NovaBay Pharmaceuticals Provides Business Update and 2012 Outlook

By February 9, 2012

Progress Across Four Business Units
Conference Call and Webcast Today at 1:00 P.M. (ET) / 10:00 A.M. (PT)

Dial-In Numbers

1-866-761-0748 (USA) or 1-617-614-2706 (International)
Participant Passcode: 46031071

Progress Continues in Company’s Four Business Units:

Hospital Products: NovaBay’s FDA cleared NeutroPhase® is now being manufactured and will soon be available to the 6 million U.S. patients suffering from chronic non-healing wounds such as diabetic, pressure, and venous stasis ulcers. NovaBay recently announced commercialization partnership in China with $1.3 Million pre-launch milestones.
Ophthalmology: Enrollment in major global adenoviral conjunctivitis study to begin in Q2-2012.
Urology: Part 1 of Phase 2 Urinary Catheter Blockage and Encrustation (UCBE) trial demonstrated 80% effectiveness, top-line results from Part 2 study of enhanced NVC-422 formulation expected in Q2-2012.
Dermatology: In support of product registration, successfully concluded safety studies in three hundred and ten healthy volunteers. Galderma, S.A. to begin major global impetigo trial with NVC-422 dermal gel in 2012.

Resources: Cash, Cash Equivalents, Short-term Investments and Accounts Receivable increased to $16.5 million at September 30, 2011 from $13.3 million at December 31, 2010.

EMERYVILLE, Calif., January 8, 2013 (GLOBE NEWSWIRE) — NovaBay Pharmaceuticals, Inc. (NYSE Amex:NBY), a clinical-stage biotechnology company developing its first-in-class, anti-infective Aganocide® compounds for the topical non-systemic treatment and prevention of antibiotic-resistant infections, today provided a business update highlighting recent accomplishments and the Company’s outlook for 2012.

“2011 saw significant progress for NovaBay and I believe we are headed toward several value inflection points in 2012 and early 2013,” stated Dr. Ron Najafi, Chairman and Chief Executive Officer. “Having demonstrated clinical proof of concept in Dermatology, Ophthalmology and Urology, we are moving all three programs into the next phase along the registration pathway.”

Dr. Najafi continued, “NovaBay has also added key members to our Management team. In Ophthalmology, we added Dr. David Stroman, formerly the Head of Anti-infective at Alcon and in wound care, we brought on board Russell Hoon, formerly President of Xylos Corporation, to lead our NeutroPhase commercialization efforts. Recently, we announced a major partnership in China in connection with the commercialization of NeutroPhase.”

“We are continuing to strengthen our Management team as well as continuing our progress in all our business units,” concluded Dr. Najafi. “We look forward to announcing multiple clinical and business development milestones over the coming months.”

BUSINESS OVERVIEW:

HOSPITAL PRODUCTS

NovaBay is preparing to market its FDA-cleared NeutroPhase wound product for the chronic non-healing wound market, which represents a promising worldwide commercial opportunity. Potential applications for NeutroPhase that are covered by its two FDA 510(k) clearances include diabetic ulcers, venous stasis ulcers and pressure ulcer stages I-IV. NovaBay’s marketing strategy is to license the commercial rights for NeutroPhase to global pharmaceutical partners with optimal infrastructure to maximize its commercial potential in each territory.
In September 2011, NovaBay announced the appointment of Russell Hoon as Vice President of its Advanced Wound Care Business Unit. With more than three decades of experience in medical product development and commercialization, Mr. Hoon’s expertise will be instrumental for the success of NeutroPhase.
Earlier this quarter, NovaBay announced a partnership with Pioneer Pharma Co. Ltd., worth up to $1.3 million in pre-commercialization milestones related to the launch of NeutroPhase in mainland China. Pioneer Pharma has access to 7500 hospitals and 40,000 pharmacies through over 1000 sales representatives. NovaBay will be establishing additional partnerships in other territories in the near future. For more information on NeutroPhase please visit the following link: www.neutrophase.com

OPHTHALMOLOGY

In May 2011, NovaBay announced encouraging results from the proof-of-concept study with NVC-422 for treating adenoviral conjunctivitis, a form of “pink eye”. The study uncovered a compelling and clinically meaningful outcome that was later highlighted in the August 2011 edition of Cataract & Refractive Surgery Today. To read the entire article, please visit the following link: http://bmctoday.net/crstoday/pdfs/CRST0811_therapeutics.pdf

In addition to demonstrating activity against multiple adenoviral serotypes, NVC-422 demonstrated clinical resolution of signs and symptoms associated with adenoviral conjunctivitis, including redness and blurred vision. The study showed that NVC-422 was most active in patients with epidemic keratoconjunctivitis (EKC). EKC is generally caused by serotypes 8, 19, and 37, and may be vision-threatening. Based on these findings, NovaBay has chosen clinical endpoints as the primary efficacy measures in the global Phase 2b study, and enrollment is expected to commence in the second quarter of 2012.

