pSivida Ltd. (PSDV, Financial) filed Quarterly Report for the period ended 2009-09-30.
PSIVIDA CORP is a global drug delivery company committed to the biomedical sector and the development of drug delivery products. Retisert is FDA approved for the treatment of uveitis. Vitrasert is FDA approved for the treatment of AIDS-related CMV Retinitis. Bausch & Lomb owns the trademarks Vitrasert and Retisert. pSivida has licensed the technologies underlying both of these products to Bausch & Lomb. The technology underlying Medidur for diabetic macular edema is licensed to Alimera Sciences and is in Phase III clinical trials. pSivida has a worldwide collaborative research and license agreement with Pfizer Inc. for other ophthalmic applications of the Medidur technology (excluding FA). Psivida Ltd. has a market cap of $57.7 million; its shares were traded at around $3.15 with and P/S ratio of 4.7.
Pursuant to a June 2005 side letter to the collaboration agreement with Bausch & Lomb, we received $3.0 million from Bausch & Lomb as an advance payment in lieu of $6.25 million of future Retisert royalties that otherwise would have been payable under the collaboration agreement. Bausch & Lomb became entitled to retain 50% of the first $3.0 million of royalties otherwise payable, or $1.5 million, and 100% of the next $4.75 million of royalties otherwise payable. Thereafter, we are entitled to receive 100% of the royalties to which we are otherwise entitled under the collaboration agreement. During the three months ended September 30, 2009 and 2008, Bausch & Lomb retained $374,000 and $478,000, respectively, of Retisert royalties that otherwise would have been payable to us. As of September 30, 2009, Bausch & Lomb is entitled to retain an additional $823,000 of future Retisert royalties otherwise payable to us. Accordingly, we currently do not expect to record royalty income on sales of Retisert by Bausch & Lomb until at least the fourth quarter of our fiscal year ending June 30, 2010.
Research and development decreased by $428,000, or 19%, to $1.8 million for the three months ended September 30, 2009 from approximately $2.2 million for the three months ended September 30, 2008. This decrease was primarily attributable to a decrease of approximately $480,000 of UK-based research and development costs, of which approximately $325,000 was primarily attributable to reductions of BrachySil clinical trial costs and approximately $155,000 reflected the favorable currency exchange impact of the relative strengthening of the U.S. dollar against the Pound Sterling.
General and administrative decreased by approximately $1.3 million, or 43%, to approximately $1.7 million for the three months ended September 30, 2009 from approximately $3.0 million for the three months ended September 30, 2008. This decrease was primarily attributable to (i) the absence in the 2009 period of a $633,000 provision for losses on a note receivable incurred in the prior year period; and (ii) an approximate $500,000 decrease in legal, audit and related consulting fees, principally resulting from the Company having reincorporated in the U.S. in June 2008.
Absent adequate levels of funding from new collaboration agreements and/or financing transactions, management currently believes that our cash position beyond December 31, 2010 will be substantially dependent upon the timing of FDA approval and the initiation and success of marketing of Iluvien, and the resulting occurrence of certain milestone events under the terms of our collaboration agreement with Alimera. Alimera has agreed to pay us $25.0 million upon FDA approval of Iluvien for DME and a 20% share in the future profits of Iluvien. In addition, the $15.0 million note issued by Alimera becomes due and payable upon the occurrence of certain defined liquidity events (such as an intial public offering of Alimera) that result in aggregate proceeds to Alimera in excess of $75 million. There is no assurance that the FDA will approve Iluvien, or that Iluvien will achieve market acceptance even if it is approved by the FDA. There is similarly no assurance that a liquidity event resulting in aggregate proceeds to Alimera in excess of $75 million will occur.
At September 30, 2009, the balance of our derivative liabilities, which are related to warrants denominated in A$, totaled approximately $2.5 million and was determined using the Black-Scholes valuation model. The change in fair value of derivatives resulted in an expense of approximately $1.5 million for the three months ended September 30, 2009 and income of approximately $1.3 million for the three months ended September 30, 2008.
