A.P. Pharma Inc. (APPA) filed Quarterly Report for the period ended 2009-06-30.
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(TM). Initial targeted areas of application for the Company\'s drug delivery technology include pain management inflammation oncology and ophthalmology applications. A.P. Pharma Inc. has a market cap of $27.9 million; its shares were traded at around $0.9 with and P/S ratio of 75.6.
Highlight of Business Operations:
Contract revenue, which is derived from work performed under collaborative research and development arrangements, was $14,000, $152,000, $22,000 and $284,000 for the three months ended June 30, 2009 and 2008 and the six months ended June 30, 2009 and 2008, respectively. The amount of contract revenue varies from period to period depending on the level of activity requested of us by our collaborators. Therefore, we cannot predict the amount of contract revenue in future periods.
Our revenue has been derived principally from contract revenue. In January 2006, we completed the sale of our rights to royalties on sales of Retin-A Micro® and Carac® for up to $30 million. We received proceeds of $25 million upon the closing of the transaction and received a $2.5 million milestone payment in June 2007. We may receive up to an additional $2.5 million based on the satisfaction of certain predetermined milestones. As a result of this transaction, there were no royalties for the first half of 2009 or 2008. We will not record additional royalty revenue on sales of Retin-A Micro® and Carac® in future periods.
Research and development expense for the three months ended June 30, 2009 decreased by $2.6 million from $5.5 million for the three months ended June 30, 2008 to $2.9 million. Research and development expense for the six months ended June 30, 2009 decreased by $6.7 million from $11.7 million to $5.0 million. The decreases in research and development expenses for the three and six months ended June 30, 2009 as compared with comparable periods in 2008 are primarily due to decreased expenditures related to APF530, largely as a result of the completion of our Phase III trial for APF530. Research and development expenses for the three and six months ended June 30, 2009 include the FDA filing fee for our APF530 NDA of approximately $1.25 million. Additionally, in late 2008 we placed our other product candidates on hold to focus our financial and managerial resources on APF 530. As a result, we had reductions in force in November 2008 and May 2009, resulting in lower payroll and related expenses. Changes in the rate of research and development expenses for the remaining quarters of 2009 will depend primarily on the availability of financial resources to continue our current research and development activities.
General and administrative expense increased for the three months ended June 30, 2009 by $203,000 from $863,000 for the three months ended June 30, 2008 to $1,066,000 primarily as a result of stock-based compensation expense, salary and bonuses for our CEO and CFO hired in the third quarter of 2008 and first quarter of 2009, respectively. General and administrative expense was $2.0 million for the six months ended June 30, 2009 as compared with $1.9 million for the comparable period of 2008. Increases in payroll and related for the six months ended June 30,2009 are largely offset by decreases in outside expenses as a result of cost containment measures or of performing tasks in-house. Changes in the rate of general and administrative expenses for the remaining quarters of 2009 will depend primarily on the achievement of corporate goals and stock-based compensation and/or retention efforts.
Loss from discontinued operations represents the net income/loss from the cosmeceutical and toiletries business which was sold to RP Scherer Corporation in July 2000. Net loss from discontinued operations totaled $0 and $40,000 for the three months ended June 30, 2009 and 2008 and $0 and $80,000 for the six months ended June 30, 2009 and 2008, respectively.
Cash, cash equivalents and marketable securities decreased by $6.7 million to $3.8 million at June 30, 2009 from $10.5 million at December 31, 2008 due primarily to our net loss for the six months ended June 30, 2009.