Marshall Edwards to Acquire Intellectual Property Portfolio for $4 Million in Stock

SYDNEY and SAN DIEGO, Dec. 21, 2010 /PRNewswire-FirstCall/ — Novogen Limited and Marshall Edwards, Inc. (Nasdaq:MSHL), an oncology company focused on the clinical development of novel therapeutics targeting cancer metabolism, announced today that they have entered into a definitive asset purchase agreement pursuant to which Marshall Edwards will acquire Novogen’s isoflavone-based intellectual property portfolio in exchange for $4 million of convertible preferred stock.

“Over the past fifteen years, Novogen has conducted the largest and most comprehensive isoflavone-based research program in the world,” said William D. Rueckert, Chairman of Novogen’s Board of Directors. “We believe these assets are now better served in the hands of a company equipped with the drug development expertise and access to capital required to execute a clinical strategy and fully realize their value. Meanwhile, this transaction serves to bolster our ownership stake in Marshall Edwards, a significant value driver for our company going forward.”

“This agreement represents the culmination of a watershed year at Marshall Edwards,” said Professor Bryan Williams, Ph.D., Chairman of Marshall Edwards’ Board of Directors. “Now armed with a hand-selected management team, world-class oncology drug development expertise and the flexibility to develop these valuable assets, we are poised to enter the clinic with two next-generation drug candidates in the coming year. In addition, this strategic acquisition will enable us to explore other potential candidates and indications within the portfolio while enhancing our ability to partner.”

Utilizing a novel isoflavone-based technology platform, researchers at Novogen have generated more than 400 new chemical structures, including a number of compounds that have demonstrated robust anti-tumor activity in cancer cells. Previously, Marshall Edwards licensed rights from Novogen for oncology drug candidates Phenoxodiol, Triphendiol, NV-143 and NV-128. Upon the closing of the asset purchase transaction announced today, any prior licensing agreements between the two companies, including any potential future milestone or royalty payments, will be canceled.

Each share of the 1,000 shares of Class A Preferred Stock is convertible into a minimum of 4,827 shares of Marshall Edwards common stock valued at $4 million based on the volume weighted average price over the prior 20 trading days. Should any of the acquired assets achieve a statistically significant result in a Phase II clinical trial or the first patient is enrolled in a Phase III clinical trial, each share of Class A Preferred Stock not already converted will become convertible into 9,654 of Marshall Edwards common stock.

The transaction has been approved by the board of directors of both companies following the recommendation of a special committee of independent directors and independent fairness opinions. The closing of the transaction is subject to shareholder approvals of both companies.