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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 2, 2005
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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 Results of Operations and Financial Condition
On November 2, 2005, the Registrant issued a press release
announcing its financial results for the fiscal quarter ended
September 30, 2005. 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 2, 2005.
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 2, 2005 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 2, 2005.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS THIRD QUARTER RESULTS
Preparations Underway for Pivotal Clinical Trials with APF530
REDWOOD CITY, Calif. (November 2, 2005) - A.P. Pharma, Inc. (NASDAQ
NM: APPA), a specialty pharmaceutical company, today reported
financial results for the three months ended September 30, 2005.
Recent and Financial Highlights
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* Phase 2 clinical trial using APF530 for the prevention of both
acute and delayed chemotherapy-induced nausea and vomiting (CINV)
was successfully completed, and all primary endpoints were
achieved.
* Preparations for APF530 Phase 3 clinical trials are underway:
o End of Phase 2 meeting with the U.S. Food and Drug
Administration (FDA) has been requested.
o Phase 3 clinical trial protocols being finalized.
o Clinical trial sites in the U.S. being recruited.
* Royalty growth for the third quarter of 2005 was driven by sales
of Carac(R), which increased by 15% compared with the prior year's
third quarter.
* Cash, cash equivalents and marketable securities were $8.1 million
as of September 30, 2005.
Financial Results
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Third quarter 2005 royalties on sales of Carac marketed by Sanofi-
Aventis grew by 15% and royalties on sales of Retin-A Micro(R)
marketed by Johnson & Johnson grew by 3% over the corresponding
quarter of the prior year. Total royalties for the third quarter of
2005 grew by 6% to $1,334,000, compared with $1,258,000 for the third
quarter of 2004. Total revenues for the third quarter of 2005
decreased $121,000 or 8% to $1,337,000, compared with $1,458,000 for
the third quarter for 2004, due to a decrease in contract revenues.
Research and development expense decreased $216,000 or 9% to
$2,306,000 for the third quarter of 2005, compared with $2,522,000
for the third quarter of the prior year. The decrease is primarily
attributable to the higher cost in the prior year of the Phase 2
clinical study using APF112 for the treatment of post-surgical pain,
compared with the cost in the current year of the APF530 Phase 2
clinical study, which was initiated during the second quarter of
2005.
General and administrative expense decreased by $26,000 or 3% to
$868,000 for the third quarter of 2005, compared with $894,000 for
the third quarter of 2004.
The loss from continuing operations in the third quarter of 2005 was
$1,764,000, compared with a loss from continuing operations of
$1,887,000 in the third quarter of 2004. The net loss for the third
quarter of 2005 was $1,744,000, or $0.07 per share, compared with a
net loss of $1,921,000, or $0.08 per share, in the third quarter of
2004.
APF530 Clinical Update
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APF530, which contains the anti-nausea drug granisetron formulated
with the Company's proprietary Biochronomer(TM) bioerodible drug
delivery system, is being developed for the prevention of both acute
and delayed CINV. As reported, the Phase 2 study was completed in
September in patients undergoing moderately and highly emetogenic
chemotherapy for cancer. The primary endpoints, which included an
evaluation of safety, tolerability and pharmacokinetics, were
successfully met. In addition, efficacy endpoints were evaluated
relating to emetic events and the use of rescue medication.
There were no serious adverse events attributed to the APF530
formulation, and injections of APF530 were well tolerated. The
pharmacokinetic evaluation of granisetron in all three dose groups
clearly indicated that measurable plasma levels of granisetron were
evident over a seven day period.
Analysis of the open label efficacy data from the Phase 2 patient
groups receiving either moderately or highly emetogenic chemotherapy
indicated that the percentage of complete responders in the
moderately emetogenic group was 90% in the acute phase and 78% in the
delayed phase. In the group receiving highly emetogenic chemotherapy,
the percentage of complete responders was 81% in the acute phase and
80% in the delayed phase. "Complete response" was defined as no
emetic episodes and no use of rescue medication. Based on the data
generated from the Phase 2 study, two dose levels of APF530 have been
selected and preparations are well underway to initiate Phase 3
clinical trials.
An end of Phase 2 meeting with the FDA has been requested to review
the final Phase 2 data, finalize the Phase 3 clinical trial protocols
and initiate the Phase 3 trials.
The Phase 3 clinical trial protocols have been designed to be an
observer-blinded, randomized clinical trial of efficacy and safety of
APF530 administered by subcutaneous injection compared with
palonosetron (Aloxi(R)) and with granisetron (Kytril(R)) by
intravenous administration for the prevention of CINV in patients
receiving either moderately or highly emetogenic chemotherapy
treatments. Clinical sites in the U.S. are currently being recruited
and clinical trial materials are being manufactured in order to be in
a position to initiate the Phase 3 trials as soon as the company
receives ratification from the FDA.
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, provide a business update 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 for international callers. A
telephone replay will be available for 48 hours by dialing (800) 642-
1687 from the U.S., or (706) 645-9291 for international callers, and
entering reservation number 1849954.
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. 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)