NovaBay has been freefalling since it reported failed Phase II data for treatment of adenoviral conjunctivitis with NVC-422. While I do not think it was a very big deal (it is by far their smallest focus - dermatology, ophthalmology, urology, and hospital infections), apparently other investors aren't so confident. If they can show encouraging data for their other Phase II trials (expected by year's end) then they almost have to recover some of their value. A market cap of $20 mln would just be ridiculous. Time is not on their side however, as they face delistment by November 2nd if they cannot post 10 consecutive days of closing over $1.00. That seems almost impossible to avoid at this point.
Right now I'm going to wait and see how things go. If they can get their house in order and post successful data, then I expect this company to be a mainstay in biotech talk. With the growing problem of microbial resistance the rewards greatly outweigh the risks (although I will not invest any more money until I see the rest of their Phase II trials).
Best case scenario: trials are successful through December 2012 and NBY becomes a nice little rocketship. Worst case scenario: December 2012 comes along, and you'll ask me "NovaBay who?" (they'll be bankrupt).