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Psivida Ltd. has a market cap of $62.9 million; its shares were traded at around $3.44 with and P/S ratio of 5.2.
Highlight of Business Operations: Revenues increased by $463,000, or 16%, to approximately $3.4 million for the three months ended December 31, 2009 from $3.0 million for the three months ended December 31, 2008. In each period, revenues were substantially attributable to the Alimera Agreement, which consisted of (i) straight-line amortization of an initial $18.3 million of deferred revenue over the 21.5 month performance period that ended at December 31, 2009; and (ii) conditional note payments and reimbursement of our development costs received from Alimera, which have been recognized as revenue over the performance period using the cumulative catch-up method. For the fiscal year ending June 30, 2010, assuming continued receipt of scheduled note payments from Alimera, we expect to record collaborative research and development revenue attributable to the Alimera Agreement of approximately $9.2 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 is 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 December 31, 2009 and 2008, Bausch & Lomb retained $373,000 and $458,000, respectively, of Retisert royalties that otherwise would have been payable to us. As of December 31, 2009, Bausch & Lomb is entitled to retain an additional $450,000 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.
General and administrative decreased by $516,000, or 22%, to approximately $1.8 million for the three months ended December 31, 2009 from approximately $2.3 million for the three months ended December 31, 2008. This decrease was primarily attributable to the absence in the current period of a $667,000 provision for losses on a note receivable incurred in the prior year period, partially offset by an approximate $100,000 increase in stock-based compensation expense attributable to options granted under the 2008 Incentive Plan.
Research and development decreased by $757,000, or 18%, to approximately $3.5 million for the six months ended December 31, 2009 from approximately $4.3 million for the six months ended December 31, 2008. UK-based research and development costs decreased by $800,000, of which (i) approximately $680,000 was primarily due to completion of the BrachySil Phase II clinical trials and the assumption by Intrinsiq of certain BioSilicon manufacturing responsibilities under the Intrinsiq supply agreement; and (ii) approximately $120,000 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 $1.8 million, or 34%, to approximately $3.5 million for the six months ended December 31, 2009 from approximately $5.3 million for the six months ended December 31, 2008. This decrease was primarily attributable to (i) the absence in the current period of a $1.3 million provision for losses on a note receivable incurred in the prior year period; and (ii) an approximate $500,000 decrease in legal, audit and consulting fees, principally resulting from the Company having reincorporated in the U.S. in June 2008.
Absent 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, upon the occurrence of certain defined liquidity events (such as an initial public offering of Alimera, other sales of capital stock of Alimera and/or the sale or other disposition of substantially all of Alimera’s assets) that result in aggregate cash and/or noncash proceeds to Alimera in excess of $75 million, the $15.0 million note issued by Alimera becomes immediately due and payable. 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 liquidity events resulting in aggregate proceeds to Alimera in excess of $75 million will occur.
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