A.P. Pharma Down 10% After Raising $53.6 Million in Common Stock Offering (APPA)

Pharmaceutical company A.P. Pharma (OTC: APPA), based in Redwood City, California, was able to raise $53.6 million in proceeds from investors, but was not able to raise its stock price today. The investors purchased 102 million shares at $0.525 per share, which is $0.065 less than today’s closing price.

On July 10, 2012, A.P. Pharma announced that the United States Patent and Trademark Office had allowed three patents to cover the company’s main product, a drug called APF530, which aims to prevent nausea and vomiting caused by chemotherapy. When the patents are issued, they will extend the APF530’s patent life to 2024.

The company is also excited about the news regarding ondansetron, APF530’s competitor, which was released June 29, 2012. It was determined that ondansetron has a serious side effect that can cause life-threating heart rhythm irregularities. This is because ondansetron is linked to QT interval prolongation. APF530, however, is not linked to QT interval prolongation, giving it a safety advantage.

A.P. Pharma uses Biochronomer, a proprietary drug delivery technology that is created by polymers. The company has two other pain relief drugs in the works. One is an opiate and the other is an anesthetic.

After closing at $0.66 last night, A.P. Pharma opened the trading day at $0.64 and dropped to $0.565 before settling at $0.59. This resulted in a drop of $0.07, or 10.6%, from yesterday. The stock has seen no consistent activity in the past 52 weeks. So, while the stock did drop today, it may very well rise back up tomorrow.

Despite today’s drop, A.P. Pharma’s stock is still not very far away from the 52-week high of $0.75, which it attained on June 8, 2012. Considering how unstable the stock appears to be, it could match that number or even exceed it in the near future.

Although the price dropped, volume was above normal. Compared to the average daily volume of 92,490 shares, today’s activity exceeded that number by nearly seven times, with a volume of 615,962 shares. That number is a close second to the 52-week high of 662,652 shares traded on June 12, 2012.

A.P. Pharma has not really been a hot stock to watch since it made huge gains in February and March 2010. Looking at the closing prices for the past year, the company has not had any consistent stock activity. However, investors are becoming more aware of this company and are excited about its drugs, so perhaps the instability will give the stock some uphill activity in the near future.

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Published by Lisa Ray

Lisa has a Bachelor of Arts in journalism from Purdue University and 3 years of experience in the publishing field.