Great reporting Sydney-siders! You have put those Victorians to...

Great reporting Sydney-siders! You have put those Victorians to shame… actually that’s probably not surprising given there were only 30 odd at the Melbourne pres and about 100 at the Raddison today.

Alan returns to Australia to provide updates to investors with some colour that cannot be properly or adequately set out in a press releases, he is under no obligation to do so and it not part of any orcastrated deal announcement. He does it for the benefit of the Aussie shareholders, old and young, long termers and newbies, and for that I am extremely grateful to Alan. It’s good to get a proper update directly from the CEO to distill some of the noise that HC produces.

Here is my summary from today’s meeting.

• Once upon a time, not that long ago, we had all our eggs in the Sanofi basket with a single product and upon which we were entirely reliant. Alan made the strategic decision to restructure the business and diversify the product offering which would be of interest to a larger pool of pharmas. We now have a broad range of products, some of which have deals announced. All the products which are yet to have deals announced, have deals in the pipeline. Unilife only produces products when they know there will be a large pharma waiting to sign a long term supply agreement at the back end. Sounds like a pretty good business model to me and explains why R&D runs at circa $20m pa.

• Unilife have done their homework. There is an imminent change in the market in terms of the way drugs will be delivered in the future resulting in half the health care injections being done at home. Doctors will only want to prescribe drugs that are in devices which are easy to use. Enter unilife.

• We have heard it before, but Biologics will be the way if the future, there are currently 3,000 drugs in the pharma pipeline, they are expensive drugs which must be in delivered in safe, easy to use, delivery devices.

• How is it possible for unilife to achieved a blended 40% EBIT margin when up and running with ramped up production in 3 or 4 years? Having no sales and marketing expenses is certainly a good start, these costs will be borne by the pharmas at the rate of 20 to 30%

• 6 device platform ‘families’ and there is a deal for each one to be signed in the next three to six months.

• Sanofi deal may only be for a minimum of 150m however Lovenox currently uses 450m pa. They won't want to be half pregnant and Unilife is aiming to take all 450m in a short period of time, ramping up from 2015.

• Ocujet will compete against devices which don’t really comply with FDA standards because they have a 20% error rate of dose, both up and down from the correct dosage, not good if you are injecting into an eye ball!! Enter unilife with a 2% accuracy quality and FDA will enforce compliance and the competition will be out of that market.

• Pumps market estimated to grow to a $8b market. Pharmas unilife are dealing with are going to require 25m units pa at a unit price of $20 to $35 each. With blended margins of 40% and PE’s up to 35 this business alone is worth more than the current unilife market cap! SP guidance? The market is undervaluing this company!

• Hikma production will ramp up in the 2nd half of calendar 2014 and will go to market quicker than Sanofi as they will only have 6 month shelf life for their generics and be up to 175m very quickly. Sanofi will ramp up in 2015.

• Cash up fronts will cover 2014 op expenditures of $40m.

• NOT GOING BACK FOR A CAPITAL RAISING- FULL STOP! Too bad for the shorts.

• 95m. 45m here. 50m in the us. 30 tightly held. 20m short on an average price of 2.40. Short squeeze will be fun to watch and don’t make it easy for them to buy on the ASX!!

• Second facility to be constructed in 3 to 5 years, Ireland a good possibility as it is the best use of carried forward tax losses.

• 12 deals were expected 5 done the others are still on the table. Forbes article put the signing of deal back 2 months. Forbes article written on the back of old news re the Talbot Smith litigation which lead to a class action which has now all been dismissed. Claims were completely bogus as was the Forbes article. The timing couldn’t have been worse, Hikma were ready to sign the next day but had to undertake further DD following the article, and then they signed.

• Take over speculation? Just that speculation of mad posters on HC….. $1b or $1.5b being offered tomorrow doesn’t properly value unilife and will not be accepted by Alan, and the long term growth story is supported by the instos. Largest risk? Take over at these low prices.

Overall a great presentation from a supremely confident CEO who is clearly buzzing with the excitement of big deals in the pipeline to be announced in the not too distant…..

Some light banter about dividends at the end was entertaining….. having survived the start up phase, achieved the inflection point, signed deals with the largest user of prefills and the largest supplier of generics, unilife is well on the way to being cash flow positive and becoming a multi-billion dollar global company. You just cannot beat having the largest pharmas in the world signing up for 10, 15 and 20 year deals that lock out the competition, what a fantastic business model.

And finally, thanks to Alan for coming to front the Aussie shareholders and keep us informed during this exciting time for unilife.

Lets not forget it is the job of a CEO to be exuberant about the future of the company they lead.