluded on October 10, 2007. The Company received gross proceeds of A$4.0 million from the sale.

The pilot plant used for the manufacture of the small scale synthetic drug compounds is located in the Company’s leased premises in North Ryde, Sydney. The North Ryde premises occupies 1,088 square meters. These premises are also used as Novogen’s corporate headquarters. The Company owns the equipment used in the pilot plant. The plant has enough capacity to produce clinical trial quantities up to Phase II of the Company’s product candidates.

Item 4A. Unresolved Staff Comments

None

Item 5. Operating and Financial Review and Prospects

The following discussion and analysis should be read in conjunction with “Item 18. Financial Statements” included below. Operating results are not necessarily indicative of results that may occur in future periods. This discussion and analysis contains forward-looking statements that involve risks uncertainties and assumptions. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors including, but not limited to, those set forth under “Forward-Looking Statements” and “Risk Factors” in Item 3. “Key Information” included above in this Annual Report. All forward-looking statements included in this document are based on the information available to us on the date of this document and we assume no obligation to update any forward-looking statements contained in this Annual Report.

Application of Critical Accounting Policies

The significant accounting policies are summarized in Note 1 to the Consolidated Financial Statements under Item 18 of this Annual Report. A reconciliation of operating results to U.S. generally accepted accounting principles (“US GAAP”) is included in Note 24 to the Consolidated Financial Statements under Item 18 of this Annual Report

Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. In determining the economic benefits, provisions are made for certain trade discounts and returned goods. The following specific recognition criteria must also be met:

Sale of goods

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer when the goods have been dispatched to a customer pursuant to a sales order and invoice.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

Government grants

Grant income is recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be followed. Grant income is recognised in the income statement over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Royalties

Royalty revenue is recognised on an accruals basis in accordance with the substance of the relevant agreements.

Litigation Settlement

Revenue is recognised when the risks and rewards have been transferred, which is considered to occur on settlement.

Inventory Adjustments

Inventories are measured at the lower of cost or net realizable value. The Company reviews the components of inventory on a regular basis for excess, obsolete and impaired inventory based on estimated future usage and sales. The likelihood of any material inventory write-downs is dependent on rapid changes in customer demand or new product introductions by competitors.

Research and development expenses

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Capitalised development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

Share-based payment transactions

The Group provides benefits to employees (including senior Executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions) under the terms of the Employee Share Option Plan.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a binomial model. Further details are given in Note 11.

In valuing equity-settled transactions, no account is taken of any performance conditions.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the vesting period of the instrument. The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Impairment of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Derecognition and disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Results of Operations

The following table provides a summary of revenues and expenses to supplement the more detailed discussions below:

INCOME STATEMENTS for the year ended 30 June, 2007

Operating Results – Fiscal 2007 v Fiscal 2006

Revenue

The Group earned gross revenues for the year ended June 30, 2007 of A$17.3 million versus A$17.4 million in the previous corresponding period, a decrease of A$0.1 million. The decrease in revenue was due to decrease in consumer product sales partially offset by increase in other revenue. Sale of the Company’s consumer products decreased by A$2.8 million or 21%, from A$13.5 million for the previous year to A$10.7 million for the year ended June 30, 2007. The decrease in consumer product sales was mainly due to the licensing of the U.S. consumer products to Natrol, Inc. Other revenue increased by A$2.6 million to A$6.6 million verses A$3.9 million for the previous corresponding period. The increase in other revenue was mainly due to licence fees received from Natrol, Inc, litigation settlements amounts received from Sante Naturelle and Chattem, Inc. for licences and settlement of patent infringements relating to consumer products in Canada and the U.S. and sale of red clover inventories which were in excess of our production requirements. Interest revenues also increased reflecting higher interest rates achieved on invested cash balances.

Total revenue, adjusted for U.S. GAAP, for the year ended June 30, 2007 of A$14.9 million versus A$15.1 million in the previous corresponding period, an decrease of A$0.2 million. Revenue under U.S. GAAP is reduced by certain trade promotions which are treated as discounts to Sales Revenue. These trade promotion expenditures are treated as a marketing expense under AIFRS. Other Revenue under U.S. GAAP is also reduced by interest revenue being recognized in Other Income whereas under AIFRS interest income is recognized in Other Revenue. See Note 24 “Differences between AIFRS and U.S. GAAP” for detailed U.S. GAAP formatted Statement of Financial Performance.

Consumer product sales

Sales in Australasia (including exports) for the year ended June 30, 2007 were A$4.5 million, a decrease of A$0.7 million or 13% from A$5.2 million for the previous year due to de-stocking in the wholesaler supply channels and a decline in the size of the menopause treatment market. Sales revenue in U.S. was A$1.4 million for the four months ending October 2006 (U.S. consumer products were licensed to Natrol, Inc. from the end of October 2006) down from A$3.4 million for the twelve month period to June 30 last year. Canada sales for the year ended June 30 2007 declined by A$0.6 million to A$1.7 million down from A$2.3 million for the previous 12 month period, due to significant inventory reduction in the two leading retail chains in Canada. Sales revenue in Europe increased by A$0.5 million to A$3.1 million for the twelve month period to June 30, 2007 up from A$2.6 million for the same period last year. European growth was driven by retail expansion and new products into U.K.

During the year ending June 30, 2007 the Company expanded its consumer business with the introduction of Promensil into Italy and Switzerland. Novogen’s marketing strategy of developing consumer health brands through consumer campaigns, continual

health care professional communications and retail expansion will continue. Promensil is a market leading brand in most countries it competes in and future growth is expected to be achieved through leveraging the Promensil brand into new markets.

