Medical company backed by mining billionaire Andrew Forrest launches biotech investment push

A medical devices company backed by mining billionaire Andrew Forrest is set to raise $4.4 million to fund investments in Australia’s biotech sector, and will buy a stake in a DNA vaccine company chaired by Gardasil developer and former Australian of the Year Professor Ian Frazer.

Forrest currently owns just over 45% of Perth-based company Allied Medical, and is also a director of the company.

The unlisted public company, which was spun out of Fortescue Metals Group in 2005, has so far concentrated on building a distribution network for selling medical devices such as catheters and pain management equipment to Australian hospitals.

But the company is also keen to branch out into direct investment in life science companies and is currently conducting a capital raising with a view to buying a $3 million stake in Brisbane-based company Coridon.

The company, which is chaired by Frazer, was founded in 2000 and focuses on developing DNA therapies vaccines for the treatment of a variety of diseases, with a particularly focus on cancer.

Allied chief executive Lee Rodne told SmartCompany this morning that he has talked with Frazer for a number of years about working on one of his projects.

“You need to invest in the people behind it and the people,” he says.

Ronde says a particularly attraction of Coridon is the fact that its vaccine technologies will support the development of a number of products.

“It’s a platform technology, which means there is the ability to have more than one product line and more than one direction. For a biotech that’s an important investment criteria.”

Ronde says Allied’s push into strategic investment has been driven by his directors, who include Forrest and former Fortescue CFO Chris Catlow.

“My directors and major shareholders are all very successful business people… so as far as looking for strategic investments, that’s been a mandate of mine for some years.”

“Biotech around the globe has been hit hard by the credit squeeze but there are still a number of winners out there that investors can profit from.”

“This is a strategic investment and obviously we think there is a lot of value out there.”

Ronde says he expects Forrest and Catlow will take up their full entitlement under the offer.