Unilife Corporation (Nasdaq: UNIS) - Third Quarter Fiscal 2010 (3/31/10) Earnings - Michael Sweeney

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Unilife Corporation (Nasdaq: UNIS) - Third Quarter Fiscal 2010 (3/31/10) Earnings 0 comments

May 18, 2010 11:18 AM | about stocks: UIS

Summary and Update

In the third fiscal quarter of this year revenues for UNIS were $2.4 million compared to $4.1 million in 2009. Right now, UNIS is not producing significant product revenues as most of their revenues were generated by March payments from the previously reported Sanofi-Aventis deal. In recognition that UNIS’ industrialization program was 12 months ahead of schedule, Sanofi-Aventis agreed to accelerate the agreed-upon quarterly payments. Reality is UNIS is 12 months ahead of schedule toward being a product revenue company.

The net loss was $12.1 million or $0.23 per diluted share. That included roughly $7.0 million of a number of non-recurring and/or non-cash items, including share-based compensation expense, the cost associated with the NASDAQ listing, and $4.3 million for compensation to the inventors of the Unifill patents.

The adjusted net loss is $5.1 million with cash reserves of $24 million.

Highlights covered on the call by CEO Alan Shortall include:

·      Stason - The agreement with Stason Pharmaceutical includes a requirement for Stason to purchase a minimum of one million units of the Unitract 1mL syringe per year during the term of the contract (subject to annual review). Stason is placing an immediate annual order with Unilife for the purchase of one million units of the Unitract 1mL syringe. Other countries within South-East Asia (Japan, China and Taiwan) may be added to the list of designated territories where Stason has exclusive rights to sell the product if the parties reach agreement on minimum orders for those countries.

·      The Unitract 1mL Syringe got FDA clearance and the 1mL Unitract Syringe will be produced in York, PA FDA registered manufacturing facilities here in the United States.

·      UNIS has employed an additional 60 people since January 2010 as UNIS continues to build the operational infrastructure;

·      The York, PA construction continues on schedule;

·      The global launch plan for Unitract is being formulated by UNIS management. Shortall stated, “We have an enormous amount of interest in that product and we are reviewing the potential distribution at the moment.” Interest includes pharmaceutical companies in Asia, Europe and the U.S.

·      One potential distributor in the U.S. has the Unitract units in six different hospitals. One of those hospitals is a children’s hospital that currently refuses to use safety syringes because they previously believed the current generation of safety syringes put healthcare workers at risk.

·      India – UNIS entered the Indian market last quarter. Dr. Gerald Verollet has worked with Unilife from last six years, and he has recently relocated to India to work with Unilife distributors in India. Dr. Verollet was the former Head of the Medical Device Department in the World Health Organization and was the instigator for writing the current international standards for safety syringes.

·      Mary Kate Wold was appointed to Unilife’s Board of Directors. She was with Wyeth for eight years until Pfizer purchased Wyeth last year for $68 billion. Mary Kate was the Senior Vice President of Finance and Treasury at Wyeth, and she was previously a partner at Shearman & Sterling. Wold will chair a new committee focusing on strategic partnerships and pharmaceutical relationships.

Sales in the Pipeline

The Unitract product has an increased level of interest lately, and CEO Shortall stated, “it’s a brilliant product”. At full production levels, Unitract can contribute $10 million of revenue. Shortall predicted that “in the third quarter this year we will start to see revenues coming in. But next year is the big one where we start to see revenues coming in.”

Disclosure: no position

Disclosure: no position
Themes: Unilife, earnings Stocks: UIS

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