Costs and Expenses

Total expenses before interest and tax increased by A$8.2 million to A$44.3 million for the year ended June 30, 2007 from A$36.1 million for the previous year. Cost of sales increased by A$1.5 million due to the costs of running the Wyong production facility at less than normal operation capacity resulting in production cost variances not capitalised into inventory. Selling and promotional expenses decreased by A$1.1 million to A$7.9 million. The decrease was associated with decrease in costs in the U.S. following the U.S. consumer products being licensed to Natrol, Inc. from the end of October 2006. Research and development expenses were A$16.1 million, an increase of A$4.1 million from A$12.0 million last year. The increase was primarily due to expenses associated with the Phase III OVATURE clinical trial being conducted by Marshall Edwards. Costs were also incurred in connection with production scale up activities of phenoxodiol and manufacture of clinical trial drug supplies. Research and development expenses also reflected an increase in costs associated with pre clinical development of glucoprime the Company’s glucan based product being developed by the Company’s subsidiary Glycotex, Inc. General and administration expenses were A$12.9 million, an increase of A$4.1 million from A$8.8 million for the same period last year. The increase was primarily due to A$2.1 million representing non-cash, share based payments incurred by Marshall Edwards in establishing the Standby Equity Distribution Agreement with YA Global Investments, LP (formerly known as Cornell Capital Partners, LP) and a A$1.4 million employee termination payment

Net loss

The operating loss attributable to the Company’s shareholders for the financial year, after allowing for losses attributable to minority interests of A$4.3 million, increased by A$3.8 million to A$20.0 million from a loss of A$16.2 million for the previous year.

The net loss after income tax for the consolidated group for the year ended June 30, 2007 increased by A$6.4 million to A$24.3 million from A$17.9 million for the previous year.

Operating Results – Fiscal 2006 v Fiscal 2005

Revenue

The Group earned gross revenues remained constant at A$17.4 million in fiscal 2006 and 2005.

Total revenue, adjusted for U.S. GAAP, for the year ended June 30, 2006 of A$15.1 million versus A$15.6 million for the previous corresponding period, a decrease of A$0.5 million. The decrease in total revenue was due to higher level of trade promotion expenditure for the year ended June 30, 2006 as compared with the previous period. Revenue under U.S. GAAP is reduced by certain trade promotions which are treated as discounts to Sales Revenue. These trade promotion expenditures are treated as a marketing expense under AIFRS. Other Revenue under U.S. GAAP is also reduced by interest revenue being recognized in Other Income whereas under AIFRS interest income is recognized in Other Operating Revenue. See Note 24 “Differences between AIFRS and U.S. GAAP” for detailed U.S. GAAP formatted Statement of Financial Performance.

Consumer product sales

Sales in Australasia for the year ended June 30, 2006 were A$5.2 million, an increase of A$0.6 million or 13% from A$4.6 million for the previous year. Sales in North America were, A$5.7 million, a reduction of A$0.5 million or 8% from A$6.2 million for the previous year. Sales in Europe of A$2.6 million for the year were up slightly by A$0.1 million from A$2.5 million for the previous corresponding period.

During the financial year, the consumer business launched three new product introductions into selected markets including Promensil Post Menopause into the U.S. market in September 2005, Promensil After Menopause in Canada in January 2006 and a Promensil menopause test in Australia in March 2006. These products will be launched progressively into other markets and are targeted to augment the Promensil brand by extending the market to include an after menopause product and menopause test to help women diagnose the symptoms of menopause.

Sales levels of our consumer products in Australia, Canada and to a lesser extent in Europe, have continued to benefit from our targeted promotional programs. Sales in the U.S. market were affected by the market decline in the natural menopause product market of 18%. This decline was due to reduced advertising, sales and marketing effort across the sector and increased competition from hormone replacement therapy products which appear to be regaining some of the markets impacted by the recent controversies surrounding safety issues. In October 2006, the Company licensed the U.S. rights to Promensil and Trinovin brands to Natrol, Inc. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market.

Costs and Expenses

Total expenses before interest and tax increased by A$5.8 million to A$36.1 million for the year ended June 30, 2006 from A$30.3 million for the previous year. Cost of sales increased by A$0.8 million due to the costs of running the Wyong production facility at less than normal operation capacity resulting in production cost variances not capitalised into inventory. Selling and promotional expenses increased by A$0.6 million to A$9.0

million. The increase was associated with the expenses incurred to fund new product launches and to continue our targeted promotional program. Research and development expenses were A$12.0 million, an increase of A$1.8 million from A$10.2 million for the same period last year, reflecting the costs associated with progressing the pre-clinical and clinical development program including the anti-cancer program being conducted by Marshall Edwards and manufacturing scale-up costs associated with phenoxodiol. General and administrative expenses were A$8.8 million an increase of A$2.2 million from A$6.6 million for the same period last year. The increased costs included the costs associated with the withdrawn registration statement for Glycotex, Inc. of A$1.0 million, A$0.2 million increase in share based payments to employees and consultants and increases in other corporate costs.

Net loss

The operating loss attributable to Novogen shareholders for the fiscal year 2006, after allowing for losses attributable to minority interests of A$1.7 million, increased by A$4.7 million to A$16.2 million from a loss of A$11.5 million for the previous year.

The net loss from ordinary activities after income tax for the consolidated group for the year ended June 30, 2006 increased by A$5.2 million to A$17.9 million from A$12.7 million for the previous year. The increase in the Company’s net loss for the year ended June 30, 2006 was due to higher cost of goods due to the costs of running the Wyong production facility at less than normal operation capacity resulting in production cost variances not capitalised into inventory, higher sales and marketing expenditure, increased research and development costs and additional administration and general expenses.

Liquidity and capital resources

The Company has continued to finance its operations primarily from equity capital.

