NovaBay Pharmaceuticals Receives Additional $1.5 Million Equity Funding from Pioneer Pharma Co.

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| Source: NovaBay Pharmaceuticals, Inc.

This Completes the First $2.5 Million Tranche of a Potential Total Investment of $5.5 Million

EMERYVILLE, Calif., Nov. 5, 2012 (GLOBE NEWSWIRE) -- NovaBay® Pharmaceuticals, Inc. (NYSE:NBY), today announced the receipt of a $1.5 million equity investment from Pioneer Pharma (Singapore) Pte. Ltd., an affiliate of Naqu Area Pioneer Pharma Co., Ltd., a Shanghai-based company that markets high-end pharmaceutical products into China. As part of the expansion of the NeutroPhase distribution agreement for Southeast Asia announced on  September 14, 2012, Pioneer has completed its investment of $2.5 million.  Pioneer has the right to invest an additional $3.0 Million on or before August 31, 2013.

About NeutroPhase®

NeutroPhase® Skin and Wound Cleanser is an FDA-cleared NovaBay proprietary preparation of normal saline containing stabilized pure hypochlorous acid (HOCl) as a preservative. Under the supervision of healthcare professionals it is intended for use in cleansing wounds as well as moistening and debriding acute and chronic lesions. HOCl is a bactericidal compound produced naturally by white blood cells to combat infection in the body. With its proprietary solution, NovaBay is targeting the six-million-patient US market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers. In laboratory studies, NeutroPhase was proven to disrupt bacterial biofilm and kill a range of pathogens including common wound pathogens (both Gram-positive and Gram-negative) in vitro, while leaving human cells unharmed. Extensive toxicology studies have demonstrated safety during application to skin and wounds. A 54 patient double blind investigator sponsored clinical study was conducted at San Francisco Wound Care Center of Seton Medical Center using a precursor formulation to NeutroPhase to moisten dressings in patients with diabetic ulcers, venous ulcers and bedsores.  While these data have not been reviewed by the FDA, this formulation was shown to be as safe as dressings moistened with saline used for the control and the results suggested a superior healing rate.

Learn more about NeutroPhase at: www.neutrophase.com.

About Pioneer Pharma Co., Ltd.

Shanghai-based Naqu Area Pioneer Pharma Co., Ltd.  was founded in Hainan, China in 1996 and imports and markets high-end pharmaceutical products into China.  Pioneer currently markets 27 different pharmaceutical products across a wide range of therapeutic categories on behalf of its strategic partners.  The company has over 34 representative offices across China and covers over 7,500 hospitals and 40,000 drugstores. For more information, please visit www.pioneer-pharma.com.

About NovaBay Pharmaceuticals, Inc. (www.novabaypharma.com)

Going Beyond Antibiotics

NovaBay Pharmaceuticals is a biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of compounds, Aganocides® and NeutroPhase® Skin and Wound Cleanser. The Company's four core business units, DermaBay, UroBay, EyeBay and MediBay, are developing treatments that tackle infections in the dermatology, urology, ophthalmology, and wound care areas.

Aganocide® Compounds

NovaBay's first-in-class Aganocide® compounds, led by NVC-422, are patented, topical antimicrobials 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® are not subject to bacterial or fungal resistance, which has been demonstrated in in-vitro and in-vivo studies. 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, which occurs most commonly in children. Enrollment into a global Phase 2b clinical study has begun and clinical data results are expected in mid 2013.

Ophthalmology - NovaBay is developing an eye drop formulation of NVC-422 for treating adenoviral conjunctivitis, a highly contagious viral eye infection for which there is no approved acute treatment. Enrollment into a global Phase 2b clinical study has begun, and clinical data results are expected in the second half of 2013.

Urology – NovaBay's urinary catheter irrigation solution containing NVC-422 is currently in a Phase 2b study, 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 the Phase 2a study and is evaluating the effect of an alternate more potent formulation of NVC-422 in Phase 2b. Results are expected in the first half of 2013.

NeutroPhase®

NeutroPhase® is the only pure hypochlorous acid (HOCI) skin and wound cleanser cleared by the U.S. Food and Drug Administration (FDA) to target the six-million-patient U.S. market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers. The saline-based solution is the only wound cleanser on the market to include a stabilized, pure form of HOCl shown in studies to kill bacteria in solution, including flesh-eating bacteria. For additional information, visit: www.neutrophase.com.

Stay informed on NovaBay's progress:

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 the expected investment of Pioneer Pharma, the capacity of NeutroPhase to satisfy the market opportunity, and NovaBay's plans and expectations regarding ongoing and future clinical trials and the timing of commencement and receiving results of clinical trials. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to: the issuance of a majority of the NovaBay common stock and warrants is subject to obtaining regulatory approvals which, if not obtained or delayed, would prevent the issuance of such shares and warrants; risks and uncertainties relating to difficulties or delays in obtaining regulatory approval, production and marketing of NeutroPhase; and certain payments to NovaBay are conditioned upon achieving specified milestones which, if not met, will cause such payments not to be made . Other risks relating to NovaBay, NeutroPhase and 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 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.

Investors:
NovaBay Pharmaceuticals, Inc.

Thomas J. Paulson
Chief Financial Officer
510-899-8809


Investors and Media:
The Ruth Group
Stephanie Carrington / Nicole Greenbaum (Investors)
(646) 536-7017 / 7009
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Tracy Lessor, Ph.D.  (Media)
(646) 536-7006