Dear Shareholders, Professor Gil Mor of Yale Medical School...

• Dear Shareholders,
  
  Professor Gil Mor of Yale Medical School released data on March 27 to a conference that shed light on why Cantrixil, and more particularly its active ingredient, TRXE-002, was so effective at killing ovarian cancer stem cells.
  It was a significant finding because it showed that TRXE-002 was killing the stem cells via two mechanisms, and in the chemotherapy space, the more ways your drug has to kill the cancer cell, the better.
  I will try and put this into perspective.
  From the day of our birth, every cell in our body is subject to having its DNA (genes) damaged on a constant basis. Viruses, chemicals, radiation and goodness knows what else are constant background noise in having the potential to cause damage to our genes. To deal with this ever-present threat, cells have developed an efficient housekeeping mechanism. This mechanism is constantly checking the integrity of our genes and fixing any faults it finds. And a crucial part of this internal housekeeping system is that where the damage to the gene is so great that it cannot be repaired, then an order is sent to the cell to die. Without this internal housekeeping process, all of us would be at risk of developing life-threatening cancers before we reached teenage years.
  But here was the problem. What if the damage to the genome affected the housekeeping system? In that scenario, the damage would remain unrepaired, our genes would be at even greater risk of accumulating damage, and with no fail-safe mechanism to trigger cell death.
  The answer that Nature came up with is beautiful in its simplicity. It created a situation where the default position is cell death. That is, chemical signals being received by every cell via the bloodstream every second of the day are instructing the cell to die. To stop these pro-death signals, the cell has to actively block them via internal so-called pro-survival mechanisms. Thus, the perfect fail-safe mechanism. For the cell to stay alive, its housekeeping system needs to be fully functional in order to keep the pro-survival mechanisms in full working order. Then, in the event of the damage to the cell’s DNA being catastrophic to the extent of disabling the housekeeping system, then the pro-survival mechanisms stop working and the default pro-death mechanisms override. An ingenious design.
  This ingenious housekeeping system and its constant maintenance of balance between pro-death/pro-survival is what keeps the great majority of us from not getting fatal cancers early in life. But all systems, no matter how well designed, have weaknesses and eventually wear out. Which is why half of us eventually do succumb to cancer at some point, usually after mid-life. But at least it has worked for most of us while we were young.
  The survival of most cancer cells generally comes down either to the cancer cell excessively blocking the incoming pro-death signals (making it impossible to die), or over-stimulating its pro-survival mechanism (further enhancing its survival), or both. Either way, it means that the cancer cell lives with what should have been fatal DNA damage.
  Targeted chemotherapy drugs work either by attempting to switch off the pro-survival mechanisms or switch on the pro-death mechanism. They rarely do both.
  That is the significance of the Yale data. It shows that TRXE-002 works on both mechanisms. This suggests that the secret to killing the cancer stem cell, the most resistant of all the different forms of cancer cell, lies in the ability to both promote and inhibit at the same time. This is known in biology as a pleiotropic effect, a property that we believe is unique to the super-benzopyran drugs, and marks their extraordinary potential in chemotherapy.
  Graham Kelly
  Chief Executive Officer Novogen Ltd