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Company Overview

OTCBB: APPA

July 2012

Exhibit 99.2

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.

July 2012

Company:

A.P. Pharma, Inc.

Ticker:

OTCBB: APPA.OB

Stock Price:

$0.66 (7/24/12)

Market Capitalization:

$309.1 million

Pro Forma Cash:

$67.1 million

Debt:

$4.6 million

Stock Summary

Based on 497.1 million fully diluted, as-converted common shares assuming the full conversion of

convertible debt outstanding and 80 million warrants using treasury stock method and 102 million

common shares anticipated to be issued on July 30, 2012; not including options

As of March 31, 2012. Pro forma for $3.0 million in cash received in May 2012 from the exercise of

convertible note purchase rights and for the net proceeds from the anticipated funding on July 30,

2012

July 2012

John B. Whelan

President, CEO & CFO

Raven Biotechnologies

Eos Biotechnology

Hewlett Packard/Agilent

Michael A. Adam,

Ph.D.

Senior Vice President &

Chief Operating Officer

Spectrum Pharmaceuticals

Pfizer/Agouron

Bristol-Myers Squibb

Thomas Ottoboni,

Ph.D.

Vice President,

Pharmaceutical Development

Talima Therapeutics

Point Biomedical

InSite Vision

Kristin Ficks*

Head of Commercial Operations

Gemini Healthcare

Celgene

Eisai/MGI Pharma

Management

*Ms. Ficks is an employee of Gemini Healthcare, LLC and a consultant to A.P. Pharma

July 2012

A.P. Pharma Highlights

July 2012

Lead product candidate, 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

APF530 shown to be non-inferior to market leader Aloxi®

1,341-patient, randomized, controlled, Phase 3 study

Presented at ASCO 2009

Company is addressing issues raised in Complete Response

Letter

Resubmission planned for September 2012

Product launch planned for 2H 2013

APF530 targets a $900 million market opportunity in US alone

Recent competitive setbacks could enhance commercial uptake

Could be second, long-acting, injectable product on market

A.P. Pharma has the potential to leverage its Biochronomer™

drug delivery technology into other opportunities

Important APF530 Milestones

Milestone

Timing

Status

Successful End-of-Review Meetings with

FDA

1Q 2011

Successful Completion of Thorough QT

Study

1Q 2012

Successful Completion of Metabolism

Study

1Q 2012

Successful Completion of Formative

Human Factors Study

1Q 2012

Complete Human Factors Validation Study

3Q 2012*

Complete CMC Activities

3Q 2012*

Resubmit NDA

Sept 2012*

Expected NDA Approval Decision

1H 2013*

Expected Product Launch

2H 2013*

* Indicates expected milestone timing

July 2012

Clinical Summary

July 2012

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

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

July 2012

Primary Efficacy Results: Complete Response

Patients Receiving Moderately

Emetogenic Chemotherapy

Acute

Delayed

APF530 5mg

APF530 10mg

Acute

Delayed

Acute

Delayed

Difference in Complete Response

APF530-Aloxi (97.5% CI)

-15

-10

-5

July 2012

Primary Efficacy Results: Complete Response

Difference in Complete Response

APF530-Aloxi (98.33% CI)

Acute

Delayed

APF530 5mg

APF530 10mg

Patients Receiving Highly

Emetogenic Chemotherapy

Acute

Delayed

July 2012

-15

-10

-5

Safety Summary

Pulmonary embolism in morbidly obese patient on day 16

>90% of injection site reactions were reported as mild; one patient discontinued due to

injection site reaction

APF530 5 mg

APF530 10 mg

Aloxi 0.25 mg

Drug

Serious

Adverse

Events

0.2

Discontinued Due to Adverse Event

0.2

Frequent Adverse Events

Gastrointestinal disorders

Constipation

Diarrhea

Abdominal pain

13.4

10.6

4.5

15.4

9.4

2.8

13.4

8.4

6.0

Nervous System

Headache

6.7

10.0

9.7

Injection

Site

Placebo (NaCl)

Bruising

Erythema (redness)

Nodule (lump)

Pain

16.8

7.1

4.7

3.4

19.9

10.9

10.7

7.1

8.9

3.0

0.6

1.1

Reported in Cycle 1

July 2012

APF530’s Efficacy with Difficult Chemo Regimens

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%

July 2012

APF530’s Sustained Efficacy in Cycles 2-4

* Sakai et al (Annals of Oncology, Vol. 19 Sept. 2008)

