appa8k032811.htm

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) March 28, 2011

 A.P. Pharma, Inc.
(Exact name of registrant as specified in its charter)

 
         
Delaware
 
001-33221
 
94-2875566
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 
     
123 Saginaw Drive
Redwood City CA
 
94063
(Address of principal executive offices)
 
(Zip Code)
 
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))
 
 
 
 

 
 

 

 
 
ITEM 2.02
  Results of Operations and Financial Condition

On March 28, 2011, A.P. Pharma, Inc. (the “Company”) reported its results of operations for the quarter and year ended December 31, 2010.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (the "Report").  The press release should be read in conjunction with the note regarding forward-looking statements, which is included in the text of the press release.

The information in this Item 2.02 and attached as Exhibit 99.1 to this Report will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  This information will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or into another filing under the Exchange Act, unless that filing expressly incorporates this information by reference.

ITEM 9.01
  Financial Statements and Exhibits

(d) Exhibits.  

 
Exhibit No.                          Document Description
      99.1                                Press Release of A.P. Pharma, Inc., dated March 28, 2011.

 
 

 


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: March 28, 2011
 
/s/ John B. Whelan
   
John B. Whelan
   
Acting Chief Executive Officer
 
 

 
appa8k032811ex991.htm


Exhibit 99.1
 
A.P. Pharma Announces
Fourth Quarter and Full Year 2010 Financial Results and Provides Corporate Update
 
 
REDWOOD CITY, Calif. – March 28, 2011 – A.P. Pharma, Inc. (NASDAQ: APPA), a specialty pharmaceutical company, today reported financial results for its fourth quarter and full year ended December 31, 2010 and provided a corporate update.
 
“Since receiving the Complete Response Letter on our APF530 New Drug Application, A.P. Pharma’s management and staff have been working to address the issues raised by the Food and Drug Administration (FDA) and to prepare for meetings with the FDA,” said John Whelan, A.P. Pharma’s acting chief executive officer.  “Company representatives met with the FDA in February and have another meeting scheduled for this week.  We believe that our discussions with the FDA will provide the necessary clarity for what work and information will be needed to best address the topics outlined in the Complete Response Letter.  Following our meetings with the FDA, we expect to be in a position to determine the resources and timeline needed for resubmitting the APF530 New Drug Application.”
 
Clinical Update
 
The Company met with the FDA in February 2011.  At this meeting, the Company presented information concerning the clinical pharmacology of APF530 and a revised presentation format for certain clinical data from the Company’s Phase 3 study.  The FDA indicated that the revised presentation format for the clinical data was acceptable for resubmission and did not request any additional efficacy studies.  The FDA has requested that a thorough QT study be included in the New Drug Application (NDA) resubmission and clarified the requirements for a previously requested metabolism study.  The FDA agreed both studies could be structured as a single clinical study conducted in healthy volunteers.  Once initiated, this study is anticipated to take approximately six months to complete.
 
A second FDA meeting is scheduled for the end of March 2011 to address the dosing system and the characterization and manufacturing of APF530.  During this meeting, the Company will be presenting the results of additional analytical work it has completed since receipt of the Complete Response Letter.
 
Corporate Developments
 
The Company is in negotiations for a bridge loan, which may be executed following the upcoming meeting with the FDA.  The bridge loan is intended to fund Company operations until additional longer-term financing is secured.  Following the FDA meeting at the end of March and the assumed funding of the bridge loan, the Company plans to seek additional financing in the form of equity, debt or collaboration
 

- more -
 
 

 
A.P. Pharma Announces Fourth Quarter and Full Year 2010 Financial Results Page
and Provides Corporate Update
 

agreements to fund operations through the potential approval of APF530.  Multiple factors, including the outcome of the second FDA meeting and general market conditions, preclude any assurance that the Company will be able to obtain adequate financing to support its operations, or that such financing will be on terms favorable to A.P. Pharma or its stockholders.
 
The Company has notified The NASDAQ Stock Market (NASDAQ) that it will not be proceeding with the plan it presented to the NASDAQ Listing Qualifications Panel in January 2011.  As a result, the Company anticipates it will receive a notice from NASDAQ that its shares will be delisted from The NASDAQ Capital Market and transferred to the OTCQB, which is operated by OTC Markets, Inc.
 
Results of Operations
 
A.P. Pharma’s net loss for the fourth quarter of 2010 was $1.6 million, or $0.04 per share, compared with a net loss of $1.9 million, or $0.05 per share, for the fourth quarter of 2009.  Net loss was lower in the current fiscal quarter primarily due to the receipt of a $0.2 million non-taxable grant under the Qualifying Therapeutics Discovery Project program and $0.3 million of lower spending resulting from continuing cost containment actions undertaken by the Company.  These reductions to the current quarter loss were partially offset by a $0.2 million increase in loss from discontinued operations.
 
Net loss for the fiscal year 2010 was $7.3 million, or $0.19 per share, compared with a net loss of $10.0 million, or $0.31 per share, for 2009.  The lower net loss is primarily due to a royalty milestone payment of $2.5 million received in the first quarter of 2010.
 
Cash and cash equivalents as of December 31, 2010 were $2.1 million, compared with $7.6 million at December 31, 2009.  The Company believes it has sufficient cash resources to fund operations into May 2011 as it continues to defer certain discretionary activities.
 
