NovaBay Pharmaceuticals’ Auriclosene® Demonstrates Statistically Significant and Clinically Meaningful Results in Phase 2b Study for the Prevention of Urinary Catheter Blockage and Encrustation

By September 19, 2016

NovaBay Pharmaceuticals’ Auriclosene® Demonstrates Statistically Significant and Clinically Meaningful Results in Phase 2b Study for the Prevention of Urinary Catheter Blockage and Encrustation

Positive clinical results in stringently designed Phase 2b study provide basis for pivotal clinical trials

EMERYVILLE, Calif. (September 19, 2016) – NovaBay® Pharmaceuticals, Inc. (NYSE MKT: NBY), a biopharmaceutical company, announces that data from a Phase 2b clinical study with Auriclosene Irrigating Solution (AIS) demonstrated statistically significant and clinically meaningful results in the prevention of urinary catheter blockage and encrustation in subjects with chronic indwelling urinary catheters who have repeat history of blockage.  Auriclosene is NovaBay’s proprietary, non-antibiotic, fast-acting, broad-spectrum antimicrobial that has exhibited the potential for rapid decolonization of a range of urologic pathogens. Auriclosene has been designated as a new chemical entity and granted composition of matter patent protection to 2028 by the U.S. Patent Office.

“Of the approximately 300,000 patients in the U.S. with indwelling catheters, about 100,000 chronically suffer from blockage and encrustation.  We estimate the healthcare costs to manage these patients in the billion dollar range,” said Mark M. Sieczkarek, Chairman, President and CEO of NovaBay.  “The results of this clinical study shows the potential of AIS to prevent urinary catheter blockage and encrustation in this patient population, which could provide millions of dollars in cost savings for the health care system and significantly improve the quality of life for these patients.

“With a market size we estimate at more than $700 million, we believe AIS represents a substantial commercial opportunity. We are actively pursuing partnering, licensing or joint venture deal structures to monetize this non-core program and advance it through pivotal trials to commercialization.  This strategy is aimed at bringing additional capital into NovaBay while we focus on building our core Avenova business,” he added.

Phase 2b Study Results
In the parallel design, two-arm Phase 2b study, 36 subjects with chronic indwelling catheters, including those with spinal cord injuries and other neurological conditions such as multiple sclerosis, were treated twice weekly for four weeks with either AIS or Vehicle Solution (citric-acid buffer).  This study was designed to provide a stringent test of the ability of AIS to prevent urinary catheter and blockage because the Vehicle Solution itself has activity in minimizing encrustation.  Standard of care for catheter irrigation is saline solution, which has no activity against biofilm and crystalline encrustation.

At the end of the treatment period, catheter flow rate measurements based on an ASTM FDA-recognized standard from both study arms were compared with flow measurements from identical new catheters in a blinded evaluation.  The primary efficacy endpoint comparing percent flow rate reduction of AIS-treated catheters to vehicle-treated catheters was achieved with statistical significance (p values < 0.05).  The clinical efficacy endpoint was also achieved with statistical significance, with no blockage in subjects in the AIS arm versus clinical blockage in 28% of the subjects treated with vehicle.  There were no serious adverse events reported in the study and auriclosene was generally well tolerated.

On September 16, 2013, NovaBay reported positive results with AIS in a Phase 2 study in the same patient population treated in the Phase 2b study.  Results of the Phase 2 study showed that irrigation with AIS was effective in preventing catheter encrustation and blockage compared with irrigation with saline solution.  Saline has no activity against biofilm and crystalline encrustation.  The Phase 2 study differed from the Phase 2b study in its crossover design with efficacy assessed by laboratory measurement of catheter blockage.  Each subject served as his/her own control having catheters treated alternatively with AIS and saline solution following a washout period.  For 14 per-protocol subjects, comparison of percent encrustation of catheters treated with AIS and saline showed a significant reduction in favor of AIS (Wilcoxon signed-rank test p value < 0.001).  No serious adverse events were reported, and overall tolerability was considered good.

About Urinary Catheter Blockage and Encrustation
Chronic indwelling urinary catheterization is necessary for patients with spinal cord injuries, multiple sclerosis, strokes or other neurogenic bladder conditions.  In these patients catheters repeatedly become coated with bacteria and bacterial biofilm, which may produce localized crystal deposits and may build up and block the catheter.  Major medical problems can follow.  The severe consequences of urinary catheter blockage and encrustation are often underappreciated.  Catheter blockage can result not only in urinary tract infections and socially embarrassing urine leakage around the catheter, but also frequent use of emergency services and, in those with high-level spinal cord injuries, potentially life-threatening autonomic dysreflexia.

About Auriclosene (NVC-422)
Auriclosene is NovaBay’s lead Aganocide compound.  These compounds work by mimicking the body’s natural defense against infection.  NovaBay has taken the effective and rapidly acting molecules that function within our own bodies and created stable analogs of these molecules.  The Company’s compounds have shown to be fast-acting with broad spectrum activity, effective against multi-drug resistant bacteria and biofilm, and with a good safety profile.

About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics
NovaBay Pharmaceuticals is a biopharmaceutical company focusing on the commercialization of prescription Avenova® lid and lash hygiene for the eye care market. Avenova is formulated with Neutrox®, which is cleared by the U.S. Food and Drug Administration (FDA) as a 510(k) medical device. Neutrox is NovaBay’s pure hypochlorous acid.  Data from a multicenter clinical study show that Avenova reduced bacterial load, the underlying cause of blepharitis, on ocular skin surface by more than 90%. Laboratory tests show that hypochlorous acid has potent antimicrobial activity in solution yet is non-toxic to mammalian cells and also neutralizes bacterial toxins.  Avenova is marketed to optometrists and ophthalmologists throughout the U.S. by NovaBay’s direct medical salesforce.  It is accessible from more than 90% of retail pharmacies in the U.S. through agreements with McKesson Corporation, Cardinal Health and AmeriSource Bergen.

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 our ability to find a partner to continue this program, the anticipated market for this product given it is still under development, the future sales of the potential product, and the Company’s expected future financial results. Forward-looking statements in this release can be identified by the words “estimate,” “believe,” and “approximately,” or variations of these words. These 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 unexpected adverse side effects or inadequate therapeutic efficacy of AIS and the Company’s ability to obtain additional financing as necessary to continue this program beyond its current state. Other risks relating to NovaBay’s business, 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 latest Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, especially under the heading “Risk Factors.” 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.

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