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Stonegate Report About Unigene Laboratories Inc.

Friday, March 14, 2008 General News J E 4
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ZURICH, Switzerland and FAIRFIELD, New Jersey, March 13 "The new Stonegate Report about Unigene confirmsthat we are uniquely positioned as the only biopharma company thatmanufactures peptides by recombinant techniques, while also having oral andnasal delivery systems to administer the peptides. Since the launch of"Fortical" in 2005 with partner Upsher-Smith Laboratories, "Fortical" hascaptured a near dominant 49% market share of the U.S. nasal calcitonin marketthat is estimated to be in the $200 million range."

Stonegate Securities, Inc. Unigene Laboratories Inc. (WKN 875852, ISINUS9047531002, UUL, OTCBB: UGNE)

Company Description

Unigene is a biopharmaceutical company that focuses on the research,production and delivery of therapeutic peptides. Its initial focus is onsalmon calcitonin (sCT) and other peptides for the treatment of chronic boneand joint disorders. Unigene received FDA approval for Fortical(R), asCT-based product that addresses the osteoporosis market, in 2005.Upsher-Smith Laboratories licensed the rights to Fortical(R). In addition,Unigene has developed a patented manufacturing process for the efficientproduction of peptides and patented technologies for the oral and nasaldelivery of peptides. The Company has also licensed the worldwide rights toits oral parathyroid (PTH) technology to GlaxoSmithKline (NYSE: GSK) and theworldwide rights for its calcitonin manufacturing technology to NovartisPharma AG (NYSE: NVS). Unigene is headquartered in Fairfield, NJ, withmanufacturing facilities in Boonton, NJ. The Company currently employs 100people.

Summary

- Strong sales growth from Fortical(R) - Since its 2005 launch withpartner Upsher-Smith Laboratories, Fortical(R) has captured a near-dominant(49%) share of the U.S. nasal sCT market that is estimated to be in the $200million range.

- Safety concerns in the osteoporosis market - Bisphosphonate-basedtherapies, the leaders in the $7 billion osteoporosis market, have come underscrutiny following reports of links to multiple serious side effects. The FDAis in the process of reviewing the safety profile of bisphosphonates, and theagency should issue a decision over the next 6-12 months. If the FDAexpresses concerns, the medical community will likely begin to consider saferalternatives to bisphosphonates. Given calcitonin's excellent safety profile(over 30 years of proven safety), Unigene could stand to benefitsubstantially.

- Blockbuster potential - Unigene's partner, Novartis, has initiated aPhase III trial to evaluate oral calcitonin's disease-modifying propertiesagainst osteoarthritis, a disease that affects over 21 million Americans, forwhich there is no curative treatment. Novartis has also initiated a Phase IIItrial evaluating oral calcitonin against osteoporosis, which utilizes UGNE'smanufacturing process. A positive outcome in either of these trials couldcatapult sCT to blockbuster status.

- UGNE's oral sCT program is progressing favorably - Apart from Novartis,Unigene is developing its own version of oral sCT utilizing tablets in animproved solid dosage form (patent applied for by the Company). The Companyjust announced the initiation of a Phase I/II trial, with dosing to becompleted by the end of February 2008. Given the favorable marketopportunities surrounding an oral sCT product, we anticipate the announcementof a partnership during the first half of 2008.

- Strong positive momentum - For the quarter ended September 30, 2007,revenues rose by 34% sequentially, reflecting a 71% increase in sales androyalties relating to Fortical(R). UGNE exhibited positive operating incomefor the third quarter and positive cash flow from operations for the ninemonths ended September 30, 2007. The cash balance grew significantly duringthe nine-month period, increasing by over $3.6 million to over $7 million.

- Valuation - With Fortic
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