NovaBay Pharmaceuticals, Inc. : NovaBay Pharmaceuticals Announces Strategic Marketing Agreement for NeutroPhase in China

EMERYVILLE, CA - January 9, 2012-- 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, today announced it has entered into a commercial
partnership agreement with Pioneer Pharma Co., Ltd., a Shanghai-based
company that markets high-end pharmaceutical products into China, for
the commercialization of NeutroPhase in this territory. Under the
terms of the agreement, NovaBay will receive an upfront payment of
over $300,000, with the potential for additional payments totaling
approximately $1 million that may be triggered by certain regulatory
milestones pre commercial launch.

NeutroPhase is a U.S. Food and Drug Administration (FDA)-cleared
wound cleanser developed by NovaBay to promote healing and improve
clinical outcomes for patients with chronic non-healing wounds,
including Stage I-IV pressure ulcers, stasis ulcers, leg ulcers,
diabetic foot ulcers, post surgical wounds, first and second degree
burns, abrasions and minor irritations of the skin.

"We are pleased to announce our partnership with Pioneer Pharma,
whose sales network covers every province of Mainland China,
including over 7,500 hospitals and 40,000 pharmacies." said Dr. Ron
Najafi, Chairman and Chief Executive Officer of NovaBay. "We are also
proud to be counted among Pioneer's strategic partners, which include
several leading global pharmaceutical companies, including Alcon
andTakeda."

"We are excited to partner with NovaBay for the sales and marketing
of NeutroPhase in China," stated President of Pioneer, Mr. XinZhou
"Paul" Li. "We believe NeutroPhase represents a significant
advancement in the care of chronic non-healing wounds that translates
into a large market opportunity here in China. Our 1,000+ member
sales force is looking forward to launching the product."

Under the exclusive agreement, NovaBay will be responsible for
preparation and submission of a Marketing Approval Application (MAA)
for NeutroPhase, which will be reviewed by China's State Food and
Drug Administration (SFDA). The MAA in China will be based on the
data in the U.S. FDA 510(k) of NeutroPhase and NovaBay does not
expect the SFDA will require further clinical testing for approval.
NovaBay will export NeutroPhase finished product to Pioneer for sale
in Mainland China following its expected approval. NovaBay has
retained rights to commercialize or partner NeutroPhase in select
Chinese markets not covered by the agreement, including Hong Kong,
Macau, and Taiwan.

Dr. Najafi continued, "NeutroPhase is our first FDA-cleared
commercial product and announcing our first strategic marketing
partnership for NeutroPhase represents a significant milestone for
the Company. As we continue to seek additional partners for
NeutroPhase in global markets, we remain on track for potential
commercialization of NeutroPhase in the United States in the first
quarter of 2012."

About NeutroPhase®

NeutroPhase is an FDA-cleared wound cleanser that consists of a
solution of pure hypochlorous acid (HOCl), which is an anti-bacterial
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. NeutroPhase is the only
pure and stable HOCl solution in the world, demonstrating a superior
therapeutic index as compared to other wound cleansers. In numerous
laboratory and clinical studies, NeutroPhase was proven to disrupt
bacterial biofilm and kill common wound pathogens (both Gram-positive
and Gram-negative), while leaving healthy living human cells
unharmed. Furthermore, the characteristics and mechanisms of action
of NeutroPhase also make it highly unlikely that resistant strains of
bacteria could develop over time. In a 54 patient double blind
clinical study conducted at San Francisco Wound Care Center of Seton
Medical Center, NeutroPhase was shown to be superior when compared
with wet to moist saline dressing (standard of care) in patients with
diabetic ulcers, venous ulcers and bedsores. Learn more about
NeutroPhase at: www.neutrophase.com -
file://rg-sbs01/TRG/Clients/NovaBay/Releases/NeutroPhase/www.neutrophase.com .

About Pioneer Pharma Co., Ltd.

Shanghai-based Pioneer Pharma 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 -
http://cts.vresp.com/c/?NovaBayPharmaceutica/78e60660fb/ceae19e726/97476c9f18 .

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 formulation
for the highly contagious skin infection, 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 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
anti-infective solution, NeutroPhase® which has received two 510(k)
clearances from the Food and Drug Administration. For additional
information, visit: www.novabaypharma.com -
http://cts.vresp.com/c/?NovaBayPharmaceutica/78e60660fb/ceae19e726/ac8331ecb0 .

Cautionary Information Regarding Forward-Looking Statements
This release contains forward-looking statements, which are based
upon management's current expectations, assumptions, estimates,
projections and beliefs. The statements in this press release
including, but not limited to, statements regarding NovaBay's
expectations on the value of NeutroPhase in the healing of chronic
non-healing wounds; the potential commercialization of NeutroPhase in
the United States in the first quarter of 2012 and potential outcome
on NovaBay's efforts to seek potential partners for NeutroPhase
globally, as well as other statements that relate to future events or
results are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The forward-
looking statements reflect the views of the management of NovaBay as
of the date of this press release and are based on assumptions and
subject to significant risks and uncertainties (many of which are
outside of NovaBay's control), including: the risk that NovaBay's
Aganocide compounds and NeutroPhase may not prove to be effective in
treating wounds; the risk that NovaBay may experience unexpected
results in further studies which may limit, delay or prevent NovaBay
from manufacturing NeutroPhase; unexpected adverse side effects or
inadequate therapeutic efficacy of NeutroPhase may inhibit it from
becoming a treatment for chronic wound and the risk of unexpected
delays in the regulatory process which may delay the manufacturing
and commercialization of NeutroPhase, as well other as risks
relating to NovaBay and its Aganocide compounds detailed in NovaBay's
Quarterly Report on Form 10-Q, 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 7, 2011. 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.

Contact Information

NovaBay Business Development and Licensing:
Roy J. Wu
Sr. VP Business Development
[phone]
[e-mail]

Investors:
NovaBay Pharmaceuticals, Inc.
Thomas J. Paulson
Chief Financial Officer
510-899-8809
[e-mail]

Investors and Media:
The Ruth Group

Joshua Drumm, PhD(Investors)
[phone]
[e-mail]

Victoria Aguiar(Media)
[phone]
[e-mail]

Click to view this email in a browser
http://hosted.verticalresponse.com/540285/78e60660fb/1495501783/ceae19e726/

If you no longer wish to receive these emails, please reply to this
message with "Unsubscribe" in the subject line or simply click on the
following link:

http://cts.vresp.com/u?78e60660fb/ceae19e726/mlpftw

This message was sent by NovaBay Pharmaceuticals, Inc. using
VerticalResponse

NovaBay Pharmaceuticals, Inc.
5980 Horton Street
Suite 550
Emeryville, California 94608
US

Read the VerticalResponse marketing policy:
http://www.verticalresponse.com/content/pm policy.html