Beyond Antibiotics

Beyond Antibiotics

Corporate Presentation

February 10, 2014

NYSE-MKT: NBY

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This presentation contains forward-looking statements, within the meaning of applicable U.S. securities laws, which statements can, in some cases, be identified with terms such as “project” "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect“, “targets”, “potential”, and other similar expressions. These forward-looking statements reflect NovaBay’s current expectation and assumptions, such as expected efficacy of compounds, timing of clinical trials, future results of clinical trials, other expected or targeted events and potential market sizes and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed in the Company's filings with the SEC which filings can be found at www.sec.gov. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable U.S. securities laws.

Forward-Looking Statements

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Antibiotic Resistance Crisis

Pre-Antibiotic Era- Pre-1930s- Minor injury = Death- Life Expectancy (LE) ~55

Alexander Fleming Bread Mold Observation

Antibiotic Era- 1930 – 2010- Penicillin- 150 Antibiotics- Wonder Drugs- Save Millions of Lives- LE ~80

Megatrend

Bacteria containing NDM-1 enzyme

Post-Antibiotic Era- Confirmed by WHO- Widespread Resistance- “Super Bugs”/ MRSA - Flesh Eating- Will this effect LE?

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White Blood Cell in Action

N-Chlorotaurine (NCT)Natural Compound

Rapid ActingEffective

BUT Unstable

Hypochlorous Acid (HOCl)Natural Compound

24 months Stable FormulationRapid Acting

Being Commercialized in 2014

White Blood Cell

Red Blood Cells

Invading Microbe

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Auriclosene (NVC-422) First Ever Stable Form of N,N-Dichlorotaurine

N,N-Dichlorotaurine (NNDCT)

Natural CompoundsRapid Acting

Effective

Limited Shelf

Life

auriclosene 0 100 200 300 400 500 6000

20

40

60

80

100

120

Time (days)

% o

f Ini

tial C

once

ntra

tion

NNDCT

auriclosene

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• Good safety profile• Fast• Broad spectrum of activity• Effective against multi-drug

resistant bacteria• Effective against biofilm

New Chemical EntityCompounds that Mimic Nature

(N,N-dichloro-2,2-dimethyltaurine) Effective and Stable, Broad Patent Protection

auriclosene

7L. D’Lima, L. Friedman, L. Wang, P. Xu, M. Anderson and D. Debabov. No Decrease in Susceptibility to NVC-422 in Multiple Passage Studies against MRSA, S. aureus, P. aeruginosa and E. coli. Prepared for submission to AAC.

Auriclosene (NVC-422) Serial Passage Against MRSA (MIC)

Fold

chan

ge in

MIC

Time in Days

= Fusidic acid

Mupirocin

NVC-422NO RESISTANCE

detected

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6 Million U.S. Patients

Two Distinct Anti-Infective Product Groups

WW: $600M

US: $100M-$200M

WW: $700M

Aganocides®Lead: Auriclosene

(NVC-422)

Wound Care Chronic

Non-healing Wounds

Dermatology Impetigo

Ophthalmology Pink Eye

Urology UCBE

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EyeBayOphthalmology Viral Conjunctivitis

(Aganocide®) DermaBay

DermatologyImpetigo

(Aganocide®)

UroBayUrology

UCBE(Aganocide®) MediBay

Advanced Wound Care

Chronic wounds(NeutroPhase

®)Business

Units$700M (WW) $600 Mil (WW)

$100-200 Mil (US)

Four Distinct Business UnitsPursuing Independent Opportunities

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Company History / Major MilestonesCorporate Partners Have Contributed ~$60 million

Founded

Novato, CA

NVC-101

Discovery and development of

NeutroPhase for wound care

Partnership

Licenses right to develop Aganocide compounds for ophthalmology uses

Initial Public OfferingOctober

Listing on NYSE-AmexNBY

$20,000,000

NovaBay licenses the right to Aganocide for impetigo

and Acne

Partnership

Strategic marketing agreement with Pioneer

Pharma for China, SE Asia

Largest Trial For viral conjunctivitis ever

launched

Launch Global Phase 2b Clinical Trial

Impetigo represents“gateway” indication

Launch Global Phase 2b Clinical Trial

Granted in multiple Ex-US countries

Aganocides Issued Additional Composition of

Matter Patents

2000

2012

2007 20091998-2003 2006 2012

20132012 2012 2012

Partnership Distribution Agreement

Shin-Poong Pharma- South Korea

Equity Investment

Licenses right to Aganocidefor Animal Health

2012- 2013

Partnership

$8.2 million to date

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Pipeline Continues to Advance

* FDA has agreed that conjunctivitis Phase 2b trial could be considered pivotal

Therapeutic Area Delivery Scope

(Patients)

2013 2014

Q1 Q2 Q3 Q4 Q1 Q2

Aganocides®

(auriclosene)

Urology(UCBE)

Irrigation Solution

US (38)

Dermatology(Impetigo)

Topical Gel

Global (300+)

Ophthalmology(Viral Conjunctivitis)

Eye drops Global (500+)

