Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS)
- Beginning Third Year of $118.4 Million BARDA
Advance Research and Development Contract
- Balance Sheet Strengthened With $3,225,000
Financing
- Net Cash Used In Operations Reduced To Only
$279,000 During the Quarter
Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS), a biotechnology
company leveraging significant government funding to develop a
platform of novel compounds to protect against radiological and
chemical threats and for use in oncology, announced today financial
results for the three months ended December 31, 2012.
The Company reported a net income of approximately $4,028,000,
which includes a non-cash adjustment for decreases in valuation of
warrants of approximately $4,510,000 related to decreases in the
fair value of warrants that are included as a component of other
income (expenses) in the statement of operations, for the three
months ended December 31, 2012, compared to a net income of
approximately $2,977,000, which includes a non-cash adjustment for
decreases in valuation of warrants of approximately $3,688,000
related to decreases in the fair value of warrants that are
included as a component of other income (expenses) in the statement
of operations, for the three months ended December 31, 2011
"We've completed the second year of our contract with BARDA,
which has allowed us to leverage our shareholder's investment with
$19.5 million of funding for the advanced development of our lead
drug AEOL 10150. Our team has delivered key development milestones,
such as developing and validating murine and NHP models for lung
acute radiation syndrome, improving our manufacturing processes,
enhancing our understanding of the mechanism of action of our drug
and initiating murine efficacy studies," stated John L. McManus,
President and Chief Executive Officer. "With the closing of our
recent financing, the Company now has adequate funding to operate
through the end of 2014, by which time we hope to be generating
revenue from procurement of AEOL 10150 as a medical
countermeasure."
Revenue for the three months ended December 31, 2012 was
approximately $1,342,000, which compares to approximately
$2,215,000 for the three months ended December 31, 2011. The
revenue is from the collaboration with BARDA announced on February
11, 2011, and the variance reflects the timing of work performed
under the contract.
Research and development expenses decreased about $901,000 to
approximately $1,169,000 for the three months ended December 31,
2012, from approximately $2,077,000 for the three months ended
December 31, 2011. The decrease is primarily attributable to the
timing of work related to the BARDA Contract.
General and administrative expenses decreased about $201,000 to
approximately $655,000 for the three months ended December 31, 2012
from approximately $856,000 for the three months ended December 31,
2011. The increase is primarily attributable to the timing of work
related to the BARDA Contract.
Aeolus is filing today with the SEC its Quarterly Report on Form
10-Q for the quarter ended December 31, 2012. Aeolus urges its
investors to read this quarterly filing as well as its Annual
Report on Form 10-K, as amended, also filed with the SEC, for
further details concerning the Company. The Quarterly Report on
Form 10-Q and the Annual Report on Form 10-K are also available on
the Company's website, at http://www.aeoluspharma.com.
About AEOL 10150 AEOL 10150 is a
broad-spectrum catalytic antioxidant specifically designed to
neutralize reactive oxygen and nitrogen species. The neutralization
of these species reduces oxidative stress, inflammation, and
subsequent tissue damage-signaling cascades resulting from
radiation exposure. AEOL 10150 could have a profound beneficial
impact on people who have been exposed, or are about to be exposed,
to high-doses of radiation in the treatment of oncology.
AEOL 10150 has already performed well in preclinical and
non-clinical studies, was well-tolerated in two human clinical
trials, and has demonstrated statistically significant survival
efficacy in an acute radiation-induced lung injury model. The
Company believes it could have a profound beneficial impact on
people who have been exposed, or are about to be exposed, to
high-doses of radiation, whether from cancer therapy or a nuclear
event.
About Aeolus Pharmaceuticals Aeolus
Pharmaceuticals is developing a platform of a new class of
broad-spectrum, catalytic-antioxidant compounds that protect
healthy tissue from the damaging effects of radiation. Its first
compound, AEOL 10150, is being developed for oncology indications,
where it is used in combination with radiation therapy. It is also
being developed, with funding by the US Department of Health and
Human Services, as a medical countermeasure against chemical and
radiological weapons, where its initial target indications are as a
protective agent against the effects of acute radiation syndrome
and delayed effects of acute radiation exposure. Aeolus' strategy
is to leverage the substantial investment in toxicology,
manufacturing, and preclinical and clinical studies made by US
Government agencies in AEOL 10150, including the contract with
BARDA valued, with options, at up to $118.4 million, to efficiently
develop the compound for use in oncology. For more information,
please visit Aeolus's corporate website at
www.aeoluspharma.com.
