ALAMEDA, Calif.—InSite Vision Inc. (OTCBB: INSV) announced on Aug. 28 that InSite and QLT Inc. (NASDAQ: QLTI) (TSX: QLT) entered into a revised merger agreement under which QLT will acquire InSite Vision. InSite Vision specializes in ophthalmologic products that treat ocular infection and inflammation, glaucoma, and retinal diseases. Under the terms of the revised merger agreement, a wholly owned subsidiary of QLT will be merged with and into InSite Vision.

At the time of the merger, each InSite Vision share will be exchanged for the following: .078 QLT shares, if the average trading price of QLT shares for the 15-trading day period ending on the trading day immediately preceding the closing of the merger (the average QLT trading price) is between $3.22 and $3.86; a number of QLT shares equal to $0.30 divided by the average QLT trading price, if the average QLT trading price is greater than $3.86; and a number of QLT shares equal to $0.25 divided by the average QLT trading price, if the average QLT trading price is less than $3.22.

On Aug. 26, 2015, QLT’s closing trading price was $3.43 per share. Based on the Aug. 27 closing price, an InSite Vision stockholder would receive shares of QLT worth approximately $0.267 per share of InSite held.

The prior agreement with QLT, announced on June 8, 2015, offered $0.178 per InSite share as of that date. Under the new agreement, the number of QLT shares to be issued in the merger is subject to a cap so that QLT will not issue QLT shares in excess of 19.9 percent of then-outstanding QLT shares. In such an event, the remaining merger consideration would be paid in cash (based on the value of the average QLT trading price) on a pro rata, per share basis.

“The amended merger agreement with QLT provides a significant improvement in value for our shareholders,” said Tim Ruane, InSite Vision's CEO. “The new agreement provides assurance of at least $0.25 per share and provides potential upside appreciation, depending on QLT’s trading prices, to up to $0.30 per share.”

InSite Vision’s board of directors approved the revised merger agreement with QLT and determined that the previously announced unsolicited offer from a multi-national pharmaceutical company to acquire InSite Vision for $0.25 per share in an all-cash transaction no longer constitutes a “company superior proposal” as defined in the QLT merger agreement.

Under the terms of the amended QLT merger agreement, the termination fee that QLT will be entitled to receive from InSite if the amended merger agreement is terminated under certain circumstances was increased from $1,170,000 to $2,667,000, or approximately 5 percent of InSite’s enterprise value.