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Q2 2013 Earnings Call
February 11, 2013 4:30 pm ET
Todd Fromer - Managing Partner
Ramin Mojdehbakhsh - Chief Operating Officer and Executive Vice President
R. Richard Wieland - Chief Financial Officer and Executive Vice President
Jeremy Feffer - Cantor Fitzgerald & Co., Research Division
Danielle Antalffy - Leerink Swann LLC, Research Division
Raj Denhoy - Jefferies & Company, Inc., Research Division
Jeffrey S. Cohen - Ladenburg Thalmann & Co. Inc., Research Division
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I would now like to introduce your host for today's conference, Mr. Todd Fromer, Investor Relations Council to Unilife. Sir, you may begin.
Thank you. Good afternoon, everyone, and good morning to our Australian supporters. Thank you for joining us for the Unilife Corporation Fiscal 2013 Second Quarter Conference Call.
Before we begin today, I would like to remind everyone that this conference call contains forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate to occur in the future are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and not on information currently available to our management.
Our management believes that these forward-looking statements are reasonable as and when made, however, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A Risk Factors and elsewhere in our Annual Report on Form 10-K and those described from time to time in other reports, which we file with the Securities and Exchange Commission.
Ladies and gentlemen, at this point in the presentation, I would normally turn the floor over to Mr. Alan Shortall, CEO of Unilife. Unfortunately, Mr. Shortall could not be available for today's live presentation. However, he has provided me with the following prepared remarks, which I will now read on his behalf.
The following is a statement written and provided by Mr. Alan Shortall, CEO at Unilife. Good afternoon, ladies and gentlemen, I would like to apologize for not being able to join you in person for today's earnings call. As you know, I take my communications with shareholders very seriously. There are few things more important to me than being available to speak directly with investors and analysts. There is only one thing that would have ever dragged me away from today's call and that is building strong commercial relationships with pharmaceutical customers. I am currently traveling and meeting with senior executives from one of our main customers. Given the importance of these customer discussions, flight schedules and time zone differences, it was impractical for me to be part of today's call.
While I cannot go into details regarding this particular customer meeting, I've often said that my primary focus is doing deals that build shareholder value, that's what I seek to do every day and is what I'm doing at this moment.
Filling in for me on today's call is our Chief Operating Officer, Dr. Ramin Mojdeh. However, before I hand the call over to Ramin, I want to take a few minutes to make some comments about our long-term funding strategy. We expect to progressively lock in a series of contracts with multiple pharmaceutical companies during the 2013 calendar year that will generate upfront revenues.
As we move to finalize many of these contracts, it's important that we have reasonable cash reserve to support our business operations.
Over recent months, we've been exploring a range of options that will provide long-term capital financing and cause minimal dilution to our existing holders. We are currently reviewing term sheets from several U.S. institutions that allow us to borrow sufficient cash to maintain business operations for the foreseeable future. This debt financing will be repaid gradually to lenders over a number of years from a portion of the accelerating revenues generated from device sales, exclusivity fees and other opportunities.
To strengthen prospective terms for this loan, we have increased our cash position in 2 ways. First, we activated the At-the-Market or ATM facility with Cantor Fitzgerald in January, whereby we issued 3.85 million in stock to U.S. institutions during favorable trading period. We have no immediate plans to use the ATM facility again in the foreseeable future.
Second, we announced today the receipt of $9.6 million in net proceeds from a common stock offering with Creed Capital, U.S. institutional investor. This investor approached us last week, seeking to take a long-term passive position in Unilife. After consideration, we determined that the timing of such an investment was favorable and in the best interest of shareholders. Together, these financings have resulted in an additional $13.4 million in cash going onto our balance sheet. I considered the dilution to be minimal and vastly outweighed by the commercial and financial options it creates for us moving forward.
In particular, it strengthens our options as we move to finalize our long-term debt funding program and sign contracts with pharmaceutical companies in the weeks and months ahead. We are in a great position to make 2013 a great calendar year.