Unigene enters agreement with GSK to advance oral PTH Phase 2 program for osteoporosis

Unigene Laboratories, Inc. (OTCBB: UGNE) today announced that the Company entered into an amended and restated exclusive worldwide license agreement with GlaxoSmithKline (GSK) to develop and commercialize an oral formulation of a recombinantly produced parathyroid hormone (PTH) analog for the treatment of osteoporosis in postmenopausal women and plans to initiate a Phase 2 study in the first quarter of 2011.

“Over the past several months we have been focused on multiple strategic imperatives, including working closely with GSK on prioritizing the advancement of our oral PTH Phase 2 program for osteoporosis.”

Under the terms of the amended and restated agreement, Unigene will conduct the Phase 2 study and will be eligible to receive the remaining milestone payments of up to $142M including an upfront payment of $4M, an additional $4M payment upon completion of Phase 2 patient enrollment and further payments based on the achievement of regulatory and commercialization milestones. In addition, Unigene is eligible to receive tiered low double-digit royalties on global sales. Once the Phase 2 study has been completed and based on a review of the data, GSK may elect to assume responsibility for all future development and commercialization of the product.

In April 2002, GSK and Unigene signed the original exclusive worldwide license agreement to develop and commercialize the oral PTH program for osteoporosis with potential payments totaling approximately $150M upon the successful achievement of development and commercialization milestones. Prior to the revised agreement, an aggregate of $8M in up-front and milestone payments were made to Unigene. In addition, Unigene was entitled to reimbursement for development expenses, as well as tiered low double-digit royalties on global sales.

Ashleigh Palmer, Chief Executive Officer of Unigene Laboratories, Inc., said, "Over the past several months we have been focused on multiple strategic imperatives, including working closely with GSK on prioritizing the advancement of our oral PTH Phase 2 program for osteoporosis." Palmer continued, "The completion of our amended agreement with GSK provides a clear path forward for the PTH program and is a significant milestone for Unigene. This is a strong validation of our new management team's commitment to our strategy and our ability to deliver results. Importantly, we now have the financial resources needed to continue to advance our oral PTH program. We are thrilled to be continuing our collaboration with GSK to advance our oral PTH program while leveraging their impressive global clinical, regulatory and commercial expertise."