Investors Happy To Find Life Is A Living Cell

The Age

Tuesday October 23, 2007

Mark Hawthorne

WITH the Australian market charging into the red, wild pigs on a sub-Antarctic island 800 kilometres south of New Zealand doesn't seem like the smartest of investments.

But the pig population of the Auckland Islands has propelled the share price of Living Cell Technologies, which is testing a diabetes treatment called DiabeCell.

Living Cell's share price has increased from 8.2? in August to 47.5? on the back of the latest data from its controversial pig-to-human transplant program.

With people suffering type-I diabetes, beta cells in the pancreas are destroyed. These cells, in a section of the pancreas called the islets of Langerhans, create insulin.

Living Cell is pursuing islet transplant technology as a means of curing this disease. Cells from the disease-free Auckland Islands pigs are put in capsules and injected into the human abdomen.

The problem for Living Cell is that such treatments are banned in Australia - apart from the philosophical dilemma, many fear that pig viruses in the cells may mutate and infect humans.

But New Zealand has relaxed its ban, which makes the disease-free pigs of the Auckland Islands so valuable. Live cells are harvested and human trials are being held in Russia and New Zealand.

Early results have been promising. The first Russian patient was injected in June. The company says control of blood glucose levels has been maintained and his daily insulin requirement has been reduced by about 40 per cent over the past four months.

A second recipient was implanted with her first dose of DiabeCell in September. One month later, and the patient has been weaned off insulin injections altogether.

"These early-stage results have exceeded our expectations, with a patient no longer dependent on insulin therapy following the smallest dose of DiabeCell," says Living Cell medical director Bob Elliot.

While the procedure is controversial, the potential market is huge.

An estimated 194 million people have diabetes and the figure is expected to each 380 million by 2025, as the growing middle classes of India and China get used to saying: "Burger, large fries and a Coke please."

Tents times

IT'S a sign of the times in the changing empire of Australia's richest man. This year Jamie Packer's listed Ellerston Capital, the global fund manager named after the Packer family farm, will host clients in the exclusive Birdcage enclosure at the Melbourne Cup.

It's the first appearance in the Birdcage for Ellerston Capital, while no media from the old PBL media empire get a run.

Meanwhile, Emirates has been splurging on its tent.

The airline has spent 3000 man-hours building the four-level Venice-inspired marquee. It has used 15,000 nails, 400 litres of paint and five kilometres of reusable pine framing. Rain water will be channelled into two 3000-litre tanks hidden under the marquee, to refresh the canals spread throughout the marquee.

We hope it's appreciated by one of the youngest attendees of the carnival. Toll Holdings boss Paul Little will be bringing his son, James Little, 11, to the marquee on Stakes Day.

Buyer beware

THERE are few older legal principles than caveat emptor. The venerable doctrine of "let the buyer beware" underpins property law, but that doesn't mean investors don't need the occasional reminder to ensure they protect their cash.

Such is the case with overseas investments. With the Australian dollar reaching 30-year highs against the greenback, many do-it-yourself super funds are sending money overseas, in the hope of picking up a little extra in the inevitable re-adjustment.

But the high dollar and rise of DIY super - the industry is worth $250 billion in Australia - have opened the door for scammers.

Law firm Mellor Olsson has already picked up on potential scams. "Lawyers are some of the greatest cynics around, as they have invariably crossed swords with fraudsters of one kind or another during their career, and developed pretty good antennae, " says managing partner Andrew Goode.

"The risk of Australians losing substantial investment funds to these operators will dramatically increase in the future with thousands of Australians now operating DIY super funds that allow them to invest their own super monies at their discretion.

"I'd recommend people stay away from get-rich-quick schemes, particularly transactions that involve direct investment one way or the other overseas and promise a high investment return," Goode says.

Class action

ONCE, lawyers weren't allowed to spruik their wares, but the rule book has largely gone out the window. Slater & Gordon is doing business on the boards, and Maurice Cashman is chasing Amcor delivery trucks.

But it still was a little odd to see Maurice Cashman, a king of the class action, sponsoring the Sunday movie on Channel Nine.

The film was S.W.A.T. - "an imprisoned drug kingpin offers a huge cash reward to anyone that can break him out of police custody". A perfect job for some of Melbourne's lawyers.

© 2007 The Age

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