MISSION VIEJO, CA--(Marketwired - August 17, 2015) - Aeolus Pharmaceuticals, Inc. (AOLS), a biotechnology company developing compounds to protect against radiological and chemical threats with significant funding from the US Government, announced today financial results for the three and nine months ended June 30, 2015.

The Company reported a net loss of approximately $784,000, or $0.01 per share for the three months ended June 30, 2015. This compares to net income of $1,576,000, or $0.01 per share, for the three months ended June 30, 2014. The net income in 2014 was attributable to revenue received under a $1.8 million Contract Modification from the Biomedical Advanced Research and Development Authority ("BARDA") for reimbursement of expenses from prior periods. The Company reported a net loss of approximately $2,194,000, or $0.02 per share for the nine months ended June 30, 2015. This compares to net income of $445,000, or $0.00 per share, for the nine months ended June 30, 2014. The net income in 2014 was attributable to the Contract Modification.

"We are very pleased with the progress this quarter in the development of AEOL 10150 as both a medical countermeasure against the pulmonary effects of Acute Radiation Syndrome ("Lung ARS") and as a treatment for diseases like idiopathic pulmonary fibrosis ("IPF")," stated John L. McManus, President and Chief Executive Officer. "In May we reported the complete results from our successful study in non-human primates exposed to lethal radiation and treated with AEOL 10150. In addition to doubling survival compared to untreated controls, animals receiving AEOL 10150 exhibited reduced incidence of inflammation and fibrosis, improved clinical measures of lung function and no evidence of molecular biomarkers for lung injury. During the quarter, we also announced an additional option exercise under our development contract with BARDA to complete the work necessary to address the FDA clinical hold on 10150. We have already commenced this work and hope to provide additional data to the FDA in the near future."

Results of Operations for the three months ended June 30, 2015

We had net loss of $784,000 and net income of $1,576,000 and cash inflows from operations of $148,000 and cash outflows from operations of $752,000 for the three months ended June 30, 2015 and June 30, 2014, respectively.

Revenue for the three months ended June 30, 2015 was $63,000, which compares to $4,983,000 for the three months ended June 30, 2014 all of which is attributable to the contract with BARDA. The higher revenue in 2014 is attributable to a Contract Modification for $1.8 million for reimbursement of expenses from prior periods and timing of reimbursement for large studies being conducted during that period. Under the BARDA Contract, we generate contract revenue from a cost-plus fee arrangement. Revenues on reimbursable contracts are recognized as costs are incurred, which is based on allowable costs incurred during the period, plus any recognizable earned fee. We consider fixed fees under cost-plus fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract.

Research and Development ("R&D") expenses decreased $2,560,000, or 90%, to $269,000 for the three months ended June 30, 2015 from $2,829,000 for the three months ended June 30, 2014. The decrease is primarily attributable to the timing of work under the BARDA Contract, including the large study in non-human primates completed in the third calendar quarter of 2014.

General and administrative ("G&A") expenses increased $1,000, or less than 1%, to $578,000 for the three months ended June 30, 2015 from $577,000 for the three months ended June 30, 2014.

Results of Operations for the nine months ended June 30, 2015

We had a net loss of $2,194,000 and net income of $445,000 and cash outflows from operations of $1,121,000 and cash inflows from operations of $403,000 for the nine months ended June 30, 2015 and June 30, 2014, respectively.

Revenue for the nine months ended June 30, 2015 was $2,177,000, which compares to $7,214,000 for the nine months ended June 30, 2014. The higher revenue in 2014 is attributable to a Contract Modification for $1.8 million for reimbursement of expenses from prior periods and timing of reimbursement for large studies being conducted during that period. All of the revenue is from the BARDA Contract. Since being awarded the BARDA Contract, we generate contract revenue from a cost-plus fee arrangement. Revenues on reimbursable contracts are recognized as costs are incurred, generally based on allowable costs incurred during the period, plus any recognizable earned fee. We consider fixed fees under cost-plus fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract.

Research and Development ("R&D") expenses decreased $2,170,000, or 46%, to $2,539,000 for the nine months ended June 30, 2015 from $4,709,000 for the nine months ended June 30, 2014. The decrease is primarily attributable to work related to the BARDA Contract.

General and administrative ("G&A") expenses decreased $227,000, or 11%, to $1,832,000 for the nine months ended June 30, 2015 from $2,059,000 for the nine months ended June 30, 2014 due to lower stock-based compensation.

As of June 30, 2015, the Company had approximately $416,000 in cash and cash equivalents and 135,930,068 common shares outstanding. The Company had accounts receivable of $656,000 and accounts payable of $1,465,000 on June 30, 2015.

Aeolus has filed today with the SEC its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. Aeolus urges its investors to read this quarterly filing as well as its Annual Report on Form 10-K, 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 www.aolsrx.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 may 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 performed well in preclinical and non-clinical studies, demonstrating statistically significant survival benefit in an acute radiation-induced lung injury model, and was well-tolerated in two human clinical trials. 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, 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 and pulmonary fibrosis. For more information, please visit Aeolus's corporate website at www.aolsrx.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 expected use of proceeds from the financing. 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, 2014. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

AEOLUS PHARMACEUTICALS, INC.
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