Karl,
On 04 August Unilife completed an ATM for 5.8 mil shares, generating $12.4 million cash. This came shortly after 30 July's PR, stating "we are scaling up our operational capacity to support increasing demand from existing and new pharmaceutical customers." "This resulted in a surge of capital expenditure and R&D during the fourth quarter of fiscal year 2014."
As we know, within two months of the ATM, Unilife announced a 15 year deal with Sanofi as the sole provider of wearable injectors for all large dose volume drugs. One analyst suggested that the Sanofi deal alone would eventually represent the equivalent to $5.00 per share. One month later, Unilife announced a Global Strategic Alliance with Flextronics, followed in two weeks by a commercial supply agreement for Depot-ject.
Was there a direct cause-and-effect relationship between last fall's increase in R&D/ATM and the above contract agreements? Who knows, but however Unilife allocate funds derived from ATM's, we have witnessed steady progress that will eventually translate into sustained, long-term growth.
I assume that some of the funds derived from this week's ATM will be used to to meet short-term production obligations which, I believe, is critical. Will some be used to finalize supply agreements for the likes of Praluent, or Humira, or Eylea, or will we be taken by surprise, as we were with Abbvie? The short answer is "I don't know", but I am more than pleased with the prospects.
As more contracts are announced and production begins in earnest we will eventually reach critical mass. At that point I can envision fund managers vigorously patting themselves on the back for "discovering" Unilife; a story that, in truth, took years to evolve. Whether it takes 6, 12 or 18 months, I am confident that I will be very happy that I persevered.
As long as Unilife continues its present trajectory; landing landmark deals, entering strategic production agreements and making inspired executive hires, I'm giving them some slack on the ATM.
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