1) InSite Vision is developing novel ophthalmic products using its DuraSite polymer drug delivery technology to improve drug efficacy, dosing, and compliance. It has three Phase 3 product candidates and is focused on execution. 2) The company will receive royalties from two partnered commercial products and is conducting a Phase 3 study called DOUBle to evaluate AzaSite Plus and DexaSite for blepharitis. 3) BromSite showed statistically superior performance to Xibrom in a Phase 1/2 study for reducing inflammation and pain post-cataract surgery and achieved over 2x the tissue concentration of Bromday in a Phase 2 PK

1. Corporate Presentation:
Annual Shareholder Meeting
Tim Ruane, CEO
InSite Vision
May 31, 2012

2. Our Approach: Novel Products, Reduced
Risk, Efficient Development
DuraSite®: Polymer drug delivery technology
• Increases efficacy
• Improves dosing and compliance
Low safety and regulatory risks
• FDA approved technology
• Combine with known agents
Shorter development timelines
• Target indications with high unmet need
• Leverage existing data on platform and products
Reduced development costs
• Streamline clinical trial programs
• Work closely with FDA to define expectations and program
2

3. Undervalued Company with Strong Focus
and Investment Fundamentals
Significant royalties from two partnered commercial products
• Merck
• Bausch + Lomb
Three Phase 3 product candidates advancing
• AzaSite Plus™ & DexaSite™
• BromSite™ (ISV‐303)
Proven platform technology
Multiple partnering opportunities
• Own global rights to the three Phase 3 products & Phase I/2 product
Strong cash position and oversight of resources
Management team focus on execution
3

4. InSite Vision’s Pipeline
InSite Vision’s Pipeline
Phase 3/SPA
Enrolling
Phase 3
Starting Soon
Phase 1/2
On-hold
New IND
Planned
4

5. AzaSite® in North America Opportunity
AzaSite®
Partner: Merck (via 2011 acquisition of Inspire Pharmaceuticals)
• Approved in U.S. & Canada for bacterial conjunctivitis
InSite Vision receives 25% royalty
• 2012 minimum royalty guarantee: $17M
• Escalating 2013 minimum royalty guarantee
• Includes AzaSite Xtra™ (ISV‐405; 2% azithromycin
in DuraSite) as “life cycle management” opportunity
2011 Royalties of $13.9M
• Merck intends to grow in bacterial conjunctivitis
Patent protection
• AzaSite: Issued IP to March 2019
• AzaSite Xtra: Issued IP to October 2027
5

6. Besivance® Opportunity
Besivance®
Partner: Bausch + Lomb
Approved in U.S. for bacterial conjunctivitis
• Launched in mid‐2009 in U.S.
• Asia/Latin America/ROW launches in 2011
• Additional filings end‐2011/early 2012
InSite Vision receives middle single‐digit
royalty on global sales
• 2011 Royalties: $1.2M (vs. $0.5M in 2010)
“Besivance Global Commercialization” ongoing
Patent protection to 2021
6

7. Blepharitis: Acute and/or Chronic
Blepharitis: Acute and/or Chronic
Inflammation of the Eyelids
• Redness • Gritty sensation
• Flaking skin • Itching
Signs &
• Crusting • Vision impairment
Symptoms
• Cysts • Discomfort
• Irritation
• Bacteria
Possible • Viruses
Causes • Allergy
• Environmental conditions
• Systemic disease
Blepharitis
(also known as Lid Margin Disease)
• Estimated 34 million people in the
U.S. alone
Prevalence
• Widely considered both
under-diagnosed and misdiagnosed
Image Source: WebMD.com
7

8. Blepharitis: Global Landscape Overview
Blepharitis: Global Landscape Overview
No approved agents
Clear market need
• Ophthalmologists see worst patients; many “silent sufferers”
Off‐label prescribing by ophthalmologists
• Scant reimbursement; patients pay out‐of‐pocket
High FDA hurdle: traditional endpoint
• Onerous in chronic settings of inflammation/infection (blepharitis)
Industry “Holy Grail”: front‐of‐eye focus
Classic first‐to‐market opportunity
• Only company in Phase 3 development with SPA in place
8

