UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

For the fiscal year ended June 30, 20132015

or

For the transition period from                     to                    

Commission File Number 000-51122

PSIVIDA CORP.

(Exact name of registrant as specified in Itsits charter)

Registrant’s telephone number, including area code: (617) 926-5000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the common stock held by non-affiliates of the registrant, computed by reference to the closing price of the common stock on the NASDAQ Global Market on December 31, 2012,2014, the last trading day of the registrant’s most recently completed second fiscal quarter, was approximately $27,506,000.$118,606,000.

There were 26,791,56129,417,365 shares of the registrant’s common stock, $0.001 par value, outstanding as of September 23, 2013.4, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

Specified portions of the registrant’s definitive proxy statement, to be filed in connection with the Annual Meeting of Stockholders to be held on December 18, 2013,3, 2015, are incorporated by reference into Part III of this Annual Report onForm 10-K.

PSIVIDA CORP.

Form 10-K

For the Fiscal Year Ended June 30, 20132015

Table of Contents

PART I

Preliminary Note Regarding Forward-Looking Statements

This Form 10-K and our 20132015 Annual Report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). Forward-looking statements are inherently subject to risks, uncertainties and potentially inaccurate assumptions. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. All statements other than statements of historical fact could be deemed forward-looking statements, including, without limitation, any expectations of revenue, expenses, cash flows, earnings or losses from operations, capital, liquidity or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning product and technology research, development, trials, trial results, regulatory requirements and commercialization timelines;approvals, reimbursement and commercialization; any other statements of expectations, estimations or belief;beliefs; and any statements of assumptions underlying any of the foregoing. We often, although not always, identify forward-looking statements by using words or phrases such as the following: “likely”, “expect”, “intend”, “anticipate”, “believe”, “estimate”, “plan”, “project”, “forecast” and “outlook”.

We cannot guarantee that the results and other expectations expressed, anticipated or implied in any forward-looking statement will be realized. The risks set forth under Item 1A of this Form 10-K describe major risks to our business, and you should read and interpret any forward-looking statements together with these risks. A variety of factors, including these risks, could cause our actual results and other expectations to differ materially from the anticipated results or other expectations expressed, anticipated or implied in our forward-looking statements. Should known or unknown risks materialize, or should our underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected in the forward-looking statements. You should bear this in mind as you consider any forward-looking statements.

Our forward-looking statements speak only as of the dates on which they are made. We do not undertake any obligation to update any forward-looking statement, whether to reflect new information, future events or otherwise. You are advised, however, to consult any further disclosures we may make in our future reports to the SEC, on our website, www.psivida.com, or otherwise.

Introduction

We develop tiny,are a leader in the development of sustained-release drug-delivery products designed tofor treating eye diseases. Our products deliver drugs and biologics at a controlled and steady rate for weeks, months or years. Utilizing our core technology platforms, Durasert™ and BioSilicon™, we are focused on treatment of chronic diseases of the back of the eye and are also exploring applications outside ophthalmology. We have developed three of theonly four sustained-release products approved by the U.S. Food and Drug Administration (FDA) for treatment of retinal diseases currently approvedback-of-the-eye diseases. The most recent is ILUVIEN^® for diabetic macular edema (DME), sold by our licensee in the U.S. orand three European Union (EU), and our countries. Our lead development product, candidate began a PhaseMedidur™ for posterior uveitis, is in pivotal phase III clinical trial in June 2013.trials. Our strategy includespre-clinical development program is focused primarily on developing products independently while continuing to leveragefor chronic ophthalmic diseases utilizing our core technology platforms through collaboration and license agreements.platforms.

ILUVIEN^®, our most recently approved product, is an injectable, sustained-release micro-insert that provides treatment of vision impairment associated with chronic diabetic macular edema (DME) considered insufficiently responsive to available therapies overDME for three years from a period of up to three years.single administration. ILUVIEN is licensed to and sold by Alimera Sciences, Inc. (Alimera), and we are entitled to a share of the net profits as(as defined in our agreement with Alimera) from Alimera’s sales of ILUVIEN. ILUVIEN was launched in late February 2015 in the U.S., where it is indicated for DME. Alimera commenced the commercial launchtreatment of ILUVIEN for DME in patients previously treated with a course of corticosteroids without a clinically significant rise in intraocular pressure. ILUVIEN has been commercially available in the U.K.United Kingdom (U.K.) and Germany in the second quarter ofsince June 2013 and expects to launch in FrancePortugal since January 2015. ILUVIEN has marketing approvals in the first quarter of 2014. The International Diabetes Federation has estimated that approximately 19.0 million people have diabetes in the seventhese and 14 other EU countries where ILUVIEN has received or been recommended for marketing authorization,the treatment of whichchronic DME considered insufficiently responsive to available therapies. Alimera has estimated that approximately 1.1 million people suffer from vision loss associated with DME. Alimera is also seeking marketing approvalsublicensed distribution, regulatory and reimbursement matters for ILUVIEN for DME in the U.S. In the second quarter of 2013, Alimera received a new Prescription Drug User Fee Act (PDUFA) goal date of October 17, 2013 afterAustralia and New Zealand in April 2014, in Canada in July 2015 and in Italy in August 2015.

resubmitting its New Drug Application (NDA) for ILUVIEN for DME. The resubmission responded to a second Complete Response Letter (CRL) received from the U.S. Food and Drug Administration (FDA) in November 2011.

Medidur™,Medidur, our lead development product, commenced the first of our two planned Phase III clinical trials for the treatment ofis an injectable, micro-insert designed to treat chronic non-infectious uveitis affecting the posterior segment of the eye (posterior uveitis) in June 2013.for three years from a single administration. Medidur, useswhich is the same Durasert micro-insert usedas ILUVIEN, is in ILUVIEN and deliversPhase III clinical trials, with the filing of a lower dosenew drug application (NDA) anticipated in the first half of the same drug as our2017. We are developing Medidur independently.

Our FDA-approved Retisert^® for posterior uveitis, which is licensed to Bausch & Lomb. We are developing Medidur independently.

We are also developing a bioerodible, injectable micro-insert delivering latanoprost (the Latanoprost Product) to treat glaucoma and ocular hypertension. Under an amended collaboration agreement, Pfizer Inc. has an option, under certain circumstances, to license the development and commercialization of the Latanoprost Product worldwide.

We are engaged in pre-clinical research with respect to both our BioSilicon and Durasert technology platforms. The primary focus of our BioSilicon technology research is the sustained delivery of peptides, proteins, antibodies and other large biologic molecules using our Tethadur™ technology in both ophthalmic and non-ophthalmic applications. Our research program also includes the use of Durasert technology in orthopedic applications and for systemic delivery of therapeutic agents.

Our FDA-approvedRetisert provides sustained release treatment of posterior uveitis for approximately two and a half years andyears. It is licensed to and sold by Bausch & Lomb.Lomb, and we receive royalties from its sales.

Our pre-clinical development program is focused on developing products using our core platform technologies, Durasert™ and Tethadur™, to deliver drugs or biologics to treat wet and dry age-related macular degeneration (AMD), glaucoma, osteoarthritis and other diseases.

Durasert™, Medidur™, Tethadur™ and BioSilicon™ are our trademarks. Retisert^® and Vitrasert^® are Bausch & Lomb’s trademarks. ILUVIEN^® and FAME^® areis Alimera’s trademarks.trademark. This Annual Report also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners.

Information with respect to ILUVIEN, and itsincluding regulatory and marketing statusinformation, and Alimera’s plans and intentions, reflects information reportedpublicly disclosed by Alimera.

Fiscal 2013,2015, fiscal 20122014 and fiscal 20112013 mean the yearstwelve months ended June 30, 2013, 20122015, 2014 and 2011,2013, respectively.

Strategy

Our strategy is to use our proprietary Durasert and BioSiliconTethadur drug delivery technology platforms to independently develop new drug delivery products for already-approved drugs and biologics tothat will provide better treattreatment of ophthalmic and other diseases, in the ophthalmic area and beyond, while continuing to leverage our technology platforms through collaborations and licenses with leading pharmaceutical and biopharmaceutical companies, institutions and others. We believe our technologies can provide sustained, targeted delivery of severalmany already-approved drugs and biologics,therapeutic agents, resulting in improved therapeutic effectiveness and better patient compliance and convenience, with reduced product development risk and cost of product development for us. We believe our proven track record of three approved products, all providing sustained release of previously approved drugs, demonstrates the effectivenesspotential of this strategy.

sustained delivery technologies. By focusing on delivery of already-approved drugs and biologics, particularly those requiring shorter clinical trials, we believe we can minimize the risks and financial investments required for product approval.

Market Overview

Opportunity for Delivery of Drugs and Biologics Generally

We develop products to address issues inherent in the delivery of drugs and biologics. The therapeutic valueefficacy of a therapeutic agent (small drug molecule or biologic) depends on its distribution to, and reaction with, the targeted tissue and other tissues in the body, duration of treatment and clearance from the body. In an ideal treatment, the appropriate amount of drug or biologic is delivered to the intended tissue at an adequate concentration and is maintained in the location with an appropriate concentration for a sufficient period of time to provide effective treatment without causing adverse effects to other tissues. Accordingly, the manner in whichdelivery of a drug or biologic is delivered can be an important element of theits ultimate therapeutic value of the treatment.value.

Drugs are frequently administered systemically by oral dosing, infusion or by injection and subsequently dispersed throughout the body via the circulatory system. In the case of many drugs, systemic administration does not deliver them to the intended site atwith an adequateappropriate concentration for a sufficient period of timeduration or delivers them in athe appropriate concentration that disperses too quickly or unevenly, thereby not achievingfailing to achieve the maximum potential therapeutic benefit. Because systemically delivered drugs disperse throughout the body, they often are administered at higher dosage levels to achieve sufficient concentrations at the intended sites. Some areas of the body, such asThis is particularly true for the eyes, joints, brain and nervous system, which have natural barriers that impede the movement of drugs to those areas, requiring the administration ofareas. These higher doses of systemically delivered drugs. These dosage levels can cause harmful side effects whento the drugs interact with other tissues. In some cases,tissues beyond the intended site. To avoid these issues, drugs may be administered locally to the targeted site, typically by injection. While this may avoid the issues of systemic delivery, problems ofHowever, maintaining a sufficient concentrations over timeconcentration at the targeted site remain. Timelyover time typically requires timely and repeated administration of systemically and locally delivered drugs is often necessary to maintain therapeutic drug levels over an extended period of time.drugs. The delivery methods themselves can have risks. Repeated administration by injection or infusion can result in serious infections and other complications.

The administration of biologics is typically more difficult than small drug molecules. Biologics generally cannot be administered orally, but instead are administered by injection or infusion. Due to the sizeinfusion and complexity of biologics, sustained release formulations are difficult to prepare and many biologics require repeated injections or infusions to maintain appropriate levels over the course of treatment. Due to their molecular size and complexity, it has been difficult to develop sustained-release formulations for biologics.

Patients often do not get drugsDrugs or biologics are often not administered on the optimal schedule prescribed, or at all, because theypatients do not self-administer the products correctlythem as prescribed or do not go toget medical professionalsprofessional administration as required for administration.required. The risk of patient noncompliance increases due to various factors, such as requirements to receivewhen treatment involves multiple products or complex or painful dosing regimens, patientas patients age or if they suffer cognitive impairment or serious illness, or lengthwhen the treatment is lengthy or expensive.

Treating retinal diseases is a significant challenge for drug delivery. Due to the effectiveness of treatment.

Repeated administration bythe blood-eye barrier, it is difficult for systemically administered drugs to reach the retina in sufficient quantities to have a beneficial effect without causing adverse side effects to other parts of the body. Injecting drugs or biologics in solution directly into the back of the eye can achieve effective, but often transient, dosage levels in the eye, requiring repeated injections. Ophthalmic biologics, such as Macugen^® (pegaptanib sodium), Lucentis^® (ranibizumab) and EYLEA^® (afilbercept), require injection or infusion can result in serious infectionsinto the eye as frequently as every four weeks. In addition to the issues of inconvenience, cost and other complications. Further,noncompliance, repeated administration byintravitreal injections have medical professionals is often expensive.risks, including intraocular infection, perforated sclera and vitreous hemorrhage.

Due to the drawbacks of traditional drug and biologic delivery, the development of methods to deliver themdrugs and biologics to patients in a more precise, controlled fashion over sustained periods of time ishas been a medical goal. Methods for sustained drug delivery include oral and injectable controlled-release products and skin patches that seek to improve the consistency of the dosage over time and extend the duration of delivery. However, most of these methods cannot provide constant, controlled dosage or deliver drugs for a sufficiently longsufficient duration for many indications,of delivery, particularly in diseases that

are chronic or require precise dosing. Moreover, skin patches and oral products still have issues of systemic delivery. There are currently very few approved sustained deliverysustained-delivery products for biologics.

Ophthalmic Drug Delivery

Treating retinal diseases is a significant challenge. Due to the effectiveness of the blood/eye barrier, it is difficult for systemically administered drugs to reach the retina in sufficient quantities to have a beneficial effect without adverse side effects to other parts of the body. Injecting drugs or biologics in solution directly into the back of the eye can achieve effective, but often transient, dosage levels in the eye, requiring repeated injections. Examples include Macugen^® (pegaptanib sodium), Lucentis^® (ranibizumab) and EYLEA^® (afilbercept), which are injected into the eye as frequently as approximately every four to eight weeks. Apart from inconvenience and cost, repeated intravitreal injections carry risks, including intraocular infection, perforated sclera, vitreous hemorrhage and cataract formation.

Our Technology Systems and Products

Our two core technology platforms, Durasert and BioSilicon,Tethadur, have attributes designed to address the following attributes:issues of sustained delivery for ophthalmic and other product candidates:

Durasert Technology System

TheOur three approved products, as well as our lead development product Medidur, use different generations of our Durasert technology platform usesto provide sustained, localized delivery of drugs to the back of the eye. In our Durasert products, a drug core is surrounded with one or more surrounding polymer layers, to provide sustained delivery of drugs. Drug release is controlled byand the permeability of those layers and other aspects of the polymer layers.design of the product control the rate and duration of the drug release. By changing elements of the design, we can alter both the rate and duration of release to meet different therapeutic needs. Our three approvedlater generation ILUVIEN and Medidur products as well as our two current product candidatesare injected at the target site in clinical trials, use different generations of this technology system.an office visit, while early generation Retisert and Vitrasert are surgically implanted.

The portfolio of our Durasert approved products and late-stage product candidates being developed by us alone or in partnership with otherscandidate includes:

Approved Product:ILUVIEN for Chronic DME

ILUVIEN is an injectable, sustained-release micro-insert delivering the off-patent corticosteroid fluocinolone acetonide (FAc) overfor treatment of DME. Injected in an office visit, ILUVIEN delivers 36 months of continuous, low-dose corticosteroid therapy with a periodsingle injection. ILUVIEN is approved in the U.S. for the treatment of up to 3 yearsDME in patients who have been previously treated with a course of corticosteroids and did not have a clinically significant rise in intraocular pressure (IOP). In the 17 EU countries where ILUVIEN has been approved, it is indicated for the treatment of vision impairment associated with chronic DME considered insufficiently responsive to available therapies.

