Keeping the flame alive…

Today, once again, Novogen announced that it has filed a couple of patents. Not received a notice of allowance or won an opposition or anything of commercial significance, but you know, just paperwork. Well done to Andrew Heaton and the team for getting some cunning new technology put down on the page – and especially a new acronym! How exciting… “VAL-ID”, I like it! Hopefully this incredibly sexy new acronym will get lots of airplay in company investor presentations going forward. Hopefully you’ve also started the process of trademarking “VAL-ID” so that we can expect to see another awesome press release in the very near future.

Gosh, though … pretty relieved you exercised some restraint and didn’t call it “Ingenious Novogen’s Versatile Approach to Library-based Iterative Design”. That would have been AWKWARD !

I’d also just like to express my deepest thank you to Iain Ross. I was worried that when a industry veteran, a “heavy hitter” got at the helm of Novogen, that we’d stop seeing this kind of ASX disclosure from the company (classified as “price sensitive”, no less!). I was so afraid that following Graham’s departure to go and do proper early stage drug development somewhere else, we wouldn’t get any more news flow about filed patents, or pre-clinical animal studies. You know, all the lightweight ASX chatter that makes Novogen, well, so “novo”. I always suspected you guys were best buddies and it just really makes me happy to see you keep the flame alive, a sort of homage to Graham’s wholesome style of company engagement with its shareholders.

Obviously, given that you’ve got headhunters out there looking for a new CEO (globally), it’s a great time to truly showcase the company’s culture at its finest. You know, really propagate that image of international-standard quality, maturity and credibility.

Well done.

27 thoughts on “Keeping the flame alive…

  1. Are these exciting new compounds super-dooper benzopyrans? Or have they supered up some other well-known chemical class? Actually a quick browse of the patent databases indicates they may be super-indoles (note – I came up with this name first) (WO2015074123 and WO2015074124).

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  2. Chris you pull no punches I was wandering what you make of Professor Gunnings involvement with Novogen (non-executive director), I understand he vets the release coming out? The ATM platform has been his baby for quite some years and after Genscreen partnered with Novogen in late 2013 – both he and Justine Stehn came over to Novogen in early 2014? My own understanding is that Andrew Heaton had a good chance to go over the platform in the 5- 6 months before they were appointed? I also follow Novogen but find nothing murky in Professor Gunning?

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    • I think Professor Gunning has no business being an NED of a public company. I think Prof. Gunning is a successful academic and an adequate scientist.

      I think Prof. Gunning’s research, in general, lacks robust validation. I don’t believe he fully understands the mechanism of action of the assets that were added to the Novogen pipeline.

      Like many academics, he is wed to long-term ideas that form an intrinsic part of his academic identity. Having worked with dozens of academic-led companies over the years, I view this as a red flag.

      I am not interested in punches. Only the truth.

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      • Molecular Medicine, Cancer Cell Biology, Cell Development Proliferation & Death, Biologically Active Molecules are his fields of research – 140 research papers and he’s been at it since the 1980’s Chris – I trust his views as not coming from a “snake oil salesman”.. His other areas of research include: diseases of childhood, primary cancer and muscle damage and is also engaged in adult stem cell research…if he told me something concerning cells in the human body – I think I’d take notice. I understand your peer review angle and have no answer as to who has peer reviewed his extensive work – but I’d imagine someone would have along the road in his long career.

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      • Yes, but he has had the same basic ideas for 20+ years and plenty of opportunity to validate them. I look at many of those publications and I don’t see robust pre-clinical validation. It’s not a criticism, it’s a fact.

        I would prefer not to comment on the stem cell research. It is very weak.

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  3. You yourself have said there’s no shortage of micro start ups in need of cash to help with their development – The first compound wasn’t developed from my reading until 2004-2005 when Genscreen called it the Trobio project and looks like that where it was for 8 years before Novogen picked it up – that’s not unusual for these experimental compounds to take years to be taken forward – as we know the big BIO conferences in the US have thousands of projects looking for development year after year..

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    • Yeah, it’s pretty unusual for anything that has value. Anything that Genscreen picked up is crap. Ian wouldn’t know how to spot a good asset if it sat on his face, and he doesn’t care.

