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ISTA Pharmaceuticals Reports Fourth Quarter and Full-Year 2007 Financial Results
Date:3/6/2008

$20.2 108%

Istalol 11.3 8.3 36%

Vitrase 5.2 4.2 24%

Other 0.3 0.3 0%

Total Net Revenue $58.9 $33.0 78%

Fourth Quarter and Year End Operating Details

Gross margin for the fourth quarter and year ended December 31, 2007 was 72% (or $13.7 million) and 73% (or $43.0 million), respectively, as compared to 73% (or $9.0 million) and 70% (or $23.1 million), respectively, for the same periods in 2006. The change in gross margin for the 2007 periods was due primarily to shifts in revenue mix.

Research and development expenses for the fourth quarter and year ended December 31, 2007, were $11.6 million and $32.5 million, respectively, as compared to $6.1 million and $23.8 million during the same periods of 2006. The increase in research and development expenses for 2007 was primarily the result of an increase in clinical development costs, which include FDA filing fees, clinical investigator fees, study monitoring costs, and data management costs, primarily related to the Xibrom QD Phase III clinical trial costs and NDA filing with the FDA and Bepreve clinical and other studies. Research and development expenses for the fourth quarter of 2007 in the amount of $11.6 million exceeded management's guidance of $8 to $10 million primarily due to timing and acceleration of certain clinical trials, including the Bepreve Phase III and ocular safety studies, and an increase in stock-based compensation expense. Stock-based compensation expenses included in R&D for the fourth quarter and year ended December 31, 2007, were $0.3 million and $1.0 million, respectively.

Selling, general, and administrative expenses for the fourth quarter and year ended December 31, 2007, were $11.5 million and $46.6 million, respectively, as compared to $9.0 m
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SOURCE ISTA Pharmaceuticals, Inc.
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