First of all Congratulations to the whole Unilife team.
Loose lips sink ships, and no one can accuse of Unilife of that, the confidentiality they have shown is of huge value to our customers and I bet its re-assuring for them to know that even when UNS seemed to be on their knees they still nothing leaked from the company.
Now this Amgen deal
.
*UNIS agreed to cease all negotiations with all other parties that had expressed interest in a potential transaction with the company.
* $15 million non-refundable DEPOSIT as consideration for
- Worldwide non-exclusive license under the patents, know- how and technology of the company to develop, manufacture and supply wearable injector devices for use in large volume drug products of Amgen's.
-An exclusive worldwide license under the patents, know-how and technology of the company to develop, manufacture and supply the 1mL wearable injector for use with certain small volume drug products.
*UNIS will manufacture and supply these wearable injectors to Amgen under the agreement that will be reached except where
- Amgen decide to source or sublicense the manufacture of up to 20% of the total annual volume of Amgen's needs. However UNIS will be paid the difference of what they would of been paid had they produced them themselves.
- If UNS is unable or unwilling to manufacture the devices or fails to meets quality specs then Amgen can source or sublicense the manufacture of UNIS wearables and pay a nominal royalty fee per unit it UNIS.
Amgen and UNIS have both agreed to negotiate in good faith during the next month and so far the terms of the potential transaction that are currently contemplated are
* A cash Payment from Amgen including for
i) non-exclusive rights to UNIS exiting technologies subject to rights under current customer agreements.
ii) An interest bearing note to be satisfied through discounted pricing and/or credits against future amounts owed
iii) The purchase of up to 19.9% of UNIS common stock by Amgen.
iv) A preferred right of access to certain NEW delivery device platforms and
v) manufacturing arrangements and rights between the parties.
In addition to the agreement they have also signed a Master Feasibility and Customisation Agreement with Amgen during the normal course of business on December 2,2015.
Now to sink the teeth into the Deal.
As Writer/TDA have mentioned Amgen are the worlds largest independent bio-TECHNOLOGY firm.
They currently have a market Cap of over 123 billion (touch bigger then Sanofi at 103 billion).
They have been ranked 4th largest bio-tech by market cap in 2015 and 12th in global revenue.
http://www.statista.com/statistics/262708/top-biotech-companies-based-on-revenue/
This deal potentially gives UNIS the financial freedom to get to commercialisation.
It gives UNIS a strong world-class partner and as Indy has mentioned the deal is also about devices which is what this company needs, Amgen is an innovative company and this deal shows that they are looking forward and will leverage UNIS expertise and technology to take on their competitors.
This is a significant company changing deal and I'm very excited to see the outcomes of A) the Deal and then B) the partnership of the two companies moving forward.
Now some issues to thinks about.
* Discovery Fund - Will UNIS pay out there obligations for the fund with the money they received?
Once the mediation between the companies are completed the Discovery fund may have to buy back the stock that was granted under dispute to them from UNIS. To me this is more upside.
* Abbvie - make no mistake about it, Abbvie are still lurking in the background, my understanding and experience gained during all this is with pharmas they are supremely cautious. My opinion is the Amgen deal significantly de-risks UNIS and allows Abbvie to come on board and sign on the dotted line (if they haven't already). Again positive development.
*Shorts - Its going to be interesting to see what happens with this when Trading opens on the NAS tonight, my opinion is its going to go ballistic as seen on the ASX this morning, the last time I checked the Days to cover for the shorts was about 28 days based on average daily volume. The potential Deal with Amgen will close at the end of this month, there is un-certainty as to why will happen but I believe 100% it will go ahead. I don't think any of us think that the shorts are going to wait for the deal to be completed before they cover, it is going start tonight and then the squeeze is on. If you think the price on the ASX is great today then wait until you have 30 millions shares trying to be covered all at once, perhaps the smart money has stopped shorting and has already covered, either way things are going to get exciting. Again another positive.
* My last thought is this- All going well at the end of January UNIS announce the terms of the deal with Amgen, so far all the negotiations have taken place in good faith and have i believe been amicable. What happens if another potential Suitor wants in after seeing the terms disclosed publicly and a bidding war breaks out? The BOD have to take into account the best value for shareholders, I am extremely happy with the outlined deal with Amgen but this may not be the end of it. Its Just something to think about.
I know this message has been long but I wanted to share my opinions on the situation.
2016 might be the year guys, I've said before and I'll say it again that the current SP is irrelevant to me. However it is nice to have your beliefs in UNIS validated by a company worth 123 billion.
GLTALTH.
This IMHO, regretting now I didn't get another loan and buy more :=)