9. AzaSite Plus™ (ISV‐502) for Blepharitis
AzaSite Plus™ (ISV‐502) for Blepharitis
Intended to rapidly reduce signs and symptoms of acute
and chronic blepharitis
Combines low doses of azithromycin and dexamethasone
with DuraSite to address both infection and inflammation
Administered twice‐daily for 14 days
Safety and superior efficacy established in 2008 Phase 3
clinical trial versus AzaSite
Issued patents to 2019; potential exclusivity to 2031
based on 2011 intellectual property filings
9

10. DexaSite™ (ISV‐305) for Blepharitis
DexaSite™ (ISV‐305) for Blepharitis
Low‐dose dexamethasone in DuraSite
Administered twice‐daily for 14 days
Originally intended to rapidly reduce acute inflammation
in the treatment of non‐microbial blepharitis
Safety and efficacy established in 2008 Phase 3 clinical
trial versus AzaSite Plus
Phase 3 results indicate unanticipated high activity of BID
dexamethasone in DuraSite
• Basis for 2009 intellectual property filings
• Potential exclusivity to 2029
10

11. Special Protocol Assessment (SPA) Approval:
DOUBle Phase 3 for AzaSite Plus & DexaSite
Phase 3 for AzaSite Plus & DexaSite
DOUBle (Dual Ophthalmic agents Used in Blepharitis)
Simultaneous evaluations of AzaSite Plus, AzaSite, DexaSite and
DuraSite (vehicle)
• Valuable data on our two agents ‐ and AzaSite ‐ in one Phase 3 study
Four‐arm Study of 900 Patients Design and Statistical Analysis Plan
AzaSite Plus
AzaSite Plus N= 900
N= 300
N= 300
Randomized
AzaSite
AzaSite
N= 150
N= 150 Blinded
DexaSite
DexaSite
N= 300
N= 300
Powered at 80%
DuraSite
DuraSite 2‐sided Fisher’s Exact Test
N= 150
N= 150
11

12. Special Protocol Assessment (SPA) Approval:
DOUBle Phase 3 for AzaSite Plus & DexaSite
Phase 3 for AzaSite Plus & DexaSite
DOUBle (Dual Ophthalmic agents Used in Blepharitis)
SPA Agreed Primary Endpoints: May 2011
Traditional Endpoint New Endpoint #1 Other Endpoints
Complete (100%) resolution of all Time to recurrence: Improvement in clinical signs &
clinical signs & symptoms (cure) Patients with complete (100%) symptoms: All other patients
resolution of clinical signs & symptoms
(cure) Exacerbation of clinical signs &
symptoms: All other patients
AzaSite Plus
AzaSite Plus AzaSite Plus
AzaSite Plus AzaSite Plus
AzaSite Plus
vs. vs. vs.
AzaSite
AzaSite DexaSite
DexaSite AzaSite
AzaSite
DexaSite
DexaSite DexaSite
DexaSite
vs. vs.
DuraSite (Vehicle)
DuraSite (Vehicle) DuraSite (Vehicle)
DuraSite (Vehicle)
12

