Unilife ($UNIS) Investor Presentation - July 2011
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Unilife ($UNIS) Investor Presentation - July 2011
- 1. Innovative Drug Delivery Device Solutions Alan Shortall Chief Executive Officer
- 2. 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. 2
- 3. 3 Introducing Unilife An emerging global leader for innovative drug delivery devices Developedfullsafetysyringeportfoliowithbest-in-classfeatures Unifill–the world’s only prefilled syringes with integrated safety Game-changer for the fastest growing, most-profitable syringe market Sanofi-aventispaid$40MMupfrontforaccess rights intwoclasses Discussions accelerating with many other interested companies Industrialization ahead of schedule, initial sales commence in July Device portfolio now rapidly expanding, driven by customer need Highly responsive business structure with a world-class team
- 4. Our Business Strategy Built upfront the operational capabilities to meet pharmaceutical device demands from clinical development to commercial sales Addressing unmet customer needs with innovation and speed Lead with Unifill, then expand into other advanced device areas Focus on customized, differentiated (non-commodity) devices Collaborating with our partners to develop the right device to deliver the right drug to the right patient, resulting in: Long-term, preferred source supply contracts with high-margins Revenue generating opportunities extending beyond product sales into exclusivity fees per therapeutic sub-class, and royalties 4
- 6. FDA-registered; meets stringent standards for primary drug containers
- 7. Designed for growth, with 400MM annual syringe capacity (stage one)
- 8. Offers customers a broad spectrum of services at one location
- 9. Automated assembly systems used to attain optimal quality5
- 10. 6 Safety devices mandated in U.S. healthcare facilities to protect those at risk of needlestick injury; E.U. facilities now following Reported needlestick injuries largely stable, despite enforcement Needlestick Injuries Caused by Syringes Among Hospital Workers in Massachusetts Sharps Injuries among Hospital Workers in Massachusetts 2002 - 2009. Massachusetts Sharps Injury Surveillance System Mandatory Use of Safety Devices in Healthcare
- 12. Passive activation of needle retraction mechanism
- 15. Directly from body into barrel
- 16. No risk of aerosol (splatter)
- 18. Intuitive use, convenient disposal7
- 19. 8 Pharmaceutical Market for Prefilled Syringes Prefilled Syringes - Historical Demand and Forecast Growth* Billions of prefilled units The fastest-growing and most profitable syringe market* 2.4B prefilled syringes in 2010, 12% annual growth rate* * Prefilled Syringes 2010 Greystone Associates
- 20. Pharmaceutical Market for Prefilled Syringes 9 Selection of 50 Marketed Prefilled Drugs by Therapeutic Class / Company Number of Prefilled Drugs
- 21. Market Transitionto Prefilled Safety Syringes Unifill Standard prefilled syringe (left) next to three attached with an ancillary safety product 10
- 25. Controlled retraction into barrel
- 27. Designed for integration into standard fill-finish lines
- 28. USP-compliant materials in the drug fluid path
- 29. Eliminates use of ancillary safety, minimal packaging volumes
- 30. Uniqueness makes it ideal for brand differentiation12
- 32. Intense competition between branded, generic and biosimilar drugs within many fast-growing therapeutic classes
- 33. Innovative devices with superior, value-adding features can:
- 34. Deliver powerful brand differentiation in competitive areas
- 35. Optimize (or extend) product drug and build market share
- 36. Generate unique claims that can obstruct generics13 Device-Led Brand Differentiation for Drugs
- 37. 14 Unifill: A challenge most thought impossible Sanofi paid $40MM for access rights to Unifill in classes of anti-thrombotic agents and vaccines until June 2014 Discussions now accelerating with multiple additional parties Potential revenue generating opportunities for Unifill syringe include commercial sales, access fees and royalties
- 38. Production Underway, Initial Sales Imminent 15 Shipments commencing in July to Sanofi and other customers Initial sales this year at relatively low volumes with high prices Expected full optimization of 60MM unit line during 2012
- 40. Require injection into patient (liquid form or reconstitution)
- 41. Pharmaceutical companies seeking devices that can be customized to specific needs of the drug and target patient^ Pfizer, EvaluatePharma
- 42. 17 Market Trends Favoring Unilife’s Expansion Patient Self-Administration of Injectable Drugs Patient self-injection desirable Reduced healthcare costs Convenient to patient during use, portability and disposal Adherence to self-treatment Preference for prescribing Device segments targeted at patient self-administration (right)