Dr. David Stroman, who led the development of NVC-422 for use in ophthalmology at Alcon, has joined NovaBay as its Senior Vice President of Ophthalmic Drug Development. Under Dr. Stroman’s leadership, NovaBay has formed an Ophthalmology Advisory Board (OAB) to provide advice on the development of NVC-422 to treat ocular infections, specifically viral conjunctivitis. Members of the OAB include:

Prof. Dr. Rubens Belfort, Jr. – Professor, Ophthalmology Department, Federal University of Sao Paulo School of Medicine; President – Hospital Sao Paulo – Sao Paulo Association for the Development of Medicine (SPDM), Sao Paulo, Brazil.
Dr. Reza Dana – Professor of Ophthalmology and Vice Chairman, Ophthalmology Department, Harvard Medical School; Director, Cornea and Refractive Services, Massachusetts Eye and Ear Infirmary, Boston, MA.
Dr. Eric Donnenfeld – Clinical Professor of Ophthalmology, NYU Medical Center; Board of Overseers, Dartmouth Medical School; Lasik Surgeon, Rockville Center, NY.
Dr. Prashant Garg – Cornea and Anterior Segment Specialist, G. Chandra Sekhar Distinguished Chair of Education, L V Prasad Eye Institute; Medical Director, Ramayamma International Eye Bank, Hyderabad, India
Dr. Stuart Levy – Director, Center for Adaptation Genetics and Drug Resistance and Professor, Departments of Medicine, Molecular Biology and Microbiology, Tufts University School of Medicine, Boston, MA.
Dr. Steven Lichtenstein – Associate Professor of Clinical Surgery and Pediatrics, Division of Ophthalmology, University of Illinois College of Medicine at Peoria & Chicago; Medical Director of Pediatric Ophthalmology, Children’s Hospital of Illinois, Peoria, IL.
Dr. Kathryn Najafi-Tagol – Glaucoma Specialist and Cataract Surgeon; Founder and Director, Eye Institute of Marin, San Rafael, CA
Dr. Robert Sambursky – Cornea Specialist, Manatee Sarasota Eye Clinic; Founder, President, and Chief Medical Officer, Rapid Pathogen Screening, Inc., Sarasota, FL
Dr. Stephen Wilmarth – Refractive and Cataract Surgeon, Medical Director, Ophthalmic Surgery, South Placer Surgery Center; Chairman, Board of Directors, Medical Vision Technology, Sacramento, CA

NovaBay has selected top-tier contract research organizations (CROs) to manage the trial as it begins enrolling patients in the second quarter of 2012. The CROs selected are: Quintiles Research Ltd. (India), Chiltern International (Brazil) and Symbio, LLC (United States).

Globally, adenoviral conjunctivitis remains the greatest unmet medical need across all ocular infections, and NovaBay believes NVC-422 could represent a significant advancement in the treatment of this condition, particularly in treating sight-threatening EKC.

UROLOGY

Previously, NovaBay announced positive results from a Phase 2a clinical study of its irrigation solution containing NVC-422, the company’s lead Aganocide compound. NVC-422 demonstrating activity against uropathogens that form biofilm on urinary catheter surfaces and can cause urinary catheter blockage and encrustation (UCBE) due to formation of bladder stones and crystals that block the catheter. These results were supported recently by interim data from a Phase 2 clinical study, which demonstrated preliminary proof of concept for NVC-422 catheter irrigation solution in preventing UCBE and maintaining catheter patency.

Part 2 of the Phase 2 study is currently underway and is expected to be completed, with top-line results expected in the second quarter of 2012. Part 2 uses a more potent formulation, which could reduce the number of required catheter irrigations from the current standard of care of 14 to 21 per week to only 3 treatments per week or less.

It is estimated that there are greater than 300,000 chronically catheterized patients in the US alone. NVC-422 catheter irrigation solution may provide significant clinical benefit by reducing the risk of complications associated with UCBE, as well as improve continence, thereby greatly enhancing the quality of life for patients and their caregivers. In 2011, NovaBay won the First Place Award for Outstanding Scientific Presentation at the Simon Foundation for Continence Conference. The criteria for this distinction included the significance of the research and its contributions to the theme of the conference: “Innovating for Continence: The Engineering Challenge.”

NovaBay is evaluating the potential of building a commercial team to market this product in the United States and will be seeking the appropriate partners outside of the U.S.

DERMATOLOGY

In support of product registration, NovaBay successfully concluded safety studies in 310 healthy volunteers. This year NovaBay’s exclusive partner Galderma S.A., the world’s leading dermatology company, is preparing to initiate a 300 plus patient global clinical study of NVC-422 dermal gel for the treatment of patients with impetigo. Galderma is funding all activities related to this program. Advancing the development of NVC-422 dermal gel for the treatment of impetigo is a high priority for both companies. NVC-422’s mechanism of action with its low potential for development of resistance and its robust activity against antibiotic resistant pathogens, uniquely differentiates it from topical antibiotics.

