EX-99.1 2 d462570dex991.htm CORPORATE PRESENTATION

Company Overview OTCBB: APPA January 2013 Exhibit 99.1

Legal Disclaimer This presentation contains "forward-looking statements" as defined by the Private Securities Litigation 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. Actual results may differ materially from the results expected in our forward looking statements. 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. 2 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Company: A.P. Pharma, Inc. Ticker: OTCBB: APPA.OB Stock Price: $0.60 (1/4/13) Market Capitalization: $280.3 million Cash: $60.0 million Debt: $4.7 million Stock Summary 1 Based on 499.0 million fully diluted, as-converted common shares assuming the full conversion of convertible debt outstanding and 80 million warrants using treasury stock method; not including options 2 As of September 30, 2012 3 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 1 2 2

John B. Whelan President & CEO Raven Biotechnologies Eos Biotechnology Hewlett Packard/Agilent Michael A. Adam, Ph.D. Senior Vice President & Chief Operating Officer Spectrum Pharmaceuticals Pfizer/Agouron Bristol-Myers Squibb Mark Gelder, M.D. Senior Vice President & Chief Medical Officer GE Healthcare Bayer Healthcare Wyeth Robert Rosen Senior Vice President & Chief Commercial Officer Bayer Healthcare Sanofi-Synthèlabo Imclone Senior Management 4 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

A.P. Pharma Highlights January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 5 Lead product candidate, APF530, is long-acting, injectable product for chemotherapy-induced nausea and vomiting (CINV) Incorporates widely used 5-HT3 antagonist - granisetron (Kytril ® ) 5-day delivery profile Reduces both acute- and delayed-onset CINV with single injection Patent coverage into 2024 APF530 shown to be non-inferior to market leader Aloxi ® 1,341-patient, randomized, controlled, Phase 3 study FDA PDUFA Action Date of March 27, 2013 Resubmitted NDA for APF530 in September 2012 Addressed issues raised in Complete Response Letter Product launch planned for 2H 2013 APF530 targets a $900 million market opportunity in US alone* Recent competitive setbacks could enhance commercial uptake Could be second, long-acting, injectable product on market A.P. Pharma has the potential to leverage its Biochronomer™ drug delivery technology into other opportunities *Branded market estimate using 2011 units based on Wolters Kluwer and Aloxi ASP

Important APF530 Milestones Milestone Timing Status Successful End-of-Review Meetings with FDA 1Q 2011 Successful Completion of Thorough QT and Metabolism Studies 1Q 2012 Completed $53.6MM PIPE Financing 3Q 2012 Successful Completion of Human Factors Validation Study 3Q 2012 Successful Completion of CMC Activities 3Q 2012 Resubmitted NDA Sept 2012 Key Commercial Organization Hires 4Q 2012 FDA PDUFA Action Date March 27, 2013 Target Product Launch 2H 2013* * Indicates expected milestone timing 6 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Clinical Summary 7 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

APF530 Pivotal Phase 3 Study Overview Randomized, controlled, multi-center study 1,341 patients in primary efficacy population Two doses of APF530 (5 mg and 10 mg granisetron) compared to the approved dose of Aloxi Patients stratified by type of chemotherapy regimen (moderately or highly emetogenic) Primary end point compared complete response between groups in both the acute (day 1) and delayed (days 2-5) phase Complete response defined as no emesis and no rescue medications A ±15% margin was used to establish non-inferiority 8 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

5-Day Profile: APF530 Pharmacokinetics January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 9 Granisetron is released rapidly following injection of APF530 and continues to be released over a 5-day period. 0 5 10 15 20 0 24 48 72 96 120 144 168 Time after Dosing (h) All subjects (n= 18) mean ± SEM

Primary Efficacy Results: Complete Response Patients Receiving Moderately Emetogenic Chemotherapy Acute APF530 10mg Acute Delayed Difference in Complete Response APF530-Aloxi (97.5% CI) -15 -10 -5 0 5 10 15 10 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. Delayed 75.0 76.9 57.2 58.5 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