At June 30, 2007, the Group had cash balances of A$39.5 million, an increase of A$6.0 million from the previous year’s balance of A$33.5 million. The increase in cash balances resulted from the proceeds of a private placement by Novogen’s U.S. subsidiary Marshall Edwards completed in July 2006. Marshall Edwards received proceeds of US$16.8 million net of certain commissions and other costs. Also, Novogen’s U.S. subsidiary Glycotex, Inc. raised US$1.6 million in a private placement completed in February 2007. The funds raised are to be used by the respective companies to fund their research & development programs.

Cash was used to fund the Company’s operations including the pivotal OVATURE clinical trial program for the anti-cancer drug phenoxodiol, being undertaken by MEI. Cash resources were also used to fund the ongoing efforts in the areas of cardiovascular and anti-inflammatory research and development. Cash was also used to supplement the cash flows from the consumer products business and general corporate purposes. At June 30, 2007 the Company held cash balances in U.S. dollars of US$18.3 million.

Marshall Edwards post balance date capital raising

On August 1, 2007, Marshall Edwards entered into a securities subscription agreement with certain accredited investors providing for the private placement of 5,464,001 shares of its common stock at a purchase price of US$3.00 per share. The investors in the transaction also received a warrant to purchase an additional 4 shares of common stock for every block of 10 shares of common stock purchased. The warrants have an exercise price of US$3.60 per share. The warrants may be exercised beginning February 6, 2008 and will expire five years from the date of issuance, on August 6, 2012. Marshall Edwards also issued 62,091 warrants to Blue Trading, LLC, which acted as the placement agent in the private placement, as part of the placement fee. The warrants issued to Blue Trading, LLC have an exercise price of US$3.00 per share and each warrant is convertible for 4 shares of common stock. These warrants may be exercised immediately and will expire five years from the date of issuance, on August 6, 2012. Marshall Edwards closed the private placement on August 6, 2007 and received gross proceeds of US$16.4 million.

Marshall Edwards has entered into a registration rights agreement with the investors party to the securities subscription agreement, and Blue Trading, LLC, and agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) for the common stock and the common stock issuable upon exercise of the warrants sold pursuant to the securities subscription agreement for resale thereunder. Marshall Edwards filed the registration statement on October 2, 2007. The resale registration statement was declared effective on October 19, 2007.

In addition, Marshall Edwards has terminated its Standby Equity Distribution Agreement, dated as of July 11, 2006, with YA Global Investments, LP (formerly known as Cornell Capital Partners, LP) as amended.

The Company invests its cash and cash equivalents in interest bearing facilities with various maturity dates. At the end of fiscal 2007, deposits amounting to A$9.5 million had a weighted average interest rate of 6.35% and cash deposits of A$30.1 million had a weighted average interest rate of 3.84%.

The Company has arranged a multi option facility with St George Bank Limited, an Australian commercial bank, of A$1.0 million, A$0.5 million of which was unused at the end of fiscal 2007.

The Company does not hedge its foreign exchange exposures. The Company, however, continues to minimise foreign exchange risk by having international sales and marketing expenses being denominated in local currencies. See “Item 11 Quantitative and Qualitative Disclosures About Market Risk – Foreign Currency Risk”.

During fiscal 2007, the Company had net cash outflows from operating activities of A$14.6 million. Included in this amount are cash receipts of A$1.9 million of interest received from invested cash balances, A$1.5 million from the proceeds of government grants being primarily the Australian Pharmaceutical Partnerships Program grants for research and development and A$1.7 million royalty received from ADM. See “Item 4. Information on the Company- Business Overview – Clinical Developments — License Agreements”.

It is the opinion of the Company that the current level of working capital is sufficient to meet present requirements. There are no commitments for capital expenditure outstanding at the end of the financial year.

Research and Development

Research and development policy

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

The Company spent A$16.1 million on gross research and development expenditure during fiscal 2007. The Company spent A$12.0 million on gross research and development expenditure in fiscal 2006.

Due to the nature and uncertainty of the research and development projects being undertaken by the Company, it is not possible to reasonably estimate the cost and timing of project completion. The costs of research and development projects are not estimated on a project by project basis and to analyse costs between projects could only be performed on an arbitrary and subjective basis.

The progress on research and development projects and expenses is monitored and controlled in a number of ways:

•		All third party research and development including the conduct of clinical trials are carried out under contract. The contract details include project milestones and expenditure budgets. Senior Novogen research and development staff monitor the projects to ensure that milestones are achieved in a timely manner.
•		In-house research and development is managed by the Research and Development Director and senior research and development staff. Budgets are prepared annually and agreed by the Novogen Board. Expenses are monitored monthly, actual versus budget by expense line and in total.

Trend Information

Sales of the Company’s dietary supplements decreased by A$2.8 million in fiscal 2007 compared to fiscal 2006, following the licensing of Promensil and Trinovin brands in the U.S. to Natrol, Inc. The Company expects that in future, profitability will be improved in the consumer products business segment. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market.

The Company expects to continue its significant expenditure on research and development and the impact on cash resources and results from operations of this expenditure will vary with the extent and timing of the future clinical trial program. It is not possible to make accurate predictions of future operating results.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Table of Contractual Obligations

The following table summarizes our future payment obligation and commitments as at June 30, 2007.

Item 6. Directors, Senior Management and Employees.

