Edgar Filing: Recro Pharma, Inc.

Free Writing Prospectus

Relieving Pain….Improving Lives

Issuer Free Writing Prospectus

Filed Pursuant to Rule 433

Registration No. 333-191879

February 13, 2014

Special Note Regarding Forward Looking

Statements

This presentation includes forward-looking statements within the meaning of the

federal securities laws. These statements, among other things, relate to our business

strategy, goals and expectations concerning our product candidates, future

operations, prospects, plans and objectives of management. The words "anticipate",

"believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project",

"will" and similar terms and phrases are used to identify forward-looking statements in

this presentation. Our operations involve risks and uncertainties, many of which are

outside our control, and any one of which, or a combination of which, could materially

affect our results of operations and whether the forward-looking statements ultimately

prove to be correct. We have described these risks in our Registration Statement on

Form S-1, as amended, filed with the Securities and Exchange Commission. Before

you purchase any of our securities, you should read the Registration Statement to

obtain more complete information about our operations and business and the risks

and uncertainties that we face in implementing our business plan. We assume no

obligation to update any forward-looking statements except as required by applicable

law.

Free Writing Prospectus Statement

This presentation highlights basic information about us and the offering. Because it is

a summary, it does not contain all of the information that you should consider before

investing.

We have filed a registration statement (including a preliminary prospectus) with the

SEC for the offering to which this presentation relates. The registration statement has

not yet become effective. Before you invest, you should read the preliminary

prospectus in the registration statement (including the risk factors described therein)

and

other

documents

have

filed

with

the

SEC

for

complete

information

about

us and the offering.

You may get these documents for free by visiting EDGAR on the SEC Website at

http://www.sec.gov. The preliminary prospectus, dated February 12, 2014, is

available on the SEC Website at http://www.sec.gov. Alternatively, we or any

underwriter participating in the offering will arrange to send you the prospectus if you

contact Aegis Capital Corp, Prospectus Department, 810 Seventh Avenue, 18th Floor,

New York, NY 10019, telephone: 212-813-1010, e-mail: prospectus@aegiscap.com.

Offering Summary

Issuer:

Recro Pharma, Inc.

Exchange / Ticker:

NASDAQ Capital Market / REPH

Shares Offered:

2,545,455 (100% primary)

Over-Allotment

15% or 381,818 (100% primary)

Price Range:

$10.00 -

$12.00 per share

Use of Proceeds:

Phase IIb and Phase III pivotal clinical trials, preclinical studies

and safety trials, manufacturing work and working capital and

general corporate purposes

Sole Book-Runner:

Aegis Capital Corp

Co-Manager:

Brean Capital

Investment Highlights

•

Dex-IN –

intranasal, non-opioid in Phase II for post-

operative pain, a significant market opportunity

•

Multiple clinical studies demonstrate analgesic

effect, fast onset of action and well tolerated

•

Multiple clinical and regulatory milestones over next

few years

•

Expect to file 505(b)(2) NDA shortly after completion

of Phase III

•

Experienced team with significant development,

regulatory and commercial experience

Experienced Management and Board

•

Gerri

Henwood

–

President

and

CEO

Founded Auxilium Pharmaceuticals (AUXL,

NASDAQ; revs ~$400M (’12); ~$1bn market cap)

and IBAH (former NASDAQ Co., net revs $130M

yr./gross revs >$450 M/yr. –

acquired 1998);

GSK

•

Chuck

Garner

–

CFO,

CBO

and

Treasurer

Over 14 years of life sciences investment

banking experience –

Deutsche Bank, Burrill &

Co., Inverness Advisors; PwC

•

Randy

Mack

–

SVP,

Development

Over 20 years of clinical development

experience –

Adolor, Auxilium, Abbott Labs

and

Harris

Labs

Board of Directors

Wayne B. Weisman –

Chairman

SCP VitaLife Partners

Winston J. Churchill

SCP VitaLife Partners

Gerri Henwood –

CEO

William L. Ashton

Harrison Consulting Group; frmly Amgen

Abraham Ludomirski, M.D.

