NovaBay announces third quarter 2007 financi...(investments. At the end of Septem...),Health

At the end of September 2007, NovaBay received clearance from the

U.S. Food and Drug Administration (FDA) for its NeutroPhase woundcare

product. NeutroPhase is NovaBay's proprietary solution of

hypochlorous acid, a molecule that is naturally produced by the

body's immune system to protect against pathogens. NeutroPhase has

been cleared by the FDA as a prescription product for moistening

absorbent wound dressings, irrigating and cleaning minor cuts, minor

burns, superficial abrasions and minor irritations of the skin, and

moistening, debriding and irrigating acute and chronic dermal

lesions, such as stage I-IV pressure ulcers, stasis ulcers, leg

ulcers, diabetic foot ulcers, post-surgical wounds, first and second

degree burns, and abrasions and minor irritations of the skin.

NeutroPhase has been licensed to an affiliate of Kinetic Concepts,

Inc. for development and commercialization purposes within the field

of wound healing.

At the end of September 2007, NovaBay completed the treatment phase

of the Phase I safety trial for NVC-422, NovaBay's lead compound in a

class of antimicrobial compounds that it calls the Aganocide

compounds, for the decolonization of the nasal passages prior to

surgery. A total of 96 subjects were enrolled in the trial. NVC-422

is being developed for use prior to surgery to kill pathogens in the

nasal passages, including Methicillin-Resistant Staphylococcus aureus

(MRSA). The presence of MRSA in the nasal passages has been

associated with a significant increase in the risk of surgical

infection and our development program is aimed at reducing this risk.

During the third quarter of 2007, NovaBay initiated toxicology

studies for NVC-422 for the prevention of cathet
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