A.P. Pharma Reports Second Quarter 2001 Results; Royalty Income Increases, Proprietary Product-Development Programs Underway
REDWOOD CITY, Calif.--(BW HealthWire)--Aug. 7, 2001--A.P. Pharma Inc. (Nasdaq:APPA), a specialty pharmaceutical company, today reported financial results for the three months ended June 30, 2001.
Second Quarter Highlights Include:
- Toxicology studies indicate safety of first-generation Biochronomer(TM) -- Phase I clinical trials planned for first half of 2002 -- Royalty stream increases -- Retin-A Micro(R) continues as a leading acne treatment, Carac(TM) gains sales momentum
- Scaled-up manufacturing processes successfully completed in collaboration with Sigma-Aldrich
- Feasibility studies utilizing the company's technology in progress with several pharmaceutical and biotech companies
- V.P. Business Development appointed to develop partnerships and research collaborations
- Retin-A Micro(R) receives marketing clearance in Canada
- Anticipated filing of a New Drug Application (NDA) for Retin-A Micro line extension
- $20 million in cash and equivalents at June 30, 2001
Michael O'Connell, president and chief executive officer, commented: "We are very pleased with our continued progress in the second quarter of 2001. Our strategic focus is paying off -- we are building the company's royalty stream, preserving cash and directing our research and development efforts toward our proprietary product-development programs in parallel with a number of collaborative feasibility studies.
"A.P. Pharma successfully completed its safety studies with the company's first-generation Biochronomer system, taking us a step closer to Phase I clinical trials, planned for the first half of 2002. The results of our safety studies have also allowed us to make progress with our feasibility studies, underway with several pharmaceutical companies."
Using its existing cash resources and growing royalty streams, A.P. Pharma intends to develop and commercialize its families of bioerodible delivery systems for injectable and implantable drug delivery.
Known as Biochronomer(TM) systems, they are designed for the controlled release of drugs into various sites such as under the skin, in muscle or in the peritoneal cavity and offer potential for use in a broad array of pharmaceutical products.
The company reported total revenues for the 2001 second quarter of $1,000,000, compared with $869,000 for the same period in the prior year. The increase in revenues was primarily attributable to increased royalties from the company's two FDA-approved products: Retin-A Micro(R), a prescription treatment for acne, marketed by Johnson and Johnson, and the newly launched Carac(TM) for actinic keratoses, marketed by Aventis.
Research and development expense for the second quarter of 2001 was $1,544,000, compared with $851,000 for the second quarter of 2000, an increase of $693,000, due mainly to now-completed toxicology studies, manufacturing scale-up and to ongoing feasibility studies in collaborations with potential corporate partners.
The loss from continuing operations for the second quarter of 2001 was $1,172,000, compared with a loss from continuing operations of $1,026,000 for the second quarter of 2000.
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(TM).
Initial targeted areas of application for the company's drug-delivery technology include pain management, inflammation, oncology and ophthalmology applications.
The company's product development programs are funded by royalties from topical products currently marketed by pharmaceutical partners and proceeds from the divestiture of its cosmeceutical product lines. For further information visit the company's Web site at www.appharma.com.
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, 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.
A.P. Pharma Inc. Income Statement Highlights (in thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2001 2000 2001 2000 Royalties $ 699 $ 564 $1,374 $ 989 Product Revenues 301 305 597 610 Total Revenues 1,000 869 1,971 1,599 Cost of Sales 113 132 207 187 Operating Expenses: Research & Development 1,544 851 2,922 1,405 Selling, General & Administrative 865 900 1,678 1,668 Total Operating Expenses 2,409 1,751 4,600 3,073 Operating Loss (1,522) (1,014) (2,836) (1,661) Interest and Other, Net 350 (12) 701 (102) Loss from Continuing Operations (1,172) (1,026) (2,135) (1,763) (Loss) Income from Discontinued Operations (25) 392 (184) 1,350 Net Loss ($1,197) ($634) ($2,319) ($413) Basic and Diluted Loss per Common Share: Loss from Continuing Operations (0.06) (0.05) (0.11) (0.09) Net Loss (0.06) (0.03) (0.11) (0.02) A.P. Pharma Inc. Balance Sheet Highlights (in thousands) (Unaudited) June 30, Dec. 31, 2001 2000 Assets Cash, Cash Equivalents and Marketable Securities $20,038 $22,523 Accounts Receivable, Net 1,262 1,691 Other Current Assets 745 836 Total Current Assets 22,045 25,050 Property, Plant & Equipment, Net 1,727 1,795 Other Non-Current Assets 151 151 Total Assets $23,923 $26,996 Liabilities and Shareholders' Equity Current Liabilities $ 4,039 $ 4,963 Long-Term Deferred Revenues 732 874 Shareholders' Equity 19,152 21,159 Total Liabilities and Shareholders' Equity $23,923 $26,996
A.P. Pharma Inc.
Gordon Sangster, 650/366-2626
Lippert/Heilshorn & Associates
Bruce Voss (investor relations)
Martin Halsall (investor relations)