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UniLife Corporation (NASDAQ: UNIS) @ Cowan

by ProActive Capital Resources Group

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UniLife Corporation (NASDAQ: UNIS)

UniLife Corporation (NASDAQ: UNIS)
Summary of Presentation by CEO Alan Shortall at 31st Annual Cowen & Company Healthcare Conference in Boston

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Investing in Unilife offers a broad investment in healthcare, it is not just a syringe story We are at the forefront of the convergence between therapeutic drugs and innovative delivery devices We are in the unique position whereby we can help pharmaceutical companies protect billions of dollars of revenue, and at the same time: Protect healthcare workers, Improve patient care, Reduce healthcare costs, Enhance the brand differentiation and product lifecycles of drugs in competitive therapeutic markets and…. drive commensurate revenue & profits for shareholders. Sanofi-aventis - the world’s largest purchaser of prefilled syringes - approached us in 2003 after a global review of all safety syringe technologies. They have since provided almost $40m to help develop the Unifill ready to fill syringe, and to have the exclusive right to negotiate its purchase within two main drug classes until 2014. We are now at various stages of discussions with many other pharmaceutical leaders We are not just a one product company. Our first product line is already FDA-approved, and we have a very strong and exciting pipeline We have the operational capabilities to meet projected pharmaceutical demand for our products, and We have a have a highly qualified Board and management team with an average of 23 years experience
Before Unilife can be a preferred and trusted supplier of primary drug containers to some of the world’s largest pharmaceutical companies, we must first demonstrate we have the industrial resources and operational capabilities to meet projected demand. Like a gold mine... The gold is worth nothing until you have the capacity to dig it out of the ground and supply it to the customer. We must demonstrate that we have the production facilities, assembly systems and quality assurance systems in place to earn the responsibility to have our devices contain the drugs of our pharmaceutical partners. The last few years have been focused on building these operational capabilities to meet projected demand. We are now reaching a point where we will be ready to supply our devices to pharmaceutical customers. Unilife has earned its reputation for meeting its key business milestones Best example is the development of our new $31 million state-of-the-art facility in York, PA - Ground turning of the site began on December 8, 2009. We moved into the completed facility on December 17, 2010. Fully on-schedule and on budget Designed by leading pharmaceutical architects to meet stringent pharmaceutical requirements for primary drug containers The facility includes eleven 8 clean rooms, a Water for Injection system, laboratories, product development centers and a fully segregated warehouse. Today, Unilife employs approximately 150 staff at the facility. Facility has been designed to accommodate our near and long-term growth requirements Stage one has the facility to manufacture up to 400 million units per year A 100,000sqf Stage Two extension is already pre-approved from local authorities, and would increase capacity to up to 1 billion units per year
More than 1.3 million lives lost each year as a result of unsafe injection practices Two key problems The reuse and sharing of syringes (mostly in developing countries or by injecting drug users); and Needlestick injuries to healthcare workers – 600,000 injuries in US each year US was the first country to introduce legislation in 2000 mandating the mandatory use of safety syringes in all healthcare facilities Legislation being strongly enforced by OSHA However as this graph from Massachusetts shows - rates of reported needlestick injuries caused by syringes have not declined since 2002 Only difference is that safety syringes are now causing the majority of all reported needlestick injuries. This is because current safety products are either being used incorrectly by healthcare workers, or not at all. OSHA, the FDA and many healthcare workers have expressed a preference for the use of products with passive and integrated safety features. Rarely however are such products available. The market continues to await the arrival of products of choice that can meet the safety and functionality needs of healthcare workers and patients. Europe and other international regions are now following the US towards the adoption of similar laws
Prefilled market is the most profitable, least congested and fastest growing market (removed “s”) for syringes. Made of glass - materials in fluid path must be biocompatible with drug for a two year shelf life. More than 2.4 billion prefilled syringes used a year, with the market valued at $1.5 billion. Convenient, accurate, fast and easy to use - Popular with healthcare workers and patients. There are more than 20 pharmaceutical companies with drugs in a prefilled syringe format More than 50 drugs are now available in a prefilled syringe format These are being marketed across 12 highly competitive therapeutic drug classes. More than 100 drugs in the pipeline expected to be launched in prefilled syringe format. However there is no prefilled syringe with safety features integrated within the glass barrel. To comply with needlestick prevention laws, pharmaceutical companies are required to attach ancillary safety products onto a regular prefilled syringe. This has several drawbacks Cost of attaching the safety product onto the prefilled syringe – risk of product loss Increases packaging, shipping and storage volumes by up to 70% Bulky size for operator handling and disposal A small number of ancillary safety devices on the market. See photo - All look similar, and share similar steps of use. Current ancillary safety devices are commodity items – they offer little opportunity for differentiation within these competitive therapeutic classes. Unifill syringe on the far right does not just provide high level of safety – it is different... By partnering with Unilife, pharmaceutical companies can generate powerful brand differentiation and optimize the lifecycles of their drug products.
