Press Releases
Flamel Technologies Announces $12.8 Million Private Placement
Lyon, France, March 1, 2000 Flamel Technologies (Nasdaq: FLML) announced today that it has entered into an agreement for a private placement of $12.8 million of its securities. Investors participating in this financing include the venture capital funds and affiliates of Biotechnology Value Fund, Alta BioPharma Partners and Chase Capital Partners. Upon the close of this financing, which is anticipated at the end of March, the company will have cash and cash equivalents of about $16 million.
Pursuant to the agreement Flamel will sell units at the French Franc equivalent to $4.00 per unit consisting of one ordinary share, 0.56 of a Class A Warrant and 0.60 of a combination of Class B or C Warrants. The Warrants have a five-year term. In total, 3,212,500 additional ordinary shares will initially be issued, together with Warrants covering an aggregate of 3,726,500 ordinary shares. Following the completion of this transaction, the company will have a total of 16,151,715 shares outstanding, excluding the exercise of Warrants.
Flamel expects to use the proceeds from the private placement to fund research and development activities including clinical trials, and for general and administrative expenses, capital expenditures and working capital.
The Class A Warrants will be exercisable at the French franc equivalent of $6.00 per share. The Class B Warrants will be exercisable at the French franc equivalent of $6.00 per share and the Class C Warrants will be exercisable at the French franc equivalent of $0.12 per share. The Class B and Class C Warrants are structured into three tranches, such that the investors will effectively have the right to purchase some combination of the Class B and Class C Warrants depending on the trading price for the company's ADSs on Nasdaq for the balance of the year 2000. If the closing price of its ADSs on Nasdaq falls below $6.00 for more than eight trading days, then the proportion of Class C Warrants which are exercisable will increase and the proportion of the Class B Warrants which are exercisable will correspondingly decrease. The relative percentage of each (33%, 66% or 100%) that will be exercisable will be determined at specified benchmark prices below $6.00. If the ADSs do not trade below $6.00 for more than eight days prior to the end of the year, then all of the Class B Warrants will be exercisable, and none of the Class C Warrants will be exercisable. Conversely, if the ADSs trade below $3.00 for more than 8 days, all of the Class C Warrants will be exercisable and none of the Class B Warrants will be exercisable.
Under French law, the transaction is subject to shareholder approval. A shareholder’s meeting has been scheduled for March 23, and all materials conforming to French law requirements will be distributed to holders of Flamel ADSs in the next several days.
"We are pleased that this transaction will solidify our cash position and provide Flamel with the financial resources which we believe will permit us to continue our research and development program through the next two years. We also believe that the additional capital will permit us to accelerate some of our other programs, such as the development of our long-acting protein," said Dr. Gérard Soula, President and CEO of Flamel.
Flamel Technologies S.A. is principally engaged in the development of advanced polymer technologies for unique medicinal applications. To meet important medical needs and develop commercially valuable products, the company is building on its primary technology platforms: the Medusa® system for the controlled peritoneal delivery of proteins and peptides, and the Micropump® system for the controlled delivery of certain oral drugs.
Agsome™, Basulin™ and ColCys™ are trademarks, and Micropump® and Medusa® are registered trademarks of Flamel Technologies.
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 view of 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 the Securities and Exchange Commission Form 20-F for the year ended December 31, 1998.
