SOURCE: Unilife Medical Solutions

Unilife Medical Solutions

September 08, 2009 09:25 ET

Unilife Announces Preliminary Final Results for Year Ended 30 June 2009

LEWISBERRY, PA--(Marketwire - September 8, 2009) - Unilife Medical Solutions Limited (ASX: UNI) (PINKSHEETS: UNIFF) has released its preliminary final results for the year ended 30 June, 2009.

Unilife Medical Solutions ("Unilife") will continue to announce its results in Australian (A$) currency until the completion of a proposed redomiciliation of the Company to the U.S., and a proposed listing on NASDAQ. At present, U.S.$1.00 equals approximately A$1.17. The Full Preliminary Final Results for the Company (Appendix 4E) are available on the Financial Reports section of the Unilife website (www.unilife.com).

Earnings Result

Group Revenue for Unilife increased by 869% from A$4,170,166 (2008) to A$40,413,706 (2009). The increase in revenue was primarily due to payments received from the pharmaceutical partner. The Net Profit after tax for the year ended 30 June 2009 was A$12,806,494 representing a 249% increase in the Net Profit as compared with the previous corresponding year. The Directors do not recommend that a dividend relating to the year ended 30 June 2009 be paid. As such, there is no applicable record date.

Cash Flow

During the year ended 30 June 2009, the net cash provided by operating activities was A$8,961,562 (2008) net cash out flow (A$7,980,916). An amount of A$246,666 was invested in research and development (2008: A$562,929) and A$3,572,645 was invested in plant, property and equipment (2008: A$895,433).

Agreements with Major Pharmaceutical Partner

On July 1, 2008, Unilife entered into a Global Agreement with its major pharmaceutical partner (pharmaceutical partner) under which the partner paid Unilife a non-refundable fee of A$16.4 million (EUR 10 million) for the exclusive right to negotiate for the purchase of the Unilife Ready-to-Fill Syringe. On June 30, 2009, Unilife signed an Industrialization Agreement with its pharmaceutical partner for the Unilife Ready-to-Fill Syringe under which its partner committed to complete the funding of the A$30.4 million (EUR 17 million) industrialization program.

Combined with the A$16.4 million (EUR 10 million) non-refundable Exclusivity Fee paid to Unilife in 2008, this commitment to fund the industrialization program will represent a total expenditure by the pharmaceutical partner of approximately A$47 million between July 2008 and the end of 2010. Between now and the end of 2009, both parties will negotiate therapeutic drug class areas where the pharmaceutical partner would have the exclusive right to use the Unilife Ready-to-Fill Syringe. Under the Industrialization Agreement, Unilife has also retained the right to enter into agreements with other pharmaceutical companies that may seek to use the Unilife Ready-to-Fill Syringe with injectable drug products marketed in other therapeutic drug classes.

Industrialization Program for the Unilife Ready-to-Fill Syringe

The Industrialization Program for the Unilife Ready-to-Fill Syringe commenced on July 1, 2008. The original project plan targeted the scheduled completion of the Industrialization Program in the fourth quarter of 2011. As the program is approximately one-year ahead of schedule, both parties recognize that it is now expected to be completed by the end of 2010. Unilife has now completed due diligence on potential qualified international suppliers for the development and supply of the high-volume automated assembly system to be used in the production of the Unilife Ready-to-Fill Syringe. A final selection of the supplier will be made during the current quarter.

FDA Clearance of Unitract 1mL Syringes

Unilife secured U.S. Food and Drug Administration ("FDA") clearance of the Unitract 1mL Insulin Syringe in October 2008. FDA clearance of the 510(k) submission for the Unitract 1mL Insulin Syringe gave Unilife permission to market the Unitract 1mL Insulin Syringe within the U.S.

U.S. Production of Unitract 1mL Syringes

In August 2009, Unilife commenced U.S. production of the Unitract™ 1mL Insulin Syringe ("Unitract 1mL Syringes") at its FDA-registered manufacturing facility in Pennsylvania. Prior to the successful transfer of the automated assembly system for the Unitract 1mL Syringes into its designated clean room in June 2009, Unilife had completed a series of key activities and operational tests. Prior to final installation in the clean room, Unilife had also successfully tested other related manufacturing systems including an automated barrel printer and an automated packaging system. The automated assembly system has been rated at up to 90% of efficiency, with Unilife now continuing to work towards achieving the optimum productivity rate for this assembly system of approximately 40 million units per annum. Commercial release of the Unitract 1mL Syringes is expected to occur during the fourth quarter of 2009 upon completion of product ageing studies, which are a standard requirement for the qualification of manufacturing processes at a new production site. A video of the automated assembly system developed by Unilife to manufacture the Unitract 1mL Syringes is available for viewing at www.unilife.com.

