pSivida Release: Positive European trial results for Retisert(TM)

Global bio-nanotech company pSivida Limited(Nasdaq:PSDV)(ASX:PSD)(GER:PSI) today announced that global eye healthcompany Bausch & Lomb (NYSE:BOL) recently released two year resultsfrom their European clinical trial of Retisert(TM) for the treatmentof chronic non-infectious posterior segment uveitis. Bausch & Lomb,exclusive licensee of Retisert(TM), conducted the randomized studythat showed the recurrence rate for uveitis was significantly lower ineyes receiving Retisert(TM) than in eyes receiving standard of care(systemic corticosteroid or other immunosuppressive agents). The studyinvolved 146 patients across ten countries in Europe and the MiddleEast.

The abstract (#1220) detailing this data is available on thewebsite of the prestigious 6th International Symposium on OcularPharmacology and Therapeutics in Berlin, that commenced on 30 March2006. http://www.kenes.com/isopt/index.asp

Uveitis is a leading cause of blindness affecting an estimated200,000(a) persons in the EU. It is also estimated to affect175,000(b) people in the US and approximately 800,000(b) peopleworldwide. Uveitis is a chronic auto-immune disease in which thebody's own defenses attack the inner lining of the eye (the uvea).Retisert(TM), approved by the FDA in April 2005, is the only FDAapproved drug for this disease. Retisert(TM) is surgically implantedinto the eye and is approved to release a constant amount of the drug,fluocinolone acetonide, over a treatment period of 30 months.

pSivida receives royalties from sales of Retisert(TM) which ispresently priced at US$18,250. Covered in the United States byMedicare and Medicaid, Retisert(TM) is co-marketed in the UnitedStates by Bausch & Lomb and Novartis.

"We believe a positive result such as this in a European study isan important step towards registration in Europe, enablingRetisert(TM) to be made available to a much wider market," said MrGavin Rezos, CEO of pSivida Limited.

(a) Source: European Medicines Agency

(b) Source: Bausch & Lomb

NOTES TO EDITORS:

What is Uveitis? An autoimmune condition, Uveitis manifests itselfas an inflammation inside the eye, that can lead to sudden or gradualvision loss.

pSivida is a global bio-nanotech company committed to thebiomedical 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 CMVRetinitis. Bausch & Lomb own the trademarks; Vitrasert(R) andRetisert(TM). pSivida has licensed the technologies underlying both ofthese products to Bausch & Lomb. The technology underlyingMedidur(TM), a treatment for diabetic macular edema, is licensed toAlimera Sciences and is in Phase III clinical trials.

pSivida owns the rights to develop and commercialize a modifiedform of silicon (porosified or nano-structured silicon) known asBioSilicon(TM), which has applications in drug delivery, woundhealing, orthopaedics, and tissue engineering. pSivida's subsidiary,AION Diagnostics Limited is developing diagnostic products and thesubsidiary pSiNutria is developing food technology products both usingBioSilicon(TM).

pSivida's intellectual property portfolio consists of 70 patentfamilies, 74 granted patents and over 290 patent applications.

pSivida conducts its operations from offices and facilities nearBoston in Massachusetts, Malvern in the United Kingdom, Perth inWestern Australia and Singapore.

pSivida is listed on Nasdaq (PSDV), the Australian Stock Exchange(PSD) and in Germany on the Frankfurt Stock Exchange on the XETRAsystem (German Symbol: PSI. Securities Code (WKN) 358705). pSivida isa founding member of the NASDAQ Health Care Index and the MerrillLynch Nanotechnology Index.

The Company's largest shareholder and a strategic partner isQinetiQ, a leading international defense, security and technologycompany, formed from the UK Government's Defence Evaluation & ResearchAgency (DERA). QinetiQ was instrumental in discovering BioSilicon(TM)and pSivida enjoys a strong relationship with them. For moreinformation visit www.QinetiQ.com.

For more information, visit www.psivida.com.

This document contains forward-looking statements that involverisks and uncertainties. The statements are indicated by the use ofwords such as "believes", "expects", "anticipates" and similar wordsand phrases. Although we believe that the expectations reflected insuch forward-looking statements are reasonable at this time, we cangive no assurance that such expectations will prove to be correct.Given these uncertainties, readers are cautioned not to place unduereliance on such forward-looking statements. Actual results coulddiffer materially from those anticipated in these forward-lookingstatements due to many important factors including: the failure ofRetisert to be registered in Europe; failure of the results of theRetisert for DME trial to be a good indicator of the results ofpSivida's ongoing Phase III Medidur(TM) for DME trial; failure of theMedidur(TM) trials in DME to show a very similar improvement in visualacuity and diabetic retinopathy severity score as Retisert(TM) forDME; inability to recruit patients for the Phase III Medidur(TM) forDME trial; our failure to develop applications for BioSilicon(TM) dueto regulatory, scientific or other issues, our inability tosuccessfully integrate CDS' operations and employees; the failure ofthe CDS' products to achieve expected revenues and the combinedentity's inability to develop existing or proposed products; thefailure of the Bausch & Lomb/Novartis co-promotion arrangement toprovide faster royalty growth; failure of the slower progression orreduction of diabetic retinopathy resulting from the Retisert(TM)implant to have significant implications for Retisert(TM) and Medidur;failure of our evaluation agreements to result in license agreements;failure of Medidur(TM) to release the same drug as Retisert(TM) at thesame rate; failure of the Medidur(TM) trials in DME to show a verysimilar stabilization or improvement diabetic retinopathy asRetisert(TM) for DME. Other reasons are contained in cautionarystatements in the Registration Statement on Form 20-F filed with theU.S. Securities and Exchange Commission, including, withoutlimitation, under Item 3.D, "Risk Factors" therein. We do notundertake to update any oral or written forward-looking statementsthat may be made by or on behalf of pSivida.