- 43. Unilife earned a reputation for device innovation via Unifill syringe Unifill platform now expanding into multiple product variants PharmaceuticalleadersapproachingUnilifewithotherunmetneeds Drug-specific collaborations from R&D thru to commercial sales Multiple projects with multiple partners in multiple device areas 18 Customer-Driven Technology Pipeline
- 45. Customized to meet specific needs of biologics and target patient
- 46. Unilife is an emerging leader for advanced drug delivery devices
- 47. Fully aligned to serve customer needs with speed and innovation
- 48. Unifill: the first and only prefill syringes with integrated safety
- 49. Significant commercial potential for broad array of injectable drugs
- 50. Arich, fast expanding portfolio being driven by customer need
Editor's Notes
- Unilife is a US-based company listed on NASDAQ under the symbol “UNIS”. Investing in Unilife offers a broad investment in healthcare. It is far more than just a syringe storyWe are at the forefront of the convergence between therapeutics and advanced drug delivery systems. We can help pharmaceutical companies protect billions in 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 with an unmet need. They asked if we could integrate our proprietary platform of safety features into the primary drug container of a prefilled syringe. This was a task many thought impossibleWe overcome this challenge with the Unifill syringe. Sanofi has subsequently paid us $40m in return for having the right to negotiate its purchase within two therapeutic classes until 2014. We are at various stages of discussions with multiple other pharmaceutical companies interested in the product for use with their approved and pipeline drugs. We are excited about the commercial potential of this game-changing product, with initial sales commencing early next month.Due our success and innovation with the Unifill syringe, we are now gaining a reputation within the pharmaceutical industry as THE go to company for device innovation. We have the flexible structure, world-class expertise and operational capabilities to develop customized devices with value-add features with a level of speed and innovation that is virtually unprecedented for our industry. We have developed these capabilities at exactly the right time. Pharmaceutical companies seek innovative, differentiated devices that are customized to meet their specific drug and patient needs Our rapidly expanding platform of proprietary devices is being driven in direct response to the emerging and unmet needs of our pharmaceutical customers. Many of these have equally significant market potential as Unifill.
- Our business strategy is helping redefine the pharmaceutical market for drug delivery devices We recognize that pharmaceutical companies are seeking to change the way that drug delivery devices are developed, and that we are uniquely positioned to help. Large device companies have a business model focused on the mass-volume production of commodity products that are typically marketed under a one-size fits all package. They say to a customer, here is our product. Now go and fit our product to your problem. This is not what pharmaceutical companies want. What they want is a flexible, responsive partner with the expertise to partner with them during clinical development to develop the right device for the right drug for the right patient. We have built our business from the ground-up so that is perfectly suited to meet this new paradigm for customized delivery devices that are delivered with speed and innovation. Our streamlined business structure cuts out the red-tape without compromising on quality. When a customer comes to us with an unmet need, we are able to use our existing platform of device technologies to develop with astonishing speed a choice of products solutions.That is exactly what we did with Sanofi for the Unifill syringe. And it is what we are replicating on a grand scale as we develop our rich device portfolio in collaboration with customers.It is important to underline that every single one of these pipeline products is unique. Not a met-too product. Not a commodity. This is a self-funding, risk-sharing model for clinical development where we own any device-related IP and could receive upfront fees for exclusivity. We may also have options to market the device to other companies for use in areas non-competitive to our primary customer. Following commercial launch, we can then look forward to long-term sales of the device under single source contracts with high margins and minimal go-to-market costs.
