MISSION VIEJO, CA--(Marketwired - December 22, 2014) - Aeolus Pharmaceuticals, Inc. (
Key Fiscal Year 2014 Operational Accomplishments
- Completion of large study in non-human primates with AEOL 10150 in Lung-ARS demonstrating 50% survival in treated animals compared to 25% in untreated control animals at 180 days after exposure to lethal radiation
- Completion of large study in mice with AEOL 10150 in Lung-ARS demonstrating 40% survival in treated animals compared to 10% in untreated control animals at 180 days after exposure to lethal radiation
- Filing of additional composition of matter and manufacturing methods patents for AEOL 10150, which could provide patent protection through 2034
- Notification from FDA of Orphan Drug Designation for AEOL 10150 for use in patients exposed to radiation following a nuclear accident or detonation in order to treat or mitigate acute radiation syndrome
- Significant progress towards developing large-scale, Good Manufacturing Practice capability for producing AEOL 10150, including:
- 90% reduction in manufacturing cost of drug substance achieved; further improvements expected upon scale up of production
- Manufacture of pilot scale batches as a precursor to primary stability batch manufacture in 2015
- 15,000 vials of final product supplied for human safety studies to support pre-Emergency Use Authorization filing
- 24 months stability demonstrated for final drug product in new formulation at room temperature; stability testing will continue to five years.
- Publication of data from animal model studies and a pilot efficacy study in non-human primates (NHPs) demonstrating the efficacy of AEOL 10150 as a medical countermeasure (MCM) against the effects of radiation exposure on the lungs in the journal Health Physics, volume 106, number 1, in January 2014
- Presentation of data at the NIH CounterACT meeting in June providing further evidence of AEOL 10150's efficacy in improving survival in sulfur mustard exposure to the lungs and in providing protection against skin damage from nitrogen mustard exposure
"Our team made significant progress during fiscal 2014 in advancing AEOL 10150 as a medical countermeasure for radiation and chemical exposure. As a result, we now have efficacy data in the mouse and NHP demonstrating the significant efficacy of AEOL 10150 as an MCM for the lung effects of acute radiation exposure ('Lung-ARS'), and we are prepared to manufacture primary stability batches of AEOL 10150 in support of a New Drug Application in Lung-ARS and/or our targeted commercial indications. The manufacturing, safety and pharmacologic work done under the BARDA contract should allow us to initiate human studies in cancer patients receiving radiation therapy during 2015 -- something that has been a goal of ours for several years," stated John L. McManus, President & Chief Executive Officer of Aeolus Pharmaceuticals, Inc. "2015 will be an exciting year as we continue to work with BARDA to prepare AEOL 10150 for a pre-Emergency Use Authorization filing and expand our development programs into commercial indications with large potential markets. We remain grateful for the funding and the technical expertise that our partners at BARDA, NIH-NIAID and NIH CounterACT continue to provide, and for the valuable contributions from our research collaborators at the University of Maryland, National Jewish Health, University of Colorado and Johnson Matthey Pharma Services."
Financial Results
The Company reported a net loss of $80,000 for the fiscal year ended September 30, 2014, versus net loss of $3,208,000 (including a non-cash loss for increases in valuation of warrants of $510,000) for the fiscal year ended September 30, 2013.
Revenue for the fiscal year ended September 30, 2014 was approximately $9,631,000, compared to $3,928,000 revenue for the fiscal year ended September 30, 2013. The revenue is from the collaboration with BARDA announced on February 11, 2011. Under the BARDA Contract, the Company generates contract revenue from a cost-plus fee arrangement. Revenues on reimbursable contracts are recognized as costs are incurred, based on allowable costs incurred during the period, plus any recognizable earned fee. Fixed fees under cost-plus fee contracts are earned in proportion to the allowable costs incurred in performance of the contract.
On May 5, 2014, the Company received a BARDA Contract Modification for $1,778,000 which reimbursed the Company for additional overhead expenses under the contract that were previously unbilled. The Contract Modification also updated our provisional indirect billing rate and placed a cap on the current and future provisional indirect billing rates. The Company estimates and accrued $304,000 in additional revenue for the fiscal year ended September 30, 2014 as a result of the new overhead rate. The Contract Modification brings the total exercised value of the BARDA contract as of September 30th, 2014 to $27.3 million. The total value of the BARDA contract is $118.4 million. We may receive up to an additional $91.1 million in options exercisable over the remaining years of the contract.
Revenue was higher in 2014 versus 2013 primarily due to the timing of work related to the BARDA contract and the Contract Modification.
Research and development expenses increased by $3,606,000, or 107%, to approximately $6,966,000 for the fiscal year ended September 30, 2014 from approximately $3,360,000 for the fiscal year ended September 30, 2013. R&D expenses were higher during the fiscal year ended September 30, 2014 versus September 30, 2013 due to the timing of work related to the BARDA Contract.
G&A expenses decreased approximately $521,000, or 16%, to approximately $2,745,000 for the fiscal year ended September 30, 2014 from about $3,266,000 for the fiscal year ended September 30, 2013. Consulting stock expense decreased by about $218,000 as a result of decreased awards for the period. Legal expense decreased by about $168,000 as a result of lower SEC filing and financing costs.