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      • Yeh it doesn’t look like a lot of action down in Blackburn the involvement of Novogen look like the last thing that’s happened.. still you never know with these things – the paths they take and personalities involved and connections.. My understanding is the development was ongoing with some funding coming in over that 8 years from the Kids cancer Project so something was being moved around the petri dish. even our Ian Frazer took quite a long time to get things right when he and Jian Zhou started out to create Gardasil in 1989 from my reading they didn’t get into human trials till 1998..and they obviously were onto something that worked..

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      • Things take time, but there is no comparison between what happened with Gardasil and what is happening with Novogen. So I think your comparison is irrelevant. If you study the history around Gardasil you will find it was a massive competition from day zero, QLD, Rochester, Hopkins… It was a war for a big prize with Merck and other big pharma companies in the middle. Plenty of lawyers, plenty of patents, plenty of heat.

        People need to stop making “pharma industry” generalisations. Novogen is not a good company. It does not have a single credible asset and it has weak leadership. It’s last chance is to start from scratch and recognise that it has a balance sheet and nothing else, but it won’t do that because it doesn’t have the courage to do the right thing by its shareholders.

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  4. All right lets say your right and Graham Kelly was flogging snake oil – he’s gone now so what do you make of the rest of the board then – why would Gunning want to keep pushing Kelly’s snake oil if that’s what it is – and Byrce Carmine – why would he want to keep pushing a dud or even Ian Phillips for that matter – like you said they’re cashed up and Graham Kelly was the only one who would have any need to keep up the pretence?

    The other thing is what about the partnership with Yale this CanTx – 15% owned by Yale and with Gil Mor doing a lot of the work and Yale chipping in something like $2 million? that’s a lot of snake oil to keep hush hush about then there are quite a few other collaborations as well Chris which I won’t bore you with..and from my reading Iain Ross was not at Novogen for only a few weeks as you claim – in 2014 – he’d been there for 8 months.

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    • Actually my comment about Ross was an incomplete sentence (since corrected). He was Chair for a week.

      Why do you “punters” always assume that an Ivy League institution equals unwavering credibility? I built my career around top-drawer US academia and it is as corrupt as anywhere. Perhaps even more so.

      As for Gil Mor, do your research. Here is a starting point for you:

      http://mobile.nytimes.com/2011/07/08/health/research/08genes.html?referrer=&_r=0

      He is just a hired gun. Plenty of them around, even at Yale. Bright? Yes. Connected? Yes. But still a hired gun.

      As for why?

      Well, they are all directors and liable for the Triaxial deal which must have had a pretty modest level of diligence around it. Even Iain Ross was part of the fun before his departure and subsequent white knight move. Plenty of reasons to keep snake oil going when reputations depend on it. Besides, everyone in this industry loves a gravy train. If you can’t make a decent drug, at least take a salary/fees for as long as possible.

      Considering Novogen’s balance sheet, that’s quite a good run.

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  5. For the life of me I can’t find where he was chairman for a week – he resigned on the 21/112014 as a NED not as chairman..Graham Kelly said on the 12/11/2014 that he would step down before Christmas and hand that role to Iain Ross but I’m sure it never happened as Iain Ross had gone a week and a half later.
    The Triaxial deal was done back in December 2012….Ross didn’t come onto the scene until March 2014 – same time as Gunning was appointed to the board – Carmine & Phillips were only appointed in June this year. I’m not seeing the same picture as you Chris why would the current board have any need to keep selling Graham Kelly’s snake oil – if that’s what happened..

    Bryce Carmine was with Eli Lilly for 30+ years – why join a company like Novogen if its all bogus? I’m just not seeing it in fact what I see is a professional board doing its job and perhaps moving Graham Kelly on because he wasn’t forming more partnerships in the US due to issues surrounding his previous life at Novogen & what is now MEIP – I take your point about Traixial but there’s only I think 1 board member left from back then..

    Maybe you could be the new CEO Chris?

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    • With your last sentence, now I know you are just being obnoxious :-). I would have no difficulty deploying $40m into useful assets and developing them but this company comes with so much baggage, it’s hard to imagine how you’d move the needle. It’s a tragedy to watch one of Australia’s best-capitalised microcap biopharma stocks flounder like this.

