pSivida Completes Acquisition of Control Delivery Systems

PERTH, Australia & BOSTON--(BUSINESS WIRE)--Jan. 3, 2006--Global bio-nanotech company pSivida Limited (NASDAQ:PSDV, ASX:PSD, Xetra:PSI) today announced that on 30 December 2005 it completed the acquisition of Control Delivery Systems, Inc. ("CDS") a private US drug delivery company located in the Boston, Massachusetts area. CDS has been renamed pSivida Inc.

This acquisition is an integral part of pSivida's on-going US growth strategy. CDS' portfolio of products and product candidates includes two approved and marketed products, one Phase III product and other early-stage product candidates. This combination will bring additional development and regulatory expertise to pSivida's management team and provide pSivida with an operating base in the Boston biotech hub, enhancing its overall visibility as well as access to the US scientific and investment communities. Australian publication Bioshares recently announced pSivida's acquisition of CDS as the 'biotech M&A deal of the year', citing pSivida's increased presence in the US, current revenue stream and synergies for combining the two companies' technologies and expertise.

“Bausch & Lomb in its last quarterly commentary said that the sales outlook for Retisert(TM) is bright”

The acquisition follows the overwhelming approval by pSivida shareholders at the AGM held in November, with 99.9% of proxies in favor. pSivida is now one of the world's first bio-nanotech companies with product and licensing revenues and has operations in the US, UK, Singapore and Australia. pSivida shares are traded on the NASDAQ, Frankfurt and Australian exchanges.

The acquisition has been funded through the issue of 16 million pSivida American Depositary Shares ("ADSs") to CDS stockholders, representing 41.5% ownership of the combined company. CDS shareholders will be subject to lock-up periods ranging from 6 to 9 months, while pSivida Executive Directors have agreed to a voluntary 6 month lock-up period.

pSivida now owns the only two FDA approved sustained release drug delivery systems for the back of the eye, being Vitrasert(TM)and Retisert(TM). pSivida also now owns another sustained release drug delivery system in phase III trials, Medidur(TM), at a time when the ophthalmology market is growing strongly, particularly in developing drugs for age related macular degeneration and diabetic retinopathy.

Retisert(TM), marketed by global US ophthalmology company Bausch & Lomb, is a treatment for chronic, non-infectious uveitis affecting the posterior segment of the eye, a debilitating eye disease that is the third largest cause of blindness in the US, affecting 175,000 people. Retisert(TM) was approved in October 2005 for full US CMS (Medicare) coverage at a rate of US$19,345, which is 106% of the wholesale price of the device of US$18,250.

"Bausch & Lomb in its last quarterly commentary said that the sales outlook for Retisert(TM) is bright," said Mr Gavin Rezos, MD and CEO of pSivida Limited. In addition to uveitis, Bausch & Lomb has the right to use Retisert(TM) as a delivery system for compounds to treat other eye diseases.

Former CEO of CDS, Dr Paul Ashton has accepted the position of Executive Director of Strategy of pSivida Limited and will be based at pSivida Inc. headquarters near Boston.

Combined company's marketed products and lead product candidates:


