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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 7, 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 November 7, 2003.
ITEM 12. Results of Operations and Financial Condition.
The following information is disclosed pursuant to Item 12 of
Form 8-K:
On November 7, 2003, the Registrant issued a press release
announcing its financial results for the fiscal quarter ended
September 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: November 7, 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 November 7, 2003.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS THIRD QUARTER RESULTS
- APF112 Phase II Clinical Trial Initiated -
- Royalty Income Increases 23% Over Q3 2002 -
REDWOOD CITY, Calif. (November 7, 2003) - A.P. Pharma, Inc. (NASDAQ NM: APPA),
a specialty pharmaceutical company, today reported financial results for the
three months ended September 30, 2003, reflecting increased royalty income and
contract revenues.
Current Highlights
- ------------------
- Phase II study using APF112 for the treatment of pain following inguinal
hernia procedures has been initiated.
- IND for surgical/orthopedic indication follow-on product candidate targeted
to be filed in early 2004.
- Third quarter royalty income increased 23% to $1,149,000 over the year-ago
period driven primarily by continued growth of Retin-A Micro(R).
- Carac formulation patent extended to 2021, increasing expected life of
royalty stream.
- Feasibility studies continue in the areas of ophthalmology, device coatings
and DNA; new studies being initiated.
- Cash, cash equivalents and short-term investments were $11 million at
September 30, 2003 compared with $14 million at December 31, 2002.
Third Quarter Financial Results
- -------------------------------
A.P. Pharma reported that total revenues for the third quarter of 2003
increased 22% to $1,268,000, compared with $1,041,000 for the third quarter of
2002. This was primarily due to a continuing increase in royalty income from
Retin-A Micro marketed by Neutrogena, a Johnson and Johnson company, and
Carac, marketed by Dermik Laboratories, an Aventis company. Total revenues
also included an increase in contract revenues for research and development
work performed in connection with feasibility studies conducted for corporate
collaborators.
Research and development expense for the third quarter of 2003 decreased to
$1,854,000 from $1,874,000 for the third quarter of 2002. The Company has
completed extensive preclinical studies for APF112, its product candidate for
post-surgical pain, and work relating to Phase II clinical trials is now
underway at several sites, including patient enrollment. The Company is also
planning to file an IND for a second product candidate early in 2004.
The loss from continuing operations for the third quarter of 2003 was
$1,015,000, or $0.05 per share, compared with a loss from continuing
operations of $1,339,000, or $0.07 per share, in the third quarter of 2002.
The net loss for the third quarter of 2003 was $1,058,000, or $0.05 per share,
compared with a net loss for the third quarter of 2002 of $1,052,000, or $0.05
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 3414626.
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(TM). Initial target areas of application
for the Company's drug delivery technology include pain management, anti-
nausea, 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
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Royalties $1,149 $ 935 $3,211 $2,768
Contract Revenues 119 106 279 193
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Total Revenues 1,268 1,041 3,490 2,961
Operating Expenses:
Research & Development 1,854 1,874 6,391 5,243
General & Administrative 649 644 2,193 2,217
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Total Operating Expenses 2,503 2,518 8,584 7,460
Operating Loss (1,235) (1,477) (5,094) (4,499)
Interest Income and Other, Net 220 138 350 516
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Loss from Continuing Operations (1,015) (1,339) (4,744) (3,983)
Gain (Loss) on Disposition of
Discontinued Operations (43) 287 1,759 432
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Net Loss ($1,058) ($1,052) ($2,985) ($3,551)
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Basic and Diluted Loss per Share:
Loss from Continuing Operations ($0.05) ($0.07) ($0.23) ($0.20)
===== ====== ====== ======
Net Loss ($0.05) ($0.05) ($0.15) ($0.17)
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Shares used in Calculating Loss per
Share:
Basic and Diluted 20,571 20,417 20,527 20,393
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A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
September 30, 2003 December 31,
(Unaudited) 2002(1)
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Assets
Cash, Cash Equivalents and
Marketable Securities $11,093 $14,121
Accounts Receivable, Net 1,267 1,340
Assets Held for Sale -- 225
Other Current Assets 393 280
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Total Current Assets 12,753 15,966
Property, Plant & Equipment, Net 1,454 1,626
Other Non-Current Assets 472 189
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Total Assets $14,679 $17,781
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Liabilities and Shareholders' Equity
Current Liabilities $ 2,027 $ 1,977
Long-Term Deferred Revenues 75 345
Shareholders' Equity 12,577 15,459
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Total Liabilities and Shareholders' Equity $14,679 $17,781
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(1) Information derived from audited financial statements.