InSite Vision Determines that an Unsolicited Offer from a Global Pharmaceutical Company to Acquire InSite for $0.35 per Share in Cash Constitutes a “Company Superior Proposal”

Bidder Favorably Concludes Due Diligence on Recent BromSite™ Patent
Lawsuit

ALAMEDA, Calif.–(BUSINESS WIRE)–InSite Vision Inc. (OTCBB:INSV) today announced that InSite’s Board of
Directors has determined that the previously announced unsolicited offer
from a global pharmaceutical company (the “Bidder”) to acquire all
outstanding shares of InSite Vision common stock at $0.35 per share in
an all-cash transaction constitutes a “Company Superior Proposal” as
defined in InSite’s previously announced definitive agreement with QLT
Inc. dated as of August 26, 2015 (NASDAQ:QLTI) (TSX:QLT).

Under the terms of the QLT merger agreement, QLT would acquire InSite in
a primarily all-stock transaction in which shareholders of InSite will
receive 0.078 QLT shares for each InSite Vision share they hold, subject
to a collar arrangement that would limit the minimum value payable for
each share to $0.25, with a maximum value payable for each share of
$0.30.

After the Bidder had favorably concluded its independent due diligence
regarding the recently filed BromSite™ patent lawsuit, InSite Vision
convened a special board meeting on Friday, September 4, 2015 in which
the InSite Board of Directors determined, in good faith and after
consultation with its independent financial and legal advisors, that the
Bidder’s unsolicited offer of $0.35 per share in cash is a Company
Superior Proposal, as such term is defined in the QLT merger agreement.
The Bidder supplemented its proposal with a definitive merger agreement
and definitive loan documents that the Bidder has indicated it is
prepared to execute upon InSite’s termination of the QLT merger
agreement.

InSite has notified QLT of the InSite Board of Directors’ determination
and will engage in discussions with the Bidder. InSite is required, and
intends to, negotiate in good faith with QLT until 5:00 p.m. Pacific
Time on Thursday, September 10, 2015 (the “Negotiation Period”) to allow
QLT the opportunity to amend its merger agreement such that the Bidder’s
proposal will no longer constitute a Company Superior Proposal. InSite
is not permitted to enter into the Bidder’s merger agreement or to
change its recommendation in favor of the QLT transaction unless, at the
end of the Negotiation Period, the InSite Vision Board of Directors has
determined that the Bidder’s offer continues to be a Company Superior
Proposal. The Bidder has stated that its offer will remain outstanding
until the expiration of the Negotiation Period and any additional days
thereafter necessary for the Bidder and InSite to enter into the
definitive agreements provided by the Bidder.

Under the QLT merger agreement, InSite would be required to pay a
$2,667,000 termination fee to QLT if the InSite Board of Directors
terminates the QLT merger agreement in favor of an agreement with the
Bidder. The Bidder has agreed to pay the termination fee to QLT on
InSite’s behalf in such event. InSite would be required to repay the
Bidder for the QLT termination fee under specified circumstances in
which InSite would be required to pay a termination fee to the Bidder in
connection with a termination of the Bidder’s merger agreement.

At this time, InSite remains subject to the QLT merger agreement and the
InSite Board of Directors has not changed its recommendation in support
of the QLT transaction, the existing QLT merger agreement, or its
recommendation that InSite’s stockholders adopt the QLT merger
agreement. There can be no assurance that a transaction with the Bidder
will result from the Bidder’s offer, or that any other transaction will
be consummated. There can be no assurance that QLT will seek to
negotiate with InSite or will make a revised offer.

Guggenheim Securities, LLC is acting as financial advisor to InSite
Vision, Roth Capital Partners provided an independent fairness opinion
concerning the original QLT merger agreement, and Jones Day is acting as
legal advisor to InSite Vision.

About InSite Vision

InSite is advancing new specialty ophthalmologic products for treatment
of diseases affecting the front and back of the eye. The company has two
commercial products based on its innovative DuraSite®
platform approved for the treatment of bacterial eye infections, AzaSite®
(azithromycin ophthalmic solution) 1%, marketed in the U.S. by Akorn,
Inc., and Besivance® (besifloxacin ophthalmic suspension)
0.6%, marketed by Bausch & Lomb, a wholly owned subsidiary of Valeant
Pharmaceuticals International. InSite has a proprietary portfolio of
clinical-stage product candidates, and has filed an NDA for BromSite™
(0.075% bromfenac) for the treatment of inflammation and prevention of
pain associated with cataract surgery. InSite currently plans to file an
NDA with the FDA in 2017 for the commercial approval by the U.S. Food
and Drug Administration (FDA) of DexaSite™ for the treatment of
blepharitis. InSite’s AzaSite Plus™ is advancing through Phase 3
clinical studies for the treatment of eye infections, and ISV-101 is in
Phase 1/2 clinical development for dry-eye disease and inflammation. For
further information on InSite, please visit www.insitevision.com.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer
to sell or the solicitation of an offer to subscribe for or buy or an
invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the
acquisition or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law.