      As for the whole Iain Ross thing, you’re dealing in semantics Hannibal. You just said it yourself, in Graham’s address Iain was the ‘chosen one’ – technically you are correct he was “Chairman Elect” but usually a CEO doesn’t nominate the Chair, it’s a board appointment. Technically, in order for Kelly to have made that announcement, the board overall would have had to agree with Iain’s appointment. Therefore whether Chair or Chair-elect, it’s all the same to me. In the eyes of the market, from the 12/11/2014 onward, GK is no longer the Chairman of the company.

      And then Iain steps down.

      As for the Triaxial piece, liability doesn’t just come from doing a deal, liability comes from running a deal and making decisions around information. What can you point to since the Triaxial deal was done that actually substantiates your comment about a “professional board”, because I am stumped. Other than raising some money (which is, of course, a very important task) what else did they do? The answer, is nothing.

      As for the “new” NEDs, I don’t have a strong opinion. Phillips is just a finance guy and possible a reasonable turn-around NED for a company that is trying to re-invent itself (though obviously not a strong pick for a biotech board since he is not a biotech guy and there are already generalists on the board). I don’t know him personally. As for Carmine, he’s a retired guy looking for board seats. He certainly didn’t need the money because he was making about $7m bucks a year at Lilly. But I see plenty of guys leave big pharma and jump on small boards and don’t make the best decisions because they wouldn’t know how to diligence a small company if you put a gun to their head, or recognise the warning signs if you spelled them out in neon. If it had been sold to him as a turn-around opportunity, then fair enough, but basically the addition of Carmine and Phillips to the board don’t move the needle for me, except that at least (thank goodness) the company didn’t bring on the usual retreads – both gentlemen are fresh blood. That’s a good thing.

      I’m not going to comment on this further, but basically everything you need to know about this company is in the public domain, and there are SO many warning signs it is ridiculous:

      – Old assets that have never been fully developed and for which there is more marketing documentation than their is science.
      – An academic “pipeline” in Gunning that has negligible validation and probably no real understanding of the mechanism of action.
      – Over-hyped technology claims that make domain experts shake with rage every time a release goes out (super-benzopyrans, for chrissake).
      – An immaterial and immature development pathway, backed up by execution that mostly looks like a set of graduate student biology experiments.
      – A disclosure profile of negligible shareholder value creation, over an extended period of time.
      – A related-party transaction that doesn’t stack up.
      – Constant slipping of timelines, often “slipped in” to other announcements with a lack of transparency.
      – Unacceptably long durations to deliver even basic outcomes, like toxicology studies (how long have they been talking about it?).
      – Lack of focus, tendency to launch a new program rather than deliver on an old one.
      – A charismatic CEO who has publicly admitted he tested his drugs out on himself (no, of course that’s not a red flag).
      – A board that lacks a disclosure and governance process such that an NED would resign after 8.5 months in the job after being nominated as Chair for an “unforseen conflict of interest” and then come back in for the CEO job less than a year later.
      – A CEO that has now resigned because (and I roughly quote) he wants to “focus on doing early-stage drug development”. I’m all for saving face, even Graham deserves some dignity, but really?

      If you were a new CEO candidate thinking about joining a company, and I am not talking about re-purposing one of the usual “good ‘ol boys” which is probably what will end up happening. I am talking about if you were real fresh blood, fresh talent, you wouldn’t touch this company with someone else’s… er… bargepole. The only way Novogen will ever pick up a really decent CEO is to :

      1) Agree that the board composition will need to be dramatically changed. Gunning has no business being on the board and Iain Ross is legacy that is not transparent, and should be refreshed. He sits on too many boards anyhow. I would never hire a guy (or gal) that sits on 5 or 6 other boards, particularly given that many of his other companies are struggling and have their own turn-around demands on NED team.

      2) Agree that you would have unfettered permission to kill programs, including the possible scenario that ALL programs would get killed and that the company would start again. In effect, the CEO’s job would be to fashion a strategy for a capitalised public shell.

      3) Stop behaving like a bunch of neophytes and putting out the irrelevant rubbish that they have been (VA-ILD, new patents, another mouse model… my eyes just about permanently roll up into my brain).

      If a new CEO comes in and starts harking on about the potential of Cantrixil and Anisina, then you will know he/she is a lightweight. It will be interesting to see what Jeremy Wurm comes up with. My bet is on either a retread, or a high-potential newbie with no track record but a willingness to give an ASX CEO gig a bash out of sheer blind ambition.

      Thanks for reading.