DME causesis a disease suffered by diabetics where leaking capillaries cause swelling in the macula, the most sensitive part of the retina, andretina. DME is a leading cause of blindness in most developed countries in the working-age population. The International Diabetes Federation has estimated that approximately 19.0 million people have diabetes in the six EU countries where ILUVIEN has been approved, and Alimera estimates that approximately 1.1 million of those people suffer from vision loss associated with DME. There is currently no approved sustained release drug treatment for DME in the U.S. or (other than ILUVIEN) in the EU.

ILUVIEN is licensed to Alimera, which commenced the commercial launch oflaunched ILUVIEN for DME in the United KingdomU.K. and Germany in the second quarter of 2013 and expects to launch in FrancePortugal and the U.S. in the first quarter of 2014. Alimera is also seeking2015. ILUVIEN has marketing approvalauthorizations in the U.S.14 additional EU countries. We are entitled to a 20% share in net profits as defined, on sales of ILUVIEN for DME by Alimera on a quarter-by-quarter, country-by-country basis. See “Strategic Collaborations—Alimera” below.

Alimera has completed two 36-month Phase III clinical trials (the FAME^® Study), which involved 956 patientsengaged in sites inregulatory proceedings and negotiations with respect to the U.S., Canada, Europe and India, to assess the efficacy and safetyamount and/or process for reimbursement of ILUVIEN in the treatment of DME. Combined enrollment of the FAME Study was completed invarious EU countries. In October 2007, the 24-month clinical readout was received in December 2009, and 36-month follow-up was completed in October 2010. The status of marketing approvals in the EU and the U.S. for ILUVIEN for DME and its commercial launch are as follows:

European Union.Alimera has received marketing authorization for ILUVIEN for DME in the U.K., Germany, France, Austria, Portugal and Spain. These approvals followed a favorable determination of approvability under the EU’s Decentralized Procedure (DCP). Marketing authorization is pending in Italy, which participated in the DCP. As part of this approval process, Alimera has committed to conduct a five-year, post-authorization, open label registry study of ILUVIEN in patients with chronic DME.

In the second quarter of 2013, Alimera commercially launched ILUVIEN in Germany and the U.K. and expects to launch in France in the first quarter of 2014. Alimera does not currently plan to expand the commercialization of ILUVIEN for DME in the EU beyond those three countries until it achieves positive cash flows and sustainability in those countries. Alimera continues to pursue pricing and reimbursement in the EU countries and marketing authorization in Italy.

In Germany, the Federal Joint Committee indicated that the obligation to submit a dossier on ILUVIEN for DME, per the Arzneimittelmarkt-Neuordnungsgesetz law, would not be necessary, and that a benefit assessment would not be required, which allowed Alimera to launch ILUVIEN for DME in Germany without price restriction. Alimera is in the process of securing agreements for reimbursement with German statutory insurance funds so that German patients will not be required to submit individual funding requests for reimbursement.

In the U.K., ILUVIEN for DME is currently only available for private pay and privately insured patients as a result of final guidance from the U.K.’s National Institute for Health and Care Excellence (NICE). In April 2013, Alimera submitted issued a Patient Access Scheme (PAS) to NICE to assess the likely impact of the PAS and to determine whether an update to NICE’s previously issued final guidance was warranted. In June 2013, the NICEpositive Final Appraisal Committee published draft guidanceDetermination recommending ILUVIEN funding, utilizing a simple patient access scheme (PAS), for the treatment of pseudophakic patients (those who have undergone prior cataract surgery)eyes (eyes with an artificial lens) in chronic DME patients considered insufficiently responsive to available therapies. If NICE amendsIn February 2014, the Scottish Medicines Consortium, after completing its guidance to adopt this recommendation,assessment and review of a similar simple PAS, announced its acceptance of ILUVIEN will also become available to pseudophakic patients in the U.K, which typically constitute a large subgroup of chronic DME patients, with the anticipation that it would be funded in England and Wales throughfor restricted use within the National Health Service.

Service (NHS) Scotland. In France,July 2014, Alimera reached agreement with INFARMED, the Transparency Commission (Commission de la Transparence or CT)marketing authorization body of the French NationalPortuguese Ministry of Health, Authority (Haute Autorite de Sante) has issued a favorable opinion for the reimbursementpricing and hospital listing by the French National Health Insurancereimbursement of ILUVIEN for chronic DME considered insufficiently responsive to available therapies and despite optimized management of diabetes. In France, patients will be reimbursed for 100% of the cost of ILUVIEN under Affection de Longue Duree, a program for severe chronic disease, such as diabetes. Alimera has reported that it will move forward with the next steppublic sector in the process, which is to determine the price and any reimbursement conditions for ILUVIEN in France.Portugal.

United States.Alimera received a new PDUFA goal date of October 17, 2013 following its second resubmission of the NDA for ILUVIEN for DME in March 2013. Using clinical data available from the previously completed FAME Study, this resubmission focused on the safety aspects of ILUVIEN and provided additional analyses as well as information to support that ILUVIEN is safe and effective in the treatment of the subgroup population of patients with chronic DME considered insufficiently responsive to available therapies, the same subgroup for which marketing authorization for ILUVIEN has been granted in six countries in the EU. Additionally, data was submitted from a completed physician utilization study for the ILUVIEN applicator and from a special reading center assessment of photographs of the fundus, or the interior surface of the eye, that were collected during the FAME study. If approved, Alimera intends to commercialize ILUVIEN directly to retina centers across the US.

Alimera has previously received two CRLs concluding that the NDA could not be approved in its then current form. Alimera originally submitted the NDA for ILUVIEN in June 2010, largely based on analyses of clinical data through month 24 of the Phase III trials. In December 2010, Alimera received its first CRL, in which the FDA asked for analyses of safety and efficacy data through month 36 of the Phase III trials. In May 2011, Alimera resubmitted the NDA in response to the 2010 CRL, including additional safety and efficacy data through month 36 and analyses of data for the subgroup of chronic DME patients.

In a second CRL received in November 2011, the FDA concluded that the resubmitted NDA did not provide sufficient data to support that ILUVIEN is safe and effective in the treatment of patients with DME. The FDA stated that the risks of adverse reactions shown for ILUVIEN in the Phase III trials were significant and were not offset by the benefits demonstrated by ILUVIEN in those trials. The FDA further indicated that Alimera would need to conduct two additional clinical trials to demonstrate that the product is safe and effective for the proposed indication. In June 2012, Alimera met with the FDA to gain a better understanding of the regulatory path for ILUVIEN in the U.S. Alimera’s March 2013 resubmission responded to this CRL using data from the FAME Study.

Other Diseases.Under our agreement with Alimera, ILUVIEN is also being studied in two Phase II clinical trials for the treatment of the dry form of age-related macular degeneration (AMD) and retinal vein occlusion (RVO). A Phase II trial studying ILUVIEN in the treatment of the wet form of AMD has been terminated based on an interim analysis, due to the determination that the endpoint of reducing the number of anti-VEGF injections may not be appropriate to assess the benefit of ILUVIEN in that disease.

Medidur for Posterior Uveitis

Medidur is our lead development product for the treatment of posterior uveitis, an autoimmune condition characterized by inflammation of the posterior of the eye that can cause sudden or gradual vision loss. This product uses the same micro-insert used in ILUVIEN for DME, but is administered with a different inserter than the commercial inserter for ILUVIEN for DME. Medidur delivers FAc, the same drug as our FDA-approved Retisert for posterior uveitis, but at a lower dose, and is expected to treat posterior uveitis on a sustained basis over a period of up to 3 years.

In June 2013, we initiated the first of two planned Phase III clinical trials of Medidur for the treatment of posterior uveitis. These trials are expected to include clinical sites in the U.S., Europe and Asia. The trials will have a primary end-point of recurrence of posterior uveitis at 12 months and are expected to enroll approximately 300 patients in total. If the results of the trials are positive, we plan to use the data to submit an NDA to the FDA. The FDA has permitted us to move directly to Phase III clinical trials and confirmed that we will be able to reference much of the data, including the clinical safety data, from Alimera’s FAME Study of ILUVIEN for DME. We are developing Medidur independently and have not licensed the rights to Medidur for posterior uveitis to Alimera or any other third party.

Because Medidur delivers FAc, the same drug as our FDA-approved Retisert product for posterior uveitis, although at a slower rate, we are optimistic that Medidur will show efficacy comparable to Retisert. Further, as Medidur uses the same micro-insert as ILUVIEN, we expect to observe a side-effect profile in posterior uveitis patients that is superior to that observed for Retisert for posterior uveitis and comparable to ILUVIEN for DME. As a result, we are optimistic that Medidur will be efficacious for posterior uveitis with a more favorable risk/benefit profile and fewer side effects than Retisert. Early interim data from an investigator-sponsored study is consistent with this hypothesis. Medidur is also easier to administer than Retisert because it is injected in an office visit, whereas Retisert is implanted in a surgical procedure.

In the U.S., posterior uveitis affects approximately 175,000 people and is responsible for approximately 30,000 cases of blindness, making it the third largest cause of blindness in the U.S.

Approved Product: Retisert for Posterior Uveitis

Retisert is approved in the U.S. for the treatment of posterior uveitis. Retisert is surgically implanted through a 3-4 mm incisionin the eye and delivers sustained levels of FAc for approximately 30 months. Retisert was approved as an orphan drug in 2005, which provided for seven-year exclusive marketing rights. Retisert is licensed to Bausch & Lomb, which sells the product in the U.S. and pays sales-based royalties to us. Retisert is eligible for Medicare reimbursement.

Approved Product: Vitrasert for CMV Retinitis

Vitrasert, was our first product, was approved in the U.S. and the EU for the treatment of CMV retinitis, a blinding eye disease that occurs in individuals with advanced AIDS. Vitrasert, which is surgically implanted, through a 5-6 mm incision, provides sustained delivery of the anti-viral drug ganciclovir for six to eight months. Vitrasert was originally licensed to and sold by Chiron Corporation and subsequently by Bausch & Lomb. During fiscal 2013, Bausch & Lomb, which discontinued sales of Vitrasertin fiscal 2013 following patent expiration.

Glaucoma LatanoprostDevelopment Product Candidate: Medidur for Posterior Uveitis

In connection withMedidur, our amended Pfizer collaboration,lead development product, is an injectable, sustained-release micro-insert designed to treat posterior uveitis for three years. Medidur uses the same micro-insert as ILUVIEN for DME (same drug, same release rate, same polymer, same design), but we have redesigned the inserter to utilize a smaller gauge needle typically used for intra-ocular injections. Like ILUVIEN, Medidur also delivers a lower dose of FA, the same drug delivered by Retisert for posterior uveitis. However, Medidur is easier to administer than Retisert because it is injected in an office visit, while Retisert is implanted in a surgical procedure. We are developing Medidur independently and have not licensed the rights to Medidur for posterior uveitis to Alimera or any other third party.

Posterior uveitis is a chronic, non-infectious inflammatory disease affecting the posterior segment of the eye, often involving the retina, which is a leading cause of blindness in the developed countries. It afflicts people of all ages, producing swelling and destroying eye tissues, which can lead to severe vision loss and blindness. In the U.S., posterior uveitis is estimated to affect approximately 175,000 people, resulting in approximately 30,000 cases of blindness and making it the third leading cause of blindness in the U.S. Patients with posterior uveitis are typically treated with systemic steroids, but frequently develop serious side effects over time that can limit effective dosing. Patients then often progress to steroid-sparing therapy with systemic immune suppressants or biologics, which themselves can have severe side effects including an injectable, bioerodible drug delivery micro-insertincreased risk of cancer.

Medidur Phase III Trials. We are currently conducting two Phase III trials to assess the safety and efficacy of Medidur for the treatment of glaucomaposterior uveitis. These are randomized, sham-controlled, double-masked trials.

The primary endpoint of both trials is recurrence of posterior uveitis, with patients in both trials followed for three years. The first Phase III Medidur trial is fully enrolled with 129 patients in 16 centers in the U.S. and ocular hypertension.17 centers outside the U.S. The Latanoprost Productprimary endpoint of this trial is designedrecurrence of uveitis at 12 months and the last patient is scheduled to provide long-term, sustained deliveryhave their 12-month follow-up visit in March 2016, with top-line data expected in the second quarter of latanoprost, currently the most commonly prescribed agent2016. The second trial will enroll up to 150 patients in approximately 15 centers in India with a primary endpoint for the NDA filing of recurrence of disease at 6 months. We plan to seek FDA approval of Medidur based on 12-month data from the first Phase III trial, six-month data from the second Phase III trial and data from a short-duration utilization study of our redesigned proprietary inserter, together with data referenced from the Phase III trials of ILUVIEN for DME. Pending favorable results in our ongoing clinical trials and concurrence from the FDA regarding filing with the data package described, we expect to file an NDA in the first half of 2017.

In our ongoing assessment of masked safety data from our first Phase III trial, we compared elevated IOP (over 21 mm Hg) at three months of follow-up in study eyes (2/3’s of which received Medidur) to fellow non-study eyes (none of which received Medidur). At that time, for all 129 enrolled patients, only 5% more study eyes experienced elevated IOP than the fellow non-study eyes. Initial IOP elevation is an indication of the likelihood of subsequent clinically significant IOP increases. We believe that the minimal difference observed in elevated IOP in our assessment suggests favorable results for a key safety measure of the trials, the number of eyes that develop clinically significant increases in IOP after receiving Medidur relative to control eyes.

Investigator-Sponsored Study of Medidur. In July 2015, Dr. Glenn J. Jaffe, Robert Machemer Professor of Ophthalmology at Duke University School of Medicine in Durham, NC (who is also a principal investigator in our first Phase III trial), reported positive top-line results from his investigator-sponsored study of Medidur, reporting a statistically significant reduction in recurrence of intraocular pressure (IOP)uveitis and a statistically significant improvement in visual acuity in eyes treated with Medidur. In the three-year, ongoing study, patients with recurrent non-infectious intermediate, posterior or pan uveitis were randomized to receive either a low dose or a high-dose of Medidur (our Phase III trials are studying only the low dose and only in patients with ocular hypertensionposterior uveitis). One eye received Medidur (which for subjects with disease in both eyes, was the eye with the worse disease) and glaucoma worldwide. This product candidate is basedfellow diseased eyes were treated with standard of care, which included steroid eye drops. At the most recent follow-up visit reported, 11 of the 13 participants had been followed for between 12 and 24 months. Dr. Jaffe reported that through the last follow-up visit reported, none of the eyes treated with Medidur had any recurrence of uveitis, while fellow eyes treated with standard of care averaged 2.33 recurrences. The difference between treatment with Medidur and standard of care was statistically significant (p=0.014). Eyes treated with Medidur experienced a significant improvement in visual acuity, gaining an average of 17 letters from baseline at 12 months on a fourth generationthe Snellen eye chart (p=0.014 at 12 months). At the last follow-up visit reported, the average gain from baseline in Medidur-treated eyes was over 20 letters, while eyes treated with standard of care declined an average of 10 letters. The most common adverse event in study eyes was elevated IOP. Through the last follow-up visit reported, three study eyes developed elevated IOP and were treated with eye drops, with filtering procedures subsequently performed in two of these eyes. However, those two eyes still gained an average of over 25 letters from baseline at the last observation. Because the study remains masked as to the dosage, results cannot yet be separated for the low and high doses of Medidur.

