Open Briefing®. pSivida. Alimera Agreement Amendment
Level 12, BGC Building
28 The Esplanade
Perth, Western Australia 6000
Date of lodgement: 19-Mar-2008
Title: Open Briefing®. pSivida. Alimera Agreement Amendment
Record of interview:
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pSivida Ltd. (NASDAQ:PSDV, ASX:PSD, Xetra:PSI) announced Monday an
amendment to its license and collaboration agreement with Alimera Sciences
relating to Medidur™ FA whereby pSivida’s share of future profits will decrease
from 50% to 20% percent in return for Alimera’s payment of up to US$78 million.
What is the strategic rationale for this transaction?
MD Dr Paul Ashton
We’re in the advantageous position where we’ve out-licensed several ophthalmic
applications of our Medidur™ drug delivery system to different partners and we
still have other ophthalmic and non-ophthalmic licensing opportunities. The
Medidur™ program for diabetic macular edema (DME) and certain other
applications are now fully funded by Alimera. Additional ophthalmic applications
of Medidur™ are licensed to and fully funded by Pfizer. We will receive payments
as these various products move through development. The payments anticipated
from these deals will provide the cash required for the company to reach key
milestones for our other programs both in ophthalmology and in oncology, where
BrachySil™ for pancreatic cancer is the furthest advanced product.
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You’ve reduced your share of future profits from Medidur™ FA for DME to 20
percent from 50 percent as a result of this transaction. Why would you enter into a
transaction that restricts your future profit upside when you’ve always been so
optimistic about its potential?
MD Dr Paul Ashton
We remain very optimistic about the potential for Medidur. The primary value of
this deal to pSivida is not only the 20% profit split, which we will now receive on
all products developed under the agreement without having to pay any
development costs, but also the cash payments to pSivida, the vast majority of
which we expect to receive before sales. This deal gives us the resources to
develop other products in our pipeline. Thus, the new agreement provides
immediate and near term funding to pSivida and eliminates our obligation to share
in development costs, significantly reducing the risk of the Medidur program to
pSivida, while giving pSivida a significant interest in the profits.
We now have products in development for several very large ophthalmic markets.
The development of these products is funded entirely by our partners, Alimera
Sciences and Pfizer. Strategically we are well positioned to capture a significant
share of the large and expanding back of the eye market.
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You’ve ascribed up to US$78 million to this transaction. How likely is it that you
will receive it?
MD Dr Paul Ashton
We have received US$12m upfront plus relief of US$20m in estimated R&D costs.
In addition we anticipate payments up to US$21m over the next 4 1/2 years and
US$25m on approval of Medidur in DME, for which we expect the NDA to be
filled in early 2010.
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What if the development costs are higher than US$20 million?
MD Dr Paul Ashton
If the costs are higher, Alimera will pay all of these higher costs.
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What is your cash position after having received the US$12 million up-front
payment? What changes will occur in your cash burn rate as a result of this
transaction?
MD Dr Paul Ashton
Our cash position as at the end of December 2007 was approximately US$10
million. We now have the US$12 million payment from Alimera and we’re
receiving quarterly research payments from Pfizer. This year we also expect to
receive a further US$1.8m from the recent sales of non-core businesses. The
recent Alimera deal, together with the previously announced Pfizer deal, should
allow us to be approximately cash flow neutral over the next few years with the
subsequent potential for significant revenue streams.
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What other programs of potential value are there within pSivida?
MD Dr Paul Ashton
Alimera is using our Medidur technology to develop products for major back of
eye diseases. The recent deal provides for up to US$78m before sales, US$12m of
which we have already received, and a profit split once sales begin.
Pfizer is using our Durasert technology to develop products for undisclosed back of
the eye diseases. The Pfizer deal provides for up to US$165m in equity
investments and development and sales related milestones plus R&D funding,
US$12m of which we have already received (US$11.5m as an equity investment
and US$0.5m as the first quarterly R&D payment). Once commercialized, we will
receive sales based royalties.
In addition to the Pfizer and Alimera deals, there are several ophthalmic and nonophthalmic
applications we are advancing. We are also working to commercialise
our BioSilicon technology, the first application of which, BrachySil, will shortly
commence a Phase IIb clinical trial in pancreatic cancer. Long term, we anticipate
BioSilicon™ will have increasing value to pSivida.
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What progress has been made in the Pfizer ophthalmology program?
MD Dr Paul Ashton
The Pfizer collaboration is going well. Since April 2007 we have received
US$12m from Pfizer pursuant to our agreement and also under the terms of this
agreement we retain the rights to use inventions outside the eye. We are not
permitted to disclose any more details on progress.
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What are the primary objectives of the BrachySil™ Phase IIb trials?
MD Dr Paul Ashton
We expect to shortly commence a dose profiling study which will examine both
safety and efficacy and generate further data on BrachySil™ as a treatment for
pancreatic cancer. The study is expected to last six months, after which we plan to
move into a pivotal study.
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What distinguishes your current ambitions in relation to BioSilicon™ from past
efforts?
MD Dr Paul Ashton
Previously a lot of our effort had gone into understanding the basic science of
BioSilicon, a remarkably elegant and radically new approach to drug delivery.
Now that much of the science has been completed, we are able to better focus on
using this technology to address the needs of patients (and potential corporate
partners). In so doing we expect to be able to move this exciting technology to the
commercial stage.
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Thank you Paul.
For previous Open Briefings by pSivida, or to receive future Open Briefings by
email, visit www.corporatefile.com.au.
For more information about pSivida, visit www.psivida.com.au or call Brian
Leedman, Vice President Investor Relations on +(61-8) 9227 8327.
CORPORATE FILE DISCLAIMER: Corporate File Pty Ltd has taken reasonable care in publishing the
information contained in this Open Briefing®. It is information given in a summary form and does not
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investment decision and you are solely responsible for any use you choose to make of the information. We
strongly advise that you seek independent professional advice before making any investment decisions.
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PSIVIDA LIMITED DISCLAIMER: SAFE HARBOR STATEMENTS UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995: Various statements made in this release are forwardlooking
and involve a number of risks and uncertainties. All statements that address activities, events or
developments that we intend, expect or believe may occur in the future are forward-looking statements. The
following are some of the factors that could cause actual results to differ materially from the forward-looking
statements: achievement of milestones and other contingent contractual payment events; failure to prove
efficacy for BrachySil; inability to raise capital; continued losses and lack of profitability; inability to develop
or obtain regulatory approval for new products; inability to protect intellectual property or infringement of
others’ intellectual property; inability to obtain partners to develop and market products; termination of
license agreements; competition; inability to pay any registration penalties; costs of international business
operations; manufacturing problems; insufficient third-party reimbursement for products; failure to retain key
personnel; product liability; inability to manage change; failure to comply with laws; failure to achieve and
maintain effective internal control over financial reporting; amortization or impairment of intangibles; issues
relating to Australian incorporation; potential delisting from ASX or NASDAQ; possible dilution through
exercise of outstanding warrants and stock options or future stock issuances; potential restrictions from
capital raises; possible influence by Pfizer; and other factors that may be described in our filings with the
Securities and Exchange Commission. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. We do not undertake to publicly update or revise our forwardlooking
statements even if experience or future changes make it clear that any projected results expressed or
implied in such statements will not be realized.
