SecProbe.io

Mail Stop 6010           July 17, 2007   Ron Najafi, Ph.D. Chairman of the Board, Chief Executive Officer and President NovaBay Pharmaceuticals, Inc. 5980 Horton Street – Suite 550 Emeryville, California  94608
Re:   NovaBay Pharmaceuticals, Inc.
Amendment No. 4 to Form S-1 Registration Statement
 File No. 333-140714

Dear Mr. Najafi:
We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to pr ovide us with supplemental information so
we may better understand your disclosure.  Af ter reviewing this information, we may or
may not raise additional comments.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General

1. We note that you have amended your confiden tial treatment request to include the
license agreement with KCI International.   Please note, comments relating to the
confidential treatment request will be sent under separate cover.

Ron Najafi, Ph.D.
NovaBay Pharmaceuticals, Inc. July 17, 2007 Page 2

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
 Critical Accounting Policies and Estimates

 Stock Based Compensation, page 39

2. We are considering your revised disclosure  in response to prior comments one and
two.    Please address the following:

a. Please explain to us why the use of th e current-value allocation method in your
valuations is appropriate. It  appears that the use of the current-value allocation
method is appropriate in only limited circum stances.  Such as when a liquidity
event in the form of an acquisition or disso lution of the enterpri se is imminent and
expectations about the future of the en terprise as a going c oncern are virtually
irrelevant or when the enterprise is at su ch an early stage of development that (i)
no material progress has been made on th e enterprise’s business plan, (ii) no
significant common equity value has been  created in the business above the
liquidation preference on the preferred stoc k, and (iii) there is no reasonable basis
for estimating the amount and timing of a ny such common equity value above the
liquidation preference that might be created in the future.
b. Marshall & Stevens used an income appro ach to estimate the fair value of your
common stock.  Please tell us the specifi c assumptions used for your clinical
success rates, projected costs, and project ed sales used to estimate your future
cash flows.  Please explain to us how th e assumptions used in the valuation are
reasonable at your stage of development.
c. You disclose the significant factors contri buting to the difference between the fair
value as of the date of each grant and the estimated IPO price.  However you have
not disclosed an estimated IPO price in your filing. If you do not have an
estimated offering price in your next f iling we are deferring an evaluation of
stock-based compensation until your estimat ed offering price is specified.
 Financial Statements

 Notes to Financial Statements

 Note 8. Stockholders’ Equity

 Stock Option Plans, page F-18

3. Consistent with your disclosure in MD&A, please revise your di sclosure to clarify
that the Board of Directors determined the fair value of your common stock in
January 2007.

Ron Najafi, Ph.D.
NovaBay Pharmaceuticals, Inc. July 17, 2007 Page 3

  As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us w ith marked copies of the amendment to
expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our  review.  We may have additional comments
after reviewing your amendment and responses to our comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
    Notwithstanding our comments, in the ev ent the company requests acceleration of
the effective date of the pending registration statement, it should furnish a letter, at the
time of such request , acknowledging that
 ‚ should the Commission or the staff, acti ng pursuant to delegated authority,
declare the filing effective, it does not foreclose the Commission from taking any
action with respect to the filing;

‚ the action of the Commission or the staff,  acting pursuant to delegated authority,
in declaring the filing effective, does not relieve the company from its full
responsibility for the adequacy  and accuracy of the disclosure in the filing; and

‚ the company may not assert this action as  a defense in any proceeding initiated by
the Commission or any person under the fe deral securities laws of the United
States.
  In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.
We direct your attention to Rules 46 0 and 461 regarding requesting acceleration
of a registration statement.  Please provide this request at least two business days in
advance of the requested effective date and allow adequate time after the filing of any
amendment for further review before submitting a request for acceleration.

Ron Najafi, Ph.D.
NovaBay Pharmaceuticals, Inc. July 17, 2007 Page 4

You may contact Todd Sherman at 202- 551-3665 or Don Abbott at 202-551-3608
if you have questions regarding comments on the financial statements and related
matters.  Please contact Suzanne Hayes at 202-551-3675 or me at 202-551-3710 with any
other questions.

         S i n c e r e l y ,             J e f f r e y  P .  R i e d l e r          A s s i s t a n t  D i r e c t o r

Cc: Chris Barry, Esq.  Dorsey & Whitney LLP  U.S. Bank Centre  1420 Fifth Avenue – Suite 3400  Seattle, Washington  98101-4010