pSivida acquires US drug delivery company

Nanotechnology company pSivida Ltd has completed the acquisition of US drug delivery company Control Delivery Systems Inc as part of pSivida's on-going US growth strategy.

Below is the full announcement:

Global bio-nanotech company pSivida Limited (ASX:PSD, NASDAQ:PSDV, Xetra:PSI) is pleased to announce that on 30 December 2005 it completed the acquisition of Control Delivery Systems, Inc. ("CDS"), a private US drug delivery company located in the Boston, Massachusetts area. CDS has been renamed pSivida Inc.

This acquisition is an integral part of pSivida's on-going US growth strategy. CDS' portfolio of products and product candidates includes two approved and marketed products, one Phase III product and other early-stage product candidates. The acquisition of CDS will bring additional product development and regulatory expertise to pSivida's management team and provide pSivida with an operating base in the Boston biotech hub, enhancing its overall visibility as well as access to the US scientific and investment communities. Australian publication Bioshares recently announced pSivida's acquisition of CDS as the 'Biotech M&A Deal of the Year', citing pSivida's increased presence in the US, current revenue stream and synergies for combining the two companies' technologies and expertise.

The acquisition was overwhelmingly approved by pSivida shareholders at its Annual General Meeting held in November, with 99.9% of proxies in favour. pSivida is now one of the world's first bio-nanotech companies with product and licensing revenues and has operations in the US, UK, Singapore and Australia. pSivida shares are traded on the NASDAQ, Frankfurt and Australian exchanges.

The acquisition was funded through the issuance of approximately 16 million pSivida American Depositary Shares ("ADSs") to CDS stockholders, representing approximately 41.5% of the ownership of 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.

pSivida now owns the only two FDA approved sustained release drug delivery systems for the back of the eye, Vitrasert® and RetisertTM. pSivida also now owns another sustained release drug delivery system in phase III trials, MedidurTM at a time when the Company believes that the ophthalmology market is growing strongly, particularly in developing drugs for age related macular degeneration and diabetic retinopathy.

RetisertTM, marketed by global US ophthalmology company Bausch & Lomb, is a treatment for chronic, non-infectious uveitis affecting the posterior segment of the eye, a debilitating eye disease that is the third largest cause of blindness in the US, affecting 175,000 people. RetisertTM was approved in October, 2005 for full US CMS (Medicare) coverage at a rate of US$19,345 which is 106% of the wholesale price of the device of US$18,250.

"Bausch & Lomb in its last quarterly commentary said that the sales outlook for RetisertTM is bright," said Mr Gavin Rezos, MD and CEO of pSivida Limited. In addition to uveitis, Bausch & Lomb has the right to use RetisertTM as a delivery system for compounds to treat other eye diseases.

Former CEO of CDS, Dr Paul Ashton has accepted the position of Executive Director of Strategy of pSivida Limited and will be based at pSivida Inc. headquarters near Boston.