Mining magnate invests in biotech

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This was published 13 years ago

Mining magnate invests in biotech

By Eli Greenblat

Andrew Forrest is supporting Ian Frazer in the search for vaccines against everything from the flu to cancer.

IRON ore magnate Andrew 'Twiggy' Forrest has teamed up with former Australian of the Year and co-founder of the cervical cancer vaccine Professor Ian Frazer to invest in a vaccines technology business chasing treatments for a range of diseases such as influenza, hepatitis C and cancer.

Allied Medical, controlled by Fortescue Metals chief executive Andrew Forrest, has invested $3 million in junior biotechnology company Coridon.

Allied Medical, controlled by Fortescue Metals chief executive Andrew Forrest, has invested $3 million in junior biotechnology company Coridon.

Allied Medical, an unlisted public company controlled by the Fortescue Metals chief executive, has agreed to invest $3 million in Brisbane-based junior biotechnology company Coridon in return for a 38.6 per cent stake.

Swapping the hard hat for the lab coat, the multimillion-dollar investment by Mr Forrest underlines a keen and relatively new interest in the biotechnology space and brings him into the orbit of one of the world's most respected scientists. It also makes the Fortescue Metals chief executive a co-investor alongside fellow billionaires and BRW Rich List high-flyers, the Liberman family, which is an early backer of Professor Frazer's latest therapeutic discoveries.

Documents obtained by BusinessDay show Allied Medical, which is chaired by Fortescue's founding chief financial officer Christopher Catlow, is seeking to raise up to $4.41 million from existing investors to buy its stake in Coridon as well as replenish working capital for other ongoing business and other investment activities.

Mr Forrest has 2 million shares in Allied Medical, equating to 46 per cent of the company's issued capital.

Under his control, he has turned Allied Medical into a growing and highly profitable national distribution company that sells a range of medical devices to Australian public and private hospitals across a broad scope of specialties such as anaesthesiology, critical care, pain management, infectious diseases, obstetrics and gynaecology.

From its catalogue of multi-flow connectors, catheters and epidural devices, Allied Medical posted revenue of $3.72 million in 2009, up from $2.94 million in 2008, while profits rocketed nearly sevenfold to $530,947.

The deal with Coridon represents Allied Medical's maiden push into biotechnology. Under terms between Mr Forrest and Professor Frazer, Allied Medical could ultimately emerge with a controlling 55.7 per cent in Coridon, potentially delivering the mining mogul tens of millions of dollars in royalties and profits from any blockbuster drug that emerges from Coridon's portfolio.

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The cervical cancer vaccine Gardasil, first worked on by Professor Frazer nearly two decades ago and backed by blood plasma company CSL, has become of the most successful vaccines in recent history, raking in sales of more than $1.2 billion in its first year.

Coridon, which was founded in 2000 for the purpose of developing DNA therapies for the prevention and treatment of viral infections, is chaired by Professor Frazer and is backed by the Liberman family, estimated to be worth more than $2 billion, and UniQuest, the University of Queensland's main commercialisation company.

Coridon has recently used its proprietary technology platform in a proof of concept animal study to demonstrate protection against Herpes Simplex Virus 2.

The potential value in Professor Frazer's work is that Coridon's DNA-based vaccine approach sets it apart from conventional vaccines as it provides the opportunity for the vaccine to be used both as a preventative vaccine (blocking initial infection) as well as a therapeutic vaccine (to treat those already infected).

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The Liberman family's investment vehicle Jagen co-funded its Herpes Simplex vaccine and stands to earn 50 per cent of any royalties and income received by Coridon from its commercialisation.

Coridon's business model is to pursue multiple vaccine discovery programs, and similar to the development of Gardasil also forge partnerships with global pharmaceutical companies to accelerate the pathway to sale for each vaccine.

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