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Unilife's investments will pay off in next 6 months, says CEO

By Natalie Morrison , 01-Aug-2012

Unilife has reported a net loss of $52.3m at the end of its fiscal year, up from $40.7m in 2011.

In its recent Q4 results, the firm largely attributed the widening deficit to higher R&D (research and development) expenses linked with expanding its portfolio of drug delivery devices.

During a conference call to investors, CEO Alan Shortall said investments, particularly for the Unifill injection device, account for the costs. Earlier this year, the company also told in-PharmaTechnologist.com it is expanding its Autoinfusor range .

However, though the net loss has widened by over $10m, Shortall was largely positive, saying the initial outlay will start to pay off in the next six months when some of the long term supply contracts gained as a result of spending start to kick in.

He said the firm will continue to hunt more long term supply contracts, especially those related to “high cost low unit” drugs, such as last month’s seven-year deal with an unnamed pharma giant .

Batting off critics who say the income from such deals is minimal, he argued that the market has overlooked the fact it could bring in $75 - $85m over the contract's entire run, and that partners could then ink similar deals for their operations in other countries.

“We have a number of those deals in the pipeline,” he said, adding that just three or four of those deals could see healthy books.

He also said revenues would come in the form of cash up front in exclusivity and development fees – similar to a recent recent development agreement with Sanofi , under which the company paid Unilife $10m upfront for the use of Unifill.

“When a company selects product to go into trial, the development fee they will pay will be miliions of dollars to adapt it to their particular trial,” he said. “We could have five or six of those over the next couple of months that could generate $5m each.”

Of strategy for the next 12 months, Shortall said there are three key milestones: shipping small batched of Unifill syringes to new and existing customers in a bid to sign more additional supply contracts, continuing to invest in R&D to generate strong return on investment, and continuing to spend on people, producing systems and quality programs to boost business.

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