Aerogen Inc (1039160) SEC Filing 10-K Annual report for the fiscal year ending Friday, December 31, 2004

Exhibit 99.1

AEROGEN, INC. REPORTS FOURTH QUARTER 2004 FINANCIAL RESULTS

Mountain View, CA, March 9, 2005 — Aerogen, Inc. (Nasdaq: AEGN) today announced financial results for the three months and twelve months ended December 31, 2004.  The net loss attributable to common stockholders for the three months ended December 31, 2004 was $2.7 million, or $0.53 per share, compared with a net loss of $5.1 million, or $1.22 per share, for the same period in 2003.  The net loss attributable to common stockholders for the twelve months ended December 31, 2004 was $23.2 million, or $4.86 per share, compared with $17.4 million, or $4.22 per share, for the same period in 2003.

Aerogen’s cash balance as of December 31, 2004 was $16.9 million.  The Company believes this cash balance is sufficient to sustain operations into the first quarter of 2006.  In order to continue operations beyond that time, the Company will need to raise additional capital, either through public or private financings, collaborative relationships or other arrangements.

The results for the twelve months ended December 31, 2004 include a charge of $11.7 million, or $2.45 per share, reflecting a deemed dividend imputed from the difference between the allocated proceeds and the conversion value of the Company’s Series A-1 Convertible Preferred Stock that was issued during the first half of 2004.  There were no deemed dividends in 2003.  As deemed dividends are only incurred upon the issuance of certain securities, and the Company completed its planned issuance of Series A-1 Convertible Preferred Stock in May 2004, there will be no further charges for deemed dividends related to the Series A-1 Convertible Preferred Stock financing.

Aerogen has concluded that it must restate its previously reported results for the first three quarters of 2004 to correct its accounting for the Series A-1 Preferred Stock and Common Stock Warrants issued in the first and second quarters of 2004.  Due to certain rights provided to the investors in the Series A-1 Preferred Stock, the Company has concluded that the warrants issued in conjunction with the Series A-1 Preferred financing should properly be accounted for as a liability, rather than as stockholders’ equity as previously presented.

The restatements will not affect cash flows, cash balances or operating income of the Company in any period.

The impact of this change on net income attributable to common stockholders included a reduction in the deemed dividend recorded for the Series A-1 issuance of $0.7 million for the year ended December 31, 2004.  Additionally, the value of the warrants changed from their initial issuance values through December 31, 2004.  The resulting decrease in the warrant liability created non-operating income for the three months ended December 31, 2004 of $1.5 million, or $0.30 per share and for the twelve months ended December 31, 2004 the non-operating income was $5.8 million, or $1.23 per share.  The change also has the impact of increasing total liabilities as well as the recorded amount of redeemable convertible preferred stock, and reducing stockholders’ equity.

A full explanation of this non-operating change in accounting, including revised financial statements, will be made in the Company’s Form 10-K for the year ended December 31, 2004.

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