Unilife Corp. (UNIS) Enters Exclusivity Agreement with Amgen (AMGN)

January 4, 2016 7:13 AM EST
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Unilife Corp. (NASDAQ: UNIS) disclosed in an SEC filing:


On December 31, 2015, Unilife Corporation (the “Company” or “we”) entered into an exclusivity agreement (the “Agreement”) with Amgen Inc. (the “Counterparty”). The Agreement was entered into in connection with the previously announced review by the Company of potential strategic alternatives, including a strategic partnership with one or more parties or the licensing of some of the Company’s proprietary technologies (a “Potential Transaction”). Pursuant to the Agreement, we agreed to negotiate a Potential Transaction exclusively with the Counterparty until the earlier of January 31, 2016 or the Counterparty notifies us in writing that it has ceased to consider a Potential Transaction (the “Exclusivity Period”). Accordingly, the Company has ceased negotiations with all other parties that had expressed an interest in a Potential Transaction with the Company.

Pursuant to the Agreement, the Counterparty paid to the Company a non-refundable $15 million deposit (the “Deposit”) as consideration for the following non-exclusive and exclusive rights and licenses provided for in the Agreement:

• The Company granted to the Counterparty a perpetual, worldwide non-exclusive license under the patents, know-how and technology of the Company for the Company to develop, manufacture and supply wearable injector devices existing as of the closing (including any improvements or modified versions) for use with certain large volume drug products of the Counterparty. In addition, the Company granted to the Counterparty a perpetual, worldwide exclusive license under the patents, know-how and technology of the Company for the Company to develop, manufacture and supply the Company’s 1mL wearable injector existing as of the closing (including any improvements or modified version to the same) for use with certain small volume drug products. Except as discussed below, the wearable injector devices will be developed and manufactured by the Company. The Counterparty will be required to pay the Company an amount for each device manufactured by the Company, based on annual volumes and device features.

• The Counterparty’s license also includes a right for the Counterparty to source and/or sublicense the manufacture of up to 20% of the Counterparty’s total annual volume needs for such devices. In such event, the Company will receive the difference between the per unit price of such device as if sold by Company and the Counterparty’s manufacturing and procurement costs for the device.

• In addition, solely in the event that the Company: (a) is unable or unwilling to manufacture the devices, or (b) fails to materially meet to be agreed-upon quality and/or supply obligations, the Counterparty may source and/or sublicense the manufacture of all of the Counterparty’s total annual volume needs for such devices in exchange for a nominal royalty fee per unit to the Company (not to exceed 10% of the cost of goods sold).

The Company and the Counterparty have agreed to negotiate in good faith during the Exclusivity Period the terms and conditions of a Potential Transaction that currently contemplate a cash payment by the Counterparty, including for (i) non-exclusive license rights to the Company’s existing proprietary devices, subject to the rights of existing customers; (ii) an interest bearing note to be satisfied through discounted pricing and/or credits against future amounts owed; (iii) the purchase by the Counterparty from the Company of up to 19.9% of the Company’s common stock; (iv) a preferred right of access to certain new delivery device platforms; and (v) manufacturing arrangements and rights between the parties. These terms and conditions are non-binding and, accordingly, the closing of a Potential Transaction with the Counterparty is subject to, among other things, satisfactory completion of diligence by and negotiations with the Counterparty, the execution of definitive documents, and other conditions necessary to complete the transaction, including any required regulatory approvals. There can be no assurance that definitive documentation for the Potential Transaction will be executed on terms acceptable to us, on terms substantially consistent with those contemplated herein, or at all. In addition, if a Potential Transaction with the Counterparty is not consummated, no assurance can be given that the Company will be able to pursue a potential sale, strategic partnership or licensing arrangement with another party, including those parties that had previously expressed interest in the Company, or any other alternative.

In addition to the Agreement, we have a pre-existing Master Feasibility and Customization Agreement with the Counterparty entered into in the ordinary course of our business on December 2, 2015.



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