EX-99.3 4 d626911dex993.htm EX-99.3

Company Overview OTCBB: APPA November 2013 Exhibit 99.3

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 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Company: A.P. Pharma, Inc. Ticker: OTCBB: APPA.OB Stock Price: $0.46 (11/8/2013) Market Capitalization: $237 million 1 Cash: $23 million 2 Debt: $5 million 2 Stock Summary 1 Based on 516 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, 2013 3 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Barry D. Quart, PharmD Chief Executive Officer Ardea Biosciences Agouron Pharmaceuticals Pfizer Robert Rosen President & Chief Commercial Officer Bayer Healthcare Sanofi-Synthèlabo Imclone Stephen Davis Chief Operating Officer Ardea Biosciences Neurogen Mark Gelder, M.D. Senior Vice President & Chief Medical Officer GE Healthcare Bayer Healthcare Wyeth Paul Marshall Senior Vice President Technical Operations Amylin Amgen Baxter International Brian Drazba Vice President, Finance & Chief Financial Officer ISTA Pharmaceuticals Insight Health Corp Arthur Andersen & Co Senior Management 4 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Highlights Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 5 Lead product candidate, SUSTOL™ (formerly known as 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; however, effective exclusivity actually longer due to polymer SUSTOL shown to be non-inferior to market leader Aloxi ® 1,341-patient, randomized, controlled, Phase 3 study SUSTOL targets a large market opportunity, with approximately 7 million doses of chemotherapy annually in US alone* Recent competitive setbacks could enhance commercial uptake Could be second, long-acting, injectable product on market Plans to leverage our Biochronomer™ drug delivery technology, development capacity and commercial expertise for other opportunities: Long-acting anesthetic for post-surgical pain Triple-combination for CINV is under evaluation Potential for several others *TDR August 2006 internal report

Strategic Product Development Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 6 Framework Large, established markets with high unmet need Rapid development & approval pathway based on reformulations and 505(b)(2) strategy Premium pricing through innovation and product differentiation Clearly defined value proposition Opportunities to optimize ROI through life cycle management (franchise extension) Low cost of entry Pipeline Chemotherapy-induced nausea and vomiting SUSTOL Potential for triple-drug combination Post-operative pain management Long-acting local anesthetic Potential for several others

SUSTOL Clinical Summary 7 Nov 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 (results from 10 mg dose group presented) 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 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

5-Day Profile: APF530 Pharmacokinetics Nov 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, providing long-acting coverage for CINV Minimum therapeutic concentration of granisetron* *Data from patent application 20120258164 for transdermal granisetron 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 Delayed APF530 10mg Acute Delayed Difference in Complete Response APF530-Aloxi (97.5% CI) -15 -10 -5 0 5 10 15 10 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 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 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 0 10 20 30 40 50 60 70 80 90 100 Acute Delayed APF530 10mg 80.7 81.3 64.3 67.1

Safety Summary 1 Safety results with the 5 mg dose of APF530 studied in separate arm of the phase 3 study are not included 2 >90% of injection site reactions were reported as mild; one patient discontinued due to injection site reaction Reported in Cycle 1 12 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. APF530 10 mg 1 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 2

FDA Requested ASCO 2011 Reanalysis Improves Difference Between SUSTOL and Aloxi Protocol Specified HEC Population Acute Delayed 13 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. Acute Delayed ASCO 2011 Guideline HEC Population 81 81 64 67 0 10 20 30 40 50 60 70 80 90 100 67 75 51 56 0 10 20 30 40 50 60 70 80 90 100

Largest Differences Between Arms is Seen With Most Difficult Chemo Regimens 1 CR Rates by 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. Highlighted HEC regimens were considered HEC in both protocol specified Hesketh and 2011 ASCO Guidelines 14 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Summary of Clinical Results Bio-erodible polymer technology releases granisetron to prevent CINV over at least 5 days Large, randomized, Phase 3 study conducted: APF530 10 mg showed non-inferiority to Aloxi 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 Injection site reactions where predominately mild Good response rates were observed in difficult chemotherapy regimens Efficacy was maintained with reanalysis using ASCO 2011 guidelines and through multiple cycles of chemotherapy TQT study showed APF530 has no clinically significant effect on QT; differentiated from Zofran(ondansetron) and Anzemet(dolasetron) 15 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

SUSTOL Regulatory Status 16 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