- We operate out of a new, state-of-the-art device manufacturing facility in York, PennsylvaniaThe facility spans 165,000 square feet, or in layman’s terms, the size of three football fields, This $32 million investment was completed in just over one year...on schedule and on budgetIt is designed by leading pharmaceutical architects to be ahead of the curve in the production of the highest quality primary drug containers. It is FDA-registered and now fully operationalThe facility is designed to accommodate our near and long-term growth requirementsThe current first stage has the capacity to manufacture up to 400 million units per yearA pre-approved 100,000sqf extension increases capacity to up to 1 billion units a yearUnder the one location, we provide our customers with a one stop shop for device innovationThe facility includes eleven 8 clean rooms, a Water for Injection system, laboratories, product development centers and a fully segregated warehouse. To maximize quality and reliability levels of our products, we utilize fully automated assembly systems that are designed by global industry leaders to meet our high-precision needsIn many ways, we operate closer to the level of our pharmaceutical customers than a typical medical device company. We currently employ 150 staff at the facility,and are growing rapidlyIt is also worth mentioning the strength of our team. Many of our Board and senior executives are respected industry leaders in the medical device and pharmaceutical markets including:Marc Firestone, current General Counsel for Kraft Foods, Mary Kate Wold, the former EVP for Wyeth prior to its acquisition by Pfizer, and our COO Dr Ramin Mojdeh who was previously global head of product development, and then head of pharmaceutical systems in North America for BD. These are the types of high caliber industry leader we are attracting to our team.
- Finally, healthcare and pharmaceutical markets are transitioning towards the mandatory use of safety syringes to protect those at risk of needlestick injuryThe U.S. was the first country to mandate the use of safety products in healthcare facilities to protect healthcare workers from needlestick injuries. Since then, the U.S has converted to the majority use of safety syringesE.U member states are now following suit, and have two years to comply. However current safety syringe technologies are not fully meeting the safety nor the functionality needs of healthcare workers. The chart here shows the annual number of reported needlestick injuries caused by syringes in Massachussets healthcare facilities since 2002, when OSHA first began to enforce their mandatory use. The red color shows the number of recorded injuries with standard non-safety syringes has declined, as you would expect with strong enforcement of mandatory lawsHowever you also see that the total number of recorded injuries remains largely stableYou have near the same number of recorded injuries in 2009 as back in 2002.The only difference is that safety products, highlighted in green, are now causing more than two-thirds of all needlestick injuries. The FDA and OSHA state that safety products with automatic and integrated safety features are preferred because this combination offers the highest levels of protection. However this chart highlights that most safety syringes still have manual or attachable features requiring an action to render the product safe. Sadly, this is not happening.
- By listening to our customers, Unilife has built an extensive platform of core technologies for a range of safety syringes. All of our hypodermic and prefilled syringe products share these core features, yet are each custom-designed to meet the specific needs of the target market. First of all, every one of our safety features are fully integrated inside the barrel of the syringe. No attachment necessaryOur needle retraction mechanism is activated automatically on the injection of the dose to virtually eliminate the risk of needlestick injuriesOperators can then control the speed at which the needle is retracted directly from the body into the barrel of the syringe to prevent the risk of splatterThe needle is then locked inside the barrel so that it can’t be reused or re-exposedOur products are intuitive for use, suitable for use by either healthcare workers or patients, and are compact and convenient for disposal.
- The pharmaceutical market for prefilled syringes is the fastest-growing, most profitable and least competitive sector for syringes. This is where we focus. They are supplied directly to the pharmaceutical company ready to fill with a measured dose of an injectable drug or vaccine. Prefilled syringes are made of glass, and are designed to be biocompatible with the drug for a period of two years. The only materials inside the fluid path are the glass barrel, the stainless steel needle and a specialized rubber seal which are all USP compliant. There were an estimated 2.4 billion prefilled syringes used in 2010, with the market growing at around 12% per year.
