NovaBay Initiates Phase 2 Trial for Treatment of Urinary Catheter Blockage and Encrustation

NovaBay Pharmaceuticals, Inc. today provided an update on its Phase 2 clinical trial for the use of its lead compound, NVC-422, to prevent urinary catheter blockage and encrustation (UCBE) which is often a contributing factor to urinary tract infections in chronically catheterized patients.

With recruitment beginning in December 2010, NovaBay's multi-center, randomized, double-blind proof-of-concept clinical trial compares the use of a catheter irrigation solution containing NVC-422 to the use of a saline irrigation, the most commonly used option for treating UCBE. The primary inclusion criterion is that subjects have a history of chronic episodes of UCBE. The trial design is a crossover study in which the patient serves as his/her own control. Patients will receive either NVC-422 or saline solution for a two-week period delivered every other day via catheter irrigation. After a two-week "washout" period, the patients will then receive a treatment with the other solution to complete the crossover design.

Primary Outcome Measures:

- Catheter patency following treatment

Secondary Outcome Measures:

- Incidence of catheter blockage requiring early removal

- Assessment of biofilm of catheter

- Assessment of encrustation of catheter

NovaBay expects the trial to be completed in Q3 2011 with results available in Q4 2011. NovaBay plans to discuss the Phase 2 results and the Phase 3 study protocol with the FDA and initiate a Phase 3 registration study for UCBE in 2012. NovaBay plans to seek approval for NVC-422 catheter irrigation solutions via a PMA route with the FDA Medical Devices division with the target label claim to be "maintenance of catheter patency."

Encrustation of catheters is a common complication in the care of many patients undergoing long-term indwelling bladder catheterization. The problem stems from infection by urease-producing bacteria, particularly Proteus mirabilis. These organisms colonize catheters, producing biofilm communities embedded in a gel-like polysaccharide matrix. The common complication of UCBE is urinary tract infections. Based on quantitative market research conducted by NovaBay, the US Market size of permanently catheterized patients is estimated to be up to 335,000 with approximately one-third chronically susceptible to UCBEs.

NovaBay is focusing its technology on four distinct therapeutic areas: dermatology, ophthalmology, urology and hospital infections. In dermatology, the focus is on developing NVC-422 gel for impetigo and acne. NovaBay has the distinct advantage of being partnered with Galderma S.A. (Galderma), the leading dermatology company in the world. In ophthalmology, the goal is to develop an eye drop for conjunctivitis with Alcon Research Ltd. (ALCON), the world's leading ophthalmology company. In urology, NovaBay aims to reduce the incidence of urinary catheter blockage and encrustation (UCBE) and the associated urinary tract infections with an irrigation solution containing NVC-422. In hospital infection, NovaBay is targeting the six-million-patient market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers with its proprietary antimicrobial solution, NeutroPhase(R), which has received two 510K clearances from the Food and Drug Administration.

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 contains one or more indications that are poorly served or have no approved FDA treatments available, all with significant 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.

NovaBay's commercialization strategy for its Urology Business Unit is to retain commercial rights in the large U.S. market and license rights to Europe and the Asia/Pacific.

In 2008, after extensive preclinical testing which confirmed NVC-422's ability to maintain catheter patency over extended periods, NovaBay entered into the urology therapeutic arena with the filing of an IND with the Food and Drug Administration. After IND clearance, NovaBay successfully concluded a 32-volunteer Phase 1 human trial that indicated the product was safe at the proposed dose. Upon successful completion of this Phase 1 trial, NovaBay entered an exploratory Phase 2 study in patients with severe bacteriuria, or colonization of bladder with bacteria but not yet considered a symptomatic urinary tract infection. The study showed that NVC-422 was well tolerated and reduced or eliminated certain pathogens in the urine. No severe adverse events were reported.

NovaBay's Aganocide compounds are novel, broad-spectrum, fast-acting, synthetic N-chlorinated antimicrobial molecules designed to mimic the body's defense against infection. When applied to the site of an infection, these compounds maintain biological activities while demonstrating improved solution stability over naturally occurring N-chlorinated antimicrobial molecules. In July 2010, NovaBay announced positive results in a 129-patient, Phase 2a impetigo skin infection study. The results showed 92 percent 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 compound (NVC-422) topical gel. Patients in the study infected with methicillin-resistant Staphylococcus aureus (MRSA) impetigo infection were successfully treated. Additionally, Aganocide compounds have shown good in-vitro activity against viruses and fungi and 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.

NovaBay Pharmaceuticals is a clinical-stage biotechnology company focused on developing its proprietary and patented Aganocide compounds. These are novel, synthetic anti-infectives with activity against bacteria, fungi and viruses, and are being developed to treat and prevent a wide range of local, non-systemic infections with a low likelihood of developing bacterial resistance.

NovaBay is focusing its technology on four distinct therapeutic areas: dermatology, ophthalmology, urology and hospital infections. In dermatology, the focus is on developing NVC-422 gel for impetigo and acne. NovaBay has the distinct advantage of being partnered with Galderma, the leading dermatology company in the world. In ophthalmology, the goal is to develop an eye drop for conjunctivitis with Alcon, the world's leading ophthalmology company. In urology, NovaBay aims to reduce the incidence of urinary catheter blockage and encrustation (UCBE) and the associated urinary tract infections with an irrigation solution containing NVC-422. In hospital infection, NovaBay is targeting the six-million-patient market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers with its proprietary antimicrobial solution, NeutroPhase(R), which has received two 510K clearances from the Food and Drug Administration. Visit www.novabaypharma.com.