Aeolus Pharmaceuticals Announces NIH Counteract Grant Award to Develop AEOL 10150 as a Treatment Against Nerve Agent Exposure

MISSION VIEJO, CA--(Marketwire - Oct 24, 2011) - Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS) (PINKSHEETS: AOLS), a biotechnology company leveraging significant funding from the U.S. Department of Health and Human Services to develop a novel platform of compounds to treat radiation and chemical exposure, as well as oncology indications, today announced that NIH CounterACT has awarded a $735,951 contract to Manisha Patel, PhD at the University of Colorado Anschutz Medical Campus to develop AEOL 10150 as a medical countermeasure (MCM) against nerve agents, titled "Evaluation of Neuroprotective Effects of AEOL 10150 against Chemical Threat Agents."

The primary objectives of the NIH CounterACT Grant awarded to the University of Colorado are to evaluate the neuroprotective efficacy of AEOL 10150 against pilocarpine-induced neurotoxicity in rats. Exposure to nerve agents, metabolic poisons, or high levels of sulfur mustard can trigger seizures and loss of consciousness. The two year award builds on research conducted by Dr. Patel in rodent models of neurotoxicity and neurodegeneration. Her laboratory has demonstrated that oxidative stress plays a central role in seizure-induced brain injury, and since nerve agents elicit seizures, it is important to determine whether AEOL 10150 is neuroprotective against such agents.

"We are pleased to see the expansion of the research and development of AEOL 10150 as a broad spectrum medical countermeasure, and are grateful for the support that NIH CounterACT provides for the development of this promising compound. With this project, the US Government is now funding research and testing of AEOL 10150 in five MCM indications," stated John L. McManus, President and Chief Executive Officer of Aeolus Pharmaceuticals, Inc. "Aeolus appreciates our partnership with the University of Colorado and the excellent research that Dr. Patel has done to be awarded this grant, and looks forward to the results of her research."

The new studies will build on prior work that has shown AEOL 10150 to be an effective countermeasure to protect the lungs from damage due to inhalation of chlorine gas and sulfur mustard gas.

AEOL 10150 is currently under development as a broad spectrum medical countermeasure with support from the US Government. NIH CounterACT is funding research and development of the compound as a countermeasure against exposure to nerve agents, chlorine gas and sulfur mustard gas. NIH-NIAID is conducting animal efficacy studies of the compound as a countermeasure for the Gastro-Intestinal (GI) effects of Acute Radiation Syndrome (ARS), and the Biomedical Advanced Research and Development Authority (BARDA) has awarded the Company a contract valued up to $118 million to develop AEOL 10150 as a countermeasure against Lung ARS/Delayed Effects of Radiation Exposure (DEARE).

About Nerve Agents
The elicitation of seizures is a common manifestation of nerve agents that target the central nervous system. Therefore it is important for medical countermeasures to intervene at two levels. The first level of intervention is usually to ameliorate the symptoms arising due to the specific interaction of the agent and cellular targets. Nerve agents and organophosphate pesticides bind and inhibit acetylcholinesterase leading to a persistent increase cholinergic tone. This produces acute effects of nerve agent poisoning including muscle paralysis, cardiorespiratory depression, massive secretion from mucous membranes, eye irritation, and blurry or dim vision which can be controlled by atropine and other cholinergic antagonists. A second level of intervention is targeting the delayed injury response to the threat agents. Seizure activity is the most critical injury response common to nerve agents and organophosphate exposures. Oxidative stress is a consequence of chemical convulsants. An important by-product of mitochondrial metabolism, xenobiotic detoxification and other enzymatic chain reactions is the production of reactive oxygen species (ROS). Excessive production of ROS can overwhelm antioxidant defenses resulting in oxidation of vulnerable cellular targets. Work from Dr. Patel's laboratory has demonstrated that seizures resulting from chemical convulsants such as pilocarpine and kainic acid oxidatively damage mitochondrial DNA, susceptible mitochondrial proteins and cellular lipids. This pilot project can rapidly identify AEOL 10150 as a neuroprotectant against nerve agents and expand its use as a potential medical countermeasure.

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 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. 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. 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, 2010. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.