AXONYX Inc. Announces Second Quarter 2006 Financial Results

AXONYX Inc. (NASDAQ: AXYX) announced today results for
the second quarter-ended June 30, 2006. The Company reported a net
loss of $4,183,000 or $0.08 per share for the second quarter of 2006
compared to a net loss of $8,179,000 or $0.15 per share for the second
quarter of 2005.
   Research and development expenses were $2,958,000 and $7,351,000
for the quarters ended June 30, 2006 and 2005, respectively. Research
and development costs declined by $4,393,000 from the prior year's
quarter ended June 30, 2005. This reduction reflects a decline in
Phenserine program expenditures of $5,282,000 due to the
completion/curtailment of the Phenserine trials in late 2005. This
reduction is offset, in part, by increased expenditures of $429,000 in
the Posiphen(TM) program, $377,000 in the Bisnorcymserine program and
$252,000 in non cash employee option charges resulting from the
adoption of new financial accounting standards. In 2006 Posiphen(TM)
is in clinical Phase I studies and Bisnorcymserine is in pre-clinical
development towards filing an investigational new drug application
(IND).
   Sales, general and administrative expenses were $1,683,000 and
$1,213,000 for the quarters ended June 30, 2006 and 2005,
respectively. Sales, general and administrative expenses increased
$470,000 over the prior year's quarter ended June 30, 2005. This
increase is attributed to a $436,000 increase in professional fees
primarily resulting from costs related to merger activity and a
$125,000 increase in non-cash charges related to stock option grants
to employees. These increases are offset in part by an $86,000
reduction in investor relations costs.
   For the six month period ended June 30, 2006, the Company reported
a net loss of $8,200,000 or $0.15 per share compared to a net loss of
$18,612,000 or $0.35 per share for the comparable period in 2005.
There was no revenue through June 30, 2006 as compared to $403,000 in
revenue for the six months ended June 30, 2005. The change in revenue
reflects the fact that OXIS operations are no longer consolidated with
our results effective March 1, 2005, and all revenue for this period
was derived from OXIS.
   Research and development expenses were $5,619,000 and $16,673,000
for the six months ended June 30, 2006 and 2005, respectively.
Research and development costs declined by $11,054,000 from the six
months ended June 30, 2005. This reduction reflects a decline in
Phenserine program expenditures of $12,328,000 due to the
completion/curtailment of the Phenserine trials in late 2005. This
reduction is offset, in part, by increased expenditures of $519,000 in
the Posiphen(TM) program and $521,000 in the Bisnorcymserine program.
   Sales, general and administrative expenses were $3,553,000 and
$2,876,000 for the six months ended June 30, 2006 and 2005,
respectively. Sales, general and administrative expenses increased
$677,000 from the six months ended June 30, 2005. This increase is
attributed to a $400,000 increase in patent acquisition costs, a
$440,000 increase in non-cash charges related to stock option grants
to consultants and employees and a $201,000 increase in professional
fees primarily resulting from costs related to merger activity. These
increases are offset in part by a $116,000 reduction in investor
relations costs and a $332,000 reduction in OXIS expenses which are no
longer consolidated with our results effective March 1, 2005 to the
condensed consolidated financial statements.

   About Axonyx

   Axonyx Inc. is a U.S.-based biopharmaceutical company engaged in
the acquisition and development of proprietary pharmaceutical
compounds for the treatment of CNS disorders. Axonyx currently has
three compounds in development for Alzheimer's disease, namely
Phenserine - a potential symptomatic and disease progression treatment
of mild to moderate Alzheimer's disease (AD), Posiphen(TM) - a
potential disease progression treatment for AD now in Phase I, and
BisNorCymserine (BNC) - a potential symptomatic treatment of severe AD
now in pre-Investigational New Drug (IND) stage. Additional
information can be found at www.axonyx.com.

   Additional Information about the Merger and Where to Find It

   In connection with the proposed merger, Axonyx and TorreyPines
Therapeutics intend to file relevant materials with the Securities and
Exchange Commission (SEC), and have filed a registration statement on
Form S-4 that contains a preliminary prospectus and a joint proxy
statement, which has not been declared effective. Investors and
security holders of Axonyx and TorreyPines Therapeutics are urged to
read these materials as they become available because they will
contain important information about Axonyx, TorreyPines Therapeutics
and the merger. The proxy statement, prospectus and other relevant
materials (when they become available), and any other documents filed
by Axonyx with the SEC, may be obtained free of charge at the SEC's
web site at www.sec.gov. In addition, investors and security holders
may obtain free copies of the documents filed with the SEC by Axonyx
by directing a written request to: Axonyx, 500 Seventh Avenue, 10th
Floor, New York, NY 10018, Attention: Investor Relations. Investors
and security holders are urged to read the proxy statement, prospectus
and the other relevant materials when they become available before
making any voting or investment decision with respect to the merger.
   This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended.