SCP VitaLife Partners

Alfred Altomari*

CEO, Agile Therapeutics

Michael Berelowitz*

Former SVP, Specialty Care Business Unit,

Pfizer

* Effective upon completion of IPO

Clinical Stage Pipeline

Product

III

Rights

Dexmedetomidine (“Dex”)

WW, exc. Europe, Turkey, CIS*

Dex

(intranasal)

Post-operative pain

Cancer breakthrough pain

Dex-SL (sublingual)

Transdermal

Fadolmidine (“Fado”)

WW, exc. Europe, Turkey, CIS*

Intrathecal

Post-operative pain

Topical

Neuropathic pain

* CIS currently includes Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia,

Tajikistan, Turkmenistan, Ukraine, and Uzebekistan.

Multiple Key Milestones Next Few Years

Event

Anticipated

Completion Timing

Post-Operative Pain Study

(6 month Phase IIb study in 150-180 pts)

2H ’14

Post-Op Pain –

Intra-Abdominal Surgery

(pivotal Phase III study; 6-9 months in 200+ pts)

2H ’15

Post-Op Pain –

Orthopedic Surgery

(pivotal Phase III study; 6-9 months in 200+ pts)

2H ’15

NDA filing

Shortly after Ph III

NDA Approval

12 month review

period

Post-Op Pain Market Underserved

•

$5.9 billion market

(1)

•

Predominantly opioid

use

•

Significant side effects /

issues associated with

opioids

•

Dearth of non-opioid

drugs in development

Inpatient procedures

Total procedures (2009)

47.9M

Addressable

>25M

Ambulatory procedures

Total procedures (2006)

53.3M

Addressable

>25M

Note: Addressable includes procedures expected to

utilize pain medication.

Source: National Center for Health Statistics and

management estimates.

(1) GBI Research, 2010 sales.

Limited Pain Relief Options for Patients

Pain

Severity

Class

Compounds

Advantages

Disadvantages

Mild

Acetaminophen

Antipyretic properties;

Oral; no opioid AEs

Only effective for mild pain

NSAIDs

Ketorolac,

ibuprofen, aspirin

Mild to moderate

analgesia; oral; no

opioid AEs

Bleeding risk; GI and renal

complications

Moderate

Sodium channel

blockers

Bupivacaine,

lidocaine

Use directly at pain

site; mostly peri-

operative

Limited duration of action; some are

concerned about local tissue impact

Severe

Alpha 2 agonists

Dexmedetomidine

(Recro Pharma)

Good pain relief;

anxiolytic properties;

no respiratory

depression, impaired GI

or addictive properties

In development –

potential for first in

class to be approved for post-

operative pain

Opioids

Morphine,

hydrocodone,

oxycodone, fentanyl

Good pain relief

Respiratory depression, impaired GI

motility after even one dose;

frequent nausea and vomiting;

abuse/addiction potential

Note: Pain severity based upon market research / physician feedback

Dexmedetomidine (“Dex”)

Dex Has Demonstrated Analgesia & Safety

•

Alpha 2 agonist (non-opioid)

–

Injectable form (Precedex) marketed by Hospira in US as sedative

–

Multiple studies demonstrating analgesia of alpha 2 agonists

•

Intranasal formulation in clinical development for post-op pain

–

In-licensed non-IV rights from Orion

–

Worldwide rights except Europe, Turkey, and CIS

•

Multiple studies demonstrate Dex pain relief and safe profile

–

Including our completed placebo controlled trials

•

Expect strong IP position

–

Pending IP coverage could run through 2030

•

Expect to file 505(b)(2) NDA shortly after completion of Ph III

Precedex®

–

Significant Growth in ICU Use

•

Growing interest among

anesthesiologists

•

Well understood and

effective

–

physician

familiarity with Dex

•

US patent expired Jan ‘14

•

Dex-IN PK/metabolism

create dosing complexities

Source: IMS Health

Dex Efficacy and Safety in Multiple Studies

Beneficial effects

Source

Approved sedative and safe profile

NDA filing / pivotal trials -

Abbott/Hospira, Orion

Morphine sparing

NDA studies plus Literature

Analgesia by IV route

Chan, 2010; Grosu, 2010; Lin, 2009, Arain,

2010

Demonstration of pain relief (VAS)

Placebo controlled trials; L. Webster, MD

(Utah) CLBP study (Recro sponsored)

Positive PK/PD plasma levels

demonstrating analgesic potential

Clinical trials run by Recro

Relieves morphine “Max”

(‘hyperalgesia’)

University of Minnesota; M. Belgrade, MD

Significant Advantages Over Opioids

Dex

Fast-acting Opioids

Non-opioid (Not controlled substance)

