Lori Freedman - VP, Corporate Affairs, General Counsel and Corporate Secretary Paul Ashton - President & CEO Len Ross - VP of Finance & Principal Accounting Officer

Good day ladies and gentlemen, and welcome to the second quarter 2010 pSivida Corp earnings conference call. My name is Erica, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of the conference. (Operator Instructions). I would now like to turn the presentation over to your host for today's call Ms. Lori Freedman Vice President, Corporate Affairs, General Counsel and Corporate Secretary. Please proceed.

Thank you Erica. Good afternoon everyone and thank you for joining us. After the markets closed toady we released the second quarter financial results for pSivida. If you do not have a copy of the release, one may be found in the investor section of our website at www.psivida.com. On the call with me today are Dr. Paul Ashton, President and Chief Executive Officer of pSivida and Len Ross Vice President of Finance and Principal Accounting Officer. Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks as well as answers to your questions will be forward-looking in nature. These forward-looking statements are inherently subject to risks and uncertainties. All statements other than statements of historical fact are forward-looking statements and we cannot guarantee that the results and other expectations expressed, anticipated or implied will be realized. Actual results could differ materially from those anticipated, estimated or projected in the forward-looking statements. For a more detail discussion of the risk factors that could impact our future results and financial conditions, I refer you to our filings with the SEC including our fiscal 2009 annual report on Form-10K which was filed on September 25, 2009. The company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call. With that, I would like to turn the call over to Paul.

Hi thank you Lori and welcome everyone. We're very pleased to be hosting our earnings release conference call and I appreciate all of you taking the time to join us today as we discuss the results of our second quarter of fiscal 2010. We've had a very good quarter as we continued to drive our business forward and I'll start today with a brief overview of pSivida and our business strategy. As many of you know, we at pSivida developed a miniaturized, sustained release ingestible growth delivery products. These are products that can be small enough to be inserted into the body via an incision as small as 2000s of an inch across and have the ability to release drugs for months or years after a single application. Our goal is to become the world's leader in miniaturized drug delivery systems. Our main focus has been on developing products for the back of the eye. These are diseases which we believe are very serious and underserved and represent an estimated multi billion dollar market opportunity. An isolated 10 million people suffer from potentially blinding back of the eye diseases in the US alone. A major problem in developing new treatments for back of the eye diseases has been the difficulty of achieving therapeutic drug levels at the target sight. Eye drops simply don't penetrate to the back of the eye and have never been clinically proven to achieve therapeutic drug levels and while taking drugs systemically, i.e. orally or intravenously, while that condition gives therapeutic ocular levels, the amount that has to be taken this way also opens the doors to unacceptable systemic toxicities. Over the past few years, people have resorted to injecting drugs directly into the eye. While this is effective, repeated injections into the eye in some…

Thank you Paul and good afternoon everyone. I will take a few minutes to review with you the second quarter results that we issued this afternoon. For the second quarter ended December 31 2009, we reported revenues of $3.4 million, an increase of $460,000 from $3 million reported in the second quarter of last year. This increase was predominately due to the receipt of conditional note payments and development cost reimbursements from Alimera during calendar year 2009. These amounts were recognized as revenue on a straight line basis through December 2009, which represented the end point of our performance obligations under the Alimera collaboration agreement. And they also included a cumulative catch up for the pro rata period from the March 2008 agreement date to the date that each payment was received. Substantially, all of our revenues in each period were attributable to the Alimera collaboration agreement. Any cash received from Alimera after December 31 2009 will be recognized as revenue upon receipt or at such earlier date if applicable on which the amount to be received is both fixed and determinable and reasonably assured of collection. Predominantly on the basis of the expected receipt of conditional note payments during the next two quarters, including $500,000 monthly principal payments scheduled to commence in April, we project total fiscal 2010 revenues attributable to Alimera of approximately $9.2 million, compared to approximately $11.8 million for the fiscal year 2009. This projected decrease primarily reflects the completion in December 2009 of the performance period during which all of the Alimera deferred revenue amounts have now been recognized with revenue. With respect to our Pfizer collaboration agreement, we continue to receive research and development funding of $500,000 per quarter. Cumulative Pfizer payments to date of approximately $4.8 million are recorded as non-current deferred revenue…

Just a few quick comments before we move to the Q&A. We have entered into a very exciting phase of development with pSivida. In December we were very happy to get the top line two year base on Iluvien based on the (inaudible) Alimera has announced their turns to file an NDA with the FDA in the second quarter of this year and to request priority review. If granted this could mean a decision as early as late 2010 and if favorable sales beginning as early as Q1, 2011. Iluvien is also in clinical (inaudible) three of the severe side diseases and we are making great strides with our earlier stage products. Our collaboration with Pfizer is progressing well and our other development activities are also accelerating. These include (inaudible) systems and long term protein delivery systems. In April of 2010, note payments from Alimera are set to very significantly increased helping to bridge it to receipt of the $25 million due on FDA approval to Iluvien and future profits for the payments. So we believe that we are very well positioned for a very exiting time ahead, and at this point we'd be happy to take your questions. Operator would you please initiate the Q&A portion of this call?

(Operator Instructions). And our first question comes from the line of (inaudible). Please proceed.

The first question is whether or not Alimera is planning to ensure more analysis of the Iluvien data? At the coming conference, Angiogenesis conference next weekend in Miami and the second question is the BioSilicon platform. Have you (inaudible) this program in to the clinic and if so could you be more specific in terms of the timings and what kind of indications are you going after?

To answer those questions in order there will be a presentation at the Angiogenesis conference in Miami on February the 20th. That's going to be given by Peter Campochiaro who is I believe the head of [Retinal] as John Hopkins Eye hospital, (inaudible) eye institute. I guess like most academics whose probably still putting those lines together so no doubt there will be additional information presented but I'm not quite sure as yet what that information will be. With respect to BioSilicon, yeah we're continuing to make great strides in that. We are looking initially having this be a potentially very simple means to deliver proteins but I've been doing this for quite a along time and (inaudible) actually have all of the bugs ironed out; you haven't got the bugs ironed out. So, when we get into clinical trials, we'll be very happy to announce that, but we're not there yet.

(Operator Instructions). Our next question comes from the line of (inaudible).

As you indicated that Alimera has additional studies in the wet and dry-related age-related macular degeneration and retinal vein occlusion. Two questions, first of all would you be able to give us any sort of current status of those studies and secondly if these things come for (inaudible) in the future to be indicated in those indicators, what would be the kind of referral for pSivida?

Yeah those trials I believe still in well in patients have started growing should the product be approved in those indications? It would continue to be at 20% profits versus Alimera, though additional milestone [sometime].

And should I assume those studies would carry out mostly directed by Alimera at this moment and continued to be so going forward?

Yes. You could assume that.

(Operator instructions). We have a follow -up question from the line of (inaudible). Please proceed.

My last question is on the NDA package where there are not there is some addition non-clinical information that made just needs together or the information is in and its just a matter of putting together the electronic filing?

Typically there’s always little bit of information stability data this kind of thing that’s being collected at last minute. I don’t have that information available I'll just quantify. We don’t know exactly the phase that Alimera is currently in, but I would anticipate that people are generally collecting the last little pieces of information for the file and not just (inaudible).

We have no further questions at this time. I will turn the call over to Dr. Paul Ashton for any closing remarks.

Very well. Thank you. I'd like to thank you all for joining us today, and I look forward to speaking with you again next quarter. In the meantime should you have any additional questions, please feel free to contact us directly. And thank you very much.

Thank you for your participation in today’s conference. This concludes the presentation. Everyone have a great day.