NeutroPhase® Commercial Launch Underway NeutroPhase®

(NVC-101) Wound CarePureHOCl

SolutionPartnered in U.S., China, SE Asia and S. Korea ; Seeking Partners WW

Phase 2, Part 2 Data

Enrolling Global Phase 2b Data

Enrolling Global Phase 2b* Data

Un-Partnered Program

Urinary Catheter Blockage and Encrustation (UCBE)

Unmet Medical Need

U.S. Orphan Drug and Fast Track Applications Filed

UroBay

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• ~74,000 patients in the US (mostly Spinal Cord injury, MS, Stroke) suffer from frequent blockage and encrustation

• Blockage and encrustation is often due to urease forming bacteria and bladder stone is the resulting product

• NVC-422 is capable of eradicating this bacteria without giving rise to resistance

• NVC-422 will prevent and treat patients prone to blockage and encrustation

Urinary Catheter Blockage and Encrustation (UCBE)

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Device-Related Infections More Common in patients with UCBE

Urine flow

UroBay

UCBE (Urinary Catheter Blockage and Encrustation)

Phase 2 Trial Results

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UCBE Clinical Trial Design (CL1001)

• Double-blind, crossover design, multi-center study

• Total of 67 Subjects randomized to receive one study solution (0.2% auriclosene or saline) for the first treatment regimen and, after a washout period (7 to 21 days), crossed over to receive the other solution for the second treatment regimen

• Each subject received both treatment regimens – one each of study drug and saline control

– Parts 1 & 2: Treatment regimen consisted of 7 treatments over 2-weeks (3 times/week)

– Part 3: Treatment regimen consisted of 8 treatments over 4- weeks (2 times/week)

• A single treatment consisted of 2 sequential catheter irrigations; each irrigation was 25 mL of study solution retained in the catheter for 15 minutes and then drained

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Per Subject Catheter Encrustation2 treatments per week for 4 weeks; per protocol N = 14

(p value = <0.001)

1000

31100

453

100100100100100100

10087

Saline

00

400

6075

00

829

0

731

NVC-422

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Auriclosene Reduces Catheter Blockages & Complete Encrustation

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N = 14

Auriclosene Saline P-Value

Percent of catheters removed for clinical blockage

14.3% 64.3% 0.016*

Percent of removed catheters that have 100% encrustation

0.0% 64.3% 0.003*

* Using McNemar exact test; N = 14

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Summary and Conclusions

• Auriclosene Irrigation Solution used twice per week significantly reduces encrustation and blockage in indwelling urinary catheters

• No significant safety or tolerability issues have been identified

• Future pivotal clinical studies will seek to provide additional evidence of safety and efficacy in this indication in order to allow registration in the US and EU

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$ Million

• Scheduled Frequent Catheter Changes $ 520

• Lithotripsy and Cystoscopy $ 300

• ICU Hospitalizations $ 300

• Emergency Catheter Removal (ER) $ 160

• Unscheduled Catheter Changes $ 80

• Prophylactic Antibiotic Therapy $ 72

• Treatment of UTI (Bacteremia) $ 24Total $1,456

+ Lost Productivity +$,$$$

Estimated Cost of Managing UCBE PatientsImpact of 100,000 Patients on the U.S. Health Care System

Cost of Prophylactic Auriclosene Therapy $ 160

MediBay

NeutroPhase® for the Treatment of Chronic Non-healing Wounds • FDA (510)k Cleared• Commercial Launch Underway

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• Significant Markets– Over 6 million patients in US (Diabetic, Venous, Pressure Ulcers)

• Proprietary Technology– Patented formulation – 0.01% Pure hypochlorous acid – No resistance expected based on novel mechanism of action

• Extensive Clinical Experience– Seton Medical Center human clinical trial– Published posters, peer-reviewed publication in medical journal

WOUNDS– Current clinical use with KOLs

• Risk Mitigation – Multiple Business Opportunities– Launching into multiple markets worldwide

NeutroPhase Value Proposition

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• Partner in the US and around the world • Export NeutroPhase from the US

NeutroPhase for Wound CareNBY Business Strategy

01/12: Established commercialization deal with Pioneer Pharma for marketing rights in China (including $1.3M payments to NBY)

11/13 and 09/12 : Expansion of marketing partnership with PioneerPharma to include S.E. Asia (included $8.2 M equity investments in NBY)

04/13: Exclusive Distribution with Shin Poong Pharma in South Korea

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Pioneer PharmaMajor Marketing Presence in China

Covered every province in China

510 Regional Distributors

Covering 7000 Hospitals

Covering over 49,572 Drugstores

EyeBay

Auriclosene Eye Drops for the Treatment of Viral Conjunctivitis (Pink Eye)

Unmet Medical Need

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Bac-terial

(US) $457

Bac-terial

(Ex-US) $768

Viral (US)

$300 (1)

Viral (Ex-US) $400 (1)

WW = $2 billion

(1) Extrapolated from Japanese incidence data of 1 million cases of adenoviral conjunctivitis per year. Other published estimates of incidence support greater frequencies in US and other countries.

