pSivida Quarterly Highlights

BOSTON--(Business Wire)--
pSivida Corp. (NASDAQ:PSDV)(ASX:PVA)(FF:PSI):

-- Reincorporation in the US Completed

-- Interim results from Medidur for DME Study

-- Commencement of new Medidur AMD Trial

-- Commencement of BrachySil Pancreatic Cancer Dose Ranging
Clinical Trial

pSivida Corp. (NASDAQ:PSDV)(ASX:PVA)(FF:PSI), a leading drug
delivery company, headquartered in Watertown MA announced its
Quarterly highlights.

Cash Flow

The cash balance at June 30, 2008 was US$15.6m, a decrease of
US$2.6m from the balance at March 31, 2008. During the current quarter
ended June 30, 2008, cash flows used in operating activities was
US$2.4m compared to cash flows provided by operating activities of
US$8.5m in the previous quarter ended March 31, 2008. Cash flows from
operating activities in the current quarter included cash inflows from
customers of US$1.5m consisting primarily of US$1.0m of research and
development funding from Pfizer and US$437k in connection with the
amended collaboration agreement with Alimera Sciences. This compares
to cash inflows from customers of US$13.0m in the previous quarter,
US$12.0m of which was received from Alimera Sciences at the closing of
the amended collaboration agreement that provides total consideration
up to US$78m plus a 20% share of future profits. Cash flows used in
operating activities included US$3.9m of outflows for the current
quarter compared to US$4.6m for the previous quarter.

Subsequent to June 30, 2008, Bausch and Lomb will retain the next
US$2.8m of Retisert(R) royalties otherwise payable to pSivida in
accordance with an advance royalty agreement the Company entered into
in June 2005. Royalties otherwise payable to pSivida for the quarter
ended June 30, 2008 were US$427k which represents a 15% increase from
US$371k for the quarter ended March 31, 2008 and a 24% decrease from
US$559k for the quarter ended June 30, 2007. Retisert(R) is the only
FDA-approved treatment for posterior uveitis, a chronic eye disease.

Reincorporation in the US

In June, the Company completed reincorporation in the United
States following approval by shareholders. The reincorporation is
designed to make the Company a more attractive investment for
shareholders by increasing the potential scope and depth of the
Company's shareholder base and liquidity, reducing ongoing compliance
costs and enabling the Company to continue the engagement of its
independent auditor, while maintaining strong ties with the Australian
investor base. This move to the US was the next key step in the
Company's long-standing strategy of building a global drug delivery
company by focusing growth and development in the US where the company
has achieved its recent significant business successes.

As a US company with common stock traded on NASDAQ, the Company
files quarterly unaudited financial statements on Form 10-Q and full
year financial statements on Form 10-K and will file these financial
statements with ASX after they are filed with the US Securities and
Exchange Commission.

Interim Results from the three-month Human PK Medidur(TM) FA Study

In June, the Company reported the interim three-month safety and
efficacy results from the first human pharmacokinetic (PK) study of
Medidur(TM) FA, in patients with Diabetic Macular Edema (DME). This
open-label Phase II study is designed to support the ongoing pivotal
Phase III clinical trial of Medidur in DME by assessing systemic
exposure to FA after administration of Medidur in the eye. The study
is secondarily designed to provide information on the safety and
efficacy of Medidur in a DME population.

A total of 37 subjects were enrolled in this trial, 20 patients on
the low dose (an approximate 0.23mcg per day dose) of Medidur and 17
patients on the high dose (an approximate 0.45mcg per day dose) with
the same inclusion/exclusion criteria as the ongoing Phase III study.
The three month interim readout from the PK study indicated 20 percent
of the low dose patients and 18 percent of the high dose patients
showed an improvement in best-corrected visual acuity (BCVA) of 15
letters or greater from baseline on an eye chart. In addition, both
the low dose and the high dose of Medidur resulted in a significant
reduction in retinal thickness as compared to the baseline.

From a safety perspective, no adverse events related to
intraocular, or inner eye, pressure were seen in the low dose
patients, while 12 percent of the high dose patients experienced
intraocular pressure increases of greater than 30 mmHg. Additionally,
the only adverse event related to cataract formation was reported in a
patient in the high dose group.

By comparison, the Retisert(R) intravitreal implant (FDA approved
for Uveitis), which releases FA at an initial rate of 0.6 mcg per day,
was also studied in a DME population. Retisert data presented at the
ARVO conference in 2004 and 2005 showed that at 6 months between 15%
and 20% of DME patients receiving Retisert gained 15 letters from
baseline on an eye chart and after 2 years this increased to 27% but
there were some steroid related side effects, particularly cataract
and elevation of IOP.

The early results of this study support our hypothesis that lower
doses of FA delivered via the Medidur system will provide visual
acuity improvements while reducing the risk of ocular side effects
commonly associated with the use of corticosteroids.

