About Aeolus Pharmaceuticals

Aeolus Pharmaceuticals is a biopharmaceutical company that is developing a new class of catalytic antioxidant compounds, referred to as manganoporphyrins, for diseases and disorders of the central nervous system, respiratory system, autoimmune system, and oncology. Over the past decade, Aeolus has synthesized, developed, and analyzed approximately 200 proprietary catalytic antioxidant compounds, all of which have the same core chemical structure.

Aeolus is based in Orange County, California and has five members on its executive management team, which comprise the Company’s employee base. The Company utilizes outside organizations, on a contract basis, to conduct the necessary operational activities, including finance, regulatory, in vivo testing, clinical monitoring, and other functions required for the successful management of its business and pipeline development.

Unlike most for-profit biopharmaceutical companies, for most of its existence, Aeolus was a wholly-owned subsidiary of Incara Pharmaceuticals, Inc. and as such, the Company’s technology was developed without business pressures to move one or two compounds forward to clinical evaluation. It was only after the collapse of Incara following Phase III clinical studies of Incara’s technology (unrelated to the Aeolus technology) that the business opportunities for Aeolus were highlighted. As a result, during a 10 year period, Aeolus scientists were able to successfully create a novel platform of compounds (200 unique structures made to date), screen them and secure a defined understanding of their breadth of applicability in a variety of diseases and disorders. Unlike companies that focus on a disease treatment by attempting to understand the disease mechanism, and unlike companies that must develop unique chemistries for each and every disease target of interest, Aeolus’ technology is predicated upon a common problem that is associated with diverse diseases and disorders: oxidative stress. Thus, by developing compounds that:

• Are small molecules (molecular weights of 600-1000 Dalton)
• Have significant potential for structural diversity
• Are without the limitations of the body’s natural antioxidant scavengers:
• non-protein
• broader activity
• better tissue penetration
• longer half-life
• Have multiple potent antioxidant activities :
• Catalytically inactivate superoxide, peroxynitrite and hydrogen peroxide
• Prevent lipid peroxidation

The Company’s compounds by definition have broad applicability across a variety of diseases and disorders. In addition, all of the Company compounds have the same core structure, which is believed to allow for a more facile and robust evaluation of the compounds as these are moved forward to the clinic.

The Company’s lead compound, AEOL 10150, is currently undergoing human clinical evaluation in patients with Amyotrophic Lateral Sclerosis, also known as Lou Gehrig’s disease. To date, the compound has evidenced clean safety and pharmacokinetic profiles. The Company recently announced the Aeolus Pipeline Initiative whereby the Company, in conjunction with a variety of academic collaborations, is focused on identifying between 1-2 compounds evaluated from six disease categories for potential entrance into human clinical evaluation in 2006, and 2-3 compounds in 2007.

There are four key components of the Company that make Aeolus unique from investment, business and strategic perspectives:

• The Company’s stock is publicly traded, yet currently has a market cap of approximately $14 million – as a result, the potential upside and return-on-investment opportunities for investors and strategic partners is high;



• AEOL 10150 is the first compound in this class of compounds that appears to have avoided the problems experienced with other catalytic antioxidants that have heretofore been clinically evaluated by others, i.e., safety. The need for use of a metal ion to aid in the exchange of electrons from free radicals (to neutralize the free radical) can itself cause problems if the metal ion is released from the agent, due to, e.g., degradation of the compound within the body. The Aeolus catalytic antioxidants have evidenced a strong safety profile to date and data developed from the clinical evaluation indicate that the metal ion is not released from the structure. Because all of the Aeolus compounds have the same core structure, it is believed that this safety profile will be substantially the same across all of the compounds;



• Although the Phase I single and multiple-dose evaluations of AEOL 10150 are being conducted in patients diagnosed with ALS, these are nevertheless safety studies such that the Company and its strategic partners would not be limited to ALS for Phase 2 efficacy studies – rather, AEOL 10150 can be evaluated in any of the numerous disease states that have been investigated in ore-clinical models using AEOL 10150, thus expanding the breadth of strategic and business opportunities for this compound; and



• While many successful biopharmaceutical companies have been able to achieve significant market valuations based upon a small number of products, Aeolus has literally hundreds of compounds that have already been made from which the Company and its strategic partners can look to for product development. The true potential and value of the Company, therefore, is not based upon one or two products, but rather, via the Aeolus Pipeline Initiative, the ability to move multiple compounds forward into clinical evaluation over a mulit-year period. Increasing the number of opportunities can reduce the risk of failure of any one program, thus providing a level of investment or partnership “security” rarely available to companies within this industry.