SUSTOL NDA Status Submitted NDA in May 2009 under 505(b)(2) filing pathway Received Complete Response Letter in March 2010 FDA raised major issues in multiple areas Resubmitted NDA in September 2012 Received Complete Response Letter March 2013 raising three main issues: 17 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. CMC: correction of PAI issues and revision of one in-vitro release method Requirement for Human Factors Validation Study with commercial product Re-analysis of the existing Phase 3 study using the ASCO 2011 guidelines for categorization of MEC and HEC

New Management Team Is Addressing the CRL Chemistry, Manufacturing, and Controls Sites with PAI issues are being eliminated from the supply chain, with work transferred to well established site with no PAI issues Transition is almost complete Secondary benefit of consolidating manufacturing and release efforts is that there has been a substantial improvement in the COGS New in-vitro release method has been developed and being validated Plan to produce three validation batches of finished product in advance of re-filing to supply Human Factors Study Human Factors Validation Study Will be conducted as soon as commercial material available Re-analysis of Phase 3 using new ASCO 2011 Guidelines Re-analysis complete Complete dataset and programs supplied to FDA and found acceptable Re-submission is now planned for late 1Q2014 18 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

SUSTOL Life-Cycle Management Plans to Obtain Post-Approval Indication for “Delayed HEC” 19 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Palonosetron lacks an indication in delayed HEC because it was unable to demonstrate superiority vs. ondansetron © 2013. A.P. Pharma, Inc. All rights reserved. 20 Goal for New HEC Study is a Differentiated Target Product Profile* “Well, it appears to be certainly longer-acting, and the real differentiator appears to be in the delayed setting” –Oncologist, Suburban, Large Private Practice “We’d probably try a few patients on it and as long as we’re getting the sense that it is doing what it’s claimed to do, then we may make the full switchover... – Oncologist, Urban, Group Practice Physician Feedback Source: August 2013 qualitative market research with n=30 oncologists Nov 2013 *Text in blue is based on the successful outcome to the planned HEC trial “[The delayed HEC study] solidifies my impression of [APF530] & gives even more confidence in its clinical profile. –Oncologist, Urban, Mid-sized, Multi-specialty Practice SUSTOL Indication MEC – acute and delayed CINV HEC – acute and delayed CINV Dosing SC injection once per cycle Duration of action Bioerodible polymer technology maintains super therapeutic levels of granisetron over 5 to 7 days - Study SUSTOL vs. palonosetron SUSTOL + fosaprepitant ondansetron fosaprepitant • • vs. + Efficacy Results • Non inferior to palonosetron • Effective in prevention of acute & delayed CINV in MEC and acute CINV in HEC • SUSTOL superior to ondansetron • Effective in prevention of delayed CINV in HEC - Safety esults • Headache, constipation, injection site bruising and pain. Majority of AEs were mild • Clean QT profile R

Planned Phase 3 “Delayed” HEC Study Schematic 1000 patients scheduled to receive HEC* randomized 1:1 Ondansetron 0.15 mg/kg IV (up to 16 mg IV) d1 + Fosaprepitant 150 mg IV d1 + Placebo SC d1 SUSTOL SC d1 + Fosaprepitant 150 mg IV d1 + Placebo IV d1 Cycle 1 1) All subjects will receive dexamethasone 12 mg IV on day 1 and 8 mg PO on days 2- 4 2) All subjects will be allowed to receive “rescue” medications as needed at the discretion of their treating physician © 2013. A.P. Pharma, Inc. All rights reserved. 21 * HEC agents as defined in the 2011 ASCO CINV Guidelines • Study design has been accepted by FDA for obtaining expanded indication • Study is powered to show superiority (10% difference) to three drug “standard of care” for HEC • Study planned to complete late 2014 Nov 2013

45 65 67 0 10 20 30 40 50 60 70 80 90 100 New SUSTOL Study in Delayed HEC Has a High Likelihood of Success Based on Previous Results ^^Average Complete Response rate improvement when adding an NK-1 RA to a 5-HT3 RA and Dex is ~15 - 20% in the delayed phase * Poll-Bigelli; Cancer, 97:12, 3090, 2003 Projected Response with addition of NK1 ^^ Study powered to show 10% difference: 65% vs 75% APF530 + Dex + Fosaprepitant** APF530+Dex Ondansetron + Dex + Fosaprepitant* Ondansetron + Dex* 87% Standard of Care Phase 3 Study HEC Study 67% 65% 45% Study powered for a 10% difference between arms 20% difference is expected with the addition of fosaprepitant, © 2013. A.P. Pharma, Inc. All rights reserved. 22

