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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
November 15, 2004
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A.P. PHARMA, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 1-16109 94-2875566
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 SAGINAW DRIVE, REDWOOD CITY, CALIFORNIA 94063
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(650) 366-2626
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2.02
On November 15, 2004, the Registrant issued a press release
announcing its third quarter financial results. The press
release is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
ITEM 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated November 15, 2004.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
A.P. PHARMA, INC.
Date: November 15, 2004 By: /S/ Michael O'Connell
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Michael P. J. O'Connell,
President and Chief
Executive Officer
EXHIBIT INDEX
99.1 Press release dated November 15, 2004.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS THIRD QUARTER FINANCIAL RESULTS
APF530 Phase 1 Study Successfully Completed
REDWOOD CITY, Calif. (November 15, 2004) - A.P. Pharma, Inc.
(NASDAQ NM: APPA), a specialty pharmaceutical company, today
reported financial results for the three months ended September
30, 2004, reflecting increased royalty income and contract
revenues as well as higher research and development expense due
to the company's Phase 2 trial with APF112 (mepivacaine) and
Phase 1 trial with APF530 (granisetron).
Current Highlights
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* Total revenues for the third quarter increased 15% to
$1,458,000.
* Royalty income from Carac(TM) and Retin-A Micro(R) grew 10%
compared to third quarter 2003.
* APF530 for the prevention of acute and delayed chemotherapy-
induced nausea and vomiting:
* Pre-clinical toxicology studies and Phase 1 dose-ranging
study in U.K. completed.
* APF530 successfully met its target kinetic profile in
healthy volunteers.
* Clinical plan anticipates Phase 2 clinical study in patients
in early 2005.
* APF112 for the treatment of post-surgical pain:
* Phase 2b clinical study in advanced stage of planning.
* Study to proceed after securing corporate partner or
additional resources.
* Cash, cash equivalents and short-term investments were $15.2
million at September 30, 2004.
Financial Results
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Total revenues for the third quarter of 2004 increased 15% to
$1,458,000, compared with $1,268,000 for the third quarter of
2003. This increase was primarily due to a continuing increase
in royalty income from both Carac, marketed by Dermik
Laboratories, an Aventis company, and Retin-A Micro, marketed by
OrthoNeutrogena, a Johnson & Johnson company. Contract revenues
for reimbursable research and development feasibility studies
also increased primarily due to a collaboration for an ophthalmic
application.
Research and development expense for the third quarter of 2004
increased to $2,656,000 from $1,854,000 for the third quarter of
2003. This increase was mainly due to the cost of the Phase 2
clinical study using APF112 for the treatment of post-surgical
pain, which was completed during the quarter, and a Phase 1 study
using APF530 for the prevention of acute and delayed
chemotherapy-induced nausea and vomiting.
The net loss for the third quarter of 2004 was $1,921,000, or
$0.08 per share, compared with a net loss for the third quarter
of 2003 of $1,058,000, or $0.05 per share.
Cash, cash equivalents and marketable securities were $15.2
million at September 30, 2004.
Clinical Update
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The Phase 1 study was recently completed in the U.K. in healthy
volunteers with three doses of APF530 for the prevention of acute
and delayed chemotherapy-induced nausea and vomiting.
Preliminary results indicate that APF530 successfully met its
target kinetic profile in healthy volunteers. At the highest
dose, the product showed meaningful plasma levels within 1 hour
post dosing and these were maintained for up to 4 days. The
company believes that meeting target plasma levels is a critical
step prior to establishing efficacy in the treatment of acute and
delayed chemotherapy-induced nausea and vomiting. In addition,
the escalating doses led to predicted increases in plasma levels
of granisetron. A regulatory submission to the FDA is planned
for early in 2005 and the company expects to initiate pivotal
studies later in 2005.
A Phase 2b clinical study using APF112 for the treatment of post-
surgical pain is in the advanced stages of planning. However,
due to the current and anticipated demands on resources for the
planned clinical program with APF530, the company will delay the
start of further studies with APF112 until a partner or
additional resources have been secured.