Primary Efficacy Results: Complete Response Difference in Complete Response APF530-Aloxi (98.33% CI) -15 -10 -5 0 5 10 15 Patients Receiving Highly Emetogenic Chemotherapy Acute Delayed 11 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. Acute Delayed APF530 10mg

Safety Summary 1 APF530 5 mg dose studied in separate arm of the phase 3 study; one pulmonary embolism in morbidly obese patient on day 16 (0.2%); one dyspepsia event (0.2%) 2 >90% of injection site reactions were reported as mild; one patient discontinued due to injection site reaction Reported in Cycle 1 12 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. APF530 10 mg Aloxi 0.25 mg N % N % Drug Related Serious Adverse Events 0 0 0 0 Discontinued Due to Adverse Event 1 0.2 0 0 Frequent Adverse Events Gastrointestinal Disorders Constipation Diarrhea Abdominal pain 72 44 13 15.4 9.4 2.8 62 39 28 13.4 8.4 6.0 Nervous System Headache 47 10.0 45 9.7 Injection Site Placebo (NaCl) Bruising Erythema (redness) Nodule (lump) Pain 93 51 50 33 19.9 10.9 10.7 7.1 41 14 3 5 8.9 3.0 0.6 1.1 1 1 2

Efficacy through Multiple Chemotherapy Cycles January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 13 1 Overall Complete Response defined as no emesis and no rescue medications during 0 to 120 hours following chemotherapy Moderately Emetogenic Chemotherapy Highly Emetogenic Chemotherapy Overall Complete Response Rates for APF530 10 mg 53.8 58.8 61.7 0 10 20 30 40 50 60 70 80 90 100 Cycle 1 Cycle 2 Cycle 3 Cycle 4 63.3 73.7 76.9 82.1 0 10 20 30 40 50 60 70 80 90 100 Cycle 1 Cycle 2 Cycle 3 Cycle 4 62.0 1

January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 14 1 Overall Complete Response defined as no emesis and no rescue medications during 0 to 120 hours following chemotherapy. Protocol criteria may vary across studies. MEC HEC Ondansetron Ondansetron Granisetron Gralla Eisenberg Aapro Emend Label Studies Emend Label Saito 50% 34% 25% 43% 52% 43% 33% 40% MEC HEC Eisenberg Gralla Grunberg Hajdenberg APPA Ph 3 Aapro APPA Ph 3 46% 69% 59% 59% 52% 41% 62% Aloxi – Second Generation First Generation 5-HT3 Antagonists 1 Overall Complete Response Rates

APF530’s Efficacy with Difficult Chemo Regimens Treatment Chemotherapeutic Regimen APF530 10 mg Aloxi 0.25 mg Moderately Emetogenic Acute Cyclophosphamide/Doxorubicin 70.7% 65.7% All other regimens 84.4% 85.0% Delayed Cyclophosphamide/Doxorubicin 47.4% 46.3% All other regimens 72.9% 70.0% Highly Emetogenic Acute Cisplatin regimens 81.1% 75.5% Carboplatin/Paclitaxel 85.4% 89.8% All other regimens 75.4% 67.6% Delayed Cisplatin regimens 66.0% 60.4% Carboplatin/Paclitaxel 70.8% 71.4% All other regimens 65.2% 57.4% 1 Data from post-hoc analysis. Not statistically significant. 15 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 1

Summary of APF530 Phase 3 Results One of the largest, randomized, controlled clinical studies conducted in the CINV setting Bioerodible polymer technology releases granisetron to prevent CINV over 5 days Non-inferiority to Aloxi was demonstrated at 10 mg For both acute- and delayed-onset CINV With both moderately and highly emetogenic chemotherapy APF530 was well-tolerated Incidence of adverse events comparable to Aloxi Good response rates were observed in difficult chemotherapy regimens Efficacy was maintained through multiple cycles of chemotherapy 16 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Regulatory Status 17 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

