SOURCE: Aeolus Pharmaceuticals

Aeolus Pharmaceuticals

December 23, 2013 08:00 ET

Aeolus Announces Fiscal Year 2013 Financial Results

MISSION VIEJO, CA--(Marketwired - Dec 23, 2013) - Aeolus Pharmaceuticals, Inc. (OTCQB: 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 months and twelve months ended September 30, 2013.

Key 2013 Operational Accomplishments

  • Exercise of $6.0 million in additional options under BARDA contract
  • Filing of application for new patents for AEOL 10150 covering synthesis, formulation and pharmaceutical composition potentially extending protection through 2034.
  • Completion of additional animal studies in Lung-ARS demonstrating significant survival advantage.
  • Award of $4.3 million NIH grant to develop AEOL 10150 as treatment for nerve gas exposure
  • Initiation of large non-human primate study with AEOL 10150 in Lung-ARS
  • Release of data from multiple animal studies demonstrating efficacy for AEOL 10150 in mustard gas exposure
  • Addition of new Directors to Board with expertise in government affairs and radiation oncology

"Our team made significant progress during fiscal 2013 in advancing AEOL 10150 as a medical countermeasure for radiation and chemical exposure. The additional efficacy data generated in radiation and mustard gas models confirms the effectiveness of AEOL 10150 as a medical countermeasure. Work in the manufacturing segment of our BARDA program has resulted in the filing of new patents, a greater than 80 percent reduction in the cost of goods, and scale up of our manufacturing process from 1 kilogram batches to 4.5 kilogram batches," stated John L. McManus, President & Chief Executive Officer of Aeolus Pharmaceuticals, Inc. "2014 will be an exciting year as we expect to report results from at least 8 animal efficacy studies for radiation, and several studies in our sulfur mustard, nerve agent and Parkinson's disease programs, and expect to file several IND's and a pre-emergency use authorization. We remain grateful for the funding and the technical expertise that our partners at BARDA, NIH-NIAID and NIH CounterACT continue to provide, and the valuable contributions from our research collaborators at the University of Maryland, National Jewish Health, University of Colorado, Indiana University, Johnson Matthey Pharma Services and Epistem."

Financial Results

The Company reported a net loss of $3,208,000 or ($0.03) per share (including a non-cash adjustment for increases in valuation of warrants of approximately $510,000) for the fiscal year ended September 30, 2013, versus net income of $1,698,000 or $0.01 per share (including a non-cash gain for decreases in valuation of warrants of $4,069,000) for the fiscal year ended September 30, 2012.

Revenue for the fiscal year ended September 30, 2013 was approximately $3,928,000, compared to $7,293,000 for the fiscal year ended September 30, 2012. The revenue is from the contract with the Biomedical Advanced Research and Development Authority ("BARDA") announced on February 11, 2011. Lower revenue in fiscal year 2013 reflects the timing of the initiation of program items under the BARDA contract.

Research and development expenses decreased by $3,108,000, or 48%, to approximately $3,360,000 for the fiscal year ended September 30, 2013 from approximately $6,468,000 for the fiscal year ended September 30, 2012. R&D expenses were lower during the fiscal year ended September 30, 2013 versus September 30, 2012 due to the timing of work related to the BARDA contract.

G&A expenses increased approximately $70,000, or 2%, to approximately $3,266,000 for the fiscal year ended September 30, 2013 from about $3,196,000 for the fiscal year ended September 30, 2012. Consulting stock expense increased by about $287,000 as a result of increased awards for the period. The increase in consulting stock expense was partially offset by a decrease in salaries and benefits of about $172,000.

For the fourth quarter of FY 2013, total revenues were $0.9 million as compared to $1.4 million in the fourth quarter of FY 2012. Net loss for the fourth quarter in FY 2013 was $0.7 million, which includes no adjustments related to warrant liability, as compared to $7.1 million, which includes a loss of approximately $6.6 million related to decreases in the fair value of the warrants, in the fourth quarter of FY 2012.

