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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): May 10, 2006
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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 May 10, 2006, the Registrant issued a press release
announcing its financial results for the first quarter ended
March 31, 2006. The press release is attached hereto as Exhibit
99.1.
The information in this Current Report on Form 8-K, including
the exhibit, is furnished pursuant to Item 2.02 and shall not be
deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the
liabilities under that Section. Furthermore, the information in
the Current Report on Form 8-K, including the exhibit, shall not
be deemed to be incorporated by reference into the filings of the
Company under the Securities Act of 1933, as amended.
ITEM 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated May 10, 2006.
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: May 10, 2006 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 May 10, 2006.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS 2006 FIRST QUARTER RESULTS
- Phase 3 Clinical Trial for APF530 Initiated -
REDWOOD CITY, Calif. (May 10, 2006) - A.P. Pharma, Inc. (NASDAQ NM:
APPA), a specialty pharmaceutical company, today reported financial
results for the three months ended March 31, 2006.
Recent and Financial Highlights
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* Royalty interests sold for up to $30 million; $25 million cash
received at closing.
* APF530 Phase 3 clinical trial protocol finalized following FDA
input
* IRB approval received and initiation of sites begun.
* Enrollment expected to be completed by year's end.
* Study will enroll approximately 1,350 patients who are being
treated with either highly or moderately emetogenic chemotherapy.
Financial Results
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During the quarter, the Company completed the sale of its interests
in royalties on sales of Retin-A Micro(R) and Carac(R) effective
October 1, 2005. The company received $25 million at the closing of
the transaction and is entitled to receive an additional $5 million
on the satisfaction of certain predetermined milestones. As a result
of the sale, no royalty revenues were recorded for the first quarter
of 2006 compared with $1,282,000 in royalty revenues for the first
quarter of the prior year.
Research and development expense was $3,469,000 for the first quarter
of 2006, an increase of 90% compared with $1,822,000 in the prior
year first quarter. Higher research and development expense in the
2006 quarter reflects preparations for the Phase 3 clinical trial for
APF530 which has recently been initiated, as announced on April 27,
2006.
General and administrative expense was $932,000 for the first quarter
of 2006, an increase of 10% compared with $849,000 in the prior year
first quarter, due primarily to increased legal and consulting fees.
The Company recorded a gain on the sale of its interests in royalties
from sales of Retin-A Micro and Carac of $23,421,000 in the first
quarter of 2006.
Income from continuing operations was $19,292,000 for the first
quarter of 2006, compared with a loss from continuing operations of
$1,250,000 in the prior year quarter. Net income for the first
quarter of 2006 was $19,299,000, or $0.76 per fully diluted share,
compared with a net loss for the first quarter of 2005 of $1,256,000,
or $0.05 per share.
Cash, cash equivalents and marketable securities totaled $26,172,000
as of March 31, 2006.
Clinical Update
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As reported on April 27, 2006, the Company initiated a Phase 3
clinical trial using APF530, its product candidate for the prevention
of chemotherapy-induced nausea and vomiting (CINV) in patients
undergoing either moderately or highly emetogenic chemotherapy.
APF530 contains the 5HT3 antagonist anti-nausea drug granisetron
formulated with the Company's proprietary Biochronomer(TM) drug
delivery system.
The APF530 Phase 3 pivotal trial protocol includes a total of
approximately 1,350 patients with approximately half receiving
moderately emetogenic chemotherapy agents in one group and
approximately half receiving highly emetogenic chemotherapeutic
agents in another group. In each group there will initially be three
arms of approximately 225 patients each; two arms will be treated
with APF530, high and low dose form and a third arm will be treated
with the currently approved dose of palonosetron (brand name
ALOXI(R)). The study's primary endpoint is to establish the efficacy
of APF530 for the prevention of acute onset (first 24 hours) and
delayed onset (4-5 days) CINV in patients receiving either moderately
or highly emetogenic chemotherapy. No other 5HT3 antagonist is
currently approved for the prevention of both acute and delayed CINV
for both moderately and highly emetogenic chemotherapy.
Conference Call
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As noted during the conference call on March 15, 2006 for year-end
results, the Company will not hold a conference call to discuss
first quarter 2006 results. The Company expects to hold conference
calls in the future to provide updates on the progress of the APF530
Phase 3 clinical trial.
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 anti-nausea, pain management, anti-
inflammation and DNA/RNAI applications. 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
Zach Bryant (zbryant@lhai.com) Chief Financial Officer
Don Markley (dmarkley@lhai.com) (650) 366-2626
Bruce Voss (bvoss@lhai.com)
(310) 691-7100
(Financial tables follow)
A.P. PHARMA, INC.
Income Statement Highlights
(in thousands, except per share data)
(Unaudited)