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  6. Chris you’ve thrown a lot of mud there all at once and after shaking it off can I point you towards the update of Iain Ross dated 30 July 2015 regarding toxicology –

    Results to date indicate that the drug is associated with gastrointestinal toxicity manifest as diarrhoea and some haematological toxicity manifest as anaemia. Also, while not uncommon for oncology drugs, preliminary studies suggest that Cantrixil is associated with cardiovascular toxicity though this observation is being assessed further. The Company anticipates completing the Cantrixil toxicology evaluation by the end of 2015.

    I’m not sure if that is selling snake oil Chris – Graham Kelly I agree was a great salesman but you shouldn’t brand everyone the same – and why did Iain return if there was this secret – I wouldn’t want to risk my reputation and return to a company I’d already left – if I knew it was bogus…

    I agree about the using the term superbenzopyran – but I believe they needed to send MEIP a signal that they weren’t developing what they said they weren’t – some good reading back in 2012 if you take the time Chris and what MEIP had Graham Kelly & Andrew Heaton sign when they stripped Novogen before allowing Triaxial to be taken over… Triaxial was registered back on the 29/9/2009 and Novogen took them over 3 years later…Dr Andrew Heaton and Graham Kelly certainly had time to perfect their new process before the MEIP agreement that allowed them to keep developing what they already had at Triaxial. Anyway some good reading if you take the time – Cheers

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    • Well, we’ll just have to agree to disagree. I have nothing against salesmen (I am one), I have a lot against a CEO that lacks integrity when he announces irrelevant pre-clinical results as being potentially transformational for the treatment of childhood cancer, and enhancing the standard-of-care, when the entire story is not only factually incorrect but unsubstantiated.

      I read that toxicoloogy update too, it is an incomplete update but already hints a problems – particularly cardiovascular toxicity. They have talked about toxicology for over a year. Toxicology doesn’t take a year to ascertain, especially for a drug like this. If you look at the half-yearly report, the burn rate is nothing like what you would expect to see for a company aggressively moving the needle on its programs. Although R&D expenditure is up from last year (where, I note, SG&A was THREE TIMES that of R&D) SG&A is still bigger. That tells you everything you need to know about how a company of this size/capitalisation is pursuing their development. If half the punters on HotCopper knew how to read a financial statement, they would see everything there is to see about this company.

      As for your question about Iain returning, I think you ask this question without fully thinking about it. Maybe you are altruistic and still have a rose-tinted lens. Iain sits on the board of Anatara (quackery), Benitec (good science too late, very mediocre team), Tissue Therapies (also can’t get its act together). So you are telling me that Iain wouldn’t have anything to do with a mediocre company? I reckon for the cash he would. I’ve got nothing against him but his ‘industry veteran’ status is not reflected in the quality of the companies he is part of. My personal guess is that he will end up effectively staying on long-term as CEO, but probably in the guise of “executive chairman”.

      Finally, regarding MEIP. I have been following this company for many years. I have read everything you allude to and it makes my sphincter pucker. Novogen had run out of steam and needed a new story. A story was all they got, including the re-engagement of a highly charismatic CEO that shareholders love with almost manic devotion. It’s not “good reading” it’s just quasi-science waffle. Maybe you should carefully read the Triaxial transaction documents and then take off your rose-tinted glasses and have a re-think about Graham’s departure in light of a technology platform that probably doesn’t work. The only thing worse that continuing to spend money on a drug that has to eventually yield some data to shareholders, would be to dilute shareholders and then disclose that the drug has major issues. I’ll be willing to bet that even if the toxicology data (which will probably never be fully presented in a peer-reviewed, public domain fashion) comes out negative, you’ll still see a glowingly positive press release talking about anti-tumour activity and the management team’s commitment to re-formulating a very promising molecule class to improve its delivery profile, or some such BS.

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  7. Chris then you have read what MEIP got out of the deal and the conditions placed on Novogen for allowing them to go forward with whatever Triaxial had been developing. That agreement ends this December – I agree about the endless releases re-hashing older knowns and the relabeling of the same compounds – but I personally see it in another light and I think Graham Kelly said it back in early 2013:

    Novogen acquired the privately-owned biotechnology company, Triaxial Pharmaceuticals Pty Ltd, in December 2012. Triaxial had been formed by Drs. Heaton, Brown and Kelly, all ex-Novogen employees. The objective of Triaxial had been to extend the earlier Novogen drug technology platform to a level of anti-cancer potency that would exceed anything previously seen. With the purchase, Company management and the Board of Directors were replaced and the Company given an entirely new set of R&D and commercial objectives, as well a fresh approach to investor relations.

