MISSION VIEJO, CA--(Marketwired - December 21, 2016) - Aeolus Pharmaceuticals, Inc. (
Key Fiscal Year 2016 Operational Accomplishments
- Received clearance from the U.S. Food & Drug Administration ("FDA") to initiate Phase I studies with AEOL 10150 in healthy normal volunteers
- Initiated work to enable an Investigational New Drug ("IND") application in AEOL 11114 for the treatment of Parkinson's disease
- Published data in the journal Toxicological Sciences demonstrating that treatment with 10150 after exposure to lethal doses of sulfur mustard gas
- Improved survival at 48 hours from 36% to 88%
- Increased blood oxygen saturation by more than 10 percent
- Improved clinical scores of lung health by 57 percent
- Decreased airway casts by 69 percent
- Restored levels of TNF-a, IL-6, KC/GRO (rat analog of human IL-8) and IL-1b, which are elevated significantly after exposure to sulfur mustard gas, to control levels
- Restored levels of TGF-beta1 to control levels
- Announced positive data from a study using AEOL 10150 to treat exposure to lethal doses of sulfur mustard gas demonstrating a doubling of survival at 28 days
- $30.8 million in total funding options exercised as of September 30, 2016 under the Company's advanced development contract with the Biomedical Advanced Research and Development Authority ("BARDA")
- Up to $87.6 million in additional funding options exercisable over the remainder of the BARDA contract
"Significant progress in the development of AEOL 10150 for the lung effects of acute radiation exposure ("Lung-ARS") and Idiopathic Pulmonary Fibrosis ("IPF") and AEOL 11114 for Parkinson's disease was made during fiscal year 2016. We completed the work required to allow us to move into human safety studies and received approval from the FDA to initiate a Phase I study in healthy normal volunteers, which we plan to begin during the first quarter of calendar of 2017," stated John L. McManus, President and Chief Executive Officer of Aeolus Pharmaceuticals, Inc. "We also completed the manufacturing optimization and formulation development work for our Parkinson's candidate, AEOL 11114 during fiscal 2016, and hope to complete the pre-clinical work necessary to file and IND and begin human studies of that compound during fiscal 2017."
Financial Results
The Company reported a net loss of $3,558,000 for the fiscal year ended September 30, 2016, versus a net loss of $2,628,000 for the fiscal year ended September 30, 2015.
Revenue for the fiscal year ended September 30, 2016 was approximately $2,076,000, compared to $3,111,000 revenue for the fiscal year ended September 30, 2015. The revenue is from the cost-plus contract with BARDA for the development of AEOL 10150 as a medical countermeasure for the pulmonary and delayed effects of acute radiation exposure. 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, 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. Revenue was higher in the prior year primarily due to the timing of work related to the BARDA contract.
On May 25, 2016, we announced that BARDA had exercised a Contract Modification worth approximately $0.4 million. The purpose of the Modification was to provide funding to complete a pharmacometric analysis of data from all completed animal efficacy studies of 10150 to determine optimal dose, dose frequency and duration of treatment. The total contract value exercised as of September 30, 2016 is approximately $30.8 million. We may receive up to an additional $87.6 million in options exercisable over the remainder of the BARDA Contract. Options are exercised based on the progress of the development program, including the completion of clinical trials or manufacturing tasks under previously exercised options.
Research and development expenses decreased by $628,000, or 18%, to approximately $2,881,000 for the fiscal year ended September 30, 2016 from approximately $3,509,000 for the fiscal year ended September 30, 2015. R&D expenses were lower during the fiscal year ended September 30, 2016 versus September 30, 2015 due to the timing of work related to the BARDA Contract.
G&A expenses increased approximately $240,000, or 11%, to approximately $2,468,000 for the fiscal year ended September 30, 2016 from about $2,228,000 for the fiscal year ended September 30, 2015. Legal expense increased by about $102,000 as a result of higher SEC filing and financing costs. Board of Director fees increased by about $56,000. The Company had previously suspended cash payments Director fees in 2008.
For the fourth quarter of FY 2016, total revenues were $546,000 as compared to $934,000 in the fourth quarter of FY 2015. Net loss for the fourth quarter in FY 2016 was $1,024,000 or ($0.00/share) as compared to $434,000 or ($0.00/share) in the fourth quarter of FY2015.