APF530 NDA Status Submitted NDA in May 2009 under 505(b)(2) filing pathway Received Complete Response Letter in March 2010 FDA raised issues in three main areas: Dosing system Two-syringe system Chemistry, Manufacturing, and Controls (CMC) Sterilization Characterization Clinical/statistical Specific studies Presentation of data Held end-of-review meetings with FDA in 1Q 2011 No additional clinical efficacy studies requested Resubmitted NDA in September 2012 PDUFA Action Date of March 27, 2013 18 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Addressed Complete Response Letter Issues Dosing System Change to single-syringe system Enhanced dosing instructions Successfully evaluated in a Human Factors study Chemistry, Manufacturing, and Controls Change from bulk to terminal irradiation Additional specifications and assays for raw materials, polymer and drug product Three registration lots completed implementing these changes Clinical/Statistical Thorough QT study Metabolism study Phase 3 clinical data presentation revision 19 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Improved Dosing System January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 20 New Single-syringe System Original Two-syringe System

Thorough QT Study Background Prolongation of the QT/QTc interval is associated with increased susceptibility to fatal cardiac tachyarrhythmias Thorough QT studies are intended to determine whether a drug has a threshold pharmacologic effect on cardiac repolarization Thorough QT studies are now routinely required by the FDA prior to drug approval FDA has raised QT cardiac safety concerns with 5-HT3 antagonists The QT interval represents the amount of time the heart’s electrical system takes to repolarize after each beat 21 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Zofran Use in CINV Restricted Most widely used generic 5-HT3 now restricted FDA issued a Drug Safety Communication June 29, 2012 “The use of a single 32 mg intravenous dose of ondansetron should be avoided. New information indicates that QT prolongation occurs in a dose-dependent manner, and specifically at a single intravenous dose of 32 mg.” “No single intravenous dose of ondansetron should exceed 16 mg due to the risk of QT prolongation.” “The lower dose intravenous regimen of 0.15 mg/kg every 4 hours for three doses may be used in adults with chemotherapy-induced nausea and vomiting.” Results of Zofran tQT study 32 mg IV dose causes 20 ms increase in QTcF 8 mg IV dose causes 6 ms increase in QTcF FDA removed 32 mg dose from market December 4, 2012 Impact on sales may be significant 22 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Anzemet in CINV Previously Removed FDA issued a Drug Safety Communication Dec. 17, 2010 “Anzemet causes a dose-dependent prolongation in the QT, PR, and QRS intervals on an electrocardiogram (ECG) …” “Anzemet injection should no longer be used to prevent nausea and vomiting associated with initial and repeat courses of emetogenic cancer chemotherapy.” Anzemet label changed to remove CINV indication IV Anzemet sales fell to near zero in one quarter 23 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

APF530 Thorough QT Study Design Double-blind, single-site Four-way crossover 56 healthy male and female subjects Study Arms SC APF530 1 g (granisetron 20 mg) – 2x therapeutic dose IV Granisetron 50 µg/kg over 3 minutes – 5x therapeutic dose Oral Moxifloxacin 400 mg (Avelox®) – positive control Placebo 0.9% Normal Saline 0.84 mL Primary endpoint: the upper bound of the one-sided 95% confidence interval for placebo-adjusted, baseline- subtracted QTcF being less than 10 milliseconds at all time points 24 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

APF530 Thorough QT Study Results Primary Endpoint Achieved in Both Granisetron Dose Groups Both APF530 and IV granisetron dose groups did not approach or exceed the upperbound of 10 ms at any time point The primary end point was met irrespective of heart-rate correction methodology – QTcF, QTcI, QTcB PK/PD relationship was flat – also showing no QTc signal Valid Study Moxifloxacin positive control group showed expected change – assay sensitivity reached 25 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Granisetron Thorough QT PK/PD Results ddQTcF vs. Granisetron Plasma Concentration Slope = -0.019 Plasma Concentration (ng/ml) 26 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. ddQTcF vs PlCon LME Regression Line 90% Upper Confidence Interval 90% Lower Confidence Interval Corr = 0.02 (p>0.32) 0 20 40 60 80 100 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60

