Ratigan leaving, page-25

If dupilumab is headed for a UNS WI then UNS now has a definitive time frame in which recurring revenues will start being generated. That is bankable to a lender especially if dupilumab is headed for blockbuster status. There are other factors including length of contract and how the company is being currently managed but overall UNS now has a way to pay back a lender. Lending into production is much different than lending into a black hole of R&D.

Based on the two below statements from the last 10Q I have put together a scenario I could see happening. Dupilumab unlike Sarilumab gets approved. Sanofi executes it's first agreement under the master services and supply agreement. As per the negotiation below they allow the termination of the PFS contract and repayment of the $10MM owed through product discounts. Further they buy a note from UNS to be paid back through product discounts with the proceeds of the sale being earmarked for CAPEX at Flex. Based on the signed supply contract UNS then puts together a consortium of lenders for additional financing that covers operations through a period long enough for them to have sufficient recurring revenue.

Very plausible scenario IF we dupilumab is headed into our WI.

"The Company believes that any potential proceeds from fundraising efforts, the potential issuance of the 2018 Convertible Note, potential customer cash receipts, and potential proceeds from business development discussions will provide the Company with enough liquidity to fund its operations for the next twelve months."

"The Company has separate contracts with one customer for its prefilled syringes and wearable injectors. In connection with the prefilled syringe contract with such customer, the Company previously received $10.0 million which may be refundable to the customer, including for termination for certain events and is therefore recorded in long-term deferred revenue. Although this $10.0 million is not yet refundable, the Company and the customer are amicably negotiating the potential termination of the contract and the potential repayment to the customer of all or a portion of the $10.0 million potentially through a long-term financial instrument. The outcome of these negotiations is still uncertain."

Then there is this from the 10Q

"During the three and six months months ended December 31, 2016, the Company recognized $0.6 million and $1.0 million of revenue, respectively, related to substantive milestones, as follows:

The Company recognized $0.6 million and $1.0 million of revenue during the three and six months ended December 31, 2016 pursuant to a master services and supply agreement with a customer related to substantive milestones that were completed and accepted. This agreement provides for certain customization and development activities for a drug delivery system to be performed for the customer and provides for payments to be made upon the completion of agreed-upon substantive milestones. An initial up-front payment of $1.1 million was determined to be non-substantive and is being recognized on a straight-line basis over the expected term of the agreement. The remaining milestones were determined to be substantive at the time the agreement was entered into. Substantive milestones that were achieved during the six months ended December 31, 2016 are as follows:

• $0.4 million for development and delivery of components for a human factor study;

• $0.4 million for completion of testing of assembly equipment; and

• $0.3 million for completion of filling process of clinical devices;

The remaining substantive milestones as of December 31, 2016 are as follows:

• $0.4 million for delivery of containers for the filling process; and

• $0.3 million for delivery of devices for clinical studies.

During the three and six months ended December 31, 2016, the Company recognized $1.5 million and $2.7 million in revenue related to services rendered on a time and materials basis, proportional performance method, the completed contract method and/or straight line basis over the requisite service period pursuant to customer agreements to provide various customization and development services."