1262104--9/27/2007--MARSHALL_EDWARDS

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If the data from our OVATURE Phase III clinical trial do not demonstrate the safety and effectiveness of phenoxodiol to the FDA s satisfaction, we will not receive FDA approval to market phenoxodiol in the United States. The third-party manufacturers that we rely upon for the production of phenoxodiol for our clinical trials, and for future commercial quantities, may not be in compliance with FDA regulatory requirements. If we do not receive marketing approval, our commercial prospects for phenoxodiol will be impaired. Final approval by regulatory authorities of our drug candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect our ability to generate operating revenues. We have a limited operating history, and we are likely to incur operating losses for the foreseeable future. We may not be able to establish the strategic partnerships necessary to develop, market and distribute phenoxodiol. We have not yet submitted an IND for NV-196 or NV-143 product candidates with the FDA and until an IND becomes effective, we will not be able to perform human clinical trials in the United States. Our commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than phenoxodiol. We have no direct control over the costs of manufacturing phenoxodiol, NV-196 or NV-143 and increases in these costs would increase the costs of conducting clinical trials and could adversely affect future profitability if these costs increase significantly. We may not be able to secure and maintain suitable research institutions to conduct our clinical trials. We face a risk of product liability claims and may not be able to obtain adequate insurance. Our rights to develop and exploit phenoxodiol and the anti-cancer compounds NV-196 and NV-143 are subject to the terms and conditions of agreements we have entered into with Novogen, and under these agreements our rights may be terminated under certain circumstances, some of which may be beyond our control. Our license rights are fundamental to our business and therefore a loss of these rights will likely cause us to cease operations. The success of our product candidates is largely dependent on Novogen s ability to obtain and maintain patent protection and preserve trade secrets, which cannot be guaranteed. Claims by other companies that we infringe their proprietary technology may result in liability for damages or stop our development and commercialization efforts. We may be subject to substantial costs stemming from our defense against third-party intellectual property infringement claims. In the event that Novogen does not comply with its obligations under a grant from the Australian Government under which phenoxodiol was, in part, developed, our rights to use the intellectual property relating to phenoxodiol and developed by Novogen may revert back to the Australian Government. The enforcement of civil liabilities against our officers and directors may be difficult. Our results are affected by fluctuations in currency exchange rates. We are authorized to issue a class of blank check preferred stock, which could adversely affect the holders of our common stock. Risks Related to Our Relationship with Novogen As our majority stockholder, Novogen has the ability to determine the outcome of all matters submitted to our stockholders for approval and Novogen s interests may conflict with ours or our other stockholders interests. Three of our directors and our secretary and chief financial officer are officers and/or directors of Novogen and other Novogen subsidiaries, which may create a conflict of interest as well as prevent them from devoting their full attention to us. We depend on a number of key personnel whose services are provided by Novogen under our services agreement. If we are not able to procure these services in the future, the strategic direction of the clinical development program would be disrupted, causing a delay in our commercialization program. Novogen can compete with us. We are dependent on Novogen for our personnel. Risks Related to Our Common Stock The trading price of the shares of our common stock could be highly volatile and could decline in value and we may incur significant costs from class action litigation. Future sales of our common stock may depress our stock price and cause stockholders to experience dilution. We will have broad discretion over the use of the net proceeds to us from any exercise of outstanding warrants. Risks Related to the Private Placement If we fail to maintain registration of the common stock issued or issuable pursuant to the exercise of warrants we issued in connection with the securities subscription agreement we entered into with certain investors effective July 11, 2006, we may be obligated to pay the investors of those securities liquidated damages. If we fail to maintain registration of the common stock issued or issuable pursuant to the exercise of warrants we issued in connection with the securities subscription agreement we entered into with certain investors effective August 1, 2007, we may be obligated to pay the investors of those securities liquidated damages.

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1262104--9/27/2007--MARSHALL_EDWARDS_INC