Novus Therapeutics Reports Fourth Quarter and Full-Year 2018 Financial Results and Provides Clinical Updates

Novus Therapeutics, Inc. (NASDAQ: NVUS), a specialty pharmaceutical
company focused on developing products for patients with disorders of
the ear, nose, and throat (ENT), today announced financial results for
the quarter and year ended December 31, 2018 and provided updates on the
OP0201 development program.

“We made significant progress on the OP0201 program in 2018,” said
Gregory J. Flesher, CEO of Novus Therapeutics. “We completed formulation
development, initiated our first of several planned clinical trials, and
filed a new patent application for OP0201. In addition, we expanded our
organization by hiring talented individuals to fill key R&D and G&A
positions. We now have four OP0201 clinical trials ongoing, including an
exploratory phase 2a study in children with acute otitis media. We look
forward to sharing the results of all of these studies in 2019.”

OP0201 Development Updates

• Study C-001 is a phase 1 clinical trial designed to evaluate safety,
  tolerability, and Eustachian tube (“ET”) function following a single
  intranasal dose of OP0201 in 16 healthy adults. The randomized,
  double-blind, placebo-controlled, cross-over trial explores the
  effects of a 20 mg dose of OP0201 on ET function. Assessment of ET
  function is captured using continuous tympanic impedance while
  subjects are exposed to changes in atmospheric pressure produced
  within a hyperbaric/hypobaric chamber. Data from this study is
  expected to be available in Q2 2019.
• Study C-002 is a phase 1 clinical trial designed to evaluate safety
  and tolerability of daily intranasal administration of OP0201 over 14
  consecutive days in 30 healthy adults. The randomized, double-blind,
  placebo-controlled, parallel-group, dose-escalation trial includes a
  30 mg per day dose (Cohort A) and 60 mg per day dose (Cohort B) of
  OP0201. Data from this study is expected to be available in Q2 2019.
• Study C-004 is a phase 1 clinical trial designed to evaluate safety,
  tolerability, and relief of ear pain over a 60-minute observation
  period following a single intranasal dose of OP0201 in 24 adults with
  acute otitis media. The randomized, double-blind, placebo-controlled,
  parallel-group trial explores the effects of a 20 mg intranasal dose
  of OP0201. Assessment of pain relief is captured utilizing a Visual
  Analog Scale (VAS), Numeric Rating Scale (NRS-11), Patient Global
  Impression of Change (PGIC), and Clinical Global Impressions Scale:
  Global Improvement (CGI-I). Data from this study is expected to be
  available in April 2019.
• Study C-006 is an exploratory phase 2a clinical trial designed to
  evaluate safety, tolerability, and efficacy of daily intranasal
  administration of OP0201 over 10 consecutive days in up to 50
  pediatric patients, 6 to 24 months of age, with acute otitis media.
  The randomized, double-blind, placebo-controlled, parallel-group trial
  explores the effects of a 20 mg per day dose of OP0201 as an adjunct
  to oral antibiotics. Patients will receive 10 days of treatment and
  will be followed for up to 30 days, during which multiple endpoints
  will be explored. Enrollment is currently ongoing with data expected
  in 2H 2019.

Fourth Quarter and Full-Year 2018 Financial Results

For the three-month period ended December 31, 2018, Novus reported a net
loss of $4.6 million, or $0.49 loss per share, compared to a net loss of
$2.1 million, or $0.30 loss per share, for the same period in 2017. For
the twelve-month period ended December 31, 2018, Novus reported a net
loss of $14.1 million, or $1.56 loss per share, as compared to a net
loss of $13.1 million, or $2.30 loss per share, for the same period in
2017. The company had approximately $13.0 million in cash and cash
equivalents as of December 31, 2018.

Research and development (R&D) expenses were $2.7 million during the
three-month period ended December 31, 2018, compared to $0.5 million for
the same period in 2017. R&D expenses for the twelve-month period ended
December 31, 2018 were $6.8 million, compared to $2.0 million for the
same period in 2017. The increase in R&D expenses for calendar 2018 was
primarily due to an increase in formulation and device development costs
of $2.1 million, an increase in clinical development costs of $1.7
million, an increase in consulting costs of $242,000 related to the
advancement of our OP0201 program and increased personnel costs of
$713,000 related to additional headcount. We expect R&D expenses to
increase in subsequent periods as we advance our OP0201 program.

