psd and nordic biotech sign mou for a33.7m

ASX/Media RELEASE 13 November 2006
pSivida and Nordic Biotech sign MOU for A$33.7M (US$26M) for
development funding and equity investment
Boston, MA. and Perth, Australia – Global bio-nanotech company pSivida Limited (ASX:PSD,
NASDAQ:PSDV, Xetra:PSI) is pleased to announce that it has signed a non-binding Memorandum of
Understanding (MOU) with Nordic Biotech Advisors. The MOU provides for Nordic Biotech II K/S or
affiliates and co-investors (Nordic) to make an AU$5.2m (US$4.0m) corporate investment in pSivida
and an A$28.5m (US$22.0m) investment over time in a “Special Purpose Vehicle” (SPV) to fund the
expected amount of pSivida’s portion of costs to develop its lead ophthalmic development product,
MedidurTM for the treatment of the chronic eye disease diabetic macular edema (DME). At closing,
the Company will receive a total of A$6.5m (US$5.0m) consisting of the A$5.2m (US$4.0m) equity
investment and a payment by the SPV to pSivida of A$1.3m (US$1.0m). The transaction is subject to
completion of due diligence and final documentation.
Upon closing, Nordic will invest A$5.2m (US$4.0m) in pSivida Limited by purchasing newly issued
shares of preferred stock. The preferred stock will be convertible into American Depository Shares
(ADSs) at a conversion price of US$2.00 per share and will contain anti-dilution protection. pSivida
will issue warrants to Nordic with a face amount equal to $A2.6m (US$2.0m), an exercise price of
$US2.00 per ADS and anti-dilution protection. An additional A$4.5m (US$3.5m) will be invested in
the SPV at closing, of which A$1.3m (US$1.0m) will be paid to pSivida by the SPV. The remaining
A$24.0m (US$18.5m) of SPV investment by Nordic will be made in regular instalments to fund the
expected amount of pSivida’s share of development costs.
pSivida and Alimera Sciences are currently co-funding the development and will co-share in the
profits of MedidurTM for DME, which is currently in Phase III multi-national clinical trials. After this
transaction closes, the SPV will receive pSivida’s profit share payments under the Alimera codevelopment
agreement and will distribute the payments to Nordic and pSivida. Revenues distributed
by the SPV would initially be paid 75% to Nordic and 25% to pSivida, subject to certain adjustments.
After cumulative revenues paid to Nordic equal four times their investment in the SPV, the split of
revenues will become 50% to both Nordic and pSivida. After cumulative revenues paid to Nordic
equal eight times their investment in the SPV, 80% of the SPV revenues will be paid to pSivida and
20% to Nordic.
After closing, at an Extraordinary General Meeting at a date to be confirmed, pSivida will seek
shareholder approval to give Nordic a full exchange right on the A$28.5m (US$22.0m) SPV interest
into pSivida ADSs at US$2.00 per share. If approved, Nordic will have the option to either share SPV
revenues or convert all or part of their SPV investment into ADSs, in which case forfeiting that portion
of their share of the SPV revenues. If shareholders do not approve the full exchange right, Nordic
may elect to stop funding, in which case Nordic’s interest in the SPV revenues will be reduced.
pSivida’s lead FDA approved ophthalmic product is Retisert™ for the treatment of uveitis, a leading
cause of blindness in the United States. MedidurTM essentially differs from RetisertTM in that it is
injected behind the eye in a simple office procedure, whereas RetisertTM is surgically inserted in a
hospital procedure. MedidurTM and Retisert can deliver the same steroid (fluocinolone acetonide or
FA), at a similar rate to the back of the eye. Sustained delivery of FA to the back of the eye has
previously been shown to reduce edema in patients with DME, reduce the progression of their
diabetic retinopathy, and most importantly, at three years provides a clinically significant increase in
many patients vision. These results were generated in a 198 patient clinical trial conducted in the
United States by Bausch & Lomb, licensee of Retisert™.
MedidurTM is being evaluated by several companies, including global pharmas and smaller biotech
companies, for the delivery of their proprietary compounds to treat other eye diseases. The Company
expects that one of these evaluations will lead to a license for pSivida’s drug delivery products.
“We believe this MOU demonstrates strong commercial interest in MedidurTM for DME, our lead
ophthalmic product in development, and this transaction, once closed, will eliminate most of the
financial risk for the Company associated with this project, cover projected costs going forward as
well as recoup all development costs to date,” said Dr Roger Brimblecombe, Chairman and CEO of
pSivida Ltd. “The closing of this transaction will allow MedidurTM for DME Phase III studies to
continue while freeing up funds to permit us to progress our other clinical development studies and
exploit our various drug delivery technologies. Additionally, we believe this transaction further
validates the synergies between pSivida and Alimera Sciences and highlights the respective
strengths of each organization. pSivida’s research expertise in drug delivery and Alimera’s global
drug development capabilities will, we believe, result in an innovative treatment for patients suffering
from DME.”