Based on the ongoing IOP assessment from our Durasert technology system,first Phase III trial and is also anticipated to utilize our BioSilicon technology. The micro-insert is designedthe top-line results from the investigator-sponsored study, we are optimistic that the Phase III trials for Medidur will show it to be injected underas efficacious as Retisert was shown to be in treating posterior uveitis, but with IOP safety results that could be even better than those shown in the conjunctiva into the sclera by an eye care professional in a minimally invasive, outpatient procedure. This product is subject to an option by Pfizer described below under “Strategic Collaborations—Pfizer”.ILUVIEN and Retisert Phase III trials.

BioSiliconTethadur Technology System

Our BioSiliconTethadur technology system utilizes BioSilicon, a fully-erodible, “honeycomb” structure of nano-porous,nanostructured elemental silicon, to provide sustained delivery of therapeutics. BioSilicon is biocompatible and biodegradable. Our primary focus is on Tethadur™, an application of our BioSilicon technology designed to provide sustained delivery of large biologic molecules, including peptides, proteins and antibodies. In this application, the sizesThe size of the pores inand surface area of the BioSilicon material areis manufactured using nanotechnology to accommodate a

specific protein, peptide or antibody molecule. A suspension of the specific biologic loaded into BioSilicon in solution is injected into the subject. The BioSilicon erodes over a predetermined duration, and the biologic molecules which are then released from the pores on a sustained basis over time. Ourbasis. We believe that by varying the pore size and surface area of Tethadur, the release rate of antibodies and other therapeutics loaded into Tethadur can be controlled, which could permit sustained delivery of antibodies and other therapeutics that currently must be delivered by frequent injections. The system is biocompatible and biodegradable. BioSilicon technology can also be designed to deliver smaller molecules.

EvaluationDevelopment Pipeline

Our pre-clinical research is focused on using our Tethadur and Durasert technology platforms to deliver therapeutic agents to treat wet and dry AMD, glaucoma and osteoarthritis, as well as to provide systemic delivery of biologics.

We expect that an IND will shortly be filed in the U.S. to commence an investigator-sponsored study of an implant utilizing our Durasert technology to treat pain associated with severe osteoarthritis of the knee. We have been collaborating with Hospital for Special Surgery, a leading specialty hospital for orthopedics and rheumatology, on the development of this product. It will be surgically implanted in the knee to provide approximately six months of sustained delivery of a corticosteroid directly to the joint. The product is designed to offer long-term pain relief and to delay or eliminate the need for knee replacement surgery.

Feasibility Study Agreements

We have evaluationentered into numerous feasibility study agreements with various companies(some of which are funded) to evaluate our Durasert and BioSiliconTethadur (including BioSilicon) technology systems for the treatment of various ophthalmic and other diseases.

Strategic Collaborations

We have entered into a number of collaboration/license agreements to develop and commercialize our product candidates and technologies. In all of our collaboration agreements, we retain the right to use and develop the underlying technologies outside of the scope of the exclusive licenses granted.

Alimera

In a February 2005 collaboration agreement, as amended and restated in March 2008, we granted Alimera an exclusive worldwide license to manufacture, develop, market and sell ILUVIEN for the treatment and prevention of human eye diseases other than uveitis. We also granted Alimera a worldwide non-exclusive license to manufacture, develop, market and sell certain additional Durasert-based products (1) to deliver a corticosteroid and no other active ingredient by a direct delivery method to the back of the eye solely for the treatment and prevention of eye diseases in humans other than uveitis or (2) to treat DME in humans by delivering a compound by a direct delivery method through an incision no smaller than that required for a 25-gauge or larger needle. The non-exclusive license is limited to those products that, amongstamong other things, (i) have a drug core within a polymer layer (with certain limitations regarding chemically bonded combinations of active agents), and (ii) are approved, or designed to be approved, to deliver a corticosteroid and no other active ingredient by a direct delivery to the posterior portion of the eye, or to treat DME by delivering a compound by a direct delivery through an incision required for a 25-gauge or larger needle. We are not permitted to use, or grant a license to any third party to use, the licensed technologies to make or sell any products that are or would be subject to the non-exclusive license granted to Alimera. Following a March 2008 amendment,

Alimera assumedhas complete financial responsibility for the development of licensed products and regulatory submissions which had previously been shared.under the collaboration agreement.

In October 2014 Alimera has agreed to paypaid us a one-time $25.0 million milestone payment upon the first productFDA approval of ILUVIEN as provided in our collaboration agreement. We are entitled to be approved by the FDA under the collaboration agreement andreceive 20% of any net profits as defined,(as defined) on sales of ILUVIEN by Alimera of each licensed product (including ILUVIEN), measured on a quarter-by-quarter and country-by-country basis, subject to an offset ofbasis. Alimera may recover 20% of previously incurred and unapplied net losses as defined, incurred(as defined) for commercialization of each product in a country by Alimera

on a country-by-country basis.offsetting up to 4% of the net profits earned in that country for that product each quarter, effectively reducing pSivida’s profit share to not less than 16% until those net losses are recouped. If Alimera sublicenses commercialization in any country, we are entitled to receive 20% of royalties and 33% of non-royalty consideration received by Alimera, less certain permitted deductions.

Either party may terminate the collaboration agreement for the other party’s uncured material breach under various conditions and upon various bankruptcy events. We may terminate the collaboration agreement with respect to a particular product if Alimera notifies us that it is abandoning or has abandoned such product, in which case the agreement provides for specific, exclusive remedies.

Bausch & Lomb

Under a 2003 amended license agreement, Bausch & Lomb has a worldwide exclusive license to make and sell our first-generation products (which, as defined in the agreement, includes Retisert) in return for royalties based on sales. We agreed with Bausch & Lomb not to develop, license or commercialize a product designed to receive regulatory approval to treat uveitis, but only for so long as (i) Bausch & Lomb is actively commercializing a product the net sales of which bear the base royalty payable to us that is not subject to any royalty reduction or offset and (ii) Bausch & Lomb has not developed or commercialized a uveitis product that does not bear such royalties. This agreement also covered Vitrasert prior to patent expiration. Bausch & Lomb can terminate its agreement with us without penalty at any time upon 90 days’ written notice.

Pfizer

In April 2007, we entered into an exclusive worldwide Collaborative Research and License Agreement (the Original Pfizer Agreement) with Pfizer for the use of certain of our technologies in ophthalmic applications that were not licensed to others. Under this agreement, we engaged in a joint research program, and Pfizer had an exclusive license to market any products developed under the agreement.

InOur June 2011 we entered into an Amended and Restated Collaborative Research and License Agreement with Pfizer (the Restated Pfizer Agreement) to focus solely on the development of a sustained release bioerodible implant designed to deliver latanoprost by subconjunctival injection. Under the Restated Pfizer Agreement, we grantedprovides Pfizer an exclusive option, under various circumstances, to license the development and commercialization of thea sustained release bioerodible implant to deliver latanoprost by subconjunctival injection (the Latanoprost ProductProduct) worldwide for human ophthalmic disease or conditions other than uveitis. If Pfizer were to exercise such option, we would be eligible to receive future consideration of up to $166.5 million plus royalties. In addition, we regained all rights to our intellectual property in ophthalmic applications previously included in the Original Pfizer Agreement other than pursuant to the Restated Pfizer Agreement and we have rights to develop and commercialize the Latanoprost Product if Pfizer does not exercise its option.

Under the Restated Pfizer Agreement, Pfizer paid us $2.3 million in cash as an upfront payment,at our discretion and expense, we agreed to use commercially reasonable efforts tocan develop the Latanoprost Product at our expense, and with technical assistance from Pfizer, for at least one year and thereafter, at our option, through completion of Phase II clinical trials, as defined. Upon completion oftrials. If we cease development, or if we commence and complete Phase II clinical trials, Pfizer has the option to acquire, upon payment of $20 million, an exclusive, worldwide license to develop and commercialize the Latanoprost Product for ophthalmic disease in humans other than uveitis. If Pfizer exercisesmay exercise its option it must use commercially reasonable efforts at its expense to developeither juncture in exchange for payments of prescribed, but different levels of, license fee and commercialize the Latanoprost Product, and we are eligible to receive development, regulatory and commercial milestone payments that could total up to $146.5 million and double-digit royalties based on net sales of the Latanoprost Product.potential future milestones plus royalties. If Pfizer does not exercise thisany such option, wethe Restated Pfizer Agreement will have the right to develop and commercialize the Latanoprost Product on our own or with a partner, with rights to Pfizer intellectual property necessary to develop and commercialize the Latanoprost Product. If we elect to cease development of the Latanoprost Product prior to completion of Phase II clinical trials, Pfizer also has an option to acquire, upon payment of a lesser option fee, an exclusive, worldwide license to develop and commercialize the Latanoprost Product for ophthalmic disease in humans other than uveitis at its expense. In this case, Pfizer must also use commercially reasonable efforts to develop and commercialize the Latanoprost Product, and we are eligible to receive lesser development, regulatory and commercial milestone payments and a lower royalty on net sales of the Latanoprost Product. If Pfizer does not exercise this option, we will have the right to develop and commercialize the Latanoprost Product on our own or with a partner, with rights to Pfizer intellectual property necessary to develop and commercialize the Latanaprost Product, following a one-year cessation of development activities.automatically be terminated.

Either Pfizer or we may terminate the Restated Pfizer Agreement for various reasons, including in the event of a material breach of this agreement that is not cured within the applicable cure period or if the other party enters into bankruptcy or similar proceedings. Pfizer may terminate this agreement at its sole discretion on 60 days’ notice. In the event Pfizer so terminates, or if we terminate for Pfizer’s material breach, we have the right to develop and commercialize the Latanoprost Product.

The Restated Pfizer Agreement replaces all of the rights and obligations under the Original Pfizera 2007 Research and License Agreement, except for confidentiality and indemnification provisions.provisions. We regained all rights to our intellectual property in ophthalmic applications previously included in the original Pfizer agreement other than pursuant to the Restated Pfizer Agreement.

Pfizer owned approximately 7.0%6.3% of our outstanding stock as of August 31, 2013.

Bausch & Lomb

Under a 2003 amended licensing agreement, Bausch & Lomb has a worldwide exclusive license to make and sell our first-generation products (which, as defined in the agreement, includes Retisert) as well as Vitrasert in return for royalties based on sales. We agreed with Bausch & Lomb not to develop, license or commercialize a product designed to receive regulatory approval to treat uveitis, but only for so long as Bausch & Lomb is actively commercializing a product the net sales of which bear the base royalty payable to us that is not subject to any royalty reduction or offset and Bausch & Lomb has not developed or commercialized a uveitis product that does not bear such royalties. Bausch & Lomb can terminate its agreement with us without penalty at any time upon 90 days’ written notice.

Intrinsiq

In January 2008, we granted an exclusive field-of-use license to Intrinsiq Materials Cayman Limited (Intrinsiq) for the development and commercialization of nutraceutical and food science applications of BioSilicon, under which we received aggregate license fee and minimum royalty payments of $1.7 million through June 2011. In February 2009, we entered into a 2-year supply agreement with Intrinsiq under which we leased certain equipment to Intrinsiq used in manufacturing BioSilicon material for total payments of $122,000. In July 2011, Intrinsiq terminated its field-of-use license agreement, we purchased the BioSilicon-related capital equipment and intellectual property assets of Intrinsiq for $223,000 and assumed four Intrinsiq employees.2015.

Enigma Therapeutics

Under a December 2012 license agreement, amended and restated in March 2013, Enigma Therapeutics Limited (Enigma) acquired an exclusive, worldwide, royalty-bearing license for the development of BrachySil

(now named OncoSil™), a BioSilicon product candidate for the treatment of pancreatic and other types of cancer. We received an upfront fee of $100,000 included in collaborative research and development revenue in fiscal 2013, and are entitled to an 8% sales-based royalty, 20% of sublicense consideration and milestones based on aggregate product sales. Enigma is obligated to pay an annual license maintenance fee of $100,000, creditable during each ensuing twelve monthtwelve-month period against reimbursable patent maintenance costs and sales-based royalties. Annual license maintenance fees of $100,000 were paid in January 2014 and January 2015. Enigma has the right to terminate its license upon 60 days prior written notice.

Research and Development

Our clinical and pre-clinical research programs primarily consist of ophthalmic applications of our technology systems. Our research and development expenses totaled $12.1 million in fiscal 2015, $9.6 million in fiscal 2014 and $7.0 million in fiscal 2013, $7.02013. Of these amounts, $10.6 million in fiscal 2012 and $6.92015, $8.2 million in fiscal 2011. Of these amounts,2014, and $5.4 million in fiscal 2013 $4.2 million in fiscal 2012 and $3.2 million in fiscal 2011 were incurred for costs of research and development personnel, clinical and pre-clinical studies, contract services, testing and laboratory facilities. Fiscal 2011 costs were reduced by a one-time IRS grant award of $208,000. All such costs were charged to operations as incurred. The remaining expense of $1.5 million in fiscal 2015, $1.4 million in fiscal 2014 and $1.6 million in fiscal 2013 $2.8 million in fiscal 2012 and $3.7 million in fiscal 2011 consisted of non-cash charges for amortization of intangible assets, depreciation of property, plant and equipment and stock-based compensation expense specifically allocated to research and development personnel. In addition, during fiscal 2012 we recorded a $14.8 million intangible asset impairment write-down, which is classified as a separate category of operating expenses in the consolidated statements of comprehensive loss.

Intellectual Property

Our intellectual property rights are crucial to our business. We hold or are licensed patents relating to our core technology systems in the United States and international markets.other countries. The following table provides general details relating to our owned and licensed patents (including both patents that have been issued and applications that have been accepted for issuance) and patent applications as of August 31, 2013:2015:

Employees

We had 2526 employees as of August 31, 2013.2015. None of our employees is covered by a collective bargaining agreement.

Sales and Marketing

We have no marketing or sales staff. We currently depend on collaborative partners to market our products. Significant additional expenditures would be required for us to develop an independent sales and marketing organization.

Third Party Reimbursement and Pricing Controls

TheSales of pharmaceutical products are significantly dependent on the availability and extent of reimbursement to which reimbursementconsumers of the cost of the products and the related administration procedures is and will be available from third-party payors, such as government health administration authorities and plans, private health insurers and other organizations, as well as on the timing and complexity of obtaining those reimbursements.

