pSivida raises $21 million as clinical trials approach

Perth-based nanotechnology company pSivida (ASX: PSD) has raised $21 million in an international placement - enough cash to see the company through to 2006, when it expects its first revenues.

The money was raised through a placement to large US and European institutions, increasing representation by foreign shareholders to around 40 per cent.

19.3 million shares were placed at a price of US$0.80 (AUD$1.09) per share, a discount of 7.6 per cent of the share price prior to the placement.

Managing director Gavin Rezos said the capital would be put towards further development of the company's BioSilicon technology, particularly in the areas of drug delivery and diagnostics.

pSivida's UK subsidiary pSiMedica is developing controlled slow release drug delivery technology, and the lead product, BrachySil, is poised to enter Phase IIa clinical trials in Singapore next month. Rezos said pSivida would also further increase its 53 per cent stake in the UK operation.

pSivida obtained the rights to commercialise diagnostic applications of BioSilicon from pSiMedica last year.

Rezos said the cash was expected to carry the company through to its first revenues, which he said was likely to occur in 2006, possibly earlier.

"We're very well positioned for the next few years," he said.

The company is also contemplating opportunities for future listing on the US or UK exchanges, in addition to its current listings on the ASX and three German exchanges. pSiMedica is expected to list on one of the UK's exchanges this year.

pSivida's share price rose slightly on news of the announcement. At the time of writing, it was trading at AUD$1.22.