Unilife has a market-driven approach to product development. All of our proprietary products share a unique technology platform that allows operators to control the speed of automatic needle retraction directly from the body into the barrel. The risk of infection from needlestick injuries or splatter is virtually eliminated. The needle is then locked inside the barrel to prevent reuse or re-exposure. All these safety features are fully integrated within the barrel of the syringe.
Our goal is to develop the first full range of prefilled and clinical use syringes that share a common technological platform of passively activated and fully integrated safety features. Our Unitract range of syringes are designed for use with drugs that are supplied in a vial or ampoule form. The range includes the Unitract 1mL safety syringes that are already approved for use and currently being sold across the U.S. Our Unifill range of prefilled syringes are designed for supply directly to pharmaceutical companies for filling an injectable drug or vaccine. All of Unilife’s prefilled and clinical use safety syringes will be used and activated in a similar way. We believe that by standardizing injection procedures with one technology platform, we can help to set a new standard for the safe, simple and routine injection of therapeutic drugs. In addition, we are also working on other confidential pipeline projects that will complement our current proprietary portfolio, and help to further expand the scope of our relationships with pharmaceutical companies.
The Unifill ready-to-fill (prefilled) syringe (“s” removed) is our lead product and our most significant near term commercial opportunity. It is designed to be integrated into (removed “the”) current industrial systems used by pharmaceutical customers to fill an equivalent standard prefilled syringe with an injectable drug or vaccine. World’s first and only known prefilled syringe with automatic safety features that are fully integrated within the glass barrel. Similar in size to an equivalent prefilled syringe. And it is one-third smaller than prefilled syringes attached with an ancillary safety product. As a primary container, all components within the fluid path utilize materials that are USP compliant, and sourced from established pharmaceutical suppliers. The handling and administration of the Unifill syringe is the same as per typical subcutaneous injections undertaken with an equivalent prefilled syringe. Upon the delivery of a full dose by the operator, a passive retraction mechanism is activated. Operators can then be in full control of the speed at which the needle withdraws directly from the body into the barrel of the syringe. This virtually eliminates the risk of needlestick injury or aerosolization (splatter). The plunger is then automatically locked in place to prevent re-exposure, and facilitate compact, convenient disposal. Unifill is ideally positioned to help pharmaceutical customers minimize industrial, packaging and storage costs; extend product lifecycles and enhance brand differentiation within competitive therapeutic markets.
