New Chapter 11 Filing - Unilife Corporation

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Unilife Corporation

  • 4/12/17 Recap: Publicly-traded ($UNIS) manufacturer and B2B supplier of injectable drug delivery systems (including wearables) to pharmaceutical and biotechnology customers filed for bankruptcy to attempt a 363 sale of the business. This is kind of like a bad episode of Shark Tank. The Company appears to manufacture pretty innovative drug delivery systems - innovative in that the devices seem to be unobtrusive and, if we understand this correctly, help patients receive treatments without the need for multiple needles. But this is one of those episodes where the Sharks start asking about the numbers and they ain't pretty: the company is post-revenue and has some patents but it is pre-FDA approvals and pre-delivery (of medicine) to end users. Its limited revenue source is through negotiated supply agreements. It has a lot of debt (see below) and an expensive facility lease. It also had - in a very Kevin O'Leary-like fashion - a royalty agreement with its senior secured lender (ROS) which entitled ROS to a 4.52% royalty on the first $50mm of net sales (with ratchets for higher sales). So sharky. Of course, this isn't really that relevant when your incurred net losses are $100.8mm like they were in '16 (but we really enjoyed playing with the analogy). Now, ROS is providing a $7.5mm DIP credit facility to fund the cases for 90 days so that the company can attempt to find a buyer (note: there is no stalking horse bidder). Reminder: this was a PUBLICLY-TRADED company so, surely, there are some angry shareholders somewhere. 
  • Jurisdiction: D. of Delaware
  • Capital Structure: $70mm secured term loan (ROS Acquisition Offshore LP), $45.7mm senior secured convertible note (Amgen Inc.), $12.1mm mortgage (First National Bank), $1.9mm financing authority loan (Keystone Redevelopment Group LLC/Commonwealth of Pennsylvania Financing Authority)     
  • Company Professionals:
    • Legal: Cozen O'Connor (Mark Felger, Keith Kleinman, Eric Scherling, Frederick Schmidt) 
    • Financial Advisor: Protiviti Inc. (Guy Davis)
    • Investment Banker: SSG Capital Advisors LLC (J. Scott Victor)
    • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: ROS Acquisition Offshore LP
      • Legal: Pachulski Stang Ziehl & Jones LLP (Laura Davis Jones, Jeffrey Davidson, Henry Kevane, Debra Grassgreen)
    • Senior Secured Convertible Noteholder: Amgen Inc.
      • Legal: Ropes & Gray LLP (James Wilton, Patricia Chen) & (local) Cole Schotz PC (Norman Pernick, Katharina Earle)
    • Large General Unsecured Creditor: Sanofi Winthrop Industrie
      • Legal: DLA Piper (US) LLP (Stuart Brown, Kaitlin Edelman)
    • Official Committee of Unsecured Creditors
      • Legal: Lowenstein Sandler LLP (Michael Etkin, David Banker, Barry Bazian, Gerald Bender) & (local) Schnader Harrison Segal & Lewis LLP (Richard Barkasy)

Updated 7/17/17