Message #18 From:
NewsBot Date: November 7, 2006 01:00:00 AM
APPA News A.P. Pharma Reports 2006 Third Quarter Results
REDWOOD CITY, Calif.--(BUSINESS WIRE)--A.P. Pharma, Inc. (Nasdaq:APPA), a specialty pharmaceutical
company, today reported financial results for the three months ended
September 30, 2006.
Highlights:
APF530 Development:
Clinical sites continue to be actively recruited and initiated.
Patients afflicted with various types of cancer being enrolled and
treated.
Some patients have now completed multiple cycles of treatment.
Close monitoring of all phases of site selection and patient
enrollment continues.
Preliminary efficacy data now targeted for release in the second half
of 2007.
Cash, cash equivalents and marketable securities $18.1 million;
financing avenues being explored.
Granted exclusive license to market AP530 in China.
Results of Operations:
We recorded no revenue in the third quarter, reflecting the sale
effective October 1, 2005, of our rights to receive royalties on sales
of Retin-A Micro® and
Carac®. In the third
quarter of the prior year, we recorded royalty revenue of $1.3 million
associated with sales of these products.
Research and development expense totaled $3.1 million, an increase of
35% over the $2.3 million reported in last year’s
third quarter. The increase reflects the higher cost levels associated
with our Phase 3 study for APF530 versus those incurred for its Phase 2
study last year.
General and administrative expense of $830,000 was 4% below the $868,000
reported for the comparable period last year.
As a net result of the abovementioned items and smaller non-operating
items, our net loss for the third quarter was $3.8 million or 15 cents
per share, versus a net loss of $1.7 million or seven cents per share
for the prior year’s third quarter.
Clinical Update
On September 28, 2006, we announced that we expect to have initial data
from our Phase 3 clinical trial with APF530 in the second half of 2007.
The revised timing is due to a slower-than-expected start in getting IRB
approvals and clinical sites prepared to begin enrolling patients, and
in recruiting patients during the summer months. The revised timeline
assumes that there is only a modest improvement in the current patient
enrollment rate. Based on the typical experience in this type of trial
we anticipate an acceleration in patient enrollment as the study
progresses. Currently, over fifty percent of the planned 80 clinical
sites for this complex double blind study are now open for enrollment.
All of these sites have received IRB approval and all necessary
materials and study drug; and have completed site initiation visits and
training. At certain sites which were the first to enroll patients, a
number of those patients have received multiple cycles of treatment. We
are closely monitoring this situation as the study progresses.
On October 2, 2006, along with RHEI Pharmaceuticals, Inc. we announced
that we had granted an exclusive license to RHEI Pharmaceuticals to
develop and sell APF530 in Greater China. While specific license terms
were not disclosed, the agreement included an upfront payment to A.P.
Pharma and includes provisions for milestone payments and double digit
percentage royalties on future net sales. Based in New Haven, Conn.,
RHEI is a specialty pharmaceutical company that acquires, licenses,
develops and commercializes therapies in China. RHEI partners with
pharmaceutical and biotech companies to expedite global development
timelines and extend market entry to China.
We are continuing to pursue additional opportunities for partnering the
development of APF530 prior to completion of the Phase 3 trials.
Additionally, in order to support ongoing business requirements, we are
exploring financing options.
About APF530 and the Phase 3 Program
APF530, which contains the 5HT3 antagonist
anti-nausea drug granisetron formulated with the Company's proprietary
Biochronomer™ bioerodible drug delivery
system, is being developed for the prevention of acute and delayed
chemotherapy-induced nausea and vomiting (CINV) in patients undergoing
either moderately or highly emetogenic chemotherapy for cancer. No other
5HT3 antagonist is currently approved for the
prevention of both acute and delayed CINV for both moderately and highly
emetogenic chemotherapy.
The APF530 Phase 3 pivotal trial protocol includes approximately 1,350
patients, with approximately 675 patients receiving moderately
emetogenic chemotherapy agents in one group and approximately 675
patients receiving highly emetogenic chemotherapeutic agents in another
group. In each group there will initially be three arms of approximately
225 patients each; two arms will be treated with APF530, high and low
dose form and a third arm will be treated with the currently approved
dose of palonosetron (brand name ALOXI®).
The study's primary endpoint is to establish the efficacy of APF530 for
the prevention of acute onset (first 24 hours) and delayed onset (4-5
days) CINV in patients receiving either moderately or highly emetogenic
chemotherapy.