The passage of the Medicare Prescription Drug and Modernization Act of 2003 imposed requirements for the distribution and pricing of prescription drugs, which may affect the marketing of our products by us or our

licensees. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, collectively referred to as the ACA, is expected to significantly change the way healthcare is financed by both governmental and private insurers. The ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of new products, and the timingrebates, discounts, taxes and other costs resulting from the ACA may have a significant effect on our results of those reimbursements, is important tooperations in the successful commercializationfuture. In addition, potential reductions of those products. The Centers for Medicare and Medicaid Services designated Retisert as eligible for Medicare reimbursement at the per capita rate of $19,345, with associated surgical fees reimbursed separately. Alimera hasgrowth in Medicare spending under the ACA could potentially limit access to certain treatments or mandate price controls for our products.

In many foreign markets, including countries in the EU, pricing of pharmaceutical products is subject to governmental control. In the U.S., there have been, engaged in regulatory proceedings and negotiations with respectthere will likely continue to be, federal and state proposals to implement similar governmental pricing and reimbursement of ILUVIEN for DME in various EU countries where it has or expects to receive marketing authorizations.control.

Competition

The market for products treating back-of-the-eye diseases is highly competitive and is characterized by extensive research efforts and rapid technological progress. We face substantial competition for our products and product candidates. Pharmaceutical, drug delivery and biotechnology companies, as well as research organizations, governmental entities, universities, hospitals, other nonprofit organizations and individual scientists, have developed and are seeking to develop drugs, therapies and novel delivery methods to treat our targeted diseases. Most of our competitors and potential competitors are larger, better established, and more experienced and have substantially more resources than uswe or our partners.partners have. Competitors may reach the market earlier, than us or our partners, may have obtained or could obtain patent protection that dominates or adversely affects our products and potential products, and may offer products with greater efficacy, lesser side effects and/or other competitive advantages. We believe that competition for treatments of back-of-the-eye diseases is based upon the effectiveness of the treatment, side effects, time to market, reimbursement and price, reliability, availability, patent position, and other factors.

Many companies have or are pursuing products to treat back-of-the-eye diseases that are or would be competitive with our products and product candidates. Some of these products and potential products include the following:

Many other companies, including GlaxoSmithKline plc, Thrombogenics NV and Novagali Pharma S.A., are seeking to develop drug therapies or sustained delivery platforms for the treatment of ocular diseases.

Revenues

We operate in one business segment. The following table summarizes our revenues by type and by geographical location. Revenue is allocated geographically by the location of the subsidiary that earns the revenue. For more detailed information regarding our operations, see our Consolidated Financial Statements commencing on page F-1.

Government Regulation

Federal Food, Drug, and Cosmetic Act and Comparable Foreign Laws.The FDA and comparable regulatory agencies in foreign countries impose substantial requirements upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies regulate, among other things, the research, development, testing, manufacture, quality control, labeling, storage, record-keeping, approval, distribution, advertising and promotion of drug products. The process required by the FDA under the new drug provisions of the Federal Food, Drug, and Cosmetic Act before our products may be marketed in the United States generally involves the following:

The testing and approval process requires substantial time, effort and financial resources, and varies substantially based upon the type, complexity and novelty of the product. We cannot be certain that any approval will be granted on a timely basis, if at all.

Pre-clinical tests include laboratory evaluation of the product, its chemistry, formulation and stability, as well as animal studies to assess the potential safety and efficacy of the product. The results of the pre-clinical tests, together with manufacturing information, analytical data and protocols for proposed human clinical trials, are submitted to the FDA as part of an IND, which must become effective before the IND sponsor may begin human clinical trials. The IND automatically becomes effective 30 days after receipt by the FDA unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the proposed clinical trials as outlined in the IND, and imposes a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. There is no certainty that pre-clinical trials will result in the submission of an IND, or that submission of an IND will result in FDA authorization to commence clinical trials.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators. Clinical trials are conducted in accordance with protocols that detail the objectives of the study, the parameters to be used to monitor safety and any efficacy criteria to be evaluated.

Each protocol must be submitted to the FDA as part of the IND. Further, each clinical study must be conducted under the auspices of an independent institutional review boardInstitutional Review Board (IRB) at the institution where the study will be conducted.or Ethics Committee (EC). The IRBIRB/EC will consider, among other things, ethical factors, safety of human subjects and possible liability of the institution. Some clinical trials, called “investigator-sponsored” clinical trials, are conducted by third-party investigators responsible for the regulatory obligations associated with sponsorship of a clinical trial. The results of these trials may be used as supporting data by a company in its application for FDA approval, provided that the company has contractual rights to use the results.

Human clinical trials are typically conducted in three sequential phases which may overlap:

In the case of products for life-threatening diseases such as cancer, or severe conditions such as blinding eye disease, or for products that require invasive delivery, initial human testing is often conducted in patients with the disease rather than in healthy volunteers. Since these patients already have the targeted disease or condition, these studies may provide initial evidence of efficacy traditionally obtained in Phase II trials, and so these trials are frequently referred to as Phase I/II or IIa trials.

We cannot be certain that we or our collaborative partners willmay not successfully complete Phase I, Phase II or Phase III testing of our product candidates within any specific time period, if at all. Furthermore, we, our collaborative partners, the FDA, the IRB,IRBs/ECs, foreign regulatory authorities or the sponsor, if any, may suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

Once ana product approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a Risk Evaluation and Mitigation Strategy (REMS) program. Other potential consequences include, among other things:

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the

approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

The Food and Drug Administration Amendments Act of 2007 (FDAAA) is designed to provide the public with more easily accessible information about the safety and efficacy of marketed drugs and the FDA with increased authority to ensure drug safety. The FDAAA requires that we register each controlled clinical trial, aside from a Phase I trial, on a website (www.ClinicalTrials.gov) administered by National Institutes of Health (NIH), including descriptive information (e.g., a summary in lay terms of the study design, type and desired outcome), recruitment information (e.g., target number of participants and whether healthy volunteers are accepted), location and contact information and administrative data (e.g., FDA identification numbers). Within one year of a trial’s completion, information about the trial, including characteristics of the patient sample, primary and secondary outcomes, trial results written in lay and technical terms and the full trial protocol must be submitted to the website, unless the drug has not yet been approved. In that case the information is posted shortly after product approval has been obtained. The FDA requires certification of compliance with all relevant FDAAA clinical trials reporting requirements during product development.

The results of product development, pre-clinical studies and clinical studies are submitted to the FDA as part of an NDA for approval of the marketing and commercial shipment of the product. The FDA may deny an NDA if the applicable regulatory criteria are not satisfied, or may require additional clinical data. Even if the additional data are submitted, the FDA ultimately may decide that the NDA does not satisfy the criteria for approval. As a condition of approval, the FDA may require a sponsor to conduct additional clinical trials to confirm that the drug is safe and effective for its intended uses.

Satisfaction of FDA requirements or similar requirements of foreign regulatory agencies typically takes several years or more, and varies substantially. Regulatory authorities may delay marketing of potential products for a considerable period of time or prevent it entirely, and may require costly procedures in order to obtain regulatory approval. The time and expense required to obtain FDA or foreign regulatory clearance or approval for regulated products can frequently exceed the time and expense of the research and development initially required to create the product. Success in pre-clinical or early stage clinical trials does not assure success in later stage clinical trials. Data from pre-clinical and clinical activities may not be conclusive, and may be susceptible to varying interpretations, which could delay or prevent regulatory approval. Even if a product receives regulatory approval, the approval may be subject to significant limitations based on data from pre-clinical and clinical activities. The FDA or foreign regulatory authorities may also require surveillance programs to monitor approved products which have been commercialized and may require changes in labeling.

Once issued, the FDA or foreign regulatory authorities may withdraw product approval for non-compliance with regulatory requirements or if safety or efficacy problems occur or are demonstrated in subsequent studies after the product reaches the market. Any product manufactured or distributed under FDA or foreign regulatory approval is subject to pervasive and continuing regulation. All manufacturers must comply with regulations related to requirements for record-keeping and reporting adverse experiences with the product, and the FDA may also require surveillance programs to monitor approved products that have been commercialized. The FDA has the power to require changes in product labeling or to prevent further marketing of a product based on the results of these post-marketing programs. Even after initial FDA or other foreign regulatory approval has been obtained, we or our collaborative partners could be required to conduct further studies to provide additional data on safety or efficacy or, should we desire, to gain approval for the use of a product as a treatment for additional clinical indications. In addition, use of a product during testing and after marketing approval has been obtained could reveal side effects which, if serious, could limit uses, or in the most serious cases, result in a market withdrawal of the product or expose us to product liability claims. For certain drugs that the FDA determines pose risks that outweigh the benefits, FDA approval may be subject to the manufacturers’ continued adherence to a REMS program. REMS, which are tailored to specifically address the risks of a given drug, may contain elements that restrict distribution of the drug to certain physicians, pharmacists and patients, or that require the use of

communication tools such as letters to healthcare providers and patients detailing the risks associated with the drug. Foreign regulatory authorities also regulate post-approval activities.

Commercial drug manufacturers and their subcontractors are required to register with the FDA and state agencies. Drug manufacturers and their subcontractors are also subject to periodic unannounced inspections by the FDA and state agencies for compliance with current good manufacturing practices (cGMP), which impose procedural and documentation requirements upon us and our third-party manufacturers.

Healthcare Law and Regulation.Healthcare providers, including physicians, and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing approval. Arrangements with healthcare providers, third-party payors and other healthcare customers are subject to broadly applicable fraud and abuse and other healthcare laws and regulations in the U.S. and in other countries and jurisdictions. Such restrictionsWithin the U.S., these laws generally apply to pharmaceutical companies once the companies have marketed products or marketed products reimbursable by federal healthcare programs such as Medicare and Medicaid. For the laws with such applicability, we could be subject to the laws if any of our product candidates in the future receive marketing approval and/or coverage under applicablefederal healthcare programs. Although the specific provisions of these laws vary, their scope is generally broad and there may not be regulations, guidance or court decisions that apply the laws to particular industry practices. Such U.S. federal and state healthcare laws and regulations include the following:

AnalogousWithin the U.S., analogous state and foreign laws and regulations, such as anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by governmental as well as non-governmental third-party payors, including private insurers. Foreign laws may also seek to prevent fraud and abuse.

Some stateLaws and regulations have been enacted by various states to regulate the sales and marketing practices of pharmaceutical companies with marketed products. The laws and regulations generally limit financial interactions between manufacturers and health-care providers; require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government; and/or require disclosure to the government and public of financial interactions. Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation. Given the lack of clarity in additionlaws and their implementation, any future reporting (if

we obtain approval and/or reimbursement from federal healthcare programs for our product candidates) could be subject to requiring drug manufacturers to report information related to payments to physiciansthe penalty provisions of the pertinent laws and otherregulations.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, also imposes obligations on certain health care providers, health plans, and health care clearinghouses (which are entities that processor facilitate the processing of nonstandard data elements of health information into standard data elements, or marketing expenditures.vice versa) and certain of their contractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Other Laws.We are also subject to numerous other federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future. In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action.

Foreign Laws.We and our collaborative partners are also subject to foreign regulatory requirements governing human clinical trials and marketing approval for pharmaceutical products sold in theirforeign countries. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary widely by country. Whether or not FDA approval is obtained, we or our collaborative partners must obtain approval of a product by the comparable regulatory authorities of foreign countries before manufacturing or marketing the product in those countries. The approval process varies from country to country, and the time required for these approvals may differ substantially from that required for FDA approval. There is no assurance that clinical trials conducted in one country will be accepted by other countries, or that approval in one country will result in approval in any other country. For clinical trials conducted outside the U.S., the clinical stages generally are comparable to the phases of clinical development established by the FDA.

Corporate Information

pSivida Corp. was organized as a Delaware corporation in March 2008. Its predecessor, pSivida Limited, was formed in December 2000 as an Australian company incorporated in Western Australia. On June 19, 2008, we reincorporated from Western Australia to the United States (the Reincorporation). Except as otherwise indicated, references in this Annual Report to “pSivida”, “the Company”, “we”, “us”, “our” or similar terms refer to pSivida Limited, a West Australia corporation, and its subsidiaries prior to June 19, 2008, and refer to pSivida Corp., a Delaware corporation, and its subsidiaries from such date. All share amounts and all information relating to options and warrants in this Annual Report have been retroactively adjusted to reflect the Reincorporation share exchange ratio, unless otherwise stated. Our principal executive office is located at 400480 Pleasant Street, Suite B300, Watertown, Massachusetts 02472 and our telephone number is (617) 926-5000.

Additional Information

Our website address is http://www.psivida.com. Information contained on, or connected to, our website is not incorporated by reference into this Annual Report on Form 10-K. Copies of our annual reports onForm 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge through our website under “SEC Filings” as soon as reasonably practicable after we electronically file these materials with, or otherwise furnish them to, the Securities and Exchange Commission (SEC).

Information with respect to ILUVIEN for DME has been derived from public disclosures by Alimera.

ITEM 1A.

RISK FACTORS

RISKS RELATED TO OUR COMPANY AND OUR BUSINESS

We do not know if or when we will achieve profitable operations from product sales, royalties and net profits participations and we may need additional capital to fund our operations, which may not be available on favorable terms or at all.

We have a history of operating losses, and expect to continue to incur losses for the foreseeable future.

With the exceptionat June 30, 2015, we had a total accumulated deficit of net income in fiscal 2010 resulting from a non-recurring event, we have incurred operating losses since our inception in 2000. We do not currently have any assured sources of revenues. Although Alimera launched ILUVIEN commercially in the U.K. and Germany in the second quarter of 2013 and announced its intention to launch in France in the first quarter of 2014, we do not know the timing and extent of any revenues we may receive from ILUVIEN for DME. Unless Alimera receives FDA approval of ILUVIEN for DME, we will not be entitled to receive the $25.0 million milestone payment that would be due on such an approval, and Alimera will not be able to sell, nor will we earn any revenues from sales of, ILUVIEN for DME in the U.S. We will not receive any funding under our Restated Pfizer Agreement unless Pfizer exercises its option with respect to the Latanoprost Product, which becomes exercisable only if we complete Phase II clinical trials, which have not yet been initiated, or if we cease development of the Latanoprost Product prior to completion of those trials. There is no assurance that Pfizer will exercise its option. Our Retisert royalty income from Bausch & Lomb is not expected to increase to a level sufficient to sustain our operations and may decline. Further, we expect to significantly increase our research and development expense as a result of our independent development of Medidur for posterior uveitis. Our ability to achieve profitability is expected to depend, among other things, upon Alimera’s ability to achieve FDA approval of and to successfully commercialize ILUVIEN for DME and our or any other licensees’ ability to achieve regulatory approval and sufficient revenues from commercialization of one or more products.