Aeolus has filed today with the SEC its Annual Report on Form 10-K for the fiscal year ended September 30, 2016. 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 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 novel compounds for use in biodefense, fibrosis, oncology, infectious diseases and diseases of the central nervous system. Its most advanced 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, development strategies and research programs, including the Company's initiation or potential initiation of pre-clinical development as well as clinical trials, including a Phase I study in pulmonary fibrosis patients. 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 and obtaining regulatory approval; the imposition or continuation of clinical holds on development projects; 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; competition from other biopharmaceutical companies; and whether BARDA exercises one or more additional options under the its contract with Aeolus. 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, 2016. 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) | ||||||
| The accompanying notes are an integral part of these condensed consolidated financial statements. | ||||||
| September 30, | ||||||
| 2016 | 2015 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 3,155 | $ | 94 | ||
| Accounts receivable | 750 | 1,585 | ||||
| Deferred subcontractor cost | - | 21 | ||||
| Prepaid expenses and other current assets | 230 | 45 | ||||
| Total current assets | 4,135 | 1,745 | ||||
| Investment in CPEC LLC | 32 | 32 | ||||
| Total assets | $ | 4,167 | $ | 1,777 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued expenses | $ | 972 | $ | 1,598 | ||
| Deferred revenue | - | 22 | ||||
| Notes payable to shareholders, net of debt discount of $273 | - | 727 | ||||
| Notes payable to shareholders redemption liability | - | 275 | ||||
| Total current liabilities | 972 | 2,622 | ||||
| Total liabilities | 972 | 2,622 | ||||
| Commitments and Contingencies (Notes E, J, K and L) | ||||||
| Stockholders' equity (deficit): | ||||||
| Preferred stock, $0.01 par value per share, 10,000,000 shares authorized: | ||||||
| Series A nonredeemable convertible preferred stock, 1,250,000 shares authorized as of September 30, 2016 and 2015, respectively; no shares issued and outstanding as of September 30, 2016 and 2015, respectively | - | - | ||||
| Series B nonredeemable convertible preferred stock, 1,600,000 and 1,600,000 shares authorized as of September 30, 2016 and 2015, respectively; zero and 526,080 shares issued and outstanding as of September 30, 2016 and 2015, respectively | - | 5 | ||||
| Series C nonredeemable convertible preferred stock, 5,000 and zero shares authorized as of September 30, 2016 and September 30, 2015, respectively; 4,500 and zero shares issued and outstanding as of September 30, 2016 and September 30, 2015, respectively | - | - | ||||
| Common stock, $0.01 par value per share, 200,000,000 shares authorized; 152,085,825 and 135,930,068 shares issued and outstanding at September 30, 2016 and 2015, respectively | 1,520 | 1,359 | ||||
| Additional paid-in capital | 191,863 | 184,421 | ||||
| Accumulated deficit | (190,188) | (186,630) | ||||
| Total stockholders' equity (deficit) | 3,195 | (845) | ||||
| Total liabilities and stockholders' equity (deficit) | $ | 4,167 | $ | 1,777 | ||
| AEOLUS PHARMACEUTICALS, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||
| Fiscal Year Ended September 30, | ||||||
| 2016 | 2015 | |||||
| Revenue: | ||||||
| Contract revenue | $ | 2,076 | $ | 3,111 | ||
| Costs and expenses: | ||||||
| Research and development | 2,881 | 3,509 | ||||
| General and administrative | 2,468 | 2,228 | ||||
| Total costs and expenses | 5,349 | 5,737 | ||||
| Loss from operations | (3,273) | (2,626) | ||||
| Interest expense | 285 | 2 | ||||
| Net loss | (3,558) | (2,628) | ||||
| Deemed dividend on Series C preferred stock | 2,486 | - | ||||
| Net loss attributable to common stockholders | $ | (6,044) | $ | (2,628) | ||
| Net loss attributable to common stockholders - basic | $ | (6,044) | $ | (2,628) | ||
| Net loss attributable to common stockholders - diluted | $ | (6,044) | $ | (2,628) | ||
| Basic net loss per common share | $ | (0.04) | $ | (0.02) | ||
| Diluted net loss per common share | $ | (0.04) | $ | (0.02) | ||
| Weighted average common shares outstanding: | ||||||
| Basic | 148,668 | 135,883 | ||||
| Diluted | 148,668 | 135,883 | ||||
| AEOLUS PHARMACEUTICALS, INC. | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (IN THOUSANDS) | |||||||||
| Fiscal Year Ended September 30, | |||||||||
| 2016 | 2015 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net loss | $ | (3,558) | $ | (2,628) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
| Amortization of discount on notes payable to shareholders | 285 | - | |||||||
| Accrued interest | - | 2 | |||||||
| Noncash compensation | 141 | 178 | |||||||
| Change in assets and liabilities: | |||||||||
| Accounts receivable | 835 | (26) | |||||||
| Deferred subcontractor cost | 21 | 405 | |||||||
| Prepaid expenses and other current assets | (185) | 1 | |||||||
| Accounts payable and accrued expenses | (626) | 46 | |||||||
| Deferred revenue | (22) | (421) | |||||||
| Net cash used in operating activities | (3,109) | (2,443) | |||||||
| Cash flows from financing activities: | |||||||||
| Proceeds from exercise of common stock warrants | - | 20 | |||||||
| Proceeds from issuance of notes payable to shareholders | - | 1,000 | |||||||
| Proceeds from issuance of common stock and common stock warrants, net | 2,005 | - | |||||||
| Proceeds from issuance of preferred stock and preferred stock warrants, net | 4,165 | - | |||||||
| Net cash provided by financing activities | 6,170 | 1,020 | |||||||
| Net increase (decrease) in cash and cash equivalents | 3,061 | (1,423) | |||||||
| Cash and cash equivalents at beginning of year | 94 | 1,517 | |||||||
| Cash and cash equivalents at end of year | $ | 3,155 | $ | 94 | |||||
| Supplemental disclosure of non-cash financing activities: | |||||||||
| Conversion of notes payable to shareholders for common stock and warrants | $ | 1,000 | $ | - | |||||
| Conversion of accrued interest on notes payable to shareholders for common stock and warrants | $ | 12 | $ | - | |||||
| Issuance of warrants for financing costs | $ | 266 | $ | - | |||||
| Deemed dividend on Series C preferred stock | $ | 2,486 | $ | - | |||||
| Notes payable to shareholders redemption liability | $ | - | $ | 275 | |||||
Contact Information:
Contact:
John McManus
President and Chief Executive Officer
Aeolus Pharmaceuticals, Inc.
1-(949) 481-9825