pSivida Corp., a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products, announced the acquisition of Icon Bioscience Inc. (Icon). Icon is a specialty biopharmaceutical company whose lead product DEXYCU (dexamethasone intraocular suspension) 9% is FDA approved for postoperative inflammation and is administered as a single dose at the end of ocular surgery. DEXYCU is the first long-acting intraocular product approved by the FDA for the treatment of postoperative inflammation. DEXYCU utilizes Icon’s proprietary Verisome® drug-delivery platform which allows for a single injection that releases over time.

The Company has entered into a financial agreement with EW Healthcare Partners. EW Healthcare Partners and a third party investor will make equity investments in pSivida for a total of up to approximately $60.5 million. In addition, SWK Holdings Corporation (SWK) has agreed to provide pSivida with up to $20 million in a debt facility. The Company will use these resources to finance the Icon acquisition and prepare for the commercial launches of DEXYCU and, if approved by FDA, Durasert™ micro-insert for the treatment of non-infectious uveitis affecting the posterior segment of the eye.

This transformative acquisition and financing are driven by the shared vision held by pSivida and its new partners, EW Healthcare Partners and SWK.

• Ophthalmology represents a large and growing therapeutic category with a sizable market, favorable demographics due to an aging population, and significant unmet clinical needs.
• DEXYCU offers a unique value creation opportunity, especially with the experience of pSivida’s CEO, Nancy Lurker, who has built multiple sales and marketing organizations that have successfully commercialized numerous products. The Company is well positioned to capitalize on DEXYCU and the potential Durasert opportunity.
• pSivida and its strategic partners will remain opportunistic in evaluating additional ophthalmology assets.            

MTS Health Partners, L.P. served as pSivida’s financial advisor in connection with the transaction and its affiliate, MTS Securities LLC, provided the pSivida board of directors with a fairness opinion. Torreya Partners served as the advisor to pSivida on the debt financing. Hogan Lovells US LLP acted as pSivida’s legal advisor and Danforth Advisors, LLC acted as pSivida’s corporate finance advisor.

EW Healthcare Partners and a third party investor will provide pSivida with funding in two tranches totaling $35 million, approximately $25.5 million of which is subject to the approval of the Company’s stockholders.  EW Healthcare Partners and a third party investor also have an option, subject to the approval of the Company’s stockholders, to make an additional investment of approximately $25.5 million for a total of up to $60.5 million.

In the first tranche, which closed concurrently with the Icon acquisition, EW Healthcare Partners purchased 8,606,324 shares of pSivida  common stock.
    
In the second tranche, which is subject to stockholder approval, EW Healthcare Partners and a third party investor will purchase approximately $25.5 million of the Company’s common stock and receive a warrant to purchase an additional approximately $25.5 million of the Company’s common stock.  The warrant will be cash-exercise only and exercisable no later than 15 business days after the issuance of a pass-through reimbursement code for DEXYCU.

Ron Eastman, a Managing Director with EW Healthcare Partners, who will immediately join pSivida’s Board of Directors, said, “EW Healthcare Partners is pleased to have the opportunity to invest in Nancy Lurker and her team as they drive the growth and transformation of EyePoint Pharmaceuticals into a fully integrated specialty biopharmaceutical company. Nancy has a strong track record of building successful commercial organizations, and we look forward to continuing to support the Company as it capitalizes on DEXYCU, Durasert and other potential ophthalmology opportunities.”

pSivida also entered into a $20 million senior secured, non-dilutive term loan agreement with SWK Funding LLC and its partners. SWK Funding LLC is a subsidiary of SWK.

“We are pleased to partner with pSivida and are fully committed to working with the team to build a leading business in ophthalmology,” said Winston Black, CEO, SWK. “Nancy has a proven track record of successfully commercializing products and we believe pSivida has a very attractive future.”