We expect to need additional capital resources to fund our operations, and our ability to obtain them is uncertain.

We expect to continue to generate negative cash flows from operations unless and until ILUVIEN for DME achieves sufficient revenues from commercialization or one or more of our product candidates achieves regulatory approval and sufficient revenues from commercialization.$270.7 million. During the past three fiscal years, we have financed our operations primarily from the proceeds of offerings of our common stock and warrants and consideration received from our collaborative partners, including license fees, andmilestone payments, research and development funding.funding and royalty income from our collaboration partners and sales of equity securities. We currentlydo not have no committed fundingany assured sources of revenue, and we expect negative cash flows from collaborative partners.operations in subsequent quarters until we receive sufficient revenues from commercialization of ILUVIEN or one or more of our other product candidates achieve regulatory approval and provide us sufficient revenues. We believe that our cash, cash equivalents and marketable securitiescapital resources of $10.3$28.5 million at June 30, 2013 together with the $9.9 million of net proceeds from our July 2013 underwritten public offering of common stock, expected Retisert royalty income and other expected cash inflows under existing collaboration and technology evaluation agreements, will2015 should enable us to fund our current andoperations as currently planned operations through(including our Medidur clinical trials) into early calendar year 2014.2017. This includes expected costs through that date of Phase III clinical trials of Medidur for posterior uveitis, but does not includeestimate excludes any potential milestone or net profits receipts under the Alimera collaboration agreement. Our capital resources would be enhanced if Alimera successfully commercializes ILUVIEN for DME in the EU and if ILUVIEN for DME were approved and successfully commercialized in the U.S., although even so,from sales of ILUVIEN. We expect that our ability to fund our planned operations beyond then will depend on the amount and timing of those payments, as well as proceeds from any such receipts is uncertain. Accordingly,future collaboration or other agreements and/or financing transactions.

Whether we expectwill require, or desire, to need additional resources to fund our planned Phase III trials of Medidur for posterior uveitis and other research and development and operations. Our need forraise additional capital resources will be influenced by the followingmany factors, among others:including, but not limited to:

We may seekIf we determine that it is desirable or necessary to raise additional capital resources through possible sales of equity or debt securities or new collaborative or licensing agreements and/or possible other agreements and transactions. Many factors relating to our company, such as the status of FDA approval of ILUVIEN for DME, the status of commercialization of ILUVIEN for DME in the EU,future, we do not know if it will be available when needed or on terms favorable to us or our stockholders. We have an at-the-market (ATM) facility, but we do not know whether and the status of development of our product candidates, as well as theto what extent we will seek to sell shares pursuant to that program and, if we are able to do so, on what terms. The state of the economy and the financial and credit markets at the time or times we seek any additional financing may make our ability to secure additional capital resourcesit more difficult or more expensive to obtain or result in less favorable terms.obtain. If available, additional equity financing may be dilutive to stockholders, debt financing may involve restrictive covenants or other unfavorable terms and potential dilutive equity, and funding through collaboration licensing or other agreements may be on unfavorable terms, including requiring us to relinquish rights to certain of our technologies or products, additional equity financing may be dilutive to stockholders, and debt financing may involve restrictive covenants or other unfavorable terms and potential dilutive equity. If adequate financing is not available if and when needed, we may be required to delay, reduce the scope of or eliminate research or development programs, postpone or cancel the pursuit of product candidates, including pre-clinical and clinical trials and new business opportunities, reduce staff and operating costs or otherwise significantly curtail our operations to reduce our cash requirements and extend our capital.products.

If the recorded value of our intangible assets under GAAP is further impaired, our financial results could be materially adversely affected.

We recorded significant amountsAt June 30, 2015, we had $1.9 million of intangible assets in connection with earlier acquisitions. We tookrelating to our Durasert and BioSilicon (including Tethadur) technologies on our balance sheet following impairment charges of $3.1$14.8 million with respect to the value of our Durasert intangible asset and $11.7 million with respect to the value of our BioSilicon intangible asset as of December 31, 2011. We had $3.4 million of intangible assets on our balance sheet as of June 30, 2013, of which $2.4 million related to our Durasert technology and $1.0 million related to our BioSilicon technology. We will continue to conduct impairment analyses of our intangible assets as required under GAAP and we would be required tocould take additional impairment charges in the future if anythe recorded values for our intangible assets were to exceed our assessment of the recoverability assessmentsof the fair market value of those assets reflect fair market values that are less than our recorded values, and such charges could be significant. The carrying values of our Durasert and BioSilicon technology systems could be impaired if there is a future triggering event,assets. Adverse events relating to these technologies, including without limitation, adverse events with respect tothe clinical development, regulatory approval and success of commercialization of products using those technologies,them, and significant changes in our market capitalization.capitalization could result in impairment charges. Further impairment charges on our intangible assets could have a material adverse effect on our results of operations.operations in the quarter of the impairment.

Our operating results may fluctuate significantly from period to period.

Our operating results have fluctuated significantly from period to period in the past and may continue to do so in the future due to many factors, including:

Due to fluctuations in our operating results, quarterly comparisons of our financial results may not necessarily be meaningful, and investors should not rely upon such results as an indication of future performance. In addition, investors may react adversely if our reported operating results are less favorable than in a prior period or are less favorable than those anticipated by investors in the financial community, which may result in decreases in our stock price.

OurThere is no assurance our Retisert royalty income from Bausch & Lomb may decline.will continue at current levels or at all.

Retisert royalty income, which totaled between $1.3 million and $1.4 million in each of the fiscal 2012, fiscal 2013 and fiscal 2014, declined to $1.2 million in fiscal 2015. We do not expect that our Retisert royalty income from Bausch & Lomb willto grow materially, if at all, and it may continue to decline. There is no assurance that Bausch & Lomb will continue to market Retisert, which received marketing approval in 2005.2005, and accordingly that we will continue to receive royalties from the sale of Retisert. Bausch & Lomb no longer markets Vitrasert.

RISKS RELATED TO THE DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCTS AND PRODUCT CANDIDATES

If the FDA does not approve ILUVIEN for DME, Alimera will be unable to commercialize the product in the U.S., and we will not receive payments to which we would be entitled upon such approval and from successful commercialization, which could materially impair our financial prospects.

Alimera received a 2010 CRL from the FDA with respect to its NDA for ILUVIEN for DME and the 2011 CRL in response to its first resubmission of the NDA. In both the 2010 and 2011 CRLs, the FDA stated that it was unable to approve the then current NDA. Although Alimera resubmitted the NDA a second time and received a new PDUFA goal date of October 17, 2013, thereThere is no assurance that Alimera’s resubmissionAlimera will demonstrate to the FDA that the benefits ofsuccessfully commercialize ILUVIEN for DME outweigh its risks, that additional clinical trials will not be required, that the subgroup of patients with chronic DME considered insufficiently responsive to available therapies will be acceptable to the FDA or that we will receive any significant revenues from its commercialization. If Alimera will be able to obtain regulatory approval fordoes not successfully commercialize ILUVIEN for DME, it would adversely affect our future results of operations and financial position.

Our future financial results depend heavily on Alimera’s ability to successfully commercialize ILUVIEN for DME. We do not know if, when, or to what extent we will receive future revenues from the commercialization of

ILUVIEN for DME. We are entitled to a net profit participation on a country-by-country and quarter-by-quarter basis on sales of ILUVIEN where Alimera markets ILUVIEN directly and to a percentage of royalties and non-royalty consideration where Alimera sublicenses the marketing of ILUVIEN. The amount and timing of any revenues we receive will be affected, among other things, by the manner in which Alimera markets ILUVIEN, the U.S. Accordingly,amounts and timing of sales of ILUVIEN, commercialization costs incurred by Alimera’s direct marketing efforts, and the terms of sublicense agreements.

The commercialization of ILUVIEN is a significant undertaking by Alimera, and ILUVIEN for DME may never be approvedis its first and marketedonly product. While Alimera believes that it has sufficient funds available to fund its operations for the continued commercialization of ILUVIEN in the U.S., in which case we would not receiveGermany, Portugal and the milestone paymentUnited Kingdom, Alimera has reported that its negative cash flows from operations and accumulated deficit raise substantial doubt about its ability to which we would be entitled on FDA approval or any revenues fromcontinue as a going concern. Alimera may seek to raise additional financing to fund its working capital needs for the commercialization which would be materially adverse to our business. Further, weof ILUVIEN. We do not know whether Alimera will continuebe successful in generating adequate cash flows, obtaining adequate capital or achieving additional marketing approvals for, obtaining adequate pricing and reimbursement for, successfully commercializing and achieving market acceptance of, and generating revenues to seek to develop,pSivida from, ILUVIEN for DME. Commercialization by Alimera in the U.S., Germany, Portugal and the U.K, including the transitioning from an outside provider of sales and marketing services in the U.K. and Germany and the provision of extended payment terms in the U.S., has required a significant expansion of Alimera’s commercial infrastructure and significant financial investments. Delays in the commercial launch in other EU countries where ILUVIEN has received marketing authorization could result in withdrawal of marketing or receive approval from the FDA or other regulatory agenciesauthorization for ILUVIEN for in one or more of those jurisdictions. Alimera’s efforts to commercialize ILUVIEN successfully will be affected, among other things, by:

If Alimera is not successful in commercializing ILUVIEN for DME and generating payments to us, it would adversely affect our business, operating results and financial condition.

Sales of ILUVIEN for DME in the EU may be materially adversely affected by pricing and reimbursement decisions of regulatory bodies, insurers and others.

Prices, coverage and reimbursement to consumers of ILUVIEN for DME, like other drugs, are generally regulated by third-party payors, such as government health administration authorities and plans, private health

insurers and other organizations and affect ILUVIEN’s sales. The timing and complexity of those reimbursements also affect sales. Prices in the EU countries are regulated, with prices generally lower and coverage and access to drugs more limited than in the U.S., which could continue to affect the amount of revenues from the commercialization of ILUVIEN for DME in the EU. Alimera has been engaged in regulatory proceedings and negotiations with respect to pricing and reimbursement. There is no assurance as to what level of governmental pricing and reimbursement will be permitted, particularly in light of the ongoing budget crises faced by a number of countries in the EU. For example, there is no assurance that the patient population in the U.K. will expand beyond privately insured and private pay patients or what the level of permitted reimbursement will be. There can be no assurance that NICE will accept the recommendation of the Appraisal Committee and amend its final guidanceScotland, National Health Service coverage is limited to provide ILUVIEN for the treatment of pseudophakicthe eyes of chronic DME patients orunresponsive to existing therapies that such patients will be reimbursed by the National Health Service. Similarly, there is no assurance thathave undergone cataract surgery, subject to simple patient access schemes. Alimera willmay not achieve satisfactory agreements with statutory insurersor other insurers. We do not know what levels of pricing will be approved or reimbursed for ILUVIEN, or what restrictions will be placed on its use or reuse in Germany to avoid individual reimbursement submissions.countries where ILUVIEN is not currently sold. In the U.S., Alimera has reported its belief thatoffered extended customer payment terms. Future sales of ILUVIEN for DME in Germany and, the U.K. have been adversely affected, and future sales in

those and other EU countriesaccordingly, our net profits share, may be adversely affected by pricing and reimbursement decisions, and such affectseffects may be material.

We do not know if and when we will receive revenues from any commercialization of ILUVIENThe micro-insert for DME in the EU and the extent of those revenues.

There is no assurance if and when, and to what extent, we will receive revenues from the commercialization of ILUVIEN for DME in the EU. Although Alimera commercially launched ILUVIEN in the U.K. and Germany during the quarter ended June 2013, there were limited sales in that quarter. Alimera has announced its intention to launch in France in the first quarter of 2014, but has not announced commercialization plans for the other EU countries where it has marketing approval. Alimera has no prior experience in commercializing products. There is no assurance that Alimera will be able to build and manage a successful commercial operation in the EU or that it will have sufficient capital to do so. Further, because we are entitled to a net profit participation on sales of ILUVIEN wherever Alimera markets ILUVIEN directly and a percentage of royalties and non-royalty consideration wherever Alimera sublicenses the marketing of ILUVIEN, the amount and timing of any revenues we receive will be affected by the manner in which Alimera determines to market ILUVIEN in other countries. Although Alimera has reported that it intends to seek marketing approval of ILUVIEN for DME in additional EU countries, there is no assurance that Alimera will apply for or obtain any such additional approvals. Further, we cannot project what the demand will be for ILUVIEN for DME in the EU countries where ILUVIEN is marketed.

Both ILUVIEN and Medidur for posterior uveitis deliverdelivers FAc, a corticosteroid that has demonstrated undesirablecertain adverse side effects in the eye, which may affect the approvability and success of these micro-insertsthis micro-insert for treatment of DME and posterior uveitis and other eye diseases.uveitis.

BothThe micro-insert for both ILUVIEN and Medidur for posterior uveitis deliverdelivers the non-proprietary corticosteroid FAc, which is associated with undesirable side effects in the eye, such as cataract formation and elevated intraocular pressure, whichIOP and may increase the risk of glaucoma and related surgery to manage those side effects. In the 2011 CRL, the FDA stated that the risks of adverse reactions shown for ILUVIEN for DME in the FAME Study were significant and were not offset by the benefits demonstrated by ILUVIEN for DME in those clinical trials. These side effects may affect the approvability of ILUVIEN for DME and the other eye conditions forAlthough Retisert, which it is being studied. Although FDA-approved Retisert and our product candidate Medidur both deliveralso delivers FAc to treat posterior uveitis, and ILUVIEN for DME have both been approved by the FDA, there is no assurance that Medidur will be determined to be safe and efficacious for the treatment of posterior uveitis in light of its expected side effects from FAc. Even if these product candidates are approved, theseThese side effects may limit the population for which marketing authorization is granted or for which reimbursement is provided in one or more jurisdictions and/or adversely affect their successful marketing.sales of Medidur, if approved, and/or ILUVIEN.

There is no assurance that Medidur will be found to be safe and effective for the treatment of posterior uveitis.

While we are optimistic that the Phase III trials for Medidur will show it to be as efficacious as Retisert was shown to be in treating posterior uveitis, but with IOP safety results that could be even better than those shown in the ILUVIEN and Retisert Phase III trials, this is only a hypothesis, and there is no assurance that the ongoing Medidur Phase III clinical trials will demonstrate these results. Data from our ongoing IOP assessment from the Medidur Phase III trials and top-line results from the Medidur investigator-sponsored study may not accurately predict the results of our Medidur Phase III program. There is no assurance that the Phase III program for Medidur will provide the necessary evidence of safety and efficacy required to file an NDA or for approval by the FDA and other regulatory authorities if an NDA is filed. Approvals of Retisert and ILUVIEN by the FDA and other regulatory authorities are not predictive of actions they may take with respect to Medidur.

There is no assurance that we will be able to file an NDA for Medidur as early as the first half of 2017, or that, if filed, the FDA will accept the NDA for review.

