Aeolus Pharmaceuticals Announces Fiscal Year 2009 Financial Results

Aeolus Pharmaceuticals, Inc. (OTC Bulletin Board: AOLS) announced financial results for the three months and twelve months ended September 30, 2009. The Company reported a net loss of $746,000, or $0.02 per share, for the three months ended September 30, 2009 compared to a loss of $1,055,000, or $0.03 per share, for the three months ended September 30, 2008. Results for the three months ended September 30, 2008 included licensing income of $175,000, a related collaboration charge of $413,000 for a milestone payment due under a license agreement and a non-cash charge of $118,000 as a result of the re-pricing of certain warrants.

The Company reported a net loss of $2,296,000, or $0.07 per share, for the fiscal year ended September 30, 2009, compared to a loss of $2,973,000, or $0.09 per share, for the fiscal year ended September 30, 2008.

Research and development expenses decreased in fiscal 2009 when compared to fiscal 2008. The lower level of R&D expenses during the current period reflects a lower amount of manufacturing and research expenses. During fiscal 2008, we were in the process of manufacturing small quantities of our drug candidates to support our development program whereas during fiscal 2009 we had no manufacturing underway and were only running stability studies on existing drug supplies. Research expenses also declined during the current year as more of the Company’s research programs were funded by external grants during fiscal 2009. The Company currently has five studies under way for its lead compound, AEOL 10150:
* as a medical countermeasure against the effects of acute radiation syndrome (“ARS”) in the lungs,
* as a medical countermeasure against the effects of acute radiation syndrome in the gastro-intestinal tract,
* as a medical countermeasure against the effects of sulfur mustard gas on the lungs,
* as a medical countermeasure against the effects of sulfur mustard gas on the skin, and
* as a medical countermeasure against the effects of chlorine gas.

About AEOL 10150

AEOL 10150 is a small molecule that catalytically consumes reactive oxygen and nitrogen species (free radicals). The compound is a manganoporphyrin that contains a positively-charged manganese metal ion that is able to accept and give electrons to and from ROS and RNS. Research has shown that ROS and RNS have important cell signaling roles, and through its interaction with RNS and ROS, AEOL 10150 appears to have multiple mechanisms of action including anti-oxidant, anti-inflammatory and anti-angiogenic activities. In animal studies AEOL 10150 has demonstrated reductions in the markers for tissue hypoxia, angiogenesis, inflammation and oxidative stress. Specifically, AEOL 10150 is able to down-regulate oxidative stress and severe inflammation, which is responsible for much of the tissue destruction that occurs as a result of radiation exposure.

AEOL 10150 offers several unique advantages as a countermeasure for the treatment of ARS, sulfur mustard gas and chlorine gas for civilian and military populations. These include:

– Flexible Treatment Paradigm – AEOL 10150 is intended for the treatment of patients post-exposure, even in those who are already exhibiting symptoms, eliminating the need for immediate administration in a predefined treatment window. This approach has the added benefit of not requiring biodosimetry (a means of laboratory analysis of the blood to determine the level of radiation exposure).

– Advanced Development Stage – AEOL 10150 has demonstrated safety in two human clinical trials, and has an extensive pre-clinical safety and toxicology package completed.

– Safe and Easily Stored — The product also has an established stability profile that permits long-term storage.

– Large scale manufacturing – Aeolus has contract capacity with a large manufacturing site to mass produce large quantities of AEOL 10150 under GMP conditions.

– Multiple Applications – AEOL 10150 has demonstrated protective effects against radiation and sulfur mustard gas exposure, and within these indications has shown the ability to treat multiple organ systems.

– Commercial Application – Additionally, AEOL 10150 is being developed for use as an adjunct to cancer radiation therapy, and animal data suggest that the compound protects healthy normal cells from the effects of radiation without compromising the efficacy of the radiation in killing tumor cells.