Psivida director of investor relations Brian Leedman said that...

Psivida director of investor relations Brian Leedman said that while the
Faber deal was exciting news, it could be overshadowed in the not too
distant future by the next instalment of the story unfolding with regards to
the cheque for $A1.3 million it received late last month in exchange for a
three-month period of negotiation exclusivity, and to cover the cost of a
preclinical study.

Leedman said his faith in the potential of the exclusive negotiation period
to yield a deal rested on the fact that it followed on directly from a
12-month evaluation of pSivida's technologies by the large global
pharmaceutical company.

He said: "We announced in early 2006 that we were entering into 12-month
evaluation periods with a number of big pharma companies - so that means
they are entering into this having already become familiar with what we have
- and the fact that they were prepared to pay up in order to make sure that
they are the only company we talk to in the next three months seems to be a
good sign."

Put like that it sounds intriguing. Looking at pSivida's pipeline it's clear
that the space they are most advanced in is treatments for eye disease,
using the Retisert and Medidur drug delivery systems, currently specifically
for the eye disease degenerative macular edema (DME).

Could that be a clue as to which big pharmas he might be talking about?

While Leedman was predictably tight-lipped, a snoop through the published
product lists and pipelines of a few of them revealed that Pfizer has had
Macugen (an intravitreal injectable VEGF inhibitor) on the market for the
treatment of AMD since it was FDA approved in late 2004.

In a pipeline update release on November 30, 2006 it listed AG-13958 as a
Phase 2 product "for the treatment of macular degeneration, the leading
cause of blindness in adults over 55 in the US."

Pfizer added to the AG-13958 listing: "This compound may provide an
alternative to deep injection into the eye." Which could be hinting at it
having an advantage over not only Macugen but also Genentech's recently
released antibody fragment drug, Lucentis, which is also administered via
injection.

GlaxoSmithKline reported in February 2006 that its vitronectin integrin
antagonist (called compound 267268) was in Phase 1 trials as a treatment for
age-related macular degeneration.

While Eli Lilly reported in September that it was weighing up its options
with relation to further development of ruboxistaurin mesylate as an oral
treatment of moderate to severe nonproliferative diabetic retinopathy in
light of a request by the US Food and Drug Administration for an additional
three-year, Phase 3 clinical trial.

Collectively these announcements indicate that big pharma is eyeing off eye
disease and collectively considering the potential of novel less-invasive
delivery systems.

While he couldn't be drawn further on the topic of the big pharma deal
Leedman said that under the terms of the Faber licence, Faber receives
exclusive rights to pSivida's technologies for diseases of the ear and for
five specific infectious diseases, namely malaria, HIV/AIDS, influenza,
tuberculosis and osteomyelitis.

In addition, pSivida has granted Faber co-exclusive rights to the Durasert,
Zanisert and Co-Drug drug delivery technologies for other infectious
diseases.

All costs of development will be borne by Faber and its operating company,
Auritec Pharmaceuticals, and pSivida will receive royalties and milestone
payments.

Leedman added: "What's great about this is that we get a share of the
royalties and the development cost for us is zero. This shows that we are
being mindful of our limited cash position and using our portfolio to
negotiate deals that will get our products to the FDA and to market."