Axonyx Reports Fourth Quarter and Full Year 2005 Financial Results

Axonyx, Inc. (NASDAQ: AXYX) today announced its
financial results for the fourth quarter and fiscal year ended
December 31, 2005.

   Financial Results

   Axonyx reported a net loss of $4,315,000, or $0.08 per share, in
the fourth quarter of 2005 as compared to $8,964,000, or $0.17 per
share, in the fourth quarter of 2004. Research and development
expenses decreased in the fourth quarter of 2005 to $2,813,000 from
$7,853,000 in the fourth quarter of 2004. The decrease is primarily
due to a $4,717,000 reduction in Phenserine program expenditures
resulting from the completion of Phenserine trials in late 2005.
General and administrative expenses decreased in the fourth quarter of
2005 to $1,249,000 from $2,212,000 in the fourth quarter of 2004. The
reduction is due to a decrease of $384,000 in expenses from OXIS
operations that are no longer consolidated with Axonyx's results
effective March 1, 2005, a decrease of $308,000 in non-cash charges
relating to stock option grants to consultants, a decline in net
payroll expenses of $151,000 reflecting no payroll bonuses in 2005,
and a reduction in other administrative expenses.
   For the year ended December 31, 2005, the Company reported a net
loss of $28,614,000 or $0.53 per share compared to $28,780,000, or
$0.58 per share, during the same period in 2004. Revenue for the year
ended December 31, 2005 was $403,000 as compared to $2,275,000 for the
year ended December 31, 2004. Revenues in 2005 and 2004 were derived
from the sale of research assays and fine chemicals at OXIS, and in
2004, a licensing agreement at OXIS for $450,000. The decline in 2005
revenue reflects the fact that OXIS operations are no longer being
consolidated with Axonyx's results effective March 1, 2005. For the
year ended December 31, 2005, the Company incurred research and
development costs of $24,621,000 compared to $23,741,000 for the year
ended December 31, 2004. The increase of $880,000 primarily reflects
increased expenditures in the Posiphen(TM) and Bisnorcymserine
programs offset in part by a decline in expenses in the Phenserine
program due to the completion of the Phenserine trials in late 2005.
During 2005, Posiphen(TM) entered clinical Phase I studies and
Bisnorcymserine was in full pre-clinical development towards filing an
investigational new drug application (IND).
   For the year ended December 31, 2005, the Company incurred general
and administrative costs of $5,143,000 compared to $8,250,000 for the
year ended December 31, 2004. The decrease of $3,107,000 for 2005 was
due to a decrease of $2,193,000 in expenses from OXIS operations and a
decrease of $1,930,000 in non-cash option charges relating to stock
option grants to consultants. These declines are offset in part by an
increase in professional fees of $1,105,000. The increase in
professional fees results from the utilization of additional outside
counsel, patent filing costs, legal cost related to class action
securities litigation, Sarbanes Oxley compliance and board member
fees.
   As of December 31, 2005, the Company had $58,338,000 in cash, cash
equivalents and investments and $53,293,000 in working capital.
   Gosse B. Bruinsma, M.D., President and Chief Executive Officer,
stated, "We finished the year with a strong balance sheet and continue
to focus on ways to drive progress in the CNS disease category. We
have delivered on a number of milestones, namely advancing
Posiphen(TM) into Phase I clinical trial and entering our first
licensing agreement for Phenserine. Looking ahead, we remain committed
to creating value for both our development programs and shareholders
through a disciplined approach to evaluating and executing on sound
opportunities."

   Recent Events Update

   --  On February 14, 2006, the Company reported a statistically
        significant reduction in the plasma levels of beta-amyloid
        1-42 (A beta-42) in healthy human subjects treated with
        Phenserine for 35 days in a previously conducted Phase I
        study.

   --  On January 31, 2006, the Company announced that three
        presentations of data on its drug development candidate,
        Phenserine, and one presentation of data on its drug
        development candidate, Posiphen(TM), will be made at the 9th
        International Geneva/Springfield Symposium on Advances in
        Alzheimer Therapy in Geneva, Switzerland, being held April
        19-22, 2006. Phenserine has been in development by the Company
        for the treatment of mild to moderate Alzheimer's disease (AD)
        and Posiphen(TM) is currently in clinical development for the
        treatment of AD progression.

   --  On January 24, 2006, the Company announced the completion of
        the ascending single dose Phase I trial with Posiphen(TM).
        This double-blind, placebo controlled study of Posiphen in
        healthy men and women sought to establish well tolerated
        doses. Posiphen appears to be well tolerated at single doses
        up to and including 80 mg.

   --  On January 4, 2006, the Company announced that it had granted
        to Daewoong Pharmaceutical Company Ltd. (Daewoong) an
        exclusive license for the use of Phenserine in the South
        Korean market. Under the terms of the agreement, Daewoong, at
        its own costs, undertakes to pursue the product development
        and regulatory work necessary for a New Drug Application (NDA)
        (or its equivalent) in South Korea with respect to Phenserine
        for the treatment of AD.

