Company to Raise $8.1 Million to Fund NDA Stage Program
REDWOOD CITY, Calif.--(BUSINESS WIRE)--Oct. 20, 2009--
A.P. Pharma (Nasdaq:APPA), a specialty pharmaceutical company, today
announced it has entered into a definitive securities purchase agreement
with certain existing accredited investors providing for a private
placement of up to $13.1 million in two tranches, the first consisting
of common stock and warrants with aggregate proceeds of approximately
$8.1 million, and a second tranche of common stock with proceeds of
approximately $5 million.
A.P. Pharma expects to complete the first tranche of the private
placement on October 22, 2009, subject to the satisfaction of customary
closing conditions. Pursuant to the terms of the securities purchase
agreement, the Company will sell approximately 8.0 million shares of
common stock at $0.88 per share, the closing price on the date of
signing the securities purchase agreement, October 19, 2009. The
purchasers of the common stock at the first closing will also receive
warrants to purchase approximately 4.0 million shares of common stock,
exercisable through January 7, 2015 for an exercise price of $0.88 per
share. The purchasers will pay $0.125 per underlying share for the
warrants at the first closing. The securities purchase agreement also
provides, under certain conditions, for the purchasers in the first
closing to have the right to purchase up to 5.2 million shares of common
stock at $0.97 per share prior to May 14, 2010. At the closing of the
first tranche, the purchasers will pay $0.125 per underlying share for
the right to purchase shares in the second tranche.
A.P. Pharma plans to use the proceeds from the offering to support the
Company’s operations and manufacturing, development and regulatory
activities needed to gain approval for APF530, its lead product
candidate. The U.S. Food and Drug Administration (FDA) is currently
reviewing the Company’s New Drug Application (NDA) for APF530, and based
on the Prescription Drug User Fee Act (PDUFA), has issued an action date
of March 18, 2010. APF530 is being developed for the prevention of
chemotherapy-induced nausea and vomiting (CINV) and is a long-acting
formulation of granisetron utilizing the Company’s proprietary
Biochronomer™ drug delivery system.
Participants in the transaction were Baker Brothers Investments (Baker
Brothers), Tang Capital Partners (Tang Capital), Tavistock Life Sciences
and Deerfield Partners. At the time of the first closing, the Company
amended its Preferred Shareholders Rights Agreement to permit an
increase in the beneficial ownership of Tang Capital and Baker Brothers
to 34% and 30%, respectively.
Upon the initial closing, Baker Brothers has the right to designate one
new independent member to A.P. Pharma’s Board of Directors. Following
the second closing, if Baker Brothers purchases its allocated shares in
the second tranche, it will have the right to designate one additional
member to the Board of Directors.
The shares and warrants sold in the private placement and the shares
issuable upon the exercise of the related warrants have not been
registered under the Securities Act of 1933, as amended, or state
securities laws, and may not be offered or sold in the United States
without being registered with the Securities and Exchange Commission
(SEC) or through an applicable exemption from SEC registration
requirements. The shares and warrants were offered and sold only to
accredited investors. The Company has agreed to file a resale
registration statement covering all the shares of the common stock
issued to the investors at the first closing and the shares issuable to
them at the second closing and upon exercise of the warrants, up to the
maximum number of shares permitted to be registered under the federal
securities laws.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of any of
the securities referred to in this news release in any state in which
such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state. Any offering of A.P. Pharma common stock under the resale
registration statements referred to in this news release will be made
only by means of a prospectus.
About A.P. Pharma
A.P. Pharma is a specialty pharmaceutical company developing products
using its proprietary Biochronomer™ polymer-based drug delivery
technology. The Company’s primary focus is on its lead product
candidate, APF530, for the prevention of CINV. The NDA for APF530 was
submitted in May 2009 and accepted for review in July 2009, at which
time the FDA set a PDUFA date of March 18, 2010. The Company has
additional clinical and preclinical stage programs in the area of pain
management, all of which utilize its bioerodible injectable and
implantable delivery systems. For further information, visit the
Company's web site at www.appharma.com.
A.P. Pharma’s Forward-looking Statements
This news release contains "forward-looking statements" as defined by
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve risks and uncertainties, including
uncertainties associated with timely development, approval, launch and
acceptance of new products, satisfactory completion of clinical studies,
establishment of new corporate alliances, progress in research and
development programs and other risks and uncertainties identified in the
Company's filings with the Securities and Exchange Commission. We
caution investors that forward-looking statements reflect our analysis
only on their stated date. We do not intend to update them except as
required by law.
Source: A.P. Pharma
A.P. Pharma, Inc.
John B. Whelan, 650-366-2626 (Corporate Contact)
Vice
President, Finance and Chief Financial Officer
or
Corporate
Communications Alliance, LLC
Edie DeVine, 209-814-9564 (Investors
and Media)
