NovaBay Regains Worldwide Rights to Its Aganocide Compounds From Alcon

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| Source: NovaBay Pharmaceuticals, Inc.

NovaBay and Alcon Terminate Collaboration Agreement

EMERYVILLE, Calif., June 16, 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, announces that its collaboration and license agreement with Alcon related to NovaBay's proprietary Aganocide compounds has ended. An agreement to finalize the collaboration has been entered into by the companies, terms of which include a payment of $2,972,245 to NovaBay. The payment includes a termination fee as well as final reimbursement for R&D and personnel costs related to the collaboration. In keeping with the terms of their agreement, Alcon will return the worldwide technology license for the lead Aganocide compound NVC-422 as well as other backup compounds to NovaBay. Rights to be returned to NovaBay include all previously licensed areas in ophthalmic, otic, and sinus applications. Additionally, all FDA regulatory filings made by Alcon will be transferred to NovaBay, and NovaBay is free to continue the development of Aganocides for these areas on its own or in collaboration with new partners.

About NovaBay Pharmaceuticals, Inc.

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. NovaBay has the 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. In urology, NovaBay aims to reduce the incidence of urinary catheter blockage and encrustation (UCBE) and the potential for urinary tract infections with an irrigation solution containing NVC-422. In hospital infection, NovaBay is targeting chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers with its proprietary anti-infective solution, NeutroPhase®, which has received two 510(k) clearances from the Food and Drug Administration. For additional information, visit www.novabaypharma.com

NovaBay Pharmaceuticals, Inc.
Thomas J. Paulson, Chief Financial Officer
510-899-8800


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