unilife's products shows a weak business case , page-4

Speaking of language, there is some wonderful stuff in this latest desperate attempt from Mr Gefvert to save his bacon.

As follows:

"The above are pictures of Unilife's devices. There's no doubt they are beautiful and elegant looking. However, in business often the best looking products are not practical from an efficiency and profitability standpoint."

Yes, that's why Apple is such a dismal failure.

"The marketability of a drug delivery device is all about the drug that's inside it. The injector that's used to inject the drug isn't as important."

probably true twenty years ago. Perhaps some research into the new and complex paradigm of biologics, and the need for new devices to deliver them, might help understand just how important the device has now become to the pharmaceutical companies developing these drugs.

"The gross margins can be well above 90% for a new biotech drug. For drug delivery devices it is rare to be above 40%."

Obvuiously, the point being....who needs 40%?

"Even if the devices are very successful like he (Alan Shortall) claims, Unilife can't sell them for very much."

Followed in quick succession by this gem...

"For patients who self-inject a drug on a regular basis, it's important that they like the injector. In those cases, the injectors can be elegant and be sold for more and have higher margins."

Huh?

"For Sanofi's drug Lovenox, as well as the generic drugs from Hikma, the nurse injects the drug. The nurse might care to use a good injector, but she isn't the one who is getting pricked with the needle."

Really? So who does get the needle-stick injury?

"Unilife has not been able to secure a commercial supply agreement with its retractable syringes. It thought it had one in 2011 with Sanofi. However, that supply agreement fell through. Then, Unilife again announced an agreement to sell the syringe to another global pharmaceutical company less than a month later. However, that too fell through."

Dissembling at best, at worst straight-out lie.

1. Both links provided by Mr Gefvert take you to the Sanofi announcement.

2. There was no second supply agreement announced "less than a month later."

3. The Sanofi agreement did not fall through. The agreement was for "initial supply of validated product" which eventually let to development of the Unifill Finesse, and the long term Supply Agreement signed in September this year, for which Sanofi have already paid $5 million upfront.

"Unilife's supply agreement with Hikma could also fall through."

Yes, and pigs might fly.

"My research suggests Sanofi will never have a commercial supply agreement with Unilife."

Uh, they already have one!

"Unilife's retractable needle is built in the syringe so that forces the pharma to buy the safety feature even if they don't need it."

Don't need it? Oh dear, getting desperate now...

Obviously Mr Gefvert has never heard of the US Needlestick Safety and Prevention Act, 2001.

Or the various EU directives addressing use of safety syringes:

http://www.safetysyringes.com/healthcare/eu/index.html

"Evidence suggests they never will get a commercial supply agreement. I spoke with a director at a biotech company (who wishes to stay anonymous), and he said he knows the guy at Sanofi who signed the deal with Unilife.

1. I know a guy who knows a guy who wishes to remain anonymous, can't think why, who said pigs won't fly.

In legal terms, this is called hearsay, and inadmissible as evidence. In HC terms it's called unsubstantiated information, or ramping. TOU that man!

2. I know a guy who knows a guy at Sanofi who signed the Unifill Supply Agreement and he says they will never have a Supply Agreement!

Too funny for words! Truly an oxymoron, though begs the question, who is the moron!

"Going With Unilife's Products Would Increase A Drug Maker's Risk. For example, what if a fire catches in Unilife's plant?"

Why stop at a fire? Indeed, why not get hit by a meteorite? When all else fails, introduce an Act of God to strike fear into the heart of the weak and vulnerable.

"Hikma's Deal With Unilife Can Fall Through For Many Reasons"

Mr Gefvert spends a lot of time on Hikma, presumably because it is his greatest cause for concern. But as with the rest of his 'research', there is so much disinformation here, I almost got lost wading through it. Almost.

All I can say is that if Hikma is as dysfunctional as Mr Gefvert suggests, the left hand not knowing what the right hand is doing, let alone the marketing and technical departments, goodness only knows how they got to be a $3 billion dollar company.

Mind you, one could posit that if Hikma was that dysfunctional, and Unilife was also that dysfunctional, with such crappy products nobody wants, and global pharma companies are only signing Supply and Development Agreements for the hell of it because they have nothing better to do with their time and money, then arguably Unilife also stands a fair chance of becoming a $3 billion dollar company as well. Or more! Birds of a feather being what they are.

For myself, I will rely on the words of the Chief Executive of Hikma, Mr Said Darwazah, who said, "This agreement supports our strategy of developing higher value products, and we are extremely pleased to be partnering with Unilife to develop our generic injectables capabilities. We look forward to leveraging Unilife's innovative platform of Unifill syringes to differentiate our injectable products and increasing our market share."

Sounds to me that Hikma's CEO has been talking to both the marketing and technical departments.

And so to the Novartis deal.

Mr Gefvert accords Novartis very little respect here.

"Novartis went to Unilife because it isn't worth other device makers' time to produce this device."

So no other medical device company in the world could be bothered collaborating with the Number 2 Pharmaceutical company in the world to help solve their unmet needs for a specialised injection device? All I can say is, more fool them.

Ignores the fact that one would rather be collaborating with Novartis, than not. Foot in the door, and all that. And getting paid.

Also ignores the fact that the agreement formalises a relationship that has been in progress since 20111. Must be worth someone to someone, else why bother?

Mr Gefvert then states categorically that "Novartis is testing an orphan drug in these trials."

Really? Where does it say that? Perhaps he 'interviewed' the Novartis executives involved? My reading of the announcement shows that the agreement is for "a novel investigational Novartis drug into a targeted organ."

No mention of orphan drug. Wonder why? Possibly because it suits his purpose for it to be a purportedly low-value orphan drug and not, potentially a blockbuster....

"An orphan drug is for a disease that affects less than 200,000 people in the United States. So if Unilife creates only 200,000 devices, how much profit would that be?"

Even if it is an orphan drug, conveniently ignores the EU and ROW markets.

At this point, I have run out of time on this response to Mr Gefvert. Myabe I will come back to it, maybe not.

Suffice to say that in my opinion, this article certainly is a weak business analysis by Mr Gefvert. His weakest yet. But, as said before, desperate times make desperate men.

Have a great weekend all. I'm off to the beach.

BTW, Great trading again, especially after the close...an uneducated observer could be forgiven for thinking we closed down...hilarious!