Press Releases
Flamel Technologies Announces 2000 Results
Lyon, France, March 15, 2001 – Flamel Technologies (Nasdaq: FLML) today announced its financial results for the fourth quarter and year ended December 31, 2000.
On a net
operating basis before the effect of accounting changes, Flamel's losses dropped
to $4.9 million ($0.32 per share) from $6.7 million ($0.52 per share) in the
prior year.
Effective
January 1, 2000, Flamel changed its method of recognizing revenue on up-front
payments to spread such revenues across the term of the related agreement,
rather than recognizing all revenues in the period they were received.
As a result, the
company took a non-cash accounting charge of $4.6 million in 2000 ($0.30 per
share) for an overall net loss of $9.5 million ($0.62 per share) for 2000.
For the quarter,
the company reported total revenues of $2.5 million, compared to $7.0 million
reported for the fourth quarter 1999, which included $5.0 million received from
Novo Nordisk on the signing of the development and license agreement for
Flamel's long-acting insulin product, Basulin(TM).
Had the
company's current accounting principals been in effect in 1999, total revenues
would have been approximately $2.0 million in the fourth quarter of 1999.
Product sales and services revenues in the fourth quarter, consisting largely of
sales of photochromic material to Corning, were approximately $0.9 million,
compared to $1.0 million in the fourth quarter of last year.
Other income
totaled approximately $0.3 million, compared to $0.4 million.
Total expenses
in the quarter were $4.1 million, compared to $5.0 million in the fourth quarter
last year. These results reflected a decline in all expense categories,
including SG&A, research and development and cost of goods sold. The company
reported a net loss of $1.6 million ($0.10 per share), compared with a net
income of $2.2 million ($0.17 per share) for the fourth quarter 1999.
If Flamel's
current accounting principals had been applied in 1999, the company's loss in
the fourth quarter of 1999 would have been approximately $2.8 million ($0.22 per
share).
For the year,
the company reported consistent total revenues of $10.9 million, compared to
$11.0 million reported for the fiscal year ended December 1999. If Flamel's
current accounting principals had been applied in 1999, total revenues for 1999
would have been $6.3 million. In 2000, license and research revenues totaled
$6.6 million compared to $7.3 million in 1999.
License and
research revenues in 2000 included continuing revenues from Novo Nordisk and
Corning, as well as from other undisclosed partners. Product sales and services
for 2000 totaled $3.0 million, compared to $3.2 million in 1999. This revenue is
the combined result of sales of photochromic materials to Corning and certain
contract manufacturing for various parties.
Other revenues
in 2000 totaled $1.2 million, compared to $0.6 million reported in 1999. This
increase is primarily the result of increasing royalties from Corning.
Total costs and
expenses for the year were $16.1 million, compared to $18.0 million reported for
the year ended December 31, 2000. Lower costs of goods sold related to the lower
manufacturing volumes for Corning after an initial ramp-up for product launch,
as well as decreases in research and development and administrative costs.
For the year
ended December 31, 2000, the net resulting loss from operations was $4.9
million, compared to a loss from operations of $6.7 million reported for the
year ended December 31, 1999.
For the year,
the company reported a negligible tax expense, equivalent to that reported for
the year ended December 31, 1999. As noted above, 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 revenues across the term of the related agreement, rather than
recognizing all of the revenues in the period in which they were received.
Flamel believes this change is consistent with the Securities and Exchange
Commission Staff Accounting Bulletin (SAB) No. 101.
As a result of
this change in accounting treatment, the company has recognized a charge in 2000
of $4.6 million ($0.30 per share) specifically related to the $5.0 million
received in December 1999 on signing a collaborative agreement with Novo
Nordisk.
Net loss from
operations of Flamel before the cumulative effect of this accounting change in
2000 was $4.9 million ($0.32 per share), compared to a loss of $6.7 million
($0.52 per share) in 1999. After giving effect to the accounting charge, the net
loss for Flamel in 2000 was $9.5 million, or $0.62 per share, compared to a net
loss of $6.7 million in 1999 ($0.52 per share).
"Flamel's
results in the year 2000 show a continuing effort to reduce losses, control
expenses and present a strong cash position," noted Stephen Willard, Chief
Financial Officer. "Expenses in 2000 declined more than 11% year over year while
revenues would have increased by approximately 73 % under the company's current
accounting principles consistently applied. Net operating loss for the year
declined 26% versus 1999, while the Company's cash and cash equivalents almost
doubled."
"The year 2000
was an important developmental year for Flamel Technologies," reported Dr.
Gerard Soula, Flamel's President and Chief Executive Officer. "We made what we
believe to be important progress with our flagship long-acting insulin product,
Basulin(TM). We announced filing of Genvir(TM), our controlled-release
formulation of acyclovir, in Europe and promising results for our
controlled-release formulation of Metformin which we are actively working to
license worldwide. We recently disclosed three new partnerships with major
pharmaceutical companies, one for Medusa(R) and two for Micropump(R), and
enhanced our leadership team with the addition of Dr. Michael Myers, Head of
Business Development, and Stephen Willard, Chief Financial Officer and General
Counsel. Finally," Dr. Soula noted, "we continue to control our costs while
preserving important research initiatives".
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(R) nano-encapsulation technology is designed to
deliver therapeutic proteins. Micropump(R) is a controlled release and
taste-masking 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(TM).
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 |
Twelve months ended | |||
|
2000 |
1999 |
2000 |
1999 | |
|
REVENUES |
||||
|
License and research revenue |
1,345 |
5,561 |
6,619 |
7,280 |
|
Product sales and services |
859 |
1,008 |
3,034 |
3,190 |
|
Other revenues |
271 |
439 |
1,249 |
570 |
|
Total Revenues |
2,475 |
7,008 |
10,902 |
11,040 |
|
COSTS and EXPENSES |
||||
|
Cost of goods and services |
(712) |
(938) |
(2,863) |
(3,294) |
|
Research and development |
(2,375) |
(2,795) |
(9,789) |
(11,054) |
|
Selling, general and administrative |
(980) |
(1,223) |
(3,435) |
(3,618) |
|
Stock compensation expense |
(8) |
(36) |
(20) |
(74) |
|
Total Costs and expenses |
(4,075) |
(4,992) |
(16,107) |
(18,040) |
|
PROFIT / (LOSS) FROM OPERATIONS |
(1,600) |
2,016 |
(5,205) |
(7,000) |
|
Interest income, net |
30 |
64 |
322 |
183 |
|
Foreign exchange gain(loss) |
26 |
122 |
49 |
139 |
|
Profit /(Loss) before income taxes |
(1,544) |
2,202 |
(4,834) |
(6,678) |
|
Income tax benefit (expense) |
(50) |
(16) |
(50) |
(16) |
| Cumulative effect of prior years (to December 31, 1999) of changing method of revenue recognition |
- |
- |
(4,577) |
- |
|
NET INCOME / LOSS |
(1,594) |
2,186 |
(9,461)) |
(6,694) |
| NET INCOME / (LOSS) PER ORDINARY SHARE before cumulative effect of change in accounting principle |
$ (0,10) |
$ 0.17 |
$ (0.32) |
$ (0.52) |
| Cumulative effect per share of prior years of changin method of revenue recognition |
- |
- |
$ (0.30) |
- |
|
NET INCOME / (LOSS) PER ORDINARY SHARE |
$ (0,10) |
$ 0.17 |
$ (0.62) |
$ (0.52) |
|
Weighted average number of ordinary shares outstanding |
16,198 |
12,939 |
15,331 |
12,939 |
