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 and six month ended March 31, 2013.
The Company reported a net loss of approximately $5,782,000, or
$0.06 per share, which includes a non-cash charge of approximately
$5,020,000 related to increases 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 March 31, 2013.
This compares to a net profit of $2,763,000, or $0.02 per share,
which includes a non-cash adjustment of approximately $3,324,000
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 March 31, 2012.
"During the first two years of our five year $118 million BARDA
contract we successfully reformulated our drug, resulting in more
than an 80 percent reduction in the cost of production, and we
developed the animal models required for approval of our drug under
the 'Animal Rule' and received FDA concurrence on these models,"
stated John L. McManus, President and Chief Executive Officer.
"Over the next 12 months, we will complete and report results for
four key animal efficacy studies in pulmonary sub-syndrome of Acute
Radiation Syndrome / Delayed Effect of Acute Radiation Exposure and
at least four studies in the chemical and gastrointestinal
sub-syndrome of Acute Radiation Syndrome indications, which we hope
will confirm the positive survival benefits of AEOL 10150 we have
already seen against the lethal effects of radiation, nerve agent,
chlorine gas, mustard gas and phosgene gas."
Revenue for the three months ended March 31, 2013 was
approximately $859,000, which compares to revenue of $2,231,000 for
the three months ended March 31, 2012. The revenue is from the
collaboration with BARDA announced on February 11, 2011. Lower
revenue in the 2nd quarter of 2013 reflects both the timing of the
initiation of program items as well as revenue recognition under
accounting rules.
Research and development expenses decreased to approximately
$618,000 for the three months ended March 31, 2013, from
approximately $1,927,000 for the three months ended March 31, 2012.
The decrease in 2nd quarter 2013 expenses reflects both the timing
of the initiation of program items as well as revenue recognition
under accounting rules.
General and administrative expenses were approximately
$1,003,000 for the three months ended March 31, 2013 compared to
approximately $865,000 for the three months ended March 31, 2012.
The higher expense was primarily due to financing-related banking
and legal charges.
Key accomplishments during the quarter include:
- Strengthened balance sheet with $3.6 million financing, led by
BVF Partners L.P., a leading life sciences investment firm, which
manages the Biotechnology Value Fund family of funds.
- Cleaned-up capital structure by eliminating warrant liability
through the exercise of approximately 95 percent of outstanding
warrants.
As of March 31, 2013, the Company had approximately $1,926,000
in cash and cash equivalents and 134,550,068 common shares
outstanding. The Company had accounts receivable of $1,620,000 and
accounts payable of $2,023,000 on March 31, 2013. Aeolus has filed
today with the SEC its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2013. Aeolus urges its investors to read
this quarterly filing as well as its amended Annual Report on Form
10-K/A, also filed with the SEC, for further details concerning the
Company. The Quarterly Report on Form 10-Q and the amended Annual
Report on Form 10-K/A 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 new class of catalytic
antioxidant compounds that protects 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 Government, 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.
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, the potential impact of AEOL 10150 and the BARDA
Contract. 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' amended Annual
Report on Form 10-K/A for the year ended September 30, 2011.
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 share data)
March 31,
2013 September 30,
(Unaudited) 2012
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,926 $ 281
Accounts receivable 1,620 882
Deferred subcontractor cost 1,005 --
Prepaids and other current assets 92 61
------------- -------------
Total current assets 4,643 1,224
Investment in CPEC LLC 32 32
------------- -------------
Total assets $ 4,675 $ 1,256
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 2,023 $ 2,272
Deferred revenue 1,046 --
------------- -------------
Total current liabilities 3,069 2,272
Warrant liability -- 19,319
------------- -------------
Total liabilities 3,069 21,591
Commitments and Contingencies (Note G)
Stockholders' equity (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 March 31, 2013 and
September 30, 2012, respectively; 526,080
and 526,080 shares issued and outstanding
as of March 31, 2013 and September 30,
2012, respectively 5 5
Common stock, $.01 par value per share,
200,000,000 shares authorized; 134,550,068
and 62,731,963 shares issued and
outstanding as of March 31, 2013 and
September 30, 2012, respectively 1,346 627
Additional paid-in capital 182,724 159,747
Accumulated deficit (182,469) (180,714)
------------- -------------
Total stockholders' equity (deficit) 1,606 (20,335)
------------- -------------
Total liabilities and stockholders' equity
(deficit) $ 4,675 $ 1,256
============= =============
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
AEOLUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share data)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2013 2012 2013 2012
-------- -------- -------- --------
Revenue:
Contract Revenue $ 859 $ 2,231 $ 2,201 $ 4,446
Costs and expenses:
Research and development 618 1,927 1,787 3,998
General and administrative 1,003 865 1,659 1,720
-------- -------- -------- --------
Total costs and expenses 1,621 2,792 3,446 5,718
-------- -------- -------- --------
Loss from operations (762) (561) (1,245) (1,272)
Non-cash financing charges and
change in fair value of warrants
(Notes D, E and F) (5,020) 3,324 (510) 7,012
-------- -------- -------- --------
Net income (loss) $ (5,782) $ 2,763 $ (1,755) $ 5,740
======== ======== ======== ========
Net income (loss) per weighted share
attributable to common
stockholders:
Basic $ (0.06) $ 0.02 $ (0.03) $ 0.05
-------- -------- -------- --------
Diluted $ (0.06) $ 0.00 $ (0.03) $ (0.01)
======== ======== ======== ========
Weighted average common shares
outstanding:
Basic 94,425 60,490 69,664 60,480
-------- -------- -------- --------
Diluted 94,425 71,858 69,664 76,334
======== ======== ======== ========
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
AEOLUS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended
March 31,
------------------
2013 2012
-------- --------
Cash flows from operating activities:
Net income (loss) $ (1,755) $ 5,740
Adjustments to reconcile net loss to net cash used in
operating activities:
Stock-based compensation 309 347
Change in fair value of warrants 510 (7,012)
Change in assets and liabilities:
Accounts receivable (738) (803)
Deferred subcontractor cost (1,005) --
Prepaid and other assets (31) (17)
Accounts payable and accrued expenses (249) 1,232
Deferred revenue 1,046 --
-------- --------
Net cash used in operating activities (1,913) (513)
-------- --------
Cash flows provided by financing activities:
Proceeds from issuance of common stock and warrants 3,616 400
Costs related to the issuance of common stock and
warrants (58) (15)
-------- --------
Net cash provided by financing activities 3,558 385
-------- --------
Net decrease in cash and cash equivalents 1,645 (128)
Cash and cash equivalents at beginning of period 281 518
-------- --------
Cash and cash equivalents at end of period $ 1,926 $ 390
======== ========
Supplemental disclosure of non-cash financing
activities:
Common stock issued for short-term receivable $ -- $ 130
-------- --------
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
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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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