For the fourth quarter of FY 2014, total revenues were $2,417,000 as compared to $883,000 in the fourth quarter of FY 2013. Net loss for the fourth quarter in FY 2014 was $524,000 or ($0.0/share) as compared to $668,000 or ($0.0/share) in the fourth quarter of FY2013.
Aeolus has filed today with the SEC its Annual Report on Form 10-K for the fiscal year ended September 30, 2014. 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 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 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.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 human clinical studies, the BARDA Contract, and other development programs. 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. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (DOLLARS IN THOUSANDS) | ||||||||
| September30, | ||||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,517 | $ | 869 | ||||
| Accounts receivable | 1,559 | 370 | ||||||
| Deferred subcontractor cost | 426 | 656 | ||||||
| Prepaids and other current assets | 46 | 39 | ||||||
| Total current assets | 3,548 | 1,935 | ||||||
| Investment in CPEC LLC | 32 | 32 | ||||||
| Total assets | $ | 3,580 | $ | 1,966 | ||||
| LIABILITIES AND STOCKHOLDERS'EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,552 | $ | 579 | ||||
| Deferred revenue | 443 | 682 | ||||||
| Total current liabilities | 1,995 | 1,261 | ||||||
| Total liabilities | 1,995 | 1,261 | ||||||
| Commitments and Contingencies (Notes E and I) | ||||||||
| Stockholders' equity: | ||||||||
| 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, 2014 and 2013, respectively; no shares issued and outstanding as of September 30, 2014 and 2013, respectively | - | - | ||||||
| Series B nonredeemable convertible preferred stock, 1,600,000 and 1,600,000 shares authorized as of September 30, 2014 and 2013, respectively; 526,080 and 526,080 shares issued and outstanding as of September 30, 2014 and 2013, respectively | 5 | 5 | ||||||
| Common stock, $.01 par value per share, 200,000,000 shares authorized; 135,850,068 and 134,550,068 shares issued and outstanding at September 30, 2014 and 2013, respectively | 1,359 | 1,346 | ||||||
| Additional paid-in capital | 184,223 | 183,276 | ||||||
| Accumulated deficit | (184,002 | ) | (183,922 | ) | ||||
| Total stockholders' equity | 1,585 | 705 | ||||||
| Total liabilities and stockholders' equity | $ | 3,580 | $ | 1,966 | ||||
| AEOLUS PHARMACEUTICALS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||
| Fiscal Year Ended September 30, | ||||||||
| 2014 | 2013 | |||||||
| Revenue: | ||||||||
| Contract revenue | $ | 9,631 | $ | 3,928 | ||||
| Costs and expenses: | ||||||||
| Research and development | 6,966 | 3,360 | ||||||
| General and administrative | 2,745 | 3,266 | ||||||
| Total costs and expenses | 9,711 | 6,626 | ||||||
| Loss from operations | (80 | ) | (2,698 | ) | ||||
| Warrant liability charges | - | (510 | ) | |||||
| Net loss | $ | (80 | ) | $ | (3,208 | ) | ||
| Net loss attributable to common stockholders - basic | $ | (80 | ) | $ | (3,208 | ) | ||
| Net loss attributable to common stockholders - diluted | $ | (80 | ) | $ | (3,208 | ) | ||
| Basic net loss per common share | $ | 0.00 | $ | (0.03 | ) | |||
| Diluted net loss per common share | $ | 0.00 | $ | (0.03 | ) | |||
| Weighted average common shares outstanding: | ||||||||
| Basic | 134,667 | 106,554 | ||||||
| Diluted | 134,667 | 106,554 | ||||||
| AEOLUS PHARMACEUTICALS, INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (IN THOUSANDS) | ||||||||||
| Fiscal Year Ended September 30, | ||||||||||
| 2014 | 2013 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (80 | ) | $ | (3,208 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
| Depreciation | - | 6 | ||||||||
| Noncash compensation | 635 | 861 | ||||||||
| Change in fair value of warrants | - | 510 | ||||||||
| Change in assets and liabilities: | ||||||||||
| Accounts receivable | (1,189 | ) | 411 | |||||||
| Deferred subcontractor cost | 230 | (555 | ) | |||||||
| Prepaid expenses and other assets | (7 | ) | 16 | |||||||
| Accounts payable and accrued expenses | 973 | (1,588 | ) | |||||||
| Deferred revenue | (239 | ) | 577 | |||||||
| Net cash provided by (used in) operating activities | 323 | (2,970 | ) | |||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from exercise of common stock warrants | 325 | - | ||||||||
| Proceeds from issuance of common stock and warrants | - | 3,616 | ||||||||
| Costs related to the issuance of common stock and warrants | - | (58 | ) | |||||||
| Net cash provided by financing activities | 325 | 3,558 | ||||||||
| Net increase in cash and cash equivalents | 648 | 588 | ||||||||
| Cash and cash equivalents at beginning of year | 869 | 281 | ||||||||
| Cash and cash equivalents at end of year | $ | 1,517 | $ | 869 | ||||||
Contact Information:
Contact:
John McManus
President and Chief Executive Officer
Aeolus Pharmaceuticals, Inc.
1-(949) 481-9825