SUSTOL Commercial Opportunity 23 Nov 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 palonosetron 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 24 © 2013. A.P. Pharma, Inc. All rights reserved. Nov 2013

Addressing Debilitating Effects of CINV © 2013. A.P. Pharma, Inc. All rights reserved. 25 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 MASCC guidelines NK-1 antagonists are only indicated in combination with 5-HT3 antagonists An Injectable 5-HT3 antagonist is co-administered with more than >80% of MEC and HEC regimens If initial regimen is non-effective, drugs are added or changed to address CINV in subsequent cycles *TDR August 2006 Nov 2013

U.S. CINV Market Dynamics 26 © 2013. A.P. Pharma, Inc. All rights reserved. Source: WK 07/2013 Nov 2013 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 Q4'12 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.

Physicians View SUSTOL As Highly Competitive vs. Palonosetron © 2013. A.P. Pharma, Inc. All rights reserved. 27 Physicians responded favorably to HTH study design vs. palonosetron – good sample size, clinically meaningful endpoints, & strong comparator PK profile and efficacy results were viewed as clinically meaningful – SUSTOL viewed as a long-acting agent with sustained efficacy over multiple days SUSTOL is perceived as a clinically equivalent alternative to palonosetron for most physicians SUSTOL safety profile is similar to palonosetron and very manageable “Well designed, well done clinical trial, the kind of trial you want to see. I think that’s very favorable.” – Oncologist, Mid-sized Community Practice “I think it’s an incrementally better product than palonosetron. The whole idea is probably the longer [PK profile].” – Oncologist, Large Community Practice “I think [APF530] is great…we need something which has a much longer [duration of action]…I would certainly use it.” – Oncologist, Urban, Community Practice “It has [few] side effects…very comparable to medications we are currently using.” – Oncologist, Suburban, Large Practice Source: August 2013 qualitative market research with n=30 oncologists Nov 2013

Despite lack of commercial presence, a significant portion of physicians view SUSTOL as differentiated © 2013. A.P. Pharma, Inc. All rights reserved. 28 Question: “Based on the design and results of these studies, how do you perceive SUSTOL vs. palonosetron?” ““The [first] study is compared with palonosetron and it seems like they are equivalent. I’m OK with that.” –Oncologist, Large Community Practice “Well, this product in comparison to palonosetron seems to be better. So, I would have no problems using a better agent …The bottom line is that your data show that this therapy was better than palonosetron.” – Oncologist, Community Practice Source: August 2013 qualitative market research with n=30 oncologists “Also… even if there were no delayed data in HEC, I would still use it because then it would be very comparable to the current medication that I'm using." –Oncologist, Mid-sized Community Practice Nov 2013 Clinically Equivalent 67% Clinically Differentiated 33%

HEC regimens represent a significant market opportunity for SUSTOL © 2013. A.P. Pharma, Inc. All rights reserved. 29 1 IntrinsiQ data from July 2012 – June 2013 HEC regimens account for ~20% (500K) of palonosetron administrations Of all HEC administrations, ~20% are given without concomitant IV 5-HT3 – inconsistent with clinical guidelines Nov 2013 497,256 1,463,558 451,490 111,696 HEC MEC LEC Minimal - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 497,256 317,915 188,988 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Annual HEC administrations Untreated with IV 5HT3 Treated with generic IV 5HT3 Treated with Aloxi

SUSTOL has the potential to be the next generation 5-HT3 receptor antagonist (RA) 30 © 2013. A.P. Pharma, Inc. All rights reserved. 5-HT3 RAs 1 st generation 2 nd generation 3 rd generation Products ondansetron granisetron palonosetron SUSTOL Duration of action Short acting ~ 8 hr half-life Longer acting ~40 hr half-life Long acting PK profile 5-7 days Indications Prevention of CINV in emetogenic chemo including high-dose cisplatin MEC – acute & delayed CINV HEC – acute CINV MEC – acute & delayed CINV HEC – acute & delayed CINV* *Obtaining delayed HEC will be based on completion of new clinical trial Nov 2013

WKH Data Oct. 2012 – Clinic Analysis Palonosetron Clinical Use Is Highly 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 all units (2.2M) comes from community clinics 80% of clinic units (1.7M) comes from 39% of accounts (904) 50% of clinic units (1.1M) comes from 15% of accounts (362) 31 © 2013. A.P. Pharma, Inc. All rights reserved. Nov 2013 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200