Marketed   Retisert(TM) for  An intravitreal drug implant marketed by
            uveitis           Bausch & Lomb, approved by the FDA for
                              the treatment of chronic non-infectious
                              uveitis affecting the posterior segment
                              of the eye, a sight threatening
                              inflammatory disease that is the third
                              largest cause of blindness in the US.
                              Two long-term, multi-center clinical
                              trials of Retisert(TM) for DME are also
                              ongoing.
----------------------------------------------------------------------
Marketed   Vitrasert(R) for  An intravitreal drug implant marketed by
            CMV Retinitis     Bausch & Lomb, approved by the FDA for
                              the treatment of AIDS-related
                              Cytomegalovirus (CMV) Retinitis, a
                              blinding condition in immune compromised
                              patients.
----------------------------------------------------------------------
Phase III  Medidur(TM)for    An injectable, non-erodible intravitreal
           Diabetic Macular   device for DME, designed to be
            Edima (DME)       administered in an office procedure.
                              DME is a major cause of vision loss in
                              working age patients.
----------------------------------------------------------------------
Phase IIb  BrachySil(TM)     A non-degradable, radioactive 32-
           for non-operable   phosphorus form of BioSilicon(TM) for
            liver cancer      the treatment of non-operable liver
                              cancer tumours.
----------------------------------------------------------------------
Phase IIa  BrachySil(TM)     A non-degradable, radioactive 32-
(1st half  for non-operable   phosphorus form of BioSilicon(TM) for
 2006)      pancreatic cancer the treatment of non-operable pancreatic
                              cancer tumours.
----------------------------------------------------------------------
Pre-       BioSilicon(TM)    A new and unique material produced from
clinical   platform           elemental silicon for use in controlled-
            technology        release drug delivery and other
                              applications across the healthcare
                              sector.
----------------------------------------------------------------------

Vitrasert(R) and Retisert(TM) are trademarks of Bausch & Lomb incorporated

NOTES TO EDITORS:

pSivida is a global bio-nanotech company committed to the biomedical sector and the development of drug delivery products in particular in oncology and ophthalmology.

pSivida owns or has the exclusive rights to use the intellectual property pertaining to BrachySil(TM), Medidur(TM), Retisert(TM) and Vitrasert(TM). The company's IP portfolio consists of 70 patent families, 74 granted patents and over 290 patent applications.

pSivida owns the rights to develop and commercialise a modified form of silicon (porosified or nano-structured silicon) known as BioSilicon(TM), which has applications in drug delivery, wound healing, orthopaedics, and tissue engineering. pSivida has granted an exclusive license to its subsidiary, AION Diagnostics Limited to develop and commercialise diagnostic products using BioSilicon(TM), and has also granted an exclusive license to its subsidiary, pSiNutria Limited to develop and commercialise food technology applications using BioSilicon(TM).

pSivida conducts its operations from offices and facilities near Boston in Massachusetts, Malvern in the United Kingdom, Perth in Western Australia and Singapore.

pSivida is listed on NASDAQ (PSDV), the Australian Stock Exchange (PSD) and in Germany on the Frankfurt Stock Exchange on the XETRA system (German Symbol: PSI. Securities Code (WKN) 358705). pSivida is a founding member of the NASDAQ Health Care Index and the Merrill Lynch Nanotechnology Index.

The Company's largest shareholder and a strategic partner is QinetiQ, a leading international defence, security and technology company, formed in July 2001 from the UK Government's Defence Evaluation & Research Agency (DERA). QinetiQ was instrumental in discovering BioSilicon(TM) and pSivida enjoys a strong relationship with it having access to its cutting edge research and development facilities. For more information visit www.QinetiQ.com

For more information, visit www.psivida.com

This document contains forward-looking statements that involve risks and uncertainties. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, we can give no assurance that such expectations will prove to be correct. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements due to many important factors including: our failure to develop applications for BioSilicon(TM) due to regulatory, scientific or other issues. Other reasons are contained in cautionary statements in the Registration Statement on Form 20-F filed with the U.S. Securities and Exchange Commission, including, without limitation, under Item 3.D, "Risk Factors" therein. We do not undertake to update any oral or written forward-looking statements that may be made by or on behalf of pSivida.

Contacts

Investor Relations:
pSivida Limited
Brian Leedman, +61 8 9226 5099
brianl@psivida.com
or
US Public Relations:
Martin E. Janis & Company, Inc
Beverly Jedynak, 312-943-1100 ext. 12
bjedynak@janispr.com
or
UK & Europe Public Relations:
Citigate Dewe Rogerson
Mark Swallow / Helena Podd
+44 (0)20 7638 9571
mark.swallow@citigatedr.co.uk

Better Be Business Wired.

Business Wire is the leading source for press releases, photos, multimedia and regulatory filings from companies and groups throughout the world.