Pfizer To Pay PSivida Up To $168.8 Million Under Revised Pact; Shares Up

PSivida Corp. (PSDV) and Pfizer Inc. (PFE) have revised an agreement in order to focus solely on development of the PSivida's glaucoma implant product.

Under the agreement, pharmaceutical company Pfizer may pay as much as $168.8 million plus royalties to PSivida, a drug-delivery product maker.

PSivida shares were up 1% at $3.94 in early trading. The stock though Monday's close has fallen 21% this year despite some positive results in trials of its other product candidate. Pfizer shares were up 0.5% at $20.56 in early trading amid a broad market upturn. The stock is up 18% this year.

The companies have worked together since 2007 on ophthalmic applications.

Under the revised terms, Pfizer will make an initial payment of $2.3 million and pSivida will have the right to develop the product candidate--which offers long-term sustained release of a common glaucoma treatment--through Phase II clinical trials.

Pfizer then will have the right to exercise an option for an exclusive global license to develop and market the product in return for a $20 million payment, double-digit royalty payments and additional milestone payments of as much as $145.5 million.

Otherwise, pSivida will develop the product on its own or with a partner. The company already has received about $7 million in research and development support since it began the program with Pfizer.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]