InSite Vision Announces Pricing of $22.2 Million Financing

InSite Vision Announces Pricing of $22.2 Million Financing

ALAMEDA, Calif.--(BUSINESS WIRE)--InSite Vision Incorporated (OTCBB:INSV) (InSite Vision) today announced that it has entered into definitive agreements with certain accredited investors in connection with a private placement financing transaction. Certain members of management and a member of the Board of Directors of InSite Vision are participating in the transaction on the same terms as the other investors. Upon the closing of the transaction, InSite Vision will receive gross proceeds of approximately $22,200,000 in exchange for the issuance of approximately 37,000,000 shares of InSite Vision common stock and warrants to purchase approximately 14,800,000 shares of InSite Vision common stock. The warrants will be exercisable for a period of five years at an exercise price of $0.75 per share. The closing of the transaction, which is subject to customary closing conditions, is scheduled to occur on or about July 18, 2011. InSite Vision intends to use the net proceeds of the transaction to fund clinical trials and for general corporate purposes, including working capital.

Piper Jaffray & Co. served as sole placement agent and JMP Securities LLC served as financial advisor in connection with the transaction.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

The securities to be sold in the transaction have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. InSite Vision has agreed to file a registration statement with the SEC covering the resale of the shares of common stock sold in the transaction and issuable upon the exercise of the warrants within 30 days of the closing of the transaction. If any such shares are unable to be included on the initial registration statement, InSite Vision has agreed to file subsequent registration statements until all such shares have been registered. The registration rights agreement imposes certain customary cash penalties on InSite Vision for its failure to satisfy specified filing and effectiveness time periods, subject to certain exceptions.

About InSite Vision

InSite Vision is committed to advancing new and superior ophthalmologic products for unmet eye care needs. InSite Vision's product portfolio utilizes its proven DuraSite® bioadhesive polymer core technology, an innovative platform that extends the duration of drug retention on the surface of the eye, thereby reducing frequency of treatment and improving the efficacy of topically delivered drugs. The DuraSite® platform is currently leveraged in two commercial products for the treatment of bacterial eye infections: AzaSite® (azithromycin 1% ophthalmic solution), marketed in the United States by Inspire Pharmaceuticals, Inc., a wholly-owned subsidiary of Merck & Co., Inc.; and BesivanceTM (besifloxacin 0.6% ophthalmic suspension), marketed by Bausch & Lomb Incorporated and its partner Pfizer Inc. InSite Vision's clinical-stage ophthalmic product pipeline includes AzaSite PlusTM (ISV-502) and DexaSiteTM (ISV-305) for the treatment of eye infections, ISV-303 for pain and swelling associated with ocular surgery, and ISV-101 for the treatment of dry eye disease. For further information on InSite Vision, please visit www.insitevision.com.

Forward-looking Statements

This news release includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and adversely affect actual future results and the trading prices of the InSite Vision's common stock, including statements regarding the projected closing date of the financing described herein and the proposed use of proceeds from the financing. The risks and uncertainties include the risk that the purchase and sale of the shares of InSite Vision common stock might not be consummated due to a failure of one or more of the conditions precedent or otherwise, that InSite Vision may not apply the use of proceeds as currently planned and the other risk factors listed or described from time to time in InSite Vision's filings with the SEC, including its annual report on Form 10-K and its quarterly reports on Form 10-Q, under the caption "Risk Factors" and elsewhere in such reports. Except as required by law, InSite Vision does not intend to update any of the statements in this news release.

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