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Recently, Unilife Corporation (UNIS - Snapshot Report) revealed that it has entered into a 15-year customization and commercial supply agreement, with an undisclosed U.S. pharmaceutical company. The agreement, which involves the use of Unilife’s EZMix dual-chamber syringe for the delivery of the pharmaceutical company’s late stage lyophilized pipeline drug, is expected to generate up to $110 million of royalty revenues. About a third of the targeted $110 million revenue from the agreement will likely be in the form of such royalty.

The deal involves the customization and supply of prefilled EZMix devices for use in many activities, which will also include human clinical trials and compatibility testing

This agreement will be accretive to Unilife’s revenues immediately. Revenue generation will be in the form of commercial device sales and royalty on the net sales of the drug. The U.S. pharmaceutical company will pay $3 million over a period of 12–24 months for using the syringe for human clinical trials and testing purposes. An additional $3 million will be given as a fund to commercially start production of the customized device. Further, in exchange of exclusive rights to the device, the pharmaceutical company will have to pay royalty payments on commercial sales of the drug.

This Zacks Rank #3 (Hold) company develops and supplies injectable drugs. Based in Pa., Unilife manufactures wearable injectors, drug reconstitution delivery systems, automatic needle retraction, and targeted delivery system with the help of latest manufacturing facilities.

Other medical stocks worth considering are NuVasive, Inc. (NUVA - Snapshot Report), Conceptus, Inc. and DynaVox Inc. . While NuVasive and Conceptus carry a Zacks Rank #1 (Strong Buy), DynaVox carries a Zacks Rank #2 (Buy).

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