Perth-based biotechnology comapny pSivida Ltd has signed a $33.7 million agreement with an unnamed investment fund to finance development of the company's diabetic macular edema treatment.
The full text of a comapny announcement is pasted below
Global bio-nanotech company pSivida Ltd is pleased to announce that it is negotiating a non-binding Memorandum of Understanding with an investment fund specialising in the biotech sector.
The MOU is expected to provide for the Investor to make an $5.2 million convertible preferred equity investment at current market in pSivida with warrant coverage and anti-dilution protection and an $28.5 million investment over time in a "Special Purpose Vehicle" to fund pSivida's portion of the costs to develop its lead ophthalmic development product, Medidur for the treatment of the chronic eye disease diabetic macular edema. At closing, it is expected that the Company will receive a total of $6.5 million consisting of the $5.2 million equity investment and a payment by the SPV to pSivida of $1.3 million.
pSivida and Alimera Sciences are currently co-funding the development and will co-share in the profits of Medidur for DME, which is currently in Phase III multi-national clinical trials. pSivida expects that the SPV will receive pSivida's profit share payments under the Alimera co-development agreement and will distribute the payments to the Investor and pSivida. It is contemplated that, after
closing, at an Extraordinary General Meeting at a date to be confirmed, pSivida will seek shareholder approval to give Investor a full exchange right on the $28.5 million SPV interest into pSivida ADSs at current market.
If approved, the Investor 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, the Investor may elect to stop funding, in which case the Investor's interest in the SPV would 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 Retisert in that it isinjected behind the eye in a simple office procedure, whereas RetisertTM is surgically inserted in a hospital procedure. Medidur 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 provide 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 these negotiations demonstrates strong commercial interest in MedidurTM for DME, our lead ophthalmic product in development, and that the proposed transaction, when closed, would eliminate most of the financial risk for the Company associated with this project," said Dr Roger Brimblecombe, Chairman and CEO of pSivida Ltd. "The closing of this transaction would also 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.