AspenBio Pharma, Inc. Announces First Quarter Results

CASTLE ROCK, Colo., May 17 /PRNewswire-FirstCall/ -- AspenBio Pharma, Inc. an emerging bio-pharmaceutical company dedicated to the development of novel drugs and diagnostics for animals and humans, announced today results for its first quarter ended March 31, 2006.

As compared to the same period a year ago: * Sales for the first quarter totaled $236,000, an increase of 57%. Sales included revenues from pre-breeding season sales of the company's new analog product for animal reproduction. * Gross profit increased to $123,000, or 52% of sales, as compared to $47,000, or 31% of sales. The improvement in gross profit was primarily attributable to improved sales volume of antigen products resulting in more efficient production, as well as higher margins on the sale of the company's new analog product for animal reproduction. * Selling, general, and administrative expenses increased by $181,000 to $470,000. The majority of the increase was attributable to additional staffing and legal costs associated with the Hurst litigation that was settled during April 2006. * Research and development expenses increased 151% to $311,000. The increase was due to accelerated development of AspenBio Pharma's near-term priority products. * Net loss totaled $651,000 or ($0.04) per share, versus a net loss of $429,000 or ($0.04) per share in 2005. * Cash and cash equivalents totaled $1,504,703 at the end of the quarter.

The first quarter was also highlighted by a number of significant milestones and achievements as the company advanced development of key products:

* Announced the initial sale and distribution of new analog product for animal reproduction -- the first of a planned diversified line of recombinant single-chain gonadotropin (hormone) drugs for livestock and other animals. * The company's U.S. and international patent applications, entitled "Methods and Devices for Diagnosis of Appendicitis," were published by the United States Patent Office and the International Bureau of the World Intellectual Property Organization. Based upon preliminary testing performed internally, the AspenBio Pharma blood based test process shows early promise as an accurate indicator of appendicitis. No known effective appendicitis diagnostic test is available on the market in the United States or internationally. * Financing activities initiated during the quarter, and closed subsequently, totaled more than $2.4 million in net proceeds. This improved cash position will enable the company to be more aggressive in product development. * Progress in the development of the bovine open cow test. Improvements resulted in accelerated weekly field trials that, if successful, will lead to conducting the large-scale field trial as provided under the terms of the company's worldwide marketing agreement with Merial. * Initial pilot studies, including dose determinations, showed positive results in the advancement of the bovine recombinant single-chain LH drug (and FSH advances subsequent to the end of the quarter). * The company initiated the contracting process with a cGMP qualified manufacturer to produce recombinant single-chain products to be sold as drugs following FDA approval. * Due diligence and discussions were initiated by prospective marketing partners regarding licensing of certain of AspenBio Pharma's new recombinant single chain products. * Key additions to the company's scientific staff, including a manager of scientific projects and a quality control specialist.

"The 2006 fiscal year has begun with very positive momentum on several fronts," said Richard Donnelly, president and CEO of AspenBio Pharma. "The company continues to make steady progress in advancing our six main product development projects, particularly our open cow test, SurBred(TM) and our largest potential single-chain drug, BoviPureLH(TM). We are now well positioned to engage worldwide licensing partners for certain of our products and maximize the value of our product pipeline. We're looking forward to reporting on many new and exciting events in the months ahead."

About AspenBio Pharma

AspenBio Pharma, Inc. is an emerging bio-pharmaceutical company dedicated to the discovery, development, manufacture, and marketing of novel proprietary products, including those that enhance the reproductive efficiency of animals and others that have large worldwide market potential. The company was formed to produce purified proteins for diagnostic applications and has become a leading supplier of human hormones to many of the nation's largest medical diagnostic companies and research institutions. The company has successfully leveraged this foundational science and technology expertise to rapidly develop an enviable late-stage pipeline of several novel reproduction hormone analogs for wide-ranging therapeutic use initially in bovine and equine species. The company has created an early pregnancy "open cow" diagnostic for dairy cows that is currently in late-stage development. AspenBio Pharma is also working on a blood test to assist in the diagnosis of appendicitis in humans. For more information, please visit the company's website: www.aspenbioinc.com.

Forward-Looking Statements

This news release includes "forward-looking statements" of AspenBio Pharma, Inc. ("APNB") as defined by the Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical fact, included in the press release that address activities, events or developments that APNB believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors APNB believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of APNB. Investors are cautioned that any such statements are not guarantees of future performance. Actual results or developments may differ materially from those projected in the forward-looking statements as a result of many factors, including development of new products, obtaining additional funding, adverse changes in market conditions, fluctuations in sales volumes, and problems in collecting receivables. Furthermore, APNB does not intend (and is not obligated) to update publicly any forward-looking statements. The contents of this news release should be considered in conjunction with the warnings and cautionary statements contained in APNB's recent filings with the SEC.

For more information contact: AspenBio Pharma, Inc. Richard Donnelly, CEO 303-794-2000 Investor Relations: Liolios Group, Inc. Scott Liolios or Ron Both 949-574-3860 Condensed Statements of Operations Three Months Ended (In thousands, except per share data) March 31, 2006 2005 Sales $236 $150 Gross profit 123 47 Other revenue 50 Operating expenses: Selling, general and administrative, including non-cash compensation of $54 and $54 470 289 Research and development 311 124 Operating loss (608) (366) Interest: (Expense) (63) (63) Income 20 -- Net loss $(651) $(429) Basic and diluted net loss per share $(.04) $(.04) Basic and diluted weighted average shares outstanding 16,087 11,714 Condensed Balance Sheet (In thousands) March 31, 2006 ASSETS Cash $1,505 Other current assets 616 Property and equipment, net 3,400 Other assets, primarily intangibles 1,017 Total assets $6,538 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $851 Long-term debt, net 3,544 Deferred revenue 200 Total liabilities 4,595 Stockholders' equity 1,943 Total liabilities and stockholders' equity $6,538

CONTACT: Richard Donnelly, CEO of AspenBio Pharma, Inc., +1-303-794-2000;or Investor Relations, Scott Liolios or Ron Both, both of Liolios Group,Inc., +1-949-574-3860, for AspenBio Pharma, Inc.

Web site: http://www.aspenbioinc.com/