NovaBay Pharmaceuticals Provides Business Unit Update and 2014 Outlook

By January 8, 2014

NovaBay® Pharmaceuticals, Inc. (NYSE MKT: NBY), a clinical-stage biopharmaceutical company developing topical non-antibiotic antimicrobial products, today provided a business update highlighting recent accomplishments and outlook for 2014.

Dr. Ron Najafi, NovaBay Chairman and Chief Executive Officer, commented, “2013 was a year of progress and discovery at NovaBay and we look forward to continuing our clinical and commercial progress in 2014. We remain dedicated to our mission of addressing the large unmet therapeutic needs of the global topical anti-infective market. The positive, statistically-significant data from the Phase 2 clinical study of auriclosene to reduce UCBE confirms our belief that treating catheters with auriclosene can make a substantial difference in the lives of patients requiring chronic indwelling urinary catheters, including those with spinal cord injuries.  We are excited to see that auriclosene may dramatically reduce the problems of unpredictable early catheter blockage.”

Dr. Najafi continued: “On the commercial front, our wound care product, NeutroPhase, was successfully used as an advanced wound cleanser in a new minimally-invasive treatment approach for managing wounds that are ravaged by flesh-eating bacteria. We also expanded our agreement with China Pioneer Pharma around NeutroPhase which included significant, additional investment.”

“NovaBay’s focus on multiple therapeutic areas, in combination with our FDA-cleared commercial product, NeutroPhase, mitigates risk. As a result of the hard work from our talented employees and partners, our clinical programs are advancing, with our ophthalmology program expected to read out in the middle of 2014,” Dr. Najafi concluded.


Urology: Statistically-significant and clinically-meaningful results from a Phase 2 clinical study of Auriclosene (NVC-422) Irrigation Solution to reduce urinary catheter blockage and encrustation were announced on September 16, 2013. Study CL1001 achieved the study’s primary endpoints and showed clear benefits for patients with long-term indwelling catheters.

Ophthalmology: The ongoing global clinical trial for auriclosene in conjunctivitis is expected to complete and results available in the middle of 2014. The launch of i-Lid Cleanser (being developed for use in ophthalmological applications) is expected in selected markets in 2014.

Dermatology: In November 2013, the Phase 2b clinical study of impetigo, conducted by our partner Galderma, was completed. While the study showed that auriclosene is safe and well tolerated, it did not meet its primary clinical endpoint. NovaBay plans to reinitiate a Phase 2b clinical trial of auriclosene for impetigo in 2014. Knowledge gained from the two previous impetigo studies is expected to lead to the use of an optimized formulation of auriclosene for this upcoming clinical trial. NovaBay will be responsible for the planning and execution of the upcoming trial. An exclusive licensing agreement provides Galderma with the right to commercialize impetigo products and an option to license auriclosene for use in other dermatological indications.

Chronic Wounds
With a mechanism of action distinct from Aganocides, NovaBay believes that the US FDA 510(k)-cleared NeutroPhase is the only available patented pure hypochlorous acid solution available which has the potential to be best suited product on the market to treat the 6 million patients in the U.S. who suffer from chronic wounds, such as pressure, venous stasis and diabetic ulcers.

As part of the expansion of the partnership agreement, China Pioneer Pharma   (HK: 1345) agreed to purchase 5 million unregistered shares of NovaBay stock for a total investment of $5.7M. This investment includes commercialization rights to two new brands, CelleRx™ and i-Lid™ Cleanser. CelleRx™ is a new product developed by NovaBay for use in the field of aesthetic dermatology. NovaBay’s other new product, i-Lid™ Cleanser, was designed for use in ophthalmological applications. The expanded partnership agreement covers the commercialization and distribution of these new brands in China and 11 countries in Southeast Asia.

NovaBay has Strong Partnerships to Market NeutroPhase:
•    USA:  Principle Business Enterprises (PBE)
•    China: China Pioneer Pharma Holdings Limited
•    South East Asia (11 countries): China Pioneer Pharma
•    South Korea: Shin Poong Pharm. Co., Ltd.(019170:Korean Stock Exchange)

NeutroPhase Approved or Launched in the Following Countries:
•    Singapore: launched
•    Malaysia: launched
•    Indonesia: in registration
•    China: in registration
•    Taiwan: in registration
•    Hong Kong: in registration for public hospitals

ISO Certification
In December, NovaBay announced that it received ISO (International Organization for Standardization) 13485 certification from the notified body DEKRA, for its quality management system. This is an important milestone supporting the manufacturing and global commercialization of NeutroPhase skin and wound cleanser.

NovaBay-Virbac Partnership
In May 2013, NovaBay entered into a collaboration and license agreement with Virbac (Euronext Paris: VIRP), a global animal health company. Virbac exercised its March 2012 Feasibility and Option Agreement, thereby acquiring exclusive worldwide rights to develop NovaBay’s proprietary compound, auriclosene (NVC-422), for topical applications for companion animals. This agreement with Virbac is an important part of NovaBay’s strategy of exploring the uses of auriclosene for a variety of indications, including veterinary medicine.

About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics®
NovaBay Pharmaceuticals is a clinical-stage biopharmaceutical company focused on addressing the unmet therapeutic needs of the global, topical anti-infective market with its Aganocide compounds, led by auriclosene. Auriclosene is a new chemical entity invented by NovaBay that has a broad spectrum of activity against bacteria, viruses and fungi. Aganocide compounds are based on the human body’s natural immune system and the molecules involved in combating infections. Bacterial resistance to Aganocides is highly unlikely, as demonstrated in published studies. Once pathogens penetrate the body’s primary defense, the next line of defense is provided by the white blood cells. NovaBay has focused on understanding these molecules generated by the white blood cells and finding ways, by chemical modification, to allow them to be developed as therapeutic products with the potential to treat a wide range of local, non-systemic infections. NovaBay believes that Aganocides will help reduce the rise of antibiotic resistance as they begin to supplant the usage of classic topical antibiotics.

Forward-looking Statements
This release contains forward-looking statements and opinions, which are based upon management’s current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding the general use of antibiotics in the United States and NovaBay’s possible effect on that use. The words “expect,” “potential,” “believe,” “may,” “lead,” and “will” are intended to identify these 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, risks and uncertainties relating to difficulties or delays in development, clinical trial, 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. Other risks relating to NovaBay and 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 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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NovaBay Pharmaceuticals Contacts
Thomas J. Paulson  
Chief Financial Officer
Contact Thomas Paulson

Ana Kapor
Director, Investor Relations and Corporate Communications
NovaBay Pharmaceuticals, Inc.
Contact Ana Kapor