pSivida to acquire Control Delivery Systems

Oct. 3, 2005 – Australian bio-nanotech company pSivida Limited (NASDAQ:PSDV) announced that it has entered into a definitive merger agreement to acquire Control Delivery Systems Inc., a private U.S. drug delivery company located in the Boston area. The company said the acquisition is expected to close in the fourth quarter of 2005 and is subject to Australian regulatory and pSivida shareholder approvals, as well as other customary closing conditions.

pSivida said the acquisition is an integral part of its ongoing U.S. growth strategy and will bring additional development and regulatory expertise to pSivida’s management team. This combination also provides pSivida with an operating base in the Boston biotech hub, enhancing its overall visibility as well as access to the U.S. scientific and investment communities.

The acquisition will be funded through the issue of approximately 16 million pSivida American Depositary Shares to Control Delivery stockholders, representing approximately 40 percent ownership of the combined company.

Based on a price of $6.50 per pSivida ADS, the transaction would represent a purchase price of approximately $104 million and an implied market capitalization of about $250 million for the combined company.


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