pSivida Shares Boom as Eye Drug Passes Pivotal Trial

12/23/09Follow @xconomy

Shares of pSivida (NASDAQ: PSDV) rocketed more than 50 percent this morning on some positive clinical trial news. The Watertown, MA-based company, the developer of a treatment for an eye disorder related to diabetes, said its technology helped patients improve their vision after two years of follow up in a clinical trial.

pSivida climbed 56 percent to $5.49 at 10:37 am Eastern time. At one point it touched a 52-week high of $6.06, about a 10-fold increase from its low point in the past year.

The stock gains were spurred by results from a study of 956 patients with diabetic macular edema, who were randomly assigned to get either a placebo injection or a low or high dose of therapy delivered through an eye implant marketed as Iluvien. The implant, placed at the back of the eye, is designed to release a gradual daily dose of a corticosteroid drug, fluocinolone acetonide. Researchers found that about 28 percent of patients on either dose of the treatment were able to read an additional 15 letters on an eye chart after two years, compared with 16 percent who did that well in the control group. The main side effect was an increase in eye pressure, which required about 5 percent of patients on the high dose and 2 percent on the low dose to undergo corrective surgery, pSivida said in a statement.

Based on the results, pSivida said its partner, Alpharetta, GA-based Alimera Sciences plans to file an application with the FDA before the end of June, seeking clearance to start selling low dose implants for patients with diabetic macular edema. The condition, in which blood vessel leakage causes swelling in the eye, is estimated to affect 340,000 patients a year in the U.S., according to Alimera.

pSivida said it stands to gain a $25 million milestone payment from Alimera if Iluvien is approved by the FDA, as well as a share of the profits that it didn’t disclose. pSivida had 22 employees as of August 31, according to its most recent annual report. New York-based Pfizer (NYSE: PFE), the world’s largest drugmaker, is the largest single shareholder in pSivida with a 10 percent as of September 30, according to the most recent proxy statement.

More details on the clinical trial results will be presented in February at the Angiogenesis, Exudation and Degeneration 2010 Meeting in Miami. pSivida also plans to hold a conference call to discuss the results at 4:30 pm Eastern time today.

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