OPHTHALMOLOGY INNOVATION SUMMIT @ AAOOCTOBER 13, 2016

NASDAQ: PSDV NANCY LURKER, PRESIDENT & CEO

SAFE HARBOR STATEMENT

SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Various statements made in this release are forward-looking, and are inherently subject to risks, uncertainties and potentially inaccurate assumptions. All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements. Some of the factors that could cause actual results to differ materially from the anticipated results or other expectations expressed, anticipated or implied in our forward-looking statements include uncertainties with respect to: our ability to obtain needed capital; our ability to achieve profitable operations; potential declines in Retisert royalties; fluctuations in our operating results; further impairment of our intangible assets; our ability to obtain marketing approvals for and successfully commercialize Medidur for posterior segment uveitis; performance by CROs, vendors and investigators; timing of filing marketing approval applications for Medidur; acceptability of data to be filed in support of Medidur marketing applications; maintenance of orphan designation for Medidur, potential off-label sales of ILUVIEN for posterior segment uveitis; successful commercialization of, and receipt of revenues from, ILUVIEN for DME; Alimera’s ability to continue as a going concern; the effect of pricing and reimbursement decisions on sales of ILUVIEN for DME; consequences of fluocinolone acetonide side effects; outcome of dispute with Alimera on commercialization expenses; any exercise by Pfizer of its option with respect to the latanoprost product; our ability to develop Tethadur to successfully deliver large biologic molecules and develop products using it; efficacy and future development of severe OA implant by us; our ability to successfully develop product candidates, initiate and complete clinical trials and receive regulatory approvals; our ability to market and sell products; the success of current and future license agreements; termination or breach of current license agreements; effects of competition and other developments affecting sales of products; market acceptance of products; effects of guidelines, recommendations and studies; protection of intellectual property and avoiding intellectual property infringement; retention of key personnel; product liability; industry consolidation; compliance with environmental laws; manufacturing risks; risks and costs of international business operations; effects of potential U.K. exit from the EU; legislative or regulatory changes; volatility of stock price; possible dilution; absence of dividends; and other factors described in our filings with the SEC. You should read and interpret any forward-looking statements in light of these risks. Should known or unknown risks materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected in the forward-looking statements. You should bear this in mind as you consider any forward-looking statements. Our forward-looking statements speak only as of the dates on which they are made. We do not undertake any obligation to publicly update or revise our forward-looking statements even if experience or future changes makes it clear that any projected results expressed or implied in such statements will not be realized.

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DELIVERING INNOVATION TO THE EYE

Focused on preventing blindness through proprietary sustained release drug technologies

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OUR HISTORY

More than 20 years of focus on eye diseases

Developed 3 FDA approved sustained release products used for the posterior segment of the eye

Licensed ophthalmology products to Bausch & Lomb & Alimera

Medidur™ program for posterior uveitis approaching commercialization

Dario Paggiarino, M.D. appointed Chief Medical Officer on August 1, 2016

Nancy Lurker appointed President & CEO on September 15, 2016

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NANCY LURKER: 25-YEAR CAREER OF MAXIMIZING PHARMACEUTICAL ASSETS

Multiple key launches

including Plavix®, Detrol® and

Detrol LA®, Ambien®, Reclast®

and Exforge®

Strong track record of working

with R&D to transition products from the clinic to

commercialization

Expertise in launch risk mitigation

US and International

markets

Led public and private companies

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KEY PSIVIDA ATTRIBUTES

Proved sustained release injectable drug technology for small molecules

Developed three approved branded eye products

Fourth eye product in the pipeline with commercial launch potential within 18 months/EU; 24 months/US

