Unilife is having an incredible day in the market today after disclosing an SEC filing with regard to an exclusivity agreement with Amgen. The agreement surrounds Unilife’s proprietary technology. Today, we’ll talk about what that technology is, what the agreement entails, how UNIS is reacting in the market, and what we can expect to see from the stock moving forward.
Details Of The UNIS/AMGN Agreement
The agreement between Unilife and Amgen is associated with the companies’ previous announcement with regard to potential strategic alternatives. Under the agreement, UNIS will provide AMGN with the exclusive rights to develop, manufacture, and supply wearable injector devices for use with large volume drug products. The company will also be providing Amgen exclusive rights to develop, manufacture and supply a 1ml wearable injector designed for use with small volume drug products.
In exchange for providing AMGN with the exclusive rights to this technology, UNIS will receive an up-front, non-refundable payment in the amount of $15 million. Amgen has also agreed to purchase up to 19.9% of Unilife’s outstanding common stock. For more details with regard to the agreement, click here.
How The Market Reacted To The News
As investors, we’ve learned that any time we see positive news with regard to a publicly traded company, we can expect to see gains in the value of that company’s stock. That’s exactly what we’re seeing today as a result of the agreement between AMGN and UNIS. Currently (10:08), UNIS is trading at $0.82 per share after a gain of 65.79% so far today. Unfortunately, the same cannot be said for AMGN. As the market continues to react to higher interest rates and worrisome economic conditions around the world, AMGN is following the overall trend downward. Currently, the stock is trading at $157.54 after a loss of 2.95% so far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from UNIS. First and foremost, the new agreement with Amgen offers Unilife the capital it needs for further growth of its operations. Also, under the agreement, we can expect to see a massive purchase of UNIS common stock relatively soon. Naturally, this will send the stock skyrocketing. Moreover, with the support of a well-established biotechnology company, Unilife will have better insight with regard to what it needs to do to achieve growth. All in all, signs are pointing toward positivity in the long run.
In the short run however, it’s important to remember that price movement in the market tends to happen through a series of overreactions. While UNIS gains are warranted to an extent, it’s not likely that this agreement is worth more than 50% growth that will hold up for any substantial period of time. As a result, I’m expecting to see a correction in the stock, bringing the price down to a more sustainable rate before growth continues.
What Do You Think?
Where do you think UNIS is headed moving forward? Let us know your opinion in the comments below!
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