Going Beyond Antibiotics

Transcription

1 Going Beyond Antibiotics Developing and Commercializing Anti Infective Products that Fight Infections without Giving Rise to Resistance December, 2016 NYSE MKT: NBY

2 Forward Looking Statements This presentation contains forward looking statements, within the meaning of applicable U.S. securities laws, whichstatementscan,insomecases,beidentifiedwithtermssuchas project, believe, may, plan, will, estimate, continue, anticipate, intend, expect, target, potential and other similar expressions. These forward looking statements reflect NovaBay s current expectation and assumptions, such as expected market potential and market acceptance of our products 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 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. 2

3 Mark Sieczkarek Background 35 years in the Life Sciences Large and Small Companies Pharmaceutical, Consumer, Diagnostics and Medical Devices Finance Sales & Marketing Manufacturing Mergers and Acquisitions General Management Bristol Myers Senior Vice President Sanofi COO of US Diagnostics Unit Kos VP CFO Sold to Abbott for $6.2B Bausch & Lomb President of the America s & Europe Conceptus CEO and President Sold to Bayer for $1.1B Solta Chairman, CEO and President Sold to Valeant for $250M NovaBay Chairman, CEO

4 Neutrophils Our first line of defense against infections Produce broad spectrum antimicrobials that do not give rise to resistance Pathogen Neutrophil Red Blood Cells 4

5 The Foundation of NovaBay Technology Develop Anti Microbial Molecules that Mimic Those Produced by Neutrophils White Blood Cell Natural molecule: Hypochlorous Acid (HOCl) Fast Acting, broad spectrum anti microbial, difficult to mfg NovaBay s Breakthrough: Neutrox Proprietary formulation, pure HOCl Two year stability FDA Cleared / Commercial Stage Natural Molecule: N Chlorotaurine (NCT) Longer Acting, Effective; BUT Unstable NovaBay s Breakthrough: Auriclosene Retains chlorine warhead Two year stability Phase 2b UCBE clinical positive Ready for Pivotal Trials

6 Two Distinct Anti-Infective Product Groups Neutrox Based Products (FDA Cleared Commercial) Aganocides Lead: Auriclosene (Advanced Clinical) WW: $600M 41 Million U.S. Patients Blepharitis Dry Eye Surgeries WW: $700M 6 Million U.S. Chronic Wounds Ulcers, bed sores Necrotizing Fasciitis Ebola Urology UCBE (Urinary Catheter Blockage and Encrustation) 300,000 Chronically catheterized in U.S. 100,000 Chronic blockage Paraplegics, quadriplegics High morbidity, mortality No warning signs of blockage Two Phase 2b trials successful Ready for pivotal Ph 3 registration trials

7 Going Beyond Antibiotics Harnessing the Anti Infective Power of White Blood Cell Chemistry Developing and Commercializing Anti Infective Products that Fight Infections without Giving Rise to Resistance NYSE MKT: NBY September 19, 2016

8 NovaBay Pharmaceuticals Commercializing Avenova Lid and Lash Hygiene in the U.S. Eye Care Market September 19, 2016 NYSE MKT: NBY

9 Strategic Focus on Eye Care 2 Initiatives Targeting Commercial Growth and Cash Flow Breakeven 1. Continue revenue Growth from sales of Avenova Large, poorly served U.S. market with 41 million potential patients Commercial strategy producing significant quarterly sales growth Leveraging substantial increase in Avenova insurance reimbursement Primary focus on rapidly growing prescription business Direct medical reps deployed in major markets across the U.S. 2. Achieve cash flow breakeven in 4Q 16 Restructuring and cost reductions Innovative sales and marketing programs to enhance margins $11.8 million private placement and potential exercise of warrants to provide necessary capital 9

10 Does not generate Resistance Bacterial Removal Mechanical Debridement Anti biofilm Activity Anti Toxin 10

11 41 Million Potential Patients in U.S. Blepharitis 24M Dry Eye 6M Contact lens intolerance 4M Retinal injections 3M Surgery Lasik 1M Surgery Catarac 3M 11

12 What is Blepharitis? Blepharon, Greek eyelid + itis inflammatory disease Signs and symptoms Itchy, sore, red eyelids; eyelids stick together; burning, gritty sensation High incidence 37% of patients seen by ophthalmologists 47% of patients seen by optometrists Most common cause is staphylococcus bacteria Complications include dry eye syndrome, conjunctivitis, meibomian cysts, sties, cornea damage Standard of care is warm compresses, lid wipes, antibiotics 12