Late last year, Unilife conducted independent evaluations of the Unifill syringe with 66 experienced healthcare workers in San Francisco, Philadelphia and Chicago. These healthcare workers use prefilled syringes with ancillary safety products on a daily basis. We asked them to compare the Unifill syringe against two leading prefilled syringe products with clip-on safety features that are used in the market today. Suffice to say, we got the WOW factor from them. Our product was strongly preferred across all five surveyed areas of functionality, safety, ease-of-use, performance and appearance. Of those 66 healthcare workers, 100% preferred the Unifill syringe against the largest selling prefilled ancillary safety device in the U.S. And more than 80% preferred the Unifill syringe against another less used prefilled safety product. Most of those who preferred the other product liked its comparably larger size because they had large hands. However 50% of those who chose the Unifill syringe liked it because of its relatively small size for easy handling, compact disposal and ability to minimize patient discomfort. It just goes to show you can’t please everyone. Additional market-based evaluations of the Unifill syringe by both Unilife and pharmaceutical companies are currently underway. To-date, the results have been equally favorable.
Unifill syringes offer pharmaceutical companies with truly Unique Selling Proposition. It is not a commodity product. You can only get them from one source…us. This is very important when you consider that the strength of our IP position, with patents scheduled in most countries, including the United States, to expire between 2026 and 2030. They thus offer far more than optimal healthcare worker protection and enhanced patient care. The commercial opportunities that can be generated through the effective use of innovative devices have led to the start of a new ‘arms race’ amongst pharmaceutical companies. Today, the convergence of therapeutic drugs and delivery devices into unique combination products represents one of the fastest-growing and highly sought-after prizes. Conversion of prefilled drugs to our Unifill products, which can be controlled within a particular therapeutic class and thus restricted to generic or branded competitors, can provide a unique opportunity to enhance, and even extend, the lifecycle of the drug product. There are more than seven prefilled drugs that will expire over the six years that have combined annual revenues of more than $20 billion. The upgrading of drugs approaching patent expiration to the Unifill syringe can create especially compelling lifecycle opportunities. White papers developed for interested pharmaceutical companies with prefilled drugs approaching patent expiration indicate that their conversion to Unifill could help protect or regain revenues of around 20% that would otherwise be lost to generics. As a unique primary drug container, it may even help improve claims for the drug device combination product, thus obstructing the entry of competitor products by reducing the likelihood of substitution.
In total, we are tracking more than 80 marketed and pipeline drugs and vaccines from more than 20 pharmaceutical companies that are deemed suitable for potential use with the Unifill™ syringe. This includes not only drugs that are currently indicated for use across more than a dozen broad therapeutic classes, but a number of new areas. This includes a number of blockbuster drugs approaching patent expiration or under threat from generic or biosimilar competition.
As I said earlier, our primary pharmaceutical customer sanofi-aventis has committed approximately $40 million in exclusivity fees and industrialization payments for the Unifill™ syringe. We have a great relationship with sanofi-aventis and are fortunate and proud to have them as a partner. Earlier this year, we agreed to a list of therapeutic drug classes where they have the exclusive right to negotiate the right to purchase the product. They have secured the full therapeutic drug classes of antithrombotic agents and vaccines, where they are market leaders, until June 2014. They have also secured an additional four sub-classes where prefilled syringes are not currently used by any pharmaceutical company.
We have retained the right to negotiate with other pharmaceutical companies seeking to utilize the Unifill™ syringe across more than 10 therapeutic classes that fall outside of those areas exclusively retained by sanofi-aventis This means we are strongly positioned to maximize the commercial opportunity of this device, which is poised to significantly disrupt the pharmaceutical market for prefilled syringes. Over the past year, we have held senior-level discussions with 20 pharmaceutical companies – most of which are already active in the prefilled syringe market. Discussions with many of these interested parties are now accelerating. As commercial production and supply of the Unifill syringe begins, we also expect to start formalizing a number of pharmaceutical discussions that are now underway. These agreements may take any number of forms, including a development or collaboration agreements, or industrialization and exclusivity agreements for pipeline products similar to what we have done with sanofi-aventis. Whilst supply agreements for the Unifill syringe could come at any time, I believe that most are likely to be secured only after commercial sales have commenced.