DIRECTORS

The names and details of the Company’s Directors during the financial year and up to the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr. Philip A. Johnston (Chairman)
Mr. Christopher Naughton (Managing Director)
Professor Paul J. Nestel
Mr. Peter B. Simpson
Dr. Leanna C. Read – resigned from the Board on January 30, 2007
Mr. Geoffrey M. Leppinus
Professor Alan J. Husband (Executive Director)

Names, qualifications, experience and special responsibilities

Philip A. Johnston Non-Executive Chairman
Dip Eng (Production)

Non-Executive Director since 1997, Mr.Johnston was elected chairman of Novogen Limited effective January 1, 2001. Mr. Johnston has extensive experience in the pharmaceutical industry, including 9 years as an Executive Director of Wellcome Australia Limited. He was previously a Director of two subsidiary companies of GlaxoWellcome. Mr. Johnston has had responsibility for production, distribution, quality assurance and consumer product development. He has also been directly involved in the establishment of strategic alliances and joint ventures. Mr. Johnston has completed a number of executive development programs including the University of New South Wales and the London Business School.

During the last three years, Mr. Johnston has served as a Director and is currently a Director of the Australian Stock Exchange listed company, Lipa Pharmaceuticals Limited and Marshall Edwards, the Company’s U.S. subsidiary which is listed on the Nasdaq Global Market.

Christopher Naughton Managing Director
BEc, LLB

Managing Director since March 1997, Mr. Naughton joined Novogen Limited in 1996 as Commercial Director. Mr. Naughton has degrees in economics from the Australian National University and in Law from the University of New South Wales. He has completed the Program for Management Development at the Harvard Business School, and is an attorney in New South Wales. Mr. Naughton has previously worked in merchant banking. He also has over 20 years experience in the pharmaceutical industry, including appointments as a Director of Wellcome Australia Limited and in worldwide business development with The Wellcome Foundation Limited in the U.K.

During the last three years Mr. Naughton has served as Chief Executive Officer and Director and is currently Chief Executive Officer and Director of Marshall Edwards.

Professor Paul J. Nestel Non-Executive Director
AO, MD, FTSE, FRACP, FAHA, FCSANZ

Professor Nestel is currently a Senior Principal Research Fellow at the Baker Heart Research Institute, Melbourne. Professor Nestel is also a Consultant Physician at the Alfred Hospital, Melbourne. He is Honorary Professor of Medicine in the Faculty of Health, Medicine, Nursing and Behavioural Science at Deakin University, Melbourne. He serves on the Board of the International Life Sciences Institute of South East Asia. He was formerly Clinical Professor in Medicine, The Flinders University of South Australia. Professor Nestel has been closely involved in national and international pharmaceutical trials of cardiovascular drugs. He has been and remains a member of many national and international committees for research and policy on cardiovascular disease. He has published over 400 scientific and medical papers and is a Fellow of the Australian Academy of Technological Sciences and Engineering, a Fellow of the American Heart Association and a Fellow of the Cardiac Society of Australia and New Zealand. Professor Nestel is an Officer of the Order of Australia and recipient of the Centenary Medal.

During the last three years Professor Nestel has served as a Director and is currently a Director for Marshall Edwards, the Company’s U.S. subsidiary which is listed on the Nasdaq Global Market.

Peter B. Simpson Non-Executive Director
MPharm, PhC

Non-Executive Director since 1994, Mr. Simpson has extensive experience in the development of pharmaceutical products for international markets. He was Research and Development Manager with David Bull Laboratories for 8 years prior to being appointed Chief Executive Officer of Biota Holdings Limited in 1987. At Biota Holdings Limited he oversaw the research and development of an effective cure for influenza and the licensing of that discovery to Glaxo Limited. Mr. Simpson is currently associated with a wide range of biotechnology and pharmaceutical interests, predominately associated with the conduct of late stage clinical studies and the commercialisation of Australian biomedical discoveries. Mr. Simpson is also the Chairman of Biogenerics Australia Pty Ltd.

Geoffrey M Leppinus Non-Executive Director
BEc, FCA

Non-executive Director since February 2005, Mr. Leppinus was, until July 2002, a Senior Audit and Advisory partner of KPMG LLP with over 30 years experience in professional accounting and auditing. At KPMG LLP he was responsible for the audit of a number of large public companies and the Australian subsidiaries of U.S. listed public corporations. Mr. Leppinus has experience in the assessment of systems of internal control over financial reporting and the financial reporting requirements applicable to listed public companies. He has also had a wide range of experience in conducting due diligence for business acquisitions. Mr. Leppinus has served as a member of the Australian Auditing

Standards Board and member of the State Council of the Institute of Chartered Accountants in Australia.

Professor Alan J. Husband Executive Director
PhD, DSc, FASM

Professor Husband was appointed as a Director of Novogen Limited in May 2006. Professor Husband has over 30 years experience in basic and applied scientific research and research management. His academic research interests in immunology and pathology have been reflected in the publication of over 200 scientific papers and several books. Professor Husband currently holds a professorial appointment at the University of Sydney. These activities in basic and applied research, coupled with experience in the biotechnology industry, provided the foundations for his current appointment as Director of Research for the Group, which he has held since 1996. In this position, Professor Husband is responsible for the development and commercialisation of the Company’s flavonoid drug technology platform. During this time he has managed the scientific discovery and clinical trial programs, including development of novel oncology, cardiovascular and anti-inflammatory therapeutics as well as wound healing technologies.

Executive Officers’ profiles

David R. Seaton – Chief Financial Officer
B Bus KCAE, M Com UNSW, CPA

Mr. Seaton is a graduate in Business Studies holds a Master of Commerce degree from the University of New South Wales. He has completed Management Development programs at Northwestern University in Chicago, Illinois, Duke University in Durham, North Carolina and the London Business School. He has had 20 years experience in the pharmaceutical industry and prior to joining Novogen Limited in 1999 was the Finance Director of GlaxoWellcome Australia Ltd. Mr. Seaton was also Finance Director of Wellcome Australia Limited prior to its merger with Glaxo in 1995.

