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) November 13,
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 principal 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)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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INFORMATION
TO BE INCLUDED IN THE REPORT
ITEM
2.02 Results of Operations and Financial Condition
On
November 13, 2007, the Registrant issued a press release announcing its
financial results for the second quarter ended September 30,
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 November 13, 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:
November13, 2007
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/S/
Michael O’Connell
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Michael
O’Connell
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Chief
Financial Officer and Chief Operating
Officer
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EXHIBIT
INDEX
99.1 Press
release dated November 13, 2007
Exhibit
99.1
News
Release
A.P.
PHARMA REPORTS THIRD QUARTER FINANCIAL RESULTS
Company
Confirms Program Development Plans for 2008
REDWOOD
CITY, Calif. (November 13, 2007) – A.P. Pharma, Inc. (NASDAQ: APPA), a
specialty pharmaceutical company, today reported financial results for its
third
quarter ended September 30, 2007.
Highlights
Operational:
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·
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APF530 (Prevention
of CINV)
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o
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Patient
enrollment continues towards completion by Spring
2008
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o
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Trial
results targeted for Q3 2008
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o
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NDA
filing planned for late 2008
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·
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APF112 (Post-surgical
pain relief)
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o
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Preclinical
work proceeding currently
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o
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Anticipate
initiation of Phase 2b trial first half
2008
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·
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APF580 (Intense
pain relief)
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o
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Progressing
towards IND submission
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o
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Anticipate
initiation of Phase 1 trial first half
2008
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Financial:
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·
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Cash,
cash equivalents and marketable securities $39.8 million as of
September
30, 2007
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·
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Sufficient
capital to complete APF530 clinical trial and initiate new clinical
programs
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Results
of Operations
Our
net
loss for the third quarter was $4.7 million, or $0.15 per share, compared
with a
$3.8 million net loss, or $0.60 per share, for the third quarter of 2006.
Our
increased net loss for the third quarter was primarily due to increased activity
in our Phase 3 clinical study for our lead product APF530, as well as activities
related to new and revised product development programs.
Total
operating expense in the third quarter of 2007 increased to $5.4 million,
compared with $3.9 million in the third quarter of 2006, as a result of
increased patient recruitments in our ongoing CINV Phase 3 clinical trial
and
the initiation of new product development programs. Research and development
costs for the third quarter increased to $4.6 million, compared with $3.1
million in the third quarter of 2006. General and administrative costs declined
to $762,000, compared with $830,000 in the third quarter of 2006.
Contract
revenues for the third quarter of 2007 were $121,000 related to the ongoing
development program utilizing our proprietary Biochronomer™ technology with a
major animal healthcare company. No third party development programs
were undertaken in 2006.
Interest
income for the third quarter 2007 increased to $0.6 million, compared with
$0.2
million for the third quarter of 2006, as a result of increased cash balances
following the public offering completed in second quarter of 2007.
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 (CINV). We selected granisetron because it is a
potent drug that blocks a specific receptor found in the gut that is responsible
for triggering CINV. Additionally, the applicable granisetron U.S.
patent expires 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 multi-center,
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.
About
APF112
APF112
utilizes our Biochronomer delivery technology to target post-surgical pain
relief. The product is designed to provide up to 36 hours of
localized pain relief by delivering mepivacaine directly to the surgical
site. Mepivacaine is a well-known, short-acting local anesthetic with
an excellent safety profile. APF112 is designed to prolong the
anesthetic effect of mepivacaine, thereby minimizing or eliminating the use
of
opiates.
We
intend
to complete additional preclinical work in 2007 on a revised protocol from
that
which was utilized in our 2004 Phase 2 trial. The previous Phase 2
trial indicated excellent safety and tolerability, but did not produce a
significant difference between APF112 and the standard of care, wherein the
latter showed significantly lower pain scores than exhibited in previously
published studies. Our plan is to initiate a Phase 2b clinical trial
of APF112 in the first half of 2008 utilizing this revised
protocol.
About
APF580
APF580
incorporates an opiate into our Biochronomer technology, and is designed
to
provide analgesia lasting up to seven days by a single injection. It
is targeted for situations where the intensity and duration of pain require
use
of an opiate rather than a local anesthetic. APF580 may find use in
acute and chronic pain settings, improve patient compliance and reduce the
risk
of drug abuse.
