InSite Vision Incorporated reported the completion of a previously announced transaction whereby InSite Vision has sold its drug candidate ISV-403 for the treatment of ocular infections to Bausch & Lomb.

Under the terms of the transaction, InSite Vision received a cash payment and reimbursement of certain ISV-403 product development expenses, and will receive a percentage of future ISV-403 product sales in all licensed countries. Bausch & Lomb is assuming all future ISV-403 development and commercialization expenses and, following a transfer period, will be responsible for all development activities, with assistance from InSite Vision as appropriate. In addition, the August 2002 ISV-403 licensing agreement and the related Series A-1 Preferred Stock purchase agreement between Bausch & Lomb and InSite Vision has been terminated and Bausch & Lomb has returned to InSite Vision for cancellation all shares of the Series A-1 Preferred Stock previously issued.

ISV-403 combines a fourth-generation fluoroquinolone, SS734, licensed from Japan's SSP, Co., Ltd., with InSite Vision's patented drug delivery system, DuraSite. Preclinical studies with ISV-403 indicated that this drug candidate is effective against bacteria resistant to third generation fluoroquinolone products.

InSite Vision is an ophthalmic products company focused on glaucoma, ocular infections and retinal diseases.