13G Filing: Palo Alto Investors and Alimera Sciences Inc (ALIM)

Item 3. If this statement is
filed pursuant to rule 240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:

(a) [ ] Broker or dealer registered
under section 15 of the Act (15 U.S.C. 78o).

(b) [ ] Bank as defined in section
3(a)(6) of the Act (15 U.S.C. 78c).

(c) [ ] Insurance company as
defined in section 3(a)(19) of the Act (15 U.S.C. 78c).

(d) [ ] Investment company registered
under section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8).

(e) [ x ] An investment
adviser in accordance with section 240.13d-1(b)(1)(ii)(E) (as to PAI LLC).

(f) [ ] An employee benefit plan
or endowment fund in accordance with section 240.13d-1(b)(1)(ii)(F).

(g) [ x ] A parent holding
company or control person in accordance with 240.13d-1(b)(1)(ii)(G) (as to Dr. Lee and Dr. Yun).

(h) [ ] A savings association
as defined in section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(i) [ ] A church plan that is
excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3).

(j) [ ] A non-U.S. institution
in accordance with §240.13d-1(b)(ii)(J).

(k) [ ] Group, in accordance
with Rule 13d-1(b)(1)(ii)(K).

If filing as a non-U.S. institution
in accordance with §240.13d-1(b)(1)(ii)(J), please specify the type of institution _______________________________________________________________.

Item 4. Ownership.

See Items 5-9 and 11 of the cover page for each Filer. The number
of shares held by the Filers includes (1) Common Stock that they hold directly and (2) Common Stock that they may acquire on conversion
of shares of the Company’s Series A Convertible Preferred Stock (“Series A Preferred”) that they hold. Shares of Common Stock are held by Healthcare Master and Healthcare Master II.