ISTA Pharmaceuticals to Raise $36.75 Million through Private Financing

ISTA Pharmaceuticals, Inc., today announced it has entered into definitive agreements with institutional accredited investors with respect to the private placement of 5.25 million shares of its common stock at a purchase price of $7.00 per share for expected gross proceeds of approximately $36.75 million before payment of placement agent commissions and offering expenses. Closing is expected to occur on or about June 29, 2007, subject to customary closing conditions. Lehman Brothers is serving as lead placement agent with Lazard Freres & Co. LLC, Susquehanna Financial Group, LLLP, and Thomas Weisel Partners LLC serving as additional placement agents for the transaction.

The offering was made only to select accredited investors in accordance with Section 4(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. The securities offered in this placement have not been registered under the Securities Act of 1933, or state securities laws, and cannot be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from the registration requirements. As part of the transaction, ISTA has agreed to file a registration statement with the SEC covering the resale of the shares of common stock to be issued in the offering. This news release is neither an offer to sell nor a solicitation of an offer to buy any of the securities discussed herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any state.