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A.P. Pharma To Raise $24 Million In Private Placement Of Common Stock And Warrants

A.P. Pharma, Inc. (OTCQB:APPA.PK), a specialty pharmaceutical company, today announced that it has entered into definitive agreements with certain new and existing accredited investors providing for a private placement of common stock and warrants in which the Company will receive $24 million in gross proceeds. The common stock and warrants are being sold in units at a price of $0.15 per unit. Each unit consists of one share of common stock and one warrant to purchase 0.5 additional shares of common stock at a price of $0.18 per share. The transaction is expected to close on or about July 1, 2011, subject to customary closing conditions.

The Company expects the proceeds from this offering, combined with its current cash resources, to fund its operations into 2013.

“We believe that this financing will provide the resources necessary to perform the activities needed to resubmit our New Drug Application (NDA) for APF530 in the first half of 2012 and to fund our operations beyond the expected U.S. Food and Drug Administration action date for APF530 in the second half of 2012,” stated John Whelan, A.P. Pharma's president and chief executive officer. “We remain committed to obtaining regulatory approval of APF530, which we believe will provide physicians and cancer patients with an important option for the prevention of chemotherapy-induced nausea and vomiting, a terrible morbidity associated with cancer treatment.”

MTS Securities, LLC acted as sole placement agent in the Offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock, including the shares of common stock issuable upon exercise of the warrants, sold in the private placement.

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