13 Case Study Compelling Results with 13

14 OCuSoft Only two Ingredients = 1. Pure Hypochlorous Acid + 2. Saline SteriLid Oasis Lid and Lash LIDCLENZ VisiCleanse Eye Scrub Water, PEG 80 Sorbitan Laurate, Sodium Tricedeth Sulfate, PEG 150 Distearate, Disodium Lauroamphodiacetate, Cocamidopropyl Hydroxysultaine, Sodium Laureth 13 Carboxylate, Sodium Chloride, Quaternium 15 Water, PEG 80, Sorbitan Laurate, Sodium Trideceth Sulfate, Cocamidopropyl Betaine, Sodium, Lauroamphoacetate, PEG 150 Distearate, Sodium Laureth 13 Carboxylate, Linalool Oil, Hepes Acetate, Sodium Perborate Monohydrate, Panthenol, Allantoin (Comfrey Root), Sodium Chloride, Tea Tree (Melaleuca Alternifolia) Oil, Tris EDTA, Boric Acid, Cocamidopropyl PG Dimonium Chloride, Etridronic Acid, Citric Acid for ph adjustment, Sodium Hydroxide for ph adjustment Water, Poloxamer, Polyethylene, Glycol, Borate, Hyaluronan, Methylparaben, Carbopol 940 non foaming ph balanced formulation of non ionic surfactant in purified water Water, Cocamidopropyl Betaine, PEG 80 Sorbitan, Laurate, Sodium Trideceth Sulfate, PEG 150 Distearate, Aloe, Barbadensis Leaf Extract, Chamomilla Recutita (Matricaria) Flower, Extract, Cucumis Sativus (Cucumber) Fruit Extract, Althaea Officinalis, Root Extract, Avena Sativa (Oat) Kernel Extract, Tetrasodium EDTA, Citric Acid, Polyaminopropyl Biguanide Water USP (Purified), PEG 200 Hydrogenated Glyceryl Palmate, Disodium Laureth Sulfosuccinate, Cocoamidopropyl amine Oxide, PEG 80 Glyceryl Cocoate, Benzyl Alcohol, Edetate Disodium 14

15 Growing Commercial Presence 15

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17 Addressing Major U.S. Markets 17

18 Market Coverage 43 Direct Medical Reps In Key Metro Areas Northeast (11): Albany, Brooklyn, Manhattan, Nassau County, White Plains, Cherry Hill, Boston, Hartford, Patterson, Wash, DC, Philadelphia Midwestern (10): Chicago No, Chicago So, Detroit, St. Louis, Buffalo, St. Paul, Kansas City, KS, Cleveland, Cincinnati, Pittsburg Southeast (11): Miami, Jacksonville, Ft. Myers, West Palm, Raleigh Durham, Charlotte, Memphis, Atlanta, Baton Rouge, Houston, Nashville Western (11): LA North, LA South San Francisco, San Jose, Sacramento, San Diego, Seattle, Phoenix, Denver, Dallas, Austin 18

19 Covering Major Markets 19

20 Net Sales ($000) 3,088 Direct Buy & Bill Sales 2,578 1,003 33% Prescriptions Sales 914 1,580 1,366 1, , ,664 2,085 70% 67% Q Q Q Q Q Q Q % 20

21 500 (500) (1,000) (1,500) (2,000) (2,500) (3,000) (3,500) (4,000) (4,500) (5,000) (5,500) (6,000) (6,500) (2,843) (3,487) History of Net Operating Losses (in thousands) Net Operating Loss ($000) Breakeven Adj Q3 for one time exps: Move related Warrant repricing (1,697) (2,013) (2,982) (2,206) (3,786) (4,150) (4,078) (4,113) (4,661) (4,859) (4,624) (4,867) (4,901) (5,348) (6,146) 21 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec

22 Avenova Phased Commercial Strategy 22

23 Avenova Phased Commercial Strategy Phase 1 Initial Launch 2015 launch targeted two sales channels at introductory pricing 1. Sales Reps detailing directly to MD s and OD s Primary emphasis Most efficient approach to seed the market 2. Prescription sales Once doctors comfortable with product, Rx sales take over Phase 2 Focus on Rx Growth / Multi pronged Marketing Strategy Ophthalmology channel has highest growth potential New pricing model recognizes full value/benefits of Avenova Strategy supported by insurance coverage approaching 90% Direct sales to doctors will continue, but de emphasized 23

