NovaBay Pharmaceuticals Commences Phase I Human Clinical Trial for the Prevention of Catheter Associated Urinary Tract Infections

By March 7, 2008

NovaBay Pharmaceuticals, Inc., www.novabaypharma.com today announced that it had completed dosing of the first cohort of volunteers in a multi-cohort Phase I safety study of a bladder and catheter lavage solution of NVC-422, NovaBay’s lead Aganocide® compound. This clinical program is aimed at preventing the development of catheter associated urinary tract infections (CAUTI).

Approximately 40% of all infections in hospitals are CAUTI, resulting in 800,000 infections per year that require major antibiotic therapy. It represents a major burden on the healthcare system as well as threatening the well-being of the patient.

Dr. Behzad Khosrovi, VP of Research and Development at NovaBay, said, “The CAUTI program is NovaBay’s second clinical development program focused on reducing the problems of infections in hospitals. Our other internal program is progressing in early Phase II studies, to reduce the threat of infections to patients caused by Staph. aureus (including methicillin-resistant Staph aureus or MRSA a group of increasingly widespread antibiotic resistant strains of bacteria) . We look forward to continuing the rapid advancement of these programs through their clinical development.”

Dr. Ron Najafi, CEO of NovaBay, commented, “We continue to achieve the milestones that we set for the company. The clinical initiation of the CAUTI program is one more example of this progress.”

About NovaBay
NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing innovative product candidates targeting the treatment or prevention of a wide range of infections in hospital and non-hospital environments. NovaBay has discovered and is developing a class of non-antibiotic anti-infective compounds, which it has named Aganocide® compounds, which are based upon small molecules that are generated by white blood cells that defend the body against invading pathogens. NovaBay believes that Aganocide® compounds could form a platform on which to create a variety of products to address differing needs in the treatment and prevention of bacterial and viral infections, including methicillin-resistant Staphylococcus aureus (MRSA). NovaBay has entered into a licensing and research collaboration agreement with an affiliate of Alcon, Inc. for use of the Aganocide® compounds in the eye, ear and sinus and in contact lens solutions and a license agreement with an affiliate of Kinetic Concepts, Inc. for the use of NovaBay’s NeutroPhase product in woundcare applications.

NovaBay™, Aganocide®, and NeutroPhase™ are trademarks of NovaBay Pharmaceuticals, Inc. All other trademarks and trade names are the property of their respective owners.

Forward Looking Statements
This release contains forward-looking statements, which are based upon management’s current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding the development and potential benefits of, and the market opportunities for, NovaBay’s product candidates. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to difficulties or delays in discovery, development, testing, regulatory approval, production and marketing of the company’s product candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the product candidates, the uncertainty of patent protection for the company’s intellectual property or trade secrets, the company’s ability to obtain additional financing as necessary and unanticipated research and development and other costs. The forward-looking statements in this release speak only as of this date, and NovaBay disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.

Contact:

Investors:
NovaBay Pharmaceuticals Contacts
Theresa Granados
510-899-8870
Head of Investor Relations
tgranados@novabaypharma.com

The Investor Relations Group
Investor Relations:
Adam Holdsworth / Rachel Colgate / Erica Ruderman
or
Media Relations:
Janet Vasquez / Laura Colontrelle
212-825-3210

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