13. DOUBle Study Execution Update
Update as of May 24th
• All 45 sites up and running
• 44/45 sites have enrolled at least 1 patient
626 patients (~70%) enrolled since November 16th FPO
• 95 patients have now completed the study
• 26 patients dropped out early
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14. The InSite Vision Opportunity
Classic first‐to‐market advantage
Potential for broad payor strategy, reimbursement, promotion
and use upon approval
SPA discussions/agreement reveal FDA interest in an approved
blepharitis drug
• Well aware of acute vs. chronic disease endpoint issue
• Clearly understand reality of ophthalmology clinical practice
Two InSite “pipeline shots on goal”
• AzaSite Plus needs superiority over AzaSite and DexaSite
• DexaSite needs only be superior to DuraSite (vehicle)
Third potential “BD shot on goal” with AzaSite vs. Vehicle
• Potential 1st positive Phase 3 to support AzaSite blepharitis NDA path
• Merck owns no rights to these data
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15. AzaSite Plus and DexaSite:
AzaSite Plus and DexaSite:
Substantial Market Opportunities
Assuming moderate market penetration and current
pricing of drugs prescribed for blepharitis, possible sales
ranges are:
• AzaSite Plus $500M to $1B
[Based on 10% at $120/prescription]
• DexaSite $200M to $400M
[Based on 5% at $90/prescription]
• AzaSite We haven’t examined possible $ effects of a
positive outcome for AzaSite via this study
Reiterated 2011 Guidance for 2012
• Fully accrued in 2H 2012
• Results end‐2012/early 2013
We believe our blepharitis program will allow us to file
one and, hopefully, two NDAs in the U.S. in 2013
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16. BromSite™ (ISV‐303) for Reduction of
BromSite™ (ISV‐303) for Reduction of
Inflammation and Pain Post‐Cataract Surgery
Inflammation and Pain Post‐Cataract Surgery
Lower dose formulation of bromfenac (0.075%) in
DuraSite
• Preclinical data indicate superior performance to bromfenac
IND filed July 2010
Phase 1/2 clinical study completed January 2011
• Four‐arm study evaluating safety and efficacy
Top‐line results reported March 2011
• Final/full results to be presented and/or published in future
Superior PK performance reported October 2011
• Phase 2 PK study vs. Ista’s Bromday – the current market leader
Anticipate exclusivity into 2029 based on 2009 filings
16

17. Confirm BromSite Regulatory Pathway with FDA
Confirm BromSite
Following Surprisingly Strong Phase 1/2 Data
Phase 1/2 design evaluated BromSite administered once‐
and twice‐daily against ISTA’s Xibrom™ and DuraSite
Primary Endpoint Secondary Endpoints
Absence of cells in anterior chamber of Reduction of:
the eye at Day 15 • Flare
• Pain & discomfort from inflammation
• Others
BromSite (BID)
BromSite (BID)
BromSite (QD) 53.3%
BromSite (QD) 53.3%
R
p=NS All statistically
N=169 significant
XiBrom (BID) p=0.0016 42.2%
XiBrom (BID) superiority @
Days 8, 15 & 29
DuraSite (BID) 19.0%
DuraSite (BID)
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18. BromSite vs. Bromday Phase 2 PK Study
vs. Bromday
Phase 2 pharmacokinetic study designed to evaluated
BromSite against ISTA’s Bromday™ (market leader)
• Statistically compared mean aqueous humor concentrations of
bromfenac for the 2 treatment arms
Study Design & Analysis
Randomized
BromSite
BromSite Double‐blind
(0.075% bromfenac in DuraSite)
(0.075% bromfenac in DuraSite) Multi‐center (N=3)
R
N=58
Patients dosed QD
Bromday
Bromday • Day ‐2 & ‐1 pre‐surgery
(0.09% bromfenac)
(0.09% bromfenac) • Day 0 of surgery
100‐200 µl fluid extracted
HPLC‐MS analysis
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19. BromSite vs. Bromday Phase 2 PK Study
vs. Bromday
BromSite achieves >2x the tissue concentration in
the eye vs. Bromday
• Potential benefits in avoiding cystoid macular edema
(CME), a potentially serious adverse event post‐surgery
• Demonstrated superiority over current market leader
Mean concentrations of bromfenac in the aqueous humor
Measured ~3 hours after last dose
BromSite
BromSite
(0.075% bromfenac in DuraSite)
(0.075% bromfenac in DuraSite)
R P=0.0032
N=58
Bromday
Bromday
(0.09% bromfenac)
(0.09% bromfenac)
19