Opioid -

DEA scheduled product

No habituation effects

Addictive

Does not cause respiratory depression

Respiratory depression

Not associated with constipation,

nausea, or vomiting

Unwanted side-effects of constipation,

nausea and vomiting

Enhances morphine effectiveness

without morphine dose increase

Additive effect requires higher dose

More cognitively intact

Frequently “Foggy”/ may be confused

Anxiolytic properties

Not anxiolytic

Effective Analgesic

Dex Has Been Well Studied by Recro

Trial

Form

Design

Outcome

REC-11-010

Dex-IN

Chronic lower back

pain POC study (n=24)

Statistically significant pain relief

within 30 minutes demonstrated

placebo

controlled

trial

–

single

use device

REC-09-003

Dex-SL

Chronic lower back

pain POC study (n=21)

Statistically

significant reduction

in pain intensity demonstrated in

placebo controlled trial

REC-11-008

Dex-IN

Multi-dose PK study

(n=12)

Safety & tolerability of IN dosage

form

•

Evaluated proprietary formulations of Dex in 8

completed clinical trials

Dex-IN Study REC-11-010

(US placebo controlled POC trial)

•

24 chronic lower back pain (CLBP) patients

–

Chronic opioid users & non-opioid users

•

PBO controlled, cross-over to evaluate:

–

Analgesia –

Standard VAS for Pain Intensity and Pain Relief at multiple

timepoints

–

Safety

–

Adverse

Events,

Vital

Signs,

Sedation

•

Single doses in a 3-way cross-over

–

PBO

–

Dex-IN 25 µg

–

Dex-IN 50 µg

•

Pain intensity measurements focused on 1 hour with

patients monitored for up to 24 hours

Fast Onset of and Prolonged Action

(Clinical trial REC-11-010 –

Dex-IN pharmacokinetics)

Note: Administered with single unit device

0.05

0.1

0.15

0.2

0.25

0.5

0.75

1.25

1.5

1.75

Time (hr)

DEX-IN 25µg

DEX-IN 50µg

Statistically Significant Pain Relief

(Dex-IN –

REC-11-010)

Scale: 0 = No Relief, 4 = Complete Relief

* p < 0.05

** p < 0.01

0.5

1.5

2.5

0.25

0.5

0.75

Time (hours)

DEX-IN PBO

DEX-IN 25µg

DEX-IN 50µg

Significant Pain Relief Over Time

(Dex-IN –

REC-11-010 –

Summary Pain Intensity Differences)

* p < 0.05

0.25

0.5

0.75

Time (Hour)

DEX-IN PBO

DEX-IN 25µg

DEX-IN 50µg

Dex-IN

Pain

Scores

Comparative

(Sublingual Sufentanil NanoTab –

Major Abdominal Surgery)

Singla, Reg Anesth Pain Med 2010

Similar Dex-IN Pain Scores over 1 hr

(Sublingual Sufentanil NanoTab –

Knee Replacement Surgery)

Skowronski, Reg Anesth Pain Med 2010

Select Opioid Clinical Trials Side Effects

Source: Stegmann et. al. (2008). The efficacy and tolerability of multiple-dose tapentadol

immediate release for the relief of acute pain following orthopedic (bunionectomy) surgery.

Current Medical Research and Opinion

Placebo

Tapentadol IR

50mg

Tapentadol IR

100mg

Oxycodone IR

10mg

Event

n = 67

n = 68

n = 67

Nausea

17.9%

46.3%

66.2%

71.6%

Dizziness

14.9%

32.8%

64.7%

56.7%

Somnolence

7.5%

28.4%

36.8%

26.9%

Vomiting

1.5%

16.4%

35.3%

38.8%

Headache

10.4%

17.9%

22.1%

20.9%

Pruritus generalized

0.0%

7.5%

13.2%

10.4%

Hyperhidrosis

1.5%

6.0%

8.8%

10.4%

Constipation

1.5%

6.0%

7.4%

17.9%

Pruritus

3.0%

7.5%

7.4%

11.9%

Feeling Hot

4.5%

7.5%

2.9%

10.4%

Dex-IN Well Tolerated

(Clinical

trial

REC-11-010

Adverse

events†)

Placebo

(n=24)

DEX-IN 25 µg

(n=24)

DEX-IN 50 µg

(n=24)

