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THE iron-ore magnate Andrew Forrest has teamed up with an Australian of the Year and co-creator 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, an unlisted public company controlled by the Fortescue Metals chief executive, has agreed to invest $3 million in the Brisbane-based junior biotechnology company Coridon in return for a 38.6 per cent stake.

With his hard hat swapped for a 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 him a co-investor alongside fellow billionaires and BRW Rich List high-flyers, the Liberman family, who were early backers of Professor Frazer's 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 business and 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 highly profitable national distribution company that sells medical devices to 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 last year, 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.

Founded in 2000 for the purpose of developing DNA therapies for the prevention and treatment of viral infections, Coridon is chaired by Professor Frazer and is backed by the Liberman family 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 provides the opportunity for a vaccine to be used both as a preventive vaccine (blocking initial infection) and a therapeutic vaccine (to treat those already infected).

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 the cervical cancer vaccine Gardasil, also forge partnerships with global pharmaceutical companies to accelerate the pathway to sale for each vaccine.

Allied Medical, created in 2005, is a legacy of the old Allied Mining and Resources company which later became Fortescue Metals.

After the rights issue to existing shareholders, priced at 50 each, Allied Medical will have a maximum of 13.23 million shares on offer. It expected that Mr Forrest will take up all his entitlements under the offer. Allied Medical has 2100 shareholders.