Healthcare Industry News:  Nestlé 

Biopharmaceuticals Dermatology

 News Release - March 25, 2009

NovaBay and Galderma Enter Into Global Agreement to Develop and Commercialize NovaBay's Novel Aganocide Drugs for Major Dermatological Conditions

Up to $50 Million Potential Milestones plus Double Digit Royalties on Future Sales

Company to Host Conference Call at 11:00 a.m. ET Today

EMERYVILLE, Calif., March 25 (Healthcare Sales & Marketing Network) -- NovaBay Pharmaceuticals, Inc. (NYSE Amex: NBY), a mid-stage biopharmaceutical company developing first-in-class anti-infective products for the treatment and prevention of a wide range of infections without causing resistance, today announced that it has entered into an agreement with Galderma S.A. to develop and commercialize NovaBay's novel proprietary Aganocide® compounds. The exclusive agreement is worldwide in scope, with the exception of certain Asian markets, and covers all major dermatological conditions, excluding onychomycosis (nail fungus) and orphan drug indications.

Under the terms of the agreement, NovaBay expects to receive from Galderma up to $50 million upon achievement of certain development and regulatory milestones related to the acne and impetigo indications and future royalties on net sales of products. The agreement also envisages further cooperation for additional dermatological products and indications. Under the agreement, NovaBay will also receive escalating double-digit royalties on net sales of products.

Galderma will be responsible for the development costs of the acne and other indications, except in Japan, and for the ongoing development program for impetigo, upon the achievement of a specified milestone. Galderma will also reimburse NovaBay for the use of its personnel in support of the collaboration. NovaBay retains the right to co-market products resulting from the agreement in Japan. In addition, NovaBay has retained all rights in other Asian markets outside Japan, and has exclusive rights to promote the products developed under the agreement in the hospital and other healthcare institutions in North America.

"This agreement highlights Galderma's commitment to the future of dermatology. Aganocide compounds have the potential to bring about significant progress in the treatment of skin diseases which affect millions of patients, without adding to the growing problem of antibiotic resistance," said Humberto C. Antunes, Chief Executive Officer of Galderma. "Galderma is glad to be working with NovaBay in this important and very promising endeavor."

"We are very pleased to have entered into this collaboration with Galderma, the world-leader in dermatology. We believe that Galderma's demonstrated development, regulatory and marketing capabilities, backed by its unrivaled reputation and track record of success, will enable NovaBay to benefit from accelerated development timelines and global commercial expertise," said Dr. Ron Najafi, Chairman and Chief Executive Officer of NovaBay. "Like our alliance with Alcon in the ophthalmic, otic and sinus fields, this agreement represents another major validation of the potential for our novel Aganocide products in treating infections caused by a wide range of bacteria, viruses and fungi."

The company's collaborations with Alcon and Galderma provide significant future revenue-generating potential for NovaBay, with favorable economic-sharing for its unique, differentiated products that address large, global dermatological and ophthalmic markets.

Conference Call

NovaBay will hold a conference call today, March 25, 2009 at 11:00 a.m. ET, to discuss its Galderma collaboration. The conference call will be simultaneously web cast on NovaBay's web site.

Conference call details:
Date: Wednesday, March 25, 2009
Time: 11:00 a.m. ET
Dial-in (U.S.):888-396-2384
Dial-in (International): 617-847-8711
Web cast:
To access audio replay:
Access # (U.S.): 888-286-8010
Access # (International): 617-801-6888
Replay Passcode: 94169247

About Aganocide Compounds

The Aganocide compounds are novel, proprietary, synthetic N-chlorinated antimicrobial molecules specifically designed by NovaBay to mimic the body's natural defense against infection. These compounds may deliver the same or better efficacy as currently used antibiotics without contributing to the growing rise of bacterial resistance. This new class of highly differentiated compounds is ideally suited to meet numerous unmet needs in dermatology and other applications, while currently available therapies do not provide adequate treatment and often cause unwanted side effects. The Aganocide compounds have shown in preclinical trials to date to be highly effective against the bacteria, viruses and fungi associated with a wide range of dermatological and other conditions. They have also been demonstrated to be effective against bacteria in biofilm, which render most antibiotics ineffective. The combined anti-bacterial and anti-fungal properties and activity of these compounds make them uniquely able to address the multi-factorial causes of many skin and other disorders. These compounds have a potentially broad therapeutic index providing a high degree of potency, good tolerability and dosing versatility and flexibility.

