News Column

pSivida Reports 2Q 2014 Results

February 12, 2014

pSivida Corp. announced financial results for its second quarter ended Dec. 31, 2013.

"We continued to advance our own pipeline of products. Enrollment continues on schedule for our lead development product, Medidur for posterior uveitis, in the first of two planned Phase III trials," said Paul Ashton, President and CEO of pSivida, in a release dated Feb. 7. "Our lead licensed product, Iluvien for chronic diabetic macular edema, moved closer to potential marketing approval in the U.S. and expanded availability in the EU.

"In posterior uveitis we believe that the trials will show an efficacy profile of Medidur comparable to Retisert, our FDA- approved implant for posterior uveitis currently being sold by Bausch & Lomb, with a side effect profile superior to Retisert. Preliminary data from a small investigator-sponsored Phase I/II study of Medidur for posterior uveitis patients were consistent with this hypothesis. Medidur, which uses the same micro-insert as Iluvien, delivers a lower dosage of the same drug as Retisert.

"We are very pleased that our licensee Alimera Sciences entered into labeling discussions with the U.S. Food and Drug Administration for Iluvien for DME and plans to respond to the FDA'sOctober 2013 Complete Response Letter in the first quarter of 2014. We understand Alimera will be providing recent safety data from patients in the U.K. and Germany and addressing the concerns raised by the FDA regarding the facility at which Iluvien for DME is manufactured. Alimera reported that new clinical trials will not be required by the FDA in connection with its review of Iluvien for DME prior to approval. If approved, we will be entitled to a $25.0 million milestone payment from Alimera and 20 percent of net profits on sales of Iluvien for DME by Alimera in the U.S.

"We are also encouraged by the speed with which Iluvien has been made available to U.K. National Health Service facilities. Less than seven weeks after the final guidance from the U.K.'sNational Institute for Health and Care Excellence recommending Iluvien as a treatment option for pseudophakic eyes (those that have had cataract surgery) with chronic DME considered insufficiently responsive to available therapies, initial orders were shipped to NHS hospitals and the first NHS patient was treated. Until receipt of this guidance, Iluvien had been available in the U.K. only to private pay and privately insured patients, but will now be available through the NHS to this typically large subgroup of chronic DME patients, subject to a patient access scheme.

"We continue to be encouraged by our studies of potential ophthalmic and non-ophthalmic uses of Tethadur, our second key technology platform designed to provide sustained delivery of peptides, proteins and antibodies. The importance of these biologics in treatment of ophthalmic disease makes Tethadur a very promising technology."

Revenues for the quarter ended Dec. 31, 2013 totaled $592,000 compared to $585,000 for the prior year period. Increased collaborative research and development revenue was offset by lower Retisert royalty income from Bausch & Lomb.

Net loss for the quarter ended Dec. 31, 2013 was $3.5 million, or $0.13 per share, compared to a net loss of $2.6 million, or $0.11 per share, for the prior year quarter. The higher net loss in the second quarter of fiscal 2014 primarily reflected costs associated with Phase III clinical trial of Medidur for posterior uveitis, which commenced in the quarter ended June 2013.

Revenues for the six months ended Dec. 31, 2013 totaled $1.2 million compared to $1.1 million for the six months ended Dec. 31, 2012. The Company reported a net loss of $7.2 million, or $0.27 per share, for the six months ended Dec. 31, 2013, compared to a net loss of $5.2 million, or $0.23 per share, for the same period of the prior year.

At Dec. 31, 2013, cash, cash equivalents and marketable securities totaled $15.7 million compared to $16.5 million at Sept. 30, 2013, reflecting approximately $1.2 million received from an existing collaboration agreement and approximately $1.25 million of net proceeds from sales of common stock under pSivida's at-the- market offering program.

pSivida has initiated the first of two planned pivotal Phase III trials of Medidur for the treatment of posterior uveitis. These trials are expected to enroll a total of approximately 300 patients. The primary end point is the recurrence of uveitis within 12 months. pSivida will be permitted to reference much of the data, including the clinical safety data, from the clinical trials of Iluvien for DME conducted by Alimera.

The investigator-sponsored Phase I/II study of Medidur for posterior uveitis is a three-year study that will evaluate the safety and efficacy of Medidur in up to 12 patients with posterior uveitis. Interim results were measured on the 12 month anniversary of the start of enrollment. Through this period, none of the eyes receiving Medidur experienced a recurrence of uveitis and inflammation was reduced in all of these eyes. In contrast, all (untreated) control eyes had either a recurrence of uveitis or a worsening of inflammation. Furthermore, at the last follow-up visit reported in interim results, best corrected visual acuity (on the Early Treatment Diabetic Retinopathy Study eye chart) improved by an average of more than nine letters in treated eyes while untreated eyes declined by an average of one letter. Interim data showed that Medidur was well tolerated, and the observed safety profile was consistent with the short-term safety profile reported in clinical studies of Iluvien in DME eyes. Only one eye receiving Medidur measured an increase in intraocular pressure above the normal range.

pSivida Corp. develops sustained release, drug delivery products.

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