Good day ladies and gentlemen, and welcome to the pSivida Corporation Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Lori Freedman, Vice President, Corporate Affairs, General Counsel. Please go ahead.

Thank you, Kate. Good afternoon everyone and thank you for joining us. After the market closed today, we released our third quarter financial results for fiscal 2013. A copy of the release is available in the Investor section of our website at www.psivida.com. On the call today with me is Dr. Paul Ashton, President and Chief Executive Officer; and Len Ross, our Vice President, Finance. Before I hand the call over to Paul, I need to remind everyone that some of our prepared remarks are and answers to your questions may be forward-looking in nature. Forward-looking statements are inherently subject to risks and uncertainties. All statements other than statements of historical facts 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 more detailed discussion of the risk factors that could impact our future results and financial condition, I refer you to our filings with the SEC including our annual report on Form 10-K for the fiscal year ended June 30th, 2012. We undertake no obligation to update any forward-looking statement in order to reflect events or circumstances that may arise after this conference call. With that, I’d like to turn the call over to Paul.

All right. Thank you, Lori, and welcome everyone as we discuss the results of our third quarter of fiscal 2013. This has been a great quarter for us. Our ILUVIEN product for the treatment of chronic Diabetic Macular Edema insufficiently responsive to existing therapies is now being actively marketed by our partner Alimera Sciences in Germany and for private payors in the U.K. Reimbursement in the U.K. from the National Health System on the patient access scheme is being considered by NICE and we expect some of the outcome within a few months. Alimera has said, it expects to launch in France in 2013 and is marketing authorizations in three of the European countries and one more Italy in process. Alimera completed a $40 million financing nine months ago to help fund the European launch and most recently secured a $20 million loan facility. Further, they have reported hiring a Senior Eu-based team with boots on the ground being provided by [print house]. We look forward to seeing the European sales of ILUVIEN ramp up. We are entitled to 20% of the net profits on sales to Alimera on a country-by-country basis. Other very exciting news for ILUVIEN was the re-filing of the new drug application seeking U.S. approval. The FDA accepted the resubmission for review and gave an October 17, as the PDUFA date and that's the date when the review is expected to be completed. We are very hopeful that the FDA will agree with the European authorities and conclude that ILUVIEN is safe and effective. If the FDA approves ILUVIEN, we will be entitled to a $25 million milestone payment and 20% of net profit from sales by Alimera in the U.S. Now more important types on revenues than the revenues we expect to receive from ILUVIEN…

Thank you Paul, and good afternoon everyone. I will briefly review our third quarter fiscal year 2013 results we reported today, starting with our financial position. As Paul mentioned, at March 31, 2013, we had cash, cash equivalents and marketable securities of $13.7 million, a net decrease of $2 million during the quarter. We anticipate that these capital resources, together with expected royalty income from Retisert and other expected cash inflows under existing collaboration and evaluation agreements will enable us to fund our current and planned operations into the fourth quarter of fiscal year 2014. This includes planned Phase III clinical trials of the posterior uveitis micro-insert, which as Paul mentioned we expect to commence this quarter, but excludes any potential milestone or net profits receipts under the Alimera collaboration agreement. Funding of our operations beyond them is expected to depend on the $25 million milestone for which we would be entitled if ILUVIEN were approved by the FDA and our potential net profits from sales of ILUVIEN by Alimera as well as the amount and timing of cash receipts pursuant to our other existing and any future collaboration or other agreements and/or financing transactions. As Paul mentioned Alimera has launched ILUVIEN for DME in Germany as well as for private pay and privately insured patients in the U.K. and has reported its intention to launch in France during 2013. Under the terms of our collaboration agreement, we are entitled to a 20% share of net profits as defined, measured quarterly on a country by country basis, subject to an offset of pre-profitability losses as defined that were previously incurred by Alimera. We will be entitled to the same net profit share if Alimera were able to market ILUVIEN in the U.S. We do not know if or when Alimera…

Thanks Len. So to sum up, it's been another excellent quarter as we saw the transition and [ostracity] from a license-based drug delivery company to a specialty pharma company. Key points are one, our ILUVIEN product is now being marketed by Alimera in the EU and we look forward to starting to see the sales ramp up. Two, the ILUVIEN NDA resubmission has been accepted by the FDA with a PDUFA date of mid October. Three, we expect our Phase III clinical trials for our micro-insert for posterior uveitis to begin enrolling patients on schedule by the end of this quarter. And four, we continue to be pleased with our pre-clinical research and our Tethadur peptide protein delivery system and are working with a global biopharmaceutical company on the ophthalmic applications of this platform technology. Now at this point, we would be happy to take your questions. Operator, would you please initiate the Q&A portion of the call?

(Operator Instructions) Our first question comes from the line of Juan Sanchez with Ladenburg. Your line is open.

Hi guys. Couple of questions. First one is the expected pace of enrolment in the uveitis trial and the second question is how do you monitor or control the Alimera Phase European operations because you know what their operating income is in our remaining [other] countries?

