Dear Shareholders:

Unilife has transitioned itself this year from being a technology company with potential to an industrial medical device manufacturer of substance.

In 2005, we began to recalibrate our strategic business plan to capitalise upon significant pharmaceutical interest we had received in our safety syringe technology. We knew that in order to translate this positive pharmaceutical interest into the development of solid business relationships required us to strengthen our operational capabilities and expand our horizons beyond Australia.

We have since gone about quietly transforming our business so that it is positioned to become a preferred partner for pharmaceutical companies and other healthcare industry leaders. Two key steps in this recalibration process were the certification of our quality and business management systems to ISO 13485 in 2006, and the acquisition of the U.S.-based medical device manufacturer Integrated BioSciences Inc (IBS) in 2007.

Through these measures, we have been able to successfully validate our credentials in the design, development and production of our products and the automated assembly systems used to manufacture them. Our acquisition of IBS in particular brought in-house a level of engineering knowledge that we consider to be unrivalled for its size in the global medical device industry as well as providing a U.S.-base from which we could build a global business.

With Unilife now consistently hitting its key business milestones, attracting world-class people to our team and establishing strategic relationships with global pharmaceutical leaders, I believe the results of our recent efforts are readily apparent.

The two agreements we have signed with sanofi-aventis underline how we are now emerging as a global leader in the pharmaceutical market for prefilled syringes. The acceleration of the industrialisation program to a point where we are currently one-year ahead of schedule confirms our business culture defined by team accountability, personal integrity and a commitment to milestone delivery. Along the way, we have also generated revenues of A$40 million and an after tax profit in excess of A$12 million for the last financial year.

Such achievements don’t just happen. It takes a strategic business plan focused on optimising our strength in fostering innovation across all elements of our business. And it takes the commitment of a world-class team and partners which are driven to achieve nothing less than the very best.

We have now secured the core people, products and partners to achieve our long-term goals. From this point forward, we will settle for nothing less than becoming a preferred supplier of best-in-class safety syringes for global pharmaceutical and healthcare industry leaders.

While there are still challenges to address, our strong patent position, device design expertise and proven production processes gives us the internal competence to continue moving forward with confidence. Our strategic plan for business expansion and the solid support of our industry partners are also helping us overcome competitive market forces as we continue to approach a position of global leadership status.

Jim Bosnjak OAM
Chairman