Mr. Seaton has been the Chief Financial Officer and Secretary of Marshall Edwards since 2000. He has been a Director and the Secretary of Glycotex, Inc since September 2005. Mr. Seaton was appointed Chief Financial Officer of Glycotex, Inc. in November 2006.

Warren Lancaster – Vice President Commercial and Corporate Development
BSc, MBA

Mr. Lancaster is a graduate in Physics and holds a Masters Degree in Business Administration from the Australian Graduate School of Management (Sydney). Mr. Lancaster worked as a business strategy and management consultant with an Australian consulting firm before joining Novogen Limited in March 1997, specifically to assume the role of Vice President- North America.

Bryan Palmer – Operations General Manager

Mr. Palmer joined Novogen in 1993. Since that time he has held a number of senior management positions within the Company. He completed the Program for Management Development at the Harvard Business School in 2001.

Craig Kearney – General Manager Consumer Business

BMS Waikato.

Craig Kearney joined Novogen in December 2001 as the General Manager of the Consumer Business. He has a Bachelor of Management Studies from Waikato University in New Zealand and has subsequently completed managerial development programmes at London School of Business and Duke University in Durham, North Carolina. He has worked 18 years in the Over The Counter (OTC) consumer pharmaceutical category including 10 years for Wellcome New Zealand and Wellcome Australia, 6 years for Parke Davis/Warner Lambert Australia. Prior to joining Novogen Limited, Mr. Kearney worked for Pfizer Australia. He held senior sales, marketing and business management roles for all three companies.

Ronald L Erratt

FINA

Mr Erratt has been the Secretary of Novogen Limited since it listed on the Australian Stock Exchange in 1994. He is also the Secretary for all the wholly owned subsidiaries of Novogen. Mr. Erratt has over 30 years experience in accounting and commercial roles. Prior to joining Novogen he was the Director of Superannuation Fund Administration at Towers Perrin, an international firm of actuaries and management consultants.

Compensation

Remuneration philosophy

Remuneration is assessed for Directors and senior Executives with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality executive team. The appropriateness and nature of emoluments is assessed by reference to employment market conditions. The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited, however, Directors and senior Executive annual remuneration have no variable performance elements that are directly linked to company performance.

Employee share option plan

The Employee Share Option Plan provides for the issue of options to eligible employees being an employee or Director of the Company or related company. Each option entitles its holder to acquire one fully paid Ordinary Share and is exercisable at a price equal to the weighted average price of such shares at the close of trading on the Australian Stock

Exchange Limited for the five days prior to the date of issue. Options are not transferable. The option lapses if the employee ceases to be an employee during the vesting period. Options vest equally over a four year period from date of grant and expire five years after grant date.

The philosophy behind the Employee Share Option Plan is to encourage a level of ownership in the Company by employees and align their interests with those of shareholders. The Employee Share Option Plan is modest in scale and is principally designed to foster teamwork and the benefits of pursuing shared goals.

The Company is a small to medium sized research organization pursuing a significant number of different projects where it relies on its staff being flexible in the way in which they work with their own colleagues together with outside collaborators. The Company’s desire to capitalize on its ability to be flexible and adapt as new information is discovered and new opportunities arise underpins the Company’s business strategies. In this context, the Company believes it is inappropriate to have individual performance hurdles tied to the issuance of share options or other variable remuneration.

The Company believes it has a highly motivated workforce which responds better to the existing remuneration arrangements than the more complex variable systems popular with companies trying to engender individual competition amongst their staff.

All Executive Directors and Executives have the opportunity to qualify for participation in the Employee Share Option Plan after achieving a qualifying service period.

Remuneration Committee

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the non-Executive Directors, the Managing Director, the Executive Director and senior Executives.

The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality executive team.

Remuneration structure

In accordance with best practice corporate governance, the remuneration structure of Non-Executive Directors, Executive Director and senior management are separate and distinct.

Non-Executive Director remuneration

The Constitution of the Company and the Australian Stock Exchange Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by General Meeting. An amount not exceeding the amount determined is then divided among the non-Executive Directors as agreed. The latest determination for the Company was at the Annual General Meeting held on October 28, 2005 when the shareholders approved an aggregate remuneration of A$560,000. The total Non-

Executive Director remuneration of the Company for the year ended June 30, 2007 utilised A$285,000 of this authorised amount.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst non-Executive Directors is reviewed periodically.

Each Non-Executive Director receives a fee for his services as a Director of the Company. An additional fee is also paid for each committee of the Board of Directors on which a Director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by Non-Executive Directors who serve on one or more committees.

The remuneration of Non-Executive Directors for the period ending June 30, 2007 is detailed in the table set forth on page 50 of this Annual Report.

Executive and senior manager remuneration

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the Managing Director, Executive Director and senior Executives. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe benefits such as the use of motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Group.

All Executive Directors and Executives have the opportunity to qualify for participation in the Employee Share Option Plan after achieving a qualifying service period.

The performance criteria against which Executive Directors and Executives are assessed have regard to the financial and non-financial objectives of the Company.

Employment contracts

It is the policy of the Remuneration Committee that employment agreements are entered into with the Company’s Chief Executive Officer, the Research Director and each of the Executives. The contracts for service between the Company and the Chief Executive Officer, Research Director and the Executives are for terms of three years with a notice period of six months. In the event the Company terminates the employment under the terms of the agreement, the Company must pay the pro-rata balance of the unexpired agreement term plus an additional amount of one and one half times the then current annual remuneration of the employee. However, the maximum payable on termination by the Company will be three years’ remuneration. The minimum payable on termination by the Company will be eighteen months’ remuneration. The Company may terminate the agreements at anytime without notice if serious misconduct has occurred. Where termination with cause occurs, there is no entitlement to termination payments under the

term of the contract. On termination, any unvested options issued under the Employee Share Option Plan are immediately forfeited.