General and administrative (G&A) expenses were $1.8 million during the
three-month period ended December 31, 2018, compared to $1.6 million for
the same period in 2017. G&A expenses for the twelve-month period ended
December 31, 2018 were $7.2 million, compared to $11.1 million for the
same period in 2017. The decrease in G&A expenses for calendar 2018 was
primarily due to a reduction of $5.1 million in merger related expenses,
partially offset by an increase of $659,000 in administrative costs
associated with operating a public company and increased personnel costs
of $511,000 related to additional headcount. We expect similar G&A
expenses in 2019, but an increase in subsequent periods.

About OP0201

OP0201 is being developed as a potential first-in-class treatment option
for OM. OM is often caused by Eustachian tube dysfunction (ETD). OP0201
is a nasal aerosol, drug-device combination product comprised of a novel
formulation of a surfactant (dipalmitoylphosphatidylcholine [DPPC]) and
a spreading agent (cholesteryl palmitate [CP]) suspended in propellant.
The product is administered intranasally via a pressurized metered-dose
inhaler (pMDI). OP0201 is intended to be used to restore the normal
physiologic activity of the ET, which is a small tube that connects the
middle ear cavity to the back of the nasopharynx. Together, the active
ingredients in OP0201 effectively absorb to the air-liquid interface of
the mucosa and reduce the interfacial surface tension of the ET, which
reduces passive pressure required for the ET to open. In other words,
OP0201 is intended to promote ‘de-sticking’ of the ET so that
ventilation of the middle ear may occur.

About Novus Therapeutics

Novus Therapeutics, Inc. (Novus) is a specialty pharmaceutical company
focused on developing products for patients with disorders of the ear,
nose, and throat (ENT). The Company has two platform technologies, each
with the potential to be developed for multiple indications. Novus’ lead
program (OP0201) is a surfactant-based nasal aerosol drug-device
combination product candidate being developed as a potential
first-in-class treatment option for patients at risk for, or with,
otitis media (OM), which is middle ear inflammation and effusion with or
without infection. Globally, OM affects more than 700 million adults and
children every year, with over half of the cases occurring in children
under five years of age. OM is one of the most common disorders seen in
pediatric practice, and in the U.S. is a leading cause of health care
visits and the most frequent reason children are prescribed antibiotics
or undergo surgery. Novus also has a foam-based drug delivery technology
platform (OP01xx), which may be developed in the future to deliver drugs
into the ear, nasal, and sinus cavities. For more information please
visit novustherapeutics.com.

Forward-Looking Statements

This press release contains forward‐looking statements that involves
substantial risks and uncertainties. Any statements about the company’s
future expectations, plans and prospects, including statements about its
strategy, future operations, development of its product candidates, and
other statements containing the words “believes,” “anticipates,”
“plans,” “expects,” “estimates,” “intends,” “predicts,” “projects,”
“targets,” “looks forward,” “could,” “may,” and similar expressions,
constitute forward‐looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, although not all
forward‐looking statements include such identifying words.
Forward‐looking statements include, but are not limited to statements
regarding: expectations regarding the timing for the commencement and
completion of product development or clinical trials, including the four
ongoing OP0201 clinical trials; expectations regarding the success of
clinical trials; the rate and degree of market acceptance and clinical
utility of the company’s products; the company’s commercialization,
marketing and manufacturing capabilities and strategy; the company’s
intellectual property position and strategy; the company’s ability to
identify additional products or product candidates with significant
commercial potential; the company’s estimates regarding expenses, future
revenue, capital requirements and needs for additional financing;
developments relating to the company’s competitors and industry; and the
impact of government laws and regulations. Actual results may differ
materially from those indicated by such forward‐looking statements as a
result of various important factors, including: the ability to develop
commercially viable product formulations; the sufficiency of the
company’s cash resources; the ability to obtain necessary regulatory and
ethics approvals to commence additional clinical trials; whether data
from early clinical trials will be indicative of the data that will be
obtained from future clinical trials; whether the results of clinical
trials will warrant submission for regulatory approval of any
investigational product; whether any such submission will receive
approval from the United States Food and Drug Administration or
equivalent foreign regulatory agencies and, if we are able to obtain
such approval for an investigational product, whether it will be
successfully distributed and marketed. These risks and uncertainties, as
well as other risks and uncertainties that could cause the company’s
actual results to differ significantly from the forward‐looking
statements contained herein, are discussed in our quarterly, annual, and
other filings with the SEC, which can be found at www.sec.gov.
Any forward‐looking statements contained in this press release speak
only as of the date hereof and not of any future date, and the company
expressly disclaims any intent to update any forward‐looking statements,
whether as a result of new information, future events or otherwise.

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