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PSIVIDA CORP is a global drug delivery company committed to the biomedical sector and the development of drug delivery products. Retisert is FDA approved for the treatment of uveitis. Vitrasert is FDA approved for the treatment of AIDS-related CMV Retinitis. Bausch & Lomb owns the trademarks Vitrasert and Retisert. pSivida has licensed the technologies underlying both of these products to Bausch & Lomb. The technology underlying Medidur for diabetic macular edema is licensed to Alimera Sciences and is in Phase III clinical trials. pSivida has a worldwide collaborative research and license agreement with Pfizer Inc. for other ophthalmic applications of the Medidur technology (excluding FA). Psivida Ltd. has a market cap of $57.7 million; its shares were traded at around $3.15 with and P/S ratio of 4.7.
Highlight of Business Operations:
Revenues increased by $577,000, or 21%, to approximately $3.4 million for the three months ended September 30, 2009 from $2.8 million for the three months ended September 30, 2008. In each period, revenues were substantially attributable to the Alimera Agreement, which consisted of (i) straight-line amortization of the initial $18.3 million of deferred revenue over the 21.5 month performance period; and (ii) the conditional note payments and reimbursement of our development costs received from Alimera that are being recognized as revenue over the performance period using the cumulative catch-up method. For the year ending June 30, 2010, assuming continued receipt of scheduled note payments from Alimera and the reimbursement from Alimera of remaining development costs during the performance period, we currently expect to record collaborative research and development revenue attributable to the Alimera Agreement of approximately $9.1 million.Pursuant to a June 2005 side letter to the collaboration agreement with Bausch & Lomb, we received $3.0 million from Bausch & Lomb as an advance payment in lieu of $6.25 million of future Retisert royalties that otherwise would have been payable under the collaboration agreement. Bausch & Lomb became entitled to retain 50% of the first $3.0 million of royalties otherwise payable, or $1.5 million, and 100% of the next $4.75 million of royalties otherwise payable. Thereafter, we are entitled to receive 100% of the royalties to which we are otherwise entitled under the collaboration agreement. During the three months ended September 30, 2009 and 2008, Bausch & Lomb retained $374,000 and $478,000, respectively, of Retisert royalties that otherwise would have been payable to us. As of September 30, 2009, Bausch & Lomb is entitled to retain an additional $823,000 of future Retisert royalties otherwise payable to us. Accordingly, we currently do not expect to record royalty income on sales of Retisert by Bausch & Lomb until at least the fourth quarter of our fiscal year ending June 30, 2010.
Research and development decreased by $428,000, or 19%, to $1.8 million for the three months ended September 30, 2009 from approximately $2.2 million for the three months ended September 30, 2008. This decrease was primarily attributable to a decrease of approximately $480,000 of UK-based research and development costs, of which approximately $325,000 was primarily attributable to reductions of BrachySil clinical trial costs and approximately $155,000 reflected the favorable currency exchange impact of the relative strengthening of the U.S. dollar against the Pound Sterling.
General and administrative decreased by approximately $1.3 million, or 43%, to approximately $1.7 million for the three months ended September 30, 2009 from approximately $3.0 million for the three months ended September 30, 2008. This decrease was primarily attributable to (i) the absence in the 2009 period of a $633,000 provision for losses on a note receivable incurred in the prior year period; and (ii) an approximate $500,000 decrease in legal, audit and related consulting fees, principally resulting from the Company having reincorporated in the U.S. in June 2008.
Absent adequate levels of funding from new collaboration agreements and/or financing transactions, management currently believes that our cash position beyond December 31, 2010 will be substantially dependent upon the timing of FDA approval and the initiation and success of marketing of Iluvien, and the resulting occurrence of certain milestone events under the terms of our collaboration agreement with Alimera. Alimera has agreed to pay us $25.0 million upon FDA approval of Iluvien for DME and a 20% share in the future profits of Iluvien. In addition, the $15.0 million note issued by Alimera becomes due and payable upon the occurrence of certain defined liquidity events (such as an intial public offering of Alimera) that result in aggregate proceeds to Alimera in excess of $75 million. There is no assurance that the FDA will approve Iluvien, or that Iluvien will achieve market acceptance even if it is approved by the FDA. There is similarly no assurance that a liquidity event resulting in aggregate proceeds to Alimera in excess of $75 million will occur.
At September 30, 2009, the balance of our derivative liabilities, which are related to warrants denominated in A$, totaled approximately $2.5 million and was determined using the Black-Scholes valuation model. The change in fair value of derivatives resulted in an expense of approximately $1.5 million for the three months ended September 30, 2009 and income of approximately $1.3 million for the three months ended September 30, 2008.
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