Summary © 2013. A.P. Pharma, Inc. All rights reserved. 32 CINV market is a large, concentrated commercial opportunity Over 2.7MM annual units of palonosetron 1 >80% of use is in the community practice setting – highly concentrated among large practices 1 Physicians view a non-inferior SUSTOL profile as highly competitive 5-7 day PK profile Non-inferior to market leader palonosetron based on large, head-to-head trial Good response in difficult chemotherapy regimens including AC and cisplatin Sustained efficacy over multiple cycles of chemotherapy Efficacy in palonosetron failures Favorable safety profile with clean QT results Differentiated profile would position SUSTOL as the next generation IV 5-HT3 Delayed CINV, especially in HEC regimens, is the biggest area of unmet need No 5-HT3 drugs approved specifically for delayed CINV in HEC Palonosetron failed to show superiority to ondansetron in delayed HEC High likelihood of clinical success versus ondansetron Supports differentiated value proposition vs. palonosetron HEC regimens represent a significant market opportunity 20% of palonosetron administrations are given with HEC regimens 2 20% of patients receiving HEC regimens do not receive concomitant treatment with an IV 5-HT3 2 1. Wolters Kluwer 2012, 2. Intrinsiq 2013 Nov 2013

New Product Initiative 33 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

SUSTOL Product Lifecycle Considerations 34 SUSTOL 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 Obtaining the delayed HEC indication will further differentiate SUSTOL from all other 5-HT3 products Creating additional product opportunities with SUSTOL will further leverage our investment in the HEC program One opportunity under evaluation is a three-drug combination containing SUSTOL, an NK1 antagonist and dexamethasone Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved.

Biochronomer Triple-Drug Combination for CINV in Dogs Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 35 Profile of each component of triple-drug combo is similar to individual agents Single shot with all three of the drugs recommended for HEC Registration could be based primarily on bioequivalence 0 10 20 30 40 50 60 70 80 90 0 100 200 300 400 500 600 700 800 900 0 24 48 72 96 120 144 168 Hours NK1 Antagonist Granisetron Dexamethasone

Biochronomer™ Bupivacaine/Ropivacaine: Post-Surgical Pain Control Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 36 Opportunity to use our polymer for post-surgical pain control utilizing the 505(b)(2) process Once we have an FDA approved polymer, manufacturing site and syringe filler, the next products using the polymer will be much easier and cheaper to develop We believe the leading product in this market, EXPAREL, can be substantially improved by: Prolonging the period of anesthetic release, so peak concentration are seen at 48- 72 hours rather than 12-24 hours as seen with EXPAREL Potentially using a better anesthetic agent, ropivacaine

Greatest Benefit for EXPAREL Is First 12 Hours Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 37 Adapted from EXPAREL Product Monograph *US Package Insert Package insert states that there was minimal to no difference between Exparel and placebo treatments 24-72 hours post-dose*

Mean Plasma Bupivacaine Concentrations After EXPAREL From FDA Clinical Pharmacology Review Data from FDA Clinical Pharmacology Review; NDA 22-496 EXPAREL; * US Package Insert Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 38 Low concentrations of bupivacaine after 24 hr may explain why there was minimal to no difference between Exparel and placebo treatments 24-72 hours post-dose*

Biochronomer™ Bupivacaine Has Superior PK Profile in Dogs *Projected from 7.5 mg/kg dose; EXPAREL data from Richard, et. al. 2012 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 39

Biochronomer™ Ropivacaine Has Superior PK Profile in Dogs *Dose adjusted to match bupivacaine; EXPAREL data from Richard, et. al. 2012 Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 40

Post-Operative Pain Management Commercial Considerations Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 41

Post-operative pain market represents an attractive opportunity for product development © 2013. A.P. Pharma, Inc. All rights reserved. 42 • Patients are typically treated with a combination of NSAIDs, opioids, local anesthetics and/or simple analgesics • Strong opioids currently hold approximately half of the market sales Treatment Paradigm • As of 2012, approximately 24.8 million procedures associated with post-operative pain were conducted in the US. Expected to grow to 32.3 million by 2022 • US post-operative pain market sales* are expected to grow 1.6% annually from ~$3.1 billion in 2012 to ~$3.6 billion by 2022 • Market growth is primarily driven by the increasing number of procedures and by new reformulations Market Size • Longer-acting local anesthetics (>3 days) with improved safety profiles • Potent opioid-sparing analgesics with improved tolerability and less severe side effects compared to opioids Unmet Needs • Pain is a major driver of inpatient admissions and increased length of stay • Reimbursement will increasingly be tied to measures of quality and ratings of patient experience – both of which are significantly impacted by pain • Costs of opioid addiction & opioid-related adverse events are significant concerns High Cost of Post-Operative Pain Source: Decision Resources, Acute Pain Pharmacor, December 2012; Decision Resources, Post-operative Pain Pharmacor, May 2006 Nov 2013

