NovaBay Pharmaceuticals Publishes on the Design of New Class of Antimicrobial Compounds It Named Aganocides

By March 18, 2008

Researchers at NovaBay Pharmaceuticals, Inc. (AMEX & TSX: NBY, www.novabaypharma.com a biopharmaceutical company developing products for the treatment or prevention of a wide range of bacterial, fungal and viral infections, have published a seminal paper on the design and synthesis of a new class of stable antimicrobial compounds. The company believes that these compounds, trademarked as Aganocides, have the potential to become a new weapon in the fight against such deadly pathogens as methicillin-resistant Staphylococcus aureus (MRSA). NovaBay is currently conducting human clinical trials of its lead Aganocide® compound in two indications.

Known as N-chloro-2,2-dimethyltaurine (MCDMT) and N,N-dichloro-2,2-dimethyltaurine (DCDMT, also referred to as NVC-422) these stable compounds are based on the chemical structures of N-chlorotaurine and N,N-dichlorotaurine, naturally occurring antimicrobial agents that are produced by white blood cells to protect humans from invasive pathogens. The importance of the chlorotaurines, including their antimicrobial properties, has been well documented. However, while they are produced transiently by white blood cells “on demand”, they cannot effectively be used as pharmaceutical products because they lack stability.

The paper has been published in the peer-reviewed international chemistry journal Tetrahedron Letters (Volume 49, February 2008, available online at www.sciencedirect.com). Authors Lu Wang, Behzad Khosrovi, and Ramin (Ron) Najafi describe the synthesis and biochemical disposition of N-chlorodimethltaurines, which differ from N-chlorotaurines by the addition of two methyl groups to the carbon adjacent to the nitrogen. The significance of this modification is that it creates stable analogs of the natural compounds, thus making them important candidates for development as antimicrobial pharmaceutical drugs.

NovaBay is investigating the use of NVC-422 as a topical antimicrobial treatment for a range of disease-causing bacteria. For example, NVC-422 is being tested for its ability to “de-colonize” individuals who harbor strains of S. aureus, including MRSA, in their nostrils. Studies suggest that patients colonized with S. aureus in their nostrils are at higher risk for the development of surgical site infections. Furthermore, carriers of S. aureus and MRSA are a source of the spread of these bacteria – a great concern to hospitals and healthcare agencies. Approximately 30% of all humans are carriers of S. aureus, including antibiotic-resistant strains.

NovaBay has tested formulations of NVC-422 and shown in vitro that they are active against Gram-positive and Gram-negative bacteria, yeasts, and viruses. Because NVC-422 kills pathogens on contact and not through typical antibiotic mechanisms, bacteria and viruses are unlikely to develop resistance.

Recently completed Phase I clinical trials demonstrated that topical application of a formulation of NVC-422 for nasal applications, known as AgaNase, to the nostrils is safe and well tolerated in healthy volunteers. The drug does not enter the bloodstream, a key safety factor. NovaBay is conducting additional Phase II studies of AgaNase in individuals who harbor S. aureus in their nasal passages in order to evaluate its efficacy. NovaBay is also testing NVC-422 in a Phase I safety study for the prevention of catheter-associated urinary tract infections (CAUTI).

In addition to its own clinical development program, NovaBay has entered into a licensing and research agreement with an affiliate of Alcon, Inc. for testing the Aganocide® compounds in eye, ear, and sinus infections, and in contact lens solutions.

“This is a very exciting accomplishment for NovaBay,” commented Ron Najafi, Chief Executive Officer of NovaBay. “We are proud of the progress we have made in our research and clinical development of antimicrobial compounds and are dedicated to continued advancement in these areas. This is part of a series of papers highlighting the work we have accomplished on antimicrobial compounds. We continue to endeavor to find ways to use these antimicrobial compounds against a number of indications to help improve people’s health and ultimately save lives.”

About NovaBay Pharmaceuticals, Inc.

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 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. The company also has a license agreement with an affiliate of Kinetic Concepts, Inc. for the use of NovaBay’s NeutroPhase product in woundcare applications.

NovaBay™, Aganocide®, AgaNase™, 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:

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Theresa Granados
510-899-8870
Head of Investor Relations
tgranados@novabaypharma.com

or
The Investor Relations Group
Investor Relations:
Adam Holdsworth / Rachel Colgate / Erica Ruderman
212-825-3210
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