Aeolus' AEOL 10150 Supresses Overexpression of 31 Hypoxia-Related Genes Caused by Radiation Exposure

MISSION VIEJO, CA--(Marketwire - Oct 17, 2012) - Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS)

• AEOL 10150 improves tissue oxygenation and reduces hypoxia-associated gene expression by more than 99% in the majority of genes activated after radiation
• Data provide strong biologic rationale to support the observed improvement in respiratory function and survival in previous studies
• Mechanism of action is a key element required for FDA approval under the "Animal Rule"

Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS), a biotechnology company leveraging significant government funding to develop a platform of novel compounds in oncology and biodefense, today announced the publication of data on AEOL 10150 in the journal, Free Radical Biology and Medicine. The article, entitled "Temporal expression of hypoxia-regulated genes is associated with early changes in redox status in irradiated lung," was authored by Isabel L. Jackson, PhD, Xiuwu Zhang, MD, PhD, Caroline Hadley, Zahid N. Rabbani, MD, Yu Zhang, Sam Marks, ZeljkoVujaskovic, MD, PhD.

"The inflammation and scarring of lung tissue that develops after exposure to high doses of radiation can result in death or a significant reduction in the quality of life in cancer patients and victims of radiation accidents or detonations," stated Brian Day, PhD, Chief Scientific Officer for Aeolus Pharmaceuticals, Inc. "We have seen AEOL 10150 protect lung tissue from damage and improve survival in studies conducted in multiple animal species. These new published findings help explain how AEOL 10150 is protecting lung tissue and enhancing survival."

Research has demonstrated that AEOL 10150 can significantly improve lung function and survival after high doses of radiation in murine and NHP studies. It is now understood that, after radiation exposure, there is a significant reduction in tissue oxygenation due to disrupted blood flow, increase in oxygen consumption by inflammatory cells, and impaired gas exchange in lung tissue damaged by radiation. The decrease in tissue oxygenation results in the activation of a number of genes involved in DNA damage/repair and cell death that can lead to excessive cell loss and oxidative stress, which can then cause genomic instability, as well as inflammation, and scar formation. The uncontrolled activation of these genes results in significant reduction in tissue function that can lead to life-threatening respiratory impairment. In this published study, treatment with AEOL 10150 was started 24 hours after exposure to radiation and continued daily for four weeks. This treatment regimen resulted in a > 99% reduction in all but one of the genes activated by radiation exposure, when measured six weeks post-radiation.

These results suggest that daily treatment with AEOL 10150 for only four weeks has a sustained effect on the molecular pathogenesis of radiation damage. This is important since symptoms of lung damage do not appear for up to 6 months following radiation exposure. Moreover, these data demonstrate the mechanism by which AEOL 10150 may confer improved lung function and survival after acute radiation.

"In addition to showing efficacy in two animal species and safety in humans, the FDA requires 'a reasonably well-understood mechanism for the toxicity of the agent and its amelioration or prevention by the product' for approval under the Animal Rule," stated John L. McManus, President and Chief Executive Officer of Aeolus Pharmaceuticals, Inc. "This study is a critical step forward in addressing one of the criteria of the FDA Animal Rule for approval of AEOL 10150. Additional work to further explain AEOL 10150's mechanism of action is being funded under our advanced research and development contract with BARDA."

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.