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Nov 13, 2006

Nordic Assumes pSivida’s Share of Development Costs for Ophthalmic Product

  • Nordic Biotech will make a $4-million corporate investment in pSivida and an additional $22-million investment in a special purpose vehicle (SPV) to fund the pSivida’s expected costs to develop its lead ophthalmic product, Medidur™, for the treatment of the chronic eye disease diabetic macular edema (DME).

    The $4-million investment will come through the purchase of newly issued shares of preferred stock. The preferred stock will be convertible into American Depository Shares (ADSs) at a conversion price of $2 per share and will contain antidilution protection. pSivida will issue warrants to Nordic with a face amount equal to $2 million, an exercise price of $2 per ADS, and antidilution protection.

    An additional $3.5 million will be invested in the SPV at closing, of which $1  million will be paid to pSivida by the SPV. The remaining $18.5 million of SPV investment by Nordic will be made in regular installments to fund the expected amount of pSivida’s share of development costs.

    pSivida and Alimera Sciences are currently co-funding the development and will co-share in the profits of Medidur for DME, which is currently in Phase III trials.  After this transaction closes, the SPV will receive pSivida’s profit share payments under the Alimera co-development agreement and the payments will be distributed to Nordic and pSivida.

    Revenues distributed by the SPV would initially be paid 75% to Nordic and 25% to pSivida, subject to certain adjustments. After cumulative revenues paid to Nordic equal four times their investment in the SPV, the split of revenues will become 50% to both Nordic and pSivida. After cumulative revenues paid to Nordic equal eight times their investment in the SPV, 80% of the SPV revenues will be paid to pSivida and 20% to Nordic.



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