Innovation in a large, growing disease area with high unmet need will drive significant dollar market growth 43 Source: Decision Resources, Post-Operative Pain Pharmacor, May 2006; Decision Resources, Acute Pain, December 2012 2012 Post-Op Pain Market (US only) 2012 Total: $3.1B By 2020, 10% penetration into the 30M procedures requiring post-op pain management equates to $850M+ opportunity at a price of $285/unit Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 25.3 25.9 26.5 27.1 27.8 28.5 29.2 29.9 30.6 32.5 0 5 10 15 20 25 30 35 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Procedures Requiring Post-Operative Pain Management

As a potential development candidate, ropivacaine has advantages over bupivacaine 44 Bupivacaine Ropivacaine Notes 1 KOL Feedback Efficacy • Both molecules have similar efficacy, onset of action, and analgesic potency “Both of these products work well for blocking pain… the issue is that they are short acting.” – Orthopedic Surgeon Safety • Lower CV and CNS toxicity • Overall better side-effect profile “Safety is where ropivacaine has a clear advantage. It is widely known in our institution that bupivacaine has more cardiovascular toxicity.” – Anesthesiologist MOA • Ropivacaine has been shown to have shorter depth and duration of motor block compared to bupivacaine “The goal is to achieve sensory blockade without significant motor blockade. In this way, ropivacaine seems to perform better.” – Orthopedic Surgeon Clinical Flexibility • Considered more clinically versatile by physicians • Approved for use in children “For all these reasons, a long-acting bupivacaine is a ‘hit’… but a long- acting ropivacaine would be a ‘home run’.” – Orthopedic Surgeon 1 Sources: 1 Scott, et al. Anesth Analg 1989; 24: 514-518; 2 Knudsen K, et al. Br J Anesth 1997 78; 507-514; 3 Bertini, et al. Reg Anesth Pain Med 1999; 4 Chelly JE, et al. J Orthop Trauma 2003; 5 Turner G, et al. Br J Anesth 1996; 76:606-610; 5 Writer WDR, et al. Br J Anaesth 1998; 81: 713-717. 6 McGlade, et al. Anaesth Intensive Care 1998;26:515-520; 7 Arikan OK, et al. J Otaryngol Head Neck Surg 2008; 37(6): 836-43; 8 Ivani G, et al. Can J Anaesth 1999; 46(5): 467-469; 9 Pitimana-aree S, et al. Reg Anesth Pain Med 2005; 30(5): 446-51; http://www.naropin-us.com/about_benefits.php 2 Source: KOL interviews October 2013 © 2013. A.P. Pharma, Inc. All rights reserved. Nov 2013 2

Summary – Pipeline offers significant opportunity for commercial value creation Large, concentrated commercial opportunity Physicians view a non-inferior SUSTOL profile as highly competitive with palonosetron 5-7 day PK profile Non-inferior to market leader palonosetron based on large, head-to-head trial Sustained efficacy over multiple cycles of chemotherapy & efficacy in palonosetron failures Favorable safety profile with clean QT results With successful outcome in planned HEC trial, a differentiated profile with delayed- HEC indication would position SUSTOL as the next generation IV 5-HT3 HEC regimens represent a significant market opportunity 45 Large, growing market High unmet need 3-5 day local anesthetic depot would offer clinical differentiation Clear value proposition given the costs of post-operative pain Rapid development and approval pathway Potential opportunity for pain franchise through line extensions © 2013. A.P. Pharma, Inc. All rights reserved. 1. Wolters Kluwer 2012, 2. Intrinsiq 2013 Chemotherapy-induced nausea and vomiting Post-Operative Pain Nov 2013

Financial Summary Nov 2013 © 2013. A.P. Pharma, Inc. All rights reserved. 46 Summary Statement of Operations (In thousands, except per share data) Nine Months Ended September 30, 2013 Revenue $ – Operating expenses 40,626 Other income (expenses) (614) Net loss $ (41,240) Net loss per share $ (0.13) Condensed Balance Sheet Data (In thousands) September 30, 2013 Cash and cash equivalents $ 22,597 Total assets $ 26,370 Total stockholders’ equity $ 20,872 1 Based on 306.1 million weighted average common shares outstanding for the period ended September 30, 2013. 1