Metabolism/Fate of Polymer Study 27 FDA requested study at end-of-review meeting in 1Q 2011 Purpose of study is to demonstrate fate of polymer in human subjects Confirm polymer breaks down into same hydrolytic end-products as seen in animals Confirm lack of other detectable polymer-related metabolites Protocol reviewed by FDA prior to initiating study Single blind, single site 14 healthy male and female subjects Gather and analyze plasma and urine samples for metabolic products Study objectives achieved Confirmed polymer breaks down into same hydrolytic end-products as in animals Confirmed lack of other detectable polymer-related metabolites January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Human Factors Study January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 28 Assess the Instructions-for-Use and usability of APF530 in simulated oncology setting Follows June 2011 FDA guidance: “Applying Human Factors and Usability Engineering to Optimize Medical Device Design” Initial risk assessment followed by iterative process of formative studies Validation study completed following formative studies New single-syringe design improves overall usability All subjects successfully followed instructions Average injection time reduced by 45% Previous Syringe Current Syringe Ease 3.1 8.3 Comfort 5.2 9.4 Control 7.7 9.5 1 0 – very difficult, 10 – very easy Mean Usability Scores 1

Commercial Opportunity 29 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Continuing Unmet Need in CINV Need for long-acting antiemetic therapies Delayed CINV (days 2-5) remains particularly challenging to manage Significant portion of patients fail to respond to Aloxi Need for antiemetic therapies with sustained efficacy CINV risk increases over multiple chemotherapy cycles 1 Available at: http://www.cancer.gov/cancertopics/pdq/supportivecare/nausea/HealthProfessional/page6#Section_183 “Despite the use of both first-generation and second-generation 5-HT 3 receptor antagonists, the control of acute CINV, and especially delayed nausea and vomiting, is suboptimal, and there is considerable opportunity for improvement with either the addition or substitution of new agents in current regimens.” NCI Statement On The Existing Unmet Need in CINV 1 30 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Addressing Debilitating Effects of CINV January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 31 More than 7 million cycles of chemotherapy administered each year ~27% are highly emetogenic ~46% are moderately emetogenic Most chemotherapy patients will undergo 4-15 cycles of chemotherapy 5-HT3 antagonists are standard- of- care for CINV Recommended in ASCO, NCCN and ONS guidelines NK-1 antagonists are only indicated in combination with 5-HT3 antagonists An Injectable 5-HT3 antagonist is co-administered with more than 90% of MEC and HEC regimens If initial regimen is non-effective, drugs are added or changed to address CINV in subsequent cycles

5-HT3 Antagonists Have Made a Substantial Impact The use of high-dose metoclopramide Introduction of first-generation 5-HT3 antagonists (short-acting) Approval of second-generation 5-HT3 antagonist (long-acting) Approval of first NK-1 antagonist Adapted from Hawkins et al, Clinical Journal of Oncology Nursing 2009, Volume 13, Number 1 FDA withdrawal of Anzemet and 32 mg dose of ondansetron (Zofran) due to QT prolongation risk 5-HT3 receptor antagonists approved for CINV 32 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 2003 2006 2011 1990s 1980s Chemotherapy Acute CINV Delayed CINV Highly Emetogenic granisetron (Kytril) ondansetron (Zofran) Aloxi None Moderately Emetogenic granisetron (Kytril) ondansetron (Zofran) Aloxi Aloxi

U.S. CINV Market Dynamics Source: Wolters Kluwer Usage in CINV estimated based on vial size 33 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. ~85% drop following tQT FDA Safety Letter ~40% drop following FDA 32 mg dose warning ~35% drop and rebound in 6-month period 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Q2'06 Q4'06 Q2'07 Q4'07 Q2'08 Q4'08 Q2'09 Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Injectable Drugs for the Prevention of CINV Number of Package Units Sold by Quarter ALOXI ANZEMET KYTRIL KYTRIL Generic (GRANISETRON) ZOFRAN ZOFRAN Generic (ONDANSETRON) EMEND * US Oncology data added starting 1/2009.

