Pfizer signs $165M deal with pSivida

Global drug behemoth Pfizer, which has had several R&D pipeline disappointments and is beginning to suffer generic competition for some of its blockbuster products (Marketletters passim) has signed a collaborative research and licensing deal with Perth, Australia-based pSivida worth up to $165.0 million to the latter, in return for its controlled drug-delivery technologies, including Medidur, in ophthalmic applications.

Under the terms of the agreement, pSivida will receive up to $155.0 million in development and sales-related milestones. The two companies will work together on a joint research program aimed at developing ophthalmic products using pSivida's sustained drug-delivery technology. In addition to milestone payments, Pfizer will fund the cost of the joint research program and will have an exclusive license to market all products developed as part of this collaboration in ophthalmic applications and will pay pSivida a royalty on net sales of those products. Pfizer may terminate the agreement on 60 days notice without cause, the companies noted.

In addition to the development and sales milestones and payment of the cost of the joint research program, Pfizer has agreed to invest $5.0 million in ordinary shares of pSivida upon entering into the license accord, the proceeds of which will be held in escrow until such monies can be used (together with other cash that is available to pSivida) to redeem an outstanding convertible note. The US pharmaceutical giant has also agreed to invest an additional $5.0 million in pSivida common equity in the future, subject to certain conditions.