pSivida rated 'speculative buy'

Brokers have rated biomaterials platform technology group pSivida (ASX: PSD) a speculative buy following a recent joint venture with Singapore General Hospital (SGH).

This week, the Perth-based company announced that its UK subsidiary pSiMedica had established a joint venture with SGH to form a company called pSiOncology.

Under the deal, pSiOncology has acquired the license intellectual property from pSiMedica, based on that company's BioSilicon technology, for use in cancer therapy research.

SGH is to contribute work in kind while pSiMedica will pitch in $500,000. In a report to investors, Paterson Ord Minnett said that BioSilicon's biocompatibility and controlled biodegradability properties provided the new entity with a development platform to enable direct the delivery of active agents in to the tumour.

It said such therapies were currently achieving sales of $300 million in the US alone, with the global market estimated to exceed $1 billion within five years.

"The JV announcement is important as it will be the first BioSilicon product to enter clinical trials," the report says. "Proof of concept and pre-clinical trials will occur over the next six to nine months with the commencement of human clinical trials expected in the first half of 2003."

It says the latest announcement follows two others in the past couple of months also involving the use of BioSilicon in collaborative arrangements, bringing to seven the number of partnerships announced by pSivida over the past 18 months. "Paterson's remain confident with management's progress to date and suggest that the recent price weakness is an opportunity to buy for the higher risk investor."

At the time of writing the stock was trading about 3 per cent, half a cent higher, at 16 cents on a turnover of just 2000 shares.