NovaBay Pharmaceuticals Issued Key Composition of Matter Patent for Aganocide Compounds

By January 9, 2009

NovaBay® Pharmaceuticals, Inc. (AMEX: NBY, www.novabaypharma.com) reports that the United States Patent and Trademark Office has approved the issuance of U.S. Patent No. 7,462,361 to NovaBay® for novel Aganocide® compounds including its current lead compound, NVC-422 (N,N-dichloro-2,2-dimethyltaurine). The patent will expire on April 24, 2026.

“The issuance of this patent—the first one issued for the Aganocide® compounds—significantly strengthens our patent portfolio, and represents a valuable asset for both NovaBay® and its partners,” commented Dr.Lawrence F. Rozsnyai, Director of Intellectual Property and Licensing. “We are continuing to secure and expand our proprietary position in the Aganocide® compounds and related antimicrobial technologies.”

NovaBay® has recently filed additional patent applications including ones for compositions of matter of additional Aganocide® compounds, methods of use and formulations, and is preparing further applications in other areas. Similar patent filings have been made in all major international countries that have significant pharmaceutical markets. “

The validation by the U.S. Patent Office of the novelty of NVC-422 is yet one more important step in bringing this molecule to the market for the treatment and prevention of infectious diseases–a critical need as the excessive use of antibiotics is leading to a dramatic increase in the number of patients with antibiotic-resistant diseases,” said Dr. Ron Najafi, NovaBay’s Chairman and CEO. “We expect that the Aganocide® compounds as the first non-antibiotic anti-infective will play a leading role as first line therapies in many indications, since they do not cause microbes to develop resistance.”

According to the Centers for Disease Control and Prevention (CDC), “Antibiotic Resistance has been called one of the world’s most pressing problems. Over the last decade, almost every type of bacteria has become stronger and less responsive to antibiotic treatment when it is really needed.”

NovaBay’s Aganocide® Compounds

The Aganocide® compounds are novel N-chlorinated antimicrobial molecules developed by NovaBay. They are designed to mimic the antimicrobial action of small molecules produced naturally by white blood cells. The naturally produced molecules are highly effective against all bacteria, viruses and fungi, but are produced and used by the body “on demand” and do not have the chemical stability to permit their use as pharmaceutical products. In laboratory testing, the Aganocide® molecules maintain the efficacy and safety of the natural molecules but are more stable, enabling their potential use as potent antimicrobial products.

NVC-422

NVC-422 is the lead molecule in the Aganocide® class and is being actively developed for several human indications in several clinical and pre-clinical programs.

NovaBay® has licensed the use of NVC-422 and other Aganocide® compounds for specific uses to an affiliate of Alcon Inc.. These uses include the treatment of viral and bacterial diseases of the eye, bacterial and fungal diseases of the ear and infections of the sinus. In addition, NovaBay® is collaborating with Alcon in the development of Aganocide® compounds for use in advanced contact lens disinfecting solutions.

NovaBay® is in Phase II development for use of NVC-422 in infections of the nasal passage and for the prevention and/or treatment of Catheter-Associated Urinary Tract Infections (CAUTI). NovaBay® expects to file an Investigational New Drug application in 2009 for a novel formulation of NVC-422 for use in Impetigo and other skin infections (including those caused by MRSA). Pre-clinical work is proceeding for other indications using NVC-422 and other Aganocide® compounds.

About NovaBay® Pharmaceuticals, Inc.

NovaBay® Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing innovative non-antibiotic, antimicrobial 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, without ever developing resistance. 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 resistant bacteria such as 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. NovaBay® and Aganocide® 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 within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, based upon management’s current expectations, assumptions, estimates, projections and beliefs. These forward-looking statements can often be identified by words such as “expects”, “intends”, “plans”, “believes”, “estimates”, “may”, “will”, and similar expressions, and variations or negatives of these words. These statements include, but are not limited to, statements regarding the development and potential benefits of, and the market opportunities for, or the potential commercialization of NovaBay’s product candidates, as well as the timing of any such development or commercialization. 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 and other risks detailed from time to time in NovaBay’s filings with the Securities and Exchange Commission including the annual report on Form 10-K for the year ended December 31, 2007. 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

or:

The Investor Relations Group

Investor Relations: Adam Holdsworth / James Carbonara

Media Relations: Janet Vasquez / Laura Colontrelle 212-825-3210

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