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Mail Stop 6010
April 20, 2006
Lori Freedman, Esq.
Vice President for Corporate Affairs
pSivida Limited
400 Pleasant Street
Watertown, MA 02472
Re: pSivida Limited
Registration Statement on Form F-3
Filed March 28, 2006
File No. 333-132776
Registration Statement on Form F-3
Filed March 28, 2006
File No. 333-132777
Dear Ms. Freedman:
We have limited our review of your filings to those issues we
have addressed in our comments. Where indicated, we think you
should
revise your documents in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. It appears that the registrant does not meet the condition in
Instruction I.A.2 to use Form F-3 because your most recent Form
20-
F was not timely filed. Please revise your filings accordingly.
2. The pro forma financial statements included in your
registration
statement should be updated, as necessary, to comply with Item 8
(5)
to the Instructions of Form 20-F at the effective date of the
registration statement. In addition, please incorporate by
reference
your Form 6-K filed on March 16, 2006 which includes your results
for
the six months ended December 31, 2005.
3. Provide a currently dated consent from each of the independent
public accountants with the next amendment.
Note 2. Purchase Price Allocation, page 23
4. We note on October 3, 2005 you filed a Form 6-K to announce you
had entered into an agreement to acquire Control Delivery Systems,
Inc. (CDS) in a merger transaction. Also, we further note from
your
disclosure in note 2 of the pro forma statements that you issued
15,082,038 ADSs with an estimated fair value of US$102 million and
901,623 nonvested ADSs with an estimated fair value of US$6.1
million
based on a value of US$6.762 per ADS. Paragraph 22 of SFAS 141
states
that the fair value of securities issued to effect a business
combination that is traded in the market should be valued using
the
market price for a reasonable period before and after the date
that
the terms of the acquisition are agreed to and announced. EITF
99-
12, issue 1, defined a reasonable period of time is intended to be
very short, such as a few days before and after the acquisition is
agreed to and announced (the measurement date). From your Form 6-
K,
it would appear that measurement date is October 3, 2005 and the
fair
value of the shares issued would be determined using the closing
prices a few days before and after this date. Tell us
supplementally
what date you determined was the measurement date and also, the
basis
you used to value the shares in the pro forma financial
statements.
We may have further comment after a review of your response.
5. You state that the pro forma financial statements reflect
preliminary estimates of the allocation of the purchase price for
the
acquisition of CDS and that such allocation may be adjusted based
on
the actual outcome of the independent valuation. Please clarify
for
the reader the potential impact on the financial statements of any
reallocation and those assets and liabilities subject to
significant
changes.
Note 3. Pro Forma Adjustments, page 24
6. Reference is made to pro forma adjustments 3(d) and 3(o). We
note
that you have allocated A$120 million of the purchase price to
patents that were acquired. Please tell us and revise to disclose
the following:
* Describe the nature of the patents that were acquired. For
instance, explain if these patents were related to CDS` Vitrasert
and
Retisert products that have approved by the FDA for treatment of
two
sight-threatening eye diseases and/or for products not yet
developed.
To the extent for products not yet developed or for technology
tell
us how you evaluated each for impairment purposes.
* How you determined the estimated fair value of the patents; and
* Your basis for using an estimated useful life of twelve years.
Please be detailed in your response. We may have further comment
after receipt of your response.
7. Reference is made to pro forma adjustment 3(e). We note that
the
excess of the purchase price over the net assets acquired in the
CDS
acquisition resulted in goodwill of approximately A$51.5 million.
Tell us and revise to include a robust discussion of the factors
that
contributed to a purchase price that resulted in recognition of a
significant amount of goodwill. Refer to the guidance in
paragraph
51(b) of SFAS 141.
8. Reference is made to pro forma adjustment 3(n). We note that
you
have provided the historical statement of operations for CDS for
the
year ended June 30, 2005. We further note that you have conformed
this information by starting with the audited historical financial
statements of CDS for the year ended December 31, 2004 (as
included
in the filing by incorporation by reference) and subtracting the
period January 1, 2004 to June 30, 2004 to arrive at the period
July
1, 2004 to December 31, 2004. Then this result is added to the
results for the period January 1, 2005 to June 30, 2005. Please
present such information in a tabular format to show the reader
how
you have conformed the financial information of CDS to pSivida`s
year-end.
Exhibit 23.1
9. We note that the independent auditors have consented to the use
of
their audit report dated December 2, 2005 on the financial
statements
of CDS for the year ended December 31, 2004. However, the
independent audit report contained in the Form 6-K filed December
22,
2005 refers to the three year period ended December 31, 2004.
Please
include a revised consent from the independent auditors that
refers
to the appropriate periods that were audited and reference the
specific Form 6-K that includes the audited financial statements
of
CDS.
As appropriate, please amend your registration statements in
response to these comments. You may wish to provide us with
marked
copies of the amendments to expedite our review. Please furnish a
cover letter with your amendments that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statements, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filings effective, it does not foreclose
the
Commission from taking any action with respect to the filings;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filings effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filings; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filings or in response to our comments on your filings.
We will consider written requests for acceleration of the
effective date of the registration statementa as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statements.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Tara Harkins at (202) 551-3639 or Michele
Gohlke, Branch Chief, at (202) 551-3327 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Tom Jones at (202) 551-3602 or me at (202) 551-3800
with any other questions.
Sincerely,
Peggy Fisher
Assistant Director
cc (via fax): Lawrence Goodman, Esq.
pSivida Limited
April 20, 2006
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