Boston, MA 03/13/2014 (wallstreetpr) – Unilife Corp (NASDAQ:UNIS) has just announced a debt funding from a prestigious healthcare called OrbiMed. This debt deal is significant in many ways for shareholders in this stock. And this explains why shares of the company have already shot up almost 12 percent in early hours of the regular sessions.
As at 11:40 a.m., shares of Unilife Corp (NASDAQ:UNIS) were changing hands at $4.77, up 10.19 percent.
The just announced debt financing agreement involves $60 million of which $40 million issued upfront. Coming to secure this funding suggests underlying strength in the company and here is where investors should be looking at.
Airtight Business Model
Being a premium healthcare investor that it is, OrbiMed carried out intensive vetting into the business model and opportunities for Unilife Corp (NASDAQ:UNIS) before agreeing to the give its $60 million investment. Talk about intensive vetting and that meant among other things looking into the company’s patent portfolio, physical property, valuation and financial statements.
If there was anyone out there who was uncertain about the strength of Unilife Corp (NASDAQ:UNIS)’s intellectual property portfolio, there is now good reason to be feel comfortable. You cannot doubt the extent to which OrbiMed could go to hire good intellectual property lawyers and auditors to ensure that the business model of Unilife is airtight, before committing its $60 million to the course.
Share Dilution Reprieve
That Unilife Corp (NASDAQ:UNIS) has entered a debt funding agreement instead of secondary shares offering to raise money comes a big reprieve for investors. With the company seeking funds and few options to get that money available, share dilution was an argument that was gaining currency, but to the disadvantage of shareholders whose value would be eroded. So then, there is no more concern about Unilife Corp (NASDAQ:UNIS) diluting its share to raise money and investors can celebrate this victory.
Attaining Positive Earnings
Money was a big problem for Unilife Corp (NASDAQ:UNIS) and now money is there. The $40 million upfront from the debt financial agreement means that the company could be worth $50 million by now in terms of cash. If the 2013 operating budget is anything to go by, this amount of cash seems enough to last the company till end of this year.
