Press Releases
FLAMEL TECHNOLOGIES REPORTS 1998 RESULTS
LYON, France, February 23, 1999 - Flamel Technologies S.A. (Nasdaq: FLML) today announced its financial results for the fourth quarter and year ended December 31, 1998.
For the quarter, the Company reported total revenues of $2.9 million, compared to $3.4 million for the fourth quarter 1997. License and research revenues in the quarter were $2.4 million, compared to $1.9 million in the fourth quarter last year, and included $2.0 million linked to the expansion of the research contract with Corning Inc. signed in December. License and research revenues in the fourth quarter 1997 included a one-time payment of $1.5 million from Monsanto Company related to the ongoing research agreement signed in December 1997. The overall decline in revenues was related to the scheduled decrease in contract manufacturing activity per the Company’s agreement with SmithKline Beecham.
Expenses in the quarter were $4.9 million, compared to $4.2 million in the fourth quarter last year. This increase is primarily related to the external clinical research costs for the recently completed Genvir Phase III study. The Company reported a net loss of $1.6 million, or $(0.12) per share, as compared with a small gain of $15,000 in the fourth quarter of 1997. This difference primarily resulted from the combination of less revenue, increased external clinical costs, lower interest income and a lower research and development tax credit in 1998 compared with the same period in 1997.
For the full year, Flamel reported increased revenue of $9.5 million, compared to $8.1 million reported for the fiscal year ended December 31, 1997. In 1998, license and research revenues were $4.3 million, compared to $3.1 million in 1997, and product sales and services revenues were $5.0 million in 1998, compared to $4.5 million in 1997.
Total costs and expenses for the year were $18.8 million, compared to $16.9 million for the year ended December 31, 1997. Higher manufacturing costs related to increased sales and overhead, clinical development costs related to the Genvir Phase III study, and additional administrative costs accounted for this overall increase. Resulting loss from operations was $9.3 million in 1998, compared to $8.8 million in 1997. Net interest income for the year was $0.3 million, compared to $0.6 million in 1997. The Company also reported an income tax benefit of $1.2 million for 1998, compared to $1.4 million for 1997.
The Company reported a net loss for 1998 of $7.8 million, or $(0.65) per share, compared to a net loss of $6.8 million, or $(0.65) per share in 1997.
Flamel ended the year with $11.7 million in cash and short-term investments, compared to $10.5 million at December 31, 1997.
"1998 was a year of continuous achievements and advancements for Flamel Technologies," stated Dr. Gerard Soula, President and Chief Executive Officer. "In February, we received approval for Asacard™ to prevent secondary myocardial infarction and stroke in the United Kingdom, and we are currently awaiting pan-European approval. In June, we raised $10.0 million through a private equity placement, and we received $2.5 million from Corning Inc. for the sale of specialty photochromic dyes for use in a new product line. In October, we announced the positive results of our European Phase III study of Genvir, our controlled-release acyclovir product used to treat genital herpes. And finally, in December, we signed an expanded long-term research and development agreement with Corning.
"In addition to these specific achievements, we continued to advance our project portfolio. Significant progress was made with our Monsanto collaboration, including seven new patent applications and the validation of our technology, as applied to Roundup®, in greenhouse tests. Early preclinical tests of ColCys™ for the prevention of post-surgical adhesions continue to be encouraging. By building on our success with Asacard™ 162.5mg., we have added an Asacard™ high-dose formulation for chronic pain and inflammation to our preclinical project portfolio. Overall, I am very pleased with our 1998 achievements," concluded Dr. Soula.
For the convenience of the Company’s shareholders, Flamel will begin to report its financial statements in both U.S. dollars and Euros effective January 1, 1999. For reference, the attached 1998 Consolidated Statements of Operations are also presented in Euros.
Flamel Technologies is engaged in the development of advanced polymer technologies for unique life science applications. To meet important medical needs and develop commercially valuable products, the Company is building on its principal technology platforms: the controlled release of therapeutic drugs and proteins with its Micropump® and Medusa® systems; the efficient delivery of agrochemical active ingredients with its Agsome™ system; ColCys™ biomaterial-based medical devices; and photochromic materials.
Roundup® is a registered trademark of Monsanto Company.
NOTE: This document contains a number of matters, particularly as related to the status of various research projects and technology platforms, that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The presentation reflects the current views of Flamel's management with respect to future events and is subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These risks include risks that products in the development stage may not achieve scientific objectives or milestones or meet stringent regulatory requirements, uncertainties regarding market acceptance of products in development, the impact of competitive products and pricing, and the risks associated with Flamel's reliance on outside parties. These and other risks are described more fully in Flamel's Form 20-F dated December 31, 1997.
FLAMEL
TECHNOLOGIES S.A
CONSOLIDATED STATEMENT OF OPERATIONS
(In
thousands, except per share data)
| Three months ended December 31, |
Year ended December 31, | |||||
| 1998 | 1997 | 1998 | 1997 | |||
| US Dollars | Euros | US Dollars | US Dollars | Euros | US Dollars | |
| Revenue | ||||||
| License and research revenue |
$ 2,362 |
2,025 |
$ 1,891 |
$ 4,283 |
3,671 |
$ 3,064 |
| Product sales and services |
418 |
358 |
1,458 |
5,007 |
4,291 |
4,543 |
| Other revenues |
95 |
81 |
2 |
232 |
199 |
447 |
| Total Revenue |
2,875 |
2,464 |
3,351 |
9,522 |
8,161 |
8,054 |
| Costs and expenses: | ||||||
| Cost of goods and services |
(1,095) |
(939) |
(922) |
(4,574) |
(3,920) |
(3,563) |
| Research and development |
(3,064) |
(2,626) |
(2,442) |
(10,608) |
(9,092) |
(10,101) |
| Selling, general and administrative |
(708) |
(607) |
(812) |
(3,536) |
(3,031) |
(3,030) |
| Stock compensation expense |
(23) |
(20) |
(52) |
(95) |
(81) |
(199) |
| Total costs and expenses |
(4,890) |
(4,191) |
(4,228) |
(18,813) |
(16,124) |
(16,893) |
| Loss from operations |
(2,015) |
(1,727) |
(877) |
(9,291) |
(7,963) |
(8,839) |
| Interest income, net |
64 |
55 |
167 |
308 |
264 |
593 |
| Foreign exchange gain (loss) |
(41) |
(37) |
6 |
(76) |
(65) |
34 |
| Loss before income taxes |
(1,992) |
(1,707) |
(704) |
(9,059) |
(7,764) |
(8,212) |
| Income tax benefit |
423 |
362 |
719 |
1,247 |
1,069 |
1,371 |
| Net income (loss) |
(1,569) |
(1,345) |
15 |
(7,812) |
(6,695) |
(6,841) |
| Net loss per ordinary share |
(0.12) |
(0.10) |
0.00 |
(0.65) |
(0.56) |
(0.65) |
| Weighted average number of ordinary shares outstanding |
12,939 |
12,939 |
10,834 |
12,046 |
12,046 |
10,558 |