Our supply chain strategy seeks to minimize risk, maximize customer choice and complement standard pharmaceutical handling systems for prefilled syringes. We recognize that many of our pharmaceutical customers may have specific material preferences for the Unifill syringe. We have thus engineered the product so that it can accommodate a wide variety of materials that are already used with prefilled syringes and vials. Pharmaceutical customers will ideally be able specify a preferred source or component materials. Indeed, it is our focus that we will have a dual to triple source strategy for the supply of all of our components and essential services wherever possible. More than a dozen established suppliers of pharmaceutical materials have already been qualified by Unilife. These suppliers cover all of the components used in the production of the Unifill syringe. We expect that additional suppliers will be added to our list as production ramps up, and we consolidate relationships with pharmaceutical companies. The first automated assembly line that has been developed for us will have the capacity to manufacture up to 60 million units of the Unifill syringe per year. To help de-risk our production ramp strategy, additional high-volume assembly lines to be added moving forward will essentially be larger scale variants of this initial line. The expected annual capacity of these future lines will be 150 million units per year. Preparations for the Factory Acceptance Testing and qualification of our first Mikron line are currently taking place. We expect initial production to commence out of our York facility towards the end of this month. We are thus confident that the initial commercial supply and sales of the Unifill syringe will commence towards the middle of the 2011 calendar year once internal qualification and validation tests have been completed.
In summary, we now have all key elements of our business in place and ready for execution. Our focus is on fast-growing, low congestion and profitable sectors of pharmaceutical and healthcare markets being driven by legislation towards the mandatory use. These markets continue to seek products of choice because their injection safety needs are not being adequately addressed at present. We have developed a full portfolio of syringes with best-in-class safety features that are custom-designed to meet the specific safety and functionality needs of each target market. In particular, the Unifill prefilled syringe is (remove “ have”) the first and only known prefilled syringe with safety integrated inside glass barrel. This non-commodity product can offer help optimize drug lifecycles and deliver powerful brand differentiation in competitive therapeutic markets. To validate its commercial potential, we have a $40 million partnership with sanofi-aventis – who are the world’s largest consumer of prefilled syringes. We are also in active discussions with many other pharmaceutical companies , many of which are now beginning to accelerate rapidly. So that we can be a strong and reliable supplier to pharmaceutical companies, we have built upfront the operational capabilities to meet projected demand. In particular, our new state-of-the-art production facility in Pennsylvania is designed to meet the stringent pharmaceutical standards for primary drug containers. To back this up, we have built a highly experienced team with deep industry expertise. Given our strong commercial position, Unilife has created a number of significant opportunities to generate sustainable revenue growth with attractive margins and minimal go-to-market costs. We look forward to delivering on our key upcoming milestones including the initial production and sale of the Unifill syringe, as well as the signing of agreements with other pharmaceutical industry leaders….Questions

UniLife Corporation (NASDAQ: UNIS) @ Cowan Presentation Transcript

Presentation to Cowen Healthcare Conference March 9, 2011 03/10/11
Cautionary Note Regarding Forward-Looking Statements This presentation contains forward looking statements under the safe harbor provisions of the US securities laws. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management. Our management believes that these forward-looking statements are reasonable as and when made. However you should not place undue reliance on any such forward looking statements as these are subject to risks and uncertainties. Please refer to our press release and our SEC filings for more information regarding the use of forward looking statements. 03/10/11
Introducing Unilife
- Markets moving to mandatory safety
