Aeolus Pharmaceuticals second quarter 2010 net loss increases to $0.10 per share

Aeolus Pharmaceuticals, Inc. (OTCBB: AOLS) announced today financial results for the three months ended June 30, 2010. The Company reported a net loss of $4,623,000, or $0.10 per share, compared to a net loss of $426,000, or $0.01 per share, for the three months ended June 30, 2009. The third quarter 2010 results include a non-cash financing and change in valuation charge of $3,856,000. Loss from operations for the three months ended June 30, 2010 were $750,000 compared to $445,000 for the three months ended June 30, 2009.

“Significant progress continues in our development programs for AEOL 10150 as a Medical Countermeasure (MCM) for radiation, chlorine gas and sulfur mustard gas exposure and AEOL 11207 as a potential therapy for Parkinson's disease and epilepsy”

"Significant progress continues in our development programs for AEOL 10150 as a Medical Countermeasure (MCM) for radiation, chlorine gas and sulfur mustard gas exposure and AEOL 11207 as a potential therapy for Parkinson's disease and epilepsy," stated John L. McManus, President and Chief Executive Officer. "We have successfully leveraged the funding and support our research collaborators receive from the NIH CounterACT and NIH-NIAID programs as well as patient advocacy groups such as the Michael J Fox Foundation to establish eight research programs which address a range of unmet medical needs."

Research and development expenses increased about $145,000 for the three months ended June 30, 2010 due to an increase in Lung ARS related research activities. Preclinical fees also increased by about $52,000 over the comparable period in 2009 due to increased animal study activity to support the Company's ARS development program. The Company currently has eight studies in progress including studies of AEOL 10150 as a potential countermeasure against the effects of: radiation on the lungs in mice and non-human primates and the gastro-intestinal tract in mice, chlorine gas on the lungs in mice and sulfur mustard gas on the lungs in rats and skin in mice, and studies of AEOL 11207 as a potential treatment for epilepsy and for Parkinson's disease.

General and administrative expenses increased by $160,000 for the three months ended June 30, 2010 due to an increase in salary, investor relations expense and legal fees. Salaries and wages increased by approximately $38,000 due to the hiring of a new employee during the first quarter of fiscal 2010. Investor relations expenses increased by $48,000, due to increased IR-related activities performed by outside consultants, and legal fees increased by $43,000.

As of June 30, 2010, the Company had $457,000 in cash and cash equivalents and 48,224,320 common shares outstanding. The company raised an additional $2.65 million through the issuance of equity and warrants during July and August of 2010.