Dear Shareholders:

The global healthcare industry is rapidly transitioning to the mandatory use of safety syringes to prevent unsafe injection practices, which cost 1.3 million lives annually.

Healthcare workers in the U.S. and Europe alone receive a combined total of 1.6 million needlestick injuries every year, while the reuse, sharing and unsafe disposal of syringes outside healthcare facilities are prime accelerants in HIV and hepatitis C epidemics. In 2000, the U.S. became the first country to mandate the use of safety syringes within healthcare facilities. Other markets such as Australia, Canada and Europe are adopting similar laws.

U.S. healthcare facilities have largely complied with this legislation. However, total recorded needlestick injuries amongst U.S. healthcare workers caused by syringes have only been reduced by around half. This suggests that many types of currently available safety syringes may not be adequately protecting healthcare workers from harm. Indeed, safety syringes now cause more reported needlestick injuries in Massachusetts than did standard syringes prior to OSHA enforcement commencing in 2002.

We believe that the healthcare workers and pharmaceutical companies are still awaiting the arrival of products with automatic, fully integrated features which can address their safety and functionality requirements.

It is our mission to become a financially robust global provider of medical devices which can enhance and save lives. To achieve this goal, we have spent over six years building our core business capabilities around the design, production and supply of innovative, world-class safety medical devices.

I believe our results have been excellent to date. We have developed a proprietary range of prefilled and clinical syringes which allows operators to control the rate of automatic needle retraction directly from the body into the syringe barrel where it is locked in place, virtually eliminating the risk of needlestick injury or reuse.

Our competitiveness can best be validated not by the global innovation awards we have won, but by the strong relationship we have built with sanofi-aventis. This leading global pharmaceutical company has committed to pay us a total of approximately A$47 million for the Unilife Ready-to-Fill Syringe. This funding comes from the payment of a A$16.4 million fee in return for the exclusive right to negotiate for the purchase of the Unilife Ready-to-Fill Syringe, and the provision of A$30 million in payments based on milestones to be achieved under the Industrialisation program. This product is the world’s first known prefilled syringe with fully integrated safety features and compatible with current filling and packaging systems.

As the world’s largest purchaser of prefilled syringes, sanofi-aventis has recognised the potential of our product to minimise costs associated with attaching ancillary safety products over standard prefilled syringes, while increasing opportunities for competitive product differentiation. In July 2009, sanofi-aventis agreed to commit itself to complete funding our A$30 million industrialisation program. We are also pleased to have retained the right to market and sell the product to other pharmaceutical companies for use in other therapeutic drug classes to be designated.

This year, we have begun to truly turn our vision for global leadership into business reality. We are currently one year ahead of our originally projected schedule in the industrialisation of the Unilife Ready-to-Fill Syringe. We have also successfully commenced production of our Unitract 1mL Syringes at our facility in Pennsylvania, and secured FDA clearance for their U.S. sale.

To reach this point, we have overcome adversity through passion and teamwork, and forged a business culture driven by personal integrity, group accountability and innovation. To complete our evolution, we are continuing to expand our commercial and operational presence in the U.S. with a proposed listing on NASDAQ, and are building a world-class team and network of industry partners with the expertise to get the job done.

We will remain focused on the delivery of four key goals: the on-time completion of the Unilife Ready-to- Fill Syringe industrialisation program, the successful production and commercial release of our Unitract 1mL Syringes, the continued expansion of our operational capabilities, and the implementation of our corporate investment strategy that will build shareholder value.

As CEO, I am proud to lead this highly capable team and guide our Company in the continued implementation of our strategic business plan. Thank you for this honour.

Alan Shortall
Chief Executive Officer