Solid balance sheet

Strong scientific team

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ILUVIEN™ FOR DIABETIC MACULAR EDEMA (DME): PARTNERED WITH ALIMERA

Approvals Approved for DME in US, 17 EUs

Payments PSDV received over $55m to date

Revenues to PSDV 20% of any product profit

Lasts for 3 Years

ILUVIEN™Licensed Product

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DURASERT™: APPROVED TECHNOLOGY FOR OCULAR DELIVERY

Long Duration Up to 3 years from single injection minimizes

frequent monthly ocular injections; now focusing on 6-month regimen

Proprietary Sustained Polymer Technology Tailored to be bioerodible or non-erodible

Broadly Applicable Can deliver many types of small molecule drugs

Strong Patent Estate Issued patents covering technology and inserter

extend beyond 2027

Lasts for 3 Years

DURASERT™Approved Technology

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TWO HIGHLY ATTRACTIVE PROGRAMS:

POSTERIOR SEGMENT UVEITIS WET AMD

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UVEITIS IS THE THIRD LEADING CAUSE OF PREVENTABLE BLINDNESS IN THE DEVELOPED WORLD

Source: The Ocular Immunology and Uveitis Foundation 10

UVEITIS IS INFLAMMATION OF THE UVEAL TRACT (IRIS, CILIARY BODY, CHOROID) OR ADJACENT STRUCTURES

Posterior Segment

Anterior Segment

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MEDIDUR PHASE III PRODUCT FOR POSTERIOR SEGMENT UVEITIS

US PREVALENCE

175,000 CASES

POTENTIAL TO EXCEED

$100M* ANNUAL REVENUE

5 YEARS AFTER LAUNCH

* Internal Market Research 12

MEDIDUR™ PHASE III TREATMENT FOR POSTERIOR SEGMENT UVEITIS

SAME DURASERT™

MICRO-INSERT AS FDA APPROVED

ILUVIEN™

SAME DRUG AS RETISERT™

AND ILUVIEN™ DELIVERS

FLUOCINOLONE ACETONIDE

(CORTICOSTEROID)

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MEDIDUR™ CLINICAL PROGRAM

Study 001 Phase III clinical trial: 129 patients

Primary end-point: Prevention of recurrence

Result: p < 0.000000001

FIRST PHASE III TRIAL: PREVENTION OF RECURRENCE COMPLETE

INSERTER TRIAL: EASE OF ADMINISTRATIONCOMPLETE

Study 006 Phase III clinical trial: 26 patients

Primary end-point: Ease of administration

Result: Positive usability

Study 005 Phase III clinical trial: 150 patients

Primary end-point: Prevention of recurrence

Enrollment status:Complete by 4Q2016

SECOND PHASE III TRIAL: PREVENTION OF RECURRENCEONGOING

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EFFICACY END-POINT: UVEITIS RECURRENCE RATES AT 6 AND 12 MONTHS

6 MONTHS RECURRENCE

18.4% Medidur™ eyes vs 78.6% sham

Medidur™ eyes

3.9X more likely to be recurrence free

Primary end-point achieved p < 0.000000001

12 MONTHS RECURRENCE

27.6% Medidur™ eyes vs 85.7% sham

Medidur™ eyes

5.1X more likely to be recurrence free

Evidence of durable response

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VISUAL ACUITY GAIN (VS DAY 1)

VISION GAIN @ 12 MONTHS (≥15 LETTERS)

22.9% Medidur™ treated

eyes gained

11.9% sham eyes

gained

VISION GAIN @ 6 MONTHS (≥15 LETTERS)

22.9% Medidur™ treated

eyes gained

7.3% sham eyes

gained Medidur™ had positive

effect on vision gain

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SYSTEMIC MEDICATION SPARING @ 6 MONTHS

18.2% Medidur™: 8/44 still on

system medication

52.4% Sham: 11/21 still onsystemic medication

SYSTEMIC MEDICATION SPARING @ 12 MONTHS

18.2% Medidur™ still on system medication

52.4% sham patients still onsystemic medication

SYSTEMIC MEDICATION SPARING AT 6 AND 12 MONTHS

Medidur™ had significant

systemic sparing medication

effect

*At baseline 50.3% of patients were on systemic meds (steroids, immuno-modulators, biologics) 17

