Company Merger with Seelos Therapeutics, Inc. Expected
to Close in Fourth Quarter 2018
Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical
company historically focused on seeking to advance innovative
medicines in urology and rheumatology, today reported financial
results for the third quarter and year-to-date for 2018 and
provided a corporate update on its pending merger with Seelos
Therapeutics, Inc.
On July 30, 2018, the Company announced the
signing of a definitive agreement to merge with Seelos
Therapeutics, Inc., a privately-held biotechnology company, in an
all-stock transaction. The merged company will focus on the
development and commercialization of central nervous system (CNS)
therapeutics with known mechanisms of action in areas with a highly
unmet medical need. Upon completion of the proposed merger, the
name of the merged company will be Seelos Therapeutics,
Inc., and the company is expected to begin trading on the
Nasdaq Capital Market under the ticker symbol “SEEL.” Upon closing
of the transaction, Apricus shareholders of record are expected to
own approximately 15% of the combined company based on an estimated
$94 million valuation at closing, subject to certain adjustments
set forth in the merger agreement. In addition, Apricus
shareholders of record at closing will receive a Contingent Value
Right (CVR) which will provide such holders 90% of any proceeds
above $500,000 obtained by Seelos for the U.S. Vitaros rights.
“Throughout the third quarter of this year, we
have been focused on a concluding the proposed merger with Seelos,
as our board believes it will provide Apricus shareholders an
opportunity to create value from a funded, diversified pipeline of
late-stage clinical assets in areas of high unmet need,”
said Richard Pascoe, Chief Executive Officer. “We will
continue to work with Seelos management in the coming weeks to
complete the merger following the Special Stockholder Meeting.”
Third Quarter and Year-to-Date Financial
Results
Net loss during the quarter ended
September 30, 2018 was $2.8 million, or loss per share of
$0.12, compared to a net loss of $3.8 million, or loss per share of
$0.29, during the third quarter of 2017. Net loss during the nine
months ended September 30, 2018 was $7.4 million, or loss per share
of $0.35, compared to net income of $2.8 million, or earnings per
share of $0.26, during the nine months ended September 30, 2017.
Net income during the nine months ended September 2017 was
primarily due to the $11.8 million gain recorded upon the sale of
our ex-U.S. Vitaros rights and assets to Ferring.
For all periods presented, financial statement
activity related to our ex-U.S. Vitaros business has been presented
as discontinued operations. As of September 30, 2018, the
Company’s cash totaled $5.3 million, compared to $6.3 million as of
December 31, 2017.
About Apricus Biosciences,
Inc.
Apricus Biosciences, Inc. (APRI) is a
biopharmaceutical company historically focused on seeking to
advance innovative medicines in urology and rheumatology. Apricus
has two product candidates: Vitaros, a product candidate in the
United States for the treatment of erectile dysfunction, which is
in-licensed from Warner Chilcott Company, Inc., now a subsidiary of
Allergan plc (Allergan); and RayVa, a product which has completed a
Phase 2a clinical trial for the treatment of the circulatory
disorder Raynaud’s phenomenon, secondary to scleroderma, for which
Apricus owns worldwide rights.
For further information on Apricus, visit
http://www.apricusbio.com.
Apricus has common law trademark rights in the
unregistered marks “Apricus Biosciences, Inc.,” “Apricus,”
“Vitaros,” and “RayVa” in certain jurisdictions. Vitaros is a
registered trademark of Ferring International Center S.A. in
certain countries outside of the United States. Solely for
convenience, trademarks and tradenames referred to in this press
release appear without the ® and ™ symbols, but those references
are not intended to indicate, in any way, that we will not assert,
to the fullest extend under applicable law, our rights or that the
applicable owners will not assert its rights, to these trademarks
and tradenames.
About Seelos Therapeutics, Inc.
Seelos Therapeutics, Inc. is a clinical-stage
biopharmaceutical company focused on the development and
advancement of novel therapeutics to address unmet medical needs
for the benefit of patients with central nervous system (CNS)
disorders. The Company’s robust portfolio includes several
late-stage clinical assets targeting psychiatric and movement
disorders, including orphan diseases. Seelos is based in New York.
