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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): May 10, 2005
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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 2.02 Results of Operations and Financial Conditions
On May 10, 2005, the Registrant issued a press release announcing
its financial results for the fiscal quarter ended March 31,
2005. The press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
ITEM 9.01 Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated May 10, 2005.
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: May 10, 2005 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 May 10,2005.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS 2005 FIRST QUARTER RESULTS
- - Cancer Patients Enrolled in Phase 2 Clinical Program for APF530 -
REDWOOD CITY, Calif. (May 10, 2005) - A.P. Pharma, Inc. (NASDAQ NM:
APPA), a specialty pharmaceutical company, today reported financial
results for the three months ended March 31, 2005.
Recent and Financial Highlights
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* APF530 Phase 2 clinical trial program underway for the prevention
of acute and delayed chemotherapy-induced nausea and vomiting.
o Primary endpoints are pharmacokinetics, safety and
tolerability.
o Protocol approved and U.S. sites are in various stages of
initiation.
o Several patients have already been screened and entered into
the study.
* Total royalties for the first quarter increased 11%, compared with
the prior year's first quarter.
o Royalties from sales of Carac(TM) increased 18%.
o Royalties from sales of Retin-A Micro(R) increased 7%.
* Cash, cash equivalents and short-term investments were $11.8
million as of March 31, 2005.
Financial Results
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A.P. Pharma reported an 11% increase in royalties for the first
quarter of 2005 to $1,282,000, compared with $1,154,000 for the first
quarter of 2004. First quarter royalties on sales of Carac and
Retin-A Micro grew by 18% and 7%, respectively. Contract revenues
totaled $78,000, compared with $26,000 for the first quarter of 2004.
Total revenues for the first quarter of 2005 increased $180,000 or
15% to $1,360,000, compared with $1,180,000 for the first quarter of
2004.
Research and development expense decreased by $1,191,000 or 40% to
$1,822,000 for the first quarter of 2005, compared with the prior
year first quarter. The 2004 first quarter included expenditures
related to the Phase 2 clinical trials for APF112 for the treatment
of post-surgical pain, as well as extensive preclinical studies for
APF530. No expenses for APF112 were incurred in the first quarter of
2005.
General and administrative expense increased by $103,000 or 14% to
$849,000 for the first quarter of 2005, compared with the prior year
first quarter, due primarily to increased legal and consulting fees.
The loss from continuing operations in the first quarter of 2005 was
$1,250,000, compared with a loss from continuing operations in the
first quarter of 2004 of $2,550,000. The net loss for the first
quarter of 2005 was $1,256,000, or $0.05 per share, compared with a
net loss for the first quarter of 2004 of $2,599,000, or $0.13 per
share.
Cash, cash equivalents and marketable securities were $11,780,000 as
of March 31, 2005.
Clinical Update
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APF530 is in development for the prevention of both acute and delayed
chemotherapy-induced nausea and vomiting (CINV), using a single
subcutaneous injection 30 minutes prior to the initiation of
chemotherapy. In April 2005, we announced initiation of the APF530
Phase 2 clinical trial program. Patients have now been screened and
enrolled into the study and dosing is underway.
APF530 contains the anti-nausea drug granisetron formulated with the
Company's proprietary Biochronomer(TM) bioerodible drug delivery
system. A single administration of APF530 is designed to provide
therapeutic plasma levels of the drug for four to five days in order
to prevent CINV during this period. In Phase 1 studies with healthy
human subjects, we evaluated four dose formulations of APF530. The
pharmacokinetics demonstrated a linear dose-proportional increase in
plasma levels of granisetron, and meaningful plasma levels were
observed over a five-day period at the higher doses. We believe
these results are particularly important based on published data that
suggest plasma levels of granisetron can potentially predict
therapeutic response in patients for both acute and delayed CINV.
The protocol design for the Phase 2 study is an open label, ascending
dose trial in patients undergoing moderately emetogenic chemotherapy
for cancer who will receive APF530 containing one of three doses of
granisetron. The primary endpoints are pharmacokinetics, safety and
tolerability. Preliminary efficacy endpoints will also be measured.
The trial is a multi-center study that will be conducted at various
U.S. and international clinical sites and will include at least 30
patients.
Conference Call Information
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Management will be hosting an investment community conference call
beginning at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) today
to discuss this announcement 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 5959618.
Individuals interested in listening to the conference call via the
Internet may do so by visiting www.appharma.com. A replay will be
available on the Company's Web site for 30 days.
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 anti-nausea, pain management,
inflammation and ophthalmic applications. The Company's product
development programs are funded by the sale of common stock in June
2004, 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
Zach 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.
Income Statement Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, March 31,
2005 2004
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Royalties $ 1,282 $ 1,154
Contract Revenues 78 26
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Total Revenues 1,360 1,180
Operating Expenses:
Research & Development 1,822 3,013
General & Administrative 849 746
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Total Operating Expenses 2,671 3,759
Operating Loss (1,311) (2,579)
Interest and Other, Net 61 29
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Loss from Continuing Operations (1,250) (2,550)
Loss from Discontinued Operations (18) (50)
Gain on Disposition of Discontinued
Operations 12 1
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Net Income (Loss) $(1,256) $(2,599)
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Basic and Diluted Earnings (Loss)
Per Share:
Loss from Continuing Operations $ (0.05) $ (0.12)
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Net Income (Loss) $ (0.05) $ (0.13)
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Shares used in Calculating Earnings
(Loss) Per Share:
Basic 25,046 20,653
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Diluted 25,046 20,653
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A.P. PHARMA, INC.
Balance Sheet Highlights
(in thousands)
March 31, 2005 December 31, 2004
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(Unaudited)
Assets
Cash, Cash Equivalents and
Marketable Securities $11,780 $13,596
Accounts Receivable, Net 1,435 1,506
Other Current Assets 308 394
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Total Current Assets 13,523 15,496
Property, Plant & Equipment, Net 1,167 1,235
Other Non-Current Assets 209 283
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Total Assets $14,899 $17,014
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Liabilities and Stockholders' Equity
Current Liabilities $ 1,956 $ 2,860
Stockholders' Equity 12,943 14,154
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Total Liabilities and Stockholders' Equity $14,899 $17,014
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