Novabay Pharmaceuticals Announces Positive Phase 1 Study Results With Lead Aganocide Compound

By November 26, 2007

EMERYVILLE, CALIF., November 26 /CNW/ -NovaBay Pharmaceuticals, Inc. (AMEX & TSX: NBY, a biopharmaceutical company developing products for the treatment or prevention of a wide range of bacterial and viral infections, reports results from a Phase I trial studying the lead Aganocide® compound, NVC-422, a novel non-antibiotic anti-infective that has shown potent in vitro activity against major pathogens, including methicillin-resistant Staphylococcus aureus (MRSA).

Nasal colonization of Staphylococcus aureus, including MRSA, is an important risk factor that predisposes the carrier to infections during invasive hospital procedures. The results of the Phase I trials show that when topically applied to the anterior nares (the lower nasal passages), NVC-422 appears safe and well tolerated with undetectable systemic exposure. Based on these results, NovaBay has commenced a second Phase I trial to test the safety of NVC-422 at a higher dose and expects to have results from this second study by early 2008. In parallel with the second Phase I study, NovaBay expects to commence a Phase IIa study by January 2008 in healthy volunteers that are carriers of Staphylococcus aureus in their nasal passages.

“AgaNase (NVC-422 for nasal applications) has the potential to be an important treatment option for physicians in the ongoing fight against drug-resistant infections, including MRSA, a growing public health concern in the hospital,” said Dr. Ron Najafi, NovaBay’s Chairman and Chief Executive Officer. “With this excellent preliminary safety data, we intend to move forward into additional trials to study the safety and efficacy of NVC-422 in volunteers and patients at risk of infection.”

In this double-blind placebo controlled Phase I trial of AgaNase, safety and tolerability were tested following repeated applications of AgaNase, using various concentrations (0.1% and 0.3%) and regimens, applied by spray or swab to the anterior nares. A total of ninety-six subjects were enrolled and completed the study. Any adverse events were local, mild, and transient and did not appear to increase at higher doses. No serious adverse events were observed in any study subject. There was no detectable systemic absorption of NVC-422 or its major metabolite.

About Surgical Site Infection

When a Surgical Site Infection (SSI) occurs, it can be a major problem, resulting, in the best cases, in a longer stay in hospital and, in the worst cases, in death. Staphylococcal infections have been reported as a major cause of SSI over many years. Several recent studies have shown that in many parts of the world, including the United States, there has been a rapid increase in the proportion of SSIs that are being caused by MRSA. An SSI caused by MRSA has a significantly higher mortality rate and more extensive hospitalization stays than SSIs caused by methicillin-susceptible Staphylococcus aureus. In some hospitals, mupirocin, a topical antibiotic, has been used to reduce Staphylococcus colonization in the nose, but the proportion of Staphylococcus aureus that is now being found to be resistant to mupirocin is increasing, including MRSA that has also become resistant to mupirocin.

About AgaNase (NVC-422 for pre-surgery nasal decolonization of MRSA)

NVC-422 is a novel topical non-antibiotic anti-infective compound that destroys pathogens extremely rapidly. In vitro, NVC-422 is highly active against gram-positive and gram-negative bacteria, yeast and viruses, including drug-resistant strains such as MRSA, mupirocin-resistant and vancomycin-resistant Staphylococcus aureus. AgaNase is being developed to reduce the risk of SSIs and to reduce the risk of MRSA infections in hospital environments. AgaNase is not an antibiotic and unlikely to contribute to antibiotic resistance.

About NovaBay

NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing innovative product candidates for 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, based upon small molecules 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 eye, ear and sinus infections and in contact lens solutions and also a license agreement with an affiliate of Kinetic Concepts, Inc. for the use of NovaBay’s NeutroPhase product in woundcare applications.

NovaBay(TM), AgaNase(TM), Aganocide® and NeutroPhase(TM) are trademarks of NovaBay Pharmaceuticals, Inc. All other trademarks and trade names are the property of their respective owners.

For more information visit the Company’s website

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.

For further information:

Investor Relations: The Investor Relations Group Adam Holdsworth

Rachel Colgate / Erica Ruderman 212-825-3210 or

Media Relations: Janet Vasquez / Susan Morgenbesser 212-825-3210