updated 2/2/2011 7:16:54 AM ET 2011-02-02T12:16:54

Developing Opportunities for the Dermatology, Ophthalmology, Urology, and Hospital Infection Markets

Data Expected From Multiple Phase 2 Clinical Trials in 2011


EMERYVILLE, Calif., Feb. 2, 2011 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE Amex:NBY), a clinical stage biotechnology company developing its first-in-class, anti-infective Aganocide® compounds for the topical treatment and prevention of antibiotic-resistant infections, provided a synopsis of its accomplishments and progress during 2010, as well as the company's outlook for 2011.

NovaBay is developing commercial opportunities for its Aganocide portfolio of anti-infectives in four distinct healthcare markets: dermatology, ophthalmology, urology and hospital infections. Each of these market segments contain indications that are poorly served or have no approved FDA treatments available, with multiple hundred-million to billion-dollar revenue potential. NovaBay's strategy is to address these market opportunities either through partnerships and collaborations or by building an internal organization to strategically market its own products when appropriate from a commercial standpoint.

DERMATOLOGY

In July 2010 NovaBay announced positive results in a 129-patient, Phase 2a impetigo skin infection study. The results showed 92% of the patients in NovaBay's highest dose were cured of the highly contagious infection following seven days of treatment with NovaBay's lead Aganocide (NVC-422) topical gel. Furthermore, methicillin-resistant Staphylococcus aureus (MRSA) is becoming an escalating problem, as an ever-increasing portion of patients are infected with this "superbug" in impetigo. Patients in the study infected with MRSA impetigo infection, were successfully treated. As resistance to antibiotics becomes a critical public health issue, NovaBay intends to aggressively pursue the development of non-antibiotic anti-infectives that are unlikely to cause resistance, as a first-line treatment for a range of topical infections.

Based on the Phase 2a clinical trial results, in December 2010, NovaBay and Galderma S.A., the world's leading dermatology company, agreed to expand their partnership to focus on the development of NovaBay's Aganocide compound NVC-422 for the topical treatment of impetigo as well as developing its technology for acne. This expansion will provide NovaBay with the additional funding and resources required for the clinical development of its NVC-422 topical gel formulation for impetigo. Moving NVC-422 gel into Phase 2b clinical development in 2011 is the current top priority, with the potential to move into Phase 3 development during 2012. Galderma will fund all development activities relating to Impetigo and acne.

Dermatology - 2010 News

  • 1/11/2010 -- NovaBay Pharmaceuticals Receives $3.75 Million in Milestone Payments from Galderma, S.A.
  • 5/25/2010 -- NovaBay Pharmaceuticals Completes Enrollment in Phase 2 Impetigo Clinical Trial
  • 7/21/2010 -- NovaBay Pharmaceuticals' Non-antibiotic Anti-infective Successful in Phase 2 Skin Infection Trial; demonstrates efficacy in treating impetigo, including cases caused by MRSA
  • 10/15/2010 -- NovaBay Pharmaceuticals Presents Human Clinical Impetigo Data on Lead Anti-infective Compound at the 48th Annual IDSA Meeting
  • 10/25/2010 -- NovaBay Pharmaceuticals' NVC-422 Demonstrates up to 95% Efficacy in 129 Patient Impetigo Phase 2 Clinical Trial, Including 100% Efficacy in MRSA Infected Patients
  • 11/8/2010 -- NovaBay Pharmaceuticals Awarded Cash Grant Under the U.S. Government Qualifying Therapeutic Discovery Program for Impetigo Research
  • 11/29/2010 -- NovaBay Pharmaceuticals Holds Successful FDA Meeting on Clinical Development of Aganocide® Compound NVC-422 for Impetigo
  • 12/6/2010 -- NovaBay Pharmaceuticals and Galderma Expand Their Agreement to Include Impetigo

OPHTHALMOLOGY

The NovaBay–Alcon partnership developing Aganocide compounds remains on track. In October 2010, NovaBay reported results of an interim analysis of Alcon's proof of concept viral conjunctivitis clinical study, which was conducted at 30 clinical sites throughout the U.S. NovaBay-Alcon's ophthalmic solution eye drop has shown good activity in pre-clinical in vitro and in vivo models. Results from this concluded clinical study are expected during the first half of 2011.  Additional licensed opportunities in ear, sinus infection and contact lens solution development are in active development through the NovaBay–Alcon collaboration.