The technology underlying Medidur FA for DME is licensed to
Alimera Sciences, a privately funded biopharmaceutical company that
specializes in the research, development and commercialization of
prescription ophthalmic pharmaceuticals, in an agreement that provides
total consideration of up to US$78m plus a 20% share of future
profits. Medidur FA for DME is in fully recruited Phase III clinical
trials. If approved, it is anticipated that Medidur will be marketed
under the name Iluvien(TM).

Clinical trial to assess safety and efficacy of Medidur FA in
patients with AMD treated with Lucentis(R)

In May, the Company announced that enrollment has begun for a
clinical trial under an investigator sponsored IND to assess the
safety and efficacy of Medidur(TM) FA in conjunction with Lucentis(R)
(ranibizumab injection, Genentech) in patients with exudative
age-related macular degeneration (wet AMD). The study is designed to
provide preliminary information on the potential of Medidur FA to
maintain the efficacy established with Lucentis while reducing the
overall number of Lucentis treatments.

Commencement of BrachySil Pancreatic Cancer dose ranging clinical
trial

In July, the Company announced that a device dose ranging clinical
trial commenced using BrachySil(TM) (P32 BioSilicon(TM)) as a
potential new brachytherapy treatment for inoperable pancreatic
cancer. The first patient received treatment at Guy's and St Thomas'
NHS Foundation Trust in London. A total of six patients will be
entered into this trial at two centers in the UK (Guy's and St Thomas'
NHS Foundation Trust, and University Hospital, Birmingham). The study
will determine the safety of escalating radiation doses of the
BrachySil(TM) device, with tumor response as a secondary end point.

Opes Prime overhang cleared

In April, the Company announced that all the Company's shares
subject to Opes Prime margin lending facilities were sold in an
orderly fashion after Opes Prime was placed in the hands of a
receiver.

New Board Appointments

In July, the Company announced the appointment to the Board of
Directors of Peter G. Savas and Paul A. Hopper as non-executive
Directors. Both have demonstrated track records of success in building
successful biotech companies and the pSivida Board will benefit from
their skills and experience.

About pSivida Corp.

pSivida is a leading drug delivery company committed to the
biomedical sector and the development of drug delivery products.
Retisert(R) is FDA approved for the treatment of uveitis. Vitrasert(R)
is FDA approved for the treatment of AIDS-related CMV Retinitis.
Bausch & Lomb owns the trademarks Vitrasert(R) and Retisert(R).
pSivida has licensed the technologies underlying both of these
products to Bausch & Lomb. The technology underlying Medidur(TM) FA
for diabetic macular edema is licensed to Alimera Sciences under an
agreement with total consideration of up to US$78m plus a 20% share of
future profits and is in fully recruited Phase III clinical trials. If
approved, it is anticipated that Medidur will be marketed under the
name Iluvien. pSivida has a worldwide collaborative research and
license agreement with previous and future payments of up US$165m with
Pfizer Inc. for certain other ophthalmic applications of the
Medidur(TM) technology.

pSivida owns the rights to develop and commercialize a modified
form of silicon (porosified or nano-structured silicon) known as
BioSilicon(TM), which has applications in drug delivery, wound
healing, orthopedics, and tissue engineering. The most advanced
BioSilicon(TM) product, BrachySil(TM), delivers a therapeutic, P32,
directly to solid tumors and is presently in dose ranging clinical
trials as a device for the treatment of pancreatic cancer.

pSivida's intellectual property portfolio consists of over 65
patent families, over 115 granted patents, including patents accepted
for issuance and over 270 patent applications. pSivida conducts its
operations from Boston in the United States, Malvern in the United
Kingdom and Perth in Australia.

SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Various statements made in this release are
forward-looking and involve a number of risks and uncertainties. All
statements that address activities, events or developments that we
intend, expect or believe may occur in the future are forward-looking
statements. The following are some of the factors that could cause
actual results to differ materially from the forward-looking
statements: achievement of milestones and other contingent contractual
payment events; failure to prove efficacy for BrachySil; inability to
raise capital; continued losses and lack of profitability; inability
to develop or obtain regulatory approval for new products; inability
to protect intellectual property or infringement of others'
intellectual property; inability to obtain partners to develop and
market products; termination of license agreements; competition;
inability to pay any registration penalties; costs of international
business operations; manufacturing problems; insufficient third-party
reimbursement for products; failure to retain key personnel; product
liability; inability to manage change; failure to comply with laws;
failure to achieve and maintain effective internal control over
financial reporting; amortization or impairment of intangibles;
possible dilution through exercise of outstanding warrants and stock
options or future stock issuances; potential restrictions from capital
raises; possible influence by Pfizer; and other factors that may be
described in our filings with the Securities and Exchange Commission.
Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. We do not undertake to
publicly update or revise our forward-looking statements even if
experience or future changes make it clear that any projected results
expressed or implied in such statements will not be realized.

pSivida Corp.
Brian Leedman
Vice President, Investor Relations
Tel: +61 8 9227 8327
brianl@psivida.com
or
US Public Relations
Martin E. Janis & Company, Inc
Beverly Jedynak
President
Tel: +1 (312) 943-1100 ext. 12
bjedynak@janispr.com

Copyright Business Wire 2008