Press Releases
Flamel Technologies Reports Second Quarter 2000 Financial Results
Lyon, France, July 31, 2000 – Flamel Technologies (Nasdaq: FLML) today announced financial results for its second quarter ended June 30, 2000.
Total revenue for the quarter was $2.8 million, compared to $1.0 million reported for the second quarter of 1999. The increase in total revenues in the second 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 of revenues of sales and royalty income from Corning Inc. related to their photochromic lens product.
Total costs and expenses were stable at $4.0 million, compared to $4.2 million reported in the second quarter of 1999. The Company’s net loss from operations in the second quarter of 2000 was $1.0 million, compared to $3.0 million, reported in the second quarter of 1999. On a per share basis, this quarter’s loss has been $0.06 per share.
Total revenue for the first six months of 2000 more than doubled to $5.2 million from $2.3 million in the same period last year. This increase is due to the combination of higher license and research revenues due to research revenues from Novo Nordisk and to revenues of sales and royalty income from Corning. Total costs and expenses for the six-month period were stable at $8.0 million, as compared to $8.5 million incurred last year. The Company’s net loss from operations in the first six months of 2000 was $2.6 million, compared to $5.9 million, reported in the comparable period of 1999. On a per share basis, before taking effect of the charge resulting from a change in accounting treatment described below, this six-months period loss would have been $0.18 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 has recognized a charge of $4.6 million ($0.31 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 six-month period ended June 30, 2000 of $7,2 million ($0.49 per share) compared to a net loss of $5.9 million ($0.46 per share) for the comparable period of 1999.
At June 30, 2000, the Company had $ 12.7 million in cash and short term investments.
The Annual General Meeting of Shareholders was held in Lyon, France, on June 14, 2000. At that time, the following individuals were elected to the Company’s Board of Directors: Dr. Gerard Soula, founder and President of Flamel; Mr. Jean Deleage, Managing Director of Alta Partners and Burr, Egan & Deleage & Co; Mr. Jean-Noël Treilles, President of the ethical division of E.Merck; Mr. Andre Ulmann, President and Chief Executive Officer of Laboratoire HRA Pharma; Mr. W. George Meredith, retired Executive Vice President of 3M’s Life Sciences Sector.
“These results demonstrate Flamel’s continued commitment to increase revenues whilst maintaining a consistent expense level. ” said Gérard Soula, C.E.O. of Flamel Technologies, “ We have signed two feasibility studies with two pharmaceuticals companies to develop new formulation of oral drugs using Micropump®. We are continuing to pursue additional partnerships with pharmaceutical and biotech companies and to explore new applications for our Micropump® and Medusa® technologies.”
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™.
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 |
Six months ended |
| June
30 2000 US $ |
June 30
1999 US $ |
June
30 2000 US $ |
June 30
1999 US $ | |
| Revenues | ||||
|
Licence and research revenue |
1,603 |
562 |
3,189 |
1,237 |
|
Product sales and services |
903 |
435 |
1,327 |
1,058 |
|
Royalties and other income |
336 |
49 |
711 |
49 |
| Total revenues | 2,842 | 1,046 | 5,227 | 1,156 |
| Costs and expenses | ||||
|
Cost of goods and services |
(788) | (638) | (1,402) |
(1,359) |
|
Research and development |
(2,466) | (2,822) | (5,106) |
(5,552) |
|
Selling, general and administrative |
(708) | (695) | (1,492) | (1,573) |
|
Stock compensation expense |
(3) | (13) | (11) | (32) |
| Total costs and expenses | (3,965) | (4,168) | (8,011) | (8,516) |
| Loss from operations | (1,123) | (3,122) | (2,784) | (6,172) |
|
Interest income, net |
127 |
93 | 143 | 214 |
|
Foreign exchange gain |
6 | (8) | 10 | 44 |
|
Loss from operations before income taxes and the cumulative effect of a change in accounting principle |
(990) | (3,037) | (2,631) | (5,914) |
|
Income tax benefit |
- | - | - | - |
| Net loss from operations before cumulative effect of a change in accounting principle | (990) | (3,037) | (2,631) | (5,914) |
| Cumulative effect on prior years (to December 31, 1999) of changing method of revenue recognition, net of tax | - | - | (4,577) | - |
| Net loss | (990) | (3,037) | (7,208) | (5,914) |
| Loss per share before cumulative effect of a change in accounting principle | - | - | $(0.18) | - |
| Cumulative effect per share on prior years of changing method of revenue recognition | - | - | $(0.31) | - |
| Net loss per ordinary share | $(0.06) | $(0.23) | $(0,49) | $(0,46) |
| Weighted average number of ordinary shares outstanding | 15,981 | 12,939 | 14,464 | 12,939 |
