Total revenue for the quarter was $2.4 million, compared to $2.8 million reported for the second quarter of 2000, reflecting lower sales of the Company's photochromic materials for the quarter as Corning sought to reduce its inventory of dyes. License and research revenue increased to $1.8 million in the second quarter of 2001, from $1.6 million in the second quarter of 2000. Total costs and expenses were $3.9 million, compared to $4.0 million reported in the same quarter of last year, reflecting the lower costs of goods sold

Total revenue for the first half of 2001 increased to $5.9 million from $5.2 million in the comparable time period of 2000. Total costs and expenses for this year's first two quarters increased slightly to $8.2 million, compared to $8.0 million incurred in the previous year's first half. The company's net loss from operations in the first six months of 2001 was $2.3 million, compared to $2.6 million reported in the same time period last year. On a per share basis the six-month period loss was ($0.13) per share, compared to a loss of ($0.18) in the first half of last year. Cash on hand at the end of the second quarter was $7.3 million

Commenting on the results, Dr. Gerard Soula, president and chief executive officer, said: "As we previously announced, we have recently signed an agreement with a new partner to work on a feasibility study utilizing our Medusa(R) technology and, on Micropump(R), we have recently obtained positive Phase I results. We believe that major pharmaceutical companies are beginning to recognize the considerable strengths of our technology platforms and that we have the potential to execute on our strategy of attracting a number of licensing agreements before the end of the year."

Dr. Soula continued: "I believe we are making significant progress in the development of our core drug delivery technologies. Our research and development work has produced some highly promising results, and we are in active negotiations with a number of existing partners potentially to license our technology based on work done for these clients to date."

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™.