InSite Vision and a subsidiary of Sun Pharmaceutical Industries have entered into a merger agreement under which an indirect wholly owned subsidiary of Sun Pharma will acquire InSite in an all-cash transaction for $0.35 per share, or approximately $48 million in aggregate equity value, on a fully diluted basis. The transaction has been approved by the boards of directors of both InSite and the Sun Pharma subsidiary, and will be completed by means of a tender offer.

InSite also announced that it has terminated its previously announced second amended and restated merger agreement with QLT. Following discussion with both Sun Pharma and QLT, and in consultation with its outside legal and financial advisors, the InSite board of directors determined that the Sun Pharma transaction represented a Company Superior Proposal under the QLT merger agreement. In connection with InSite’s termination of the QLT merger agreement, InSite was required to pay a $2,667,000 termination fee to QLT. The Sun Pharma subsidiary has paid this fee to QLT on InSite’s behalf.

Under the terms of the merger agreement, an indirect wholly owned subsidiary of Sun Pharma will commence a tender offer for all outstanding shares of InSite at $0.35 per share in cash. The completion of the tender offer will be conditioned on InSite’s stockholders tendering at least a majority of InSite’s outstanding shares, determined on a fully diluted basis, and other customary closing conditions. Following completion of the tender offer, both companies will complete a merger in which InSite shares that were not tendered in the tender offer will be cancelled and converted into the right to receive $0.35 per share.

InSite will separately prepare a proxy statement under which InSite will seek stockholder approval of a merger involving the indirect wholly owned subsidiary of Sun Pharma and InSite, pursuant to which all outstanding shares of InSite would be converted into the right to receive $0.35 per share. If the merger agreement is terminated under specified circumstances, InSite will be obligated to pay the Sun Pharma subsidiary a termination fee of $2,667,000 to reimburse it for the termination fee paid to QLT.

The acquisition is expected to close in the fourth quarter of 2015.