Transition of Key Commercial and Operational Functions to U.S. Facility

During the period, Unilife transitioned key commercial and operational functions from Australia to its FDA-registered U.S. manufacturing facility. In the period from September 2008 to now, Unilife has recruited or relocated more than 35 management and senior professional staff that are now situated at this facility. These U.S.-based roles include the appointment of a Chief Financial Officer, a Senior Vice-President of Operations, a Vice-President of Quality Systems and Regulatory Affairs and Director-level positions for Manufacturing, Supply Chain, Engineering, Product Development and Sales and Marketing.

The current Unilife management team has on average more than 20 years experience. The majority of the members of this management team have a strong background in the medical device and pharmaceutical markets, having worked for multinational companies such as Baxter, Medtronic, Teva, Safety Syringes, Resmed, MEDRAD, Biotronik, Tyco, Dentsply, Boston Scientific and Kimberley Clark. In April 2009, Unilife announced the change of name of its U.S. subsidiary from Integrated BioSciences Inc. to Unilife Medical Solutions Inc.

During the period, Unilife also completed a review of opportunities within Europe for the establishment of a manufacturing facility suitable for the high-volume production of the Unilife Ready-to-Fill Syringe. Following a review of these potential European sites and the necessary operational and supply-chain resources required to support key projects such as the Unilife Ready-to-Fill Syringe, the Company elected to centralize its manufacturing activities within Pennsylvania. Unilife has subsequently commenced a review of facility options within Pennsylvania.

Agreement with the Commonwealth of Pennsylvania

In April 2009, the Office of the Governor of the Commonwealth of Pennsylvania announced that Unilife would be provided with a A$2.15 million (US$1.775 million) funding program which included an A$736,000 (US$600,000) Infrastructure and Facilities Improvement Grant, a A$122,000 (US$100,000) Opportunity Grant, a A$1.2 million (US$1 million) loan from the Machinery and Equipment Loan Fund and a A$92,000 (US$75,000) grant for Job Training Assistance.

Preparations for Listing on U.S. Exchange

During the period, Unilife declared its intention to seek a listing on a recognized U.S. stock exchange as part of its strategy to consolidate commercial and operational activities within the U.S. Subsequent to this period, Unilife announced earlier this month its intention to undertake a proposed redomiciliation of the Company from Australia to the U.S., and a proposed listing on NASDAQ.

To support awareness of Unilife and its business activities within U.S. financial markets, an Executive Informational Overview® report on the Company was released by U.S.-based research group Crystal Research Associates, LLC in January 2009.

In August 2009, U.S. investment banking firm Griffin Securities Inc. initiated independent research coverage on the Company. A copy of this report is available for viewing at or www.griffinsecurities.com.

This independent report was prepared by Keith Markey, Scientific Director of Griffin Securities. Mr. Markey has been an equities analyst for more than 20 years, specializing in the biotechnology, pharmaceutical, and medical device sectors. Much of his career has been with Value Line, Inc., where he held various managerial positions in the Research Department for the world's leading investment advisory newsletter, the Value Line Investment Survey. He was responsible for initiating coverage of stocks in all industries and created Value Line Select, a premium advisory publication. Keith began his career as a biochemist, working in the fields of endocrinology and neuroscience at New York University Medical School and Cornell Medical College. His research, which resulted in more than 30 scientific publications, contributed to our understanding of regulatory biochemistry and stem cell plasticity. Keith has lectured on scientific and financial subjects, and is a contributing editor to HUM-MOLGEN, a news service for the scientific research community. He is also a member of the New York Academy of Sciences and the National Association of Science Writers. Keith earned a Ph.D. in Neurochemistry from the University of Connecticut and an M.B.A. in Finance from the Leonard N. Stern School of Business at New York University.

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