Virbac Animal Health acquired worldwide rights to develop NovaBay Pharmaceutical’s compound auriclosene (NVC-422) for global veterinary markets by exercising an option under a year-old agreement, the companies said today.

Under their Feasibility and Option Agreement, Virbac will pay NovaBay an option exercise fee as well as development and precommercial milestone payments, all undisclosed. NovaBay also said it expects to receive royalties on the sale of any commercial products in the “companion animal” or pet care field.

Virbac said it opted to develop auriclosene following “extensive testing” for veterinary uses during the agreement’s 12-month option period.

“This agreement with Virbac is an important part of our strategy of exploring the uses of auriclosene for a variety of indications, including veterinary medicine,” Ron Najafi, Ph.D., NovaBay’s chairman and CEO, said in a statement.

As of April 17, NovaBay was recruiting patients for the Phase IIb “BAYnovation™” (NCT01532336) study of an eyedrop formulation of auriclosene, designed to evaluate its clinical and microbiological efficacy and safety for adenoviral conjunctivitis compared to a placebo comparator.

NovaBay was also recruiting patients for a separate Phase II study (NCT01243125) evaluating auriclosene’s ability compared with sterile saline irrigation solution to prevent the growth of urinary pathogens, including Proteus and others, resulting in biofilm formation and encrustation leading to blockage. The company reported positive data from an earlier part of an ongoing Phase II study, and is evaluating the effect of an alternate more potent formulation of auriclosene. Results are expected mid-year.

Separately, NovaBay has teamed up with Galderma to develop a formulation of auriclosene for the treatment of highly contagious skin infection, impetigo, which occurs most commonly in children. Enrollment has begun in a global Phase IIb clinical study, with results expected in the second half of this year.

Auriclosene is the first of NovaBay’s Aganocide® compounds that U.S.-owned NovaBay agreed to develop with French-owned Virbac. Under their original agreement, inked in March 2012, NovaBay will receive an up-front payment plus additional support for R&D. At the time, NovaBay expressed its interested in testing auriclosene in ophthalmology, dermatology, and urology.

NovaBay focuses on developing global, topical anti-infective treatments through its two compound categories—Aganocides, and NeutroPhase® Skin and Wound Cleanser. The company’s four core business units—DermaBay, UroBay, EyeBay, and MediBay—are developing treatments for infections in dermatology, urology, ophthalmology, and wound care, respectively.

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