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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): August 12, 2004
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A.P. PHARMA, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 1-16109 94-2875566
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 SAGINAW DRIVE, REDWOOD CITY, CALIFORNIA 94063
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(650) 366-2626
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
99.1 Press release dated August 12, 2004.
ITEM 12. Results of Operations and Financial Condition.
The following information is disclosed pursuant to Item 12 of
Form 8-K:
On August 12, 2004, the Registrant issued a press release
announcing its financial results for the fiscal quarter ended
June 30, 2004. The press release is attached hereto as Exhibit
99.1 and incorporated herein by reference.
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: August 12, 2004 By: /S/ Michael O'Connell
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Michael P. J. O'Connell,
President and Chief
Executive Officer
EXHIBIT INDEX
99.1 Press release dated August 12, 2004.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS SECOND QUARTER FINANCIAL RESULTS
REDWOOD CITY, Calif. (August 12, 2004) - A.P. Pharma, Inc. (NASDAQ
NM: APPA), a specialty pharmaceutical company, today reported
financial results for the three months ended June 30, 2004,
reflecting increased royalty income and contract revenues as well as
higher research and development expense due to the company's Phase 2
trial with APF112 and Phase 1 trial with APF530.
Second Quarter Financial Highlights
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* Total revenues for the second quarter increased 15% to $1,284,000.
* Royalties from Retin-A Micro(R) grew by over 9%.
* Increased contract revenues reflect reimbursements from a new
collaborator in an ophthalmic application.
* Research and development expense increased by 27% as a result of
clinical trials on APF112 and APF530.
* The Company completed a financing of approximately 4.2 million
shares raising net proceeds of approximately $11.8 million.
* Cash, cash equivalents and short-term investments were $16.7
million at June 30, 2004.
Financial Results
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A.P. Pharma reported that total revenues for the second quarter of
2004 increased 15% to $1,284,000, compared with $1,117,000 for the
second quarter of 2003. This increase was primarily due to a
continuing increase in royalty income from Retin-A Micro marketed by
OrthoNeutrogena, a Johnson & Johnson company, and to an increase in
contract revenues for reimbursable research and development
feasibility studies, primarily from a new collaborator in an
ophthalmic application.
Research and development expense for the second quarter of 2004
increased to $2,963,000 from $2,335,000 for the second quarter of
2003. This increase was mainly due to the costs of Part 2 of the
Phase 2 clinical study being conducted using APF112 for the treatment
of post-surgical pain and a Phase 1 study being performed in the U.K.
using APF530 for the treatment of chemotherapy-induced nausea and
vomiting.
The net loss for the second quarter of 2004 was $2,444,000, or $0.12
per share, compared with a net loss for the second quarter of 2003 of
$1,960,000, or $0.10 per share.
Cash, cash equivalents and marketable securities increased to $16.7
million at June 30, 2004 as a result of the sale in June 2004 of
approximately 4.2 million shares of common stock. The net proceeds
from the financing, which was completed pursuant to a "shelf"
registration statement, were approximately $11.8 million.
About A.P. Pharma
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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 pain management, anti-nausea,
inflammation, oncology and ophthalmology applications. The Company's
product development programs are funded by the sale of common stock,
royalties from topical products currently marketed by pharmaceutical
partners, proceeds from the divestitures of its cosmeceutical and
analytical standards product lines and by fees it receives from
collaborative partners. For further information visit the Company's
web site at www.appharma.com.
Forward-looking Statements
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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.
Investor Relations Contacts: Company Contact:
Lippert/Heilshorn & Associates Gordon Sangster
Zachary Bryant (zbryant@lhai.com) Chief Financial Officer
Jody Cain (jcain@lhai.com) (650) 366-2626
Bruce Voss (bvoss@lhai.com)
(310) 691-7100
(Financial tables follow)
A.P. Pharma, Inc.
Statement of Operations Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2004 2003 2004 2003
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Royalties $1,103 $1,031 $2,257 $2,063
Contract Revenues 181 86 206 160
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Total Revenues 1,284 1,117 2,463 2,223
Operating Expenses:
Research & Development 2,963 2,335 5,999 4,537
General & Administrative 762 766 1,486 1,544
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Total Operating Expenses 3,725 3,101 7,485 6,081
Operating Loss (2,441) (1,984) (5,022) (3,858)
Interest Income and Other, Net 49 54 79 129
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Loss from Continuing Operations (2,392) (1,930) (4,943) (3,729)
Gain (Loss) from Discontinued
Operations (52) (30) (101) 1,802
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Net Loss ($2,444) ($1,960) ($5,044) ($1,927)
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Basic and Diluted Loss
per Share:
Loss from Continuing Operations ($0.11) ($0.09) ($0.24) ($0.18)
===== ===== ===== =====
Net Loss ($0.12) ($0.10) ($0.24) ($0.09)
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Shares used in Calculating
Loss per Share:
Basic and Diluted 21,048 20,535 20,850 20,505
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A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
June 30, 2004 December 31,
(Unaudited) 2003
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Assets
Cash, Cash Equivalents and
Marketable Securities $16,657 $ 9,484
Accounts Receivable, Net 1,287 1,340
Other Current Assets 462 434
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Total Current Assets 18,406 11,258
Property, Plant & Equipment, Net 1,366 1,430
Other Non-Current Assets 282 467
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Total Assets $20,054 $13,155
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Liabilities and Shareholders' Equity
Current Liabilities $ 1,833 $ 1,892
Shareholders' Equity 18,221 11,263
Total Liabilities and Shareholders'
Equity $20,054 $13,155
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