- More than 50 drugs with combined annual sales of around $50 billion are currently available in a prefilled syringe format. There are more than 20 major pharmaceutical companies that currently utilize prefilled syringes for many of their blockbuster drugs across more than a dozen therapeutic sectors. Prefilled syringes are strongly preferred over drugs supplied in a vial or ampoule form for many reasons, including the elimination of drug wastage and the speed and convenience at which healthcare workers or patients can simply and reliably deliver a measured dose of medication. Due to their popularity, we are aware of more than a hundred other drugs currently in the development pipeline of pharmaceutical companies that are considered suitable for launch in prefilled format.However having a prefilled syringe is now considered to be just a foot in the door. For a drug to be successful within highly competitive therapeutic markets, and compliant with government legislation, pharmaceutical companies now recognize that much more is needed than just a commoditized off-the-shelf prefilled syringe.
- Until we came along, the industry thought that the idea of a prefilled syringe with integrated safety features was impossible. To comply with needlestick prevention laws, pharmaceutical companies have attached ancillary clip-on safety products onto a conventional prefilled syringe. There are several problems with these ancillary safety products. Pharmaceutical companies must take the prefilled syringe over to a secondary assembly line inside their clean rooms to clip these products on. A percentage are damaged during this process, resulting in the loss of the drug, the prefilled syringe and the safety product. They are approximately 60-70% larger in volume than an equivalent standard prefilled syringe. Packaging, transport and storage costs thus increase by 60-70%, which can be expensive as many of these drugs are stored in cold roomsDuring their use, one of these products for example, requires operators to inject the dose, then take the needle out of the body immediately exposing you to risk of an injury. You then hold the device at arms length with the needle pointing down to the ground to eliminate the risk of splatter. You then apply significant pressure to activate the safety mechanism that slides an external sheath of the needle. Many healthcare workers we have spoken to either do not know it’s a safety product, or just dispose of it without activating the safety feature. But most of all, these prefilled safety devices look similar to each other. They do not offer any real opportunities for one drug to differentiate itself over a competitor.
- Now let’s talk about the leading edge of our portfolio that is about to become commercially available. Let me introduce the Unifill ready to fill syringe. Unifill is the world’s first and only pre-filled syringe system with fully integrated safety mechanism. It is a primary drug delivery device, a safety device, and a sharps containment system, all in one. After finishing the dose, the needle in Unifill retracts inside the glass barrel automatically and is fully contained and locked. The speed of retraction is controlled by the user’s thumb. It can then be conveniently disposed. Unifill is now in production and will be available commercially in July. We have significant capacity in place and will look to add more capacity as demand increases.
- The Unifill syringe represents a unique, differentiated and highly elegant solution for pharmaceutical companies active in the therapeutic markets where prefilled syringes are used. The product is designed for integration into the standard fill-finish lines used by pharmaceutical companies for conventional prefilled syringes. It eliminates the need for bulky clip-on safety.All materials inside the fluid path are also USP compliant for compatibility with the drugsIndependent market evaluations conducted in 2010 with experienced healthcare workers in the U.S against current leading prefilled syringe products with ancillary safety features showed a Taking into account other product variants in our proprietary platform, it has the capacity to serve as a substitute for the entire 2.4 billion unit market for prefilled syringes. And it is entirely unique. You can only get it from us. We are not aware of any other prefilled syringe with integrated safety either available or in development. Furthermore, our patents do not expire until 2028. This makes it an ideal candidate for pharmaceutical companies seeking a prefilled device that can be utilized to generate brand differentiation for a drug within a competitive market. Let me speak a bit more about this point of differentiation….
