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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): August 4, 2003
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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 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
99.1 Press release dated August 4, 2003.
ITEM 12. Results of Operations and Financial Condition.
The following information is disclosed pursuant to Item 12 of
Form 8-K:
On August 4, 2003, the Registrant issued a press release
announcing its financial results for the fiscal quarter ended
June 30, 2003. The press release is attached hereto as Exhibit
99.1 and incorporated herein by reference.
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: August 4, 2003 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 August 4, 2003.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS SECOND QUARTER RESULTS
- APF112 Phase II Clinical Package Submitted for FDA Review -
- Royalty Income Increases 11% Over 2Q 2002 -
REDWOOD CITY, Calif. (August 4, 2003) - A.P. Pharma, Inc. (NASDAQ NM:
APPA), a specialty pharmaceutical company, today reported financial
results for the three months ended June 30, 2003, reflecting increased
royalty income and contract revenues as well as higher research and
development expenses as the Company prepares to initiate a Phase II
clinical trial with APF112.
Current Highlights
- ------------------
- Second quarter royalty income increased 11% to $1,031,000.
- Extensive Biochronomer(R) and APF112 safety studies completed.
- APF112 Phase II clinical study protocol and preclinical safety
package submitted to the FDA.
- Inguinal hernia Phase II study planned to be initiated in 3Q 2003;
clinical sites selected.
- Feasibility studies continue in the areas of ophthalmology, coatings
and DNA; new studies being initiated.
- Cash, cash equivalents and short-term investments were $12.1 million
at June 30, 2003 compared with $14.1 million at December 31, 2002.
Second Quarter Financial Results
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A.P. Pharma reported that total revenues for the second quarter of 2003
increased 15% to $1,117,000, compared with $968,000 for the second
quarter of 2002, primarily due to a continuing increase in royalty
income from Retin-A Micro(R) marketed by Neutrogena, a Johnson and
Johnson company. Total revenues also included an increase in contract
revenues for research and development work performed in connection with
feasibility studies.
Research and development expense for the second quarter of 2003
increased to $2,335,000 from $1,872,000 for the second quarter of 2002.
This increase was due mainly to the cost of Biochronomer studies which
were designed to demonstrate the biocompatibility of the polymer, and
APF112 preclinical safety studies using the enhanced APF112 formulation
for the treatment of post-surgical pain as part of a plan agreed in
discussions with the U.S. Food and Drug Administration (FDA). In
addition, costs associated with the manufacture of GMP product for
human clinical trials were incurred. A comprehensive Phase II clinical
package has been submitted to the FDA for review and the Company plans
to initiate human clinical trials in inguinal hernia patients during
the third quarter of 2003. The Company is also planning to file an IND
for a second product candidate early in 2004.
The net loss for the second quarter of 2003 was $1,960,000, or $0.10
per share, compared with a net loss for the second quarter of 2002 of
$1,493,000, or $0.07 per share.
Conference Call Information
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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 this announcement and to answer questions.
To participate in the live call by telephone, please dial (888) 803-
8275 from the U.S., and (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 1702289.
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.
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.
Initial target areas of application for the Company's drug delivery
technology include pain management, inflammation, oncology and
ophthalmology applications. The Company's product development programs
are funded by royalties from topical products currently marketed by
pharmaceutical partners, by 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,
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:
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Lippert/Heilshorn & Associates Gordon Sangster
Jody Cain (jcain@lhai.com) Chief Financial Officer
Bruce Voss (bvoss@lhai.com) (650) 366-2626
(310) 691-7100
(Financial tables follow)
A.P. Pharma, Inc.
Income Statement Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
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Royalties $1,031 $930 $2,063 $1,833
Contract Revenues 86 38 160 86
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Total Revenues 1,117 968 2,223 1,919
Operating Expenses:
Research & Development 2,335 1,872 4,537 3,369
General & Administrative 766 813 1,544 1,573
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Total Operating Expenses 3,101 2,685 6,081 4,942
Operating Loss (1,984) (1,717) (3,858) (3,023)
Interest Income and Other, Net 54 175 129 379
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Loss from Continuing Operations (1,930) (1,542) (3,729) (2,644)
Gain (Loss) on Disposition of
Discontinued Operations (30) 49 1,802 145
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Net Loss ($1,960) ($1,493) ($1,927) ($2,499)
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Basic and Diluted Loss per Share:
Loss from Continuing Operations ($0.09) ($0.08) ($0.18) ($0.13)
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Net Loss ($0.10) ($0.07) ($0.09) ($0.12)
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Shares used in Calculating Loss per Share:
Basic and Diluted 20,535 20,403 20,505 20,381
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A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
June 30, 2003 December 31,
(Unaudited) 2002(1)
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Assets
Cash, Cash Equivalents and
Marketable Securities $12,075 $14,121
Accounts Receivable, Net 1,341 1,340
Assets Held for Sale -- 225
Other Current Assets 511 280
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Total Current Assets 13,927 15,966
Property, Plant & Equipment, Net 1,505 1,626
Other Non-Current Assets 477 189
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Total Assets $15,909 $17,781
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Liabilities and Shareholders' Equity
Current Liabilities $2,156 $1,977
Long-Term Deferred Revenues 145 345
Shareholders' Equity 13,608 15,459
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Total Liabilities and Shareholders' Equity $15,909 $17,781
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(1) Information derived from audited financial statements.