Global Study to Enroll patients in Four Countries Worldwide

LAUSANNE, Switzerland  and EMERYVILLE, CA– September 24, 2012 – Galderma S.A., a global leading pharmaceutical company exclusively focused on dermatology and NovaBay Pharmaceuticals, Inc. (NYSE MKT: NBY), a biotech company developing novel anti-infective products for the treatment and prevention of topical infections, including those caused by antibiotic-resistant bacterial strains, today announced that the first patients have been enrolled in the Companies’ Phase 2b clinical study of a proprietary topical formulation of NVC-422 (CD07223) for the treatment of impetigo. The study is expected to enroll over 300 patients at 24 clinical sites in four countries worldwide and aims to confirm efficacy and evaluate 2 different dosage regimens.

“We are pleased with the Phase 2b study launch and our continuous progress with our partner NovaBay. We are highly committed to developing this exciting and differentiated product candidate for the treatment of impetigo,” said Humberto C. Antunes, Chief Executive Officer of Galderma.  “We share NovaBay’s enthusiasm for NVC-422, and together we expect to advance this program through late-stage clinical development, and potential approval and commercialization.”

“If successful, NVC-422 will be the first “non-antibiotic anti-infective” moving to replace traditional antibiotics in the treatment of impetigo. I commend both development teams at NovaBay and Galderma on our very successful collaboration and their efforts in bringing this product closer to the finish line,” said Dr. Ron Najafi, Chairman and Chief Executive Officer of NovaBay. 

In further support of product registration, Galderma has established preclinical and clinical safety for topical NVC-422, including the successful completion of safety studies involving more than 300 healthy volunteers, as well as the feasibility of manufacturing scale-up and long-term shelf-life.  As announced previously, following an End of Phase 2a meeting with the Food and Drug Administration (FDA) attended by both Companies, valuable guidance from the FDA has been incorporated into the Phase 2b protocol.

Impetigo is a highly contagious skin infection that mainly affects infants and children, which is caused by Staphylococcus aureus, including MRSA (methicillin-resistant Staphylococcus aureus), Streptococcus pyogenes, or both.  A review article published recently in Pediatric Dermatology1 reported that antibiotic-resistant organisms have become more prevalent in impetigo, and that the disease should be treated with topical agents that will reduce antibacterial resistance and minimize the incidence of adverse events.  In a Phase 2 clinical study, NVC-422 was shown to be safe and well tolerated, and demonstrated a 100% response rate for treating patients with impetigo caused by MRSA, whether MRSA was the sole organism or in a mixed infection2 and more than a 93-95% response to all strains and full clinical response. Additionally, NVC-422 was rapidly bactericidal against 55 clinical isolates of MRSA acquired from a database of patients in the U.S. and Europe. 
1Bangert S, Levy M, and Hebert AA, (2012) Bacterial Resistance and Impetigo Treatment Trends: A Review; Pediatric Dermatology Vol. 29 No. 3 243–248. Abstract available: http://onlinelibrary.wiley.com/doi/10.1111/j.1525-1470.2011.01700.x/abstract

2Iovino SM, Krantz KD, Blanco DM, Fernández JA, Ocampo N, Najafi A, Memarzadeh B, Celeri C, Debabov D, Khosrovi B, Anderson M., (2011) NVC-422 topical gel for the treatment of impetigo.; Int J Clin Exp Pathol. Aug 15;4(6):587-95. Abstract available: http://www.ncbi.nlm.nih.gov.elibrary.einstein.yu.edu/pubmed/21904634

About NovaBay Pharmaceuticals, Inc.

