NovaBay Pharmaceuticals, Inc. Reports First ... - Investing Stocks

NovaBay Pharmaceuticals, Inc. Reports First Quarter Financial Results

EMERYVILLE, Calif., May 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 local non-systemic treatment and prevention of antibiotic-resistant infections, has reported first quarter 2011 financial results and also highlighted recent progress of its proprietary and partnered development programs within its four business units.

As of March 31, 2011, the Company?s cash, cash equivalents and short-term investments totaled $12.6 million, compared with $12.8 million at the end of the previous year, reflecting an approximate $200,000 net cash burn through the first three months of the year. NovaBay?s minimal cash burn over the three-month period reflects prudent cash management and receipt of milestone and support payments from its partners, Galderma S.A. and Alcon. Furthermore, with combined average balances of cash, cash equivalents and short-term investments of approximately $12 million since December 2008 (2¼ years), NovaBay has effectively accomplished its primarily non-dilutive financing strategy through upfront, milestone, and R&D reimbursement revenues received from its two collaboration partners.

NovaBay?s license and collaboration revenue for the three months ended March 31, 2011 was $2.5 million, compared with $2.1 million for the first quarter 2010. The Company earns license and collaboration revenue from its significant corporate partnerships with Galderma S.A. and Alcon.

During the first quarter, NovaBay continued to advance three Phase 2 clinical trial programs. These consist of: 1) in its Dermatology Business Unit: impetigo, a highly contagious skin infection ??? planning an expanded Phase 2b trial scheduled to start in the second half of 2011; 2) in its Urology Business Unit: urinary catheter blockage and encrustation (UCBE), potentially leading to urinary tract infections ? Phase 2 trial currently underway; and 3) in its Ophthalmology Business Unit: viral conjunctivitis or pink eye ??? the results of the Phase 2 study have been analyzed for safety, microbiological and clinical efficacy. The trial results are expected to be released during May 2011. The Company will continue to review the data with its partner and other experts in the ophthalmic community to determine its next steps. NovaBay also reported that the manufacture of NeutroPhase®, its FDA 510(k) approved product, continues at a contract manufacturing facility in the US. Assuming successful scale up can be achieved, NovaBay expects to see this product on the market next year with select partners.

The Company?s research and development and clinical expenses were $2.9 million in the first quarter of 2011, compared with $2.2 million in the first quarter of 2010, reflecting increased clinical activity in the impetigo program.

NovaBay reported a first quarter net loss of $2.0 million, or $0.08 per share, compared with a net loss of $1.6 million or $0.07 per share for the quarter ended March 31, 2010. The net loss was primarily due to increased research, development and clinical trial expenses as the Company moves forward in its in-house Phase 2b clinical trial for UCBE. 

First Quarter and Recent Highlights:

• April 2011: NovaBay Pharmaceuticals Spotlights Positive Results From NeutroPhase® Study of 26 Patients With Chronic Non-Healing Wounds
• April 2011: NovaBay Pharmaceuticals Awarded 1st Place for Outstanding Scientific Presentation at The Simon Foundation for Continence Conference
• April 2011: NovaBay Pharmaceuticals Spotlights Positive Results for Its Novel Anti-Infective at 2011 Simon Foundation for Continence Conference
• March 2011: NovaBay updated investors on the status of its Phase 2b clinical trial for UCBE in chronically catheterized spinal cord injury patients prone to frequent urinary tract infections. The 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. NovaBay expects the trial to be completed in Q3 2011 with results available in Q4 2011. The Company 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. 
• February 2011: Fast Company ranks NovaBay No. 7 in their annual list of the world?s most innovative biotech companies. The magazine praises NovaBay ?for antibiotic-like compounds that fight their battles by mimicking the human immune system.?
• January 2011: Aganocide NVC-422 shown effective against ?Superbug? producing NDM-1 (New Delhi Metallo-beta-lactamase-1) and six other highly drug-resistant pathogens. NovaBay currently is engaged in testing additional strains of E. coli and K. pneumoniae encoded with the NDM-1 gene. The Company previously reported that NVC-422 was effective in vitro against resistance phenotypes of E. coli and K. pneumoniae, including extended-spectrum beta-lactamase (ESBL) and multidrug-resistant (MDR) strains. NovaBay intends to publish and present the full data set at the upcoming Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC).  