About Acne

Acne is the most common skin disease that affects people of all races and age-groups, but it is most common in teenagers and young adults. An estimated 80 percent of all people between the ages of 11 and 30 suffer from outbreaks of acne at some point, and some people in their forties and fifties are also affected. There is a clear need for more effective antimicrobial treatments than the currently available antibiotics.

About Impetigo

Impetigo, a contagious skin infection that usually produces blisters or sores on the face, neck, hands, and diaper area, is one of the most common skin infections among children. It also occurs in adults. Impetigo is contagious and can be spread from one person to another through close contact or by sharing towels, sheets, clothing, toys, or other items. Scratching can also spread the sores to other parts of the body.

Impetigo is caused by one of two types of bacteria - strep (streptococcus) or staph (staphylococcus). Often these bacteria enter the body when the skin has already been irritated or injured due to other skin problems such as eczema, poison ivy, insect bites, chickenpox, burns, or cuts. Children may develop impetigo after having a cold or allergies that have caused the skin under the nose to become raw. However, impetigo can also develop in completely healthy skin.

About Galderma

Galderma, created in 1981 as a joint venture between Nestle and L'Oreal, is a global leading pharmaceutical company dedicated exclusively to the field of dermatology. The company is present in 65 countries with over 1000 sales representatives and is committed to improving the health of skin with an extensive line of innovative medical, corrective and aesthetic solutions to treat a range of dermatological conditions including: acne, rosacea, fungal nail infections, psoriasis & other steroid-responsive dermatoses, pigmentary disorders, skin cancer and medical solutions for skin senescence. Galderma has research and development facilities located in Sophia Antipolis (France), Princeton, New Jersey (USA), and Tokyo (Japan). Leading worldwide dermatology brands include Differin®, Epiduo®, Oracea®, MetroGel® 1%, Rozex®, Clobex®, Tri-Luma®, Loceryl® and Cetaphil®. For more information on Galderma, visit

About NovaBay Pharmaceuticals, Inc.

NovaBay Pharmaceuticals is a mid-stage biopharmaceutical company focused on developing its proprietary and patented Aganocide compounds, first-in-class, novel, synthetic anti-infective product candidates that are bioequivalent to the active antimicrobial molecules generated within white blood cells to treat and prevent a wide range of infections without causing resistance. NovaBay has internal development programs aimed at addressing hospital and respiratory infections. The company has a licensing and research collaboration agreement with Alcon, Inc. for use of its Aganocides in the eye, ear and sinus, and in contact lens solutions. NovaBay has entered into an agreement with Galderma S.A. to develop and commercialize Aganocides in acne, impetigo and other dermatological indications. NovaBay® and Aganocide® are trademarks of NovaBay Pharmaceuticals, Inc. For more information on NovaBay, visit

Cautionary Information Regarding Forward-Looking Statements

This press release includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks, uncertainties and other factors. Such statements include, but are not limited to, statements regarding the expected financial and other benefits to be received from the Galderma agreement and the Alcon Agreement, and the benefits that Aganocide compounds may deliver. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others: the risk that results obtained in animal models may not be obtained in humans; the risk that milestones and net sales may not be achieved under the Galderma agreement; and the risk of unexpected delays in the regulatory process may delay the commencement or completion of clinical trials. Other risks relating to NovaBay and Aganocide® compounds, including risks that could cause actual 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/A for the period ended September 30, 2008, under the caption "Risk Factors" in Item 1A of Part II of that report, which was filed with the Securities and Exchange Commission on November 14, 2008.

Source: NovaBay Pharmaceuticals

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