A.P. Pharma Reports Third Quarter Results; APF112 Phase II Clinical Trial Initiated; Royalty Income Increases 23% Over Q3 2002.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.--(BUSINESS WIRE)--Nov. 7, 2003 A.P. Pharma, Inc. (Nasdaq:APPA), a specialty pharmaceutical company, today reported financial results for the three months ended September 30, 2003, reflecting increased royalty income and contract revenues. Current Highlights -- Phase II study using APF APF, n the abbreviation for acidulated phosphate fluoride. 112 for the treatment of pain following inguinal hernia inguinal hernia n. A hernia into the inguinal canal. inguinal hernia Surgery The prolapse of a loop of intestine into a patent inguinal canal procedures has been initiated. -- IND for surgical/orthopedic indication follow-on product candidate targeted to be filed in early 2004. -- Third quarter royalty income increased 23% to $1,149,000 over the year-ago period, driven primarily by continued growth of Retin-A Micro(R). -- Carac formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation patent extended to 2021, increasing expected life of royalty stream. -- 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. continue in the areas of 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 , device coatings and DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. ; new studies being initiated. -- Cash, cash equivalents and short-term investments were $11 million at September 30, 2003, compared with $14 million at December 31, 2002. Third Quarter Financial Results A.P. Pharma reported that total revenues for the third quarter of 2003 increased 22% to $1,268,000, compared with $1,041,000 for the third quarter of 2002. This was primarily due to a continuing increase in royalty income from Retin-A Micro, marketed by Neutrogena, a Johnson and Johnson company, and Carac, marketed by Dermik Laboratories, an Aventis company. Total revenues also included an increase in contract revenues for research and development work performed in connection with feasibility studies conducted for corporate collaborators. Research and development expense for the third quarter of 2003 decreased to $1,854,000 from $1,874,000 for the third quarter of 2002. The Company has completed extensive preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. for APF112, its product candidate for post-surgical pain, and work relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 is now underway at several sites, including patient enrollment. The Company is also planning to file an IND for a second product candidate early in 2004. The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of 2003 was $1,015,000, or $0.05 per share, compared with a loss from continuing operations of $1,339,000, or $0.07 per share, in the third quarter of 2002. The net loss for the third quarter of 2003 was $1,058,000, or $0.05 per share, compared with a net loss for the third quarter of 2002 of $1,052,000, or $0.05 per share. Conference Call Information 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., and 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 3414626. 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. 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 in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. and implantable systems under the trade name Biochronomer(TM). Initial target areas of application for the Company's drug delivery technology include pain management, anti-nausea, inflammation, oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. and ophthalmology applications. The Company's product development programs are funded by royalties from topical topical /top·i·cal/ (top´i-k'l) pertaining to a particular area, as a topical antiinfective applied to a certain area of the skin and affecting only the area to which it is applied. top·i·cal adj. products currently marketed by pharmaceutical partners, by proceeds from the divestitures of its cosmeceutical cos·me·ceu·ti·cal n. A cosmetic that has or is purported to have medicinal properties. and analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. 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 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring in the future.
A.P. Pharma, Inc.
Income Statement Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Royalties $ 1,149 $ 935 $ 3,211 $ 2,768
Contract Revenues 119 106 279 193
Total Revenues 1,268 1,041 3,490 2,961
Operating Expenses:
Research & Development 1,854 1,874 6,391 5,243
General & Administrative 649 644 2,193 2,217
Total Operating Expenses 2,503 2,518 8,584 7,460
Operating Loss (1,235) (1,477) (5,094) (4,499)
Interest Income and Other, Net 220 138 350 516
Loss from Continuing
Operations (1,015) (1,339) (4,744) (3,983)
Gain (Loss) on Disposition of
Discontinued Operations (43) 287 1,759 432
Net Loss ($1,058) ($1,052) ($2,985) ($3,551)
Basic and Diluted Loss per Share:
Loss from Continuing
Operations ($0.05) ($0.07) ($0.23) ($0.20)
Net Loss ($0.05) ($0.05) ($0.15) ($0.17)
Shares used in Calculating
Loss per Share:
Basic and Diluted 20,571 20,417 20,527 20,393
A.P. Pharma, Inc.
Balance Sheet Highlights
(in Thousands)
September 30, December 31,
2003 2002(1)
(Unaudited)
Assets
Cash, Cash Equivalents and Marketable
Securities $11,093 $14,121
Accounts Receivable, Net 1,267 1,340
Assets Held for Sale -- 225
Other Current Assets 393 280
Total Current Assets 12,753 15,966
Property, Plant & Equipment, Net 1,454 1,626
Other Non-Current Assets 472 189
Total Assets $14,679 $17,781
Liabilities and Shareholders' Equity
Current Liabilities $ 2,027 $ 1,977
Long-Term Deferred Revenues 75 345
Shareholders' Equity 12,577 15,459
Total Liabilities and Shareholders'
Equity $14,679 $17,781
(1) Information derived from audited financial statements.
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