Ophthalmology - 2010 News

  • 5/6/2010 -- Positive in vitro Data on New Class of Anti-infectives Announced by NovaBay Pharmaceuticals at ARVO 2010
  • 7/15/2010  -- NovaBay Pharmaceuticals Receives Notice of Allowance on Anti-infective NVC-612 and Related Compounds
  • 10/18/2010 -- NovaBay Pharmaceuticals Reports on Status of Phase 2 Proof of Concept Clinical Trial of NovaBay's NVC-422 for Viral Conjunctivitis

HOSPITAL INFECTIONS

NovaBay has its roots in the development of NeutroPhase™ (NVC-101). NeutroPhase is a patented compound containing 100% pure hypochlorous acid, the same potent chemical that white blood cells generate to attack invading pathogens during oxidative burst. NeutroPhase has received 510K clearance from the device division of the FDA as a liquid bandage. The specifics of the FDA cleared indications for use provide sufficient claims for NovaBay to market NeutroPhase into the chronic non-healing wound market. Potential applications would be for the treatment of numerous conditions such as diabetic ulcers, venous stasis ulcers and pressure ulcer stages I-IV. As posted on the FDA website:

"The device (NeutroPhase™) is intended for moistening absorbent wound dressings and cleaning minor cuts, minor burns, superficial abrasions and minor irritations of the skin. It is also intended for moistening and debriding acute and chronic dermal lesions, such as Stage I-IV pressure ulcers, stasis ulcers, leg ulcers, diabetic foot ulcers, post surgical wounds, first and second degree bums, abrasions and minor irritations of the skin."

The cost of treating chronic wounds is estimated at $5 billion to $7 billion in the U.S., and the occurrence of these wounds is increasing at a rate of 10% per year. NovaBay is currently seeking a commercial partner for NeutroPhase to cover the North American, European and Japanese markets.

Hospital Infections - 2010 News

  • 9/16/2010  -- NovaBay Pharmaceuticals Spotlights Positive In-Vitro Results for New Class of Anti-infectives at 50th Annual ICAAC Meeting
  • 12/16/2010  -- NovaBay Pharmaceuticals CEO Contributes Article to The Scientist

UROLOGY

In April 2010, NovaBay reported results from the Phase 2a clinical study of NVC-422 in chronically catheterized patients with high levels of bacteriuria, or bacteria in the bladder. The study showed that NVC-422 was well-tolerated and reduced or eliminated certain pathogens in the urine.

Furthermore, in 2010 NovaBay reported that an irrigation solution containing NVC-422 in a phase 2a pilot study demonstrated good activity against Proteus mirabilis, a Gram-negative bacterium that can cause severe urinary catheter blockage and encrustation (UCBE). It is estimated that there are over 300,000 patients in the U.S. alone who are permanently catheterized due to neurologic disorders (quadriplegics, paraplegics, stroke or MS patients). These patients can become contaminated with Proteus mirabilis resulting in a crystalline biofilm formation leading to catheter blockage, with the further potential to develop urinary tract infections and even sepsis. NovaBay's lead Aganocide compound has been shown to be safe in a phase 1 study with 32 healthy volunteers and has been shown to prevent a Proteus mirabilis biofilm from forming. NovaBay has commenced a Phase 2 trial in permanently catheterized patients at three centers in the U.S. and will provide investors and potential partners with more detail on the design this clinical trial in the near future.

NovaBay is evaluating the potential of building a commercial team to market this product along with other complimentary products for the urology and neurology markets. More information on NovaBay's urology opportunities will be announced during 2011. 