-ENDSReleased
by:
pSivida Limited
Brian Leedman
Director of Investor Relations
pSivida Limited
Tel: + 61 8 9226 5099
[email protected]
US Public Relations
Beverly Jedynak
President
Martin E. Janis & Company, Inc
Tel: +1 (312) 943 1100 ext. 12
[email protected]
European Public Relations
Accent Marketing Limited
Eva Reuter
Tel: +49 (254) 393 0740
[email protected]
NOTES TO EDITORS:
pSivida is a global bio-nanotech company committed to the biomedical sector and the development of drug delivery
products. Retisert™ is FDA approved for the treatment of uveitis. Vitrasert® is FDA approved for the treatment of
AIDS-related CMV Retinitis. Bausch & Lomb own the trademarks Vitrasert® and Retisert™. pSivida has licensed the
technologies underlying both of these products to Bausch & Lomb. The technology underlying Medidur™ for diabetic
macular edema is licensed to Alimera Sciences and is in Phase III clinical trials.
pSivida owns the rights to develop and commercialise a modified form of silicon (porosified or nano-structured silicon)
known as BioSilicon™, which has applications in drug delivery, wound healing, orthopaedics, and tissue engineering.
pSivida’s subsidiary, AION Diagnostics Limited is developing diagnostic products and the subsidiary pSiNutria is
developing food technology products both using BioSilicon™.
pSivida’s intellectual property portfolio consists of 76 patent families, 95 granted patents, including patents accepted
for issuance, and over 300 patent applications. pSivida conducts its operations from offices and facilities near Boston
in the United States, Malvern in the United Kingdom, Perth in Australia and Singapore.
pSivida is listed on NASDAQ (PSDV), the Australian Stock Exchange (PSD) and on the Frankfurt Stock Exchange on
the XETRA system (German Symbol: PSI. Securities Code (WKN) 358705). pSivida is a founding member of the
NASDAQ Health Care Index and the Merrill Lynch Nanotechnology Index.
Nordic Biotech
Nordic Biotech Advisors ApS is the investment advisor to Nordic Biotech K/S and Nordic Biotech Venture Fund II K/S,
and was founded in 2001. The company is associated with a large number of advisors and consultants from the
pharmaceutical industry, clinical, academic and financial sectors, and draws on the experience and network of San
Francisco-based Biotechnology Value Fund. www.nordicbiotech.com
This document contains forward-looking statements that involve risks and uncertainties including with respect to the closing of the
transaction on the terms described in the MOU; pSivida’s portion of the costs to develop Medidur™ for DME; potential products,
applications and regulatory approvals. Although we believe that the expectations reflected in such forward-looking statements are
reasonable at this time, we can give no assurance that such expectations will prove to be correct. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements. Actual results could differ materially from
those anticipated in these forward-looking statements due to many important factors including: failure of the company to
successfully close the transaction contemplated by the MOU with the Nordic Biotech; the failure of the Company to obtain the
requisite shareholder approval to give the Nordic Biotech a full exchange right; failure of pSivida’s share of Medidur development
costs to be no more than US$22m; failure of this MOU to demonstrate strong commercial interest in Medidur for DME; failure of the
Nordic Biotech transaction, when closed, to eliminate most of the risk for the Company; inability to progress other clinical
development studies and to exploit pSivida’s other drug delivery technologies; failure of there to continue to be synergies between
pSivida and Alimera Sciences; failure of Medidur for DME to be an innovative treatment for DME; failure of the results of the
Retisert™ for DME trial to be a good indicator of the results of pSivida’s ongoing Phase III Medidur™ for DME trial; failure of the
Medidur™ trials in DME to show a very similar improvement in visual acuity and diabetic retinopathy severity score as Retisert™
for DME; failure of Medidur™ to release fluocinolone acetonide at the same rate as Retisert™; our inability to recruit patients for
the Phase III Medidur™ for DME trial; our inability to raise additional funds at favourable terms or any terms; our inability to repay
the amended notes and new convertible notes; our inability to develop proposed products, including without limitation, in the drug
delivery, wound healing, orthopaedics, and tissue engineering, diagnostics and food technology fields; failure of our evaluation
agreements to result in license agreements; failure to develop applications for BioSilicon™ due to regulatory, scientific or other
issues; failure to complete negotiations for new centers for the BrachySil™ Phase IIb clinical trial for inoperable primary liver
cancer; failure of our discussions with the FDA for BrachySil™ to continue or to lead to FDA approval; failure of the BrachySil™
Phase IIb clinical trial for inoperable primary liver cancer to determine the optimal dose, provide key safety data or support future
pivotal efficacy trials or product registration or approval; failure of the BrachySil™ primary liver program that is in Phase IIb clinical
trials to provide a valuable platform for the development and commercialisation of BrachySil™ for pancreatic cancer and other
indications; failure of the findings of the pancreatic cancer Phase IIa trial to provide a platform for further multicenter efficacy and
safety trials; failure of there to be optimisation and standardisation between our two pancreatic cancer study centres. Other
reasons are contained in cautionary statements in the Annual Report on Form 20-F filed with the U.S. Securities and Exchange
Commission, including, without limitation, under Item 3.D, "Risk Factors" therein. We do not undertake to update any oral or written
forward-looking statements that may be made by or on behalf of pSivida.