- Now, everybody is aware of the ensuing patent cliff for major branded drugs. There are some 30 branded biologics with combined sales of $51 billion that will lose patent by 2015. More than seven are in a prefilled syringe format.These biologics, as well as countless others in the pipeline, are targeted to threat chronic and acute long-term diseases across dozens of rapidly expanding therapeutic markets. These markets are being driven by an aging population, and billions of people in emerging countries such as China that now expect the best possible healthcare treatment. We must also recognize that governments like the U.S. are seeking to further streamline healthcare budgets, with a resultant increased focus on biosimilar and generic drugs. These factors are all converging to make pharmaceutical companies desire one thing above all else for their marketed and pipeline drugs…Differentiation. The brand companies want to differentiate their products against the biosimilars and generics to protect as much market share as possible. They also want to keep their prices as high as possible, for as long as possible. Meanwhile, generic companies want to differentiate their drugs to take a bigger share from the brand companies, as well as other generic competitors. Unique non-commodity delivery devices with superior safety and functionality features are the preferred weapon in this new era to generate powerful brand differentiation for a drug. Devices that are differentiated, and can add real value to the healthcare worker and patient, can optimize the lifecycle of these drugs. That’s how you beat the competition. Where a device is exclusively bound to a particular drug, it can even help to extend the product lifecycles by giving the customer something they can’t get from a generic. And where the device is very special, the FDA has given guidance that it can generate unique claims for the combination product. If generics or biosimilar competitors can’t match these device-specific claims, their approval can be delayed or blocked altogether.
- As I said earlier, Unilife has achieved what many thought impossible with the design and commercialization of the Unifill syringe. This gives a clear runway for success. Sanoficame to us in 2003 with the challenge of integrating our proprietary safety features into the primary drug container of a prefilled syringe. After successfully proving our capacity to design and develop a device that would meet their requirements, they have since paid us approximately $40 million so that they the right to access this technology in their keytherapeutic areas such as vaccines and antithrombotic agents until June 2014. We are also now accelerating discussions with many of the other 20 pharmaceutical companies that are active in the prefilled syringe market. The level of interest is very strong, and we are very pleased with the status of discussions across several fronts. Because of the level of differentiation that the Unilife syringe can provide drugs within a number of competitive therapeutic classes, we believe that revenue generation opportunities can extend well beyond commercial salesFurthermore, we expect to negotiate with interested pharmaceutical companies seeking to obtain some level of unique access to the product within desired therapeutic sub-classes. Based upon discussions with some pharmaceutical companies, we also believe there is an opportunity to receive royalties for areas where we can protect market share for those drugs coming under threat from generic or biosimilar competition.
- The Unifill syringe is now in production. Sales of the product to multiple customers will begin from July this year. We expect customers will initially require only relatively small volumes of the product – say a few million units - for them to commence drug stability studies and other product evaluations. Whilst these volumes will be relatively small, we expect each unit will be sold at prices far higher than at commercial levels. I hear from some shareholders asking why we have not signed sales agreements for the product already. There is no pharmaceutical company in the world that will commit to buy the product until they have received formal, validated batches off our commercial assembly lines. This is about to occur. Everything is very much going to plan. Customers are expected to begin entering into commercial supply contractswith us prior to them beginning to stockpile of the Unifill syringe during 2012. Stockpilingwill occur in anticipation of regulatory approval of their drugs, isstandard practice for the industry, and fits in nicely with our ramp plans. We expect top have full utilization of our current capacity of up to 60MM units by the end of 2012We furtherexpect to add additional higher-volume lines moving forward that will have an annual capacity of 150MM units per year. This process can take our annual production capacities for Unifill up to 400MM units beyond 2014, and 800MM units beyond 2016. Should these production targets be achieved, this would represent only around 14% of the entire market for prefilled syringes at that time.
- There are many market forces and trends that bode well for our businessIn many ways, we are in the right place at the right time. The pharmaceutical market for therapeutic drugs is changing. The drug pipelines of most major pharmaceutical companies are now teeming with large molecular drugs that will treate acute and chronic diseases. These are biologic drugs and vaccines that are so complex they comprise of thousands of atoms. They can’t be digested, and require direct injection. Many of these drugs can be supplied in a liquid stable form. Others are supplied in a dry drug or powder form and require reconstitution immediately prior to the injection. The complexity of these drugs, and the need for their targeted administration to the patient, means you cannot just buy a commodity device from off the shelf. Increasingly, pharmaceutical companies are outsourcing the development of customized devices to industry specialists during the clinical trials phase of the drug. This way, the device is tailored to the specific needs of the drug and the patient. This creates many opportunities for capable and adaptable device innovators like us. We can therefore have the inside running to develop from the ground up the device technology that fully meets the customer’s needs, and then reap the commercial rewards during the entire lifecycle of the drug.
