Novogen gets up to $5m to fund CS-6 development

Novogen (ASX:NRT) has secured a funding arrangement worth up to $5 million with a US-based investor to help it pay for clinical development of cancer treatment candidate CS-6.

The company has not named the investor involved, but Novogen CEO Dr Graham Kelly said it is a “large institutional investor ... that has a strong track record of investing in early-stage biotech companies”.

The investor has agreed to purchase up to five interest-free convertible securities worth between $165,000 and $1 million apiece.

The first investment of $1 million will be made immediately, and the deal has a three-year term.

Novogen will have the right to terminate the agreement at any time after paying a termination fee, and also has the option to repurchase the securities for cash or limit the rate at which the investor can dispose of any converted shares.

Dr Kelly said the agreement was formulated to balance the need to secure funding for CS-6 development with the desire to “minimise shareholder dilution by taking only that much money that was needed, as and when it was needed”.

Novogen will now have the funds needed to take CS-6 into the clinic and to fulfil its secondary goal of identifying a panel of phenotype-specific anticancer drugs for use in personalised chemotherapy, he said.

During lab studies, CS-6 has been shown to attack both cancer cells and cancer stem cells. The company is initially targeting brain cancer, but the treatment has also shown promise against chemotherapy-resistant ovarian cancer stem cell lines.

Novogen shares were trading 5.41% higher at $0.195 as of around 1 pm on Monday.