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pSivida Ltd. Reports Operating Results (10-Q)

May 13, 2010 | About:

10qk

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pSivida Ltd. (PSDV) filed Quarterly Report for the period ended 2010-03-31.

Psivida Ltd. has a market cap of $85.1 million; its shares were traded at around $4.61 with and P/S ratio of 7.1.

Highlight of Business Operations:

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 was 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 March 31, 2010 and 2009, Bausch & Lomb retained $391,000 and $288,000, respectively, of Retisert royalties that otherwise would have been payable to us. As of March 31, 2010, Bausch & Lomb is entitled to retain an additional $60,000 of future Retisert royalties otherwise payable to us. Accordingly, we currently expect to record royalty income on sales of Retisert by Bausch & Lomb during the fourth quarter of our fiscal year ending June 30, 2010.

Research and development decreased by $212,000, or 11%, to $1.7 million for the three months ended March 31, 2010 from approximately $1.9 million for the three months ended March 31, 2009. This decrease was primarily attributable to $220,000 of reduced UK-based research and development costs resulting from the completion of the BrachySil Phase II clinical studies and the assumption by Intrinsiq of certain BioSilicon manufacturing responsibilities under the Intrinsiq supply agreement, which decrease was partially offset by a $70,000 unfavorable effect of a comparative weakening of the US$.

General and administrative decreased by $354,000, or 17%, to approximately $1.7 million for the three months ended March 31, 2010 from approximately $2.1 million for the three months ended March 31, 2009. This decrease was primarily attributable to the absence in the current period of approximately $380,000 of severance cost obligations accrued in the prior year period, partially offset by $122,000 of increased stock-based compensation expense.

Research and development decreased by $969,000, or 16%, to approximately $5.2 million for the nine months ended March 31, 2010 from approximately $6.2 million for the nine months ended March 31, 2009. The decrease resulted from lower UK-based research and development costs, of which (i) approximately $900,000 was primarily due to completion of the BrachySil Phase II clinical studies and the assumption by Intrinsiq of certain BioSilicon manufacturing responsibilities under the Intrinsiq supply agreement; and (ii) approximately $50,000 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 $2.1 million, or 29%, to approximately $5.2 million for the nine months ended March 31, 2010 from approximately $7.3 million for the nine months ended March 31, 2009. This decrease was primarily attributable to (i) the absence in the 2010 period of a $1.3 million provision for loss on a note receivable incurred in the prior year period; (ii) the absence in the 2010 period of approximately $550,000 of salary and related severance agreement compensation of a former employee; and (iii) an approximate $500,000 decrease in professional fees, principally resulting from the Company having reincorporated in the U.S. in June 2008; partially offset by an approximate $330,000 increase in stock-based compensation.

Cash and cash equivalents totaled approximately $4.0 million at March 31, 2010 compared to $6.9 million at June 30, 2009. On April 27, 2010, Alimera paid the $15.0 million conditional note in full plus accrued and unpaid interest. We believe we can fund our operations as currently conducted through at least March 31, 2011. Absent funding from new collaboration agreements and/or financing transactions, management currently believes that our longer term cash position 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. 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.

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