Aloxi Market Performance Pricing Average Selling Price = $175 Medicare Reimbursement = $186 Wholesale Acquisition Cost ~ $380 Orange Book Patent Exclusivity One patent expires April 2015 Three patents expire January 2024 34 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 0 50 100 150 200 250 300 350 400 450 2004 2005 2006 2007 2008 2009 2010 2011 Zofran went generic Aloxi Sales

~80% of Aloxi Is Used in Clinics IMS Health and Source Healthcare Analytics (WKH) data and Eisai Co., Ltd. published sales figures 35 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. U.S. Aloxi Units by Class of Trade – 12 Months Ending June 30 th 2012 Hospital Other Clinics 1 2.2 million units 2 0.5 million units 0 3 0.1 million units

>90% of Aloxi Units Contracted Through GPOs January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 36 2.2 Million Clinic Units 8% 23% 48% 21% Misc Onmark ION USO IMS Health and Source Healthcare Analytics (WKH) data and Eisai Co., Ltd. published sales figures Clinic Units by GPO – 12 Months Ending June 30 th 2012

WKH Data Oct. 2012 – Clinic Analysis Aloxi Clinical Use Is Largely Concentrated Cumulative Number of Accounts 32 1% accts 87 4% accts 161 7% accts 252 11% accts 500 22% accts 674 29% accts 904 39% accts 1246 54% accts 2305 100% accts 362 15% accts 80% of units (1.7M) comes from 39% of accounts (904) 50% of units (1.1M) comes from 15% of accounts (362) 37 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200

No New Injectable 5-HT3 Drug on Horizon 38 *Company reports, Leerink Swann; **Clinical Trials.gov NCT01339260 FDC = Fixed Dose Combo; PDUFA date expected 12-15 months post P3 data EUR-1025 development program uncertain (once-a-day oral modified-release formulation of ondansetron) January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. APF530 FDA PDUFA Date 2012 2013 2014 2015 Rolapitant Oral FDA Approval Expected Q4 2014 Rolapitant IV Study Data 1H 2014 FDC P3 Oral Data Expected Q1 2013 FDC Oral FDA Approval 1H 2014 Rolapitant P3 Oral Data Expected 2H 2013 Rolapitant IV FDA Approval Expected 2H 2015 Candidate Class Indication Sponsor Possible Launch APF530 5-HT3 Extended release Prevention of CINV in MEC/HEC A.P. Pharma 2H 2013 FDC** FDC combines netupitant (NK-1) with palonosetron (Aloxi) in a single oral tablet Prevention of CINV in MEC/HEC Eisai / Helsinn Oral 2H 2014 Rolapitant* Long-acting NK-1 Prevention of CINV in MEC/HEC only in combination with 5-HT3 Tesaro Oral 2H 2014 IV 2H 2015

APF530 Proposed Label January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 39 Proposed indication submitted in NDA INDICATIONS AND USAGE 1.1 Chemotherapy-Induced Nausea and Vomiting APF530 is indicated for: • Moderately emetogenic cancer chemotherapy (MEC)- prevention of acute and delayed nausea and vomiting associated with initial and repeat courses • Highly emetogenic cancer chemotherapy (HEC)- prevention of acute nausea and vomiting associated with initial and repeat courses