For more information, please visit its
website: www.SeelosTx.com, the content of which is not
incorporated herein by reference.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995 and other
Federal securities laws. For example, we are using forward-looking
statements when we discuss the structure, timing and completion of
the proposed merger; the combined company’s listing on Nasdaq after
closing of the proposed merger; the possibility that any
out-licensing of Vitaros assets will occur and that the conditions
to payment under the CVRs will be met; expectations regarding
ownership structure and the valuation of the combined company; the
future operations of the combined company; the nature, strategy and
focus of the combined company; and that the product candidates have
the potential to address critical unmet needs of patients. Apricus
and Seelos may not actually achieve the plans, carry out the
intentions or meet the expectations or projections disclosed in the
forward-looking statements and you should not place undue reliance
on these forward-looking statements. Because such statements deal
with future events and are based on Apricus’ current expectations,
they are subject to various risks and uncertainties and actual
results, performance or achievements of Apricus could differ
materially from those described in or implied by the statements in
this press release, including: the risk that the conditions to the
closing of the transaction are not satisfied, including the failure
to timely or at all obtain shareholder approval for the
transaction; uncertainties as to the timing of the consummation of
the transaction and the ability of each of Apricus and Seelos to
consummate the transaction; risks related to Apricus ability to
correctly manage its operating expenses and its expenses associated
with the transaction pending closing; risks related to the market
price of Apricus’ common stock relative to the exchange ratio;
unexpected costs, charges or expenses resulting from the
transaction; potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed merger transaction; certain cash and non-cash adjustments
set forth in the merger agreement that may alter the percentage of
the combined company held by Apricus shareholders and/or the
related combined company valuation; the uncertainties associated
with the clinical development and regulatory approval of Seelos
product candidates such as SLS-002, SLS-006, SLS-008, SLS-010 and
SLS-012, including potential delays in the commencement, enrollment
and completion of clinical trials; the potential that earlier
clinical trials and studies of Seelos’ product candidates may not
be predictive of future results; and the requirement for additional
capital to continue to advance these product candidates, which may
not be available on favorable terms or at all. The foregoing review
of important factors that could cause actual events to differ from
expectations should not be construed as exhaustive and should be
read in conjunction with statements that are included herein and
elsewhere, including the those risks discussed under the heading
“Risk Factors” in Apricus’ annual report on Form 10-K filed with
the Securities and Exchange Commission (“SEC”) on March 1, 2018,
and in any subsequent filings with the SEC. Except as otherwise
required by law, Apricus disclaims any intention or obligation to
update or revise any forward-looking statements, which speak only
as of the date hereof, whether as a result of new information,
future events or circumstances or otherwise.
No Offer or Solicitation; Important
Additional Information Will be Filed with the SEC
This communication shall not constitute an offer
to sell or the solicitation of an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. In connection with
the proposed merger, Apricus intends to file relevant materials
with the SEC, including a registration statement that will contain
a proxy statement and prospectus. These materials will be filed
with the SEC and will be mailed to Apricus’ shareholders seeking
any required shareholder approvals in connection with the proposed
merger. Investors and shareholders will be able to obtain free
copies of the proxy statement/prospectus and other documents filed
by Apricus with the SEC (when they become available) through the
website maintained by the SEC at www.sec.gov. Before making any
voting or investment decision, investors and shareholders are urged
to read the proxy statement/prospectus (including any amendments or
supplements thereto) and any other relevant documents that Apricus
may file with the SEC when they become available because they will
contain important information about the proposed merger.
Participants in the
Solicitation
Apricus and Seelos, and each of their respective
directors and executive officers and certain of their other members
of management and employees, may be deemed to be participants in
the solicitation of proxies in connection with the proposed merger.
Information about Apricus’ directors and executive officers is
included in Apricus’ Annual Report on Form 10-K for the year ended
December 31, 2017, filed with the SEC on March 1, 2018, and the
definitive proxy statement for Apricus’ 2018 annual meeting of
shareholders, filed with the SEC on April 6, 2018. Additional
information regarding these persons and their interests in the
transaction will be included in the proxy statement relating to the
merger when it is filed with the SEC. These documents can be
obtained free of charge from the sources indicated above.
Contact
Investor Relationsir@apricusbio.com (858)
222-8041
(Financial Information to Follow)
Selected Financial
InformationCondensed Consolidated Statements of
Operations(In thousands, except per share amounts)
(Unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
|
2017 |
Operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
$ |
(769 |
) |
|
$ |
(1,960 |
) |
|
$ |
(1,148 |
) |
|
$ |
(3,226 |
) |
General
and administrative |
(1,934 |
) |
|
(1,756 |
) |
|
(6,144 |
) |
|
(4,799 |
) |
Total
other income (expense) |
(135 |
) |
|
(293 |
) |
|
(70 |
) |
|
(1,125 |
) |
Loss from
continuing operations |
(2,838 |
) |
|
(4,009 |
) |
|
(7,362 |
) |
|
(9,150 |
) |
Income
(loss) from discontinued operations |
— |
|
|
177 |
|
|
(24 |
) |
|
11,917 |
|
Net income (loss) |
$ |
(2,838 |
) |
|
$ |
(3,832 |
) |
|
$ |
(7,386 |
) |
|
$ |
2,767 |
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share |
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.12 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.85 |
) |
Discontinued operations |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
1.11 |
|
Total
earnings (loss) per share |
$ |
(0.12 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.35 |
) |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding for basic and diluted earnings
(loss) per share |
23,774 |
|
|
13,208 |
|
|
21,038 |
|
|
10,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets(In thousands)
|
September 30, 2018 |
|
December 31, 2017 |
|
(Unaudited) |
|
|
Assets |
|
|
|
Cash |
$ |
5,283 |
|
|
$ |
6,331 |
|
Other current
assets |
198 |
|
|
261 |
|
Property and equipment,
net |
46 |
|
|
79 |
|
Other long term
assets |
37 |
|
|
35 |
|
Assets of discontinued
operations |
— |
|
|
— |
|
Total assets |
$ |
5,564 |
|
|
$ |
6,706 |
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
Current
liabilities |
$ |
1,404 |
|
|
$ |
1,583 |
|
Current liabilities of
discontinued operations |
21 |
|
|
— |
|
Notes payable, net |
— |
|
|
— |
|
Warrant
liabilities |
— |
|
|
694 |
|
Other long term
liabilities |
26 |
|
|
58 |
|
Stockholders’
equity |
4,113 |
|
|
4,371 |
|
Total liabilities and stockholders’ equity |
$ |
5,564 |
|
|
$ |
6,706 |
|
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