Unilife Announces Chairman's Letter to Shareholders

Aug 09, 2011, 14:01 ET from Unilife Corporation

YORK, Pa., Aug. 9, 2011 /PRNewswire/ -- Unilife Corporation ("Unilife" or the "Company") (NASDAQ: UNIS; ASX: UNS) today announced that Mr. Jim Bosnjak OAM, Chairman of Unilife, issued an open letter to shareholders as an update on the Company's business.

Dear Shareholder,

As you may be aware, the global economy has taken a significant step backwards in the last few weeks due to uncertainty and instability across international markets, including the Middle East, the Japanese tsunami, and the U.S. debt situation that have resulted in the downgrading of the U.S. credit rating. Like many companies large and small, Unilife's market value has been impacted by this financial downturn. Having met all of our key milestones and built significant business value in the Company in recent years, this is a frustration that I share with you and every other Unilife shareholder.

I recently visited our facility in York, PA to get a first-hand look at recent developments and meet with our high-caliber team. Following this eye-opening visit, I wanted to share with you my personal thoughts about the current business position of Unilife. When you look at the fundamentals of Unilife and the size and scope of our market opportunity, you realize just how well positioned we are to emerge as a global industry leader for advanced drug delivery systems.

The Unifill Syringe is a Game-Changer in the $2.5 Billion Prefilled Syringe Market

  • Sanofi has paid Unilife a total of approximately $40MM for the exclusive right to negotiate the purchase of the Unifill syringe for use within the full therapeutic classes of antithrombotic agents and vaccines until June 30, 2014, providing a very strong indicator of the tremendous commercial potential of the device.
  • Having had the distinct pleasure of testing a Unifill syringe hot off our production lines, I can say that the finished product is even more breath-taking than I expected. It is comfortable to hold, easy to inject and effortless in activating the safety mechanism.
  • I now fully understand why pharmaceutical companies are so excited about using the device with their injectable drugs and vaccines. To get an idea about how special the Unifill syringe is, go to our website at www.unilife.com to watch a video of experienced healthcare workers attending a recent U.S. conference and using the device for the first time. As they literally say..."Wow!"
  • It is wonderful to see the Unifill syringe being manufactured at our facility, and being shipped to customers. I look forward to hearing about additional sales in the near future.

The Unifill Syringe is at the Leading Edge of a Rich Portfolio of Advanced Drug Delivery Systems

  • Like many shareholders, I first invested in Unilife because I recognized the unique potential of our safety syringe technology. This potential was further validated by our agreements with Sanofi for the Unifill syringe. However Unilife is no longer a one product company. And it's no longer a one customer company. The story has now grown much bigger than just syringes.
  • The Unifill syringe sits at the leading edge of a rich product pipeline developed in direct response to the unmet needs of pharmaceutical companies, healthcare workers and patients.
  • The Unifill syringe has now expanded into a full portfolio of prefilled safety syringes and devices. Together, this technology platform can cater to the specific needs of every one of the hundreds of prefilled drugs and vaccines either in development or approved for use.
  • By serving the device innovation needs of our pharmaceutical customers, we have now expanded our activities well beyond syringes into other high-value device sectors including self-injection systems, drug reconstitution and specialized organ delivery systems.
  • We are now active in most sectors of an injectable drug delivery device market that is forecast to increase in size by 50% between 2010 and 2015 to a value of $15 billion.
  • Having seen fully functional prototypes of these pipeline devices and been advised of their commercial potential and competitive position, I am confident that many will be commercialized with the financial backing of the pharmaceutical partners whose needs we are directly serving.