Conference Call
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Management will be hosting an investment community conference
call beginning at 11:00 a.m. Eastern Time (8:00 a.m. Pacific
Time) today to discuss the financial results, further details on
the clinical trial results and to answer questions.
To participate in the live call by telephone, please dial (888)
803-8275 from the U.S. or (706) 634-1287 from outside the U.S. A
telephone replay will be available for 48 hours by dialing (800)
642-1687 from the U.S. or (706) 645-9291 from outside the U.S.,
and entering reservation number 1565399.
Individuals interested in listening to the conference call via
the Internet may do so by visiting www.appharma.com. A replay
will be available on the Company's Web site for 30 days.
About A.P. Pharma
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A.P. Pharma is a specialty pharmaceutical company focused on the
development of ethical (prescription) pharmaceuticals utilizing
its proprietary polymer-based drug delivery systems. The
Company's primary focus is the development and commercialization
of its bioerodible injectable and implantable systems under the
trade name Biochronomer(TM). Initial target areas of application
for the Company's drug delivery technology include pain
management, anti-nausea, inflammation and ophthalmic
applications. The Company's product development programs are
funded by the sale of common stock in June 2004, royalties from
topical products currently marketed by pharmaceutical partners,
proceeds from the divestitures of its cosmeceutical and
analytical standards product lines and by fees it receives from
collaborative partners. For further information visit the
Company's web site at www.appharma.com.
Forward-looking Statements
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Except for historical information, this news release contains
certain forward-looking statements that involve risks and
uncertainties including, among others, uncertainty associated
with timely development, approval, launch and acceptance of new
products, satisfactory completion of clinical studies,
establishment of new corporate alliances and progress in research
and development programs. Other risks and uncertainties
associated with the Company's business and prospects are
identified in the Company's filings with the Securities and
Exchange Commission. The Company does not undertake to revise
these forward-looking statements to reflect events or
circumstances occurring in the future.
Investor Relations Contacts: Company Contact:
Lippert/Heilshorn & Associates Gordon Sangster
Zachary Bryant (zbryant@lhai.com) Chief Financial Officer
Jody Cain (jcain@lhai.com) (650) 366-2626
Bruce Voss (bvoss@lhai.com)
(310) 691-7100
(Financial tables follow)
A.P. Pharma, Inc.
Statement of Operations Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
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Royalties $ 1,258 $ 1,149 $ 3,515 $ 3,211
Contract Revenues 200 119 407 279
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Total Revenues 1,458 1,268 3,922 3,490
Operating Expenses:
Research & Development 2,656 1,854 8,655 6,391
General & Administrative 760 649 2,245 2,193
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Total Operating Expenses 3,416 2,503 10,900 8,584
Operating Loss (1,958) (1,235) (6,978) (5,094)
Interest Income and Other, Net 71 220 149 350
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Loss from Continuing Operations (1,887) (1,015) (6,829) (4,744)
Gain (Loss) on Disposition of
Discontinued Operations (34) (43) (135) 1,759
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Net Loss ($1,921) ($1,058) ($6,964) ($2,985)
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Basic and Diluted Loss per
Common Share:
Loss from Continuing Operations ($0.08) ($0.05) ($0.31) ($0.23)
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Net Loss ($0.08) ($0.05) ($0.31) ($0.15)
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Shares used in Calculating Loss
per Share:
Basic and Diluted 24,936 20,571 22,212 20,527
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A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
September 30, 2004 December 31,
(Unaudited) 2003
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Assets
Cash, Cash Equivalents and Marketable
Securities $15,247 $ 9,484
Accounts Receivable, Net 1,238 1,340
Other Current Assets 500 434
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Total Current Assets 16,985 11,258
Property, Plant & Equipment, Net 1,313 1,430
Other Non-Current Assets 281 467
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Total Assets $18,579 $13,155
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Liabilities and Shareholders' Equity
Current Liabilities $ 2,252 $ 1,892
Shareholders' Equity 16,327 11,263
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Total Liabilities and Shareholders'
Equity $18,579 $13,155
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