I believe I am stating the obvious but I will go through it anyways because this is what I see as the relationship between SA and Unilife. From SA's documents they have put out they are attempting to avert losing about $12.4B in sales due to some drugs coming off patent protection.
Unilife have what most people understand to be the "best in class" needlestick injury protection device available (or soon to be) in the foreseeable future (until someone else gets theirs through regulatory approvals).
SA paid Unilfe a large whack of money so that when the production starts rolling, their competition would be essentially locked out of purchasing the needles from Unilife for any of the classes of products that are coming off this patent protection. Because the wording of the legislation is that companies must purchase product in and actively use the "best in class" products to prevent needlestick injury SA wil package those products in Unilife syringes. SA will also go back to its customers of those drugs and ensure that they should not buy inferior packaged drugs from its competition as it would not look good if they were found to be purchasing products that were deemed to not be "best in class".
SA will also lobby US government to ensure that their position on harm reduction is enforced . This will basically ensure continued sales of their drugs, it won't matter how many generics are there, because of the package and not the drug.
This is why Unilife has a great future with regards to SA. Sorry if this was too obvious but many I believe have danced around this subject without understanding the relationship.
IMO (disclaimer).
UNS Price at posting:
80.5¢ Sentiment: Buy Disclosure: Held
