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Apricus Biosciences Announces Third Quarter 2014 Financial Results and Provides Corporate Update

Company Recently Expanded Development Pipeline with U.S. In-License of Fispemifene

Vitaros® Launch Continues to Exhibit Strength in Europe

Conference Call and Webcast Today, Monday, November 10, 2014 at 8:30 a.m. ET

SAN DIEGO, Nov. 10, 2014 (GLOBE NEWSWIRE) -- Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, today provided a corporate update and reported financial results for the third quarter 2014.

"We are extremely pleased with the recent progress we have made toward our corporate goals, highlighted by our recent in-licensing of the U.S. rights to fispemifene, an investigational treatment for urological conditions in men," said Richard Pascoe, Chief Executive Officer. "The in-licensing strategically diversifies our pipeline while effectively building upon our core assets including Vitaros®, our marketed drug for erectile dysfunction, as well as RayVa, our product candidate for the treatment of Raynaud's phenomenon secondary to scleroderma, a condition for which there are no approved therapies in the United States."

Mr. Pascoe continued, "Vitaros has now been launched in four European countries—the United Kingdom, Sweden, Germany, and most recently, Belgium. At this early stage in the launch, we already have seen a rapid uptake in the commercial acceptance of Vitaros in these countries, with product re-orders continuing to flow, high double digit month-over-month prescription growth trends over the first three months of sales, and importantly, product refills, an early indication of patient satisfaction. We expect Vitaros will continue to be a key driver of value and growth for the Company as a revenue-generating asset, and in addition, we have created significant strategic value in Apricus by building a balanced portfolio of product candidates with fispemifene and RayVa to drive both short- and long-term value though the continued execution of our development plans."

Third Quarter Highlights and Recent Developments

  • Expanded development pipeline with the in-licensing of the U.S. rights for fispemifene, a Phase 2b ready asset, from Forendo Pharma, targeting urological conditions in men;
  • Vitaros launched by Sandoz in Germany, Sweden and Belgium, triggering $1 million in milestone payments to Apricus;
  • Appointed Sandford Smith to Apricus' Board of Directors;
  • Received Notice of Allowance from the United States Patent and Trademark Office (USPTO) for a patent application pertaining to RayVa, related to methods and compositions for treating Raynaud's phenomenon, including claims related to treating Raynaud's phenomenon that is secondary to systemic sclerosis; and
  • Secured $10 million in venture debt financing from Oxford Finance LLC and Silicon Valley Bank to fund the cash portion of the acquisition of fispemifene rights and to fund the anticipated Phase 2b clinical development program in 2015.

2014 Year-End Priorities

  • Support additional territory launch activities in Europe of Vitaros by our partners;
  • Initiate the production of Vitaros Room Temperature devices to generate the required 12-month stability data required for approval;
  • Begin enrollment in the RayVa Phase 2a clinical trial of patients with Raynaud's phenomenon secondary to scleroderma;
  • Continue to explore out-licensing opportunities for Vitaros and Femprox®; and
  • Prepare for the initiation of the fispemifene Phase 2b clinical trial in patients with secondary hypogonadism in the first half of 2015.

Third Quarter 2014 Financial Results

The Company reported total revenues of $1.9 million for the three-month period ended September 30, 2014 related to the recognition of $1.0 million in-license revenues associated with the out-licensing of Vitaros in France, Monaco and certain countries in Africa to Laboratoires Majorelle, a $0.5 million milestone payment from Hexal AG (Sandoz) for the launch of Vitaros in Sweden, and $0.4 million for the initial revenues from the sale of Vitaros product to the Company's licensee partners. Net loss for the third quarter ended September 30, 2014 was $3.1 million, or $(0.08) per share, compared to a net loss of $3.0 million, or $(0.08) per share for the third quarter ended September 30, 2013.

Total revenues were $7.4 million for the nine-month period ended September 30, 2014, compared to total revenue of $2.1 million for the nine month period ended September 30, 2013. For the nine-month period ended September 30, 2014, net loss was $4.5 million or $(0.12) per share compared to a net loss of $15.6 million or $(0.47) per share for the nine-month period ended September 30, 2013.

The significant increase in revenues and the reduction in net loss in the first nine months of 2014 are reflective of the continued focus by management on the primary valuation driving initiatives established for this fiscal year and into 2015.

