bullish stock

The news today is substantial, based on previous analyst reports (see below). I think we'll see this stock go up near close of business, and market open tomorrow, after the news flows to NASDAQ and Frankfurt Stock Exchange.

Moving forward, investors should watch for additional news relating to agreements with major pharmaceutical companies. If additional agreements are announced it’ll be a bullish sign. By the end of the year, investors should also look for pSivida to be receiving milestone payments from at least one of its partnerships. The company’s success will ultimately be driven by regulatory approval—and effectiveness-- of its technology and that is what individual investors should most focus on.

pSivida is an Australian-based biotechnology company committed to the biomedical applications of nanotechnology. Specifically, the company is developing and commercializing BioSilicon™—a biocompatible and biodegradable nanostructured porous silicon—that has multiple potential applications, including: controlled drug delivery, brachytherapy and tissue engineering.

Below is a list of reason to be bullish on the company:

? pSivida’s BrachySil technology (a radioactive biochip that “locks” on cancer cells and releases predetermined doses of radioactive molecules to kill the cell) has demonstrated effectiveness in reducing the number of malignant cells in a small sample of patients with inoperable liver cancer. By reducing the tumor, the device may help prolong a patient’s life long enough to receive a life-saving transplant. In preliminary trials the technology was found to be 100 percent effective in killing smaller tumors and 56 percent effect in killing larger tumors and reported no adverse side-effects. If it can continue to demonstrate effectiveness in Phase IIb trials, pSivida could be poised to capture a sizeable portion of the $1 billion dollar brachytherapy market.

? To date, one U.S.-based “Top 5 Global pharmaceutical firm” is testing pSivida’s BioSilicon technology and pSivida hopes to report with a few months that a second “Top 5 Global pharma,” along with a major vaccine company, will also begin testing its technology. From an investor’s perspective, these relationships are important because the pharmaceutical firms will fund the direct cost of testing the technology. More importantly, the agreements could lead to significant future milestone payments.

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The stock has been down, because of certain amendments to a $15m subordinated convertible that was completed in June 2005. Investors reacted angrily chopping the share price by 20%.

Most obvious was the change to the conversion price from AU98c to AU32c. Further changes included a pushing out of the repayment dates to July 2007 and January 2008, removal of a cash reserve requirement, and the ability to redeem the notes anytime from royalties or new raisings.

If you read the news article today, it says, 'In addition to the development and sales milestones and payment of the cost of the joint research program, Pfizer has agreed to invest A$6.1m (US$5m) in ordinary shares of pSivida upon entering into the License Agreement, the proceeds of which will be held in escrow until such proceeds can be used (together with other cash available to pSivida) to redeem an outstanding convertible note.'

This stock looks very bullish.