29/08/2006 - 22:00

Sirtex saga takes its toll on Gray

29/08/2006 - 22:00

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The commercial and legal sagas surrounding former Perth scientist Bruce Gray has taken a new twist with his decision to step down as chairman of listed Sydney company, Sirtex Medical.

Sirtex saga takes its toll on Gray

The commercial and legal sagas surrounding former Perth scientist Bruce Gray has taken a new twist with his decision to step down as chairman of listed Sydney company, Sirtex Medical.

Dr Gray’s resignation flows from legal action instituted by the University of Western Australia, which is claiming an interest in Sirtex’s intellectual property.

At stake is a near-$50 million shareholding in Sirtex, which in the past year has made substantial progress in commercialising a new treatment for liver cancer.

Dr Gray was professor of surgery at UWA during the 1990s and later established the Cancer Research Institute, which was affiliated with the university.

UWA has claimed beneficial ownership of a number of inventions allegedly developed by Dr Gray while he was employed by the university.

It is also making a claim to Dr Gray’s 31 per cent shareholding in Sirtex, currently worth $37 million, and the Cancer Research Institute’s 9 per cent shareholding, worth $10 million.

The three defendants – Dr Gray, Sirtex and the Cancer Research Institute – have denied the allegations and are defending the UWA proceedings.

Sirtex has also decided that it would be “prudent and in the best interests of the company” to issue a cross-claim against Dr Gray and the Cancer Research Institute.

If the court finds in favour of UWA, which is being represented by Jackson McDonald, the cross-claim will allege Sirtex was misled by Dr Gray and the CRI when they assigned the relevant inventions to the company.  

As a result of this decision, the 64-year-old Dr Gray has stood down as chairman of Sirtex, though he will continue as a non-executive director.

Sirtex managing director Gilman Wong said the proposed cross-claim was based on legal advice from law firm Freehills.

It was also supported by a committee of independent directors that includes new Sirtex chairman Richard Hill and Perth accountant Grant Boyce.

Dr Gray has engaged Lavan Legal barrister Martin Bennett, while the Cancer Research Institute has engaged Tottle Partners to defend the claims, which are due to go to court in March next year.

The UWA court case is not the first time Dr Gray has been at the centre of controversy. In 2003, US company Cephalon launched a friendly $270 million takeover offer for Sirtex.

Dr Gray and most other shareholders accepted the offer but Cephalon was unsuccessful because the Cancer Research Institute, chaired by Dr Gray, did not accept.

The Cephalon offer was at $4.85 per share, more than double the current price of $2.10 per share.

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