Dry Mouth

Nausea

Vomiting

Feeling Abnormal

BP Decrease

Dizziness

Headache

Paraesthesia

Sinus Headache

Somnolence

Nasal Congestion

Nasal Discomfort

Hypotension

†Reported by more than one subject

Dex-IN Repeat Dosing Well Tolerated

(Clinical trial REC-11-008)

•

7 consecutive doses of 35 mcg Dex-IN every 6 hours

•

Evaluated heart rate, blood pressure and BP upon

standing every 5 minutes for two hours after dosing

–

Transient effect after initial dosing

•

None of the above effects categorized by

investigators as AEs

Well Tolerated Profile –

Repeated Dosing

(Study REC-11-008 –

35 mcg Dex-IN formulation)

Period 1

n = 12

Period 2

n = 10

Term

Total

7am

1pm

7am

1pm

7pm

1am

7am

1pm

7pm

Back Pain

Muscle Spasms

Dizziness

Headache

Anxiety

Nasal Discomfort

Nasal Dryness

Rhinalgia

Rinorrhea

Number of Subjects

Dex-IN Next Steps in Post-Operative Pain

•

Initial commercial use: acute (5-7 days)

•

Planned Phase IIb bunionectomy study in 150-180 pts

–

Randomized, placebo controlled study

•

Primary endpoint – summary of pain intensity scores (SPID)

•

Rescue therapy allowed

–

6 months from first subject dosed to data available

•

GLP toxicology studies

•

Pivotal post-op pain studies – abdominal, orthopedic

Fadolmidine (“Fado”)

Fado Effective in Phase II for Pain Relief

•

Alpha 2 agonist

–

more potent at the alpha 2c receptor than Dex

–

>20 fold less potent at the alpha 1b receptor than clonidine

•

Fado has demonstrated analgesia in multiple animal models

•

Positive Phase II analgesia study in bunionectomy patients

–

Intrathecal route of administration

•

Formulation work underway for topical prototype

–

Potential in regional neuropathies

•

WW rights to all human uses except Europe, Turkey and CIS

•

NCE patent w/ expected extension to 2021 / pursuing add’l IP

Corporate Overview

Intellectual property

•

Dex applications for methods for treating/preventing

pain through intranasal, sublingual and transdermal

formulations without sedation

•

Dex composition of oral transmucosal (SL)

formulation and dispensing devices

•

Fado IP in-licensed from Orion

–

Composition of matter

–

Method of administration for analgesia

–

Treatment and prevention of hypotension and shock

•

Regulatory exclusivity

–

505(b)(2) –

3 years (Dex-IN, Dex-SL)

–

505(b)(1) –

NCE, 5 years (Fado)

Capitalization Structure

(Based upon expected closing date of March 12, 2014)

Capitalization

Outstanding

Common Stock

(1)

2,837,171

95%

Stock Options

(2)

152,182

Fully-Diluted Shares Outstanding (prior to offering)

2,989,353

100%

(1)

Assumes automatic conversion of preferred stock and accrued dividends into an aggregate of 1,193,762 shares of common

stock and conversion of outstanding bridge notes and accrued interest into an aggregate of 1,487,809 shares of common

stock at an assumed IPO closing price of $11.00 per share (the midpoint of the price range) and assuming the conversion

occurs on March 12, 2014 (expected IPO closing date).

(2)

334,800 options outstanding at an exercise price of $6.00. Assumes treasury stock method at an assumed IPO closing

price of $11.00 per share (the midpoint of the price range).

Note: 181,026 of new stock options will be issued to management at the IPO closing price upon closing of the IPO. Excludes

warrants to be issued to Aegis upon completion of IPO. Warrants are exercisable at 150% of the IPO price.

Use of Proceeds / Dex-IN Next Steps

•

Expect to complete Phase IIb post-op pain trial

–

6 month study

•

Expect to complete both Phase III pivotal trials

–

Intra-abdominal study and orthopedic procedure study

–

6-9 month studies

•

Plan for NDA filing

•

Additional clinical safety data, preclinical tox and

CMC work

•

Working capital and general corporate purposes

Investment Highlights

•

Dex-IN –

intranasal, non-opioid in Phase II for post-

operative pain, a significant market opportunity

•

Multiple clinical studies demonstrate analgesic

effect, fast onset of action and well tolerated

•

Multiple clinical and regulatory milestones over next

few years

•

Expect to file 505(b)(2) NDA shortly after completion

of Phase III

•

Experienced team with significant development,

regulatory and commercial experience