24 Key Opinion Leader Endorsements 24

25 KOL from Across U.S. Support Ophthalmic Advisory Board Dr. Eric Donnenfeld Past president of Ocular Microbiology and Immunology Group and serves on the Board of Directors of American Society of Cataract and Refractive Surgery. Dr. Donnenfeld has published over 175 journal articles, and >20 book chapters and books. Dr. Richard L. Lindstrom Founder and attending surgeon of Minnesota Eye Consultants and Adjunct Professor Emeritus at the University of Minnesota Department of Ophthalmology. Dr. Russell N. Van Gelder, M.D., PhD. Current President of The American Academy of Ophthalmology; University of Washington Professor and Chair of the Department of Ophthalmology. Dr. Francis Mah Director of Cornea and External Disease and Co Director of Refractive Surgery, Scripps Clinic Medical Group, La Jolla, CA. Dr. Terry Kim Professor of Ophthalmology at Duke University School of Medicine, and Associate Director of the Corneal and External Disease Service and Refractive Surgery Service at the Duke University Eye Center. Dr. Edward J. Holland Director of Cornea Services at the Cincinnati Eye Institute and Professor of Ophthalmology at the University of Cincinnati

26 KOLs from Across U.S. Support Optometry Advisory Board Dr. Arthur Epstein Director of Dry Eye Ocular Surface Disease Center and Director of Clinical Research at Phoenix Eye Care; heads practice s Dry Eye Ocular Surface Disease Center and serves as Director of Clinical Research. Internationally recognized expert in complex contact lens management and medical complications of contact lenses, dry eye and anterior segment disease. Dr. Christine Sindt Founded Scleral Lens Education Society is nationally recognized expert on specialty contact lenses for children, practice specializes in treatment of anterior segment disease. Dr. Katherine M. Mastrota Center Director of Omni Eye Surgery in New York City; Contributing Editor to Contact Lens Spectrum and Optometric Physician and authored numerous articles. Named Secretary to the Ocular Surface Society of Optometry. Serves on Board of Directors of Optometric Society of the City of New York. Dr. Brian Rosenblatt Owner of Rosenblatt Family Eye Care Associates, a group practice in Raritan, NJ focusing on Contact Lenses, Glaucoma, Anterior Segment Disease, and Ocular Manifestations of Systemic Diseases. Member of the AOA, NJSOP, and is currently a candidate for fellowship of the American Academy of Optometry. Dr. Bill Townsend Served 11 years as consultant at VA Medical Center in Amarillo, TX. Currently an adjunct professor at University of Houston, College of Optometry. Special emphasis on ocular surface disease and dry eye. Fellow of American Academy of Optometry and President of Ocular Surface Society of Optometry

27 Advertising Placements in Top Trade Journals Collateral Marketing Materials 27 27

28 Interactive Website Find a Physician Find a Pharmacy 28

29 Media Coverage Growing 29

30 Media Coverage Growing Article: Avenova With Neutrox Is Breakthrough in Fight Against Contact Lens Intolerance 30

31 Media Coverage Growing Article: New Therapy Introduced for Chronic Dry Eye 31

32 Media Coverage Growing Article: Dry Eye: A Growing Problem in an Aging Population 32

33 Media Coverage Growing Article: New Treatments for Contact Lens Intolerance On The Rise 33

34 Media Coverage Growing Article: Did You Know Your Eye Makeup Could Be Making You Sick? 34

35 Media Coverage Growing Article: Spotlight on Demodex: Eliminating the Mite y Menace 35

36 Media Coverage Growing 36

37 Financial Overview Million Market Cap (12/2/16) $60 Cash (9/30/16) $9.4 Debt $0 Shares Outstanding (Preliminary 9/30/16) 15 Shareholders Equity (9/30/16) $6.8

38 Strategic Focus on Eye Care 2 Initiatives Targeting Commercial Growth and Cash Flow Breakeven 1. Continue revenue Growth from sales of Avenova Large, poorly served U.S. market with 41 million potential patients Commercial strategy producing significant quarterly sales growth Leveraging substantial increase in Avenova insurance reimbursement Primary focus on rapidly growing prescription business Direct medical reps deployed in major markets across the U.S. 2. Achieve cash flow breakeven in 4Q 16 Restructuring and cost reductions Innovative sales and marketing programs to enhance margins $11.8M private placement and exercise of warrants to provide necessary capital 38

39 NovaBay Pharmaceuticals Commercializing Avenova Lid and Lash Hygiene in the U.S. Eye Care Market NYSE MKT: NBY December, 2016