Unilife move to NASDAQ(Video)
TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH UNILIFE MEDICAL SOLUTIONS LIMITED (ASX:UNI) CEO, ALAN SHORTALL
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for an update from Unilife Medical Solutions is CEO, Alan Shortall. Alan welcome back. For those in our audience not familiar with Unilife, can you briefly tell us what you do?
Alan Shortall: Yes, Unilife Medical Solutions is an Australian publicly listed company. We listed in November 2002 originally. We design, develop and manufacture innovative safety medical devices. In particular we have a patent protected portfolio of retractable syringes. Those retractable syringes have major functional and safety advantages over the current generation of safety syringes. In particular, we believe that they will become the product of choice and that is in a market sector where demand is actually being driven by legislation.
Clive Tompkins: And Alan, can you tell us about the features and advantages of your prefilled syringes?
Alan Shortall: Most of the current generation of safety or retractable syringes require an action to make them safe and that conscious action often doesn’t take place. The difference with our product is that actually when the injection stroke has been completed, the retraction is automatic. So there’s no action required on the part of the healthcare worker.
In fact there are two features that are common to each of our technologies - that is automatic and controlled retraction. So the retraction mechanism can be activated while the needle is still in the patient and then the healthcare worker actually controls the rate of retraction. Thereby it eliminates the risk of needlestick injuries.
Clive Tompkins: You’re now headquartered in Pennsylvania with an automated assembly line recently commissioned. Why Pennsylvania and when is the line due for completion?
Alan Shortall: Well, one of the difficulties with most technology companies is to try to make the transition from being a technology company to being an industrial producing company. The Unilife Medical Solutions Board made the decision about four years ago to look to acquire a company which had the operational skill sets to which we could implement our technology and then bring it to market.
We identified a company called Integrated BioSciences Inc (IBS )which was located in central Pennsylvania. Not only were they contract syringe manufacturers with FDA registered manufacturing facilities, but they had a twenty year history of designing and building automation assembly systems. So it was an ideal fit for us to be able to transition into being a manufacturing company. So we acquired Integrated Biosciences in late 2007 - so consequently central Pennsylvania has become our corporate headquarters now.
The automotive assembly line for our 1mL size insulin and safe syringe has been completed and is working successfully - that was completed in August of this year. Since August we have been producing product and placing it in quarantine ready for market release – should be released about the 18th of December. In the meantime, what we’ve been doing is rapid age testing which is part of the regulatory process requirement and that is normal with any new production line in a new clean room facility.
Clive Tompkins: So Alan, what is the capacity of the line and is it scalable?
Alan Shortall: Yes the line is scalable to a certain extent; its replicable would be the word I’d use. The current line has the capacity of 40 million units per annum and as the line grows, we’ll actually replicate that line. But in fact, as a company, we’re focusing all our operational resources on the industrialisation programme for our prefilled syringe technology.
We have an exclusive agreement with Sanofi-aventis which is the fourth largest pharmaceutical company in the world. Sanofi-aventis have paid us approximately $50 million for the five years exclusive rights to negotiate to purchase our prefilled syringes from us. So we are focusing all our operational resources on that program at the moment.
Clive Tompkins: The market for prefilled syringes is in the vicinity of $2 billion, how quickly will you be able to deliver product?
Alan Shortall: Well the industrialisation programme for bringing our Unifill prefilled syringes to the market started on the 1st July 2008. We announced at that time that the industrialisation programme would be completed at the end of 2011. On the 1st of July this year 2009, we updated the market once we had signed the industrialisation agreement with Sanofi-aventis and we were able to tell the market that we were actually one year ahead of schedule on the industrialisation programme.
It will now be completed at the end of 2010 at which time we will be able to produce 60 million units per year capacity on the first line, and that’ll be sterile product which will start to be supplied to our pharmaceutical partner very early in 2011.
Clive Tompkins: Alan can you tell us about the decision to award Mikron the contract for the prefilled syringe production line?
Alan Shortall: We had actually gone to an extensive programme of due diligence researching all automation suppliers locally. We started with about thirty, narrowed it right down to about five - we did site visits to all five. One of the key criteria we wanted from any supplier of the automation systems was they had experience in handling needles which are very specialised. Glass barrels - which prefilled syringes are made of glass barrels - it’s very specialised and also to have provided assembly systems for similar devices. Mikron met all the requirements from that perspective.
Clive Tompkins: And Alan you recently filed patents for a new prefilled product called Unifill Select, what’s the opportunity for this product?
Alan Shortall: Well a lot of vaccines, and particularly vaccines that are prefilled, use interchangeable needles, because it’s important to be able to vary the length of the needle according to the size of the patient. Currently again, there is no safety prefilled range that’s suitable for vaccines with interchangeable needles. So we’ve actually developed a whole new technology which is biocompatible, which will fit into pharmaceutical companies’ standard filling systems and is suitable for vaccines with interchangeable needles. It opens up a whole new market opportunity for us.
Clive Tompkins: Now that you have plans to list on NASDAQ, you’ve lodged an Information Memorandum with ASIC as part of the process, when is listing on NASDAQ likely to occur and at what price?
Alan Shortall: We believe that we will have completed the Redomiciliation and be listed on NASDAQ by the end of the first two weeks in February. The Information Memorandum will be posted out to our shareholders early in December. We have scheduled an Extraordinary General Meeting for our shareholders to vote on the Redomiciliation for the 8th of January. So we are very far down the process.
In relation to the share price, I don’t think there’ll be any immediate change. In fact from our shareholders perspective, they won’t notice much difference but at least they will have a choice. They can actually have NASDAQ listed shares to trade on NASDAQ if they wish, or they can have what’s known here in Australia as CDI’s or Chess Depository Interest, which to all intents and purposes will trade on the ASX just like our shares do now on a one to one basis.
But I think medium to long term; the U.S.A is the largest medical device market in the world. It’s also the largest capital market and we have our operations in the U.S.A. I think the demand for stock is going to be driven by the U.S.A going forward and also the average P/E ratio for companies in our sector on the ASX is 17:1 and then NASDAQ is 30:1. So I think it’s a smart move for us and I think it’s going to help to increase shareholder value as we go forward.
Clive Tompkins: Alan Shortall, thanks again for the update.
Alan Shortall: You’re welcome, thank you.