UNITED
STATES
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 8, 2007
A.P.
Pharma, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-16109
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94-2875566
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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123
Saginaw Drive
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Redwood
City CA
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94063
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(Address
of prinicipal executive offices)
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(Zip
Code)
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Registrant's telephone number, including area
code (650) 366-2626
N/A
(Former
name
or former address, if changed since last report)
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2.
below):
[
] Written communications pursuant
to Rule 425 under the
Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant
to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
INFORMATION
TO BE INCLUDED IN THE REPORT
ITEM 2.02 Results of Operations and
Financial Condition
On May 8, 2007, the Registrant issued a press
release announcing its financial results for the first quarter ended March
31,
2007. The press release is attached 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 8, 2007.
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.
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A.P.
PHARMA, INC.
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Date:
May 8, 2007
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/S/
Stephen C. Whiteford
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Stephen
C. Whiteford
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Vice
President, Finance and Chief Financial
Officer
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EXHIBIT
INDEX
99.1 Press release dated May 8,
2007
Exhibit
99.1
News
Release
A.P.
PHARMA REPORTS RESULTS FOR THE FIRST QUARTER 2007; UPDATES PROGRESS OF APF530
PROGRAM
REDWOOD
CITY, Calif. (May 8, 2007) – A.P. Pharma, Inc. (NASDAQ: APPA), a
specialty pharmaceutical company, today reported financial results for its
first
quarter ended March 31, 2007.
Highlights
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·
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APF530
Development:
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-
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Patient
enrollment rates remain steady and lead to an NDA filing in
2008
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-
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Held
successful Clinical Investigators
meeting
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·
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Filed
an S-1 registration statement to raise additional capital of up
to $28.8
million.
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·
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Cash,
cash equivalents and marketable securities $9.4 million at March
31.
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Results
of Operations
In
this
news release, the “Company”, “we”, “us”, and “our” refer to A.P. Pharma,
Inc.
We
have
generated no revenue since the fourth quarter of 2005, when we sold our rights
to receive royalties on certain former products. Accordingly, our
total operating expenses of $6.1 million this quarter vs. $4.4 million in
the
first quarter of 2006 are directly reflected as operating losses. Our
research and development (“R&D”) expenses increased by 44%, from $3.5
million to $5.0 million, reflecting higher costs associated with our pivotal
Phase 3 trial for APF530, which we began in the second quarter of
2006. In the first quarter of 2006, our R&D expense
reflected costs associated with our lower cost Phase 2 study for
APF530. Our general and administrative expenses increased by 20% to
$1.1 million, primarily due to legal expenses associated with our current
fund
raising activities. In total, our operating loss widened by $1.7
million to $6.1 million from $4.4 million.
Following
interest income of $148,000 and certain smaller items below our operating
loss
line, which netted to a charge against income of $44,000, we reported a net
loss
of $6.0 million or 24 cents per share. In last year’s first quarter,
we recorded a gain of $23.4 million on the sale of our rights to receive
royalties on former products. As a result, we reported net income of $19.3
million or 76 cents per share. (All references to per share are to
diluted amounts)
Operations
Update
In
December we announced that because of the extended timeline for patient
enrollment, we now expect to file the New Drug Application (NDA) for APF530
in
2008, assuming successful completion of
our
financing plans. Currently APF530 is in pivotal Phase 3 clinical
trials, with more than 80% of the planned 80 clinical sites for the trial
now
active, following the closure of several previously established sites that
were
deemed nonproductive. Patient enrollment in the trial continues at a
steady pace. We recently completed a clinical investigators’ meeting
to address the complexity of our study and to stimulate patient
enrollment. Over 80% of the sites were represented. We
believe that one of the outcomes of this meeting will be enhanced involvement
and enthusiasm of participating centers, which will lead to improved patient
enrollment rates.
On
April
5, 2007, we filed with the Securities and Exchange Commission (the “SEC”) a
registration statement on Form S-1 for a proposed public offering of up to
$28.8
million of our common stock. We plan to use the proceeds from this
offering to complete the clinical development of APF530, the development
and
clinical testing of other product candidates, and for working capital, capital
expenditures and general corporate purposes.
About
APF530
Our
lead
product candidate using our proprietary Biochronomer™ technology is APF530,
which contains granisetron, a drug approved for the prevention of
chemotherapy-induced nausea and vomiting, or CINV. We selected
granisetron because it is a potent drug which blocks a specific receptor
found
in the gut that is responsible for triggering CINV. Additionally, the
applicable granisetron patent will expire in the United States on December
29,
2007. APF530 is designed to provide at least five days prevention of
CINV. In September 2005, we completed a Phase 2 human clinical trial
of APF530 that achieved all of its primary and secondary
endpoints. In May 2006, we initiated our pivotal Phase 3 clinical
trial of AFP530. We believe that this clinical trial will lead to regulatory
approval of APF530 for the prevention of acute and delayed onset CINV for
patients undergoing both moderately and highly emetogenic, or vomit-inducing,
chemotherapy.
Our
pivotal Phase 3 clinical trial, initiated in May 2006, is a multicenter,
randomized, observer-blind, actively-controlled, double-dummy, parallel group
study that will compare the efficacy of APF530 with Aloxi®. The trial will
include approximately 1,350 patients, stratified in two groups, one receiving
moderately and the other receiving highly emetogenic chemotherapeutic agents.
