InSite Vision Signs AzaSite(R) Licensing and Distribution Agreement With Bioceutica...

InSite Vision Signs AzaSite(R) Licensing and Distribution Agreement With Bioceutica S.A. for Four South American Countries

InSite to Receive Double-Digit Royalty on Sales of AzaSite in
Targeted Territory
ALAMEDA, Calif.--(Business Wire)--
InSite Vision Incorporated (AMEX:ISV) announced today that it has
signed a licensing and distribution agreement with Bioceutica S.A., an
ophthalmology-focused Argentine pharmaceutical company, for InSite's
AzaSite(R) (azithromycin ophthalmic solution) 1% for the treatment of
bacterial conjunctivitis (pink eye).

Under the terms of the agreement, InSite grants exclusive rights
to Bioceutica to commercialize AzaSite for ocular bacterial infection
in Argentina, Chile, Paraguay and Uruguay. Bioceutica will also be
responsible for securing regulatory approval of AzaSite in those
countries. In exchange, Bioceutica will pay for the cost of product
registration in those countries and provide a double-digit royalty to
InSite on net sales of AzaSite upon approval by regulatory
authorities. InSite Vision will be responsible for providing
manufactured product.

"As we expand our international partner network, Bioceutica
represents the type of focused market experience and commitment
necessary to assure AzaSite's commercial success in global markets,"
said S. Kumar Chandrasekaran, Chairman and Chief Executive Officer of
InSite Vision. "We believe that Bioceutica's management experience and
success in marketing in-licensed products will enable them to be
successful with AzaSite in this growing South American region."

"We believe we will secure a significant market share in the
ocular infection market in South America with AzaSite," said Mr. Oscar
Zenarruza, Chief Executive Officer of Bioceutica. "We are delighted at
the opportunity to work with InSite Vision and foresee a substantial
market potential for AzaSite in South America -- one that we believe
we are fully equipped to execute upon."

AzaSite was approved in the United States for bacterial
conjunctivitis (pink eye) treatment by the Food and Drug
Administration (FDA) in April 2007, and was commercially launched in
the United States by Inspire Pharmaceuticals, Inc. in August 2007.
Inspire, a biopharmaceutical company based in Durham, North Carolina,
is the exclusive licensee of AzaSite in the United States and Canada.
InSite has filed a New Drug Submission (NDS) with Health Canada
seeking regulatory approval to market AzaSite in Canada. In addition,
in December 2007, InSite signed a licensing and distribution agreement
with Shin Poong Pharm in South Korea and is seeking other
international partners for commercialization and distribution of
AzaSite.

About AzaSite

AzaSite contains the drug azithromycin, a broad-spectrum
antibiotic formulated with InSite's proprietary drug delivery
technology (DuraSite(R)) as eye drops. This is the first time
azithromycin has been formulated successfully for use in the eye.
AzaSite offers a reduced dosing frequency as compared to currently
available eye drops in the United States for the treatment of
bacterial conjunctivitis and has a favorable safety and efficacy
profile.

About DuraSite

InSite's DuraSite drug delivery technology is a patented synthetic
polymer-based formulation designed to extend the residence time of a
drug relative to conventional topical therapies. It enables topical
delivery of a solution, gel or suspension and can be customized for
delivering a wide variety of potential drug candidates. For more
information about the core DuraSite drug delivery technology, visit
http://www.insitevision.com/durasite.

About Bioceutica

Bioceutica S.A., with headquarters in Buenos Aires, Argentina, is
a privately held company focused on advanced molecular therapy, in
particular biopolymers. Bioceutica's areas of interest include
therapeutic solutions in ophthalmology, neurology and dermatology. In
the area of dermatology, Bioceutica markets a complete line of
products aimed at treating several pathologies.

About InSite Vision

InSite Vision (http://www.insitevision.com) develops novel topical
anti-infective products, including AzaSite launched in the United
States by Inspire Pharmaceuticals for the topical treatment of
bacterial conjunctivitis (pink eye). Based on its proprietary
azithromycin-DuraSite technology platform, InSite is expanding its
portfolio of anti-infective ophthalmic products to include AzaSite
Plus(TM) and AzaSite Xtra(TM) whose product features have the
potential to provide significant advantages currently not available
with conventional treatment options. In addition, InSite is evaluating
the use of its azithromycin-DuraSite platform to develop topical
anti-infective products outside of the market category of
ophthalmology beginning with AzaSite Otic(TM) for ear infections.

Forward-Looking Statements

This news release contains certain statements of a forward-looking
nature relating to future events, such as, the potential success and
market share of AzaSite in Argentina, Chile, Paraguay and Uruguay, the
potential success of Bioceutica's commercialization and marketing
efforts, InSite's plans with respect to commercializing AzaSite in
additional countries and regions, 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 reliance on third parties, including Inspire, Shin
Poong, and Bioceutica for the commercialization of AzaSite and its
other products; the ability of InSite Vision to enter into additional
corporate collaborations for AzaSite outside of its currently licensed
territories and with respect to its other product candidates;
Bioceutica's ability to successfully obtain approval for and market
AzaSite in Argentina, Chile, Paraguay and Uruguay and ability to
successfully market AzaSite in those territories; 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, AzaSite Plus,
AzaSite Xtra, and AzaSite Otic; 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 AzaSite Plus and AzaSite Otic.
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.

InSite Vision
Joyce Strand, 510-747-1220

Copyright Business Wire 2008