Animal
studies with APF580 are currently being conducted, and data from those studies
are being supplemented with additional preclinical data from an ongoing research
and development agreement with a major animal health company, which is
evaluating APF580 for use in cats and dogs. We plan to initiate a
Phase 1 clinical trial of APF580 in the first half of 2008, and to initiate
a
Phase 2 clinical trial in the fourth quarter of 2008.
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
24168083. 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
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
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
Contacts:
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Lippert/Heilshorn
& Associates
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Gregory
Turnbull
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Don
Markley (dmarkley@lhai.com)
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President
and Chief Executive Officer
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(310)
691-7100
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(650)
366-2626
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Michael
O’Connell
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Chief
Financial Officer and
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Chief
Operating Officer
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(650)
366-2626
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(Financial
tables follow)
A.P.
PHARMA, INC.
Statements
of Operations Highlights
(in
thousands, except per share data)
(Unaudited)
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Three
Months Ended
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Six
Months Ended
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|||||||
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Sept.
30,
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Sept.
30,
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Sept.
30,
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Sept.
30,
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|||||
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2007
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2006
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2007
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2006
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Royalties
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$0
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$0
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$0
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$0
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Contract
Revenues
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121
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0
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280
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0
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||||
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Total
Revenues
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121
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0
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280
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0
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Operating
Expenses:
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Research
& Development
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4,595
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3,118
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13,344
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10,433
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General
& Administrative
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762
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830
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2,753
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2,695
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Total
Operating Expenses
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5,357
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3,948
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16,097
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13,138
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Operating
Loss
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(5,236)
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(3,948)
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(15,817)
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(13,138)
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Interest
Income, Net
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561
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244
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865
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786
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Gain
on Sale of Interest in Royalties
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0
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0
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2,500
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23,429
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Other
Income (Expense)
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(3)
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(49)
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1
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(53)
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Income
(Loss) from Continuing Operations
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(4,678)
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(3,753)
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(12,451)
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11,024
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Income
(Loss) from Discontinued Operations
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0
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(79)
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15
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(130)
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Gain
on Disposition of Discontinued Operations
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1
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15
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18
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38
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Income
(Loss) before Income Taxes
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(4,677)
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(3,817)
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(12,418)
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10,932
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Tax
Provision
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(8)
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0
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(44)
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0
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Net
Income (Loss)
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($4,685)
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($3,817)
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($12,462)
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$10,932
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Basic
Earnings (Loss) Per Common Share:
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||||||||
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Income
(Loss) from Continuing Operations
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($0.15)
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($0.59)
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($0.80)
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$1.75
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Net
Income (Loss)
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($0.15)
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($0.60)
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($0.80)
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$1.73
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Diluted
Earnings (Loss) Per Common Share:
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||||||||
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Income
(Loss) from Continuing Operations
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($0.15)
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($0.59)
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($0.80)
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$1.73
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||||
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Net
Income (Loss)
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($0.15)
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($0.60)
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($0.80)
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$1.72
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Shares
Used in Calculating Earnings (Loss) Per Share:
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||||||||
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Basic
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30,736
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6,319
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15,553
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6,312
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Diluted
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30,736
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6,319
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15,553
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6,359
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A.P. PHARMA, INC.
Balance
Sheet Highlights
(in
thousands)
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Sept.
30, 2007
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December
31, 2006
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|||
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(Unaudited)
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(1)
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|||
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Assets
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||||
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Cash,
Cash Equivalents and Marketable Securities
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$39,789
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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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||
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Other
Current Assets
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853
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609
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Total
Current Assets
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40,757
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16,206
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||
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Property
and Equipment, Net
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794
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958
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||
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Other
Non-Current Assets
|
75
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87
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Total
Assets
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$41,636
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$17,251
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||
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Liabilities
and Stockholders' Equity
|
||||
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Total
Liabilities
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$4,558
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$5,192
|
||
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Stockholders'
Equity
|
37,078
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12,059
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||
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Total
Liabilities and Stockholders' Equity
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$41,636
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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
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Company's
2006 Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
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