Press Releases

pSivida To Acquire Control Delivery Systems

PERTH, Australia--(BUSINESS WIRE)--Oct. 3, 2005--pSivida Limited

Global bio-nanotech company pSivida Limited (NASDAQ:PSDV, ASX:PSD, Xetra:PSI) today announced that it has entered into a definitive merger agreement to acquire Control Delivery Systems, Inc. ("CDS"), a private U.S. drug delivery company located in the Boston, Massachusetts area. The acquisition is expected to close in the fourth quarter of 2005 and is subject to Australian regulatory and pSivida shareholder approvals, as well as other customary closing conditions.

Key Terms

  • Funded through the issue of approximately 16 million pSivida American Depositary Shares ("ADSs") to CDS stockholders, representing approximately 40% ownership of the combined company.
  • Based on a price of US$6.50 (AU$8.66) per pSivida ADS, the transaction would represent a purchase price of approximately US$104 million (AU$139 million) and an implied market capitalization of approximately US$250 million (AU$333 million) for the combined company.
  • CDS shareholders will be subject to lock-up periods ranging from 6 to 9 months, while pSivida Executive Directors have agreed to a voluntary 6 month lock-up period.

Key Benefits

  • Revenue generated from existing product sales with near-term increased revenues from newly marketed products.
  • Rrobust product development pipeline with several product candidates in late stage clinical development.
  • Leverages the synergistic technology platforms of both companies.
  • Short to medium-term: the combined company plans to capitalize on its BioSilicon(TM) (pSivida) and AEON(TM) (CDS) drug delivery technologies to develop a series of products focusing on ophthalmology and oncology.
  • Longer-term: the combined company expects to develop novel drug delivery products in a range of therapeutic areas. Furthermore, the combined company will continue to utilize its platform technologies, both on its own and through partnerships, to develop innovative healthcare products in the non-core areas of diagnostics, orthopedics, tissue repair, and food technology.

The acquisition, an integral part of pSivida's on-going U.S. growth strategy, will bring additional development and regulatory expertise to pSivida's management team. This combination also provides pSivida with an operating base in the Boston biotech hub, enhancing its overall visibility as well as access to the U.S. scientific and investment communities.

Gavin Rezos, Managing Director of pSivida, said, "This acquisition is an excellent opportunity for pSivida to capitalize on the combination of complementary technologies and skills. The diversified product portfolio and development capabilities of the combined company present value creating opportunities, reducing our overall risk profile whilst generating significant current and near term revenues."

Paul Ashton, President and CEO of CDS, said, "By bringing together our existing platforms and expertise, the combination of CDS and pSivida will potentially create a leading global bio-nanotech company developing next generation products and technologies in the areas of ophthalmology, oncology, and drug delivery generally. From our perspective, this acquisition has significant benefits to our shareholders in terms of future value enhancing prospects. We are particularly excited about the potential to integrate BioSilicon(TM )with our drug delivery technology platform to create next generation treatments for a broad range of diseases and conditions."

CDS at a glance

-- CDS is a private company based near Boston, MA. It was founded in 1992 and is engaged in the design, research and development of innovative, sustained-release drug delivery products based on its proprietary delivery technologies:

-- AEON(TM) system: a linear drug delivery implantable system, with controlled delivery over months to years, non-erodible / erodible, and currently employed in two marketed products; Retisert(TM) and Vitrasert(R)

-- CODRUG(TM) system: a non-linear drug delivery system, with controlled delivery over hours to weeks, polymer-free, bio-erodible, and in early clinical studies

-- CDS' portfolio of products and product candidates includes two approved and marketed products, one Phase III product, and other early- stage product candidates

-- CDS has strategic collaborations with Bausch & Lomb and Alimera Sciences

-- CDS has 41 patent families, 38 issued patents, including 12 issued U.S. patents, and 210 patent applications pending worldwide

-- CDS has an experienced management team, state-of-the-art lab facilities, a lean infrastructure, and low overhead expenses

-- CDS develops sustained-release drug delivery products for severe and chronic eye diseases. Bausch & Lomb recently launched CDS' Retisert(TM) ocular implant for uveitis. With partner Chiron Corporation, CDS previously developed and commercialized Vitrasert(R) for CMV retinitis, now marketed by Bausch & Lomb. CDS' pipeline also includes Medidur(TM), an injectable long-term sustained release product in Phase III trials for treatment of DME.

pSivida Limited

pSivida is a global bio-nanotech company committed to the biomedical sector and the development of products in healthcare. The company's focus is the development and commercialization of a modified form of silicon (porosified or nano-structured silicon) known as BioSilicon(TM).

pSivida owns the intellectual property pertaining to BioSilicon(TM) for use in or on humans and animals. The IP portfolio consists of 29 patent families, 34 granted patents and over 80 patent applications. The core patent, which recognizes BioSilicon(TM) as a biomaterial was granted in the UK in 2000 and in the US in 2001.

pSivida is listed on NASDAQ (PSDV), the Australian Stock Exchange (PSD) and in Germany on the Frankfurt Stock Exchange on the XETRA system (German Symbol: PSI. Securities Code (WKN) 358705). pSivida's shares also trade in the United Kingdom on the OFEX International Market Service (IMS) under the ticker symbol PSD. pSivida is a founding member of the NASDAQ Health Care Index and the Merrill Lynch Nanotechnology Index.

The Company's strategic partner and largest shareholder is the QinetiQ group, the largest science and technology company in Europe. QinetiQ is the former UK government Defence Evaluation Research Agency and was instrumental in discovering BioSilicon(TM). pSivida enjoys a strong relationship with QinetiQ having access to its cutting edge research and development facilities. For more information on QinetiQ visit www.qinetiq.com.

For more information visit www.psivida.com.