The below article was written on February 2nd., before last week's second extension. Still, I think the message remains relevant. I don't recall it having been posted on HC. If so, my apologies.
Author: James E. Brumley
Affiliation: Small Cap Network
Link:
Article Link
Article begins...................
If Amgen is Considering a Partnership with Unilife, Take The Hint
If a company like Amgen Amgen, Inc. (NASDAQ:AMGN) is interested in doing a deal with Unilife Corp. (NASDAQ:UNIS), that's all that needs to be said. The only thing left to do is clearing one technical hurdle for the stock.
The last month or so hasn't been an easy one to own Unilife Corp. (NASDAQ:UNIS). The struggling company is mulling a major partnership, and though the deadline for a decision was the end of January, it's since been extended to the end of this week. It's tested the patience of shareholders.
Then again, owning UNIS over the past month has been a heck of lot easier than it's been to own the stock since the end of 2014. Unilife shares fell 90% between early 2015 and the end of December, and only began to perk up within the past few days.
But what a past few days it's been! The company, largely presumed dead in the water by most investors, may be on verge of a game-changing partnership. Meanwhile, the stock itself just needs one more good nudge to confirm that the bulls are falling in love with it again (making it buy-worthy).
Unilife Corp. Is the maker of the world's first pre-filled and pre-assembled insulin patch pump. It's a clever product, and works. But, it's just not caught on the way the company expected. In fact, as the end of 2015 approached its outlook was so grim it began to look at possible mergers or the sale of licensing rights to its technologies.
The first and only bidder and so far? None other than Amgen, Inc. (NASDAQ:AMGN), which paid $15 million for first dibs. A deal has not been struck yet, but the fact that UNIS is taking more time to consider its partnership with Amgen speaks volumes about just how serious Unilife is about taking on a partner. Conversely, a company with the caliber of Amgen speaks volumes about the potential of the product. If it's not Amgen, odds are good there's another major company waiting in the wings to forge a similar relationship. Amgen is reportedly even adding the rights to buy shares in the company into the negotiations.
Yet, there's one last hurdle to clear before the stock can be deemed an outright buy. That's the recent peak level right at $1.01. It's been tagged three times since November with the most recent tag happening just last week in the wake of news of a potential partnership with the aforementioned Amgen.
Point being, the bulls have already tipped their hand, so to speak, showing traders how far they're willing to go without a secured deal. With a secure deal, a move above $1.01 could mean all those would-be buyers still on the sidelines finally have all the reason they need to pile in en masse.
In other words, take the hint. Put Unilife on your watch list, and be ready to put it in your portfolio should the ceiling at $1.0 break. Most likely it will be news of a company-saving relationship. If it's not Amgen and it's not now, it should be a company like Amgen sooner than later.
Either way, the real story here is the stock itself. As you can see on the chart below, after a miserable 2015 the bulls started to charge early on this year, moving above the 20-day and 50-day moving average lines in early January. In the meantime those two lines have made a bullish cross. You'll also see how UNIS has moved above the 100-day moving average line in the meantime. This is the most bullishness we've seen from the stock in a long while.
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