A.P. Pharma Reports Second Quarter Financial Results; Royalty Income Continues to Increase; Clinical Programs Advance with Additional Corporate Collaborators.Business Editors & Health/Medical Writers REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BW HealthWire)--Aug. 5, 2002 A.P. Pharma, Inc. (Nasdaq:APPA), a specialty pharmaceutical company, today reported financial results for the three months ended June 30, 2002. Highlights include: -- Royalty income increased 34% compared with the second quarter of last year and increased 36% versus the first half of last year; -- The Company's third U.S. FDA-approved product, a low-dose version of Retin-A Micro(R), was launched in July by Ortho Neutrogena (Johnson & Johnson); -- Phase II clinical studies for the Biochronomer(TM) post-surgical pain product APF112 are targeted to commence in the second half of 2002; -- Preclinical studies continue with the Company's second Biochronomer product candidate APF328, a localized anti-inflammatory product. Clinical trials with APF328 are expected to commence in 2003; -- Six reimbursed feasibility studies involving the Biochronomer system have been initiated; -- Two funded feasibility projects moved into in vivo testing, setting the stage for possible long-term licensing arrangements; -- Approximately $16.3 million in cash and cash equivalents at quarter end. In 2002, A.P. Pharma commenced its clinical program with APF APF, n the abbreviation for acidulated phosphate fluoride. 112, its lead product candidate for the treatment of post-surgical pain. Phase II clinical trials Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II in patients following arthroscopic knee surgery Arthroscopic knee surgery Surgery performed to examine or repair tissues inside the knee joint through a special scope (arthroscope). Mentioned in: Chondromalacia Patellae arthroscopic knee surgery are targeted to commence in the second half of 2002. Using the company's Biochronomer bioerodible drug delivery system, APF112 is designed to provide 24-36 hours of post-surgical pain relief and to minimize the use of morphine-like drugs (opioids Opioids One of the major classes of semi or fully synthetic psycho-active drugs that includes methadone. Mentioned in: Cancer Therapy, Palliative, Methadone opioid ), which are used extensively in post-surgical pain management. Opioids are associated with a wide range of side effects Side effects Effects of a proposed project on other parts of the firm. , such as nausea, sedation Sedation Definition Sedation is the act of calming by administration of a sedative. A sedative is a medication that commonly induces the nervous system to calm. Purpose The process of sedation has two primary intentions. , dizziness dizziness: see vertigo. , constipation constipation, infrequent or difficult passage of feces. Constipation may be caused by the lack of adequate roughage or fluid in the diet, prolonged physical inactivity, certain drugs, or emotional disturbance. , vomiting vomiting, ejection of food and other matter from the stomach through the mouth, often preceded by nausea. The process is initiated by stimulation of the vomiting center of the brain by nerve impulses from the gastrointestinal tract or other part of the body. , urinary retention Urinary retention The result of progressive obstruction of the urethra by an enlarging prostate, causing urine to remain in the bladder even after urination. , and in some situations, life-threatening respiratory depression. Additional products including APF328 for localized anti-inflammatory relief are in various stages of preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. development. A.P. Pharma has also initiated several feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. with third parties for other Biochronomer product applications in areas such as ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for , restenosis restenosis /re·ste·no·sis/ (re?ste-no´sis) recurrent stenosis, especially of a cardiac valve after surgical correction of the primary condition.restenot´ic re·ste·no·sis n. , osteoporosis and immune stimulation. The Company's collaborators range from Fortune 500 pharmaceutical companies to biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. . Second Quarter Financial Results A.P. Pharma reported total revenues for the second quarter of 2002 of $1,249,000, compared with $1,000,000 for the second quarter of 2001. The increase in revenues for the second quarter of 2002 was primarily attributable to a 34% increase in total royalties on sales of both Retin-A Micro, marketed by Johnson & Johnson, and Carac(TM), marketed by Dermik Laboratories, an Aventis company. Total revenues also included research and development fees earned from collaborators for work underway on feasibility studies. Research and development expense for the second quarter of 2002 was $1,872,000, compared with $1,544,000 for the second quarter of 2001, due mainly to the cost of clinical studies associated with the Company's APF112 product. The net loss for the second quarter of 2002 was $1,493,000, or $0.07 per share, compared with a net loss for the second quarter of 2001 of $1,197,000, or $0.06 per share. Conference Call Information A.P. Pharma will host a conference call to discuss second quarter results today, beginning at 11:00 a.m. ET (8:00 a.m. PT). To participate in the live call via telephone, please call 888/803-8290 or 706/645-9291. A telephone replay will be available for 48 hours following the conclusion of the call by dialing 800/642-1687 or 706/645-9291, and entering reservation number 4979246. The conference call will be broadcast live over the Internet at www.appharma.com. A replay will be available on the Company's Website for 14 days. About A.P. Pharma's Proprietary Biochronomer System The Biochronomer system is a unique and versatile family of injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. and implantable drug delivery systems specifically designed to provide delivery of drugs over periods from hours to months. The second generation of this family has been designed for the short-term release of pharmacologically phar·ma·col·o·gy n. 1. The science of drugs, including their composition, uses, and effects. 2. The characteristics or properties of a drug, especially those that make it medically effective. active compounds for periods up to one month. This generation of polymers has been the focus of the Company for the development of its products and is incorporated as an injectable gel in the Company's APF112. 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. 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 by proceeds from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of its cosmeceutical cos·me·ceu·ti·cal n. A cosmetic that has or is purported to have medicinal properties. product lines as well as fees it receives from collaborative partners. For further information visit the Company's Web site at www.appharma.com. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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,
2002 2001 2002 2001
---- ---- ---- ----
Royalties $930 $695 $1,833 $1,343
Contract Revenues 38 4 86 31
Product Revenues 281 301 566 597
Total Revenues 1,249 1,000 2,485 1,971
Cost of Product Revenues 108 113 221 207
Operating Expenses:
Research & Development 1,872 1,544 3,369 2,922
Selling, General
& Administrative 937 865 1,773 1,678
Total Operating Expenses 2,809 2,409 5,142 4,600
Operating Loss (1,668) (1,522) (2,878) (2,836)
Interest Income
and Other, Net 175 350 379 701
Loss from Continuing
Operations (1,493) (1,172) (2,499) (2,135)
Loss from Discontinued
Operations -- (25) -- (184)
Net Loss ($1,493) ($1,197) ($2,499) ($2,319)
Basic and Diluted Loss
per Share:
Loss from Continuing
Operations ($0.07) ($0.06) ($0.12) ($0.11)
Net Loss ($0.07) ($0.06) ($0.12) ($0.11)
Shares used in Calculating
Loss Per Share:
Basic and Diluted 20,403 20,278 20,381 20,249
A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
(Unaudited)
June 30, December 31,
2002 2001(a)
---- -------
Assets
Cash, Cash Equivalents
and Marketable Securities $16,325 $19,494
Accounts Receivable, Net 1,472 1,468
Other Current Assets 683 662
Total Current Assets 18,480 21,624
Property, Plant
& Equipment, Net 1,782 1,668
Other Non-Current Assets 203 215
Total Assets $20,465 $23,507
Liabilities and Shareholders' Equity
Current Liabilities $2,940 $3,550
Long-Term Deferred Revenues 835 785
Shareholders' Equity 16,690 19,172
Total Liabilities and
Shareholders' Equity $20,465 $23,507
(a) Information derived from audited financial statements included
in the Company's Form 10-K for the year ended December 31, 2001.
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