Press Releases
FLAMEL TECHNOLOGIES REPORTS SECOND QUARTER 1998 RESULTS
LYON, FRANCE, July 28, 1998 – Flamel Technologies S.A. (NASDAQ: FLML )today announced financial results for the second quarter and six-month period ended June 30, 1998.
Total revenue in the quarter was $2.7 million as compared to $1.3 million in the second quarter of 1997. Revenue from product sales and services totaled $2.3 million, consisting of $1.9 million of photochromic material to Corning Inc. and $0.4 million of cimetidine formulations to SmithKline Beecham in accordance with the subcontracting agreement related to the Company’s purchase of SmithKline’s manufacturing plant in Pessac, France. Other revenue in the quarter was primarily related to research and development funding payments. Revenue in the second quarter of 1997 included $1.0 million from sales of cimetidine formulations to SmithKline and $0.3 million in research and development funding.
Costs and expenses were $4.8 million in the second quarter 1998, compared to $3.1 million last year. Higher manufacturing costs related to increased product sales, and increased administrative expenses, primarily related to the Company’s recent equity financing and business development activities, were the major components of this increase. The Company reported a net loss of $1.6 million, or $(0.14) per share, compared to a net loss of $2.2 million, or $(0.22) per share in the second quarter of 1997.
Total revenue for the first six months of 1998 was $4.9 million, compared to $3.5 million for the first six months of 1997. In 1998, sales of proprietary photochromic material to Corning, which now total $2.2 million, accounted for the overall increase in revenue and more than replaced cimetidine formulation sales which are declining per the Company’s agreement with SmithKline.
Total cost and expenses for the six months ended June 30, 1998 were $9.7 million, compared to $8.0 million incurred in the same period last year. Higher manufacturing costs related to increased sales; increased clinical trial expenses related to the Phase III study of Viropump; also additional research personnel and higher second quarter administrative costs accounted for the cost increase in 1998. The net loss for the first six months of 1998 was $4.1 million, or $(0.36) per share, compared to $3.9 million, or $(0.38) per share, for the first half of 1997.
At June 30, 1998, the Company had $16.7 million in cash and investments following the completion of a $10 million equity financing with Financiere et Industrielle Gaz et Eaux, an affiliate of the Lazard Group. The financing included the issuance of 2.0 million ordinary shares bringing the number of Company shares outstanding at June 30, 1998 to approximately 12.9 million. "This $10 million funding, received on very favorable terms, has provided us with the cash reserves necessary to continue the development of our product pipeline including Basulin™, which we believe represents an important therapeutic advance in the treatment of diabetes, as well as the enhancement of Agsome™ for its application to Roundup®," commented Dr. Gerard Soula, President and Chief Executive Officer. With regards to Basulin™, which utilizes Flamel’s proprietary Medusa® system for the controlled delivery of proteins and peptides, Dr. Soula announced that the latest scientific data related to this project was presented recently at the 25th International Symposium on Controlled Release of Bioactive Materials held in Las Vegas, NV.
Further commenting on the quarter Dr. Soula said, "With the manufacture and delivery of initial stock quantities of photochromic material to Corning, Flamel has clearly demonstrated its ability to consistently produce and supply large amounts of commercial material. Given the size of this initial order, we do not anticipate additional production requirements this year, but we do expect activity to resume in 1999 following utilization of this material."
Flamel Technologies is engaged in the development of advanced polymer technologies for unique drug delivery and biomaterial applications. The Company is building on its principal technology platforms — the delivery of active ingredients with its Micropump® and Medusa® drug delivery systems, its Agsome™ delivery system for agrochemical active ingredients, its Colcys™ biomaterial-based medical devices, and photochromic materials for eyeglass lens products — to meet important medical needs and develop other commercially valuable products.
Agsome™, Basulin™ and Colcys™ are trademarks, and Micropump® and Medusa® are registered trademarks of Flamel Technologies. Roundup® is a registered trademark of Monsanto Company.
Note: This press release contains statements which may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the risks and uncertainties, including, but not limited to, the risk associated with the Company’s limited history of operations and historic and future losses, the risk that products in the development stage may not achieve scientific objectives or milestones or meet regulatory requirements, uncertainties regarding market acceptance of products in development, the impact of competitive products and pricing, reliance on outside parties including the risks associated with key strategic alliances, and other risks detailed in the Company’s filings with the Securities and Exchange Commission.
Flamel
Technologies
Three
Months Ended June 30, 1998
|
Three months ended | ||
|
1997 |
1998 | |
| Revenue : | ||
|
$ 322 |
$ 254 |
|
1,009 |
2,326 |
|
- |
137 |
|
1,331 |
2,717 |
| Costs and expenses : | ||
|
(885) |
(1,274) |
|
(2,204) |
(2,356) |
|
(797) |
(1,127) |
|
(49) |
(28) |
|
(3,095) |
(4,785) |
| Loss from operations |
(2,604) |
(2,068) |
| Interest income (expense), net |
138 |
23 |
| Foreign exchange gain (loss) |
20 |
(11) |
| Loss before income taxes |
(2,446) |
(2,056) |
| Income tax benefit |
228 |
414 |
| Net loss |
$ (2,218) |
$ (1,642) |
|
$ (0.22) |
$ (0.14) |
| Weighted average number of ordinary shares outstanding |
10,301 |
11,357 |
Flamel Technologies
Six Months Ended June
30, 1998
|
Six months ended | ||
|
1997 |
1998 | |
| Revenue : |
|
|
|
$ 906 |
$ 1,239 |
|
2,093 |
3,561 |
|
461 |
137 |
|
3,460 |
4,937 |
| Costs and expenses : |
|
|
|
(1,837) |
(2,539) |
|
(4,584) |
(5,177) |
|
(1,516) |
(1,967) |
|
(98) |
(48) |
|
(8,035) |
(9,731) |
|
|
| |
| Loss from operations |
(4,575) |
(4,794) |
|
|
| |
| Interest income (expense), net |
225 |
172 |
| Foreign exchange gain (loss) |
28 |
(11) |
| Loss before income taxes |
(4,322) |
(4,633) |
| Income tax benefit |
402 |
570 |
| Net loss |
$ (3,920) |
$ (4,063) |
|
|
| |
| Net loss per ordinary share |
$ (0.38) |
$ (0.36) |
|
|
| |
| Weighted average number of ordinary shares outstanding |
10,290 |
11,141 |
