NovaBay Pharmaceuticals Completes Enrollment in Phase 2 Impetigo Clinical Trial

EMERYVILLE, Calif., May 25, 2010 — NovaBay Pharmaceuticals, Inc., a clinical stage biotechnology company developing first-in-class, anti-infective compounds for the treatment and prevention of antibiotic-resistant infections, today announced the completion of enrollment in a Phase 2a proof-of-concept trial for the treatment of impetigo. Impetigo is a highly contagious skin infection afflicting more than 1 million people annually in the United States, primarily children and infants.

The double-blind, randomized, sequential group study evaluated the safety and efficacy of NovaBay’s lead Aganocide(R) compound, NVC-422, in 120 patients ages 2 to 12 at clinical centers in the Dominican Republic. Preliminary results of the trial will be released in July. NovaBay’s partner in the trial is Galderma S.A., one of the world’s leading dermatology companies.

NovaBay’s effort to develop a new anti-infective treatment for impetigo comes at a time when infections are becoming increasingly resistant to currently available antibiotics. Impetigo is primarily caused by Streptococcus pyogenes or Staphylococcus aureus (staph). However, community-acquired staph skin infections such as impetigo are increasingly caused by methicillin-resistant Staphylococcus aureus (MRSA).

MRSA infections are resistant to certain antibiotics and can be difficult to treat. Complications resulting from impetigo, although rare, include cellulitis and abscesses, deeper soft tissue infections that can spread into the bloodstream. When these infections are caused by community-acquired MRSA, they can be potentially life-threatening and often require systemic (intravenous) antibiotic treatment.

Impetigo is currently treated with topical antibiotic ointments such as Bactroban(TM) (mupirocin) or Altabax(TM) (retapamulin), and with oral antibiotics when topical treatments fail or in cases of larger areas of skin infection. Unfortunately, bacteria have developed resistance to some topical antibiotics in the same way they have to some oral antibiotics. For example, mupirocin resistance has been identified on the epidemic community-acquired MRSA strain USA300, suggesting that mupirocin use may select for more resistant strains.1 The oral treatment options for community-acquired MRSA skin infections are unfortunately very limited and some strains are now resistant to all but a few antibiotics.

NovaBay’s Aganocide compounds are novel, synthetic N-chlorinated antimicrobial molecules specifically designed and developed to mimic the body’s natural defense against infection. The Aganocide compounds maintain biological activities while demonstrating improved stability over the naturally occurring N-chlorinated antimicrobial molecules. In preclinical testing, NovaBay’s 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.

1) J. Patel, et al. Division of Healthcare Quality Promotion, Centers for Disease Control and Prevention, Atlanta, Georgia, Clinical Infectious Diseases, 2009: 49[15]:935-41

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 and respiratory infections. 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:

Cautionary Information Regarding Forward-Looking Statements
The statements in this press release of NovaBay’s expectations regarding the timing of the release of the preliminary results from NovaBay’s Phase 2a study of NVC-422 in impetigo, and the potential benefits of NovaBay’s Aganocide(R) compounds, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Such risks and uncertainties include: the risk that results of the Phase 2a clinical trial may be delayed due to unexpected events; the risk that unexpected results of the Phase 2a study may limit or delay NovaBay from conducting further clinical trials; results in preclinical trials are not necessarily predictive of results that may be obtained in clinical trials; and the risk that regulatory approvals or requirements may prevent NovaBay from being able to commercialize its Aganocide compounds. 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 for the period ended March 31, 2010, under the caption “Risk Factors” in Item 1A of Part II of that report, filed with the Securities and Exchange Commission on May 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.

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