Unilife undecided on takeover plans; gives December 31 deadline
The firm revealed in September it was entertaining acquisition proposals, but also considering a strategic partnership with another company or the sale of some of its technology. Unilife hired Morgan Stanley to “conduct a review of strategic alternatives to maximize shareholder value” in response to “third-party initiated expressions of interest.”
Life science investor OrbiMed provided $6.9m in debt financing to Unilife since October 16, with the possibility of another $3m. The company agreed to $60m in financing agreement earlier this year. CFO David Hastings revealed on Friday OrbiMed has agreed to waive Unilife’s requirement to generate $54.1m in customer cash receipts from January 1, 2015 to December 31, 2015.
Hastings also revealed the massive round of job cuts which began in September will slash 24% of the workforce, not the previously planned 17%. The firm also shrank executive pay-outs, bringing total severance costs to around $500m. The company will start to see the cost savings next quarter, said Hastings; the layoffs are expected to bring down R&D expenses by 30% in FY2016 and sales, general and administrative costs by 20%.
Total revenue for this quarter (Q1 2016) was $3.2m, up from $1.4m year-on-year. R&D expenses rose to $14.6m, compared to $10.4m in the same quarter last year, but fell 5% from Q4 2015.
Abbvie auto-injectors deal
In the same call, Shortall revealed Unilife’s supply deal with AbbVie is much bigger than previously thought.
“This quarter Unilife delivered to AbbVie customized electronic reusable auto-injectors based on the LISA device platform on schedule for use in human factor studies.
“Unilife will recognize $1.2m in revenue in the second quarter of fiscal 2016 from AbbVie for completion of the LISA feasibility program, in addition to payments received for earlier achieved milestones under that program,” he said.
This tops the $5m agreement for LISA and Unifill Finesse prefilled syringes signed and announced in January. Unilife’s Finesse milestones have already been reached.
Platforms: wearables, pre-filled and novel
Unilife has two long-term supply agreements for its wearables tech, one with Medimmune for a commercialised monoclonal antibody. Shortall stressed that Bluetooth links and technology that warms drugs to a comfortable temperature using patient body heat will drive patient compliance and give an edge over hand-held autoinjectors.
Shortall said the company is planning to expand its manufacturing lines for prefilled injectables, and has received a larger than usual order from one customer for the next five years.
The CEO anticipated growing commercial use of ocular and novel platforms, which cost around $75 to $200 per device: demand “will range between a few hundred thousand units and the few million units per year.” Novartis added extra device batches to its order for clinical trials of a custom delivery device.
