Unilife sells rights to its drug delivery devices to Amgen for $75M lifeline

Unilife's wearable Imperium insulin patch pump--Courtesy of Unilife

The long-awaited grand alliance between Amgen ($AMGN) and injectable device specialist Unilife ($UNIS) has commenced. In return for a lifeline worth up to $75 million, Amgen gains exclusive rights to the struggling York, PA, company's wearable injectors within selected drug classes and nonexclusive rights to all of Unilife's proprietary injectable delivery systems within the therapeutic areas of oncology, inflammation, bone health, nephrology, cardiovascular and neuroscience.

Unilife's share price is up 15% on the news to around $1.15, giving it a market cap of about $184 million. The company receives a $20 million license fee, and $30 million in the form of the sale of a senior secured convertible note to Amgen. The biotech may purchase additional notes worth up to $25 million by January 2018. Unilife says it expects to earn additional future revenues as a result of the strategic collaboration.

On Dec. 31, Unilife inked a nonexclusive deal to supply Amgen with already existing wearable injector devices "for use with certain large volume drug products," as well as its 1-mL wearable injector "for use with certain small volume drug products" in return for $15 million.

At the time, the companies announced they would negotiate a grand alliance that would potentially include Amgen purchasing 19.9% of Unilife. Although the potential stake in Unilife that Amgen could acquire under the actual deal is unclear, senior secured convertible notes are securities that give the purchaser the option to convert debt to shares of the issuer's company, according to Investopedia.

In September, Unilife laid off 50 employees to focus on commercializing its Imperium line of wearable insulin patch pumps.

The company has had some success signing drug delivery partnerships with other Big Pharma players, including a deal in November to supply AstraZeneca's ($AZN) Medimmune with wearable injectors for a late-stage monoclonal antibody. And in January 2015, it received $5 million from AbbVie ($ABBV) for the use of its devices in therapies to treat autoimmune diseases.

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