Details of the nature and amount of each element of the emolument of each Director of Novogen Limited and the five Executive Officers included in the Company’s senior management are as follows:

Director remuneration from Novogen Limited for the year ended June 30, 2007

Director remuneration from Marshall Edwards for the year ended June 30, 2007

Director remuneration from Glycotex, Inc. for the year ended June 30, 2007

Total Directors’ remuneration for the year ended June 30, 2007

Compensation of the Executive Officers of the Company and the consolidated entities for the year ended June 30, 2007

Executive Directors have been disclosed under Directors’ remuneration only and have been excluded from the Executive remuneration. See page 123 Note 21(c) for further information on exercise price and expiration dates of the options.

Novogen’s Constitution provides that the directors who are not Executive Officers shall be paid an ordinary remuneration which may not exceed the maximum amount fixed by the shareholders of the Company in general meetings from time to time. Directors’ fees are higher for the role of Company Chairman.

No Director has received or has become entitled to receive, during or since the end of the fiscal year ended 2007, a benefit because of a contract made by Novogen Limited, a controlled entity, or a related body corporate with a Director, a firm of which a Director is a member or an entity in which a Director has a substantial financial interest.

Executives are those directly accountable and responsible for the operational management and strategic direction of the Company and its consolidated entities and include the Company’s Secretary.

Mr. Philip A. Johnston and Professor Paul J. Nestel are also directors of Marshall Edwards and each receive remuneration in the form of director’s fees of A$41,250 per annum. Mr. Philip A. Johnston and Mr. Christopher Naughton are also directors of Glycotex, Inc. and receive directors’ fees of A$63,597 and A$47,698 per annum respectively. These amounts have been separately identified and included in the table above.

The elements of emoluments have been determined on the basis of the cost to the Company and the consolidated entity.

The Company has adopted the fair value measurement provisions of Australian Accounting Standard, AASB 124 “Related Party Disclosures” prospectively for all options granted to Directors and relevant Executives, which had not vested at July 1, 2003. The fair value of such grants being amortised are disclosed as part of Director and Executive emoluments on a straight-line basis over the vesting period. No adjustments have been made or will be made to reverse amounts in relation to options that never vest (i.e. forfeitures).

Options granted as part of Director and Executive emoluments have been valued using the binomial option pricing model, which takes account of factors including the option exercise price, the volatility of the underlying share price, the risk free interest rate, expected dividends, the current market price of the underlying share and the expected life of the option.

Fair values of options:

The fair value of each option is estimated on the date of grant using a binomial option-pricing model with the following assumptions used for grants made on:

The dividend yield reflects the assumption that the current dividend payout, which is zero, will continue with no anticipated increases. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

Further detail on the remuneration of Directors and Executives are also provided in Note 21.

Arrangements and Relationships

There are no arrangements (other than standard employment remuneration arrangements) by which any Director or Executive Officer was appointed to his position. There are no family relationships between any of the Directors or Executive Officers.

Pension Benefits

The Company has paid A$1,022,000 during fiscal 2007 for employee superannuation benefits and pension benefits.

Term of Directors

The term for each Director (excluding the Managing Director) is three years at which time that Director retires from office and offers himself/herself for re-election at the next Annual General Meeting. For more information about the term and details of the Managing Director’s term refer to the Employment contract attached filed as Exhibit 4.1 to the Company’s Annual Report on Form 20F for fiscal year ended June 30, 2007 filed with the SEC on November 29, 2006.

The Board of Directors has the power to appoint any person to be a director either to fill a casual vacancy or as an additional Director (up to a maximum of 10). Any Director so appointed may hold office only until the next Annual General Meeting when he or she shall be eligible for election.

Board of Directors

The Board of Directors of Novogen Limited is elected by and accountable to shareholders. It monitors and directs the business and is responsible for the corporate governance of the Company. The Managing Director, who is accountable to the Board, is responsible for managing the development of the Company consistent with the objective of enhancing long term shareholder value.

Since January 30, 2007, the Board has been comprised of six Directors four of whom are non-Executive Directors. In addition, the Board has established the following Committees — Audit, Remuneration and Nomination and Capital Works Committees.

There are also Scientific Advisory Boards whose membership includes the Executive Director which advises on clinical and scientific strategy and direction.

Structure of the Board of Directors

The skills, expertise and experience relevant to the position of Director held by each Director in office at the date of this Annual Report is included in Item 6 beginning on page 44. Directors are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In the context of Director independence, “materiality” is considered from both the Company and individual Director perspective. In determining whether a non-Executive Director is independent, he or she must not hold more than 5% of the Company’s outstanding shares.

Also, the following qualitative factors, among others, are considered:

	•		whether the director has been employed as an Executive of the Company within the last three years;
	•		whether the director has been a principal of a material professional advisor or consultant of the Company;
	•		whether the director has a material contractual relationship with the Company;
	•		whether the director has served on the Board of Directors for a period which could be perceived to interfere with his or her ability to act in the best interests of the Company; and
	•		whether the director has any business interests which could be perceived to interfere with his or her ability to act in the best interests of the Company.

In accordance with the definition of independence above, and the materiality thresholds set, the following Directors of Novogen Limited are considered to be independent:

There are procedures in place, agreed upon by the Board of Directors, to enable Directors in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

For additional details regarding appointments to the Board of Directors please refer to the Company’s web site.

Audit Committee

The Board of Directors has an Audit Committee, which operates under a charter approved by the Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within the Group. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations such as bench marking of operational key performance indicators. The Board of Directors has delegated the responsibility for the establishment and maintenance of a framework of internal control and ethical standards for the management of the consolidated entity to the Audit Committee.