Worldwide Conjunctivitis MarketBacterial and Viral

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• Number 1 unmet medical need in ocular infections• Epidemic Keratoconjunctivitis (EKC)

– Can be sight threatening– Highly contagious – Causes large epidemic outbreaks

Adenoviral ConjunctivitisUnmet Medical Need

Viral Conjunctivitis

Phase IIa(Proof-of-Concept)Trial Results

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Clinical SuccessClearing of Redness

Sustained clinical cure: the sum of bulbar conjunctival injection and foreign body sensation is zero and remains zero for all subsequent visits

Day 3 Day 5 Day 7 Day 9 Day 11 Day 18 -

10

20

30

40

50

60

70

80

6 13 13

19

38

69

- - -

8

31

54

NVC-422 Vehicle

% of Patients (n = 29) Phase IIa

15%

69% on Day 18 in EKC Adenoviral Patients15% Separation from Vehicle

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Clinical SuccessBlurred Vision Clearing

Sustained clearing of blurred vision is obtained if symptom is zero and remains zero for all subsequent visits

Day 3 Day 5 Day 7 Day 9 Day 11 Day 18 -

10 20 30 40

50 60 70 80 90

100

31

46

62 69

85 92

-

13 13

25

38

50

NVC-422 Vehicle

% of Patients (n = 21) Phase 2a

42%

92% on Day 18 in EKC Adenoviral Patients42% Separation from Vehicle

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Sustained Microbiological Success

Sustained Clinical Cure

Sustained Clearing of Blurred Vision

Resolution of SEIs

Safe and Well Tolerated

Summary: Proof-of-Concept Phase 2a StudyPatients with EKC Serotypes

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Phase 1 – Escalating Exposure Study COMPLETED

Phase 2a – Proof-of-Concept Study COMPLETED

• Phase 2b – BAYnovation: Global Safety/Efficacy Study ONGOING– US Enrollment began May, 2012– India Enrollment began December, 2012– Brazil enrollment began April, 2013– Sri Lanka enrollment to began September, 2013– Completion and results expected in the first half of 2014

• Phase 3 study: BAYnovation II, Second Global Safety/Efficacy Study• Anticipated NDA filing ~ 2017• Anticipated Product Launch ~ 2018

Adenoviral Conjunctivitis Timeline

Financial Overview

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Financial OverviewKey Statistics

Million

Market Cap (2/7/14)

$45

Cash and Equivalents(Estimated 12/31/13)

$13

Debt $0

Shares Outstanding - Common(Plus: 4.7M Warrants + 7.2M stock options) 45

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2014 Anticipated Milestones*

*Expected as of February 2014

Business Unit Date Event

Urology H1 Initiate a second phase 2b study in UCBE

Wound CareH1 Additional NeutroPhase partnerships

H1 Additional NeutroPhase country registrations

Ophthalmology

H1 Phase 2b conjunctivitis global study

H2 Announce new consumer lens care product (market through major distributors)

H2 Launch of i-Lid Cleanser (targeting ophthalmologists/optometrists)

Dermatology

H2 Initiate phase 2b study in impetigo

H2 FDA discussion of clinical development of NVC-422 in Necrotizing Fasciitis

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NBY Management Team

Roy WuSVP, Business Development(Genelabs, Kissei, Syntex)

Ron Najafi, Ph.D.Chief Executive Officer

(Aldrich, Rhone Poulenc Rorer, Applied Biosystems)

Tom PaulsonChief Financial Officer

(Abbott, Quidel,. Ciba-Corning, Neurogen, Avigen)

Kenneth Krantz, MD, Ph.D.Vice President, Medical Affairs

(Searle, Schering-Plough, Ayerst, J&J)

David Stroman, Ph.D.SVP, Ophthalmology

(Alcon, Upjohn)

Russell HoonSVP, Advance Wound Care(Xylos, Tutogen, Integra)

Keith Bley, Ph.D.SVP, Product Development(NeurogesX, Roche, Syntex)

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Experienced LeadershipBoard of Directors

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Paul Freiman Former CEO, NTII; Former Chairman & CEO, Syntex

Alex McPherson, MD, Ph.D.Lead Independent Director, Chair-N&GC

Former President & CEO, Biomira Inc.Past President CMA, Deputy Minister Health

Gail MaderisPresident and CEO, BayBioFormer CEO of Five Prime Therapeutics Former president of Genzyme Oncology

Charles CashionChair- Audit Committee

SVP, CFO at Conatus PharmaFormer CFO at IDUN Pharmaceuticals, Inc.

Tony WicksChair-Compensation Committee

Former CEO of several mining companies

Mark SieczkarekFormer Chairman & CEO, Solta MedicalFormer CEO, ConceptusFormer SVP, The Americas Region, Bausch & Lomb

Massimo Radaelli, Ph.D. Chairman & CEO, Noventia PharmaChairman, Bioakos Pharma

Ron Najafi, Ph.D. Chairman & CEO, NovaBay

Beyond Antibiotics

Corporate Presentation

February 10, 2014

NYSE-MKT: NBY