APF530 Planned Market Positioning January 2013 40 © 2013. A.P. Pharma, Inc. All rights reserved. Acute Onset 24 Hours) Delayed Onset 120 Hours) Moderately Emetogenic Highly Emetogenic Moderately Emetogenic Highly Emetogenic (0- (24- APF530 Aloxi Kytril Zofran If approved by FDA, APF530 and Aloxi would be the only “long acting” 5-HT3 antagonists approved for the prevention of acute and delayed-onset CINV

APF530 and Aloxi Profiles 41 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. Attribute APF530 Aloxi Indication MEC – acute and delayed CINV HEC – acute CINV MEC – acute and delayed CINV HEC – acute CINV MOA 5-HT3 receptor antagonist 5-HT3 receptor antagonist Dosing SC injection once per cycle IV once per cycle Long acting agent Bioerodible polymer technology releases granisetron over 5 days ~ 40 hour half life Efficacy Non -inferiority to Aloxi Effective in difficult chemotherapy regimens Effective in difficult chemotherapy regimens Demonstrated efficacy through multiple cycles in MEC and HEC Safety Headache, constipation, injection site bruising and pain Clean QT profile Headache and constipation Clean QT profile

Summary January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 42 $900 million market potential for injectable 5-HT3 antagonists* APF530 demonstrated non-inferiority to the market share leader Aloxi APF530 product profile 5-day release PK profile Good response in difficult chemotherapy regimens Efficacy through multiple cycles of chemotherapy Clean QT results Current market dynamics are stale with minimal investment providing opportunities to become the market leader Competitive landscape creates opportunity with the removal of Anzemet and Zofran 32mg Greater than 80% of Aloxi sales are in the community setting and highly concentrated consistent with other supportive care products *Branded market estimate using 2011 units based on Wolters Kluwer and Aloxi ASP

A.P. Pharma Product Lifecycle Considerations 43 APF530 covered by multiple patents 2 patents covering combination of polymer, excipients and drug expire in 2021 3 patents covering APF530 expire in 2024 Polymer-based injectable products are difficult to copy independent of IP ANDA FDA requirements for injectable products Must have same inactive ingredients in the same concentration as the reference listed drug Polymers are complex mixtures of varying-length molecules, making characterization for “sameness” very challenging January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Financial Summary January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 44 Expect cash sufficient to fund commercial launch of APF530 Summary Statement of Operations (In thousands, except per share data) Year Ended December 31, 2011 Nine Months Ended September 30, 2012 Revenue $ 646 $ – Operating expenses 11,708 15,203 Other income (expenses) (752) (408) Net loss $ (11,814) $ (15,611) Net loss per share 1 $ (0.10) $ (0.07) Condensed Balance Sheet Data (In thousands) September 30, 2012 Cash and cash equivalents $ 60,048 Total assets $ 61,761 Total stockholders’ equity $ 57,517 1 Based on 120.3 and 225.1 million weighted average common shares outstanding for the periods ended December 31, 2011 and September 30, 2012, respectively

A.P. Pharma Highlights January 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 45 Lead product candidate, APF530, is long-acting, injectable product for chemotherapy-induced nausea and vomiting (CINV) Incorporates widely used 5-HT3 antagonist - granisetron (Kytril) 5-day delivery profile Reduces both acute- and delayed-onset CINV with single injection Patent coverage into 2024 APF530 shown to be non-inferior to market leader Aloxi 1,341-patient, randomized, controlled, Phase 3 study FDA PDUFA Action Date of March 27, 2013 Resubmitted NDA for APF530 in September 2012 Addressed issues raised in Complete Response Letter Product launch planned for 2H 2013 APF530 targets a $900 million market opportunity in US alone* Recent competitive setbacks could enhance commercial uptake Could be second, long-acting, injectable product on market A.P. Pharma has the potential to leverage its Biochronomer drug delivery technology into other opportunities *Branded market estimate using 2011 units based on Wolters Kluwer and Aloxi ASP

Thank You A.P. Pharma, Inc. OTCBB: APPA January 2013 46 January 2013 © 2013. A.P. Pharma, Inc. All rights reserved.