Filing an NDA for Medidur will require positive results from our two Phase III trials. Based on our most recent meeting with the FDA, we plan to seek approval of Medidur based on 12-month data from our first Phase III trial, six-month data from our second Phase III trial and data from a short-duration utilization study of our redesigned proprietary inserter, together with data referenced from the Phase III trials of ILUVIEN for DME. We will be filing an amendment with the Indian regulatory authority requesting to change the primary endpoint in the protocol of our second Phase III trial in India from twelve to six months consistent with the primary endpoint for filing the NDA in the U.S., although there is no assurance they will accept the amendment. Further, although enrollment is complete in our first Phase III trial, we do not expect enrollment to be completed in our second Phase III trial until the end of the second quarter of 2016. Many factors could affect the timing of filing any NDA for Medidur, including completion of enrollment in the second trial in the time frame we anticipate, utilizing the data on which we currently plan to base the NDA, analyzing the data in the time frame we anticipate, requirements from regulators that would affect our timing, and the actual results from the trials. As a result, there is no assurance that an NDA for Medidur will be filed on the basis of the data we currently plan to use or that it will be filed in the first half of 2017, if at all.

Even if we file an NDA for Medidur, there is no assurance that the FDA will accept the NDA for review. While we believe the FDA will accept the filing of an NDA for Medidur based on the data we currently plan to utilize, the FDA has significant discretion in determining whether to accept an NDA for review and there is no assurance that the FDA will find the design of our clinical trials or the data we include in an NDA to be sufficient to accept the NDA for review. Any delay in the filing of an NDA for Medidur or the FDA’s refusal to accept the NDA for review could materially and adversely affect our business and the price of our common stock.

We are currently conducting, and may in the future conduct, clinical trials for product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in such locations.

We are currently conducting a Phase III trial of Medidur in India, and may in the future choose to conduct one or more of our clinical trials outside the United States.

In general, the FDA accepts data from clinical trials conducted outside the United States; however, acceptance of this data is subject to, among other things, the clinical trials being conducted and performed by qualified investigators in accordance with Good Clinical Practice principles. The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In addition, while these clinical trials are subject to applicable locals laws, FDA acceptance of the data will depend on its determination that the trials also complied with all applicable U.S. laws and regulations. If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of the applicable product candidates.

There is no assurance that Pfizer will exercise its option with respect to the Latanoprost Product if we initiate and complete Phase II trials or thatcease development, in which case we will not receive any further financial consideration under the Restated Pfizer Agreement.

In June 2011, we amended our Collaborative Research and License Agreement with Pfizer to focus solely on the development of the Latanoprost Product. Development of this product through Phase II clinical trials is at our own expense. Pfizer has an option for an exclusive, worldwide license to develop and commercialize the Latanoprost Product upon our completion of Phase II clinical trials, which are at our option and expense, or if we ceaseupon our cessation of development of the Latanoprost Product at any time prior to completion of those trials. There is no assurance that we will commence or complete Phase II clinical trials for the Latanoprost Product; that, if completed, the trials will be successful; that Pfizer will, in any event, exercise its option; that, if exercised, Pfizer will commence Phase III clinical trials; or that the Latanoprost Product will achieve successful Phase III trial results, regulatory approvals or commercial success. As a result, there is no assurance that we will receive any further licensing, milestone or royalty payments under the Restated Pfizer Agreement.

We do not know if we will be able to deliver proteins (including antibodies) and peptides with our Tethadur technology or that we will be able to develop product candidates or approved products using this technology.

Although we are optimistic that our Tethadur technology platform can provide sustained delivery of proteins (including antibodies) and peptides, and our data from an in vitro study has shown that the long-term sustained release of antibodies such as Avastin is achievable using Tethadur, our research is at an early stage and we face challenges. Development of any product candidates is expected to require significant additional research. There is no assurance that our subsequent research will be successful or that we will be able to develop product candidates or approved products using Tethadur to deliver proteins and peptides.

Product development is very uncertain. If we or our licensees are unable to or do not develop product candidates to enter clinical trials, if we or any licensees do not initiate or complete clinical trials for our product candidates or if our product candidates do not receive the necessary regulatory approvals, neither we or ournor any licensees will be unableable to commercialize ourthose product candidates.candidates and generate revenues for us.

Our current and future activities are and will be subject to stringent regulation by governmental authorities both in the U.S. and other countries in which our products are marketed. Before we or our licensees can manufacture, market and sell any of our product candidates, approval from the FDA and/or foreign regulatory authorities is required to market in the applicable jurisdictions. Generally, in order to obtain these approvals, pre-clinical studies and clinical trials must demonstrate that a product candidate is safe for human use and effective for its targeted disease or condition.

ILUVIEN for DME has completed pivotal clinical trials, which were conducted pursuant to our Alimera collaboration agreement, andOther than Medidur for posterior uveitis, has commenced the first of twofor which pivotal Phase III clinical trials. Alltrials are ongoing, all of our other product development is at earlier stages. An investigator-sponsored Phase I/II study of the Latanoprost Product is ongoing, but we have not commenced Phase II clinical trials, and BioSilicon and Tethadur product candidates are all in the pre-clinical stage. Product development at all stages involves a high degree of risk, and only a

small proportion of research and development programs result in product candidates that advance to pivotal clinical trials or toresult in approved products. There is no assurance that evaluationany feasibility study agreements we have, or enter into, with third parties, or our own research and development programs and collaborations will result in any new product candidates, or licenses, or that we or ourany licensees will commence clinical trials for any new product candidates or continue clinical trials for any of our product candidates.once commenced. If clinical trials conducted by or for us or ourany licensees for any of our product candidates do not provide the necessary evidence of safety and efficacy, those product candidates will not receive the necessary regulatory approvals, cannot be manufactured and sold, and will not generate revenues.revenues for us. Initial or subsequent clinical trials may not be initiated by or for us or ourany licensees for product candidates or may be delayed, terminated or fail due to many factors, including the following:

Results from pre-clinical testing, and early clinical trials, investigator-sponsored studies and other data and indications often do not accurately predict results of laterfinal pivotal clinical trials.trial results. Data obtained from pre-clinical and clinical activities are susceptible to varying interpretations, which may delay, limit or prevent regulatory approval. Data from pre-clinical studies, earlyother clinical trials and interim periods in multi-year trials are preliminary and may change, and final data from pivotal trials for such products may differ significantly. Adverse side effects may develop that delay, limit or prevent the regulatory approval of products, or cause such regulatory approvals to be limited or even rescinded. Additional trials necessary for approval may not be undertaken or may ultimately fail to establish the safety and efficacy of our product candidates. There is no assurance, for example, that the Durasert product candidate to treat pain associated with severe knee osteoarthritis will advance to Phase III trials or will be safe or effective.

The FDA or other relevant regulatory agencies may not approve our product candidates for manufacture and sale, and any approval by the FDA does not ensure approval by other regulatory agencies or vice versa (which could require us to comply with numerous and varying regulatory requirements, possibly including additional clinical testing). Any product approvals we or our licensees achieve could also be withdrawn for failure to comply with regulatory standards or due to unforeseen problems after the products’product’s marketing approval. In either case, marketing efforts with respect to the affected product would have to cease. In addition, the FDA or other regulatory agencies may impose limitations on the indicated uses for which a product may be marketed. The imposition by the FDA or other regulatory organizations of any such limitations on the indicated uses for which any of our products may be marketed which maywould reduce the size of, or otherwise limit, the potential market for the product.product subject to such limitations.

In addition to testing, regulatory agencies impose various requirements on manufacturers and sellers of products under their jurisdiction, such as packaging, labeling, manufacturing practices, record keeping and reporting. Regulatory agencies may also require post-marketing testing and surveillance programs to monitor a product’s effects. Furthermore, changes in existing regulations or the adoption of new regulations could prevent us from obtaining, or affect the timing of, future regulatory approvals.

We do not currently have a limited abilitysales and marketing capacity. There is no assurance that we will have the financial resources to develop the capacity to, or be able to, successfully market and marketsell products ourselves. Ifif we are unableseek to find development or marketing partners, or our development or marketing partners do not successfully develop or market our products, we may be unable to effectively develop and market products on our own.so.

Our strategy includes independently developing and commercializing products. We do not know when or if we will seek to directly commercialize any products but weourselves. We currently have limited product developmentno marketing and sales staff and no experience in commercializing products. Direct commercialization would require us to develop sales and marketing capability and to make a significant financial investment. If we decide to independently and directly commercialize a product, there is no marketing or sales staff. Developing products and achieving market acceptance for them can require extensive and substantial efforts by experienced personnel as well as expenditure of significant funds. We may notassurance we will be able to establishhire and manage a successful sales and marketing capability or fund sufficient capabilitieshave the financial resources necessary to developfund independent commercialization of any products.

The success of our current and possible future collaborative and licensing arrangements depends and will depend heavily on the experience, resources, efforts and activities of our licensees, and if they are not successful in developing and marketing our products, and achieve market penetration ourselves.it will adversely affect our revenues, if any, from those products.

Our business strategy also includes continuing to leverage our technology platforms by entering into collaborative and licensing arrangements for the development and commercialization of our product candidates, where appropriate, and we currently have collaboration and/or licensing arrangements with Alimera, Pfizer, Bausch & Lomb and Enigma. The curtailment or termination of any of these arrangements could adversely affect our business, our ability to develop and commercialize our products, product candidates and proposed products and our ability to fund operations.

appropriate. The success of thesecurrent and future collaborative and licensing arrangements do and will depend heavily on the experience, resources, skill, efforts and activities of our licensees. Our licensees have had, and are expected to have, significant discretion in making decisions related to the development of product candidates and the

commercialization of products under these collaboration agreements. Risks that we face in connection with our collaboration and licensing strategy include the following:

To the extent that we seek to independently manufacture, marketWe currently have collaboration and sell products or are unable to enter into future license agreementslicensing arrangements with marketingvarious companies, most significantly Alimera and sales partners where we deem appropriate, we would experience increased capital requirements to develop the ability to manufacture, market and sell future products. There can be no assurance that we will be able to manufacture, market or sell our products or future products independently.

Our current licensees may terminate their agreements with us at any time, and if they do, we will lose the benefits of those agreements and may not be able to develop and sell products currently licensed to them.

Our licensees have rights of termination under our agreements with them. Exercise of termination rights by one or more of our licensees may leave us without the financial benefits and development, marketing or sales resources provided under the terminated agreement, which may have an adverse effect on our business, financial condition and results of operations. Additionally, our interests may not continue to coincide with those of our partners, and our partners may develop, independently or with third parties, products or technologies that could compete with our products. Further, we may disagree with our partners over the rights and obligations under those agreements, including ownership of technologies or other proprietary interests, noncompetition, payments or other issues, which could result in breach of the agreements, including related damages or injunctive relief or termination.

For example, Pfizer may terminate the Restated Pfizer Agreement with respect to the Latanoprost Product without penalty at any time and for any reason upon 60 days’ written notice,Bausch & Lomb. While Bausch & Lomb may terminate its license agreement with respect to Retisert without penalty at any time upon 90 days’ written notice and Alimera may abandon the development and commercialization of any licensed product, including ILUVIEN for DME, at any time.

Any of our licensees may decide not to continue to develop, exercise options or commercialize products under their respective agreements, change strategic focus, or pursue alternative technologies instead of our technologies or develop competing products. While Pfizer and Bausch & Lomb havehas significant experience in the ophthalmic field and have substantial resources, there is no assurance whether, and to what extent, that experience and those resources will be devoted to Retisert, and we do not expect revenues from Retisert to increase materially and they may decline further. Although we believe potential revenues from ILUVIEN for DME are important to our technologies.future results of operations and financial condition, Alimera has limited experience and limited financial resources, and ILUVIEN for DME is Alimera’s first and only commercial product. Actions, including breachesAlimera has reported that its negative cash flows from operations and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Further, due to the limited revenue generated by Alimera to date, Alimera may not be able to maintain compliance with covenants under its loan agreement and, in the event of a default, we do not know whether Alimera will be able to obtain amendments or waivers of those covenants. We do not know if Alimera will be able to raise additional financing if and when required.

If our current and future licensees are not successful in developing and marketing our products, it will adversely affect our revenues, if any, from those products.

Our current licensees may terminate their agreements with us at any time or fail to fulfill their obligations under those agreements, and, if they do, we will lose the benefits of those agreements.

Our licensees have rights of termination of theseunder our agreements bywith them and could terminate those agreements without cause on short notice. Further, our licensees may fail to fulfill their obligations under their agreements, or we may disagree with them over the rights and obligations under those agreements, which could result in breach of the agreements and/or termination. Exercise of termination rights by one or more of our licensees or by us may leave us without the financial benefits and development, marketing or sales resources provided under the terminated agreement. It could be necessary for us to replace, or seek to provide ourselves, the services provided by the licensee, and there is no assurance we would be successful in doing so. It could delay, impair or stop the development or

commercialization of any of the products or product candidates licensed to them or require significant additional capital investment by us, which we may not have the resources to fund. If any of our licensees do not perform their obligations under our agreements or if any of those agreements are terminated, it could have an adverse effect on our business, financial condition and results of operations.

If competitive products of our competitors receive regulatory approval or reach the market earlier, are more effective, have fewer side effects, are more effectively marketed or cost less than our products or product candidates, our products or product candidates may not be approved, may not achieve the sales we anticipate and could be rendered noncompetitive or obsolete.

We believe that pharmaceutical, drug delivery and biotechnology companies, research organizations, governmental entities, universities, hospitals, other nonprofit organizations and individual scientists are seeking to develop drugs, therapies, products, approaches or methods to treat our targeted diseases or their underlying causes. For many of our targeted diseases, competitors have alternate therapies that are already commercialized or are in various stages of development, ranging from discovery to advanced clinical trials. For example, Lucentis has been approved to treat patients with DME in the U.S. and EU, and Bayer HealthCare and Regeneron have instituted Phase III studies of EYLEA, already approved in the U.S. and Australia to treat wet AMD, to treat DME. Any of these drugs, therapies, products, approaches or methods may receive government approval or gain market acceptance more rapidly than our products and product candidates, may offer therapeutic or cost advantages, or may more effectively treat our targeted diseases or their underlying causes, which could result in our product candidates not being approved, reduce demand for our products and product candidates or render them noncompetitive or obsolete.

Many of our competitors and potential competitors have substantially greater financial, technological, research and development, marketing and personnel resources than we do. Our competitors may succeed in developing alternate technologies and products that, in comparison to the products we have and are seeking to develop:

Many of these competitors have greater experience in developing products, conducting clinical trials, obtaining regulatory approvals or clearances and manufacturing and marketing products than we do.

Our products and product candidates may not achieve and maintain market acceptance and may never generate significant revenues.

