Products, Pipeline and Profitability The Changing Face of ISTA

2 Forward-Looking Statement Certain statements contained herein are “forward-looking” statements, (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward- looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, failure to initiate clinical studies, failure to achieve positive results in clinical trials, failure to receive market clearance from regulatory agencies, and those risks and uncertainties discussed in filings made by ISTA Pharmaceuticals, Inc., with the Securities and Exchange Commission.

3 Products, Pipeline and Profitability Strong product revenue growth Established Rx eye business Emerging Rx allergy franchise Broad pipeline for Rx eye and allergy Three product candidates extend key franchises The year of profitability Expect to be EPS and cash flow positive NASDAQ Listed: ISTA

4 Marketed Product Portfolio 2009 Net Revenues $111 Million, +33% yoy Q1 Revenue - New Q1 Revenue +50% yoyQ1 Revenue +29% yoy Q1 Revenue +110% yoy

5 Established Rx Eye Business XIBROM, ISTALOL and VITRASE Remain Market Leaders Market Share (TRx $$)* *Data From Ophthalmologists Only (March NPA) Nevanac, Pataday, Betimol and Hylenex are trademarks of their respective owners

6 BEPREVE ® (bepotastine besilate ophthalmic solution)1.5% Emerging Rx Allergy Franchise For treatment of ocular itching associated with allergic conjunctivitis Launched in 2009 Increased sales force from 100 to 165 reps $600 million market Estimated 2010 revenue of >$20 million

7 BEPREVE Launch On-Track Weekly TRx trends strong Allergy season late – began ramping in April Sales force making inroads with top prescribers Demand from wholesalers up significantly in April Source: IMS HEALTH weekly NPA

8 Near-Term Product Pipeline Bromfenac once-daily Bromfenac dry eye Bepotastine nasal spray for allergy

9 Bromfenac Once-Daily Next Product in the Xibrom ™ Franchise First once-daily ocular NSAID ~$325 million market Treats pain and inflammation associated with cataract surgery Dosed pre-cataract surgery, as well as 14 days post-cataract surgery Anticipate 3-year exclusivity (until 2013) Q2 2009Q Q Q Phase 3 Completion Submission PDUFA Action Date Launch (E) October 16, 2010

10 Bromfenac Dry Eye Lower Concentration than Xibrom Underserved market - only one approved treatment ~$600 million in 2010(E) sales Proven anti-inflammatory agent Phase 2 Trial - Reduced a sign and a symptom of dry eye disease in same patient population New formulation, new patent June 2009 Mid-Summer 2010 Late Positive Phase 2 Phase 3 Filing (E) Launch (E)

11 Bepotastine Nasal Spray Next Product in BEPREVE Franchise Rx nasal allergy >$2 billion market, dominated by steroids Multiple mechanisms of action Secondary end-points in BEPREVE ocular studies showed nasal efficacy Patent protection expected thru 2019 On-Going Q2/ Formulation/Animal StudiesHuman Clinical Studies

The Year of Profitability Net Revenue$147-$165 million Xibrom $95 -$105 million Bepreve > $20 million Gross Margin*74% - 76% R&D*18% - 22% SG&A*48% - 52% Operating Income $8 - $10 million Net Income >$1 million EPS >$0.02 per share (44 mm shares without warrant valuation expense) Cash Flow $6 - $10 million * % of Net Sales

13 Poised for Success in 2010 and Beyond Growing Rx Eye and Allergy business Xibrom, BEPREVE, Istalol, Vitrase Three new product launches planned in the next few years Bromfenac once-daily (2010)~$325 million market Bromfenac dry eye (2012) ~$600 million market Bepotastine nasal spray for allergy >$2 billion market 2010 – The Year of Profitability Strong revenue growth Positive net income/EPS Cash flow of $6 -10 million Existing products and pipeline expected to generate $500 million in annual sales