psivida enters licensing negotiations with major g

pSivida Enters Licensing Negotiations with Major Global Pharma
for Drug Delivery Technologies

pSivida to receive US$990k for three months exclusive negotiation

rights and additional preclinical study

BOSTON & PERTH, Australia--(BUSINESS WIRE)--December 26, 2006 Global drug delivery company pSivida Limited (ASX:PSD) (NASDAQ:PSDV) (Xetra:PSI) announced today that it is has entered into an exclusive negotiation period with a major global pharmaceutical company, to acquire a worldwide, royalty bearing license to make, use and sell products using pSivida's drug delivery technologies.

-- The pharmaceutical company will make payments totaling US$990k

(AU$1.3m) to pSivida for the right to exclusively negotiate a

licensing agreement with the Company for a period of three

months and to fund the cost of a preclinical study.

-- The preclinical study will focus on an evaluation of pSivida's

drug delivery technologies in a very significant product

opportunity.

-- This announcement follows several 12 month evaluation

agreements of pSivida's drug delivery technologies with large

companies including this major global pharmaceutical company.

-- pSivida recently completed a placement to raise US$2.9m

(AU$3.7m) before costs to Australian and European investors.

-- This raising is an interim financing measure prior to the

expected closing of the definitive documents with Nordic

Biotech Advisors for a US$4.0m (AU$5.1m) corporate investment

in pSivida and a US$22.0m (AU$28.2m) investment over time in a

"Special Purpose Vehicle" (SPV) that is expected to fully fund

pSivida's portion of costs to develop Medidur(TM) for the

treatment of the chronic eye disease diabetic macular edema

(DME).

Dr. Roger Brimblecombe, CEO and Chairman of pSivida Limited said, "We are delighted to be working with this major global pharma and to build our relationship on the positive findings from their initial pre-clinical evaluation of our drug delivery technologies