Novogen's revenues down, loss up

Cancer drug developer Novogen's (ASX:NRT, Nasdaq:NVGN) revenue was down 10 per cent for the half year to December 31, 2005 compared with the previous corresponding period, due to a decrease in sales of its over-the-counter (OTC) natural products for menopause following a resurgence in rival prescribed drugs.

"The re-emergence of hormone replacement therapy products prescribed for menopause treatment, particularly in the US caused the natural menopause market -- of which we are a part -- to readjust," said CEO Chris Naughton.

Total revenue stood at AUD$8.64 million for the first half of 2005-06 compared with $9.59 million for the six months to December 31, 2004.

The majority of revenue was from sales of OTC products internationally, contributing $6.4 million compared with $7.3 million in the previous corresponding half. Interest earned from cash deposits also added to revenues.

Novogen also received royalties of approximately $0.7 million for the six months, in the form of milestone payments under a licence agreement with Archer Daniels Midland and $0.3 million from another licence agreement with Melbrosin.

The company's net loss also increased $1.6 million to $6.5 million when compared with the first half of 2004-05, due to a decrease in net sales revenues of $0.9 million combined with an increase in selling and promotional expenses of $0.7 million, an increase of $0.3 million in R&D expenses and an increase of $0.1 million in other expenses, compared to the corresponding period last year.

"We're heavily engaged in pharmaceutical drug research, particularly our cancer program through our listed US subsidiary Marshall Edwards," said Naughton. "A lot of the spending was directed towards the clinical program of Marshall Edwards."

Novogen's consolidated cash reserves were down from $48 million in the previous corresponding period to $42.4 million at December 31, 2005.

"We're well funded for the programs that we've go on board at the moment. That's not to say we wouldn't be seeking to expand our funding, but in the biotech world we're reasonably set." said Naughton.

Naughton also said that the company's cash position meant that the company wouldn't need to seek outside partnerships prematurely for drug development and pharmaceutical licensing.

Novogen's anti-cancer drug phenoxodiol is currently entering phase III trials.