    I personally have a belief that what they’ve produced may not be all that different from what MEIP had gotten from Novogen when they stripped the IP and if Novogen developed before the agreement ended then they could end up in court – funny enough MEIP have only recently started movement again on ME-344..

    I think Graham Kelly may possibly have been trying to get past that agreement cut-off line due to the similarity of what they’d been working on at Triaxial to what MEIP had and a lot of mice had to suffer in the meantime.. 😉

    I don’t have rose coloured glasses Chris but there is a lot to this story that hard to see but for me it has its genesis way back in 2007 when Novogen and MEIP distanced themselves from Graham Kelly after his “other ” issues…MEIP went in its own direction in the US and cut all ties to Novogen as part of the deal in 2012 – stripped it first to a shell – reminds of “scorched earth” policy used in warfare..

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    • Like I said, great story. None of the guys deserve to be trusted, and so far the story has yielded nothing. It costs <$100,000 and takes <2m to do a GLP acute tox (NOAEL) study with a detailed histology workup for basic organ toxicity. For small molecule drugs like this, that sort of basic toxicology tells you a whole lot (unlike, say an antibody drug where species cross-reactivity makes life difficult). Since pulling off the deal with Triaxial the company hasn't been able to accomplish even this, as far as I am aware, and in fact did the deal without even that basic level of data. That alone is irresponsible.

      Sorry "Hannibal", you aren't going to move the needle for me on this one and frankly, I don't have much more to say on the topic.

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      • I’m not trying to move your needle Chris.

        I think that the MEIP deal is where it’s at though and if I’m right we’ll see their Cantrixil in human trials after December – I also agree about the untrustworthiness of the Graham Kelly thing – but as I saw someone else write about the O.J. Simpson case – the police framed a guilty man who then was able to claim he was framed – and walked free… Graham Kelly has left the building Chris and the board has no carry over from it – of the 6 – 3 have been there less than 3 months & Professor Gunning a year and a half. The other two I can see moving on in a board reshuffle in the not so distant future to make sure the old connection are well and truly severed – just as MEIP did…I congratulate you on holding a blow torch to these companies though – the boards remind me of police who join going to stop all crime and end up eating donuts behind a desk or politicians entering never going to tell a lie and that goes for all companies across the spectrum from big to small…I’ve invested in enough of them over the years and been offered everything including the steak knives – but you being a salesman yourself would know that one Chris 😉 its a shame that drug development is even connected to the investment community…I await your next take on Novogen

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      • Thanks for reading and for the constructive criticism. It’s very challenging for me to always have to respond to “anonymous” feedback, but where it is value-added, I appreciate it. I don’t think there will be much more for me to say about NRT until there is a new CEO appointment.

        Many people think that I was “responsible” for Graham’s departure. I wish I had been, but alas I truly believe he accomplished it himself. As for the the nexus between drug development and the investment community, I am all for it. If you think about what “we” (as humans) have accomplished in the last decade in terms of combating cancer (40% improvement in 5-year remission rates across the board), effectively a cure for HCV (which is why Benitec astounds me), deep insights into genomic health and some totally new ideas about neurodegeneration, it’s pretty exciting. Biotechnology now an established asset class in the US and now we need to do the same in Australia by clearing out the shit, demanding quality and transparency, and instilling a culture of rigour and maturity that simply doesn’t exist and, quite frankly, betrays he quality of our biomedical research every. single. day.

        Let’s go!

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  8. Sorry Chris to annoy this particular thread again – just making sure my speculation is not taken as anything but that about Novogen – Graham Kelly & MEIP – I have theories and that’s all 🙂 cheers – Hannibal

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  9. I am a supporter of the Kids Cancer Project which is what drew me to Novogen..I’ve did have a closer look at the accounts and for 2013/14 I can see that R&D spending was about half of wages but his year I think the gap will not be much – still I take your point R & D should far outstrip anything else – I also took areal close look at Triaxial – only $30,000 reported losses in 3 years of research – so I still stand by my original hypothesis that what they originally had at Triaxial was very close to what Novogen/MEIP had previously…all speculation 😉

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