What: Shares in biotechnology hopeful Unilife Corporation (ASX: UNS) tumbled around 35% to 24 cents today after the steam came out of yesterday’s big price rise on positive news of a new commercial agreement with a US biotech partner.
So what: Dual listed on the ASX and Nasdaq, Unilife is a US-based company that designs, manufactures and supplies injectable drug delivery systems for use by healthcare professionals or commercial pharmaceutical or biotechnology partners.
Overnight the Nasdaq listed scrip climbed 31.3% and today’s price action on the ASX is likely the result of investors adjusting to the valuation US investors placed on the business in the wake of the news over the commercial agreement.
The commercial agreement will see Unilife receive a US$15 million non-refundable payment from large US biotechnology business Amgen, with plenty of further opportunity for Unilife to supply its injector devices to Amgen for use in the global healthcare markets it operates in.
Now what: The fact that there appears to be demand for Unilife’s injectable devices from a large healthcare business is a positive sign. However, the shares have been on a wild ride over the last year losing around 70% of their value since February 2015 despite the recent strong price rises and investors should expect the stock to remain volatile.
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Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.