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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 8, 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 Condition
On August 8, 2005, the Registrant issued a press release
announcing its financial results for the fiscal quarter ended
June 30, 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 August 8, 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: August 8, 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 August 8, 2005.
(continued from previous page)
Exhibit 99.1
A.P. Pharma Logo
News Release
A.P. PHARMA REPORTS SECOND QUARTER FINANCIAL RESULTS
Patient Enrollment for APF530 Phase 2 Trial Successfully Completed
REDWOOD CITY, Calif. (August 8, 2005) - A.P. Pharma, Inc. (NASDAQ NM:
APPA), a specialty pharmaceutical company, today reported financial
results for the three months ended June 30, 2005.
Recent and Financial Highlights
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* Patient enrollment in the open label APF530 Phase 2 clinical trial
has been successfully completed. APF530 is designed for the
prevention of acute and delayed chemotherapy-induced nausea and
vomiting (CINV) and contains the anti-nausea drug granisetron
formulated with the Company's proprietary Biochronomer(TM) system.
* The Phase 2 study was designed for patients receiving moderately
emetogenic chemotherapy for cancer to evaluate pharmacokinetics,
safety and tolerability. Measures of efficacy were also
introduced into the study.
o Three dose groups involving more than 40 patients were treated
in an ascending dose study.
o Preliminary safety and pharmacokinetic data to date are very
encouraging and all clinical endpoints were achieved. Sustained
plasma levels of granisetron were observed over five days.
o Greater than 90% of patients experienced only mild nausea, no
vomiting, and did not need to take any rescue medication in
either the acute or delayed phase of CINV.
* Preparations are underway for a Phase 3 clinical trial planned to
begin in the fourth quarter of 2005.
* Royalties for the second quarter of 2005 grew by 8%, driven by
sales of Carac(R) which increased by 25% compared with the prior
year's second quarter.
* Cash, cash equivalents and marketable securities were $9.7 million
at June 30, 2005.
Financial Results
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A.P. Pharma reported an 8% increase in total royalties for the second
quarter of 2005 to $1,187,000 compared with $1,103,000 for the second
quarter of 2004. Second quarter royalties on sales of Carac by
Sanofi-Aventis grew by 25% and royalties on sales of Retin-A Micro(R)
by Johnson & Johnson grew by 1% over the corresponding quarter of the
prior year. Contract revenues for the second quarter of 2005 totaled
$63,000 compared with $181,000 for the second quarter of 2004. Total
revenues for the second quarter of 2005 decreased $34,000 or 3% to
$1,250,000, compared with $1,284,000 for the second quarter for 2004.
Research and development expense increased by $173,000 or 6% to
$3,078,000 for the second quarter of 2005, compared with $2,905,000
for the second quarter of the prior year. The increase is primarily
attributable to the APF530 Phase 2 clinical study which was initiated
during the second quarter of 2005, and manufacturing expenses which
were incurred in anticipation of a Phase 3 clinical study which is
planned to be initiated in the fourth quarter of 2005.
General and administrative expense increased by $3,000 to $823,000
for the second quarter of 2005 compared with $820,000 for the second
quarter of 2004.
The loss from continuing operations in the second quarter of 2005 was
$2,564,000 compared with a loss from continuing operations of
$2,392,000 in the second quarter of 2004. The net loss for the
second quarter of 2005 was $2,608,000, or $0.10 per share, compared
with a net loss of $2,444,000, or $0.12 per share, in the second
quarter of 2004.
APF530 Clinical Update
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APF530, which contains the anti-nausea drug granisetron formulated
with the Company's proprietary Biochronomer(TM) bioerodible drug
delivery system, is being developed for the prevention of both acute
and delayed chemotherapy-induced nausea and vomiting (CINV).
Following a single subcutaneous injection prior to the initiation of
chemotherapy, APF530 is designed to provide therapeutic plasma levels
of granisetron for four to five days in order to prevent CINV during
this period. The Phase 2 study was designed as an open-label, dose-
ascending trial in patients undergoing moderately emetogenic
chemotherapy for cancer. Patients in the study received an injection
of APF530 containing one of three doses of granisetron: 5, 10 or 15
milligrams. The primary endpoints include an evaluation of
pharmacokinetics, safety and tolerability. In addition, efficacy
endpoints were evaluated relating to emetic events and the use of
rescue medication.
Preliminary data to date are very encouraging and all clinical
endpoints were achieved in the first patient group treated. From the
Phase 1 study in healthy volunteers, it was anticipated that plasma
levels of granisetron would be sustained over four to five days.
Based on literature, it was anticipated that the plasma levels in
chemotherapy patients would be approximately twice the drug levels
seen in healthy volunteers, given equivalent doses. The
pharmacokinetic data from the first APF530 patients who received 5
milligrams of granisetron indicate that the plasma levels were four
fold greater with sustained levels of granisetron measured at day 5.
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.
To date, safety and tolerability data in patients receiving the
APF530 doses have been excellent with no drug-related serious adverse
events. Injections of APF530 were well tolerated and there was only
one report of mild discomfort at the site of injection. Overall,
side effects with regard to the APF530 formulation appear to be
minimal.
Efficacy assessments in the first two groups of this open-label study
are excellent with more than 90% of the patients achieving a
"complete response," meaning that there were no episodes of vomiting
and no requirements for rescue medication, and that no more than mild
nausea was experienced. It is interesting to note that published
response rates for other approved 5HT3 antagonists are considerably
lower.
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 8037521.
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
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)