FLAMEL TECHNOLOGIES REPORTS SECOND QUARTER 1999 RESULTS

LYON, FRANCE, July 28, 1999 -- Flamel Technologies S.A. (Nasdaq: FLML) today announced financial results for the second quarter and six-months period ended June 30, 1999.

Revenue for the quarter was U.S.$1,046,000, or Euros 990,000, compared to U.S.$2.7 million for the second quarter of 1998. The revenue decrease in the 1999 period was due to a U.S.$1.9 million non-recurring sale of initial photochromic material inventory to Corning Inc., sold in the second quarter of 1998. An increase of U.S.$308,000 in license and research revenue during the second quarter of 1999 was generated as a result of the long-term development agreement signed with Corning in late 1998.

Total costs and expenses in the quarter were U.S.$4.2 million, or Euros 3.9 million, compared to U.S.$4.8 million incurred in the same period last year. The decreased costs this year resulted from a combination of reduced costs of goods sold and lower administrative costs, which were partially offset by increased spending in research and development. For the quarter, the Company reported a net loss of U.S.$3.0 million (U.S.$0.23 per share), or Euros 2.9 million (Euros 0.22 per share), compared to a net loss of U.S.$1.6 million (U.S.$0.14 per share) in the second quarter of 1998.

Total revenue for the first six months of 1999 was U.S.$2.3 million, compared to U.S.$4.9 million for the same period last year. The 1998 non-recurring sale of photochromic material to Corning and lower scheduled contract manufacturing volumes accounted for the decrease in the 1999 revenue. Total costs and expenses for the six-month 1999 period decreased to U.S.$8.5 million, as compared to U.S.$9.7 million incurred last year. The net loss for the six-month period in 1999 was U.S.$5.9 million (U.S.$0.46 per share), or Euros 5.7 million (Euros 0.44 per share), compared to the net loss of U.S.$4.1 million (U.S.$0.36 per share) reported last year.

At June 30, 1999, the Company had U.S.$6.8 million in cash and short-term investments.

The Annual General Meeting of Shareholders was held in Lyon, France, on June 22, 1999. At that time, the following individuals were elected to the Company's Board of Directors: Dr.Gérard Soula, founder and President of Flamel; Ms. Janik Blouin, General Manager of Flamel; Mr. Jean Deleage, Managing Director of Alta Partners and Burr, Egan & Deleage & Co.; Financière Industrielle Gaz et Eaux, as represented by Mr. Jean-Jacques LaBorde; Mr. Jeremy Young, Managing Director of E.M. Warburg, Pincus & Co.; Mr. Nicholas Lowcock, Vice President of Warburg, Pincus & Co. Citing personal reasons, Mr. Douglas MacMaster, Jr., a member of Flamel's Board of Directors since 1996 withdrew his nomination as a Director and resigned from his position as the Company's non-executive Chairman.

In acknowledging the resignation, Dr. Soula said, "During the past three years, Flamel has benefited greatly from Doug's extensive pharmaceutical and business experience. I would like to express my sincere gratitude and deep appreciation to Doug for the leadership and guidance he provided to us."

Commenting on the quarter, Dr. Soula highlighted the Company's progress in key development projects, including assembly of the dossier for the European filing of Genvir, the controlled-release acyclovir product, preparations for the Phase I trial of BasulinÔ, the long-acting basal insulin product, and continuing efforts on the AgsomeÔ technology.

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 AgsomeÔ system; ColcysÔ biomaterial-based medical devices; and photochromic materials for eyeglass lenses.

Note: This press release contains a number of matters, particularly as related to the status of various research projects and technology platforms, which may 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 and key strategic alliances. These and other risks are described more fully in Flamel's Annual Report on Securities and Exchange Commission Form 20-F for the year ended December 31, 1998.

FLAMEL TECHNOLOGIES S.A.
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