SAFETY ENDPOINT: IOP ELEVATION

IOP6 MONTH MEDIDUR

6 MONTH SHAM

6 MONTH DELTA

AS OFJULY 1,

2016MEDIDUR

AS OFJULY 1,

2016SHAM

AS OFJULY 1,

2016DELTA

> 21 mm 27.6% 16.7% 10.9% 34.5% 26.2% 8.3%

> 25 mm 16.1% 4.8% 11.3% 21.8% 16.7% 5.1%

> 30 mm 10.3% 0% 10.3% 17.2% 11.9% 5.3%

Surgery 2.4% 0% 2.4% 4.6% 4.8% -0.2%

Difference between Medidur™

and sham decreases with time

*Inter-Ocular Pressure 18

AS OF JULY 1, 2016

45% of phakic Medidur™

eyes had CS

9.5% of phakic control

eyes had CS

SAFETY ENDPOINT: CATARACT SURGERY

At baseline

51% of eyes

had already had cataract surgery

(CS)

BY 6 MONTHS

9.5% of phakic* Medidur™

eyes had CS

4.8% of phakic control

eyes had CS

*Phakic = normal lens 19

EU MAA FILING UPDATE

Study 006 Inserter

clinical trial: 26 patients

Preparing filing package for MAA filing

in Q1 ʼ17

Study 001 Phase III

clinical trial: 129 patients

Primary end-point:

Prevention of Recurrence

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FDA FILING UPDATE

Study 001 Phase III

clinical trial: 129 patients

Primary end-point:

Prevention of Recurrence

Study 005 Phase III

clinical trial: 150 patientsPreparing

filing package for NDA filing

in 2H 2017Study 006

Inserterclinical trial: 26 patients

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WET AGE-RELATED MACULAR DEGENERATION (AMD) IS A CHRONIC EYE DISEASE THAT CAUSES PROGRESSIVE VISION LOSS

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CAUSED BY ABNORMAL BLOOD VESSELS THAT LEAK FLUID OR BLOOD INTO THE MACULA (CENTRAL VISION)

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WET-AMD PROGRAM:DURASERT™ WITH TKI

US PREVALENCE

~1.2MPATIENTS

200,000NEW DX PER YEAR

2015 GLOBAL MARKET SIZE

$5.3B*

* Internal Market Research 24

WET-AMD PROGRAM:DURASERT™ WITH TKI

CURRENT TREATMENT(ANTI-VEGF) REQUIRES

INTRAVITREAL INJECTIONS EVERY

4 WEEKS OR MORE

LONG TERM STUDIES SHOW PROGRESSIVE VISION LOSS

DESPITE CONTINUED ANTI-VEGF THERAPY

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DURASERT™ WITH TKI FOR WET-AMD

Tyrosine kinase inhibitors (TKIs) are antiangiogenic small molecules known to inhibit both VEGF and PDGF, two factors involved in wet AMD

TKIs dual pharmacological action and sustained delivery could result in: Improved vision and Reduced frequency of intravitreal injections

TKI on market is effective in two non-clinical models of wet AMD with Durasert™

IND-enabling studies with bioerodible Durasert™ underway now

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FINANCIAL HIGHLIGHTS

CASH:

$29M AT JUNE 30 2016

NODEBT

34M SHARES

0.6M WARRANTS

5.1M OPTIONS

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ESTABLISH CLEAR OPERATING PLAN FOR CURRENT FISCAL YEAR

END OF YEAR OBJECTIVES

ESTABLISH THREE YEAR STRATEGIC PLAN

STAY ON TRACK FOR

US/EU REGULATORY FILINGS

EXPAND AND ACCELERATE WORK ON COLLABORATIONS TO MAXIMIZE SUSTAINED RELEASE TECHNOLOGY

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DELIVERINGINNOVATION

TO THE EYE 29

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