?Our team continues to pursue our clinical milestones and we are working diligently to advance our programs,? commented Dr. Ron Najafi, NovaBay?s Chairman and Chief Executive Officer. ?During the first quarter we announced the start of our Phase 2 trial to address the unmet medical need to treat urinary catheter blockage and encrustation as well as additional pre-clinical studies confirming the broad-spectrum anti-microbial capabilities of NovaBay?s Aganocide portfolio of compounds.

?We expect to announce the results of the proof-of-concept phase 2 clinical trial of NVC-422 for adenoviral conjunctivitis and our plans for this program during May and we look forward to Galderma initiating an expanded Phase 2b clinical trial with NVC-422 for the treatment of the highly contagious skin infection, impetigo,? Dr. Najafi concluded.

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 and acne. 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 with Alcon, the world?s foremost ophthalmology company. 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 the six-million-patient market of 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.

Cautionary Information Regarding Forward-Looking Statements

NOVABAY PHARMACEUTICALS, INC.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
	March 31, 2011	December 31, 2010
(in thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$ 11,869	$ 11,534
Short-term investments	750	1,272
Accounts receivable	???	500
Prepaid expenses and other current assets	312	448
Total current assets	12,931	13,754
Property and equipment, net	1,598	1,588
Other assets	138	174
TOTAL ASSETS	$ 14,667	$ 15,516
LIABILITIES AND STOCKHOLDERS? EQUITY
Liabilities:
Current liabilities:
Accounts payable	$ 346	$ 406
Accrued liabilities	1,033	726
Equipment loan	42	106
Deferred revenue	2,311	1,485
Total current liabilities	3,732	2,723
Deferred revenues ? non-current	1,889	2,204
Deferred rent	104	99
Total liabilities	5,725	5,026
Stockholders? Equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at March 31, 2011 and December 31, 2010	???	???
Common stock, $0.01 par value; 65,000 shares authorized at March 31, 2011 and December 31, 2010; 23,450 and 23,392 issued and outstanding at March 31, 2011 and December 31, 2010, respectively	235	234
Additional paid-in capital	38,894	38,469
Accumulated other comprehensive loss	???	(14)
Accumulated deficit during development stage	(30,187)	(28,199)
Total stockholders? equity	8,942	10,490
TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY	$ 14,667	$ 15,516

NOVABAY PHARMACEUTICALS, INC.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended  March 31,		Cumulative Period from July 1, 2002 (inception) to
(in thousands, except per share data)	2011	2010	March 31, 2011
Revenue:
License and collaboration revenue	$ 2,490	$ 2,084	$ 42,096
Operating Expenses:
Research and development	2,920	2,233	43,880
General and administrative	1,515	1,469	29,740
Total operating expenses	4,435	3,702	73,620
Operating Loss	(1,945)	(1,618)	(31,524)
Other income (expense), net	(31)	(11)	1,420
Loss before income taxes	(1,976)	(1,629)	(30,104)
Provision for income taxes	(12)	???	(83)
Net loss	$ (1,988)	$ (1,629)	$ (30,187)
Net loss per share:
Basic and diluted	$ (0.08)	$ (0.07)
Shares used in per share calculations:
Basic and diluted	23,428	23,300

 CONTACT: Investors:          NovaBay Pharmaceuticals, Inc.          Thomas J. Paulson, Chief Financial Officer          510-899-8809          tjpaulson@NovaBaypharma.com           Investors and Media:          The Investor Relations Group          Investor Relations:          Adam Holdsworth          212-825-3210          adam@investorrelationsgroup.com          Public Relations:          Laura Colontrelle          212-825-3210          laura@investorrelationsgroup.com 

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