Yes Juan, so let’s take the first one first. We expect the uveitis trial to enrol in approximately 12 months. Second, under our agreement with Alimera, we are provided with an enrolling commercialization budget, so we see what those costs are projected to be and also we see the agreements that Alimera has with say Quintiles and with the commercial manufacturer of the those -- of the ILUVIEN product itself. So there is relatively few costs which are not documented -- all of their costs are documented. There is very few costs which are not completely transparent.

Okay. Thank you.

Our next question comes from the line of Jason Kolbert with Maxim Group. Your line is open.

Hi guys. Can you talk a little bit about the difference -- who reviewed this filing? Did you use outside consultants before you submitted to the FDA and if there was any one area in the filing where you think you wish you could have had more time, what area is it?

This filing was submitted by Alimera Sciences. So unfortunately, I can’t really provide any public information, which they have not already provided. However, I would say that Alimera obviously took a good long time to resubmit this document, which is a good thing, was resubmitted over a year after they received the complete response letter. So that's actually a positive.

Okay. May be we could just talk a little bit about the uveitis trial? Can you review with me the endpoints and the powering assumptions that went into the -- that went into the enrolment for this trial?

Yes sure. The primary end point is recurrence of uveitis. People and being enrolled in this trial, which is for recurrent posterior uveitis at baseline they should have had at least two recurrences in the prior 12 months or being on some systemic therapy to manage their disease. This is essentially the same entry criteria that was used for the Retisert trial and we know from those data, that the recurrence rate in the control group, which in that case for the [fellow line], the recurrence rate was approximately 50% at 12 months. In contrast, the Retisert recurrence rate was about 5%. So if you run the numbers on that, you can have statistical significance with actually a very small sample size. So in our discussions with the FDA, we thought it advisable to give rather more patience than we would theoretically need based on a straightforward time calculation; one, because we wanted to give the FDA plenty of safety data even though we can reference the 1,000-odd patients clinical data set that's available from the ILUVIEN and DME trial. So plenty of safety data, but also to ensure that you know until you do the Phase III, you go in a lot of data that's going to show, so we are -- [still] is powered not on the 50% versus 5% recurrence rate, but we are powered to show approximately a 20-odd percentage point difference between treatment and control. So we are very confident that these trials will be powered adequately to show statistical significance and be able to give the FDA a good healthy number of patients for safety assessment.

Thanks guys. Congratulations on all the progress.

Thank you.

(Operator Instructions) Our next question comes from the line of Larry Smith with (inaudible). Your line is open.

Hi Paul. You said in the Alimera agreement where you are getting 20% of net income that Alimera can recover some of their costs before you start realizing that. What are those costs? Are they all of the development costs that have gone into the product? How substantial are they? Can you quantify them in terms of millions of dollars?

I'll hand this over to Lori Freedman, who is more familiar with the deal having negotiated it.

Hi there. So the -- Alimera can recover what would be the net loss of 20% of net losses from our post-profitability. We can’t quantify that currently, we've got a product-by-product, country-by-country basis, so there is one product, which is ILUVIEN for DME and it would be so for instance in Germany, it would be only for Germany and they can recover the 20% of pre-profitability net losses with a cap of 20% per each payment to us.

I am just a little bit...

...in cost included in that, that would only be commercial [resin] cost.

Well if I could just give you an example. Let’s say that they have net income of $1 million in Germany and you are entitled to 20% of that or $200,000, what constitutes the net loss that they are putting -- offsetting that again? How do you calculate that and what magnitude could it be?

Well, so profitability is the first quarter that net sales would exceed direct commercialization cost. So prior to that first quarter that net sales exceeds direct commercialization cost, the direct commercialization cost will have exceeded net sales and that would be our net losses to date and that's accumulated. Once that -- once we get to the first quarter on a country-by-country, product-by-product basis, where net sales exceeds direct commercialization cost, the Alimera is able to offset those direct commercialization cost from our net profit payment with a 20% cap per payment.

Okay. Thank you. And Paul could I ask you another question in regard to posterior uveitis? Could we make an hypothesis that you can file an sNDA because ILUVIEN get approved in the U.S. if that is the case, then how quickly after the enrolment is completed, you think that you could -- and in the Phase III trial, how quickly do you think you could file an NDA if those two points of the hypothesis are correct?

I am sorry. Could you repeat the hypothesis please?

Hypothesis is you can file -- you are allowed to file an sNDA because ILUVIEN is approved in the U.S. Second is if enrolment is completed in 12 months in posterior uveitis then how quickly could you file and NDA in that indication?

So if enrolment is complete in 12 months, the trial has a 12-month follow-up before the primary endpoint. So that would be -- the timelines we are starting in June 13, 12 months to recruit, June 14, 12 months to get data June 15, so you are looking at end of 2015 to be filing.

Okay. Thank you.

Thank you.

I am not showing any further questions at this time. I would like to turn the call back over to Mr. Paul Ashton for closing remarks.

Great. Well, thank you very much for joining us today and I look forward to speaking with you again next quarter and in the mean time if you have any additional questions, please feel free to contact us and thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you may all disconnect. Everyone have a great day.