More than 50 injectable drug products, with total sales of more than U.S.$50 billion, are currently available in a prefilled syringe format. Many pipeline drugs are also targeted for use in a prefilled syringe format. Pharmaceutical demand for prefilled syringes exceeds 2 billion units a year, with the market growing at more than 10% per year. Sanofi-aventis is the world's largest purchaser of prefilled syringes, with Merck, Novartis, Roche, Wyeth and Teva amongst those other major pharmaceutical companies who utilise these products to fill injectable drugs and vaccines.

Unilife entered into a collaborative relationship with sanofi-aventis in 2003 for the development of the Unilife Readyto-Fill Syringe. On July 1, 2008, the Company signed an Exclusive agreement (the Exclusive agreement) with sanofi-aventis, pursuant to which sanofi-aventis paid Unilife a A$16.4 million (€10 million) fee for the exclusive right to negotiate for the purchase of the Unilife Ready-to-Fill Syringe.

On June 30, 2009, both parties signed an Industrialisation agreement pursuant to which sanofi-aventis agreed to provide Unilife with A$30 million (€17 million) in payments based on milestones to be achieved under the Industrialisation program for the Unilife Ready-to-Fill Syringe. Through August 31, 2009, Unilife has received payments of A$17 million (€10million) under the Industrialisation program.

Further to a First Amendment signed on June 30, 2009 to the Exclusive agreement, should both parties be able to agree on an exclusivity list of therapeutic drug classes by February 28, 2010, then sanofi-aventis will retain exclusive rights to the use of the product within these designated therapeutic drug classes until July 1, 2014.

If both parties are unable to reach an agreement on such list by February 28, 2010, then sanofi-aventis will retain full exclusivity across all therapeutic drug classes until July 1, 2012, at which time Unilife would be free to commence sales and deliveries to any pharmaceutical company across all therapeutic classes. If both parties enter into a supply agreement prior to July 1, 2014 for the purchase of the Unilife Ready-to-Fill Syringe for use with a particular drug product, sanofi-aventis will receive a ten-year extension of its exclusive right to purchase the product within the relevant therapeutic drug class. This extension will be reduced to five years if sanofi-aventis does not sell a minimum of 20 million units of the product for use with an injectable drug product in this therapeutic class in at least one of the first five years of the supply agreement. Each therapeutic class on the exclusivity list will be treated separately for this purpose. The Industrialisation agreement does not require Unilife to commit more than 30% of its annual production capacity to sanofi-aventis. Should sanofi-aventis wish to receive a greater portion of annual product capacity, it is required to provide orders to Unilife twenty-four months in advance.

Since Unilife has retained certain rights under the Industrialisation agreement with sanofi-aventis to market and sell the product to other pharmaceutical companies, it expects to be able to pursue agreements with these companies with respect to therapeutic drug classes for which sanofi-aventis does not retain exclusivity.