Aeolus Provides Investor Update on Passage of Pandemic All-Hazards Preparedness Act of 2013

MISSION VIEJO, CA--(Marketwire - Mar 14, 2013) - Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS)

• Bill Signed into Law by President Obama
• Passed Senate By Unanimous Consent; Passed by Supermajority in House
• $2.8 Billion Added To Procurement Budget Through 2018
• BARDA $415 Million Annual Operating Budget Authorized Through 2018

Aeolus Pharmaceuticals, Inc. (OTCQB: AOLS), a biotechnology company leveraging significant government funding to develop a platform of novel compounds to protect against radiological and chemical threats and for use in oncology, provided an update to investors on the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 (PAHPRA). The bill was signed into law today by the President. Previously, it passed the Senate by unanimous consent on February 28^th, and the amended bill was passed by the House on March 4, 2013 by a vote of 370 to 28.

The Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 was introduced in the House by Congressman Mike Rogers and in the Senate by Senator Richard Burr, and will strengthen and reauthorize federal programs to develop medical countermeasures against chemical, biological, radiological and nuclear weapons. It will ensure that the United States is better prepared to respond to threats and that the government has the resources needed to prepare for and respond to an attack or pandemic outbreak. Co-sponsors of the bill include Senators Casey, Harkin, Enzi and Alexander, and Representatives Burgess, Eshoo, Green, Pallone and Waxman.

Aeolus is currently entering the third year of its $118 million advanced R & D contract with the Biomedical Advanced Research and Development Authority (BARDA) to develop its lead compound, AEOL 10150, as medical countermeasure (MCM) for the pulmonary sub-syndrome of Acute Radiation Syndome (Lung-ARS). The Company is also developing AEOL 10150 as an MCM for the gastrointestinal sub-syndrome of ARS (GI-ARS) as well as an MCM for exposure to chlorine gas, mustard gas, phosgene gas and nerve agents with funding from the National Institutes of Health - National Institute of Allergy and Infectious Disease and CounterACT programs.

"We are pleased to see such overwhelming bipartisan support for this important bill, which not only extends the funding for BARDA, but also provides additional emphasis on improving and expediting the development and procurement of critical medical countermeasures for the Strategic National Stockpile," stated John L. McManus, President and Chief Executive Officer.

As a result of the passage of the Pandemic and All-Hazards Preparedness Act (PAHPA) of 2006, the federal government, in partnership with state and local governments, took significant steps to strengthen our nation's medical and public health preparedness and response capabilities. This bipartisan reauthorization builds on these efforts by enhancing existing programs and authorities using lessons learned since 2006 to maximize our nation's resilience to threats, whether naturally occurring or deliberate. Important terms of this bill include:

• Emphasizes chemical, radiological, biological, and nuclear threats as part of an all-hazards approach to our National Preparedness Goals; promotes strategic initiatives to advance medical countermeasures (MCMs) development and procurement.
• Enhances the Secretary's ability to make MCMs under review available in limited circumstances based on either a declared emergency or identified threat.
• BioShield - Encourages further development of MCMs to address chemical, biological, radiological, and nuclear threats by reauthorizing BioShield's Special Reserve Fund. Requires HHS to report to Congress when the Special Reserve Fund falls below a certain threshold and the potential impact of such a reduction on addressing MCM priorities.
• Advanced Research and Development - Enhances the Biomedical Advanced Research and Development Authority's (BARDA's) strategic focus on supporting the development of innovative and cutting-edge biodefense initiatives.
• MCM Acceleration - Charges the FDA with promoting MCM professional expertise and developing regulatory science tools to advance the review, approval, clearance, and licensure of MCMs within FDA as well as enhancing scientific exchange between FDA and MCM stakeholders.
• Regulatory Management Plan - Requires FDA to work with sponsors and applicants of certain eligible MCMs to develop individualized regulatory management plans to improve regulatory certainty.

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. 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 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.