   Participants in the Solicitation

   Axonyx and its directors and executive officers and TorreyPines
Therapeutics and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders
of Axonyx in connection with the proposed transaction. Information
regarding the special interests of these directors and executive
officers in the merger transaction is included in the proxy
statement/prospectus referred to above. Additional information
regarding the directors and executive officers of Axonyx is also
included in Axonyx's Annual Report on Form 10-K for the year ended
December 31, 2005, which was filed with the SEC on March 16, 2006.
This document is available free of charge at the SEC's web site
(www.sec.gov) and from Investor Relations at Axonyx at the address
described above.

   This press release may contain forward-looking statements or
predictions. These statements represent our judgment to date, and are
subject to risks and uncertainties that could materially affect the
Company, including those risks and uncertainties described in the
documents Axonyx files from time to time with the SEC, specifically
Axonyx's annual report on Form 10-K. Specifically, with respect to our
drug candidates Phenserine, Posiphen(TM) and Bisnorcymserine, Axonyx
cannot assure that: any preclinical studies or clinical trials,
whether ongoing or conducted in the future, will prove successful, and
if successful, that the results can be replicated; safety and efficacy
profiles of any of its drug candidates will be established, or if
established, will remain the same, be better or worse in future
clinical trials, if any; pre-clinical results related to cognition and
the regulation of beta-APP and/or amyloid beta will be substantiated
by ongoing or future clinical trials, if any, or that any of its drug
candidates will be able to improve the signs or symptoms of their
respective clinical indication or slow the progression of Alzheimer's
disease; any of its drug candidates will support an NDA filing, will
be approved by the FDA or its equivalent, or if approved, will prove
competitive in the market; Axonyx will be able to successfully
out-license any of its drug candidates; Axonyx will be able to
successfully in-license any additional compounds; or that Axonyx will
have or obtain the necessary financing to support its drug development
programs. Axonyx cannot assure that it will be successful with regard
to identifying a (sub-) licensing partner for any of its compounds.
Axonyx undertakes no obligation to publicly release the result of any
revisions to such forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
   We refer you to our report on form 10-K for the year ended
December 31, 2005 filed with the SEC, where these risks and others are
more fully described.
   We do not undertake to discuss matters relating to our ongoing
clinical trials or our regulatory strategies beyond those which have
already been made public or discussed herein.
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                              AXONYX INC.
            Condensed Consolidated Statements of Operations
           For the Three and Six Months ended June 30, 2006
                              (unaudited)


                    Three months ended            Six months ended
                         June 30,                      June 30,
                     2006        2005             2006         2005
                    ------      ------           ------       -------

Product sales       $           $           $           $    403,000

Cost of product
 sales                                                       210,000
                    -------     -------          -------     --------

                                                             193,000

Costs and expenses:
 Research and
  development         2,958,000   7,351,000   5,619,000   16,673,000
 General and
  administrative      1,683,000   1,213,000   3,553,000    2,876,000
                    -----------  ----------   ---------    ----------

                      4,641,000   8,564,000   9,172,000   19,549,000
                    -----------   ---------   ---------   -----------

Loss from operations (4,641,000) (8,564,000) (9,172,000) (19,356,000)

Other income
 (expense)
 Interest income        625,000     558,000   1,332,000    1,130,000
 Foreign exchange       (32,000)    (56,000)    (23,000)     (81,000)
 Gain(loss) on
  issuance of
  subsidiary stock       46,000      11,000      78,000     (320,000)
 Equity in loss of
  OXIS                 (181,000)   (128,000)   (415,000)    (147,000)
 Interest expense             -           -                   (2,000)
                    ------------   ---------   ---------   ----------

Net loss before
 outside interest in
 subsidiary          (4,183,000) (8,179,000) (8,200,000) (18,776,000)

Outside interest in
 loss of subsidiary                       -                  164,000
                    ------------  ----------   ---------   ----------

Net loss             (4,183,000) (8,179,000) (8,200,000) (18,612,000)
                    ------------ ----------- ----------- ------------

Net loss per common
 share              $      (.08) $    (0.15)  $   (0.15)  $    (0.35)
                    ============ ===========  ==========  ===========

Weighted average
 shares basic and
 diluted             53,681,000  53,666,000  53,681,000   53,661,000
                     =========== =========== =========== ============

See notes to the condensed consolidated financial statements

                                       June 30,          December 31,
                                        2005            2005 (audited)
                                    ----------------------------------
Cash and Investments                $ 50,730,000         $ 58,338,000

Working Capital                     $ 46,624,000         $ 53,293,000

Total Stockholders' Equity          $ 51,026,000         $ 58,383,000

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