Complete Response Rates for Delayed-onset CINV in Patients Receiving

Highly Emetogenic Chemotherapy

351

315

254

117

100%

90%

72%

33%

240

169

129

100%

70%

54%

39%

N =

% of Cycle 1

APF530 10mg

Aloxi 0.75mg*

July 2012

Summary of APF530 Phase 3 Results

One of the largest, randomized, controlled clinical studies

conducted in the CINV setting

Non-inferiority to Aloxi was demonstrated

For both acute-

and delayed-onset CINV

With both moderately and highly emetogenic chemotherapy

APF530 was safe and well-tolerated

Incidence of adverse events comparable to Aloxi

High response rates were observed in difficult

chemotherapy regimens

A high level of efficacy was maintained through multiple

cycles of chemotherapy

July 2012

Regulatory Status

July 2012

APF530 NDA Status

Submitted NDA in May 2009 under 505(b)(2) filing

pathway

Received Complete Response Letter in March 2010

FDA raised issues in three main areas:

Dosing system

Two-syringe system

Chemistry, Manufacturing, and Controls (CMC)

Sterilization

Characterization

Clinical/statistical

Specific studies

Presentation of data

Held end-of-review meetings with FDA in 1Q 2011

No additional clinical efficacy studies requested

Implementing plan to resubmit NDA in September 2012

July 2012

Progress of NDA Resubmission

Dosing System

Change to single-syringe system –

completed

Enhanced dosing instructions –

completed

Overall, simpler and more convenient

Formative, non-clinical human factors study –

completed

Human factors validation study –

pending

Chemistry, Manufacturing, and Controls

Change from bulk to terminal irradiation –

feasibility completed

Additional specifications and assays for raw materials, polymer and drug

product –

in progress

Manufacturing runs incorporating these changes –

in progress

Clinical/Statistical

Thorough QT study –

completed

Metabolism study –

completed

Phase 3 clinical data presentation revision –

in progress

July 2012

Improved Dosing System

July 2012

Original Two-syringe System

New Single-syringe System

Thorough QT Study Background

Prolongation of the QT/QTc interval is associated with increased

susceptibility to fatal cardiac tachyarrhythmias

Thorough

studies

are

intended

determine

whether

drug

has

threshold pharmacologic effect on cardiac repolarization

Thorough QT studies are now routinely required by the FDA prior to

drug approval

FDA has raised QT cardiac safety concerns with 5-HT3 antagonists

The QT interval represents

the amount of time the

heart’s electrical system

takes to repolarize after

each beat

July 2012

Zofran Use in CINV Restricted

Most widely used generic 5-HT3 now restricted

FDA issued a Drug Safety Communication June 29, 2012

“The

use

single

intravenous

dose

ondansetron

should

avoided. New information indicates that QT prolongation occurs in a

dose-dependent manner, and specifically at a single intravenous dose of

32 mg.”

“No single intravenous dose of ondansetron should exceed 16 mg due to

the risk of QT prolongation.”

“The lower dose intravenous regimen of 0.15 mg/kg every 4 hours for

three doses may be used in adults with chemotherapy-induced nausea

and vomiting.”

Results of Zofran tQT study

32 mg IV dose causes 20 ms increase in QTcF

8 mg IV dose causes 6 ms increase in QTcF

GSK has removed the 32 mg dose from the Zofran label

Impact on sales may be significant

July 2012

Anzemet in CINV Previously Removed

FDA issued a Drug Safety Communication Dec. 17, 2010

“Anzemet causes a dose-dependent prolongation in the QT, PR, and QRS

intervals on an electrocardiogram (ECG) …”

“Anzemet injection should no longer be used to prevent nausea and

vomiting associated with initial and repeat courses of emetogenic cancer

chemotherapy.”

Anzemet label changed to remove CINV indication

IV Anzemet sales fell to near zero in one quarter

July 2012

APF530 Thorough QT Study Design

Double-blind, single-site

Four-way crossover

56 healthy male and female subjects

Study Arms

SC APF530 1 g (granisetron 20 mg) –

2x therapeutic dose

IV Granisetron 50 µg/kg over 3 minutes –

5x therapeutic dose

Oral Moxifloxacin 400 mg (Avelox®) –

positive control

Placebo 0.9% Normal Saline 0.84 mL

Primary endpoint: the upper bound of the one-sided 95%

confidence interval for placebo-adjusted, baseline-

subtracted QTcF being less than 10 milliseconds at all

time points

July 2012

APF530 Thorough QT Study Results

Primary Endpoint Achieved in Both Granisetron Dose

Groups

Both APF530 and IV granisetron dose groups did not approach or exceed

the upperbound of 10 ms at any time point

The primary end point was met irrespective of heart-rate correction

methodology –

QTcF, QTcI, QTcB

PK/PD relationship was flat –

also showing no QTc signal

Valid Study

Moxifloxacin positive control group showed expected change –

assay

sensitivity reached

July 2012

Granisetron Thorough QT PK/PD Results

ddQTcF vs. Granisetron Plasma Concentration

Slope = -0.019

Plasma Concentration (ng/ml)