As of September 30, 2014, cash and cash equivalents totaled $16.1 million compared to $21.4 million as of December 31, 2013.

Based upon its current operating plans, its ability to access additional capital under the Company's committed equity financing facility and its potential to borrow an additional $5.0 million in term loans, the Company believes it can fund its on-going operations through 2015. The Company expects to have net cash outflow from operations during the remainder of 2014 and during 2015 as it continues to develop room temperature Vitaros, continues a Phase 2a development program for RayVa, its product candidate for the treatment of secondary Raynaud's phenomenon, initiates a Phase 2b development program for fispemifene, its product candidate for secondary hypogonadism, chronic prostatitis and lower urinary tract symptoms in men and incurs other operating expenses.

In the fourth quarter of 2014 and to a greater extent in 2015, Apricus expects to begin to collect initial royalty revenues from partner sales of Vitaros in Europe. These revenues will be based on sales reports received from licensee partners and will reflect sales of product in their territory multiplied by the applicable contracted double-digit royalty rates.

Conference Call Details

Apricus will host a live conference call and webcast today at 8:30 a.m. Eastern Time to discuss the Company's financial results and provide a corporate update. To participate by telephone, please dial 877-407-9210 (Domestic) or 201-689-8049 (International). The conference ID number is 13594918. A live and archived audio webcast can be accessed through the investors' section of the Company's website at www.apricusbio.com. Please log in approximately five to ten minutes before the event to ensure a timely connection. A replay of the webcast will be available on the Company's website for ninety days following the call.

About Apricus Biosciences, Inc.

Apricus Biosciences, Inc. (APRI) is a biopharmaceutical company advancing innovative medicines in urology and rheumatology. The Company's lead product, Vitaros®, for the treatment of erectile dysfunction, is approved in Europe and Canada and commercialized in several countries in Europe. Apricus' marketing partners for Vitaros include Abbott Laboratories Limited, Takeda Pharmaceuticals International GmbH, Hexal AG (Sandoz), Recordati Ireland Ltd. (Recordati S.p.A.), Bracco S.p.A. and Laboratoires Majorelle. The Company's second-generation Vitaros room temperature device is under development and is expected to enhance the product's commercial value. The Company recently initiated a Phase 2a trial for RayVa, the Company's product candidate for the treatment of Raynaud's phenomenon. Femprox®, the Company's product candidate for the treatment of female sexual interest/arousal disorder, has successfully completed an approximately 400-subject proof-of-concept study. The Company is currently seeking a strategic partner for Femprox. In October 2014, Apricus gained U.S. development and commercialization rights for fispemifene, a selective estrogen receptor modulator for the treatment of male secondary hypogonadism, chronic prostatitis and lower urinary tract symptoms, in Phase 2 development.

For further information on Apricus, visit http://www.apricusbio.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act, as amended. Statements in this press release that are not purely historical are forward-looking statements. Such forward-looking statements include, among other things: references to the timing of initial and re-order shipments of Vitaros® and initial royalty revenues from the sale of Vitaros in various countries by Apricus' commercial partners; the planned launch strategy for Vitaros in the United Kingdom, Sweden, Germany, Belgium and other countries; the planned production of the required 12-month stability data for the Vitaros room temperature device; the planned enrollment in the RayVa Phase 2a clinical trial of patients with Raynaud's phenomenon secondary to scleroderma; the planned commencement of clinical trials for fispemifene and an approved pathway for RayVa and fispemifene; the size of the commercial opportunity for Vitaros, RayVa and fispemifene and the potential for such products to achieve commercial success; the expected funding under the venture debt facility of a second term loan subject to initiation of a Phase 2b trial for fispemifene; the planned out-license of Femprox® and Vitaros; and Apricus' 2014 financial outlook, including cash projections. Actual results could differ from those projected in any forward-looking statements due to a variety of reasons that are outside the control of Apricus, including, but not limited to: its ability to further develop its product Vitaros for the treatment of erectile dysfunction, such as the room temperature version of Vitaros, and its product candidates RayVa for the treatment of Raynaud's phenomenon and fispemifene for the treatment of secondary hypogonadism, chronic prostatitis and lower urinary tract symptoms in men, as well as the timing of such events; Apricus' ability to carry out clinical studies for RayVa and fispemifene, as well as the timing and success of the results of such studies; Apricus' dependence on its commercial partners to carry out the commercial launch and sales of Vitaros in various territories, such as Takeda in the United Kingdom, Sandoz in Sweden, Germany and Belgium, and Majorelle in France, and the potential for delays in the timing of commercial launches in additional countries; competition in the erectile dysfunction market and other markets in which Apricus and its partners operate; Apricus' ability to obtain and maintain intellectual property protection for Vitaros, RayVa, fispemifene or any other product candidates; Apricus' ability to raise additional funding that it may need to continue to pursue its commercial and business development plans; Apricus' ability to draw the second term loan under the credit facility when expected, or at all, including Apricus' failure to meet the conditions required to draw under the loan and security agreement; Apricus' ability to remain in compliance with the terms and restrictions under the credit facility; Apricus' ability to access additional capital under the equity facility; Apricus' ability to obtain the requisite governmental approval for the room temperature version of Vitaros, RayVa, fispemifene and Femprox; and market conditions. These forward-looking statements are made as of the date of this press release, and Apricus assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Readers are urged to read the risk factors set forth in Apricus' most recent annual report on Form 10-K, subsequent quarterly reports filed on Form 10-Q, and other filings made with the SEC. Copies of these reports are available from the SEC's website at www.sec.gov or without charge from Apricus.