In
each group, the patients are randomized to receive in the first chemotherapy
treatment cycle either APF530 high dose (10 mg), APF530 low dose (5 mg) or
the
currently approved dose of Aloxi. In subsequent treatment cycles (up to three
additional cycles), the patients are re-randomized to either of the two APF530
doses.
Market
Assessment
We
commissioned Timely Data Resources, Inc., or TDR, to conduct market research
to
determine oncologists’ and oncology nurses’ perceptions of current antiemetics
for CINV. This survey, completed in August 2006, was intended to assess the
market opportunity for APF530 for the prevention of CINV. TDR interviewed
75
randomly selected medical oncologists and 25 oncology nurses from across
the
United States. The survey concluded that there is significant unmet need
in the
treatment of CINV, especially delayed onset CINV. 84% of the surveyed
oncologists and oncology nurses currently use Aloxi and continue to have
patients who experience CINV, particularly delayed onset CINV.
Conference
call
Management
will host an investment-community conference call today beginning at 11:00
a.m.
Eastern time (8:00 a.m. Pacific time) to discuss the financial results, to
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 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
6645110. The call will also be broadcast live on A.P. Pharma’s
website, www.appharma.com. A replay will be available for 30
days.
About
A.P. Pharma
We
are a
specialty pharmaceutical company focused on developing pharmaceutical products
using our proprietary Biochronomer polymer-based drug delivery technology.
Our
product development philosophy is based on incorporating approved therapeutics
into our proprietary bioerodible drug delivery technology to create controlled
release pharmaceuticals to improve treatments for diseases or conditions.
Our
lead product candidate, APF530, is currently in a pivotal Phase 3 clinical
trial
for the prevention of acute and delayed onset chemotherapy-induced nausea
and
vomiting, or CINV. We expect to complete enrollment of our pivotal Phase
3
clinical trial in the first half of 2008 and to announce results of that
trial
in the third quarter of 2008. We expect to file our new drug
application, or NDA, for approval of APF530 in the fourth quarter of
2008.
Our
primary focus is to advance our proprietary Biochronomer technology, consisting
of bioerodible polymers designed to release drugs over a defined period.
We have
completed over 100 in vivo and in vitro studies demonstrating that our
Biochronomer technology is potentially applicable to a range of therapeutic
areas, including pain management, prevention of nausea and vomiting, control
of
inflammation and treatment of ophthalmic diseases. We have also completed
comprehensive animal and human toxicology studies that have established that
our
Biochronomer polymers are safe and well tolerated. Furthermore, our Biochronomer
technology can be designed to deliver drugs over periods varying from days
to
several months.
Forward-looking
Statements
This
news
release contains “forward-looking statements” as defined by the Private
Securities 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.
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Investor
Relations Contacts:
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Company
Contact:
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Lippert/Heilshorn
& Associates
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Gregory
Turnbull
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Zack
Bryant (zbryant@lhai.com)
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President
and
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Don
Markley (dmarkley@lhai.com)
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Chief
Executive Officer
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Bruce
Voss (bvoss@lhai.com)
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(650)
366-2626
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(310)
691-7100
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(Financial
tables follow)
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A.P.
PHARMA, INC.
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Statement
of Operations Highlights
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(in
thousands, except per share data)
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(Unaudited)
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Three
Months Ended
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March
31,
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March
31,
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2007
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2006
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Revenue
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$ -
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$ -
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Operating
Expenses:
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Research
& Development
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4,987
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3,469
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General
& Administrative
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1,118
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932
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Total
Operating Expenses
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6,105
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4,401
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Operating
Loss
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(6,105)
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(4,401)
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Interest
Income, Net
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148
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262
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Gain
on Sale of Interest in Royalties
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-
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23,421
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Other
Income, Net
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-
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10
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Income
(Loss) from Continuing Operations
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(5,957)
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19,292
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Loss
from Discontinued Operations
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(24)
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-
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Gain
on Disposition of Discontinued Operations
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16
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7
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Income
(Loss) before Income Taxes
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(5,965)
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19,299
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Tax
Provision
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36
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-
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Net
Income (Loss)
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$ (6,001)
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$ 19,299
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Diluted
Earnings (Loss) Per Common Share:
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Income
(Loss) from Continuing Operations
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$ (0.24)
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$ 0.76
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Net
Income (Loss)
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$ (0.24)
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$ 0.76
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Shares
used in Calculating Diluted Earnings
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(Loss)
Per Share:
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25,324
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25,483
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A.P.
PHARMA, INC.
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Balance
Sheet Highlights
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(in
thousands)
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March
31, 2007
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December
31, 2006
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(unaudited)
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(1)
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Assets
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Cash,
Cash Equivalents and Marketable Securities
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$ 9,362
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$ 15,522
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Accounts
Receivable, Net
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125
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75
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Other
Current Assets
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522
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609
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Total
Current Assets
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10,009
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16,206
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Property
and Equipment, Net
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883
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958
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Other
Non-Current Assets
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70
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87
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Total
Assets
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$ 10,962
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$ 17,251
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Liabilities
and Stockholders' Equity
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Total
Liabilities
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$ 4,735
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$ 5,192
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Stockholders'
Equity
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6,227
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12,059
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Total
Liabilities and Stockholders' Equity
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$ 10,962
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$ 17,251
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(1)
Derived from our audited financial statements for the year ended
December
31, 2006 included in the Company’s 2006 Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
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#
#
#
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