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Aeolus Pharmaceuticals Announces Second Quarter Fiscal Year 2010 Financial Results

^{Published on 2010-05-17 10:40:27 - Market Wire}
 

MISSION VIEJO, Calif.--([ BUSINESS WIRE ])--Aeolus Pharmaceuticals, Inc. (OTCBB:AOLS) announced today financial results for the three months ended March 31, 2010. The Company reported net income of $6,918,000, or $0.07 per diluted share, compared to a net loss of $665,000, or $0.02 per share, for the three months ended March 31, 2009. The second quarter 2010 results include non-cash financing and change in valuation gain of $7,817,000, which offset our operating loss and resulted in a profit for the quarter. During the three months ended March 31, 2010, the Companya™s net cash used in operating activities was $598,000 compared to $321,000 for the three months ended March 31, 2009.

"We anxiously await the outcome of these proposal filings, as well as data from ongoing studies in each of our target areas of MCM research during the second half of the Companya™s fiscal year 2010."

aResults for the second quarter of fiscal 2010 reflect the acceleration of our development programs for AEOL 10150 as a Medical Countermeasure (MCM) for radiation, chlorine gas and sulfur mustard gas exposure. Our spending on MCM development leverages the funding and support we continue to receive from the NIH CounterACT and NIH-NIAID programs, and has helped to generate the data that positioned the Company to file for advanced development funding from Health and Human Services during the past quarter.a stated John L. McManus, President and Chief Executive Officer. aWe anxiously await the outcome of these proposal filings, as well as data from ongoing studies in each of our target areas of MCM research during the second half of the Companya™s fiscal year 2010.a

Research and development expenses increased by $213,000 for the three months ended March 31, 2010 versus March 31, 2009 due to an increase in spending on consultants and pre-clinical studies to support the Companya™s development of AEOL 10150 as an MCM for radiation exposure. Consulting expenses increased by $186,000, due principally to the cost of hiring a consultant to assist the Company in filing detailed proposals with: 1) the Biomedical Advanced Research and Development Authority (BARDA) for a government funded contract to develop AEOL 10150 for Lung Acute Radiation Syndrome (ARS), and 2) with the Chemical, Biological Medical Systems (CBMS) for a government funded contract to develop AEOL 10150 for GI ARS. Preclinical expenses also increased over the comparable period in 2009 due to increased animal study activity to support the Companya™s ARS development program The Company currently has eight studies in progress including studies of AEOL 10150 as a potential countermeasure against the effects of: radiation on the lungs in mice and non-human primates and the gastro-intestinal tract in mice, chlorine gas on the lungs in mice and sulfur mustard gas on the lungs in rats and skin in mice, and studies of AEOL 11207 as a potential treatment for epilepsy and for Parkinsona™s disease.

General and administrative expenses increased by $150,000 for the three months ended March 31, 2010 due to an increase in salary, stock based compensation expense and legal fees. Salaries and wages increased due to the hiring of a new employee during the first quarter of fiscal 2010. Stock compensation expense increased as a result of a higher level of grant activity and an increase in the valuation assigned to such grants in the current quarter when compared to the prior year quarter. The increase in legal fees reflects costs associated with the October 2009 financing and December 2009 financing amendment that were realized during the March ended quarter.

As of March 31, 2010, the Company had $1,272,000 in cash and cash equivalents and 48,224,320 common shares outstanding.

About Aeolus Pharmaceuticals

Aeolus is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that mimics and thereby amplifies the bodya™s natural enzymatic systems for eliminating reactive oxygen species, or free radicals. Studies funded by the National Institutes for Health are currently underway evaluating AEOL 10150 as a treatment for exposure to radiation, mustard gas and chlorine gas.

The statements in this press release that are not purely statements of historical fact are forward-looking statements. Such statements include, but are not limited to, those relating to Aeolusa™ product candidates, as well as its proprietary technologies and research programs. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aeolusa™ actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Important factors that could cause results to differ include risks associated with uncertainties of progress and timing of clinical trials, scientific research and product development activities, difficulties or delays in development, testing, obtaining regulatory approval, the need to obtain funding for pre-clinical and clinical trials and operations, the scope and validity of intellectual property protection for Aeolusa™ product candidates, proprietary technologies and their uses, and competition from other biopharmaceutical companies. Certain of these factors and others are more fully described in Aeolusa™ filings with the Securities and Exchange Commission, including, but not limited to, Aeolusa™ Annual Report on Form 10-K for the year ended September 30, 2009. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.