Apricus Biosciences' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Apricus Biosciences, Inc. (APRI)

Q2 2012 Earnings Call

August 10, 2012 10:30 AM ET


Ed Cox – VP, IR and Corporate Development

Bassam Damaj – CEO and President

Steve Martin – SVP and CFO


Jason Butler – JMP Securities

Scott Henry – ROTH Capital Partners



Greetings. Welcome to the Apricus Biosciences’ Second Quarter 2012 Results Conference. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Ed Cox, Vice President of Investor Relations and Corporate Development for Apricus Biosciences. Thank you. You may begin.

Ed Cox

Good afternoon and thank you for joining us today. I am Ed Cox, Vice President of Corporate Development and Investor Relations here at Apricus Bio. With me from Apricus, are Dr. Bassam Damaj, President and Chief Executive Officer, and Steve Martin, our Chief Financial Officer.

During the call, Bassam will review the recent corporate events and Steve will discuss the second quarter financial results. Bassam will then recap the company’s upcoming milestones and provide a brief update before opening the call for questions.

Before we begin, let me remind you, during today’s conference call the management team will make forward-looking statements regarding future events or future financial performance of the company. Please keep in mind that such statements are predictions based on current expectations and actual results could differ materially. You should refer to our most recent filings with the Securities and Exchange Commission for an additional discussion on factors affecting our business.

With that, I will the turn the call over to Dr. Bassam Damaj. Bassam?

Bassam Damaj

Thank you, Ed. Good morning to you all from sunny San Diego, and thank you for joining us today.

The first half of 2012 has been an exciting time for Apricus, as we have continued to execute our growth strategy. The second quarter in particular has been one of our most exciting and as a result of our recent transactions to own Scomedica, the leading French healthcare contract sales and marketing organization and its parent and holding company Finesco. And I will go into more detail about this important milestone later in the call.

Our growth strategy is simple, acquire, develop and commercialize new products either directly in geographical areas where we have our own sales force or through strategic partnerships with third party. We now have four approved products, a strong pipeline with multiple late-stage opportunities, and commercial partnerships with leading pharmaceutical companies including Novartis, Abbott, Sandoz, Warner Chilcott, Wockhardt, and Bracco.

The second quarter was also marked by several important regulatory meetings that has Canada for Femprox and MycoVa and the issuance of multiple patents that strengthen our intellectual property portfolio. Later on the call, I will provide updates and more details on these corporate initiatives and updates.

And but first, I will turn the call to our CFO, Steve Martin, to discuss the financial results of our second quarter. Steve?

Steve Martin

Thank you Bassam. Yesterday afternoon we issued our report on Form 10-Q for the second quarter ended June 30, 2012. We continue to reduce our operating losses towards our goal of being cash flow positive. The net loss for the second quarter of 2012 was $4.9 million or $0.19 per share. This compares to the net loss in the second quarter of 2011 of $7.8 million or $0.39 per share, a reduction of 36%.

As of June 30, 2012 we had cash and cash equivalents totaling $17.9 million compared to $7.4 million at December 31, 2011. We remain in a very strong cash position and believe we have sufficient capital to achieve our growth plans.

With the addition of Scomedica in France, which closed in July, we added over $2 million in cash to our available funds. The Company entered into three license agreements in the first half of 2012, two for Vitaros and the other for MycoVa. Pursuant to these agreements, the company recorded approximately $0.7 million in license revenue for upfront license fees not including tax withholdings amounts totaling $125,000 related to Italy and Germany.

Our cash inflows in 2012 will come from three primary sources. First, the receipt of license and milestone revenues associated with existing commercial partnerships and new commercial partnerships for our products Vitaros and MycoVa. Secondly, from product revenues associated with the current sale of oncology supportive care products in the United States. And thirdly, in beginning of July 2012, revenues from the delivery of promotional sale services from contracts we had in place for Scomedica in France.

We continue to be in active negotiations for the out-licensing of our products in multiple geographies. And we expect to announce additional major partnership arrangements in the second half of 2012.

Related to the oncology supportive care products now being sold in the United States, in late June and early July we sold through to hospital customers our initial Apricus Totect kits for the treatment of anthracycline extravasation, and we are excited by the prospects of re-supply to the marketplace in this important therapy. Both Totect and our product Granisol for nausea as a result of chemotherapy and radiation therapy are now available through our distributors in the United States.

In addition, we plan to re-launch Totect with improved pricing, packaging and promotional activities during the second half of 2012, which we believe will expand the availability and use of this product in hospitals and clinics and drive sales in 2012 and beyond.

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