OrbiMed Arrangement Gives Unilife (UNIS) 'Significant' Amount of Credibility - Analyst

Cantor maintains its Buy rating and $8 price target on Unilife (Nasdaq: UNIS) following the company's announcement of entering a new financing arrangement.

Ahead of the opening bell today, Unilife announced that it has entered into a $60 million debt financing agreement with an affiliate of OrbiMed. $40 million was funded to Unilife at the closing of the deal. Provided the Company is in compliance with the terms of the agreement, two additional tranches of $10 million each will be provided to Unilife in December 2014 and June 2015.

Analyst Jeremy Feffer commented: As one of the largest pure-play healthcare investors, OrbiMed provides UNISwith a significant level of credibility, in our view. According to UNIS management, OrbiMed performed exhaustive levels of due diligence and had an opportunity to review the details of the supply agreements signed late last year. Given that there is no equity component to this deal, we do not necessarily view the interest rate as particularly onerous, and we similarly expect limited long-term impact from the royalty payments given that UNIS will likely buy out the royalty component. In the meantime, however, we believe the focus should shift back to UNIS' ability to execute on these supply agreements as concerns about near-term liquidity disappear.

For an analyst ratings summary and ratings history on Unilife Corporation click here. For more ratings news on Unilife Corporation click here.

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