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) December 31, 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):
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
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[ ]
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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
March
13, 2008, the Registrant issued a press release announcing its financial
results
for the full year and fourth quarter ended December 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 March 13, 2008.
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:
March 13, 2008
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/S/
Gregory Turnbull
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Gregory
Turnbull
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President,
Chief Executive Officer and Chief Financial
Officer
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EXHIBIT
INDEX
99.1 Press
release dated March 13, 2008
News
Release
A.P.
PHARMA REPORTS RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2007
APF530
PHASE 3 TRIAL ENROLLMENT NEARS COMPLETION
REDWOOD
CITY, Calif. (March 13, 2008)
– A.P. Pharma, Inc. (NASDAQ: APPA), a specialty pharmaceutical company,
today reported financial results for its fourth quarter and full year ended
December 31, 2007.
Highlights
Operational:
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·
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APF530 (Prevention
of chemotherapy-induced nausea and vomiting, or
CINV)
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o
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Patient
enrollment nearing completion
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o
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Announcement
of trial results targeted for Q3
2008
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o
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NDA
submission 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 in Q2
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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Plan
initiation of Phase 1 trial in Q2
2008
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·
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CEO
Succession Program
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o
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Active
candidate screening and recruitment
underway
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Financial:
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·
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Cash,
cash equivalents and marketable securities of $35.1 million as
of December
31, 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 fourth quarter was $7.7 million, or $0.25 per share, compared
with a net loss of $5.7 million, or $0.90 per share, for the fourth quarter
of
2006. The greater net loss for the fourth quarter of 2007 was principally
due to
increased activity in the Phase 3 clinical study for our lead product APF530,
as
well as the recognition of contractual severance costs associated with
the
departure of our former chief executive officer.
For
the full year 2007, our net loss was $20.2 million, or $1.04 per share,
compared
with 2006 net income of $5.3 million, or $0.83 per share. The primary
factor contributing to this difference was the recognition in 2006 of a
$23.4
million gain upon the sale of our royalty rights from two out-licensed
products;
in 2007 we recorded a gain of $2.5 million upon attainment of a performance
milestone related to that same royalty sale transaction. The
differential between the two years also reflects higher 2007 expenditure
levels
for the APF530 trial and executive severance costs, as described
above.
Contract
revenues related to the ongoing development program utilizing our proprietary
Biochronomer™ technology with a major animal healthcare company were $131,000 in
the fourth quarter of 2007, and $412,000 for the full year 2007. No
such third party development programs were active in 2006.
About
APF530
Our
lead product candidate using our proprietary Biochronomer technology is
APF530,
which contains granisetron, a drug approved for the prevention of
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 expired on
December 29, 2007. APF530 is designed to provide at least five days
prevention of CINV. In September 2005, we completed a Phase 2
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 results from 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 the second quarter of
2008 on
a protocol that is revised compared with the protocol utilized in our 2004
Phase
2 trial. The previous Phase 2 trial indicated excellent safety and
tolerability, but did not demonstrate 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 second quarter 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 second quarter 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 38668203. 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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(Financial
tables follow)
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A.P.
PHARMA, INC.
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Income
Statement Highlights
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(in
thousands, except per share data)
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||||||||||||||||
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(Unaudited)
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||||||||||||||||
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Three
Months Ended
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Twelve
Months Ended
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December
31,
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December
31,
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December
31,
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December
31,
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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 | $ | 0 | $ | 0 | $ | 0 | ||||||||
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Contract
Revenues
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131 | 0 | 412 | 0 | ||||||||||||
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Total
Revenues
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131 | 0 | 412 | 0 | ||||||||||||
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Operating
Expenses:
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Research
& Development
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6,020 | 4,792 | 19,364 | 15,236 | ||||||||||||
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General
& Administrative
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1,928 | 933 | 4,681 | 3,628 | ||||||||||||
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Total
Operating Expenses
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7,948 | 5,725 | 24,045 | 18,864 | ||||||||||||
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Operating
Loss
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(7,817 | ) | (5,725 | ) | (23,633 | ) | (18,864 | ) | ||||||||
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Interest
Income
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459 | 213 | 1,326 | 1,006 | ||||||||||||
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Gain
on Sale of Interest in Royalties
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0 | 0 | 2,500 | 23,429 | ||||||||||||
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Other
Income (Expense)
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9 | 6 | 7 | (54 | ) | |||||||||||
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Income
(Loss) from Continuing Operations
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(7,349 | ) | (5,506 | ) | (19,800 | ) | 5,517 | |||||||||
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Loss
from Discontinued Operations
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(357 | ) | (59 | ) | (342 | ) | (188 | ) | ||||||||
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Gain
on Disposition of Discontinued Operations
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1 | 18 | 20 | 56 | ||||||||||||
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Income
(Loss) before Income Taxes
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(7,705 | ) | (5,547 | ) | (20,122 | ) | 5,385 | |||||||||
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Tax
Provision
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4 | (119 | ) | (41 | ) | (119 | ) | |||||||||
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Net
Income (Loss)
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$ | (7,701 | ) | $ | (5,666 | ) | $ | (20,163 | ) | $ | 5,266 | |||||
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Basic
Earnings (Loss) Per Common Share:
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Income
(Loss) from Continuing Operations
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$ | (0.24 | ) | $ | (0.87 | ) | $ | (1.02 | ) | $ | 0.87 | |||||
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Net
Income (Loss)
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$ | (0.25 | ) | $ | (0.90 | ) | $ | (1.04 | ) | $ | 0.83 | |||||
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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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$ | (0.24 | ) | $ | (0.87 | ) | $ | (1.02 | ) | $ | 0.87 | |||||
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Net
Income (Loss)
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$ | (0.25 | ) | $ | (0.90 | ) | $ | (1.04 | ) | $ | 0.83 | |||||
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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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30,754 | 6,327 | 19,358 | 6,316 | ||||||||||||
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Diluted
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30,754 | 6,327 | 19,358 | 6,359 | ||||||||||||
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AP
PHARMA, INC.
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Balance
Sheet Highlights
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(in
thousands)
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||||
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December
31, 2007
|
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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$35,062
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$15,522
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Accounts
Receivable, Net
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152
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75
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||
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Other
Current Assets
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582
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609
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Total
Current Assets
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35,796
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16,206
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Property
and Equipment, Net
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1,079
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958
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Other
Non-Current Assets
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75
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87
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Total
Assets
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$36,950
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$17,251
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Liabilities
and Stockholders' Equity
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||||
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Total
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$7,476
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$5,192
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Stockholders'
Equity
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29,474
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12,059
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||
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Total
Liabilities and Stockholders' Equity
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$36,950
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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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