Our Business is Perfectly Aligned to Serve the Emerging Needs of Pharmaceutical Partners  

  • The pharmaceutical market for injectable drugs and vaccines is changing. Pharmaceutical drug pipelines are bursting with more than a thousand highly complex biological drugs that are targeted for the treatment of specific acute and chronic diseases. The market for these biologics, which must virtually all be injected, is growing at more than 10% per year and is projected to be valued at $180 billion in 2015. This represents around 20% of the global drug market.
  • By their nature, these biologics have highly specific molecular requirements, and they must be administered to the patient in a very accurate manner. Therefore, what pharmaceutical companies do to secure regulatory approval is to enter into partnerships with device manufacturers to create what is called a drug-device combination product.
  • Each biologic drug often has its own unique device requirements. While biologics will typically sell for hundreds if not thousands of dollars per unit, the total volumes are relatively small...perhaps only 12 million doses a year, on average. As a result, the commodity products and business structure of incumbent device manufacturers are largely ill-equipped to meet the needs of pharmaceutical companies for unique devices. We hear many stories from our growing list of pharmaceutical customers about how traditional device manufacturers are either unwilling or unable to meet their needs for lower volume, innovative devices.
  • Having proven our industry credentials for device innovation with the Unifill syringe, word is now getting around the pharmaceutical industry that Unilife represents a compelling alternative. We have the broad portfolio of injectable drug delivery systems, the advanced operational capabilities and the industry expertise to address the needs of our pharmaceutical customers with unprecedented speed, agility and responsiveness.
  • In particular, we can develop our customized devices in parallel with the development of the pipeline drug to create unique combination products. These collaborations enable us to ensure the right device delivers the right drug at the right dose to the right patient at the right time.
  • This approach can do much more than improve patient care, and enhance and save the lives of healthcare workers. It can allow the pharmaceutical company to maximize market share and drug revenues. Furthermore, because our devices are integral to the regulatory approval of the combination product, the unique claims that we can provide can obstruct the entry of generic and bio-similar competitors. This can significantly extend the lifecycles of these biologics and potentially add billions of dollars to the bottom line of our customers.
  • The benefit to Unilife is that we can get locked into long-term, high-margin contracts that can span the entire lifecycle of the drug. When we are funded by our pharmaceutical company customers for the development of these customized devices and their exclusive use, I think this represents a very attractive business model. In addition, though the volumes may sound low, the selling prices are far higher than commodity items and carry far greater profit margins for Unilife.

Our World-Class Team

  • Some of the world's top pharmaceutical and drug delivery device professionals are now joining Unilife in recognition of our potential to rewrite the rulebook for injectable drug delivery devices.
  • These are highly educated people with many years of experience working for some of the largest device companies in the world. They are choosing to join Unilife because they share our vision for serving the needs of our customers, and are attracted by our entrepreneurial no-nonsense attitude towards getting things done.
  • It is the experience, enthusiasm and excitement that I saw on the faces of our staff last week that gives me the greatest confidence in our future business success.

While the world weathers the storm of the current market turmoil, I am pleased to say that our business is strong, healthy, and remaining firmly on track to deliver on our promise to patients, partners, customers and shareholders. Thank you for your continued support.

Jim Bosnjak OAM - Chairman

About Unilife Corporation

Unilife Corporation (NASDAQ: UNIS / ASX: UNS) is a U.S.-based developer, manufacturer and supplier of advanced drug delivery systems with state-of-the-art facilities in Pennsylvania. Established in 2002, Unilife works with pharmaceutical and biotechnology companies seeking innovative devices for use with their parenteral drugs and vaccines. Unilife has developed a broad, differentiated proprietary portfolio of its own injectable drug delivery products, including the Unifill® and Unitract® product lines of safety syringes with automatic, operator controlled needle retraction. Unifill represents the world's first prefilled syringe technology integrating safety within the primary drug container. The products are ideally positioned to help pharmaceutical companies maximize the lifecycle of their injectable drugs and enhance patient care. Unifill syringes, together with other devices that are part of the Unilife technology platform, can either be supplied to pharmaceutical customers ready for use, or customized to address the specific requirements of targeted novel drugs.  For more information on Unilife, please visit www.unilife.com

This letter contains forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to our management. Our management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in "Item 1A. Risk Factors" and elsewhere in our Annual Report on Form 10-K and those described from time to time in other reports which we file with the Securities and Exchange Commission.

General: UNIS-G

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