InSite Vision Signs International Licensing and Distribution Agreement for AzaSite(®) in Japan and Taiwan With Nitten Pharmaceutical Co., Ltd

InSite Vision (NYSE Amex:ISV) today announced that it has signed an exclusive international licensing and distribution agreement for AzaSite^® (azithromycin ophthalmic solution) 1% with Nitten Pharmaceutical Co., Ltd., one of the top ten Japanese ophthalmic pharmaceutical companies. AzaSite contains a broad-spectrum antibiotic formulated with InSite Vision’s patented DuraSite^® drug delivery vehicle to enhance the retention time of the antibiotic on the surface of the eye. AzaSite offers the benefit of a less frequent and more convenient dosing regimen in a safe and effective therapy for the treatment of bacterial eye infections.

Under the terms of the agreement, Nitten is responsible for securing regulatory approval and has exclusive rights to commercialize AzaSite for ocular bacterial infection in Japan and Taiwan. Nitten will pay InSite one million U.S. dollars upon the execution of the license agreement, followed by milestone payments of one million dollars upon the first regulatory submission and one million dollars upon the first regulatory approval. After approval, Nitten will also pay a double-digit royalty on net sales of AzaSite in Japan and on net royalties from Taiwan, where Nitten intends to use a partner to commercialize AzaSite. InSite Vision will initially be responsible for manufacturing AzaSite.

"Nitten has a track record of success in marketing both branded and generic ophthalmic products and is well-positioned to be our commercial partner for AzaSite in Japan and Taiwan,” said Louis Drapeau, Chief Executive Officer of InSite Vision. "As we expand our international partnerships to bring AzaSite to patients globally, Nitten represents the type of established market leadership and commercial expertise necessary to assure commercial success for AzaSite.”

"We are pleased to license AzaSite considering the positive acceptance this unique ocular antibiotic has experienced in the United States. We believe there is a significant market opportunity in both Japan and Taiwan for this product, and we look forward to establishing this product in our markets as soon as possible,” said Ayumi Uetake, President of Nitten.

AzaSite was approved for bacterial conjunctivitis (pink eye) treatment by the United States Food and Drug Administration (FDA) in April 2007, and was commercially launched in the United States for the treatment of bacterial conjunctivitis by Inspire Pharmaceuticals, Inc. in August 2007. AzaSite received regulatory approval from Health Canada on March 31, 2009. Inspire Pharmaceuticals is responsible for marketing AzaSite in the U.S. and in Canada. InSite Vision is seeking additional international partners for commercialization and distribution of AzaSite outside of North America.

About Nitten

Nitten Pharmaceutical Co., Ltd, with headquarters in Nagoya, Japan, is a private company established in 1919. It is one of the ten largest ophthalmic pharmaceutical companies in Japan and employs more than 200 people with sales in excess of US $35,000,000.

About InSite Vision

InSite Vision is committed to advancing new and superior ophthalmologic products for unmet eye care needs. InSite is recognized for the discovery and development of novel ocular pharmaceutical products based on its DuraSite^® bioadhesive polymer core technology, an innovative platform that extends the duration of drug delivery on the eye’s surface, thereby reducing frequency of treatment and improving the efficacy of topically delivered drugs. By formulating the well-established antibiotic azithromycin in DuraSite, InSite developed the lowest-dosing ocular antibiotic for the treatment of bacterial conjunctivitis (pink eye) available to the United States ophthalmic market, AzaSite^® (azithromycin ophthalmic solution) 1%. AzaSite is marketed by Inspire Pharmaceuticals in the United States and will be marketed by international partners in South Korea, four countries in South America, Turkey and China upon approval in those countries.

InSite’s ophthalmic product development portfolio also includes ISV-502, which is currently in Phase 3 pivotal trials for the treatment of eye and eyelid infection and inflammation and additional product candidates leveraging the company’s core technologies. For further information on InSite Vision, please visit www.insitevision.com.

Forward Looking Statements

This news release contains certain statements of a forward-looking nature relating to future events, such as the timing of approval of AzaSite in Japan and Taiwan, the expected success and market share of AzaSite in Japan and Taiwan, the potential success of Nitten's commercialization and marketing efforts, the benefits of AzaSite, InSite's expected development and commercialization of additional anti-infective therapies using DuraSite sustained delivery technology, InSite's corporate goals, and the proposed indications and clinical status of the company's other product candidates. Such statements entail a number of risks and uncertainties, including but not limited to: InSite Vision's ability to obtain additional funding to continue its operations; its reliance on third parties, including Inspire and Nitten, for the commercialization of AzaSite and its other products; the ability of InSite Vision to enter into additional corporate collaborations for AzaSite outside the U.S. and Canada and with respect to its other product candidates; Nitten's ability to successfully obtain approval for and market AzaSite in Japan; Inspire's ability to successfully market AzaSite in the United States and Canada; the clinical results of InSite's product candidates; InSite Vision's ability to expand its technology platform to include additional indications; InSite Vision's ability to maintain and develop additional collaborations and commercial agreements with corporate partners, including those with respect to AzaSite, ISV-502, AzaSite Xtra; and its ability to adequately protect its intellectual property and to be free to operate with regard to the intellectual property of others; and determinations by the FDA, including those with respect to ISV-502. Reference is made to the discussion of these and other risk factors detailed in InSite Vision's filings with the Securities and Exchange Commission, 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. Any forward-looking statements or projections are based on the limited information currently available to InSite Vision, which is subject to change. Although any such forward-looking statements or projections and the factors influencing them will likely change, InSite Vision undertakes no obligation to update the information. Such information speaks only as of the date of its release. Actual events or results could differ materially and one should not assume that the information provided in this release is still valid at any later date.