Having opted to retain its injectables business in the face of a “significant amount” of interest back in April, Hikma has signed a 15 year commercial supply contract with Unilife Corporation for use of a customised prefilled syringes, called the Unifill Nexus, for an initial 20 of its generic products.
“We are trying to deliver products with the end user in mind,” Hikma’s VP Corporate Strategy, Susan Ringdal, told this publication. “These have retractable needles so eliminate risk of sticking” when administered to a patient.
“We obviously looked at a lot of our options for suppliers of this type of technology and we wanted to have a differentiated offering,” she continued, adding: “We felt Unilife were extremely responsive to our requirements.”
Details of the deal will see Unilife supply the syringes to Hikma - currently installing filling lines across its facilities - who will pay an estimated $40m (€29.5m) to the device company, comprising of an upfront payment of $5m, an additional $15m in 2014 and a further $20m in milestones.
However, revenue from this deal is predicted to be far more, according to Cantor Fitzgerald analyst Jeremy Feffer.
“Following an unspecified ramp-up period, Hikma has agreed to an annual minimum of 175 million units, which at the Unifill ASP of $0.90, amounts to at least $157m in annual revenues,” noted Feffer. “Even at a discounted price, this deal is still likely to generate more than $100m per year.”
Ringdal was unable to divulge further information when asked regarding fiancial details, discounts and unit costs.
Long-term Contracts and Ambition
In September, Unilife inked a deal with French drugmaker Sanofi and earlier this month the firm penned a long-term deal with AstraZeneca offshoot MedImmune for use of its wearable injectors.
Speaking at a shareholders meeting last week (transcript here), CEO Alan Shortall said of the recent deals: “Given that we expect to generate hundreds of millions of dollars in future revenue of every one, we could build a profitable business on any single one of those deals.”
He added: “It goes without saying that many of our newest customers, Sanofi, MedImmune, Hikma, to name but a few, are nothing short of giants in the global pharmaceutical industry.
“And I fully believe that Unilife, given the business that we have already locked in today and the numerous customers in our pipeline, will soon be a giant in our own right.”
However, though Feffer reiterated his Buy rating for Unilife, he did note certain risks including delays in supply, regulatory approval and competition from “larger and significantly better capitalized companies” which may affect Unilife’s drive.
However, Shortall seems unphased by such risks, telling stakeholders: “My belief is any fool could now run the Unilife profitably today as it is. But I am committed to making Unilife the biggest and most successful supplier of injectable drug delivery systems in the world. And it's not a job for me. It's a mission.”