Psivida in talks to acquire US drug delivery company

By Ruth Beran
Monday, 15 August, 2005

Trading of shares in Perth-based nano-biotech company Psivida (ASX:PSD) resumed trading today, after the company revealed that it was in negotiations to acquire an as yet unnamed US based specialised drug delivery company..

The private company, based in a biotech hub in north east USA, will remain unnamed until the acquisition is complete, said Psivida managing director Gavin Rezos.

"They're a drug delivery company which has products in phase III. They have a current marketed product and they have one other product which is about to be marketed, this month," said Rezos.

The drug delivery company has products in a discrete area, and is treating a number of indications in relation to one part of the body, said Rezos.

"It's almost a perfect marriage," said Rezos, providing Psivida with facilities capable of becoming its US headquarters and with experienced staff and management, particularly in the business development side.

"We can marry [Psivida technology] BioSilicon directly with their products to create second-generation products, and they're in a discrete area which big pharma is very interested in," said Rezos.

The US company is debt free and has FDA certified facilities.

While Psivida aims to move its headquarters to the US, the company's Australian staff will continue to work with Psivida's subsidiary AION Diagnostics, said Rezos. "That sort of marries with what markets are looking for and expect," he said. "In Australia, the markets want to see diagnostics, whereas in the US they want to see much bigger blue sky."

Under the terms of the deal, shareholders in the US company would be issued with Psivida American Depositary Receipts (ADRs), with the possibility of owning up to 40 per cent or more of Psivida stock following the acquisition.

Finalisation of fundamental terms, including the ultimate price and the approval of the US company and Psivida shareholders, is yet to be completed. "Due diligence is progressing. It won't be long, but it still takes a bit of time," Rezos said.