Recently, the staff of Aicube sat down with Alan Shortall, the Founder, CEO and Executive Director of Unilife. The company is a developer and maker of advanced drug delivery systems based in the United States and was founded by Alan Shortall in Australia in 2002.

Aicube: Is Unifill Your Only Product?

Alan Shortall: We have a range of products that are available or ready for commercialization. In fact, every one of these products and their underlying technologies has been driven by the unmet needs of our pharmaceutical customers. We actually have them lining up at our front door asking us to try to come up with solutions for their therapeutic drugs so that they can take them to market.

Aicube: Why are pharmaceutical companies being driven to launch their drugs in innovative differential devices?

Alan Shortall: The change from chemical-type drugs to biological drugs—which are now driving the need for pharmaceutical companies to come up with novel devices. Oftentimes these drugs can be very viscous and so consequently to absorb them or inject them into the body (because they have large molecules and they’re complex) they must be injected. Give consideration to trying to inject a drug that is like honey. It’s not easy to inject. If that needs to be injected and it needs to be injected over a particular period of time, a standard syringe is not going to be able to do that. So there’s got to be new ways of actually delivering the drugs to specifically meet the requirements and the efficacy of delivering that drug. It will be linked with the regulatory approval process as well.

Aicube: Why are pharmaceutical companies seeking Unilife to develop their devices?

Alan Shortall: The pharmaceutical industry in particular has shifted towards biological drugs. Biological drugs by their nature are generally very complex compounds with large molecules. In many cases, they need customized devices or novel devices to actually be able to deliver them because they’re so complex. Commodity, off-the-shelf devices that are traditionally supplied by incumbent device manufacturers have been developed under a one-size fits all model. But this approach does not meet the specific needs of many of these biological drugs. Unilife has a completely different customer-centric model. We give the customer exactly what they need every time. And we bowl them over with service, agility and reliability.

Aicube: What are the benefits for Unilife in supplying unique devices to pharmaceutical companies?

Alan Shortall: We have a range of products but also we have variations of those products that have been customized for the pharmaceutical companies—specific for a particular drug. The beauty of that for us and for the Unilife shareholders is that as pharmaceutical companies actually get regulatory approval with our proprietary device it means the pharmaceutical company is locked in to using that device and purchasing it from us. So we will then be putting in place long-term supply agreements that will give us a very strong financial, robust financial model going forward.

The other thing in relation to that—what it does do is [that it] actually insures both the medium and long-term strategic value but also the financial opportunity which is enormous for our shareholders.

Aicube: What gives Unilife the capabilities to accommodate the needs of pharmaceutical companies?

Alan Shortall: First of all, we actually have the credibility because we’ve achieved the impossible by being able to manufacture the Unifill prefilled syringe. Secondly, with the industry innovation already demonstrated, we have the expertise on board. We’re nimble as a company, as an entrepreneurial company. We have the infrastructure in place. We have the operational capabilities. More importantly, we have the passion and the courage to be able to change the marketplace.

Aicube: Why wouldn’t a pharmaceutical company go to a larger established company?

Alan Shortall: Traditionally the incumbent, large, dominant medical device companies are driven by commodity products…. Large volumes and low margins. They’re me-too products. These products in many cases do not meet the specific requirements of the pharmaceutical companies.

Aicube: Do you have plans for expansion of the facility?

Alan Shortall: The facility that we’ve built would see us out to 400 million units of production capacity. We have a planning permission already in place for an extension to that factory section. So that would be basically like building on a concrete box—which we will then fit out the clean rooms for that extension. When we’ve done that we will then pull down the dividing wall so there will be no interference with our production capacity at that stage. The facility with the extension place will then see us out to a billion units. At that stage, we would be considering a secondary

Aicube: How long will it take to get other lines up and running once the demand rises post 2012?

Alan Shortall: The second line we bring in will have 150-million unit line capacity. That will become a standard size production line at that time. We expect to bring in basically one per year going forward up to 2016. So by the end of 2014 we should be producing approximately 400 million units a year. By the end of 2016 we should be producing close to 800 million units per year.

Now, that 800 million units by the end of 2016 would represent approximately 15 percent of the projected prefilled syringe market at that time. So we believe that is pretty much a conservative number in terms of the requirement that we will need. It takes about 12 months to actually get a line in place. We have the capacity to increase that production [inaudible] program if we need to—which will be a great position to be in.

Aicube: How will you pay for the development of new products?

Alan Shortall: We anticipate the development of those devices in many cases will be funded either fully or partially by collaboration agreements which we will be putting in place with these pharmaceutical companies. In fact, we already have two or three products that have been developed in collaboration with some of these pharmaceutical companies. The fact is, we’re moving so quickly that the pharmaceutical companies can’t keep up with the paper work in terms of the agreements we need to put in place.

Aicube: In what stage are companies soliciting Unilife?

Alan Shortall: We’re currently in communications and collaboration with a number of pharmaceutical companies developing new devices for specific—. These devices I’m referring to now will be customized devices. They will be customized specific to their requirements.

Aicube: What is the customization of devices for biological drugs offering pharmaceutical companies?

Alan Shortall: First of all, when we are talking about these complex biologics, they’re so complex. By way of example, water as you probably know has three atoms. Some of these biologics have between 50 to 100,000 atoms. They’re very complex; they have large molecules. Often times they’re actually very viscous. So in developing the drug, previously the pharmaceutical company would develop the drug, get regulatory approval, and then decide what device they’re going to use to deliver it in the marketplace. And they would have a number of choices.

But because of the complexity of these drugs, the pharmaceutical companies have actually now got to start thinking earlier in the process. So coming into Phase Two and Phase Three trials, they need to actually be planning what device they’re going to use to deliver the drug. Often times the customized device is an essential requirement to be able to administer the drug efficiently to be able to get regulatory approval.

As I said, the beauty for our shareholders going forward is that once our device becomes and gets regulatory approval as part of the device-drug combination, it means we are locked in with that pharmaceutical company into long-term supply agreements. That gives us a very robust financial model going forward.

Aicube: What is the process of taking your products to market?

Alan Shortall: We’re an advanced drug delivery systems business. . In effect, once we start to supply those pharmaceutical companies with our devices, they actually fill the devices and they deliver them into the marketplace.

So our business model is financially very attractive because we have no go-to-market strategies. We don’t need teams of sales people or distributors or anything else. The pharmaceutical companies take care of that for us.

Aicube: What is Unilife offering in comparison to major incumbent medical device manufacturers?

Alan Shortall: Excitement—involved in an entrepreneurial company that is changing the marketplace that isn’t commodity-driven but that they can actually contribute and do something that is going to make a significant difference to saving millions of lives potentially but also actually having a specific input and direction in where the market is going.

Aicube: Alan Shortall, thank you for taking the time to speak with us today.

Alan Shortall: You are welcome, my pleasure.

Founded in Australia, Unilife still has offices in Sydney although they moved their main production facility to the United States in 2008. The company’s roots in Australia began when two inventors approached the firm’s future CEO Alan Shortall with a revolutionary idea. Shortall helped to found the medical device company that designs and distributes syringes and other injectable devices to pharmaceutical companies across the globe.

Tel: +612 8346 6500
Fax: +612 8346 6511

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