Apricus Biosciences Offers Year-End '14 Update; in '15 Plans to Advance Clinical Pipeline, Further Commercialization of ED Drug Vitaros(R)

Apricus Biosciences, Inc.(Nasdaq: APRI), a biopharmaceutical company advancing innovative medicines inurology and rheumatology, today reviewed its 2014 corporate progress and itsclinical development and commercialization plans for 2015.Apricus' 2014 Accomplishments * Successful European launch of Vitaros^®, Apricus' novel topical treatment for erectile dysfunction (ED); * Completion of development of the Vitaros Room Temperature Device (RTD) required to begin stability testing; * Diversification and strengthening of Apricus' product pipeline, including the recent acquisition of US rights to fispemifene for urological conditions in men, and the initiation of Phase 2a testing of RayVa™ for Raynaud's phenomenon; * Enhancement of Apricus' Senior Management Team and Board; and * Recast the Company's risk profile by modifying its development priorities and prudently managed funding options to support its strategy."2014 has been a transformational year for Apricus. Importantly, we achievedseveral key corporate goals that will support our growth strategy in 2015 andbeyond," said Richard Pascoe, Chief Executive Officer. "We expanded anddiversified our drug development pipeline with the in-licensing offispemifene, an investigational treatment for urological conditions in men,that is in Phase 2 development. We initiated a Phase 2a clinical trial forRayVa, our product candidate for the circulatory disorder Raynaud'sphenomenon. In addition, through our partners, Vitaros, our topical treatmentfor erectile dysfunction, was commercially launched in Europe. The Vitaroslaunch has been proceeding well, with double-digit growth in monthlyprescription activity and positive trends in repeat usage."Mr. Pascoe added, "We also assembled a focused and highly experienced seniormanagement team that is well positioned to execute on our strategy andoperating plans. These new executives joined Apricus because they see thepotential to create substantial value by advancing our pipeline and building astrategically diversified company. I am confident that this accomplished teamhas the drive, incentive and passion to achieve business success and createshareholder value.""With this solid base of accomplishments, we enter 2015 with a strongportfolio of commercial and development-stage assets. Anticipated 2015milestones across our programs should reinforce and build investor interestand confidence in Apricus' vision throughout next year," said Mr. Pascoe.2014 Management Team EnhancementsNeil Morton joined Apricus in March as Vice President, Business Developmentfrom Auxilium Pharmaceuticals, where he helped build a pipeline of men'shealth products including the male erectile dysfunction treatment Stendra^™.Since joining Apricus, Mr. Morton played an instrumental role in the Company'sin-licensing of fispemifene.Earlier this month, Brian Dorsey was appointed Chief Development Officerbringing to Apricus over 20 years of direct experience in manufacturing, drugdevelopment and regulatory leadership, which includes securing FDA approvalfor the sleep maintenance drug Silenor^®.Last week, Dr. Barbara Troupin joined Apricus as Chief Medical Officer to leadthe Company's clinical development efforts. Dr. Troupin most recently heldleadership positions in Medical Affairs and Clinical Development at Vivus,where she was the clinician lead for the Phase 3 program for weight loss drugQsymia^®, as well as lead contributor for all medical review of the successfulNew Drug Application and the lead medical presenter at the FDA AdvisoryCommittee Meeting for this product.Apricus also plans to appoint a new Vice President of Finance in January.Given Apricus' size, focus on clinical development, and financial reportingneeds, Apricus will focus its financial management and reportingresponsibilities on this incoming position rather than filling the recentlyvacated CFO role. The Company's Chief Executive Officer and Chief MedicalOfficer will lead all investor-facing activities.While these executive appointments required the departure of several seniorexecutives, Apricus has been successful in forging a smaller, more costeffective and nimble team that possesses the expertise and relevant experiencerequired to execute its refocused mission.Product and Pipeline UpdatesVitarosDuring 2014 Apricus secured European approval, expanded its Europeandistribution partnerships, and the Company's partners initiated commerciallaunch of Vitaros in four countries: the United Kingdom in June, Germany andSweden in August and Belgium in November. During 2015, Vitaros is expected tolaunch in six additional European territories, including major markets such asFrance, Italy and Spain. The market for ED treatments in Europe representsapproximately $1.3 billion in annual sales. Vitaros represents a compellingalternative form of treatment for all ED patients but particularly those thatare not using or unable to utilize, for safety reasons, the pill formulationsthat make up the bulk of ED treatments. Vitaros also provides a morepatient-friendly treatment option than injectable or catheter-administered EDmedications that generate approximately $100 million in annual sales inEurope.Apricus' marketing partners for Vitaros are Abbott Laboratories Limited,Takeda Pharmaceuticals International GmbH, Hexal AG (Sandoz), RecordatiIreland Ltd. (Recordati S.p.A.), Bracco S.p.A. and Laboratoires Majorelle.During the fourth quarter of 2014, Apricus completed the development of theroom temperature formulation of Vitaros, which is housed and delivered in asmall, custom developed, disposable dispenser or "room temperature device."The initial production of Vitaros RTD to generate the required stability datarequired for marketing approval has commenced. The Company continues to expectits commercial partners to launch the Vitaros RTD in 2016.FispemifeneDuring the fourth quarter of 2014, Apricus in-licensed the U.S. rights tofispemifene from Forendo Pharma. Fispemifene is an exciting new chemicalentity with solid Phase 2 data that builds upon the Company's male urologicalfocus. The first indication being pursued for fispemifene is for the treatmentof secondary hypogonadism in males. Apricus believes fispemifene targets atleast $1 billion of the total market for current therapies that currentlygenerate over $2 billion in annual sales. The Company plans to begin a Phase2b clinical trial with fispemifene in this lead indication in the first halfof 2015, with top-line data expected to be reported by the end of 2015. Sincein-licensing fispemifene, Apricus has transferred the regulatory filings fromForendo, developed the Phase 2b clinical trial protocol, held a scientificadvisory board meeting with leading experts in the field to refine ourdevelopment strategy, initiated the manufacturing process to obtain drugproduct, and begun the clinical trial site selection process.RayVaPatient enrollment commenced in December 2014 for a 45-patient Phase 2aclinical trial for RayVa, Apricus' internally developed product candidate forRaynaud's phenomenon, a circulatory disorder affecting the hands and feet.Patients are being actively screened and enrolled for this trial, which isexpected to be completed and results announced in the second quarter in 2015.Apricus believes RayVa's market potential could approach $200 million inannual sales, as it would be the only FDA approved treatment for thisdebilitating condition.FemproxIn consultation with its clinical and regulatory experts, Apricus decidedearlier this year to put on hold the development of its female sexual interest/ arousal disorder product candidate Femprox, until such time as theregulatory pathway becomes more certain and a more robust partneringenvironment develops. This decision reflects both the anticipated costs ofdevelopment and the current development risks related to such an investment.Goals and Priorities for 2015 and Beyond1) Apricus will continue to leverage Vitaros as a cash-generating assetthrough growing royalty and milestone payments as the Company's commercialpartners ramp up sales and expand the product's market reach via additionalEuropean launches. Apricus will also continue to pursue out-licenseopportunities for Vitaros in Asia Pacific and Latin America and will work tosupport the launch of Vitaros by its distribution partner in Canada.2) Apricus plans to complete Phase 2 clinical trials for RayVa and fispemifenein 2015 and report RayVa Phase 2a study results by the end of the secondquarter of 2015 and fispemifene Phase 2b study results in the fourth quarterof 2015. Positive results from these trials, if achieved, would furtherdemonstrate these drug candidates' therapeutic and commercial potential andposition Apricus to move these assets into Phase 3 clinical trials, whenappropriate.3) Apricus will seek to fund operations and the continued development of theseprojects via cost-effective, shareholder-friendly means. Funding sourcesinclude ongoing cash flows from Vitaros' commercialization, pursuit ofadditional out-licensing agreements for Vitaros, RayVa and Femprox, andaccessing equity or debt funding or strategic investments as market conditionsallow, in addition to the prudent management of expenses and existing cash.Apricus will continue to be disciplined stewards of shareholder capital,advancing projects only when the Company has determined that the cost ofcapital and the potential upside are aligned with shareholders' interests.Mr. Pascoe concluded, "This year, the Board of Directors and I have madecrucial decisions on our strategic priorities and capital allocation, with agoal of maximizing the future potential of Apricus while prudently managingrisk. We recognize the challenges our shareholders have faced over the pastyear; however, we are confident that progress in our growth plan during 2015will create the momentum needed to build sustained shareholder value.""I would like to thank our employees and partners for their hard work andcommitment to execution of key goals for 2014. Through their collectiveefforts, I am confident we will succeed in 2015. Finally, I want to thank ourinvestors for their patience and their efforts to embrace the new strategiesand underlying rationale we have employed to focus Apricus on the mostcompelling development opportunities from a return on investment and riskmanagement standpoint. Their support and persistence is genuinelyappreciated."