Forward-Looking Statements
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
Aeolus' product candidates, as well as its proprietary technologies
and research programs, the Company's potential initiation of large
efficacy studies in mice and NHPs, as well as a phase 1 study in
healthy normal volunteers, the BARDA Contract, and the Company's
expectation regarding the generation of revenue from procurement of
AEOL 10150 as a medical countermeasure. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause Aeolus' 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
Aeolus' product candidates, proprietary technologies and their
uses, and competition from other biopharmaceutical companies, and
whether BARDA exercises one or more additional options under the
BARDA Contract. Certain of these factors and others are more fully
described in Aeolus' filings with the Securities and Exchange
Commission, including, but not limited to, Aeolus' Annual Report on
Form 10-K for the year ended September 30, 2012. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.
AEOLUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December 31, September 30,
2012 2012
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2 $ 281
Accounts receivable 1,550 882
Prepaids and other current assets 54 61
------------- -------------
Total current assets 1,606 1,224
Investment in CPEC LLC 32 32
------------- -------------
Total assets $ 1,638 $ 1,256
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued expenses $ 3,064 $ 2,272
------------- -------------
Total current liabilities 3,064 2,272
Warrant liability 14,809 19,319
------------- -------------
Total liabilities 17,873 21,591
Commitments and contingencies (Note H)
Stockholders' deficit:
Preferred stock, $.01 par value per share,
10,000,000 shares authorized:
Series B nonredeemable convertible preferred
stock, 1,600,000 and 1,600,000 shares
authorized as of December 31, 2012 and
September 30, 2012, respectively; 526,080
and 526,080 shares issued and outstanding
as of December 31, 2012 and September 30,
2012, respectively 5 5
Common stock, $.01 par value per share,
200,000,000 shares authorized; 62,731,963
and 62,731,963 shares issued and
outstanding as of December 31, 2012 and
September 30, 2012, respectively 627 627
Additional paid-in capital 159,819 159,747
Accumulated deficit (176,686) (180,714)
------------- -------------
Total stockholders' deficit (16,235) (20,335)
------------- -------------
Total liabilities and stockholders'
deficit $ 1,638 $ 1,256
============= =============
AEOLUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
December 31,
------------------------
2012 2011
----------- -----------
Revenue:
Contract revenue $ 1,342 $ 2,215
Costs and expenses:
Research and development 1,169 2,070
General and administrative 655 856
----------- -----------
Total costs and expenses 1,824 2,926
----------- -----------
Loss from operations (482) (711)
Non-cash financing charges and change in fair
value of warrants (Notes C and E) 4,510 3,688
Interest income (expense), net -- --
Other income (expense), net -- --
----------- -----------
Net income (loss) $ 4,028 $ 2,977
=========== ===========
Net income (loss) per weighted share attributable
to common stockholders:
Basic $ 2,049 $ 1,487
----------- -----------
Diluted $ (200) $ (415)
=========== ===========
Basic net income (loss) per common share $ 0.03 $ 0.02
----------- -----------
Diluted net income (loss) per common share $ 0.00 $ (0.01)
=========== ===========
Weighted average common shares outstanding:
Basic 62,732 60,471
----------- -----------
Diluted 65,635 78,690
=========== ===========
AEOLUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
December 31,
------------------------
2012 2011
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 4,028 $ 2,977
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Stock-based compensation 72 197
Change in fair value of warrants (4,510) (3,688)
Change in assets and liabilities:
Accounts receivable (668) 177
Prepaid and other assets 7 7
Accounts payable and accrued expenses 792 998
----------- -----------
Net cash provided by (used in) operating
activities (279) 668
----------- -----------
Net decrease in cash and cash equivalents (279) 668
Cash and cash equivalents at beginning of period 281 518
----------- -----------
Cash and cash equivalents at end of period $ 2 $ 1,186
=========== ===========
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Contact: Russell Skibsted Sr. Vice President and Chief Financial
Officer Aeolus Pharmaceuticals, Inc. 1-(949) 481-9825
Aeolus Pharmaceuticals (CE) (USOTC:AOLS)
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