802724--3/17/2008--INSITE_VISION

related topics

{product, candidate, development}

{product, liability, claim}

{product, market, service}

{property, intellectual, protect}

{operation, natural, condition}

{stock, price, operating}

{personnel, key, retain}

{control, financial, internal}

{cost, regulation, environmental}

{provision, law, control}

{cost, operation, labor}

{acquisition, growth, future}

{loan, real, estate}

It is difficult to evaluate our business because we are in an early stage of development and our technology is untested and successful development of pharmaceutical products is highly uncertain and requires significant expenditures and time We have a history of operating losses and we expect to continue to have losses in the future Clinical trials are expensive, time-consuming and difficult to design and implement and it is unclear whether the results of such clinical trials will be favorable The results of our clinical trials may not support our product candidate claims Our strategy for commercialization of our products requires us to enter into successful arrangements with corporate collaborators The commercial success of our products is dependent on the diligent efforts of our corporate collaborators If we fail to enter into future collaborations or our current collaborations are terminated, we will need to enter into new collaborations or establish our own sales and marketing organization Our future success depends on our ability to to assist us with the development of new products, new indications for existing products, and in the conduct of our clinical trials to achieve regulatory approval for commercialization and any failure or delay by those parties to fulfill their obligations could adversely affect our development and commercialization plans Physicians and patients may not accept and use our products We may require additional licenses or be subject to expensive and uncertain patent litigation in order to sell our products Our business depends upon our proprietary rights, and we may not be able to protect, enforce or secure our intellectual property rights adequately In certain circumstances, we may lose the potential to receive future royalty payments after the AzaSite Notes are repaid in full or we may be required to pay damages for breaches of representations, warranties or covenants under certain of the AzaSite Note Financing Agreements. Inspire s failure to successfully market and commercialize AzaSite would harm sales of AzaSite and, therefore, would delay or prevent repayment of the AzaSite Notes, which would delay or prevent us from receiving future revenue from sales of AzaSite. Royalties under the Inspire License Agreement may not be sufficient for our subsidiary to meet its payment obligations under the AzaSite Notes. If the Inspire Agreement is terminated in whole or in part while the AzaSite Notes remain outstanding, we will be forced to find a new third party collaborator for AzaSite, pursue commercialization efforts ourselves or else we will lose our right to certain intellectual property rights related to AzaSite to our subsidiary. We rely on a sole source for the supply of the active pharmaceutical ingredient for AzaSite. We are dependent upon key employees and we may not be able to retain or attract key employees, and our ability to attract and retain key employees could be harmed by our current financial situation We may not successfully manage growth Our products are subject to government regulations and approvals which may delay or prevent the marketing of potential products and impose costly procedures upon our activities We have no experience in commercial manufacturing and if contract manufacturing is not available to us or does not satisfy regulatory requirements, we will have to establish our own regulatory compliant manufacturing capability and may not have the financial resources to do so We compete in highly competitive markets and our competitors financial, technical, marketing, manufacturing and human resources may surpass ours and limit our ability to develop and/or market our products and technologies If we cannot compete successfully for market share against other drug companies, we may not achieve sufficient product revenues and our business will suffer Uncertainties regarding healthcare reform and third-party reimbursement may impair our ability to raise capital, form collaborations and sell our products Our insurance coverage may not adequately cover our potential product liability exposure Our use of hazardous materials may pose environmental risks and liabilities which may cause us to incur significant costs If we engage in acquisitions, we will incur a variety of costs, and the anticipated benefits of the acquisitions may never be realized Management and principal stockholders may be able to exert significant control on matters requiring approval by our stockholders The market prices for securities of biopharmaceutical and biotechnology companies such as ours have been and are likely to continue to be highly volatile due to reasons that are related and unrelated to our operating performance and progress We have adopted and are subject to anti-takeover provisions that could delay or prevent an acquisition of our Company and could prevent or make it more difficult to replace or remove current management If earthquakes and other catastrophic events strike, our business may be negatively affected We face the risk of a decrease in our cash balances and losses in our investment portfolio

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802724--3/17/2008--INSITE_VISION_INC