Apricus Biosciences, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2014 2013 2014 2013
License fee revenue $ 1,500 $ -- $ 6,954 $ 669
Product sales 398 -- 398 --
Contract service revenue -- 28 -- 1,480
Total revenue 1,898 28 7,352 2,149
Cost of product sales 485 -- 560 --
Cost of service revenue -- 15 -- 2,568
Gross profit (loss) 1,413 13 6,792 (419)
Costs and expenses, net
Research and development 1,876 919 5,423 3,867
General and administrative 2,719 2,866 8,655 10,446
Gain on contract settlement -- (534) (910) (534)
Recovery on sale of subsidiary -- (75) (50) (180)
Deconsolidation of former French subsidiaries, net -- -- (846) (641)
Total costs and expenses, net 4,595 3,176 12,272 12,958
Loss from continuing operations before other income (expense) (3,182) (3,163) (5,480) (13,377)
Total other income (expense) 50 (36) 291 (858)
Loss from continuing operations (3,132) (3,199) (5,189) (14,235)
Income (loss) from discontinued operations 19 214 691 (1,358)
Net loss $ (3,113) $ (2,985) $ (4,498) $ (15,593)
Net loss per share
Basic and diluted $ (0.08) $ (0.08) $ (0.12) $ (0.47)
Weighted average shares outstanding
Basic and diluted 39,059 37,004 38,282 33,361
These financial statements were derived from the Company's Consolidated Financial Statements as filed in its September 30, 2014 Report on Form 10-Q.
Apricus Biosciences, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
September 30,
2014
December 31,
2013
Assets
Cash and cash equivalents $ 16,109 $ 21,405
Property and equipment, net 1,319 955
Other current and non-current assets 2,368 950
Total assets $ 19,796 $ 23,310
Liabilities and stockholders' equity
Convertible notes payable, net $ 1,203 $ 2,600
Deferred revenue 2,284 1,800
Deconsolidation of French subsidiaries -- 2,846
Other current and non-current liabilities 4,313 5,092
Total liabilities 7,800 12,338
Total stockholders' equity 11,996 10,972
Total liabilities and stockholders' equity $ 19,796 $ 23,310
As of September 30, 2014, the Company had 40,023,686 shares of common stock outstanding.
These financial statements were derived from the Company's Consolidated Financial Statements as filed in its September 30, 2014 Report on Form 10-Q.

CONTACT: Steve Martin Apricus Biosciences, Inc. Senior Vice President, Chief Financial Officer & Secretary ir@apricusbio.com (858) 222-8041 Institutional Investors: Angeli Kolhatkar akolhatkar@burnsmc.com Media: Justin Jackson jjackson@burnsmc.com Burns McClellan (212) 213-0006 Retail Investors: Chris Eddy, David Collins apri@catalyst-ir.com Catalyst Global (212) 924-9800

Source:Apricus Biosciences, Inc.