Axonyx Inc. Announces Third Quarter Financial Results

AXONYX Inc. (NASDAQ: AXYX) announced today results for
the third quarter-ended September 30, 2005. The Company reported a net
loss of $5,687,000 or $0.11 per share for the third quarter of 2005
compared to a net loss of $6,693,000 or $0.13 per share for the third
quarter of 2004. There was no revenue for the quarter ended September
30, 2005 as compared to $954,000 in the third quarter of 2004. 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 the prior periods was derived from OXIS.
   Research and development costs were $5,135,000 and $6,054,000 for
the three months ended September 30, 2005 and 2004, respectively. The
reduction in research and development costs primarily reflects the
reduction in Phenserine pre-clinical costs. Sales, general and
administrative expenses were $1,018,000 and $1,540,000 for the three
months ended September 30, 2005 and 2004, respectively. The reduction
was primarily attributable to OXIS operations no longer consolidated
with our results effective March 1, 2005 and a reduction of $223,000
in non-cash option charges for the three months ended September 30,
2005 as compared to the same period in 2004.
   For the nine month period ended September 30, 2005, the Company
reported a net loss of $24,299,000 or $0.45 per share compared to a
net loss of $19,816,000 or $0.40 per share for the comparable period
in 2004. There was $403,000 and $1,865,000 in revenue for the nine
months ended September 30, 2005 and 2004, respectively.
   Research and development costs were $21,808,000 and $15,888,000
for the nine months ended September 30, 2005 and 2004, respectively.
In 2005, two additional Phenserine Phase III trials were underway, as
well as continuing costs associated with earlier trials. Posiphen
preclinical costs increased by $1,815,000 over the prior nine month
period as the Company advanced Posiphen preclinical testing. The nine
month period also includes costs of $423,000 incurred with the
Company's third compound, BisNorCymserine. Sales, general and
administrative expenses were $3,894,000 and $6,038,000 for the nine
months ended September 30, 2005 and 2004, respectively. Non-cash
charges relating to stock option grants to consultants were $1,622,000
lower in the nine months ended September 30, 2005 than the nine months
ended September 30, 2004. Professional fees were $2,055,000 compared
to $1,050,000 in the nine months ended September 30, 2005 and 2004,
respectively. The increase in professional fees is primarily
attributed to utilization of additional outside counsel, patent filing
costs, legal costs related to class action securities litigation,
Sarbanes Oxley compliance and board member fees. In addition, the
reduction in sales, general and administrative expenses for the nine
months ended September 30, 2005 from prior year levels result from
OXIS operations no longer consolidated with our results effective
March 1, 2005.

   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 Central Nervous System disorders. The
Company 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.

   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 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 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.
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                              Axonyx Inc.
             Summary of Consolidated Financial Statements
        For the Three and Nine Months ended September 30, 2005
                 Consolidated Statement of Operations
                              (unaudited)

                     Three months ended         Nine months ended
                       September 30,               September 30,
                    2005          2004          2005         2004
                 ------------ ------------ ------------- -------------
Revenue
  Product sales  $            $   504,000  $    403,000  $  1,415,000
  Licensing                       450,000                     450,000
                 ------------ ------------ ------------- -------------
Total revenue                     954,000       403,000     1,865,000

Cost of product
 sales                            282,000       210,000       786,000
                 ------------ ------------ ------------- -------------

                                  672,000       193,000     1,079,000
Costs and
 expenses:
  Research and
   development     5,135,000    6,054,000    21,808,000    15,888,000
  General and
   administrative  1,018,000    1,540,000     3,894,000     6,038,000
                 ------------ ------------ ------------- -------------

                   6,153,000    7,594,000    25,702,000    21,926,000
                 ------------ ------------ ------------- -------------
Loss from
 operations       (6,153,000)  (6,922,000)  (25,509,000)  (20,847,000)

Other income
 (expense)
  Interest income    586,000      379,000     1,716,000       805,000
  Interest
   expense                        (13,000)       (2,000)      (38,000)
  Gain (loss) on
   issuance of
   subsidiary
   stock               2,000       16,000      (318,000)       71,000
  Equity in loss
   of Oxis          (108,000)                  (255,000)
  Financing fees                 (164,000)                   (464,000)
  Foreign
   exchange          (14,000)      (3,000)      (95,000)      (40,000)
                 ------------ ------------ ------------- -------------
Total other
 income
 (expense)           466,000      215,000     1,046,000       334,000
                 ------------ ------------ ------------- -------------

Net loss before
 minority
 interest in
 subsidiary       (5,687,000)  (6,707,000)  (24,463,000)  (20,513,000)

Minority
 interest in
 loss of
 subsidiary                        14,000       164,000       697,000
                 ------------ ------------ ------------- -------------

Net loss          (5,687,000)  (6,693,000)  (24,299,000)  (19,816,000)

Foreign currency
 translation
 adjustment                         2,000                     (32,000)
                 ------------ ------------ ------------- -------------

Comprehensive
 loss            $(5,687,000) $(6,691,000) $(24,299,000) $(19,848,000)
                 ------------ ------------ ------------- -------------

Net loss per
 common share    $     (0.11) $     (0.13) $      (0.45) $      (0.40)
                 ============ ============ ============= =============

Weighted average
 shares basic
 and diluted      53,668,024   51,701,443    53,663,562    48,974,854

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                 Condensed Consolidated Balance Sheets
 
                              September 30, December 31,
                                  2005          2004 (audited)
                              -------------------------------
Cash, Cash Equivalents and
 Investments                  $ 63,198,000 $ 90,591,000
Working Capital               $ 56,717,000 $ 84,546,000
Total Stockholders' Equity    $ 62,592,000 $ 86,538,000

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