20. BromSite Summary
February 2012 pre‐Phase 3 FDA meeting
• Finalized Phase 3 protocols
• Standard endpoints (same as 2010 Phase 1/2 Study)
• BromSite need only show superiority vs. DuraSite (vehicle)
• 2 Phase 3 Studies (n=240 each)
• Clinical trial material now manufactured
Reiterated 2011 Guidance
• Fully accrued in 2H 2012
• Results end‐2012/early 2013
We believe our BromSite program will give us an
opportunity to file an additional NDA in 2013
• IND to potential NDA filing: 3 years
• Ideal model for future InSite development plans
20

21. Europe: Expanding our Commercial
Footprint
February 2012 EU Regulatory Meetings (2 Countries)
• InSite blepharitis programs: AzaSite Plus & DexaSite
• Covered 2008 Phase 3 data & ongoing DOUBle study
Key Results
• U.S. efficacy/safety data sufficient to support EU filings; there is
NO de facto need for EU patient data
• EU/North American formulation differences (preservative levels)
are a non‐issue; we simply need appropriate EU CMC package
• Centralized filing/review procedure should be available to us
We are evaluating opportunities to file in EU first
We believe these principles should apply to AzaSite &
BromSite
21

22. European Regulatory Pathways: Continued
Q2 2012 EU Regulatory Meetings
• BromSite Phase 3 program: Package submitted; meetings
scheduled
• AzaSite NDA filing pathway: Package submitted; awaiting
scheduled
Key Questions
• Seeking agreement in BromSite Phase 3 clinical program
• Seeking agreement that AzaSite NDA data sufficient to support EU
filings; no need for additional EU patient data
Informal inputs: AzaSite Xtra as sNDA to AzaSite or full NDA
• CMC issues on EU/North American formulation differences; seek
agreement for appropriate EU CMC package
• Is centralized filing/review procedure available for AzaSite and
BromSite?
22

23. R&D Pipeline – What’s Next?
R&D Pipeline – What’s Next?
ISV‐101: Bromfenac solution in DuraSite
• IND filed and Phase 1/2 study approved; on hold due to pipeline prioritization
AzaSite Xtra™ (ISV‐405): Azithromycin (2.0%) solution in DuraSite
• “Double strength” AzaSite with issued global IP through end‐2027
• Completed all formulation/stability data and all GLP toxicology work to support
global IND and/or IND‐equivalent filings
ISV‐102: Tetracycline‐based solution in DuraSite
• Completed formulation/stability studies
• Potential therapy for the treatment of ocular infections
ISV‐620: Prostaglandin analog solution in DuraSite
• Completed formulation/stability studies
• Potential therapy for cosmetic eyelash enhancement
ISV‐215: Prostaglandin analog solution in DuraSite
• Completed formulation/stability studies
• Potential therapy for treatment and/or prevention of Glaucoma
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24. IP Update
November 2011: USPTO definitively rules against UCSF in
AzaSite patent interference
• USCF files appeal end‐2011; we just received basis of appeal filing
• Our case; Merck in monitoring role
Merck continues its prosecution of paragraph IV/ANDA
case vs. Sandoz
• Merck’s case; InSite monitoring role
• Likely Q1 2013 trial date
Continued close coordination of AzaSite IP/legal issues by
Merck/InSite
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25. InSite Vision: Strong Fundamentals,
Near‐Term Catalysts, Undervalued Opportunity
Near‐Term Catalysts, Undervalued Opportunity
Two partnered commercial products
• Merck
• Bausch & Lomb
Three Phase 3 product candidates advancing
• AzaSite Plus™
• DexaSite™
• BromSite™ (ISV‐303)
Multiple NDA/registration plans
• North America: AzaSite Plus & DexaSite, and BromSite
• Europe now fully on our radar screen
AzaSite, AzaSite Plus, DexaSite, BromSite
Potential for multiple 2013 NDA filings in U.S. and/or Europe
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26. Thank you
www.insitevision.com