Aeolus has filed today with the SEC its Annual Report on Form 10-K for the fiscal year ended September 30, 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 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 efficacy 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 and other inducers of reactive oxygen species. 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. 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 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, 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
 (Unaudited)
(In thousands, except share and per share data)
 
    September 30,  
    2013     2012  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 869     $ 281  
Accounts receivable     370       781  
Deferred subcontractor cost     656       101  
Prepaids and other current assets     39       61  
Total current assets     1,935       1,224  
                 
Investment in CPEC LLC     32       32  
Total assets   $ 1,966     $ 1,256  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                
Current liabilities:                
Accounts payable and accrued expenses   $ 579     $ 2,167  
Deferred revenue     682       105  
Total current liabilities     1,261       2,272  
                 
Warrant liability     --       19,319  
Total liabilities     1,261       21,591  
                 
Commitments and Contingencies (Notes E and I)                
                 
Stockholders' equity (deficit):                
Preferred stock, $.01 par value per share, 10,000,000 shares authorized:                
Series A nonredeemable convertible preferred stock, 1,250,000 shares authorized as of September 30, 2013 and 2012, respectively; no shares issued and outstanding as of September 30, 2013 and 2012, respectively     --       --  
Series B nonredeemable convertible preferred stock, 1,600,000 and 600,000 shares authorized as of September 30, 2013 and 2012, respectively; 526,080 and 526,080 shares issued and outstanding as of September 30, 2013 and 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 at September 30, 2013 and 2012, respectively     1,346       627  
Additional paid-in capital     183,276       159,747  
Accumulated deficit     (183,922 )     (180,714 )
Total stockholders' equity (deficit)     705       (20,335 )
Total liabilities and stockholders' equity (deficit)   $ 1,966     $ 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 per share data)
 
    Fiscal Year Ended September 30,  
    2013     2012  
Revenue:                
Contract revenue   $ 3,928     $ 7,293  
                 
Costs and expenses:                
Research and development     3,360       6,468  
General and administrative     3,266       3,196  
Total costs and expenses     6,626       9,664  
                 
Loss from operations     (2,698 )     (2,371 )
Warrant liability gain (charges)     (510 )     4,069  
Net income (loss)   $ (3,208 )   $ 1,698  
                 
Net income (loss) attributable to common stockholders - basic   $ (3,208 )   $ 856  
Net income (loss) attributable to common stockholders - diluted   $ (3,208 )   $ (2,161 )
                 
Basic net income (loss) per common share   $ (0.03 )   $ 0.01  
Diluted net income (loss) per common share   $ (0.03 )   $ (0.03 )
                 
Weighted average common shares outstanding:                
Basic     106,554       61,593  
Diluted     106,554       71,041  
                 

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)
      Fiscal Year Ended September 30,  
      2013       2012  
Cash flows from operating activities:                    
Net income (loss)     $ (3,208 )     $ 1,698  
Adjustments to reconcile net income (loss) to net cash used in operating activities:                    
  Depreciation       6         7  
  Noncash compensation       861         568  
  Noncash interest and financing costs       --         17  
  Change in fair value of warrants       510         (4,086 )
Change in assets and liabilities:                    
  Accounts receivable       411         896  
  Deferred subcontractor cost       (555 )       (101 )
  Prepaid expenses and other assets       16         (6 )
  Accounts payable and accrued expenses       (1,588 )       23  
  Deferred revenue       577         105  
Net cash used in operating activities       (2,970 )       (879 )
                     
Cash flows from investing activities:                    
  Purchase of equipment       --         --  
Net cash used in investing activities       --         --  
                     
Cash flows from financing activities:                    
  Proceeds from issuance of common stock and warrants       3,616         660  
  Costs related to the issuance of common stock and warrants       (58 )       (18 )
Net cash provided by financing activities       3,558         642  
                     
Net increase (decrease) in cash and cash equivalents       588         (237 )
                     
Cash and cash equivalents at beginning of year       281         518  
Cash and cash equivalents at end of year     $ 869       $ 281  
                     

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Contact Information

  • Contact:

    John McManus
    President and Chief Executive Officer
    Aeolus Pharmaceuticals, Inc.
    1-(949) 481-9825