unilife's products shows a weak business case , page-31

TDA,You make a point that, honestly, is one that I have a nagging concern about. You write, "Indi, I think one may have to have a look at what was happening at that time with generic lovenox coming out during the IA. Sanofi were fighting against it happening but it happened and plans can change and focus can shift when large pharma are faced with a blockbuster facing generic competition. At least the focus is back on with Sanofi and we have a commitment from, not just for lovenox either, they have left that door open so they can take up the 150m minimum per annum."

First, if Sanofi did shift its focus away from Unifill as a key tool to beat back generic competition, then I'm concerned that companies might not see the value proposition that we're told is there and I think is there. This would be a big hole in my investing theory.

Second, if Sanofi didn't shift its focus away from Unifill, then then why is the pharma company still years away from shipping product to customers? The gap in this story gives me an uneasy feeling even while I remain optimistic that more deals are coming along.

Third, the "toe in the door" hope or whatever it is doesn't get me too excited. The language in Unilife's press release (i.e. "up to $15 million in milestone payments") could easily be contingent upon Sanofi continued "focus," which could shift at any time as you noted. Also, contractual exclusivity, if Sanofi doesn't see the value proposition that we're all banking on, would be worth how much?

Finally, I see clear value in the Sanofi deal as follows: 1) Needed cash to offset high investment/spend rate, 2) credibility that a major pharma is continuing its relationship and APPEARS to be doing a major rollout (even though I have a few modest concerns about what is actually going on given the points above), and 3) the announcement evidently opened the door for other pharma companies to follow suit.

I will say this, had Sanofi attended a big NYC announcement like I understood was going to happen, then possibly I would feel somewhat better. But more than anything, point is what bothers me most.