UNI 0.00% $1.06 unilife medical solutions limited

wont have to raise anymore capital allan

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    Unilife looks at plunge into capital raising
    By Ian Porter
    Manufacturing reporter
    August 3, 2005

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    Unilife chief Alan Shortall expressed confidence about cash flow.
    Photo: Dallas Kilponen
    Unilife Medical Solutions, which is just completing its first syringe factory, has confirmed it is considering a new capital raising as its remaining cash balances dip below $6 million.

    In a statement to the Stock Exchange, chairman David Rieckie affirmed a capital raising was one of three funding options under examination.

    The statement came after an article in The Age on Monday that appeared to rule out the prospect of a new capital raising.

    In Monday's article, chief executive Alan Shortall said he believed the company would not have to raise new capital, because Unilife was working on several joint development projects that were expected to generate licence fees or milestone payments this financial year. He said directors were "reasonably comfortable" that Unilife would start receiving cash flows before its bank account was emptied.

    Mr Rieckie told the ASX that directors were considering "a full range" of funding strategies.

    "These strategies include licence fee arrangements, milestone payments and/or further capital raisings," he said.

    AdvertisementFunding is becoming an issue for Unilife. At June 30 it had cash deposits of about $6 million, enough to last about 12 months if it spends at the same rate as in the last financial year. The company has started the process of winning production approval for its St Mary's, Sydney, factory from the Therapeutic Goods Administration.

    Mr Rieckie said Unilife was pursuing "a number of major projects", locally and internationally.

    The company claims its core product, a syringe that cannot be refilled and that automatically retracts the needle after use, is unique and is attracting attention from governments. Last week, Mr Shortall said governments were assessing its use in syringe exchange programs aimed at stopping the spread of blood-borne disease.

    In addition, Mr Shortall said Unilife was working with pharmaceutical companies to develop a syringe suitable for use in pre-filled form. A key to this model is the minimisation of the "dead space" between the bottom of the plunger and the top of the needle.

    He believed Unilife could reduce this dead space by more than half, which, over millions of pre-filled syringes, would amount to a significant saving of drugs.
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