- There is a strong trend to take healthcare out of hospitals and into the home of the patient.Studies show that simple, safe and convenient drug delivery devices can have an increasing impact on the overall value of the drug-device combination product. Devices are critical in patient acceptance, safety, ease of use, convenience, portability, disposal and other lifestyle considerations. The less the device impacts the patient’s quality of life, the more popular the drug will be. Further to my previous point about differentiation, devices are also important in developing a preference for one drug over their competitors. The easier it is for a patient to administer the drug at home, the more likely that the physician will write a prescription for that product. They’re also important in compliance with therapy. When devices are not easy to use or convenient, therapy compliance drops. As a result, the number of doses sold drops. These factors directly impact the commercial success and overall value of a drug. This is another key growth factor for differentiated drug delivery devices that are accepted and preferred by patients and clinicians. There are a range of device sectors that lend themselves well to patient self-administration. These include pens, pumps, prefilled syringes, auto-injectors and reconstitution devices. We are very strongly positioned in the prefilled syringe market, and have a number of pipeline products now in development that will be highly competitive in all of these other device segments. I’d like to talk a little bit about this expanding pipeline of products…
- The successful completion of the industrialization program for the Unifill syringe has given Unilife significant credibility in the pharmaceutical market. We have not only done the impossible, but brought the product to market well ahead of our original schedule. That is almost unprecedented for our industry.We are now expanding our rich pipeline of advanced drug delivery systems across multiple fast-growing device devices in parallel. The Unifill prefilled platform will expand with a number of new products such as the Unifill Select, as well as other customized variants. The Unifill platform also serves as the engine for a new generation of devices that can improve the self-administration of drugs by patients at home. Furthermore, we are actively focused on a range of products that will be utilized for the reconstitution of dry drugs, the administration of highly viscous and large volume drugs such as Monoclonal Antibodies, and other specialized devices targeted to inject drugs into specific target organs. Many of these products are being developed in direct response to the needs of pharmaceutical companies we are in active discussions with. We expect to sign multiple agreements with a number of pharmaceutical companies over the next 12 months for many of these devices. For those customized devices which are developed in conjunction with pipeline drugs, we expect to receive funding that will support these projects all the way through to their approval and commercial launch. At this time, we will expect to be either the sole or a preferred supplier with very strong margins.
- The drug delivery market is now being driven by a new paradigm whereby pharmaceutical companies want devices that are innovative and customized to the meet the specific needs of highly specialized biologics, and the target patient group. They especially want devices with superior safety and functionality features that can enable their drugs to generate strong brand differentiation within competitive markets. Whether it be a brand-name, biosimilar or a generic drug, the pharmaceutical company wants a device that is differentiated and adds real value to the patientUnilife is an emerging global leader for advanced drug delivery systems. Our entire business is aligned around addressing unmet customer needs with an unparalleled level of speed, innovation and reliability. Our capabilities have been validated with the successful commercialization of the Unifill syringe, the world’s first and only prefilled syringe with integrated safety features. This device is about to be launched, and has significant commercial potential across a broad array of therapeutic marketsOur success with Unifill is now being replicated on a grand scale, as we bring to market a rich and expansive portfolio of other pipeline devices. Every one of these products in our pipeline is a potential game-changer within its respective class, and has been developed in direct response to the needs of pharmaceutical companies that we are directly engaged with. Unilife is redefining the market for drug delivery devices. We are in the midst of something of a perfect storm with pharmaceutical companies seeking a new paradigm for customized, differentiated devices that we are best positioned to service.