Additional Information

In connection with the proposed merger of InSite Vision and QLT, QLT
filed with the U.S. Securities and Exchange Commission (SEC) a
Registration Statement on Form S-4 that includes a preliminary proxy
statement of InSite Vision and that also constitutes a preliminary
prospectus of QLT (the Form S-4). The Form S-4 has not yet been declared
effective by the SEC and is not complete and will be further amended.
InSite Vision plans to mail the definitive proxy statement/prospectus to
its stockholders when it becomes available. INVESTORS ARE URGED TO READ
THE DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE
DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Investors and security
holders will be able to obtain free copies of the definitive proxy
statement/ prospectus (when available) and other documents filed with
the SEC by QLT or InSite through the website maintained by the SEC at http://www.sec.gov
and, in QLT’s case, also on the System for Electronic Document Analysis
Retrieval (SEDAR) website maintained by the Canadian Securities
Administrators at www.sedar.com.
Copies of the documents filed with the SEC by InSite will be available
free of charge on InSite’s website at www.InSiteVision.com
or by contacting InSite at 510-747-1220.

Participants in the Merger Solicitation

QLT, InSite Vision, their respective directors and certain of their
executive officers and employees may be considered participants in the
solicitation of proxies in connection with the proposed transaction
between InSite Vision and QLT. Information regarding the persons who
may, under the rules of the SEC, be deemed participants in the
solicitation of the QLT and InSite Vision shareholders in connection
with the proposed merger of InSite Vision with QLT and a description of
their direct and indirect interests, by security holdings or otherwise,
are set forth in the preliminary proxy statement/prospectus that has
been filed with the SEC. Information about the directors and executive
officers of QLT is set forth in its Annual Report on Form 10-K/A, which
was filed with the SEC on April 30, 2015. Information about the
directors and executive officers of InSite Vision is set forth in its
proxy statement for its 2015 annual meeting of shareholders, which was
filed with the SEC on February 19, 2015.

Cautionary Statements Related to Forward-Looking Statements

Statements in this document that are not strictly historical, including
statements regarding the potential terms of a transaction with the
Bidder, negotiations with QLT, the status of InSite’s proposed merger
with QLT and other statements contained herein may be “forward-looking”
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and involve a number of risks and uncertainties.
There are a number of important factors that could cause actual events
to differ materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance on
any such forward-looking statements. These factors include risks and
uncertainties related to, among other things: general economic
conditions and conditions affecting the industries in which InSite
Vision operates; that the unsolicited proposal from the Bidder may not
result in a definitive agreement for an alternative transaction or an
amended transaction with QLT; InSite and QLT’s ability to satisfy
conditions in the QLT merger agreement and consummate a merger on the
anticipated timeline or at all if the QLT merger remains in place;
InSite and the Bidder’s ability to satisfy conditions in the Bidder’s
proposed merger agreement and consummate a merger on the anticipated
timeline or at all if InSite enters into a definitive merger agreement
with the Bidder. Additional information regarding the factors that may
cause actual results to differ materially from these forward-looking
statements is available in (i) InSite Vision’s SEC filings, including
its Annual Report on Form 10-K for the fiscal year ended December 31,
2014 and Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2015 under the caption “Risk Factors” and elsewhere in such
reports; and (ii) QLT’s SEC filings, including its Annual Report on Form
10-K (as amended) for the fiscal year ended December 31, 2014 and
Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2015 under the caption “Risk Factors” and elsewhere in such reports. The
forward-looking statements made herein speak only as of the date hereof
and InSite Vision nor any of its affiliates assumes any obligation to
update or revise any forward-looking statement, whether as a result of
new information, future events and developments or otherwise, except as
required by law.

AzaSite®, DuraSite® and DuraSite®
2 are registered trademarks of InSite Vision Incorporated.
AzaSite
Xtra, AzaSite Plus, BromSite,
DexaSite and BromDex™ are trademarks
of InSite Vision Incorporated.
Besivance® is a
registered trademark of Bausch + Lomb Incorporated.

Contacts

InSite Vision
Louis Drapeau, 510-747-1220
Chief Financial
Officer
mail@insite.com
or
Media/Investor
Inquiries
BCC Partners
Karen L. Bergman, 650-575-1509
Susan
Pietropaolo, 845-638-6290
cell: 201-923-2049