July 2012

Metabolism/Fate of Polymer Study

FDA requested study at end-of-review meeting in 1Q 2011

Purpose of study is to demonstrate fate of polymer in

human subjects

Confirm polymer breaks down into same hydrolytic end-products as seen

in animals

Confirm lack of other detectable polymer-related metabolites

Protocol reviewed by FDA prior to initiating study

Single blind, single site

14 healthy male and female subjects

Gather and analyze plasma and urine samples for metabolic products

Study objectives achieved

Confirmed polymer breaks down into same hydrolytic end-products as in

animals

Confirmed lack of other detectable polymer-related metabolites

July 2012

Principle Activities Remaining for NDA Filing

July 2012

Human Factors

Formative study successfully completed

FDA agreement on validation study protocol

Validation study scheduled for Q3 2012

Registration Lots

Three of three required lots successfully filled

Analytical testing for lot release underway

Complete Assembly of NDA

Focus is on creating a high-quality submission

Facilitate FDA review

Human Factors Study

July 2012

Assess the Instructions-for-Use and usability of APF530 in

simulated oncology setting

Follows June 2011 FDA guidance: “Applying Human Factors and Usability

Engineering to Optimize Medical Device Design”

Initial risk assessment followed by iterative process of formative studies

Validation study performed to confirm results of formative studies

Two formative human factors studies completed

All subjects successfully followed instructions

Average injection time reduced by 45%

Mean Usability Scores

Previous Syringe

Current Syringe

Ease

3.1

8.3

Comfort

5.2

9.4

Control

7.7

9.5

–

very

difficult,

–

very

easy

Commercial Opportunity

July 2012

U.S. Market Opportunity for APF530

More than 7 million cycles of chemotherapy administered

each year

~27% are highly emetogenic

~46% are moderately emetogenic

Significant unmet medical need for additional therapies to

address delayed-onset CINV

5-HT3 antagonists are standard-of-care for CINV

Recommended

treatment

guidelines

–

NCCN,

ASCO,

ONS

An injectable 5-HT3 antagonist is co-administered with more than 90% of

moderately and highly emetogenic regimens

APF530 targets a $900

million market opportunity in the

US alone

In 2011, there were 5.1 million vials of injectable 5-HT3 antagonists

administered for CINV

The average selling price for market leader Aloxi is $175

Sources: Company-sponsored survey and analysis and Wolters Kluwer

July 2012

Complete Response Rates for 5-HT3 Antagonists

1 generation 5-HT3 Average Overall Complete

Response

Rates

Moderately Emetogenic Chemotherapy ~ 42%

Highly Emetogenic Chemotherapy ~ 39%

Aloxi

Average

Overall

Complete

Response

Rates

Moderately Emetogenic Chemotherapy ~ 57%

Highly Emetogenic Chemotherapy ~ 51%

There are no long-acting 5-HT3 alternatives if a patient

does not get a complete response with Aloxi

Overall Complete Response defined as no emesis and no rescue

medications during 0 to 120 hours following chemotherapy

Averages derived from published clinical studies

July 2012

Antiemetic Treatment Patterns

Most chemotherapy patients will undergo 4 to 15 cycles of

chemotherapy

Doctors prefer to administer antiemetics on-site for

moderately and highly emetogenic chemotherapy

Patient compliance is a significant concern

Average cost per CINV event ranges from $4,000 to $5,300

Issues controlling CINV typically appear during the first few

cycles

If the initial prevention regimen is not effective, drugs are

added and/or changed to address CINV in subsequent

cycles

No long-acting injectable alternative to Aloxi is available to prevent

delayed-onset CINV

July 2012

CINV Market Dynamics

Source: Wolters Kluwer

Usage in CINV estimated based on vial size

July 2012

~35% drop and rebound

in 6-month period

~85% drop following tQT

FDA Safety Letter

Aloxi Market Performance

Zofran went

generic

Pricing

Average Selling Price = $175

Medicare Reimbursement = $186

Wholesale Acquisition Cost ~ $380

Orange Book Patent Exclusivity

One patent expires April 2015

Three patents expire January 2024

July 2012

Aloxi Sales

CINV Market Dynamics: Conclusions

