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Apricus' Q1 Loss Narrows

Zacks Equity Research

Apricus Biosciences, Inc. (APRI) reported first quarter 2014 loss of 11 cents per share, narrower than the year-ago loss of 23 cents per share, but wider than the Zacks Consensus Estimate of a loss of 3 cents per share.

In the first quarter of 2014, Apricus did not generate any revenues. The company had reported revenues of $0.9 million in the year-ago quarter. The Zacks Consensus Estimate was $3 million.

The Quarter in Detail

R&D expenses increased 2.2% year over year to $1.4 million. This was due to higher investments in the pipeline.

G&A expenses decreased 20% year over year to $3.1 million.

Takeda (TKPPY), in collaboration with Apricus, initiated a sampling program in the UK for Vitaros (erectile dysfunction). The early availability of Vitaros will allow prescribers to experience the effect of the drug on patients before it is launched commercially. Vitaros is slated for launch in the UK on Jun 16, 2014. Apricus has an agreement with Recordati, worth up to $51 million, for the commercialization of Vitaros in several other EU countries.

Additionally, Apricus is developing a second-generation Vitaros (Room Temperature Vitaros), in which alprostadil will be stored separately from the ingredients that cause it to become unstable at room temperature and will be mixed immediately prior to use. This will extend the shelf-life for Vitaros to up to 36 months (currently approved shelf-life is 18 months) and will also not require refrigeration.

The study is expected to be completed by the third quarter of 2014. The company plans to file for approval for the second-generation Vitaros room temperature device in 2015 and launch it in Europe in 2016, if approved.

The U.S. Food and Drug Administration (:FDA) approved Apricus’ Investigational New Drug (IND) application for RayVa (a combination of alprostadil and Apricus’ DDAIP.HCI permeation enhancer platform technology) for the treatment of Raynaud's phenomenon secondary to scleroderma. The company intends to start patient enrolment in a randomized, double blind, placebo-controlled phase IIa study on RayVa in the second half of 2014. The FDA indicated that it might grant priority review status to RayVa.

Meanwhile, Apricus is seeking partnerships for the development and commercialization of Femprox (female sexual interest/arousal disorder) in Europe, while it will retain commercial rights on Femprox in the U.S.

2014 Guidance

In 2014, Apricus expects to earn cash by out-licensing Femprox. Later in 2014, Apricus expects royalty revenues on Vitaros sales. A major portion of expenses incurred by the company will be allocated to the development of the Vitaros room temperature device, the commercialization of Vitaros in the EU as well as pipeline development.

Apricus currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Cardiome Pharma Corp. (CRME) and Shire plc (SHPG). While Cardiome carries a Zacks Rank #1 (Strong Buy), Shire carries a Zacks Rank #2 (Buy).

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