   --  On November 29, 2005, the Company reported the results of an
        additional analysis of a subgroup of patients from its two
        curtailed Phase III clinical trials (AX-CL-09/010) with
        Phenserine. The subgroup of patients, who received Phenserine
        15mg twice daily, demonstrated a statistically significant
        benefit over placebo as measured by the Alzheimer's Disease
        Assessment Scale-cognitive subscale (ADAS-cog), when treated
        for more than 12 weeks. Additionally, this subgroup showed a
        positive trend towards improvement in the Clinical Interview
        Based Impression of Change (CIBIC+) test, which approached
        statistical significance.

   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 AD, namely
Phenserine - a potential symptomatic and disease progression treatment
of mild to moderate 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. The Company is looking to
identify licensing partners to further the development of Phenserine.

   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; 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, or that any such partner will
successfully develop or commercialize any such compound. 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.
-0-
*T

            Condensed Consolidated Statement of Operations


                      Three Months Ended            Year Ended
                         December 31,              December 31,
                     --------------------        ----------------
                       2005         2004         2005         2004
                    ----------- ------------ ------------ ------------
Revenue
  Licensing                                              $    450,000
                  
  Product sales                $    410,000 $    403,000    1,825,000
                   ---------------------------------------------------
Total revenue                       410,000      403,000    2,275,000
Cost of product
 sales                              381,000      210,000    1,167,000
                   ---------------------------------------------------
                                     29,000      193,000    1,108,000

Costs and expenses:
Research and
 development       $ 2,813,000    7,853,000   24,621,000   23,741,000
Sales, general and
 administrative      1,249,000    2,212,000    5,143,000    8,250,000
                   ---------------------------------------------------
                     4,062,000   10,065,000   29,764,000   31,991,000
                   ---------------------------------------------------

Loss from
 operations         (4,062,000) (10,036,000) (29,571,000) (30,883,000)

Interest income        519,000      430,000    2,235,000    1,235,000
Equity in loss of
 OXIS                 (762,000)               (1,017,000)
Gain (loss) on
 issuance of
 subsidiary stock        4,000    1,083,000     (314,000)   1,154,000
Other income                         19,000                    19,000
Financing fees                     (392,000)                 (856,000)
Interest expense                    (13,000)      (2,000)     (51,000)
Loss on foreign
 exchange              (14,000)     (43,000)    (109,000)     (83,000)
                   ---------------------------------------------------

Net loss before
 minority interest
 in subsidiary      (4,315,000)  (8,952,000) (28,778,000) (29,465,000)
                   ---------------------------------------------------

Outside interest in
 loss of subsidiary                 (12,000)     164,000      685,000
                   ---------------------------------------------------
Net loss            (4,315,000)  (8,964,000) (28,614,000) (28,780,000)
                   ---------------------------------------------------

Foreign currency
 translation
 adjustment                          18,000                   (14,000)
                   ---------------------------------------------------
Comprehensive loss $(4,315,000)$ (8,946,000)$(28,614,000)$(28,794,000)
                   ===================================================

Net loss per common
 share - basic and
 diluted                 (0.08)       (0.17)       (0.53)       (0.58)
                   ===================================================

Weighted average
 shares - basic and
 diluted            53,681,000   52,950,000   53,668,000   49,977,000
                   ===================================================


Consolidated Balance Sheets

                                                 December 31,
                                         -----------------------------
                                              2005            2004
                                          ------------    ------------

ASSETS
Current assets:
  Cash and cash equivalents              $  1,638,000    $ 10,091,000
  Investments                              56,700,000      80,500,000
    Accounts receivable                                       229,000
    Stock subscriptions receivable                          2,250,000
  Inventories                                                 246,000
  Other current assets                        614,000         141,000
                                         -----------------------------
    Total current assets                   58,952,000      93,457,000

Property, plant and equipment, net             49,000         116,000
Investment in OXIS                          4,917,000
Technology for developed products, net                      6,807,000
Patents and patents pending, net                              995,000
Security deposits                             124,000          19,000
                                         -----------------------------

                                         $ 64,042,000    $101,394,000
                                         =============================

LIABILITIES
Current liabilities:
  Accounts payable                       $  4,147,000    $  6,365,000
  Accrued expenses                          1,512,000       2,386,000
  Note payable                                                160,000
                                         -----------------------------
    Total current liabilities               5,659,000       8,911,000

Outside interest in OXIS                                    5,945,000


STOCKHOLDERS' EQUITY
Preferred stock - $.001 par value,
 15,000,000 shares authorized; none
 issued
Common stock - $.001 par value,
 150,000,000 and 75,000,000 shares
 authorized as of 2005 and 2004,
 respectively; 53,680,721 and 53,645,518
  shares issued and outstanding in 2005
  and 2004, respectively                       54,000          54,000
Additional paid-in capital                149,466,000     149,150,000
Unearned compensation - stock options         (15,000)       (144,000)
Accumulated comprehensive loss                               (14,000)
Accumulated deficit                       (91,122,000)    (62,508,000)
                                         -----------------------------
     Total stockholders' equity            58,383,000      86,538,000
                                         -----------------------------

                                         $ 64,042,000    $101,394,000
                                         =============================

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