Deal Done!, page-60

An excellent outcome for Unilife, and shareholders, all parties on the same page going forward.

Amgen:

Total funds received from Amgen on Closing Date 22 February 2106: US$50 million - US$20 million License Fees plus US$30 million from 2016 Convertible Note.

Additional US15 million Jan 2017. US$10 million Jan 21018

Yes, Indijo, you can try and introduce a negative by saying Amgen paid West the same amount for just one device several years ago, but in the circumstances that seems somewhat churlish.

Firstly, this is not the West deal. Amgen don't want just one device from Unilife's platform technologies - they want multiple devices across multiple therapeutic classes.

Secondly, on top of the US$20 million license fee, they have already committed an immediate additional US$30 million by way of the 2016 CN to ensure they get them, with another US$25 million to come. So, in fact, they have paid US$50 million up front to put in place the necessary framework to ensure their needs are met.

The fact that the additional funds are by way of Convertible Notes demonstrates a high degree of confidence in the AMGEN-Unilife partnership going forward.

Add to that the US$15 million non-refundable negotiation fee, and they have so far paid a total of US$65 million to get what they want, with US$25 million to come. Total: US$90 million.

So, not "just" US$20 million for "just" one device, but a far more complex all-encompassing deal structured to meet many, if not all, of Amgen's anticipated injectable drug delivery device needs going forward .

Seems like a positive outcome to me. After all, what other drug delivery company have Amgen done a deal like this with?

Orbimed:

Orbimed have agreed:

1: To defer all interest payments due from Jan 2106 for a 2 year period from the date of the agreement.

2: To remove all minimum cash receipt covenants from the loan for all future periods.

3: To waive rights to royalty payments otherwise payable under the agreement, and to further defer royalty payments payable on revenue received by UNS from Amgen until after the end of the 1st quarter in which the company sells a commercial quantity of devices as developed for Amgen.

4: UNIS has issued Orbimed/Royal Opportunity Fund (ROS) a warrant for approx. 17 million common stock at a strike price of US$1.25, to be used for working capital. Don't know when the warrants will be issued, but presumably as required, so another safety net put in place to help ensure operational continuity.

5: The right to implement management changes as required.


Key Takeout:

All parties to this deal have moved to put in place a framework geared towards ensuring they get what they want - bottom line being Unilife survives and prospers.

This is all about preserving cash and making sure that all funds advanced are focussed on the negotiated outcomes. To this end, they also have a hand in steering the ship with regards operations and future management changes.

1: Amgen want their devices and are prepared to pay large sums of upfront cash - and support Unilife in all possible ways - to get them.

2: Orbimed/ROS want their loan repaid, and interest thereon. More importantly, they have their eyes on the bigger prize - royalties from Unilife device sales - and are prepared to support Unilife in all possible ways to get them. Orbimed have been through a lot with Unilife and are still there, still prepared to back them and their future success. Says a lot.

3: Unilife wants to move forward, not just with this deal, but with all other existing and future commercial supply agreements, with a degree of financial, management and operational security to make sure it gets them.

This deal provides the best possible structure for all these outcomes - and more - to be realised.