Going Beyond Antibiotics
NovaBay Pharmaceuticals is a clinical-stage biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of products.
www.NovaBayPharma.com

Aganocide® Compounds
NovaBay’s first-in-class Aganocide compounds, led by NVC-422, are patented, synthetic molecules with a broad spectrum of activity against bacteria, viruses and fungi.  Mimicking the mechanism of action that human white blood cells use against infections, Aganocides possess a reduced likelihood that bacteria or viruses will be able to develop resistance, which is critical for advanced anti-infectives.  Having demonstrated clinical efficacy in Phase 2 proof-of-concept clinical studies, NVC-422 is suited to treat and prevent a wide range of local, non-systemic infections. NovaBay’s clinical development activities are focused on three disease areas:

• Dermatology - Partnered with Galderma, a leading dermatology company, to develop a formulation of NVC-422 for treatment of highly contagious skin infection, impetigo, caused primarily by S. aureus and Group a -hemolytic streptococci.
• Ophthalmology - NovaBay is developing an eye drop formulation of NVC-422 for treating adenoviral conjunctivitis.  Enrollment into a global Phase 2b clinical study has begun with top-line data expected in the first half of 2013.
• Urology – NovaBay’s urinary catheter irrigation solution containing NVC-422 is currently enrolling patients in its Phase 2 proof-of-concept clinical studies, with the goal of reducing the incidence of urinary catheter blockage and encrustation (UCBE) and associated urinary tract infections.  The Company reported positive data from Part A of this study and expects to announce top-line results from Part B later in 2012.

NeutroPhase®
NovaBay is also developing NeutroPhase, which is an FDA 510(k)-cleared product for advanced wound care.  We believe that NeutroPhase is the only patented pure hypochlorous acid solution available and has the potential to be best suited to treat the six-million-patients in the U.S. who suffer from chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers.

For additional information, visit: www.neutrophase.com.

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About Galderma
Galderma is a global company founded in 1981 committed to delivering innovative medical solutions to meet the dermatological needs of people throughout their lifetime while serving healthcare professionals around the world.  The company has 31 wholly-owned affiliates with a worldwide network of distributors and more than 4,000 employees. Galderma’s extensive product portfolio is available in 70 countries and treats a range of dermatological conditions including: acne, rosacea, onychomycosis, psoriasis & steroid-responsive dermatoses, pigmentary disorders, skin cancer and medical solutions for skin senescence.
With approximately 20% of revenues invested each year to discover and develop new products and access innovative technologies, the company is one of the world’s leading investors in dermatology R&D. Four state-of-the-art R&D centers and four manufacturing sites are dedicated to providing a wide range of innovative medical solutions which meet the highest standards of safety and efficacy.
Strategic global brands include Epiduo, Oracea, Clobex, Differin, Rozex/MetroGel, Silkis/Vectical, Tri-Luma, Loceryl, Cetaphil, Metvix, Azzalure, Dysport*, Restylane and Emervel.
For more information about Galderma, please visit: www.galderma.com

*Dysport is a trademark of Ipsen

Cautionary Information Regarding 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 NovaBay's expectation on the potential efficacy of Aganocide compounds for the treatment of impetigo and other indications; any potential plans for future clinical development of NVC-422; the expected timing of enrollment and commencement of clinical trials, expected timing of receipt and announcement of results of clinical studies, and efficacy of NeutroPhase and Aganocides  are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward- looking statements reflect the views of the management of NovaBay as of the date of this press release and are based on assumptions and subject to significant risks and uncertainties (many of which are outside of NovaBay's control), including: Galderma may not continue its development of NVC-422, NVC-422 may not prove to be effective in treating impetigo; and the FDA or other regulatory agencies may delay clinical trials, or require additional studies or procedures, which could delay or prevent the development of Aganocide compounds. These and other risks relating to the development of Aganocide compounds are detailed in NovaBay's 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.

Contact Information

Investors:
NovaBay Pharmaceuticals, Inc.
Thomas J. Paulson
Chief Financial Officer
510-899-8809
tjpaulson@novabaypharma.com
Investors and Media:
The Ruth Group

Joshua Drumm, PhD (Investors)
(646) 536-7006
jdrumm@theruthgroup.com  

Victoria Aguiar (Media)
(646) 536-7013
vaguiar@theruthgroup.com

Galderma S.A.
Vanessa Duviquet
Director, Marketing Services & Corporate Communications
Tel: + 33 (0)1 58 86 45 60
vanessa.duviquet@galderma.com