Aerogen Inc (1039160) SEC Filing 10-Q Quarterly report for the period ending Thursday, June 30, 2005

Exhibit 99.1

AEROGEN, INC. REPORTS FIRST QUARTER 2005 FINANCIAL RESULTS

Mountain View, CA, May 13, 2005 — Aerogen, Inc. (Nasdaq: AEGN) today announced financial results for the three months ended March 31, 2005.  The net loss attributable to common stockholders for the three months ended March 31, 2005 was $0.8 million, or $0.13 per share, compared with a net loss of $11.9 million, or $2.66 per share, for the same period in 2004.

The results for the three months ended March 31, 2004 included a charge of $6.4 million, or $1.45 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 the three months ended March 31, 2005.

The terms of the Series A-1 Convertible Preferred Stock provide for a dividend, at the rate of 6% per year, to be paid quarterly in cash or Aerogen common stock, at the Company’s election, to each holder of Series A-1 Convertible Preferred Stock.  During the three months ended March 31, 2005 and 2004, the Company elected to pay this dividend in Aerogen common stock, resulting in charges related to ordinary dividends of $0.4 million, or $0.07 per share, and $20,000, or $0.00 per share, respectively.

The gain from the decline in the fair market value of the liability associated with outstanding warrants was $4.0 million for the three months ended March 31, 2005, as compared to a loss of $1.1 million for the same period in 2004.  The gain in 2005 was due to a decline in the market value of the Company’s common stock in the first quarter of 2005 while the loss in 2004 was due to an increase in the market value of its common stock in the first quarter of 2004.

Aerogen’s cash balance as of March 31, 2005 was $13.6 million.  Based on current expectations of sales and royalty levels and operating costs, existing capital resources will not enable the Company to maintain current and planned operations beyond the first quarter of 2006; however, if certain expected product sales and/or royalties are not realized, the current cash balance may not sustain planned operations beyond the middle of the fourth quarter of 2005. The Company is pursuing a number of alternatives to maximize stockholder value, including strategic transactions, collaborative partnerships and the licensing or sale of certain of our intellectual property. If these efforts are not successful, the Company will need to raise additional capital before the end of 2005 in order to continue operations. Licensing or collaborative arrangements, if necessary to raise additional funds, may require Aerogen to relinquish rights to certain of its products or technologies, or desirable marketing territories, or all of these.

Revenues for the three months ended March 31, 2005 were $1.6 million, compared with $1.1 million for the same period in 2004.  The 45% increase in revenues for the three-month period ending March 31, 2005, as compared with the same period in 2004, primarily resulted from an increase in product sales of the Aeroneb^® Professional Nebulizer System (“Aeroneb Pro”) and royalties associated with a large consumer products company’s sales of an air freshener incorporating our aerosol generator technology.  The increase in Aeroneb Pro sales was slightly offset by a decrease in the sales of our OnQ^® Aerosol Generators to Evo Medical Solutions (“Evo”) (formerly Medical Industries America) in the three months ended March 31, 2005, as compared to the same period in 2004.  There were no shipments to Evo during January or

— more —