Unilife Corporation has been under constant pressure for a significant number of shorting funds. The newly reported short numbers are in and $UNIS continues to show a hugely significant portion of their float as being short. The number of shares short is basically 25% of the total number of shares available to trade on Nasdaq.

While the short figure has approached 10 million shares a month ago, that number has dropped marginally. This could be in part the lack of arbitrage opportunities that are present on the Australian market where Unilife trades under ticker symbol UNS. The volume of trading on the ASX has dropped significantly and that makes it more difficult for a fund to close a position with a quick 3-4% gain as it had in the past. It would also appear that a number of institutions are actually utilizing this activity to pick up shares at much lower costs than they could had the short activity not been as vigorous.

Institutional holdings now stand at 71% of the total number shares and they have continued to increase. 5.5 million shares were added by new funds and a total of 11 million shares overall were added. Even taking into account the company's latest offering, shows a healthy increase of 3 million + shares. The funds have figured out how to grab shares at these levels betting the company will close some deals.

If you follow the trading pattern in the stock there has been significant resistance points starting at the 3.20 mark. The stock has breached that level several times on good purchasing volume only to see these gains erased later in the day on much lower volumes. Clearly if the stock is going to cause a short squeeze closing above the 3.20 mark in a significant fashion is going to be an important hurdle. The shorts have continually tried to create a level of doubt as to the company's product line and strategy. There have been a number of false accusations made in message board posts and conjectures of failure by short cohorts.

The truth of the matter is that dealing with pharmas and biotechs is long term business. They are not internet companies that can flip on a switch and be in business the next days. Success is measured in terms of years and not days, weeks or months. There is a very real reason that institutional investors continue to purchase these shares in the open market and through private placements, they see the long term opportunities. All things considered, the time horizon is not long compared to the equivalent being invested in pharmas/biotechs. New drugs can take 10 years+ to come to market, but Unilife's products are designed to work with these new drugs and products at the end of the development cycle so not only do pharmas get the right device, they also have an opportunity to extend patent life because of the patents held by Unilife for the delivery devices. This presents a faster and easier way for them to get in on long term potential blockbusters.