The Audit Committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of the Audit Committee are independent Non-Executive Directors. The members of the Audit Committee during the fiscal year 2007 were Mr. Geoffrey Leppinus (Chairman), Professor Paul J. Nestel, Mr. Philip A. Johnston, Dr. Leanna C. Read (Dr. Read resigned from the Board of Directors of Novogen Limited on January 30, 2007 and attended all meetings while in office) and Mr. Peter B. Simpson.

Performance

The performance of the Board of Directors and the key Executives is reviewed regularly against both measurable and qualitative indicators. During the reporting period the Board of Directors conducted a performance evaluation which involved the assessment of each Board member’s and key Executive’s performance. The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director, Executive Director and senior Executives.

The Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality executive team.

The Remuneration and Nomination Committee is responsible for the oversight of Board succession and proposing candidates for Board vacancies. When a new Director is to be appointed, the Remuneration and Nomination Committee reviews the range of skills, experience and expertise on the Board, identifies its needs and prepares a short list of candidates with appropriate skills and experience.

The tables below shows the number of ordinary shares and options to purchase ordinary shares held directly or indirectly by the named Executives of the Company as of November 30, 2007.

Shares held

		Ordinary				%
		shares fully				Total shares
		paid				on issue
D.R. Seaton			37,378				—
W.J. Lancaster (USA)			—				—
B.M. Palmer			205,636				0.2
C.D. Kearney			8,850				—
R.L. Erratt			231,368				0.2

Options granted to and held by named Executives

		Eligible				Exercise
Total		executives				price
options		participating				(A$)				Grant date				Expiry date
116,286			5				2.10				30/11/2002				30/11/2007
47,332			5				6.76				27/2/2004				27/2/2009
69,560			5				4.90				16/3/2005				16/3/2010
93,632			5				3.64				21/4/2006				21/4/2011
157,728			5				2.41				30/3/2007				30/3/2012

Each option represents the right to purchase one ordinary share.

Exemptions from Certain Corporate Governance Rules of the NASDAQ Stock Market, LLC

Exemptions from the corporate governance standards of the NASDAQ Stock Market, LLC (“Nasdaq”) are available to foreign private issuers such as Novogen when those standards are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the issuer’s country of domicile. In connection with Novogen’s National Market Listing Application, Nasdaq granted Novogen exemptions from certain corporate governance standards that were contrary to the laws, rules, regulations or generally accepted

business practices of Australia. These exemptions and the practices followed by Novogen are described below:

•

Novogen is exempt from Nasdaq’s quorum requirements applicable to meetings of ordinary shareholders. In keeping with the law of Australia and generally accepted business practices in Australia, Novogen’s Constitution (formerly known as the Memorandum of Association and Articles of Association) requires a quorum of three shareholders for a shareholders’ meeting.

•

Novogen is exempt from Nasdaq’s requirement that each Nasdaq issuer shall require shareholder approval of a plan or arrangement in connection with the acquisition of the stock or assets of another company if “any director, officer or substantial shareholder of the issuer has a 5 percent or greater interest (or such persons collectively have a 10 percent or greater interest), directly or indirectly, in the Company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5 percent or more”.

Novogen is listed on the Australian Stock Exchange and subject to Chapter 10 of the Australian Stock Exchange listing rules which requires shareholder approval for an acquisition from or disposal to a “related party” (including a director) or “substantial shareholder” (who is entitled to at least 10% of the voting securities) of “substantial assets”. The Australian Corporations Act to which Novogen is also subject generally requires shareholder approval for a transaction with a director or director-controlled entity unless on arm’s length terms.

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

The names of the major shareholders known to the Company are as follows at November 30, 2007

Bende Holdings Pty Ltd — holding 5,399,638 Ordinary Shares representing 5.5% of the outstanding Ordinary Shares.

Oppenheimer Funds Inc – holding 13,462,783 Ordinary Shares representing 13.8% of the outstanding Ordinary Shares.

Josiah T. Austin and El Coronado Holdings, LLC (beneficially owned by Mr. Austin) – holding 15,756,420 Ordinary Shares representing 16.1% of the outstanding Ordinary Shares. On July 11, 2006, El Coronado and certain other accredited investors entered into a subscription agreement with Marshall Edwards pursuant to which El Coronado purchased 1,500,000 units from Marshall Edwards at a purchase price of $2.90 per unit for an aggregate purchase price of $4,350,000. Each unit consisted of one share of Marshall Edwards’ common stock and 0.35 of a warrant to purchase one share of Marshall Edwards’ common stock. El Coronado received 1,500,000 shares of Marshall Edwards’ common stock and a warrant to purchase 525,000 shares of common stock based on its purchase of the units. The warrants have an exercise price of $4.35 per share. The exercise price and number of shares issuable upon exercise of the warrants are subject to adjustment in the event of stock dividends, stock splits and other similar events. The warrants may be exercised no less than six months from July 11, 2006 and will expire four years from the date of issuance, or July 11, 2010.

In connection with the securities subscription agreement, Marshall Edwards entered into a registration rights agreement with El Coronado and certain other accredited investors pursuant to which Marshall Edwards is obligated to file a resale registration statement with the SEC covering the shares of common stock issued in connection with the securities subscription agreement, in addition to the shares of common stock underlying the warrants issued in connection with the securities subscription agreement. Marshall Edwards filed the registration statement on August 9, 2006. The resale registration statement was declared effective September 5, 2006.

