Press Releases
Flamel Technologies Reports First Quarter 2000 Financial Results
LYON, FRANCE May 11, 2000 – Flamel Technologies S.A. (Nasdaq: FLML) today announced financial results for its first quarter ended March 31, 2000.
Total revenue for the quarter was $2.0 million, compared to $1.3 million reported for the first quarter of 1999. The increase in total revenues in the first quarter of 2000 was primarily the result of research revenues from Novo Nordisk related to the development of LABI, a long-acting insulin product and royalty income from Corning Inc. related to their photochromic lens product.
Total costs and expenses in the quarter were $4.0 million, compared to $4.3 million reported in the first quarter of 1999. This overall reduction in expenses was spread consistently across all cost areas and is reflective of the Company’s continued efforts to reduce its overhead. On a comparable basis, the Company’s net loss from operations in the first quarter of 2000 was $2.0 million, compared to $2.9 million, reported in the first quarter of 1999. On a per share basis, before giving effect to the charge resulting from a change in accounting treatment described below, this quarter’s loss would have been $0.16 per share.
Effective January 1, 2000, the Company changed its method of recognizing revenue on the up-front payments it receives when signing new collaborative agreements. The Company will now spread such revenue across the term of the related agreement, rather than recognizing all of the revenue in the period it was received. Flamel believes this change is consistent with the Securities and Exchange Staff Accounting Bulletin (SAB) No. 101. As a result of this change in accounting treatment, the Company recognized a charge of $4.3 million ($0.33 per share) specifically related to the $5.0 million received in December 1999 on signing a collaborative agreement with Novo Nordisk. This change resulted in a net loss for the quarter of $6.3 million ($0.49 per share) compared to a net loss of $2.9 million ($0.22 per share) for the quarter ended March 31, 1999.
In his comments on the quarter’s results, Dr. Gerard Soula, President and Chief Executive Officer, said, "Generally, I am pleased with our financial results for the quarter. As a result of
our efforts, our revenues have increased and our overall expenses are down as compared with the prior year. Additionally, during the quarter, we secured funding necessary to continue our important research and development activities for at least the next two years and we added new Board Directors who, I believe, will make solid contributions to our future successes." Dr. Soula continued, "The year 2000 has started positively in other areas as well. The first clinical study of LABI, formerly known as Basulin™, our long-acting basal insulin product, was successfully completed and the results validated in humans the potential of our Medusa® technology as seen in earlier preclinical studies. We are also pleased with the growing market success of Corning’s new SunSensor™ eyeglass product as seen from our increasing royalty income," added Dr. Soula.
Flamel Technologies S.A. is a biopharmaceutical company principally engaged in the development of two unique polymer-based delivery technologies for medical applications. Flamel’s Medusa® nano-encapsulation technology is designed to deliver therapeutic proteins. Micropump® is a controlled release technology for the oral administration of small molecule drugs. Flamel’s expertise in polymer science has also been instrumental in the development of a photochromic eyeglass lens product now marketed by Corning Inc. Additionally, Flamel has developed new herbicide delivery systems now being tested by Monsanto and has patented a biomaterial, ColCys®.
Basulin™ is a trademark and Micropump®, Medusa® and ColCys® are registered
trademarks of Flamel Technologies.
SunSensor™ is a trademark of Corning.
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, 1999.
FLAMEL
TECHNOLOGIES S.A.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Amounts in thousands, except per share
data)
|
Three months
ended |
|
2000 US $ |
2000 Euros |
1999 US $ |
1999 Euros | |
| Revenues |
|
|
|
|
|
Licence and research revenue |
1,183 |
1,199 |
675 |
601 |
|
Product sales and services |
424 |
429 |
623 |
555 |
|
Royalties and other income |
375 |
380 |
||
| Total revenues |
1,982 |
2,008 |
1,298 |
1,156 |
|
|
|
|
| |
| Costs and expenses |
|
|
|
|
|
Cost of goods and services |
(614) |
(622) |
(721) |
(642) |
|
Research and development |
(2,640) |
(2,675) |
(2,730) |
(2,430) |
|
Selling, general and administrative |
(784) |
(794) |
(878) |
(782) |
|
Stock compensation expense |
(8) |
(8) |
(19) |
(17) |
| Total costs and expenses |
(4,046) |
(4,099) |
(4,348) |
(3,871) |
|
|
|
|
| |
| Loss from operations |
(4,064) |
(2,091) |
(3,050) |
(2,715) |
|
|
|
|
| |
|
Interest income, net |
16 |
16 |
121 |
108 |
|
Foreign exchange gain |
4 |
4 |
52 |
46 |
|
Loss from operations before income taxes and the cumulative effect of a change in accounting principle |
(2,044) |
(2,071) |
(2,877) |
(2,561) |
|
Income tax benefit |
- |
- |
- |
- |
| Net loss from operations before cumulative effect of a change in accounting principle |
(2,044) |
(2,071) |
(2,877) |
(2,561) |
|
|
|
|
| |
|
Cumulative effect on prior years (to December 31, 1999) of changing method of revenue recognition, net of tax |
(4,304) |
(4,360) |
- |
- |
| Net loss |
(6,348) |
(6,431) |
(2,877) |
(2,561) |
| Loss per share before cumulative effect of a change in accounting principle |
$(0.16) |
€(0.16) |
- |
- |
|
Cumulative effect per share on prior years of changing method of revenue recognition |
$(0.33) |
€(0.33) |
- |
- |
| Net loss per ordinary share |
$(0.49) |
€(0.50) |
$(0,22) |
€(0,20) |
|
|
|
|
| |
| Weighted average number of ordinary shares outstanding |
12,947 |
12,947 |
12,939 |
12,939 |
