02/07/2009 - 00:00

Mansell to chair new cancer institute

02/07/2009 - 00:00

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AS legal fights go, the long-running battle between the University of WA, former staff member Dr Bruce Gray, and the company he founded, Sirtex Medical, is bigger and nastier than most, but one piece of good news has unfolded.

AS legal fights go, the long-running battle between the University of WA, former staff member Dr Bruce Gray, and the company he founded, Sirtex Medical, is bigger and nastier than most, but one piece of good news has unfolded.

A new cancer research trust with assets of more than $16 million has emerged from the legal quagmire.

The trust will be administered by the WA Institute for Medical Research and overseen by a trustee company, Cancer Research Fund Pty Ltd, which has attracted a blue-chip board of directors headed by prominent company director Peter Mansell.

This month, the trustee company formally took control of $16 million worth of assets, including an 8.2 per cent stake in Sirtex.

Its assets were formerly held by the Cancer Research Institute Inc, a charitable research body established by Dr Gray in the 1990s that has been inactive after being enmeshed in complex legal fights.

The underlying legal dispute was triggered when UWA claimed it was the rightful owner of intellectual property developed by Dr Gray and currently being sold by Sirtex.

UWA lost the substantive case in July 2008 but has appealed against the Federal Court ruling because of concerns the judgement may underline the rights of universities to intellectual property developed by their staff.

The dispute has resulted in Dr Gray being ousted from the board of Sirtex and led to a series of inter-related legal claims.

Based on Sirtex's claims for cost recovery, the three major parties have collectively spent about $15 million in legal fees.

RSM Bird Cameron partner Mark Conlan, who was appointed CRI's receiver in 2006 after the courts could not determine who controlled it, is relieved its assets have been transferred to a new entity that can finally focus on charitable support of cancer research.

"The key issue was not winning or losing the legal action but to minimise the amount spent on that legal action," Mr Conlan said.

"The best course of action was to reach an agreement with UWA that led to its assets being protected for research. UWA accepted that and they did not gain a legal advantage."

The research trust's Sirtex shareholding is not only financially valuable, it is strategically important because it could determine control of Sirtex.

The shareholding has doubled in value since January in line with the company's rising share price.

That reflects the commercial success of Sirtex, which is a rarity in Australia - a biotechnology company with growing sales, positive cash flow and profits.

The strategic importance of the Sirtex stake will become apparent next week when the company holds a general meeting requisitioned by Dr Gray, who retains a 29.5 per cent shareholding.

Dr Gray has called the meeting in an attempt to remove current chairman Richard Hill - the fourth time Dr Gray has sought to oust Mr Hill.

It means that one of Mr Mansell's first tasks, when he convenes the Cancer Research Fund's first board meeting this Friday, will be deciding how to vote its 8.2 per cent shareholding at the general meeting.

Mr Mansell told WA Business News it was premature to comment until he had met with the new board, which includes two WA Institute of Medical Research nominees - Peter Klinken and Peter Leonhardt - Mr Conlan's nominee, energy executive Stuart Hohnen, and one UWA nominee.

The establishment of the Cancer Research Trust had been opposed by Dr Gray, who wanted CRI's assets transferred to the Melbourne-based Water & Eliza Hall Institute for Medical Research.

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