About APF530
 
 
A.P. Pharma's lead product, APF530, prevents both acute-onset and delayed-onset chemotherapy-induced nausea and vomiting (CINV).  APF530 contains the 5-HT3 antagonist, granisetron, formulated in the Company’s proprietary Biochronomer™ drug delivery system, which allows therapeutic drug levels to be maintained for five days with a single subcutaneous injection.  Granisetron was selected because it is widely prescribed by physicians based on a well-established record of safety and efficacy.
 
 
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, APF530, for the prevention of CINV.  A.P. Pharma received a Complete Response Letter on the APF530 NDA in March 2010 and is in the process of preparing a resubmission responsive to the deficiencies listed in the Complete Response Letter.  The Company has additional clinical and preclinical stage programs

 
 

 
A.P. Pharma Announces Fourth Quarter and Full Year 2010 Financial Results Page
and Provides Corporate Update
 

 
in the area of pain management, all of which utilize its bioerodible injectable and implantable delivery systems.  Further work on these programs has been deferred while the Company focuses on the approval of APF530.  For further information, please visit the Company's web site at www.appharma.com.
 
 
(financial tables follow)
 
 
 
 
 

 
 

 
A.P. Pharma Announces Fourth Quarter and Full Year 2010 Financial Results Page
and Provides Corporate Update
 

  A.P. Pharma, Inc.
  Condensed Statements of Operations
  (in thousands, except per share amounts)
  (Unaudited)
                     
                     
       
Three Months Ended
December 31,
Twelve Months Ended
December 31,
       
2010
 
2009
 
2010
 
2009
                   
Contract revenue
 $                  179
 
 $               122
 
 $            1,301
 
 $            1,261
                     
Operating expenses:
             
 
Research and development
                  1,502
 
               1,419
 
               7,264
 
               7,796
 
General and administrative
                    410
 
                  803
 
               3,971
 
               3,707
   
Total operating expenses
                  1,912
 
               2,222
 
             11,235
 
             11,503
     
Operating loss
                (1,733)
 
              (2,100)
 
              (9,934)
 
           (10,242)
                     
Other income (expenses):
             
 
Gain on sale of royalty interest
                      -
 
                    -
 
               2,500
 
                   -
 
Other income (loss), net
                    240
 
                    (6)
 
                  240
 
                   (5)
 
Interest income (expense), net
                      (1)
 
                     3
 
                    (2)
 
                   29
   
Total other income (expense)
                    239
 
                    (3)
 
               2,738
 
                   24
Loss from continuing operations before income taxes
                (1,494)
 
              (2,103)
 
              (7,196)
 
           (10,218)
Income tax benefit
                      -
 
                  122
 
                    -
 
                 122
 
Loss from continuing operations
                (1,494)
 
              (1,981)
 
              (7,196)
 
           (10,096)
 
Income (loss) from discontinued operations
                   (102)
 
                   68
 
                (150)
 
                   68
   
Net loss
 $              (1,596)
 
 $           (1,913)
 
 $           (7,346)
 
 $         (10,028)
                     
                     
Basic and diluted net loss per share:
             
Loss from continuing operations
 $               (0.04)
 
 $            (0.06)
 
 $            (0.18)
 
 $            (0.31)
Net loss
 
 $               (0.04)
 
 $            (0.05)
 
 $            (0.19)
 
 $            (0.31)
                     
Shares used to compute basic and diluted net
             
    loss per share
                39,813
 
             37,325
 
             39,671
 
             32,625

 
 

 
A.P. Pharma Announces Fourth Quarter and Full Year 2010 Financial Results Page
and Provides Corporate Update
 
A.P. Pharma, Inc.
Condensed Balance Sheets
(in thousands)
  (Unaudited)
             
             
             
       
December 31, 2010
 
December 31, 2009
             
Assets
       
Current assets:
     
 
Cash and cash equivalents
 $                         2,109
 
 $                             7,593
 
Accounts receivable
                               110
 
                                   171
 
Prepaid expenses and other current assets
                               282
 
                                   549
   
Total current assets
                            2,501
 
                                8,313
             
Property and equipment, net
                               357
 
                                   510
Other long-term assets
                                 53
 
                                   128
     
Total assets
 $                         2,911
 
 $                             8,951
             
             
Liabilities and Stockholders' Equity
     
Current liabilities:
     
 
Accounts payable
 $                            159
 
 $                                162
 
Accrued expenses
                               461
 
                                1,080
 
Deferred revenue
                               237
 
                                     92
 
Accrued disposition costs
                               703
 
                                   553
   
Total current liabilities
                            1,560
 
                                1,887
Deferred revenue
                                 35
 
                                   268
     
Total liabilities
                            1,595
 
                                2,155
             
Stockholders' equity:
     
 
Common stock
                               401
 
                                   394
 
Additional paid-in capital
                        149,340
 
                            147,481
 
Accumulated deficit
                       (148,425)
 
                          (141,079)
   
Total stockholders' equity
                            1,316
 
                                6,796
     
Total liabilities and stockholders' equity
 $                         2,911
 
 $                             8,951

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 capital resources and liquidity, timely development and regulatory approval of product candidates, satisfactory completion of clinical studies, progress in research and development programs, launch and acceptance of new products 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.

 

 
A.P. Pharma Announces Fourth Quarter and Full Year 2010 Financial Results Page
and Provides Corporate Update
 

Contacts
 
Corporate Contact:
A.P. Pharma, Inc.
John B. Whelan, Acting Chief Executive Officer and Chief Financial Officer
650-366-2626
 
and
 
Media Relations:
Corporate Communications Alliance, LLC
Edie DeVine
209-814-9564