Important U.S. Development Milestone Achieved for Rebamipide Program; Drug Already Approved and Marketed for Dry Eye Syndrome in Japan as Mucosta^® ophthalmic suspension UD2%

Seattle, WA, USA and Tokyo, JAPAN (July 18, 2012) - Acucela Inc., a clinical-stage biotechnology company focused on developing new treatments for blinding eye diseases, and Otsuka Pharmaceutical Co., Ltd., today announced the initiation of a Phase 3 clinical trial to evaluate rebamipide ophthalmic suspension in patients with dry eye syndrome. Dry eye is a multifactorial disease of the tears and ocular surface and one of the most common diseases treated by ophthalmologists in their daily practices. According to the 2011 Market Scope Dry Eye Report, 25 million Americans and 370 million patients worldwide suffer from dry eye.

Rebamipide ophthalmic suspension is a novel compound discovered by Otsuka Pharmaceutical and has a new mechanism of action to increase the level of mucin in the tear film covering the conjunctiva and cornea. In January 2012, the drug was launched for the treatment of dry eye syndrome in Japan as Mucosta^® ophthalmic suspension UD2%.

Subjective symptoms of dry eye vary and can include dryness, foreign body sensation, itching, burning sensation, eye pain and photophobia. Advanced dry eye syndrome may lead to serious complications and ocular surface damage that can result in decreased vision.

"Advancing rebamipide ophthalmic suspension into late-stage development is an exciting and important milestone for Acucela and for the patients who suffer from the debilitating effects of dry eye," said Ryo Kubota, MD, PhD, chairman, president, and chief executive officer, Acucela Inc. "Today's announcement is in line with our strategy to develop leading-edge therapies to help patients living with disabling eye diseases around the world. We are excited about the initiation of this important clinical study for rebamipide, as we continue to advance our pipeline of innovative ophthalmology treatments through the clinic."

Dr. Taro Iwamoto, President and Representative Director, Otsuka Pharmaceutical Co., Ltd., stated, "Following the launch of the product in Japan, we are pleased to start Phase 3 clinical trials for rebamipide ophthalmic suspension in the U.S. We are partnering with Acucela, a company with a wealth of experience in the field of ophthalmology in North America. Otsuka expects our Japan- originated new innovation, designed to normalize the quality of tears, will be welcomed by many patients in the U.S. who are waiting for new treatments."

About the Rebamipide Ophthalmic Suspension Phase 3 Clinical Study

This Phase 3 clinical study will be conducted to determine the efficacy and safety of 2% rebamipide ophthalmic suspension in subjects with dry eye syndrome. It is a multi-center, randomized, placebo-controlled, double-masked, parallel-group study. Approximately 560 subjects are planned to be enrolled equally into the two treatment groups and the study is expected to be completed by the end of 2013.

About the Otsuka Pharmaceutical/Acucela Rebamipide Ophthalmic Suspension Agreement

Otsuka Pharmaceutical and Acucela entered into an agreement on September 4, 2008 to co-develop rebamipide ophthalmic suspension for the treatment of dry eye syndrome in the United States. In addition to co-developing rebamipide ophthalmic suspension with Otsuka Pharmaceutical, Acucela will spearhead the regulatory strategy to gain approval for the product in the United States.

About Acucela Inc.

Acucela Inc. (www.acucela.com) researches, develops and intends to commercialize therapies for unmet or underserved needs in ophthalmology. The Company currently has three product candidates in clinical development: ACU-4429 for dry age-related macular degeneration, rebamipide for dry eye syndrome and OPA-6566 for ocular hypertension and glaucoma, all of which are being co-developed in the United States with Otsuka Pharmaceutical. Based on Acucela's core technology, visual cycle modulation, the investigational compound ACU-4429 is designed as an oral therapy to slow the progression of dry age-related macular degeneration. The Company also intends to leverage the VCM technology to develop treatments for diseases such as: retinopathy of prematurity, Stargardt disease and diabetic retinopathy. Rebamipide, being developed for dry eye syndrome in the United States, is marketed in Japan under the trade name Mucosta^® ophthalmic suspension UD2% by Otsuka Pharmaceutical. OPA-6566, an adenosine A2a receptor agonist, is being investigated as an ophthalmic solution for lowering intraocular pressure in open-angle glaucoma or ocular hypertension patients under the co-development agreement with Otsuka Pharmaceutical.