Market Assessment
A qualitative and quantitative market assessment conducted by an
independent research company has confirmed the significance of the
market potential for APF530 at its targeted profile. By achieving the
clinical end points of the Phase 3 trial in the management of acute and
especially delayed onset nausea and vomiting, which is the head-to-head
trial against Aloxi, APF530 has the potential to have significant
adoption rates in many oncology practices. More than 90% of the
physicians reporting in the survey indicated that they would use APF530
at least some of the time with highly emetogenic chemotherapy, and more
than 80% of physicians reporting would use it some of the time with
moderately emetogenic chemotherapy.
Conference Call
Management will be hosting an investment-community conference call today
beginning at 11:00 a.m. Eastern time (8:00 a.m. Pacific time) to discuss
the financial results, to provide a business update 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
9268982. The call will also be broadcast live on A.P. Pharma’s
website, www.appharma.com. A
replay will be available on there site for 30 days.
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 target areas of
application for the Company’s drug delivery
technology include anti-nausea, pain management, anti-inflammation and
DNA/RNAI applications. For further information visit the Company’s
web site at www.appharma.com.
Biochronomer(TM) is a trademark owned by A.P. Pharma, Inc.
ALOXI(R) is a registered trademark owned by Helsinn Healthcare, SA
(Switzerland)
Retin-A Micro(R) is a registered trademark owned by Johnson & Johnson.
Carac(R) is a registered trademark owned by sanofi-aventis U.S. LLC
Forward-looking Statements
This news release contains “forward-looking
statements” as defined by the Private
Securities Reform Act of 1995. These forward-looking statements involve
risks and uncertainties including uncertainties associated with timely
development, approval, launch and acceptance of new products,
satisfactory completion of clinical studies, establishment of new
corporate alliances, progress in research and development programs 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.
A.P. Pharma, Inc.
Statement of Operations Highlights
(in thousands, except per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2006
2005
2006
2005
Royalties
$0
$1,334
$0
$3,803
Contract Revenues
0
3
0
144
Total Revenues
0
1,337
0
3,947
Operating Expenses:
Research & Development
3,118
2,306
10,443
7,205
General & Administrative
830
868
2,695
2,540
Total Operating Expenses
3,948
3,174
13,138
9,745
Operating Loss
(3,948)
(1,837)
(13,138)
(5,798)
Interest Income, Net
244
74
786
221
Gain on Sale of Interest in Royalties
0
0
23,429
0
Other Income (Expense)
(49)
(1)
(53)
0
Income (Loss) from Continuing Operations
(3,753)
(1,764)
11,024
(5,577)
Loss from Discontinued Operations
(79)
(9)
(130)
(72)
Gain on Disposition of Discontinued Operations
15
29
38
42
Net Income (Loss)
($3,817)
($1,744)
$10,932
($5,607)
Basic Earnings (Loss) per Common Share:
Income (Loss) from Continuing Operations
($0.15)
($0.07)
$0.44
($0.22)
Net Income (Loss)
($0.15)
($0.07)
$0.43
($0.22)
Diluted Earnings (Loss) per Common Share:
Income (Loss) from Continuing Operations
($0.15)
($0.07)
$0.43
($0.22)
Net Income (Loss)
($0.15)
($0.07)
$0.43
($0.22)
Shares used in Calculating Earnings (Loss) per Share:
Basic
25,278
25,145
25,246
25,095
Diluted
25,278
25,145
25,435
25,095
A.P. Pharma, Inc.
Balance Sheet Highlights
(in thousands)
September 30, 2006
December 31,
(Unaudited)
2005(1)
Assets
Cash, Cash Equivalents and Marketable Securities
$18,073
$5,809
Accounts Receivable, Net
75
1,519
Other Current Assets
743
320
Total Current Assets
18,891
7,648
Property, Plant & Equipment, Net
953
1,164
Other Non-Current Assets
105
157
Total Assets
$19,949
$8,969
Liabilities and Shareholders' Equity
Current Liabilities
$2,419
$2,766
Shareholders' Equity
17,530
6,203
Total Liabilities and Shareholders' Equity
$19,949
$8,969
(1) Derived from our audited financial
statements for the year ended December 31, 2005 included in the
Company’s 2005 Annual Report on Form
10-K filed with the Securities and Exchange Commission.
