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August
17, 2007
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Mary
E. Weber
617-951-7391
Mary.Weber@ropesgray.com
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Division
of Corporation Finance
100
F
Fifth Street, N.E.
Washington,
DC 20549
Attention:
Kate
Tillan
Re:
SEC
Comment Letter dated August 8, 2007
pSivida Limited
Form 20-F for the fiscal year ended June 30, 2006
File No. 000-51122
Dear
Ms.
Tillan:
On
behalf
of pSivida Limited, an Australian public limited liability company (the
“Company”),
this
letter responds to comments provided in your letter dated August 8, 2007 (the
“Comment
Letter”)
in
connection with the Company’s Annual Report on Form 20-F for the fiscal year
ended June 30, 2006.
For
reference purposes, the comments set out in the Comment Letter are reproduced
in
bold in numerical sequence in this letter, and the corresponding responses
of
the Company are shown below such comments.
B.
Business
Overview, page 22
Strategic
Collaborations, page 29
Alimera
Sciences, Inc., page 31
| 1. |
You
disclose that you entered into a non-binding memorandum of understanding
with Nordic Biotech Advisors. Please tell us and clarify in future
filings
how you will account for the development costs incurred under the
Alimera
agreement.
|
-2-
| 2. |
We
note that Nordic will invest $4 million in shares of your preferred
stock
and invest $22 million over time. Please tell us and clarify in future
filings whether the additional $22 million investment will be in
shares of
your preferred stock. We note the disclosure on page 32 that you
“agreed
to file a resale registration statement to register the sale by Nordic
of
ADSs into which its preferred stock, warrants and investment could
be
converted.” Please tell us and clarify in future filings the nature of the
‘investment.’
|
| 3. |
Further,
please reconcile the amounts that Nordic will invest. In the second
to
last paragraph on page 31 you disclose that Nordic will invest $4
million
on closing in preferred shares and another $22 million over time.
In the
first paragraph on page 32 you disclose that Nordic will invest $3.5
million in Medidur and the remaining $18.5 million in regular
installments. Tell us and revise future filings to disclose whether
the
amounts on page 32 are in addition to the amounts on page
31.
|
| 4. |
Please
tell us the significant terms of the preferred shares, warrants and
‘investment’ and how you will account for both under A-IFRS and U.S. GAAP,
including a discussion of the Medidur profit sharing
terms.
|
RESPONSE
TO COMMENTS 1 THROUGH 4
Nordic
Biotech Advisors’ investment in the Company’s equity pursuant to the provisions
of the November 13, 2006 non-binding Memorandum of Understanding (the
“Memorandum”) was never consummated. Accordingly, the comments above are no
longer applicable.
Consolidated
Financial Statements
Note
29. Reconciliation to US GAAP, page F-64
(e)
Sale and leaseback transaction, page F-67
| 5. |
We
reference the US GAAP adjustment related to the sale and leaseback
transaction - deferred gain. Please tell us how you considered EITF
01-3
and Example 3 therein, in determining the appropriate accounting
for the
sale lease back under US GAAP. In your response, please clarify why
you
have assumed a legal obligation related to the deferred gain originally
recorded by CDS.
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-3-
RESPONSE
TO COMMENT 5
Upon
further evaluation of the sale and leaseback transaction, giving consideration
to EITF 01-3 and Example 3 therein, the Company has concluded that it did not
assume a legal obligation related to the deferred gain originally recorded
by
CDS. Further, as the terms of the lease appear to be reasonable in light of
market conditions at the date of acquisition of CDS, the operating lease
commitment was neither favorable nor unfavorable. On that basis, the Company
has
concluded that the deferred gain attributable to the sale and leaseback
transaction should not have been included in the US GAAP purchase price
allocation for the acquisition of CDS.
The
Company has performed a SAB 99 analysis and has concluded that the impact of
the
inclusion of the deferred gain on its financial statements as of and for the
year ended June 30, 2006, in the light of surrounding circumstances and
considering both quantitative and qualitative factors, is immaterial. The impact
of the misstatement to the US GAAP reconciliation as of and for the year ended
June 30, 2006 is 0.16% of US GAAP net loss and 0.06% of US GAAP shareholders’
equity. There is no impact on prior periods as the acquisition of CDS was
consummated in December 2005.
As
the
revised accounting treatment under US GAAP is consistent with that under A-IFRS,
there is no longer a GAAP difference. On that basis, the Company intends to
make
a prospective adjustment to eliminate this GAAP difference in the reconciliation
to US GAAP as of and for the year ended June 30, 2007.
The
Company hereby acknowledges that (i) it is responsible for the adequacy and
accuracy of the disclosure in the filing; (ii) staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from
taking any action with respect to the filing; and (iii) it may not assert staff
comments as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
*
* * * *
-4-
I
hope
that the foregoing has been responsive to your comments. If you have any
questions about this letter or require any further information, please call
Richard Gluckselig at 212-841-0445 or me at 617-951-7391. Thank you for your
assistance.
Respectfully
submitted,
/s/
Mary
E.
Weber
| cc: |
Mr.
Michael J. Soja
|
Chief
Financial Officer
pSivida
Limited
Ms.
Lori
Freedman, Esq.
Vice
President, Corporate Affairs & General Counsel
pSivida
Limited
Mr.
Peter
Rupp
Deloitte
Touche Tohmatsu
Mr.
Richard Gluckselig, Esq.
Ropes
& Gray LLP