Unilife posts deepening Q2 loss on costs

15-Feb-2011 - Last updated on 15-Feb-2011 at 10:17 GMT

Unilife saw its losses increase in the second quarter of fiscal 2011 on the lack of industrialisation revenue, higher R&D spending and the cost of its move to the US.

Net losses for the three months ended December 31 was $10.4m (€7.6m) more than doubling the shortfall the syringe maker posted for the year earlier quarter, while revenue for the period fell 43 per cent to $1.8m.

The formerly Australia-based firm attributed some of the Q2 loss to relocation of its global headquarters and manufacturing operations to Pennsylvania, US in the first quarter of fiscal 2011.

However, while the move increased selling general and administrative expenses by $1.5m, the majority of Unilife’s Q2 loss was due to the lack of income from its 2008 partnership with French drug giant Sanofi-Aventis.

That deal, which is focused on the industrialisation of the Unifill syringe range, did not generate revenue for Unilife in the three months ended December 31, 2010, whereas it contributed some $2m in the comparable period a year earlier.

Unilife is entitled to one final milestone payment from this part of the Sanofi deal dependant on the production of commercially viable units, after which point firms will negotiate on a manufacturing and supply agreement.

R&D spending up

The final factor in the US synring manufacturers deepening loss is also related to its Unifill ready to fill range.

While the deal with Sanofi grants the drugmaker exclusive rights to intellectual property in certain therapeutic indications, it does not prevent Unilife from developing and licensing the technology to other pharmaceutical firms.

And this is clearly what Unilife plans to do given that, for the reported quarter, it said that: “Research and development expenses increased by $1.1 million, primarily as a result of additional expenditures incurred to finalize the product specifications of our Unifill syringe.”