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Unilife reports 'strong quarter' despite no revenue from products

By Dan Stanton , 14-May-2014

Unilife reports 'strong quarter' despite no revenue from products

Unilife says it is confident future revenue from current contracts could total $1bn and is scaling up manufacturing capacities despite no product sales in the third quarter.

For the third quarter 2014, the drug delivery device firm reported a net loss of $15m (€11m) and revenue of $1.4m, though none of that came from sales of its injectable products.

However, CEO Alan Shortall was upbeat and said in a conference call Monday that “this has been another strong quarter for Unilife,” with new customer agreements – now totalling ten - generating cash receipts and continued interest from pharma following recent deals with Sanofi , Novartis , and Hikma .

“I am often asked about our commercial pipeline and when the next deal is coming,” he told investors. “While it is true that we have a large growing commercial pipeline with a string of additional agreements in process, I would like to make one thing clear: Unilife is a successful business with a clear pathway to profitability based on existing supply agreement alone.”

Cantor Fitzgerald analyst Jeremy Feffer said in a note management gave “sufficient comfort” during the call and “investors should not focus at all on the $1.4m of revenues that the company reported.”

He added: “There were no product sales in the quarter, but management indicated that products will begin shipping on three different Unifill programs during the September and December quarters.”

Upping Production

President and COO Ramin Mojdehbakhsh added the current contracts for its Unifill prefilled syringe products are expected to bring in cumulative future revenue in excess of $1bn, and the firm is preparing to up capacity to service these agreements.

“We had one Unifill line in place with an annual production capacity of 60 million units. Much of this capacity has been sold or reserved for existing customers. Much of this capacity has been sold or reserved for existing customers,” Mojdehbakhsh said.

“Traditional assembly lines are on order to manufacture other products within our Unifill platform. Various components for these additional lines are being received and installed. As each of these new lines is installed, work will continue towards production and supply.”

Furthermore he added the firm intended to scale up manufacturing capacities for other products with orders made for additional assembly lines and equipment. When questioned on how this would affect the firm’s financials, he said: “Capital expenditure is increasing and that's obviously fully expected.”

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