NovaBay Pharmaceuticals Reports Positive Results in Sinus Infection Study

By September 12, 2011

NovaBay® Pharmaceuticals, Inc. (NYSE Amex:NBY), a clinical-stage biotechnology company developing its first-in-class, anti-infective Aganocide® compounds for the local non-systemic treatment and prevention of antibiotic-resistant infections, presented a new study reporting results of its Aganocide compound NVC-422 for the treatment of sinusitis in a sheep model.

The study, titled “Efficacy of NVC-422 Against Staphylococcus aureus Biofilms in a Sheep Model of Sinusitis,” was conducted by Professor P.J. Wormald and his research team from the University of Adelaide in Australia in collaboration with researchers at NovaBay. It was presented at the 2011 meeting of the American Rhinologic Society in San Francisco on September 10.

In this study the sheep frontal lobe sinuses were infected with staph aureus. The infection was allowed to form a biofilm to develop over a seven day period. Two concentrations of NVC-422 (0.1% and 0.5%) were used in the study drug treatment group while the controls were treated with normal saline or vehicle control. The results showed that nasal irrigation with the study drug NVC-422 effectively reduced the S. aureus biomass with the 0.5% being more effective without adverse events.

Ron Najafi, CEO of NovaBay, stated: “These results from the team at the University of Adelaide are very encouraging and add to the portfolio of important results with our lead Aganocide compound NVC-422. This study was observed to reduce bacterial biofilm mass in a dose-dependent manner. Further research will clarify our understanding of NVC-422’s specific abilities to reduce the incidence of biofilms, and its possible use in treating humans with antibiotic-resistant chronic sinusitis.

About Sinus Infections (Sinusitis)

Sinusitis is an ailment marked by an inflammation of the paranasal sinuses, often as a consequence of a bacterial infection. Infections with the formation of a bacterial biofilm account for many cases of antibiotic-resistant chronic sinusitis. When a biofilm forms on an infection, treatment becomes very complicated, since the bacteria inside it exists in a state that renders it largely immune to antibiotics. The American Academy of Allergy, Asthma and Immunology reports that sinusitis is one of the leading forms of chronic disease, with an estimated 18 million cases and at least 30 million courses of antibiotics in the United States per year.

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 an NVC-422 gel formulation for the highly contagious skin infection of 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 potential for urinary tract infections with an irrigation solution containing NVC-422. In hospital infection, 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®,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

The statements in this press release regarding NovaBay’s expectation on the potential efficacy of Aganocide compounds; the potential to develop a treatment for sinusitis as well as other statements that relate to future events or results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward- looking statements reflect the views of the management of NovaBay as of the date of this press release and are based on assumptions and subject to significant risks and uncertainties (many of which are outside of NovaBay’s control), including, but are not limited to: the risk that results obtained in preclinical studies may not be obtained in humans; NovaBay’s Aganocide compounds may not prove to be effective in treating sinusitis; and the FDA or other regulatory agencies may delay clinical trials, or require additional studies or procedures, which could delay or prevent the development of Aganocide compounds. These and other risks relating to the development of Aganocide compounds are detailed in NovaBay’s filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in Item 1A of Part II of that report, which was filed with the Securities and Exchange Commission on August 10, 2011. The forward-looking statements in this press 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.

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