pSivida's BrachySil(TM) Pancreatic Program: Regulatory Approval for European Human Trial.

BOSTON, & PERTH, Australia -- Global bio-nanotech company pSivida Limited (NASDAQ:PSDV)(ASX:PSD)(Xetra:PSI) today announced that the Regulatory Agency in the U.K. (The Medicines and Healthcare Products Regulatory Agency or MHRA) has granted approval to proceed with the first human study of BrachySil(TM) in pancreatic cancer through a phase IIa clinical trial.

Pancreatic cancer is a second clinical indication for BrachySil(TM), currently in Phase IIb clinical trials for the treatment of inoperable primary liver cancer. Pancreatic cancer has one of the lowest cancer survival rates (five-year overall survival rate of approximately 5%). There is significant clinical and market demand for effective therapies to treat this aggressive form of cancer. According to GLOBOCAN(1), there were over 230,000 new cases and nearly as many deaths from pancreatic cancer worldwide in 2002. Approximately 50% of these new cases were in North America and Europe.

The six-month clinical study, which has been approved to proceed by the MHRA, is a phase IIa trial in patients with inoperable pancreatic cancer and will be undertaken at two leading centers for cancer treatment, Guys & St Thomas' Hospital in London (UK) and Singapore General Hospital. The trial represents the "first-in-man" safety study for BrachySil(TM) in this indication and is designed to enroll a total of 15 patients. The primary objective is to determine the safety of the targeted image-guided implantation of pSivida's BrachySil(TM) product. Efficacy, as determined by CT scanning of the tumor size and overall survival, will be secondary endpoints. The findings will provide a platform for further multi-center efficacy and safety trials.

Pre-clinical evaluation of BrachySil(TM) into pancreatic cancers has provided the teams involved in the clinical trial with valuable feedback allowing optimization of BrachySil(TM) for this indication and standardization between the two study centers. The clinical program will utilize product sourced from the same GMP manufacturing process and supply chain that is currently being utilized for the liver cancer program. The manufacturing process is established and scaled up to support clinical development and early launch volumes.

A phase IIa study for advanced inoperable liver cancer completed in June 2005 on eight patients showed BrachySil(TM) to be both safe and well tolerated. All patients experienced a decrease in the size of their tumors, with some experiencing complete tumor regression.

"We have recently announced progress with the development of BrachySil(TM), our targeted oncology product, in primary liver cancer. We believe that because the BrachySil(TM) primary liver program is in Phase IIb clinical trials, it will provide valuable clinical information for the development and commercialization of BrachySil(TM) for pancreatic cancer and other indications," said pSivida CEO, Mr. Gavin Rezos. "We also believe that gaining regulatory agency approval in Europe to begin the first clinical study for the pancreatic cancer indication represents a very positive milestone toward broader value generation from BrachySil(TM)."

(1) GLOBOCAN is a worldwide database of cancer incidence and mortality rates.

NOTES TO EDITORS:

pSivida is a global bio-nanotech company committed to the biomedical sector and the development of drug delivery products. Retisert(TM) is FDA approved for the treatment of uveitis. Vitrasert(R) is FDA approved for the treatment of AIDS-related CMV Retinitis. Bausch & Lomb own the trademarks Vitrasert(R) and Retisert(TM). pSivida has licensed the technologies underlying both of these products to Bausch & Lomb. The technology underlying Medidur(TM), a treatment for diabetic macular edema, is licensed to Alimera Sciences and is in Phase III clinical trials.

pSivida owns the rights to develop and commercialize a modified form of silicon (porosified or nano-structured silicon) known as BioSilicon(TM), which has applications in drug delivery, wound healing, orthopedics, and tissue engineering. pSivida's subsidiary, AION Diagnostics Limited, is developing diagnostic products and the subsidiary pSiNutria is developing food technology products both using BioSilicon(TM).

pSivida's intellectual property portfolio consists of 70 patent families, 74 granted patents and over 290 patent applications. pSivida conducts its operations from offices and facilities near Boston in the United States, Malvern in the United Kingdom, Perth in Australia and Singapore.

pSivida is listed on NASDAQ (PSDV), the Australian Stock Exchange (PSD) and on the Frankfurt Stock Exchange on the XETRA system (German Symbol: PSI. Securities Code (WKN) 358705). pSivida is a founding member of the NASDAQ Health Care Index and the Merrill Lynch Nanotechnology Index.

The Company's largest shareholder and a strategic partner is QinetiQ, a leading international defence, security and technology company, formed in 2001 from the UK Government's Defence Evaluation & Research Agency (DERA). QinetiQ was instrumental in discovering BioSilicon(TM) and pSivida enjoys a strong relationship with, including access to its cutting edge research and development facilities.

For more information, visit www.psivida.com.

This document contains forward-looking statements that involve risks and uncertainties. The statements are indicated by the use of words such as "believes", "expects", "anticipates" and similar words and phrases. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, we can give no assurance that such expectations will prove to be correct. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements due to many important factors including: failure to complete negotiations for new centers for the BrachySil(TM) phase IIb clinical trial for inoperable primary liver cancer; the failure of our discussions with the FDA for BrachySil(TM) to continue or to lead to FDA approval; the failure of the BrachySil(TM) phase IIb clinical trial for inoperable primary liver cancer to determine the optimal dose, provide key safety data or support future pivotal efficacy trials or product registration or approval; failure to commence Phase IIa BrachySil(TM) trials for the treatment of pancreatic cancer; the failure of the results of the Retisert(TM) for DME trial to be a good indicator of the results of pSivida's ongoing Phase III Medidur(TM) for DME trial; failure of the Medidur(TM) trials in DME to show a very similar improvement in visual acuity and diabetic retinopathy severity score as Retisert(TM) for DME; inability to recruit patients for the Phase III Medidur(TM) for DME trial; our failure to develop applications for BioSilicon(TM) due to regulatory, scientific or other issues, our inability to successfully integrate pSivida Inc's operations and employees; the failure of the pSivida Inc's products to achieve expected revenues and the combined entity's inability to develop existing or proposed products; the failure of the Bausch & Lomb/Novartis co-promotion arrangement to provide faster royalty growth; failure of the slower progression or reduction of diabetic retinopathy resulting from the Retisert(TM) implant to have significant implications for Retisert(TM) and Medidur(TM); failure of our evaluation agreements to result in license agreements; failure of Medidur(TM) to release the same drug as Retisert(TM) at the same rate; failure of the Medidur(TM) trials in DME to show a very similar stabilization or improvement diabetic retinopathy as Retisert(TM) for DME; failure to achieve cost savings; failure to execute on US growth strategy; failure of the findings of the pancreatic cancer phase IIa trial to provide a platform for further multicenter efficacy and safety trials; failure of there to be optimization and standardization between the two pancreatic cancer study centers; failure of the BrachySil(TM) primary liver program that is in Phase IIb clinical trials to provide a valuable platform for the development and commercialization of BrachySil(TM) for pancreatic cancer and other indications. Other reasons are contained in cautionary statements in the Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission, including, without limitation, under Item 3.D, "Risk Factors" therein. We do not undertake to update any oral or written forward-looking statements that may be made by or on behalf of pSivida.