InSite Vision Announces Global Alliance with Bausch & Lomb.

ALAMEDA, Calif.--(BUSINESS WIRE)--July 18, 1996--InSite Vision Incorporated (Alameda, Calif)(NASDAQ: INSV) today announced a global alliance with Bausch & Lomb covering the manufacture of potential InSite Vision products, the worldwide marketing of InSite Vision's PilaSite(R) product candidate for glaucoma, and a joint development program utilizing InSite's proprietary DuraSite(R) eyedrop-based drug delivery technology.

In connection with the alliance, Bausch & Lomb will make a $2.0 million equity investment in InSite Vision, provide up to $2.0 million in new product development funding, and pay royalties to InSite on future PilaSite product sales.

"Through this alliance, InSite Vision achieves several key corporate objectives," said company Chairman and Chief Executive Officer Kumar Chandrasekaran, Ph.D. "First, with access to pharmaceutical manufacturing capabilities, we can now proceed with filing New Drug Applications for U.S. Food and Drug Administration approval to market our PilaSite and BetaSite glaucoma product candidates. Importantly, we can advance these products, which have successfully completed Phase III clinical studies, without incurring the substantial infrastructure costs required to develop our own large-scale production facilities. And, Bausch & Lomb can provide manufacturing of other product candidates as they move into later stage clinical testing.

"Second, by marketing PilaSite through Bausch & Lomb's established ophthalmic marketing and sales organization, we believe the full commercial potential of this product candidate will be achieved," Chandrasekaran continued.

PilaSite contains pilocarpine, a drug used to reduce elevated Intraocular pressure in glaucoma patients. In order to be effective, conventional pilocarpine must be administered up to four times daily, with the potential for vision-impairing pupil constriction and other side effects to occur with each dose. In contrast, PilaSite eyedrops administered twice daily are designed to provide efficacy equivalent to four daily doses of conventional pilocarpine with reduced side effects.

"Next, through our joint product development program, we look forward to expanding the use of our patented DuraSite technology by formulating and testing new eyedrop-based glaucoma medications. This aspect of our alliance meets our goal of entering into product development agreements which provide near-term funding as well as potential future royalties on product sales."

"Finally," said Chandrasekaran, "Bausch & Lomb's equity investment in InSite Vision further strengthens our financial position for the independent advancement of our other product candidates."

In addition to PilaSite and BetaSite, InSite Vision's active development programs include: ISV-205 for the prevention of glaucoma progression and other indications; ISV-900, a genetically based diagnostic and prognostic tool for glaucoma; and ISV-120 for the prevention of pteryglum recurrence.

"We are excited about this relationship with InSite Vision," stated Alan P. Dozler, president of Bausch & Lomb's U.S. Pharmaceutical business. "Through our joint efforts with InSite Vision, we plan to explore new uses of the DuraSite technology for additions to Bausch & Lomb's ophthalmic product line."

InSite Vision is an ophthalmic pharmaceutical company focused on the development of improved and new eye medications based on its proprietary DuraSite(R) eyedrop-based delivery system. DuraSite-based products are designed to permit the gradual release of drug into the eye over a period of hours, thereby overcoming the various treatment problems common with conventional ophthalmic drug delivery.

This press release contains, among other things, certain statements of a forward-looking nature relating to future events or the future business performance of InSite Vision. Such statements involve a number of risks and uncertainties. Among these are: results of preclinical and clinical studies, determinations by the U.S. Food and Drug Administration, results of discussions with potential collaborators as well as the risk factors listed from time to time in the company's filings with the Securities and Exchange Commission, including but not limited to those contained in InSite Vision's report on Form 10Q for the quarter ended March 31, 1996. -0-

Note to Editors: "InSite Vision," "PilaSite," "BetaSite," and "DuraSite" are trademarks of InSite Vision Incorporated.

CONTACT: InSite Vision, Alameda

Kumar Chandrasekaran, 510/865-8800