In both domestic and foreign markets, the commercial success of our products and product candidates will require not only obtaining regulatory approvals, but also obtaining market acceptance by retinal specialists and other doctors, patients, government health administration authorities and other third-party payors. Whether and to what extent our products and product candidates achieve and maintain market acceptance will depend on a number of factors, including demonstrated safety and efficacy, cost-effectiveness, potential advantages over other therapies, our and our collaborative partners’ marketing and distribution efforts and the reimbursement policies of government and other third-party payors. In particular, if government and other third-party payors do not recommend our products and product candidates, limit the indications for which they are recommended, or do not provide adequate and timely coverage and reimbursement levels for or recommend our products, and product candidates, the market acceptance of our products and product candidates will be limited. Both government and other third-party payors attempt to contain healthcare costs by limiting coverage and the level of reimbursement for products and, accordingly, they mightmay challenge the price and cost-effectiveness of our products, or refuse to provide coverage for our products. If our products and product candidates fail to achieve and maintain market acceptance, they may fail to generate significant revenues and our business may be significantly harmed.

Guidelines, recommendations and studies published by various organizations could reduce the use of our products and potential use of product candidates.

Government agencies, professional societies, practice management groups, private health and science foundations and organizations focused on various diseases may publish guidelines, recommendations or studies related tothat affect our or our competitors’ products and product candidates or our competitors’ products.candidates. Any such guidelines, recommendations or studies that reflect negatively on our products or product candidates, either directly or relative to our competitive products, could result in current or potential decreased use, sales of, and revenues from one or more of our products and product candidates. Furthermore, our success depends in part on our and our partners’ ability to educate healthcare providers and patients about our products and product candidates, and these education efforts could be rendered ineffective by, among other things, third-parties’ guidelines, recommendations or studies.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

We rely heavily upon patents and trade secrets to protect our proprietary technologies. If we fail to protect our intellectual property or infringe on others’ technologies, our ability to develop and market our products and product candidates may be compromised.

Our success is dependent on whether we can obtain patents, defend our existing patents and operate without infringing on the proprietary rights of third parties. As of August 31, 2013,2015, we had 212238 patents and 111116 pending

patent applications, including patents and pending applications covering our Durasert, BioSilicon (including Tethadur)Tethadur and other technologies. Intellectual property protection of our technologies is uncertain. We expect to seek to patent and protect our proprietary technologies. However, there is no assurance that any additional patents will be issued to us as a result of our pending or future patent applications or that any of our patents will withstand challenges by others. In addition, we may not have sufficient funds to patent and protect our proprietary technologies to the extent that we would desire, or at all. If we were determined to be infringing any third-party patent, we could be required to pay damages, alter our products or processes, obtain licenses, pay royalties or cease certain operations. We may not be able to obtain any required licenses on commercially favorable terms, if at all. In addition, many foreign country laws may treat the protection of proprietary rights differently from, and may not protect our proprietary rights to the same extent as, laws in the United StatesU.S. and Patent Co-operation Treaty countries.

Prior art may reduce the scope or protection of, or invalidate, our patents. Previously conducted research or published discoveries may prevent our patents from being granted, invalidate issued patents or narrow the scope of any protection obtained. Reduction in scope of protection or invalidation of our licensed or owned patents, or our inability to obtain patents, may enable other companies to develop products that compete with our products and product candidates on the basis of the same or similar technology. As a result, our patents and those of our licensors may not provide any, or sufficient, protection against competitors. While we have not been, and are not currently, involved in any litigation over intellectual property, such litigation may be necessary to enforce any patents issued or licensed to us or to determine the scope and validity of third party proprietary rights. We may also be sued by one or more third parties alleging that we infringe their intellectual property rights. Any intellectual property litigation would be likely to result in substantial costs to us and diversion of our efforts, and could prevent or delay our discovery or development of product candidates. If our competitors claim technology also claimed by us, and if they prepare and file patent applications in the U.S. or other jurisdictions, we may have to participate in interference proceedings declared by the U.S. Patent and Trademark Office or the appropriate foreign patent office to determine priority of invention, which could result in substantial costcosts to us and diversion of our efforts. Any such litigation or interference proceedings, regardless of the outcome, could be expensive and time consuming. Litigation could subject us to significant liabilities to third parties, requiring disputed rights to be licensed from third parties and/or requiring us to cease using certain technologies.

We have entered into many agreements that limit our or the third parties’ rights with respect to our intellectual property, including rights to use, options on rights to use, or prohibitions on rights to use (including noncompetition obligations) our or jointly developed intellectual property. Those rights could adversely affect our rights to develop and commercialize products utilizing our intellectual property.

We also rely on trade secrets, know-how and technology that are not protected by patents to maintain our competitive position. We try to protect this information by entering into confidentiality agreements with parties that have access to it, such as our corporate partners, collaborators, employees, and consultants. Any of these

parties could breach these agreements and disclose our confidential information, or our competitors may learn of the information in some other way. If any material trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, our competitive position could be materially harmed.

RISKS RELATED TO OUR BUSINESS, INDUSTRY, STRATEGY AND OPERATIONS

If we fail to retain key personnel, our business could suffer.

We are dependent upon the principal members of our management and scientific staff. In addition, we believe that our future success in developing and marketing our products and achieving a competitive position maywill depend on whether we can attract and retain additional qualified management and scientific personnel.personnel as well as a sales and marketing staff. There is strong competition for management and scientificqualified personnel within the industry in which we operate, and we may not be able to attract and retain such personnel. As we have a small number of employees and we believe our products are

unique and highly specialized, the loss of the services of one or more of the principal members of our management or scientific staff, or the inability to attract and retain additional personnel and develop expertise as needed, could have a material adverse effect on our results of operations and financial condition.

If we are subject to product liability suits, we may not have sufficient insurance to cover damages.

The testing, manufacturing, and marketing and sale of the products utilizing our technologies involve risks that product liability claims may be asserted against us and/or our licensees. Our current clinical trial and product liability insurance may not be adequate to cover damages resulting from product liability claims. Regardless of their merit or eventual outcome, product liability claims could require us to spend significant time, money and other resources to defend such claims, could result in decreased demand for our products and product candidates, or result in reputational harm, and could result in the payment of a significant damage award. Our product liability insurance coverage is subject to deductibles and coverage limitations and may not be adequate in scope to protect us in the event of a successful product liability claim. Further, we may not be able to acquire sufficient clinical trial or product liability insurance in the future on reasonable commercial terms, if at all.

Consolidation in the pharmaceutical and biotechnology industries may adversely affect us.

There has been consolidation in the pharmaceutical and biotechnology industries. Consolidation could result in the remaining companies having greater financial resources and technological capabilities, thus intensifying competition, and fewer potential collaboration partners or licensees for our product candidates. In addition, if a consolidating company is already doing business with any of our competitors, we could lose existing or potential future licensees or collaboration partners as a result of such consolidation.

If we or our licensees fail to comply with environmental laws and regulations, our or their ability to manufacture and commercialize products may be adversely affected.

Medical and biopharmaceutical research and development involves the controlled use of hazardous materials, such as radioactive compounds and chemical solvents. We and our licensees are subject to federal, state and local laws and regulations in the U.S. and abroad governing the use, manufacture, storage, handling and disposal of such materials and waste products. We and they could be subject to both criminal liability and civil damages in the event of an improper or unauthorized release of, or exposure of individuals to, hazardous materials. In addition, claimants may sue us or them for resulting injury or contamination, and the liability may exceed our or their ability to pay. Compliance with environmental laws and regulations is expensive, and current or future environmental regulations may impair the research, development or production efforts of our company or our licensees and harm our operating results.

If we or our licensees encounter problems with product manufacturing, there could be delays in product development or commercialization, which would adversely affect our future profitability.

Our ability and that of our licensees to conduct timely pre-clinical and clinical research and development programs, obtain regulatory approvals, and develop and commercialize our product candidates will depend, in part, upon our and our licensees’ ability to manufacture our products and product candidates, either directly or through third parties, in accordance with FDA and other regulatory requirements. The manufacture, packaging and testing of our products and product candidates are regulated by the FDA and similar foreign regulatory entities and must be conducted in accordance with applicable cGMP and comparable foreign requirements. Any change in a manufacturing process or procedure used for one of our products or product candidates, including a change in the location at which a product or product candidate is being manufactured or in the third-party manufacturer being used, may require the FDA’s and similar foreign regulatory entities’ prior review and/or approval in accordance with applicable cGMP or other regulations. Additionally, the FDA and similar foreign regulatory entities may implement new standards, or change their interpretation and enforcement of existing standards, for the manufacture, packaging and testing of products at any time.

There are a limited number of manufacturers that operate under cGMP and other foreign regulations that are both capable of manufacturing our products and product candidates and are willing to do so. Alimera has contracted

with individual third-party manufacturers with respect tofor the manufacture of componentsILUVIEN and its components. If any of ILUVIEN. Alimera’s third-party manufacturers breach their agreements or are unable or unwilling to perform for any reason or fail to comply with cGMP and comparable foreign requirements, Alimera may not be able to locate alternative acceptable manufacturers, enter into favorable agreements with them or get them approved by the applicable regulatory authorities in a timely manner. Delays in the commercial production of ILUVIEN could delay or impair Alimera’s marketing of ILUVIEN, which, in turn, could adversely affect Alimera’s generation of net profits for us.

Failure by us, our collaborative partners, or our or their third-party manufacturers, to comply with applicable manufacturing requirements could result in sanctions being imposed on us or our collaborative partners, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product, operating restrictions and criminal prosecutions. In addition, we or our collaborative partners may not be able to manufacture our product candidates successfully or have a third party manufacture them in a cost-effective manner. If we or our collaborative partners are unable to develop our own manufacturing facilities or to obtain or retain third-party manufacturing on acceptable terms, we may not be able to conduct certain future pre-clinical and clinical testing or to supply commercial quantities of our products.

We manufacture supplies in connection with pre-clinical or clinical studies conducted by us orand our licensees. Our licensees have the exclusive rights to manufacture commercial quantities of products, once approved for marketing. Our and our licensees’ reliance on third-party manufacturers entails risks, including:

Problems associated with international business operations could affect our or our licensees’ ability to manufacture and sell our products. If we encounter such problems, our or their costs could increase and our development of products could be delayed.

We currently maintain offices and research and development facilities in the U.S. and the U.K., and our goal is to develop products for sale by us and our licensees in most major world healthcare markets. Manufacturing of pharmaceutical products requires us or our licensees to comply with regulations regarding safety and quality and

to obtain country and jurisdiction-specific regulatory approvals and clearances. We or our licensees may not be able to comply with such regulations or to obtain or maintain needed regulatory approvals and clearances, or may be required to incur significant costs in doing so. In addition, our operations and future revenues may be subject to a number of risks associated with foreign commerce, including the following:

Legislative or regulatory changes may adversely affect our business, operations and financial results.

Our industry is highly regulated and new laws, regulations and judicial decisions, and new interpretations of existing laws, regulations and judicial decisions, may adversely affect our business, operations and financial results.

U.S. federal and state governments continue to propose and pass legislation designed to reduce the cost of healthcare. The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (PPACA), represents one of the most significant healthcare reform measures in decades. The PPACA is intended to expand U.S. healthcare coverage primarily through the imposition of health insurance mandates on employers and individuals and expansion of the Medicaid program. Several provisions of the PPACA could significantly reduce payments from Medicare and Medicaid for our products and any product candidates whichthat obtain marketing approval overin the next 10 years.future. Federal and state legislatures within the U.S. and foreign governments will likely continue to consider changes in existing healthcare legislation. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. The PPACA’s effects cannot be fully known until its provisions are implemented, andcontinuing efforts of the Centers for Medicare & Medicaid Services,government, insurance companies, managed care organizations and other federal and state agencies, issue applicable regulationspayors of healthcare services to contain or guidance. Proposed U.S. statereduce costs of healthcare reforms, andmay adversely affect the demand for any foreign healthcare reforms, also could alter the availability, methods and rates of reimbursements from the government and other third-party payorsproducts for which we or our licensees may obtain regulatory approval; our or our licensees’ ability to set a price that we or they believe is fair for our productsproducts; our or our licensees’ ability to obtain coverage and reimbursement approval for a product; our or our licensees’ ability to generate revenues and achieve or maintain profitability; or the level of taxes that we are required to pay.

In addition, other legislative changes have been proposed and adopted since PPACA. The Budget Control Act (BCA) of 2011 includes provisions to reduce the federal deficit. The BCA, as amended, resulted in the imposition of 2% reductions in Medicare payments to providers beginning in 2013. More recent legislation extends reductions through 2024. Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented, and/or any significant taxes or fees that may be imposed on us, as part of any broader deficit reduction effort or legislative replacement to the BCA, could have an adverse impact on our anticipated product candidates which obtain approval, and could adversely affect our business strategy, operations and financial results.revenues.

The FDAAA granted the FDA enhanced authority over products already approved for sale, including authority to require post-marketing studies and clinical trials, labeling changes based on new safety information and compliance with risk evaluations and mitigation strategies approved by the FDA. The FDA’s exercise of this relatively new authority could result in delays and increased costs during product development, clinical trials and regulatory review and approval, increased costs following regulatory approval to assure compliance with new post-approval regulatory requirements, and potential restrictions on the sale or distribution of approved products following regulatory approval.

Changes in the regulatory approval policy during the development period, changes in or the enactment of additional regulations or statutes, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. For example, the July 9, 2012 reauthorization of the PDUFA extended by two months the period in which the FDA is expected to review and approve certain NDAs. Although the FDA has recently stated that it expects to meet PDUFA’s updated timing goals, it has in the past provided its managers discretion to miss them due to heightened agency workload or understaffing in the review divisions. Accordingly, it remains unclear whether and to what extent the FDA will adhere to PDUFA timing goals in the future, which could delay approval and commercialization of our product candidates.

RISKS RELATED TO OUR COMMON STOCK

The price of our common stock may be volatile.

The price of our common stock (including common stock represented by CHESS Depositary Interests (CDIs)) may be affected by developments directly affecting our business, as well as by developments out of our control or not specific to us. The price of our common stock dropped significantly when the FDA issued its 2011 CRL with respect to ILUVIEN for DME. The biotechnology sector, in particular, and the stock market generally are vulnerable to abrupt changes in investor sentiment. Prices of securities and trading volumevolumes of companies in the biotechnology industry, including ours, can swing dramatically in ways unrelated to, or that bear a disproportionate relationship to, our performance. The price of our common stock (and CDIs) and their trading volumes may fluctuate based on a number of factors including, but not limited to:

In addition, low trading volume in our common stock or our CDIs may increase their price volatility. Holders of our common stock and CDIs may not be able to liquidate their positions at the desired time or price. Finally, we will need to continue to meet the listing requirements of the NASDAQ Global Market, including the minimum stock price, and the Australian Securities Exchange (ASX), for our stock and CDIs to continue to be traded on those exchanges, respectively.

If the holders of our outstanding warrants and stock options exercise their warrants and options, ownership of our common stock holders may be diluted, and our stock price may decline.

