NIH CounterACT Program Begins Studies of Aeolus Pharmaceuticals’ AEOL 10150 as a Countermeasure to Sulfur Mustard Gas Exposure

MISSION VIEJO, Calif.-(Business Wire)-February 9, 2009 - Aeolus Pharmaceuticals, Inc. (OTC Bulletin Board:AOLS) announced today the initiation of the first of a series of studies of AEOL 10150 as a countermeasure to mustard gas exposure. The studies, funded by the National Institutes for Health’s CounterACT program, have been designed to test the efficacy of AEOL 10150 as a treatment for damage to the skin, lungs and eyes due to exposure to sulfur mustard gas and to examine potential effective doses, duration of delivery and the window of opportunity for treatment after exposure.

The new studies will be conducted using “whole” sulfur mustard gas and build on results from previous studies using CEES, an analog of mustard gas, which were conducted at National Jewish Health and the University of Colorado. Studies at these two sites showed that doses in the range of 5 to 30 mg/kg of AEOL 10150 given at one and eight hours after exposure mitigate both lung and skin injury in animal models. Doses in the range of 5 to 10 mg/kg/d showed the most potent effect including significant mitigation as assessed by histopathology and immunohistochemistry.

“Initiating studies in whole mustard is a critical milestone for Aeolus. We are optimistic based on the data from the CEES studies, but are anxious to see the results of studies using whole mustard”, stated John L. McManus, President and Chief Executive Officer of Aeolus Pharmaceuticals, Inc. “We are grateful to the NIH CounterACT program for their support and funding of this program and have been encouraged by the work done so far.”

About AEOL 10150

AEOL 10150 is a small molecule that catalytically consumes reactive oxygen and nitrogen species (free radicals). The compound is a manganoporphyrin that contains a positively-charged manganese metal ion that is able to accept and give electrons to and from reactive oxygen species (“ROS”) and reactive nitrogen species (“RNS”). Research has shown that ROS and RNS have important cell signaling roles, and through its interaction with RNS and ROS, AEOL 10150 appears to have multiple mechanisms of action including anti-oxidant, anti-inflammatory and anti-angiogenic activities. In animal studies AEOL 10150 has demonstrated reductions in the markers for tissue hypoxia, angiogenesis, inflammation and oxidative stress. Specifically, AEOL 10150 is able to down-regulate oxidative stress and severe inflammation, which is responsible for much of the tissue destruction that occurs as a result of exposure to certain chemicals and radiation.

AEOL 10150 offers several unique advantages as a countermeasure for the treatment of Acute Radiation Syndrome, mustard gas and chlorine gas for civilian and military populations. These include:

— Flexible Treatment Paradigm – AEOL 10150 is intended for the treatment of patients post-exposure, even in those who are already exhibiting symptoms.

- Advanced Development Stage – AEOL 10150 has demonstrated safety in three human clinical trials, and has an extensive pre-clinical safety and toxicology package completed. The product also has an established stability profile that permits long-term storage.

— Large scale manufacturing – Aeolus has contract capacity with a large manufacturing site to mass produce large quantities of AEOL 10150 under GMP conditions.

— Multiple Applications – AEOL 10150 has demonstrated protective effects against radiation and mustard gas exposure, and within these indications has shown the ability to treat multiple organ systems.

— Commercial Application – Additionally, AEOL 10150 is being developed for use as an adjunct to cancer radiation therapy, and animal data suggest that the compound protects healthy normal cells from the effects of radiation without compromising the efficacy of the radiation in killing tumor cells.

Potential for AEOL 10150 as a Countermeasure Against Multiple Terrorist Threats

AEOL 10150 has shown significant protective effects against radiation and mustard gas in animal models. Additionally, based on its mechanism, it is believed that the compound may potentially protect against exposure to chlorine gas. A compound with the potential to protect against multiple threats would be of significant benefit in both the military and civilian efforts to protect citizens against potential threats. The FDA has a special “Animal Rule” under which compounds may be approved for use against chemical and nuclear threats on the strength of animal efficacy studies, which allows the potential for an accelerated approval path versus conventional pharmaceutical applications.

About Aeolus Pharmaceuticals

Aeolus is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that mimics and thereby amplifies the body’s natural enzymatic systems for eliminating reactive oxygen species, or free radicals. Studies funded by the National Institutes for Health are currently underway evaluating AEOL 10150 as a treatment for exposure to mustard gas and will shortly be initiated to evaluate the compound as a treatment for exposure to chlorine gas. Additionally, the Company has initiated animal studies necessary to seek approval of the compound as a treatment to protect the lungs from exposure to radiation.

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’ Annual Report on Form 10-K for the year ended September 30, 2008. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

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