Full Press Release Details
A.P. Pharma Announces Second Quarter 2012 Financial Results and Highlights Recent Corporate Progress
REDWOOD CITY, Calif. August 2, 2012 A.P. Pharma, Inc. (OTCBB: APPA.OB), a specialty pharmaceutical company, today reported financial results for the quarter ended June 30, 2012 and
highlighted recent corporate progress.
With the recent closing of our common stock offering, we are in a strong financial position as
we approach the commercialization phase with our lead product candidate, APF530, for the prevention of both acute- and delayed-onset chemotherapy-induced nausea and vomiting, said John B. Whelan, A.P. Pharma s president and chief
executive officer. As previously announced, we successfully completed our thorough QT and metabolism studies required for our APF530 New Drug Application resubmission. We now also have successfully completed our non-clinical human factors
validation study. We remain on track to resubmit our New Drug Application for APF530 to the U.S. Food and Drug Administration in September 2012.
Recent Accomplishments
Results of Operations
A.P. Pharma s net loss for the second quarter of 2012 was $4.6 million, or $0.02 per share, compared to a net loss of $1.9 million,
or $0.05 per share, for the second quarter of 2011. The net loss was higher in the current fiscal quarter primarily due to increased spending related to the planned NDA resubmission and higher personnel-related expenses, including stock compensation
expense. The prior-year quarter included contract revenue from an agreement with Merial Limited, which was terminated in May 2011.
Cash and cash equivalents as of June 30, 2012 were $12.4 million, compared to $18.0 million at December
31, 2011. Net cash used in operating activities was $8.1 million for the six months ended June 30, 2012. In May 2012, the Company received $3.0 million in cash proceeds from the issuance of convertible notes resulting from note holders
exercise of purchase rights associated with the $4.5 million private placement financing announced in April 2011.
In July 2012, the Company
completed a private placement of common shares resulting in $50.7 million of net proceeds. The Company believes that its current cash resources are sufficient to fund its operations through the anticipated product launch of APF530 in 2013.
A.P. Pharma s lead product candidate, APF530, is being developed for the prevention of both acute- and delayed-onset chemotherapy-induced nausea and vomiting (CINV). One of the most debilitating side
effects of cancer chemotherapy, CINV is a leading cause of premature discontinuation of treatment. There is only one injectable 5-HT3 antagonist approved for the prevention of delayed-onset CINV, so this indication represents an area of particular
unmet medical need. 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. This five-day range is designed to cover the delayed phase of CINV, whereas currently available intravenous and oral formulations of granisetron are approved only for the prevention of acute-onset CINV. Granisetron was
selected for APF530 because it is widely prescribed by physicians based on a well-established record of safety and efficacy.
A.P. Pharma is a specialty pharmaceutical company developing products using its proprietary Biochronomer polymer-based drug delivery platform. This drug delivery platform is designed to improve the therapeutic profile of
injectable pharmaceuticals by converting them from products that must be injected once or twice per day to products that need to be injected only once every one or two weeks. The Company s lead product candidate, APF530, is being developed for
the prevention of both acute- and delayed-onset chemotherapy-induced nausea and vomiting. A.P. Pharma received a Complete Response Letter to its APF530 New Drug Application (NDA) and is targeting a resubmission of the NDA to the U.S. Food and Drug
Administration in September 2012. For further information, please visit the Company s web site at www.appharma.com.
(financial tables follow)
Condensed Statements of Operations
(in thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Contract revenue | $ | $ | 251 | $ | $ | 646 | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 3,067 | 1,282 | 6,396 | 2,423 | ||||||||||||
| General and administrative | 1,313 | 509 | 2,753 | 1,078 | ||||||||||||
| Total operating expenses | 4,380 | 1,791 | 9,149 | 3,501 | ||||||||||||
| Operating loss | (4,380 | ) | (1,540 | ) | (9,149 | ) | (2,855 | ) | ||||||||
| Interest expense, net | (146 | ) | (263 | ) | (207 | ) | (264 | ) | ||||||||
| Loss from continuing operations | (4,526 | ) | (1,803 | ) | (9,356 | ) | (3,119 | ) | ||||||||
| Loss from discontinued operations | (43 | ) | (129 | ) | (134 | ) | (232 | ) | ||||||||
| Net loss | $ | (4,569 | ) | $ | (1,932 | ) | $ | (9,490 | ) | $ | (3,351 | ) | ||||
| Basic and diluted net loss per share: | ||||||||||||||||
| Loss from continuing operations | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.08 | ) | ||||
| Net loss | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.08 | ) | ||||
| Shares used to compute basic and diluted net loss per share | 200,112 | 40,016 | 200,079 | 40,062 |
Condensed Balance Sheets
| June 30, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 12,442 | $ | 17,974 | ||||
| Prepaid expenses and other current assets | 557 | 266 | ||||||
| Total current assets | 12,999 | 18,240 | ||||||
| Property and equipment, net | 1,102 | 1,075 | ||||||
| Other long-term assets | 130 | 130 | ||||||
| Total assets | $ | 14,231 | $ | 19,445 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 605 | $ | 1,010 | ||||
| Accrued expenses | 1,056 | 1,498 | ||||||
| Accrued disposition costs | 1,216 | 1,082 | ||||||
| Convertible notes payable to related parties, net of discount | 239 | 103 | ||||||
| Total current liabilities | 3,116 | 3,693 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 2,004 | 2,002 | ||||||
| Additional paid-in capital | 178,840 | 173,989 | ||||||
| Accumulated deficit | (169,729 | ) | (160,239 | ) | ||||
| Total stockholders equity | 11,115 | 15,752 | ||||||
| Total liabilities and stockholders equity | $ | 14,231 | $ | 19,445 |
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 the potential approval of APF530 and the potential timing for such approval, if approved at all, as well as risks relating to capital resources and liquidity, 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.
Investor Relations Contact:
Office Phone: 646-597-6979
John B. Whelan, President and Chief Executive Officer
Office Phone: 650-366-2626