corporatefile interview

13:02 19Apr2007 BSW-pSivida Managing Director Interviewed for corporatefile.com in Australia

BOSTON & PERTH, Australia--(Business Wire)--pSivida Limited (NASDAQ:PSDV) today released the text of an
interview posted at corporatefile.com.au, in Australia. The following
is the text of that interview:
corporatefile.com.au
pSivida Limited (ASX code PSD) recently announced a licensing
agreement for its drug delivery technology Medidur(TM) with Pfizer Inc
worth up to A$203 million (US$165 million). The deal includes an
immediate capital investment of A$6.1 million (US$5 million), a
possible further capital investment of another A$6.1 million (US$5
million) and potential development and sales related milestones of
A$191 million (US$155 million). What is the strategic rationale for
entering a licensing agreement at this stage of the technology's
development?
MD Dr. Paul Ashton
Medidur(TM) is already licensed to Alimera Sciences for the
treatment of diabetic macular edema (DME) and now Pfizer has stepped
in to license Medidur(TM) for ophthalmic applications, we believe
marking a significant validation of our drug delivery technology.
This is our first major pharmaceutical company licensing deal and
we're free to license this product beyond ophthalmic applications. We
have evaluation agreements relating to non-ophthalmic applications of
our technologies with other pharmaceutical companies and a leading
medical device company and we're hopeful these will result in
significant licensing deals.
Importantly, this licensing deal resulted directly from Pfizer's
12-month evaluation of Medidur(TM), just one of our pharma evaluation
agreements. Subsequently Pfizer moved to an exclusive three-month
negotiation period for which we received A$1.3 million (US$1 million)
and this has led to the A$203 million (US$165 million) licensing deal.
corporatefile.com.au
Are the potential development and sales milestone payments from
Pfizer to be applied by pSivida to fund the clinical trial program
from this collaboration?
MD Dr Paul Ashton
Pfizer will be funding the cost of the trial program. Development
and sales milestone payments will be in addition to Pfizer's funding
of the cost of the program.
corporatefile.com.au
In your ASX announcement, you indicated the deal included a 60-day
termination clause. Can you clarify the significance of this?
MD Dr Paul Ashton
In my experience, it's common for large pharmaceutical licensing
deals to permit the pharma to terminate without cause. This is quite
reasonable. For example, in the development of a particular product,
it would be reasonable to make allowance for the possible
discontinuance of development in the event of failure at a future
stage.
Should our collaboration with Pfizer be successful, we will
receive development milestone payments and sales related royalty
payments.
corporatefile.com.au
Pfizer's A$6 million (US$5 million) investment is conditional upon
the removal of Sandell as a convertible note holder. How have you
sought to address this issue?
MD Dr Paul Ashton
The Pfizer funds will be held in escrow until the Sandell loan
note has been fully converted or redeemed. We now have sufficient
funds available to redeem all of the Company's convertible debt. The
repayment of all of the company's convertible debt will simplify the
company's capital structure and we believe put the company on a far
stronger financial footing.
corporatefile.com.au
pSivida also announced on April 5, 2007 an A$11million (US$9
million) private placement of ordinary shares to allow you to retire
the outstanding convertible notes. To what extent are the note holders
converting to equity ahead of redemption?
MD Dr Paul Ashton
Since the announcement of the Pfizer licensing deal, approximately
one third of the company's convertible debt has been converted into
equity.
corporatefile.com.au
To what extent does the licensing deal with Pfizer underpin the
company's financial position? What is the post-deal cash position and
forecast cash burn in future periods?
MD Dr Paul Ashton
Our current cash position will be disclosed in the March Quarterly
Report due out at the end of April. Our cash position has improved as
we've raised in excess of A$28 million (US$23 million) this calendar
year, recently sold our subsidiary AION Diagnostics and our cash burn
has been reduced following rationalization of the business to focus on
our core drug delivery technologies.
corporatefile.com.au
The Pfizer licensing deal covers ophthalmic applications for
Medidur(TM). What is the market potential for Medidur(TM), and how
does it compare with other treatments for chronic eye disease?
MD Dr Paul Ashton
The ophthalmic pharmaceutical market is rapidly expanding.
Pfizer's Xalatan treatment for glaucoma generates over US$1 billion
per year. The recently approved drug Lucentis, a treatment for
age-related macular degeneration, is achieving significant sales
volumes and is likely to become the next billion-dollar-plus product.
However, Lucentis requires regularly repeated injections directly into
the eye. A sustained release delivery system requiring less frequent
administration should generate strong sales and take significant
market share in the treatment of chronic eye diseases.
corporatefile.com.au
What other applications are being progressed for Medidur(TM)? Will
you be seeking additional licensing opportunities for Medidur(TM)?
MD Dr Paul Ashton
Medidur(TM) is presently in Phase III clinical trials for the
treatment of DME. DME is one of the leading causes of vision loss in
the United States and potentially a multibillion dollar market, with
presently no approved drug treatments.
We're also free to license Medidur(TM) for non-ophthalmic
applications. Given the eye is a very sensitive organ, if Medidur(TM)
can be injected into the back of the eye, we believe you can inject
the device almost anywhere for the controlled delivery of drugs.
corporatefile.com.au
What are the key milestone achievements being targeted for pSivida
during the 2007 calendar year?
MD Dr Paul Ashton
Having now delivered a key milestone, being our first global
pharmaceutical licensing agreement, the company expects to progress
our clinical trials of