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NovaBay Pharmaceuticals Provides Business Update And 2013 Outlook

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 .

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Forward-Looking Statements

This release contains forward-looking statements, which are based upon NovaBay's current expectations, assumptions, estimates, projections and beliefs. Many of these statements are identified by the use of words denoting future events, such as "expect," "anticipate," "plan," "intend," "will," and variations of such words. These forward-looking statements include, but not limited to, NovaBay's plans and expectations regarding ongoing and future clinical trials, the timing of commencement and receiving results of clinical trials, the potential additional investment from Pioneer Pharma in 2013 and the execution of potential global partnerships for NeutroPhase in 2013. These statements are subject to risks and uncertainties that could cause actual results to differ materially 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, risks and uncertainties relating to difficulties or delays in development, clinical trial, regulatory approval, production and marketing of the company's product candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the product candidates, the uncertainty of patent protection for the company's intellectual property or trade secrets, the company's ability to obtain additional financing as necessary and unanticipated research and development and other costs. Other risks relating to NovaBay 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.

CONTACT: NovaBay Pharmaceuticals, Inc.
         Thomas J. Paulson (Investors)
         Chief Financial Officer
         (510) 899-8809
         tjpaulson@novabaypharma.com
         
         The Ruth Group
         Stephanie Carrington / Nicole Greenbaum (Investors)
         (646) 536-7017 / 7009
         scarrington@theruthgroup.com / ngreenbaum@theruthgroup.com

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