- Best-in-class safety syringe portfolio
- 1 st product line already FDA-cleared
- Only prefilled with integrated safety
- $40m agreement with sanofi-aventis
- Discussions accelerating with other pharmaceutical companies
- State-of-the-art facilities in PA
- World-class Board / management
03/10/11 Emerging Global Leader for Innovative Drug Injection Devices
Unilife’s Operational Capabilities
- 165,000sqf state-of-the-art production facility in York, PA
- Meets stringent pharma standards for primary drug containers
- Eleven clean rooms, and other advanced infrastructure
- Automated assembly systems used to attain optimal quality
- Capacity to produce up to 400m units per year (stage 1)
03/10/11
The Global Transition to Safety Syringes
- Healthcare and pharmaceutical markets being driven by legislation to mandatory use of safety syringes
- Needlestick injury reports not declining despite enforcement
- Market preference for devices with passive, integrated safety
03/10/11
Pharmaceutical Challenges for Prefilled Safety
- 2.4 billion prefilled syringes
- 50+ drugs / vaccines now in a prefilled syringe format
- Only clip-on safety options available for compliance
- Delivery devices increasingly used as brand differentiator
Standard prefilled syringe (left) next to three attached with an ancillary safety product 03/10/11 Unifill
Unilife Technology Core Proprietary Features
- Fully integrated safety features
- Automatic needle retraction
- Operator controlled withdrawal
- Non-reusable / tamper-proof
- Intuitive use, convenient disposal
03/10/11
Developing a Full Proprietary Portfolio Unifill ® Ready-to-Fill syringes (glass barrel filled by pharma) Commercial release 2011 Development Pipeline Development Pipeline Development Pipeline Approved and launched Development Pipeline Staked needle (Subcutaneous) Attachable needle (IM) 3, 5mL - used with standard luer needles Staked needle (Insulin / TB) Project Taipan Project Liger Unifill syringe Unifill Select Unitract 1mL Unitract Clinical Confidential Projects Unitract ® Clinical syringes (for use with vials) 03/10/11
- Primary injectable drug container
- Only prefilled syringe with safety integrated inside the glass barrel
- USP-compliant materials
- Integration into fill-finish systems
- Minimal packaging, transport and storage volumes
- Compact handling, intuitive use
- Optimal protection from harm
The Unifill ® Ready-to-Fill Syringe 03/10/11
- Unifill preferred across all 5 areas :
- Functionality
- Safety
- Appearance
- Ease-of-use
- Performance
- Independent evaluations with 66 experienced U.S. nurses
- Compared to leading prefilled ancillary safety products
Results of Independent Market Evaluations 03/10/11
- Unique drug delivery device – not a commodity
- Streamlines filling, packaging, transport and storage systems
- Highest levels of protection for healthcare workers or patients
- Patent protection up to 2030
- Offers strong brand differentiation in competitive drug classes
- Can help optimize or extend product lifecycles
- Potential to obstruct generic or biosimilar competition
Unique Selling Proposition for Unifill 03/10/11
Potential Drug Candidates for Unifill Syringe 83 approved and pipeline drugs from 19 pharmaceutical companies across more than 20 therapeutic classes now available or potentially suitable for use in a prefilled syringe designated for subcutaneous injections 03/10/11
Relationship with sanofi-aventis
- Contributed approximately $40m for exclusive right to negotiate purchase of Unifill syringe until June 2014
- Parties agreed to a Unifill syringe exclusivity list in March 2010
- Ten year exclusivity extension per drug class if commercial supply orders placed before 2014
- Unilife required to commit only 30% of capacity
- Other sub-classes may be added (agreement both parties)
03/10/11
Other Pharmaceutical Discussions 03/10/11
Preparing for Production and Sales
- Qualified components ready – internal testing successful
- A dozen experienced suppliers already qualified
- Initial production to commence in late-March 2011
- Initial sales to customers in mid-2011
03/10/11
Summary 03/10/11
- Markets driven by legislation to mandatory safety syringe use
- Full portfolio of syringes with best-in-class safety features
- World’s only prefilled syringes with safety inside glass barrel
- $40 million from sanofi-aventis for exclusivity in defined classes
- Accelerating talks with many other pharmaceutical leaders
- State-of-the art production capabilities to meet demand
- Highly experienced team with deep industry expertise
- Significant projected revenue growth and attractive margins
- 2011 focus on production, sales and agreements