A study published recently in Emerging Infectious Diseases showed how overuse of common topical antibiotics may inadvertently promote dissemination of highly drug-resistant MRSA (methicillin-resistant Staphylococcus aureus), which is one of the leading causes of impetigo. In August 2011, the International Journal of Clinical and Experimental Pathology (IJCEP) published results of NovaBay’s 129 patient study for the treatment of impetigo, which demonstrated excellent clinical and microbiological cure rates with 100% (n=10) response rate for infections caused by MRSA. Both articles are available at the following link: www.novabaypharma.com/technology/articles

NVC-422 has the potential to become a logical and much-needed alternative to traditional topical antibiotics that currently address large global markets.

Conference Call and Webcast

NovaBay will hold a conference call today, February 9, 2012 at 1:00 PM (ET) / 10:00 AM (PT). To participate, please dial 1-866-761-0748 (USA) or 1-617-614-2706 (International); participant passcode: 46031071.

A live webcast will be available atwww.wsw.com/webcast/cc/nby/.

A replay will be available beginning February 9, 2012 at 3:00 PM (ET) / 12:00 PM (PT) by dialing 1-888-286-8010 (USA) or 1-617-801-6888 (International); participant passcode: 38581546. A replay of the webcast will be available beginning shortly after the call and may be accessed at www.novabaypharma.com/investors/events

About NovaBay Pharmaceuticals, Inc.

NovaBay Pharmaceuticals is a clinical-stage biotechnology company focused on developing its proprietary and patented Aganocide compounds. These are novel, synthetic anti-infectives with activity against bacteria, fungi and viruses, and are being developed to treat and prevent a wide range of local, non-systemic infections with a low likelihood of developing bacterial resistance.

NovaBay is focusing its technology on four distinct therapeutic areas: dermatology, ophthalmology, urology and hospital infections. In dermatology, the focus is on developing NVC-422 Gel formulation for the highly contagious skin infection, impetigo. NovaBay has the advantage of being partnered with Galderma, the leading dermatology company in the world. In ophthalmology, the goal is to develop an eye drop for viral conjunctivitis. In urology, NovaBay aims to reduce the incidence of urinary catheter blockage and encrustation (UCBE) and the associated urinary tract infections with an irrigation solution containing NVC-422. In hospital infections, NovaBay is targeting the six-million-patient market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers with its proprietary anti-infective solution, NeutroPhase®, the only pure hypochlorous acid solution, which has received two 510(k) clearances from the Food and Drug Administration. For additional information, visit: www.novabaypharma.com

Cautionary Information Regarding Forward-Looking Statements
This release contains forward-looking statements, which are based upon NovaBay’s current expectations, assumptions, estimates, projections and beliefs. Many of these statements are identified by the use of words denoting future events, such as “expect,” “anticipate,” “plan,” “intend,” “will,” “estimated” and variations of such words. These forward-looking statements include, but not limited to, NovaBay’s plans and expectations regarding ongoing and future clinical trials, the timing of commencement and receiving results of clinical trials, the potential achievement of multiple clinical and business development milestones, the plan to build its own commercial organization with respect to Urology, and potential future partnerships in urology and hospital products. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Factors that might cause to such differences include, but are not limited to: the risk that negative results from development programs could preclude Galderma from providing additional funding to NovaBay; the risk of unexpected delays in the regulatory process may delay the commencement or completion of clinical trials; inherent risks and uncertainties relating to difficulties or delays in conducting clinical trials; the inherent uncertainty of patent protection for the company’s intellectual property or trade secrets; the risks that results obtained in animal models may not be obtained in humans; as well other as risks relating to NovaBay and its Aganocide compounds detailed in NovaBay’s Quarterly Report on Form 10-Q, under the caption “Risk Factors” in Item 1A of Part II of that report, which was filed with the Securities and Exchange Commission on November 7, 2011. 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 Information
NovaBay Business Development and Licensing:

Roy J. Wu
Sr. VP Business Development
(510) 899-8815
Contact Roy Wu

Investors:
NovaBay Pharmaceuticals Contacts
Thomas J. Paulson  
Chief Financial Officer
510-899-8809
Contact Thomas Paulson

Inquires for NeutroPhase:
Russell Hoon
VP of Advanced Wound Care / Hospital Products
215-489-1960
rhoon@NovaBaypharma.com

Investors and Media:

The Ruth Group
Joshua Drumm, PhD (Investors)

(646) 536-7006
jdrumm@theruthgroup.com

Victoria Aguiar (Media)
(646) 536-7013
vaguiar@theruthgroup.com

 

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