NovaBay Establishes Primary Proof of Concept for NVC-422 Phase 2 UCBE Clinical Program

By November 30, 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, today announced that it has advanced its Phase 2 clinical program for its lead compound, NVC-422, in the treatment of urinary catheter blockage and encrustation (UCBE) in patients with spinal cord injury (SCI). Part A of the study has been completed, having met its scientific and clinical goals of establishing primary proof of concept. Part B of the study currently is underway using an advanced formulation of NVC-422 to treat patients under the same study protocol.

Part A utilized a double-blinded, placebo-controlled crossover design and enrolled 20 patients with chronic indwelling transurethral or suprapubic urinary catheters. In the evaluable patients, catheter irrigation with NVC-422 was able to prevent catheter blockage in 80% of the paired comparisons in which complete catheter blockage occurred during one of the treatment periods.

“Based on the conclusive and compelling results from Part A of our Phase 2 clinical study, which demonstrated the ability of NVC-422 to prevent catheter blockage and maintain catheter patency in patients with spinal cord injury, we decided to move into Part B,” said Dr. Ron Najafi, Chairman and Chief Executive Officer of NovaBay. “In Part B of the study, we are currently testing our more potent formulation of NVC-422, which we expect will reduce the number of required catheter irrigations from the current standard of care of two or three treatments per day to only three treatments per week. We anticipate that this dramatic decrease in the number of treatments, as well as improved continence, will greatly enhance the quality of life for our patients and their caregivers.”

Dr. Najafi continued, “Another key differentiator for NVC-422 is that it is the only therapy with the potential to reduce morbidity and mortality by killing the pathogens responsible for the formation of bladder stones and UCBE. By maintaining catheter patency and reducing the number of catheter changes, we also expect treatment with NVC-422 will further improve quality of life for these patients by lowering the potential risk for urinary tract infection.”

Part B of the Phase 2 study is already underway and is expected to enroll 20 patients, with top-line results expected in the first quarter of 2012. It will evaluate an enhanced formulation of NVC-422 in preventing the development of UCBE. The new formulation is more potent than that used in Part A, and is expected to support a more favorable dosing regimen. Additionally, NovaBay has doubled the number of clinical sites from three to six centers, which the Company expects will accelerate enrollment in the study.

The double-blinded, placebo-controlled, crossover design of this clinical trial evaluates the use of NVC-422 in male and female SCI patients with chronic indwelling transurethral or suprapubic urinary catheters, and a recent repeated history of urinary catheter encrustation and/or blockage. Patients’ catheters are irrigated with a solution of NVC-422 or placebo for a total of seven treatments over two weeks, followed by a two-week washout period and an additional seven treatments of active or placebo. Patients are treated every other day excluding weekends.

NVC-422 for the Treatment of UCBE

Urinary catheter blockage and encrustation (UCBE) is the build-up of crystalline salts of calcium and magnesium in the bladder and lumen of the catheter caused by an abundance of gram negative bacteria that secrete urease. The condition can cause severe to life-threatening urinary tract infections (UTIs) and as a result requires frequent catheter changes. It is estimated that over 335,000 permanently catheterized U.S. patients are susceptible to UCBE and approximately 100,000 of these chronically suffer from this condition.

The current standard of care for treating UCBE requires catheter irrigation three times daily. The goal of this Phase 2 trial is to demonstrate that NVC-422 will be an effective alternative treatment when used only three times a week (Monday, Wednesday and Friday). Unlike current treatments, NVC-422 is expected not only to clear the catheter, but also kill the bacteria responsible for the encrustation and thereby maintain catheter patency. Consequently, the Company believes that NVC-422 irrigation solution has the potential to reduce the occurrence of UCBE, improve continence, reduce the number of catheter changes required, potentially lower the incidence of UTIs, and also improve the quality of life for these patients.

NovaBay won the First Place Award for Outstanding Scientific Presentation at the 2011 Simon Foundation for Continence Conference. The criteria for the selection of NovaBay as the award winner included: the significance of its research and its contributions to the theme of the conference: “Innovating for Continence: The Engineering Challenge.”

About NovaBay Pharmaceuticals, Inc.

NovaBay Pharmaceuticals is a clinical-stagebiotechnology 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 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 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:

Cautionary Information Regarding Forward-Looking Statements

This release contains forward-looking statements, which are based upon management’s current expectations, assumptions, estimates, projections and beliefs. The statements in this press release including, but not limited to statements (i) regarding NovaBay’s expectations regarding the potential of NVC-422 to treat UCBE; (ii) that NovaBay’s NVC-422 irrigation solution has the potential to reduce the occurrence of UCBE, improve continence, reduce the number of catheter changes required and potentially lower incidences of UTIs; (iii) relating to the potential of NVC-422 to reduce morbidity and mortality by killing the pathogens responsible for the formation of bladder stones and UCBE; and (iv) NovaBay’s expectation to enroll 20 patients for Part B of the Phase 2 study, with top-line results expected in the first quarter of 2012, as well as other statements that relate to future events or results, are forward-looking statements. 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: the risk that NovaBay may experience unexpected results in further studies which may limit, delay or prevent NovaBay from conducting further clinical trials; unexpected adverse side effects or inadequate therapeutic efficacy of NVC-422 may inhibit NVC-422 from becoming a treatment for urinary catheter blockage and encrustation; the risk of unexpected delays in the regulatory process which may delay the commencement or completion of clinical trials and the risks that results obtained in the Phase I and Part A of Phase 2 may not be obtained in the current Part B of Phase 2 clinical trial. Other risks relating to NovaBay and its Aganocide compounds, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are 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 Pharmaceuticals Contacts
Thomas J. Paulson  
Chief Financial Officer
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