Glee Club

1.We have cornerstone supply agreements with Sanofi, Hikma and MedImmune for wearable injectors and multiple products from the Unifill platform.

2. We expect to sign additional cornerstone deals in all other areas of our product portfolio. These additional agreements and strategic partnerships will relate to products, including our Unifill prefilled syringes, auto-injectors, drug reconstitution delivery systems and ocular delivery systems. An early indication of the large and rapidly growing nature of our commercial pipeline is represented in the number of active customer programs that are now underway.

Note the specific devices mentioned.....

2.Additional customer programs are scheduled to commence through each additional quarter of this fiscal year. We consider these programs to be a leading indicator of future supply agreements. We expect that some of these agreements could be of a similar magnitude to the deals already signed to-date.

3.We continue to expand the production capacity and scale up capability of our product portfolio to support increasing demand for our products and services. This is being done in conjunction with a number of established global industry partners.

4.In regards to our Unifill platform, we commenced initial commercial supply of the Unifill syringe in the first quarter of fiscal year 2015. Initial commercial supplies of two additional products will commence during the rest of this fiscal year.

5.Based upon the minimum unit volume requirements under the agreement with Sanofi and Hikma alone, we are scaling up over the next few years to have a manufacturing capacity of at least 400 million Unifill syringes per year.

In terms of the volumes, in terms of prefilled syringes, I would put that number in the timeframe that you mentioned, say be the end of 2016 around 400 million units, if not higher. And I will also put the capacity for wearable injectors in the order of three to five million units in that timeframe.

And we have a number of other products that we are also ramping up and as customer demand firms and as the clinical development nears completion, we will be discussing those more openly and we will be discussing more regarding the capacity of those products as well.

6.We are on track to generate at least an additional $30 million in cash receipts from customers during the final three quarters of fiscal year 2015. There is significant upside potential beyond this range as we look to finalize a number of additional new agreements between now and the end of this fiscal year.

We anticipate that amount in cash receipts and that's a conservative estimate at this time.

7.In summary, we continue to execute in all areas. Year-on-year revenue will increase. Losses will narrow. Sales will accelerate. Production capacities will expand. Deals will continue.

Question Time

Production Ramp

1. So that ramp that we are talking about would begin around when you see the combination products. That is the drug in our device. It already has a market.

We anticipate that the uptake for these products will be swift and significant and we are optimistic about the ramp being relatively short. Those are significant capacities that we bring online in big chunks. But I can tell you that the ramp is going to continue to accelerate and in the timeframe of 2016, 2017, you are going to see those capacities installed.

We have lines operating across all of the product platforms and product lines that we have, and they are at various stages of scaling. Today, in our plant, you will see a number of automatic lines that are manufacturing different prefilled syringes in the Unifill prefilled syringe family. You would also see lines with significant capacity as we mentioned earlier, a million units plus in the wearable injectors and this is across all the different components of it, including primary containers and also the devices as well, and again other products that we are also ramping up. But those are two areas that you would see significant scale up as we speak today.

Break-Even

1.On this current trend and with the current strategy and by the way, having now moderated the R&D investment as we have said in the past quarter, because we now believe that we have achieved critical mass, I anticipate crossing that threshold in the 2018 to 2020 timeframe.

I just want to clarify something in relation something we said earlier about cash flow positive potentially between 2018 to 2020. This is always a choice on our part. As we invest heavily in supplying and signing contracts with our pharmaceutical customers and building an unassailable position in the drug delivery business, we will make that choice as we go forward. But I believe that those dates are very conservative.

OrbiMed

We have already got $18 million of the $20 million for this year, and we are very confident we will have no problem with those covenants.


In summary, being a full paid-up member of the so-called Glee Club, it's easy to poke holes in things and find fault. It's more challenging to find solutions. In the highlighted areas it is evident that there is a truckload of work going on at Cross Farm.

Expectations are for significant commercial agreements to be signed across all product platforms by EOY fiscal 2015. In support of this, there is current production capacity across all product platforms. Further production capacity will be installed and ramped up to meet expected demand as early as 2016.

Confidence is very high, not only about the ability to meet the Orbimed covenants, but also about the prospect that the $30 million in upfronts, milestones and development fees for fiscal 2105 is conservative.

Likewise the expectation of break-even/profitability by 2018.

Could be wrong but I almost detect a sense of under-promise over-deliver in these statements.

And while the thrashing of the SP is disappointing, I think it's overdone. We shall see. But there is nothing in the EC today to concern me, or to suggest that Unilife is not on track to deliver on all  shareholder expecations, and more.

Caveat....in time