Aloxi has gained market share over last 3 years despite

availability of generics for acute-onset CINV

From 48% in 2008 to 56% in 4Q 2011

Kytril was widely used prior to Zofran

going generic

High physician acceptance of granisetron

Possible shift away from generic Zofran due to recent

thorough QT results

Aloxi dipped ~35% when Zofran went generic but then

regained 100% of its lost share two quarters later

NK1 antagonists typically are only used as an adjunct to 5-

HT3 antatgonists

Injectable Emend

units sold less than 15% of injectable units sold for

CINV prevention

July 2012

APF530’s Potential Competitive Positioning

Provides 5 days of prevention against chemotherapy-induced

nausea and vomiting with a single injection

Second, long-acting, injectable product on market

Lack of complete effectiveness of available antiemetics

indicates need for additional products to prevent CINV

Most patients undergo 4 to 15 cycles of chemotherapy

Cardiac safety is becoming an important point of differentiation

Product

Effective for Delayed-

onset CINV

Cardiac Safety

Aloxi

Yes

Clean tQT results

Anzemet

QT effect –

contraindicated for CINV

Zofran/ondansetron

QT effect -

32 mg dose removed

Restrictions added to label

Kytril/granisetron

AFP530

Yes

Clean tQT results

July 2012

Oncology Supportive Care Market Addressable by

Small Organization

July 2012

Less than 3,000 oncology practices in the US

50% of market represented by several hundred practices

Handful of group purchasing organizations (GPOs)

facilitate purchases for majority of market

3rd party infrastructure in place to support sales activities

Contracting

Reimbursement

Distribution

Education

APF530 Commercialization Plan

A.P. Pharma owns worldwide rights to APF530

No milestone or royalty obligations owed to any third parties

Building core sales and marketing team ahead of launch

with plan to expand on approval

Hire core sales and marketing leadership in 2H 2012 (~10 people)

Hire field team of ~40 individuals following approval

Utilize

GPOs

and

channel

partners

provide

additional

services

such

medical education, rebate contracts, clinical pathways, etc.

Seeking commercial partner(s) for ex-US markets

July 2012

A.P. Pharma Product Lifecycle Considerations

APF530 covered by multiple patents

2 patents covering combination of polymer, excipients and drug expire in

2021

patents

just

allowed

covering

APF530

–

expire

2025

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

July 2012

Financial Summary

July 2012

Expect cash sufficient to fund commercial launch of APF530

Summary Statement of Operations

(In thousands, except per share data)

Year Ended

December 31, 2011

Quarter Ended

March 31, 2012

Revenue

$ 646

$ –

Operating expenses

11,708

4,769

Other income (expenses)

(752)

(152)

Net loss

$ (11,814)

$ (4,921)

Net

loss

per

$ (0.10)

$ (0.02)

Condensed Balance Sheet Data

(In thousands)

March 31, 2012

Pro Forma

March

31,

2012

Cash and cash equivalents

$ 13,444

$ 67,111

Total assets

$ 14,994

$ 68,661

Total

stockholders’

equity

$ 11,633

$ 65,300

Based on 120.3 and 200.0 million weighted average common shares outstanding for the periods

ended December 31, 2011 and March 31, 2012, respectively

Pro

forma

for

$3.0

million

cash

received

May

2012

from

the

exercise

convertible

note

purchase

rights

and

for

the

net

proceeds

from

the

anticipated funding on July 30, 2012

A.P. Pharma Highlights

July 2012

Lead product candidate, 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

APF530 shown to be non-inferior to market leader Aloxi®

1,341-patient, randomized, controlled, Phase 3 study

Presented at ASCO 2009

Company is addressing issues raised in Complete Response

Letter

Resubmission planned for September 2012

Product launch planned for 2H 2013

APF530 targets a $900 million market opportunity in US alone

Recent competitive setbacks could enhance commercial uptake

Could be second, long-acting, injectable product on market

A.P. Pharma has the potential to leverage its Biochronomer™

drug delivery technology into other opportunities

Thank You

A.P. Pharma, Inc.

OTCBB: APPA

July 2012

Heron Therapeutics (HRTX) 8-KA.P. Pharma to Raise $53.6 Million in Common Stock Offering