Urology - 2010 News

  • 4/15/2010  -- NovaBay Pharmaceuticals Reports Positive Data from Exploratory Phase 2 Trial 
  • 9/16/2010  -- NovaBay Pharmaceuticals Spotlights Positive Results for New Class of Anti-infectives at 50th Annual ICAAC Meeting

Conclusion

Commenting on NovaBay's 2010 accomplishments, Dr. Ron Najafi, NovaBay's Chairman and Chief Executive Officer, stated, "During 2010, we have made it clear that we have four distinct opportunities moving forward in dermatology, ophthalmology, urology and hospital infections. In each of these opportunities we have either a Phase 2 clinical asset, or, in the case of hospital infection, we have a device approval from the FDA that we intend to commercialize in 2012.This strategy of multiple product opportunities has the potential to increase NovaBay's probability of success and decrease risk to shareholder investment."

About NovaBay's Aganocide Compounds

NovaBay's Aganocide compounds are novel; synthetic N-chlorinated antimicrobial molecules designed and developed to specifically mimic the body's natural defense against infection. These compounds maintain biological activities while demonstrating improved solution stability over the naturally occurring N-chlorinated antimicrobial molecules. In preclinical testing, Aganocide compounds have been shown to be highly effective against bacteria, including some multi-drug resistant strains (such as MRSA), viruses and fungi. NovaBay's Aganocide compounds have the potential to deliver the same or better efficacy than antibiotics, and to address the growing problem of antibiotic resistance by employing a novel mechanism of action.


About NovaBay Pharmaceuticals, Inc.

NovaBay Pharmaceuticals is a clinical stage biotechnology company focused on developing its proprietary and patented Aganocide compounds, which are novel, synthetic anti-infective product candidates with equivalent activity to the active antimicrobial molecules generated within white blood cells. NovaBay's Aganocide compounds are being developed to treat and prevent a wide range of infections without causing bacterial resistance. NovaBay has internal development programs aimed at addressing hospital infections, chronic non-healing wounds, urinary catheter blockage and encrustation (UCBE) and onychomycosis. The company has a license and research collaboration agreement with Alcon, Inc. for use of its Aganocide compounds to treat eye, ear and sinus infections as well as for contact lens care. NovaBay has also entered into an agreement with Galderma S.A. to develop and commercialize Aganocide compounds in acne, impetigo and other dermatological indications. For more information on NovaBay, visit: www.NovaBaypharma.com .

Cautionary Information Regarding Forward-Looking Statements

This release contains forward-looking statements, which are based upon NovaBay's current expectations, assumptions, estimates, projections and beliefs. The statements in this press release of NovaBay's expectations including, but not limited to (i) NovaBay's expectations regarding its partnerships with Galderma and Alcon, respectively; (ii)any potential plans for future clinical development of NVC-422 and of bringing products to market for dermatological indications, including the expected timing or the results of the Phase 2b and Phase 3 clinical developments;(iii) that Alcon and NovaBay will announce the results of the viral conjunctivitis clinical trial during the first half of 2011; (iv) the potential that the full data will differ from the interim data,(v) the potential efficacy of Aganocide® compounds, (vi) NovaBay's plan to commercialize Neutrophase (NVC 101) in 2011; (vii) that the strategy of multiple product opportunities has the potential to increase NovaBay's probability of success and decrease risk of shareholder investment; (viii) the potential to deliver the same or better efficacy than antibiotics and to address the growing problem of antibiotic resistance as well as other statements that relate to future events or results are forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Factors that might cause to such differences include, but are not limited to: the risk that negative results from the development programs could preclude Galderma and Alcon from providing additional funding to NovaBay, the risk of unexpected delays in the regulatory process may delay the commencement or completion of clinical trials; inherent risks and uncertainties relating to difficulties or delays in conducting clinical trials; and the inherent uncertainty of patent protection for the company's intellectual property or trade secrets, the risks that results obtained in animal models may not be obtained in humans; as well other as risks relating to NovaBay and its Aganocide compounds 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 12, 2010. 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: NovaBay Pharmaceuticals, Inc.
         Thomas J. Paulson, Chief Financial Officer
         510-899-8800
         tjpaulson@NovaBaypharma.com
         
         The Investor Relations Group
         Investor Relations:
         Adam Holdsworth
         212-825-3210
         adam@investorrelationsgroup.com
         
         Public Relations:
         Laura Colontrelle
         212-825-3210
         laura@investorrelationsgroup.com

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