As of August 31, 2013,2015, we had outstanding warrants and options to acquire approximately 5.16.1 million shares of our common stock, or approximately 16.1%17.1% of our shares on a fully diluted basis. The issuance of shares of our common stock upon exercise of these warrants and stock options could result in dilution to the interests of other holders of our common stock and could adversely affect our stock price. The overhang of outstanding warrants and options may adversely affect our stock price.

We do not currently intend to pay dividends on our common stock, and any return to investors is expected to come, if at all, only from potential increases in the price of our common stock.

At the present time, we intend to use available funds to finance our operations. Accordingly, while payment of dividends rests within the discretion of our board of directors, no cash dividends on our common shares have been declared or paid by us and we have no intention of paying any such dividends in the foreseeable future.

None.

We do not own any real property. We lease the following:

None.

Not applicable.

PART II

Market Information, Holders and Dividends

Our common stock is traded on the NASDAQ Global Market under the trading symbol “PSDV”. The following table sets forth the high and low prices per share of our common stock as reported on the NASDAQ Global Market for the periods indicated:

On September 23, 2013,August 31, 2015, the last reported sale price of our common stock on the NASDAQ Global Market was $4.03.$3.75. As of that date, we had approximately 2620 holders of record of our common stock and, according to our estimates, approximately 3,7504,960 beneficial owners of our common stock. In addition, as of that date, there were approximately 2,2502,010 beneficial owners of our CDIs.

We have never paid cash dividends, and we do not anticipate paying cash dividends in the foreseeable future.

Equity Compensation Plan Information

The following table provides information about the securities authorized for issuance under the Company’s equity compensation plans as of June 30, 2013:2015:

On the first day of each fiscal year until July 1, 2017, the number of shares reserved for issuance under the Company’s 2008 Incentive Plan will be increased by the least of (i) 750,000 shares; (ii) 4% of the then outstanding shares of common stock; and (iii) any such lesser number of shares as is determined by the Compensation Committee of the Board of Directors. On July 1, 2013,2015, the number of shares issuable under the 2008 Incentive Plan was increased by 750,000 shares.

Issuer Repurchases of Equity Securities

None.

The selected historical financial data set forth below as of June 30, 2015, 2014, 2013, 2012 2011, 2010 and 20092011 and for each of the years then ended have been derived from our audited consolidated financial statements, of which the financial statements as of June 30, 20132015 and 20122014 and for the years ended June 30, 2013, 20122015, 2014 and 20112013 are included elsewhere in this Annual Report on Form 10-K.

The information set forth below should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the audited consolidated financial statements, and the notes thereto, and other financial information included elsewhere herein. Our historical financial information may not be indicative of our future results of operations or financial position.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes beginning on page F-1 of this Annual Report on Form 10-K. This discussion contains forward-looking statements, based on current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ significantly from those anticipated or implied in these forward-looking statements as a result of many important factors, including, but not limited to, those set forth under Item 1A, “Risk Factors”, and elsewhere in this report.

Overview

We develop tiny,are a leader in the development of sustained-release drug-delivery products designed tofor treating eye diseases. Our products deliver drugs and biologics at a controlled and steady rate for weeks, months or years. Utilizing our core technology platforms, Durasert™ and BioSilicon™, we are focused on treatment of chronic diseases of the back of the eye and are also exploring applications outside ophthalmology. We have developed three of theonly four sustained-release products approved by the U.S. Food and Drug Administration (FDA) for treatment of retinal diseases currently approvedback-of-the-eye diseases. The most recent is ILUVIEN^® for diabetic macular edema (DME), sold by our licensee in the U.S. orand three European Union (EU), and our countries. Our lead development product, candidate began a PhaseMedidur™ for posterior uveitis, is in pivotal phase III clinical trial in June 2013.trials. Our strategy includespre-clinical development program is primarily focused on developing products independently while continuing to leveragefor chronic ophthalmic diseases utilizing our core technology platforms through collaboration and license agreements.platforms.

ILUVIEN^®, our most recently approved product, is an injectable, sustained-release micro-insert that provides treatment of vision impairment associated with chronic diabetic macular edema (DME) considered insufficiently responsive to available therapies overDME for three years from a period of up to three years.single administration. ILUVIEN is licensed to and sold by Alimera Sciences, Inc. (Alimera), and we are entitled to a share of the net profits as(as defined in our agreement with Alimera) from Alimera’s sales of ILUVIEN. ILUVIEN was launched in late February 2015 in the U.S., where it is indicated for DME. Alimera commenced the commercial launchtreatment of ILUVIEN for DME in patients previously treated with a course of corticosteroids without a clinically significant rise in intraocular pressure. ILUVIEN has been commercially available in the U.K.United Kingdom (U.K.) and Germany in the second quarter ofsince June 2013 and expects to launch in FrancePortugal since January 2015. ILUVIEN has marketing approvals in the first quarter of 2014. The International Diabetes Federation has estimated that approximately 19.0 million people have diabetes in the seventhese and 14 other EU countries where ILUVIEN has received or been recommended for marketing authorization,the treatment of whichchronic DME considered insufficiently responsive to available therapies. Alimera has estimated that approximately 1.1 million people suffer from vision loss associated with DME. Alimera is also seeking marketing approvalsublicensed distribution, regulatory and reimbursement matters for ILUVIEN for DME in the U.S. In the second quarter of 2013, Alimera received a new Prescription Drug User Fee Act (PDUFA) goal date of October 17, 2013 after resubmitting itsAustralia and New Drug Application (NDA) for ILUVIEN for DME. The resubmission responded to a second Complete Response Letter (CRL) received from the U.S. FoodZealand in April 2014, in Canada in July 2015 and Drug Administration (FDA) in November 2011.Italy in August 2015.

Medidur™,Medidur, our lead development product, commenced the first of our two planned Phase III clinical trials for the treatment ofis an injectable, micro-insert designed to treat chronic non-infectious uveitis affecting the posterior segment of the eye (posterior uveitis) in June 2013.for three years from a single administration. Medidur, useswhich is the same Durasert micro-insert usedas ILUVIEN, is in ILUVIEN and deliversPhase III clinical trials, with the filing of a lower dosenew drug application (NDA) anticipated in the first half of the same drug as our2017. We are developing Medidur independently.

Our FDA-approved Retisert^® for posterior uveitis, which is licensed to Bausch & Lomb. We are developing Medidur independently.

We are also developing a bioerodible, injectable micro-insert delivering latanoprost (the Latanoprost Product) to treat glaucoma and ocular hypertension. Under an amended collaboration agreement, Pfizer has an option, under certain circumstances, to license the development and commercialization of the Latanoprost Product worldwide.

We are engaged in pre-clinical research with respect to both our BioSilicon and Durasert technology platforms. The primary focus of our BioSilicon technology research is the sustained delivery of peptides, proteins, antibodies and other large biologic molecules using our Tethadur™ technology in both ophthalmic and non-ophthalmic applications. Our research program also includes the use of Durasert technology in orthopedic applications and for systemic delivery of therapeutic agents.

Our FDA-approvedRetisert provides sustained release treatment of posterior uveitis for approximately two and a half years andyears. It is licensed to and sold by Bausch & Lomb.Lomb, and we receive royalties from its sales.

Our pre-clinical development program is focused on developing products using our core platform technologies, Durasert™ and Tethadur™, to deliver drugs or biologics to treat wet and dry age-related macular degeneration (AMD), glaucoma, osteoarthritis and other diseases.

Summary of Critical Accounting Policies and Estimates

OurThe discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires that we make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base

our estimates on historical experience, anticipated results and trends and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. By their nature, these estimates, judgments and assumptions are subject to an inherent degree of uncertainty, and management evaluates them on an ongoing basis for changes in facts and circumstances. Changes in estimates are recorded in the period in which they become known. Actual results may differ from our estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 2 to the accompanying consolidated financial statements, we believe that the following accounting policies are critical to understanding the judgments and estimates used in the preparation of our financial statements. It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies discussed below.

Revenue Recognition

Our business strategy includes entering into collaborative license and development agreements for the development and commercialization of product candidates utilizing our technology systems. The terms of these arrangements typically include multiple deliverables by us (for example,(such as granting of license rights, providing research and development services, and manufacturing of clinical materials and participating on joint research committees) in exchange for consideration to us of some combination of one or more of non-refundable license fees, funding of research and development activities, payments based upon achievement of clinical development, regulatory and sales milestones, and royalties in the form of a designated percentage of product sales or participation in profits.

Revenue arrangements with multiple deliverables are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customercollaborative partner and based on the selling price of the deliverables. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price method using management’s best estimate of the elements andstandalone selling price of deliverables when vendor-specific objective evidence or third-party evidence of selling price is not available. Allocated consideration is recognized as revenue upon application of the appropriate revenue recognition principles are applied to each unit.

The assessment of multiple deliverable arrangements requires judgment in order to determine the appropriate units of accounting, the estimated selling price of each unit of accounting, and the points in time that, or periods over which, revenue should be recognized.

For the year ended June 30, 2013,2015, we reported $780,000$25.4 million of collaborative research and development revenue. Revenue is recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured.

We prospectively adopted the provisions of ASU No. 2009-13, Revenue Recognition (Topic 605):Multiple-Deliverable Revenue Arrangements (“ASU 2009-13”) for new and materially modified arrangements originating on or after July 1, 2010. ASU 2009-13 requires a vendor to allocate revenue to each unit of accounting in arrangements involving multiple deliverables. It changes the level of evidence of standalone selling price required to separate deliverables by allowing a vendor to make its best estimate of the standalone selling price of deliverables when vendor-specific objective evidence or third-party evidence of selling price is not available.

As discussed further in Note 3 to our consolidated financial statements, adoption of this accounting pronouncement in fiscal 2011 resulted in the recognition of revenue in connection with our 2007 Collaborative Research and License Agreement with Pfizer that became subject to the new accounting pronouncement after a material modification to the agreement occurred. As a result of the adoption of ASU 2009-13, deferred revenues associated with this Pfizer agreement will be recognized as revenues earlier than would otherwise have occurred.

We concluded that our deliverables under the Restated Pfizer Agreement are conducting the research and development program for the Latanoprost Product through completion of Phase II clinical trials (the “R&D program”) and participation on a Joint Steering Committee (JSC)(“JSC”). We treat these as a single deliverable, having concluded that the JSC does not have standalone value separate from the R&D program. We concluded that the Pfizer exercise option for the worldwide exclusive license is not a deliverable of the arrangement, due to it being a substantive option and not being priced at a significant and incremental discount.

The total arrangement consideration of the Restated Pfizer Agreement totaled $10.05 million, which consisted of the $7.75 million of deferred revenue on our balance sheet at the effective date plus the $2.3 million upfront payment. The difference between the total arrangement consideration and the estimated selling price of the combined deliverables, or $3.3 million, was recognized as collaborative research and development revenue in the quarter ended June 30, 2011, the period of the modification. The remaining balance is being recognized as revenue using the proportional performance method over the estimated period of our performance obligations under the R&D program.

To determine the estimated selling price of the combined deliverable, we applied an estimated margin to our cost projections for the combined deliverable. A change in the estimated margin or our cost projections would have directly impacted the amount of revenue recognized during fiscal 2011. An increase of 10% in our estimated selling price of the combined deliverables would have reduced revenue recognized in fiscal 2011 by $670,000 and would have increased the amount of deferred revenue recognized in each of fiscal 2012 and fiscal 2013 by 10%, or $75,000 and $37,000, respectively. Application of the proportional performance method in any fiscal period would result in an increase or decrease in revenue recognized to the extent that the aggregate projected costs to conduct the R&D program decreases or increases, respectively, compared to the previous period.

ValuationRecognition of Intangible Assets

At December 31, 2011, we recorded a $11.7 million impairment of our BioSilicon intangible and a $3.1 million impairment of our Durasert intangible. The combination of the 2011 CRL and the subsequent significant declineExpense in the Company’s market capitalization were determined to be impairment indicators of the Company’s finite-lived intangible assets. To assess the recoverability of the these assets (which had a carrying value of $19.4 million at December 31, 2011), we used both market-based and income-based valuation methodologies, and allocated the resulting fair value of the combined intangible assets to the individual assets based on values determined under the income-based approach.Outsourced Clinical Trial Agreements

We amortize our intangible assets using the straight-line method over their estimated economic lives, which currently extend through calendar year 2017 and is expected to result in a charge to operations of approximately $760,000 per year. We believe that the carrying value of our intangible assets will be recouped primarily through expected net cash flows from our existing or future collaboration agreements or through our own product development and commercialization.

We will continue to review our intangible assets for impairment whenever events or changes in business circumstances indicate that the asset carrying values may not be fully recoverable or that the useful lives of assets are no longer appropriate. Factors that could trigger an impairment review include the following:

If an impairment trigger is identified, we determine recoverability of an intangible asset by comparing projected undiscounted net cash flows to be generated by the asset to its carrying value. If the carrying value is not recoverable, an impairment charge is recorded equal to the excess of the asset’s carrying value over its fair value, and the carrying value is adjusted. Estimated future undiscounted cash flows, which relate to existing contractual agreements as well as projected cash flows from futurerecognize research and development collaboration agreements utilizing the underlying technology systems, require management’s judgment regarding future events and probabilities. Actual results could vary from these estimates. Future adverse changes or other unforeseeable factors could result in an impairment chargeexpense with respect to some or alloutsourced agreements for clinical trials with contract research organizations (“CROs”) as the services are provided, based on our assessment of the carrying valueservices performed. We make our assessments of the services performed based on various factors, including evaluation by the third-party CROs and our own internal review of the work performed during the period, measurements of progress by us or by the third-party CROs, data analysis with respect to work completed and our management’s judgment. We have agreements with two CROs to conduct the Phase III clinical trial program for Medidur for posterior uveitis. Our financial obligations under the agreements are determined by the services that we request from time to time under the agreements. The actual amounts owed under the agreements and the timing of those obligations will depend on various factors, including changes to the protocols and/or services requested, the number of patients to be enrolled and the rate of patient enrollment, achievement of pre-defined direct cost milestone events and other factors relating to the clinical trials. As of June 30, 2015, our CRO agreements provided for two Phase III clinical trials and a utilization study of our intangible assets. Suchproprietary inserter at an impairment charge could materially impact future resultsaggregate remaining cost of operationsapproximately $16.4 million. We can terminate the agreements at any time without penalty, and financial positionif terminated, we would be liable only for services through the termination date plus non-cancellable CRO obligations to third parties.

During fiscal 2015, we recognized approximately $6.1 million of research and development expense attributable to our Medidur Phase III clinical trial program. Changes in our estimates or differences between the reporting period identified.

A significant change in the estimationactual level of the projected undiscounted net cash flows for the productsservices performed and product candidates utilizing the Durasert or BioSilicon technology systems, among other things, couldour estimates may result in the further impairment of the carrying value of the respective assets.changes to our research and development expenses in future periods.

Results of Operations

Years Ended June 30, 20132015 and 20122014