psivida secures additional us$15m funding

ASX/MEDIA RELEASE

pSivida secures additional US$15m funding

Effective conversion price of US$7.10 per ADR (AU$0.95 per ordinary share)

Global bio-nanotech company pSivida Limited (ASX:PSD, NASDAQ:PSDV, Xetra:PSI) is pleased to announce that it has signed an agreement with a New York based institutional accredited investor (the “Investor”) pursuant to which the Investor, subject to satisfaction of closing conditions, will purchase US$15m (AU$20m) of Subordinated Convertible Debentures convertible into PSDV American Depository Receipts (“ADR”) at an initial conversion price of US$7.10 (AU$0.95 per ordinary share). The proceeds of the issuance are expected to be used
for the expanded development of pSivida’s platform technology, BioSiliconTM.

The debentures will mature three years from the date of closing and will bear 8% interest payable quarterly. pSivida may, at its sole discretion, choose to make interest payments in cash and/or ADRs . The Investor will also receive warrants to purchase approximately 633,000 additional ADRs. The warrants are exercisable for six years at an initial exercise price of US$7.20 (AU$0.96 per ordinary share).

ADRs issued upon conversion of the debentures or exercise of the warrants will be registered under the Securities Act of 1933 to permit resale in the United States on behalf of the Investor within 180 days from the date of the agreement.

The transaction is subject to shareholder approval for the issuance. The closing is anticipated to occur in mid November.

This announcement follows pSivida’s acquisition of Boston based drug delivery company, Controlled Delivery Systems (“CDS”) earlier this week. Gavin Rezos, Managing Director of pSivida Limited said, “Revenue from CDS’s RetisertTM products and an expected BioSiliconTM licensing deal make convertible debt financing an appropriate strategy to meet our funding needs in the short to medium term.”

BIO-IB, LLC, a New York based healthcare investment banking boutique, acted as financial advisor and Curtis, Mallet-Prevost, Colt & Mosle LLP acted as legal advisor to pSivida on this transaction.

-ENDS