On August 1, 2007, El Coronado and certain other accredited investors entered into a securities subscription agreement with Marshall Edwards pursuant to which El Coronado purchased 700,000 shares of Marshall Edwards’ common stock at a purchase price of $3.00 per share for an aggregate purchase price of $2,100,000. El Coronado also received a warrant to purchase an additional 4 shares of common stock for every block of 10 shares of common stock purchased. As a result, El Coronado received a warrant to purchase 70,000 shares of common stock. All of the warrants have an exercise price of $3.60 per share. The exercise price and number of shares issuable upon exercise of the warrants are subject to adjustment in the event of stock dividends, stock splits and other similar events. The warrants may be exercised beginning February 6, 2008 and will expire five years from the date of issuance, or August 6, 2012.

In connection with the securities subscription agreement, Marshall Edwards entered into a registration rights agreement with El Coronado and certain other accredited investors pursuant to which Marshall Edwards agreed to file a resale registration statement with the SEC covering the shares of common stock issued in connection with the securities subscription agreement, in addition to the shares of common stock underlying the warrants issued in connection with the securities subscription agreement. Marshall Edwards filed the registration statement on October 2, 2007. The resale registration statement was declared effective October 19, 2007.

On April 12, 2005, El Coronado entered into a subscription agreement with Glycotex pursuant to which El Coronado purchased 237,778 shares of Glycotex common stock at a purchase price of $16.83 per share for an aggregate purchase price of $4,001,804. In connection with the subscription agreement, El Coronado entered into a registration rights agreement with Glycotex pursuant to which the shares of common stock purchased by El Coronado will be entitled to piggy back registration rights in the event that Glycotex files a registration statement in connection with a primary or secondary offering of its securities.

On February 15, 2007, El Coronado entered into a subscription agreement with Glycotex pursuant to which El Coronado will purchase an aggregate of 98,874 shares of Glycotex common stock in two separate tranches for an aggregate purchase price of $2,000,000. El Coronado purchased the first tranche of 83,940 shares of common stock at a purchase price of $17.87 per share on February 15, 2007 for an aggregate purchase price of $1,500,008. El Coronado will purchase the second tranche of 14,934 shares of common stock at a purchase price of $33.48 per share at a date to be determined by Glycotex after the company achieves an IND for one of its drug candidates from the FDA. The terms of the subscription agreement provide that El Coronado shall be entitled to piggy back registration rights with respect to the shares purchased by it in the event that Glycotex files a registration statement in connection with a primary or secondary offering of its securities.

The major shareholders do not have voting rights that differ from those other shareholders of the Company. Josiah T. Austin and El Coronado Holdings, LLC became major shareholders during fiscal 2006. There have been no other significant changes to the shareholdings of the known major shareholders over the last three years.

At November 30, 2007 there were 9,480,932 of the Company’s ADRs outstanding, representing 47,404,660 Ordinary Shares (or 48.6% of the then outstanding Ordinary Shares). At November 30, 2007 there were 33 registered holders of the Company’s ADRs.

Item 8. Financial Information

Consolidated financial statements are included in “Item 18 – Financial Statements” on pages 80 through 135.

Export Sales

Export sales to third parties from Australia are not a significant portion of total sales. The details of sales by geographic region are contained in “Item 4 – “Information on the Company”.

Legal Proceedings

There are no pending legal proceedings which either individually or in the aggregate will have a significant effect on the Company’s financial position or loss, nor have any such proceedings had any impact in the recent past.

Dividends

The Company has incurred losses since its inception and as a result has not declared any dividends. Any dividends declared in the future will be paid in Australian dollars.

Significant Changes

On August 1, 2007, Marshall Edwards entered into a securities subscription agreement with certain accredited investors providing for the private placement of 5,464,001 shares of its common stock at a purchase price of US$3.00 per share. The investors in the transaction also received a warrant to purchase an additional 4 shares of common stock for every block of 10 shares of common stock purchased. The warrants have an exercise price of US$3.60 per share. The warrants may be exercised beginning February 6, 2008 and will expire five years from the date of issuance, on August 6, 2012. Marshall Edwards also issued 62,091 warrants to Blue Trading, LLC, which acted as the placement agent in the private placement, as part of the placement fee. The warrants issued to Blue Trading, LLC have an exercise price of US$3.00 per share and each warrant is convertible for 4 shares of common stock. These warrants may be exercised immediately and will expire five years from the date of issuance, on August 6, 2012. Marshall Edwards closed the private placement on August 6, 2007 and received gross proceeds of US$16.4 million.

Marshall Edwards has entered into a registration rights agreement with the investors party to the securities subscription agreement, and Blue Trading, LLC, and has agreed to file a registration statement with the SEC for the common stock and the common stock issuable upon exercise of the warrants sold pursuant to the securities subscription agreement for resale thereunder. Marshall Edwards filed the registration statement on October 2, 2007. The resale registration statement was declared effective on October 19, 2007.

In addition, Marshall Edwards has terminated its Standby Equity Distribution Agreement dated as of July 11, 2006, with YA Global Investments, LP (formerly known as Cornell Capital Partners, LP) as amended.

There have been no other significant events occurring after balance date which have had a material impact on the business.

Item 9. Offer and Listing Details

Trading Markets

The principal listing of Novogen and quotation of its Ordinary Shares and listed options to purchase Ordinary Shares is on the Australian Stock Exchange. The trading symbol on Australian Stock Exchange is “NRT”.

American Depositary Receipts

Novogen’s Ordinary Shares trade in the U.S. in the form of ADRs on the Nasdaq Global Market. Each ADR represents five Ordinary Shares of Novogen. The trading symbol on Nasdaq is “NVGN”. Novogen has entered into a Deposit Agreement with the Bank of New York under which the Bank of New York, acting as depositary, issues the ADRs.

The following table sets forth, for the calendar periods indicated, the high and low market quotations for Novogen’s Ordinary Shares, as quoted on the Australian Stock Exchange, and Novogen’s ADRs, as quoted on the Nasdaq.