Press Releases
Lyon, France, October 30, 2003 – Flamel Technologies S.A. (NASDAQ: FLML) today announced its financial results for the third quarter of 2003.
For the third quarter, Flamel reported total revenues of $5.4 million, compared to $6.3 million in the third quarter of 2002. Expenses increased to $7.3 million, from $4.1 million in the third quarter of 2002, largely as a result of increased research and development and clinical studies and a 20% increase in the value of the Euro against the U.S. dollar during the 12 month period. Net loss in the third quarter of 2003 was $1.87 million, compared to a net profit of $2.4 million in the third quarter of last year. Net income per share for the third quarter of 2003 was ($0.11), compared to a net profit per share in the third quarter of 2002 of $0.15. Cash on hand at the end of the third quarter was $22.1 million, with an additional $4.3 million in accounts receivable, versus $14.6 million, with an additional $2.9 million in accounts receivable at the end of the third quarter a year ago.
Flamel's third quarter revenues included license and research revenues of $4.2 million, which included revenues from research contracts, but no milestones. License and research revenues in the third quarter of 2002 of $5.4 million included a $4 million milestone payment from Servier. Revenues from product sales and services increased slightly to $0.9 million, compared to $0.7 million in the third quarter of 2002, reflecting diminished services to Corning and increasing contract manufacturing revenues. Other revenues remained stable at $0.2 million. Costs and expenses of Flamel's research and development increased to $5.0 million, from $2.9 million in the third quarter of 2002, largely as a result of increasing clinical and preclinical study work, primarily related to projects developed internally, as well as the increase of 20% in the value of the Euro against the U.S. dollar during the twelve month period. Costs of goods and services sold increased to $0.9 million, compared to $0.5 million a year ago, in large part in conjunction with increased revenues in this category. SG&A increased to $1.4 million from $0.7 million, largely as a result of additional expenses related to the secondary offering completed in October.
"We are very pleased and excited to work on the development of Basulin®® with Bristol-Myers-Squibb. We feel confident that they will be an excellent partner. As planned, the Phase II(a) study on Basulin® has commenced," said Dr. Gerard Soula, president and chief executive officer of Flamel Technologies S.A. "We continue actively the development of Medusa® for other proteins and Micropump for small molecules."
Stephen Willard, chief financial officer of Flamel, commented: "Our research and development income increased substantially compared to a year ago as we perform work for a variety of partners under license. The research and development income in the third quarter of 2002 was largely the result of receipt of a $4 million milestone payment from Servier. Expenses increased year-over-year as we have increased our budget for research and development and preclinical studies to reflect work on a number of new projects."
Mr. Willard also noted: "Our cash position to date has also improved significantly. As a result of the exercise of warrants, the addition of approximately $61 million from our recent secondary offering, and the $20 million upfront payment from BMS which is expected shortly, we project that we will have, upon receipt of that payment, approximately $100 million of cash on our balance sheet. On an operating basis, we expect to be cash flow positive for the year 2003."
Flamel Technologies, S.A. is a biopharmaceutical company principally engaged in the development of two unique polymer-based delivery technologies for medical applications. Micropump® is a controlled release and taste-masking technology for the oral administration of small molecule drugs. Flamel's Medusa® technology is designed to deliver controlled-release formulations of therapeutic proteins. Flamel's expertise in polymer science has also been instrumental in the development of a photochromic eyeglass lens product now marketed by Corning Inc.
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, 2002.
FLAMEL
TECHNOLOGIES S.A.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Amounts in thousands, except per share
data)
|
Three months ended |
Nine months ended |
| September
30 2002 US $ |
September 30
2003 US $ |
September
30 2002 US $ |
September 30
2003 US $ | |
| Revenues | ||||
|
Licence and research revenue |
5,441 |
4,245 |
10,801 |
10,504 |
|
Product sales and services |
653 |
899 |
1,967 |
2,800 |
|
Other revenue |
183 |
222 |
718 |
594 |
| Total revenues | 6,277 | 5,366 | 13,486 | 13,898 |
| Costs and expenses | ||||
|
Cost of goods and services sold |
(457) | (883) | (1,538) |
(2,694) |
|
Research and development |
(2,929) | (4,989) | (8,624) |
(13,514) |
|
Selling, general and administrative |
(745) | (1,467) | (2,536) | (3,818) |
|
Stock compensation expense |
(3) | (10) | (13) | (14) |
| Total costs and expenses | (4,134) | (7,349) | (12,711) | (20,040) |
| Profit/(Loss) from operations | 2,143 | (1,983) | 775 | (6,142) |
|
Other income |
80 |
(8) | 2,476 | 999 |
|
Interest income, net |
78 |
65 | 156 | 207 |
|
Foreign exchange gain/ (loss) |
72 | 57 | (75) | (236) |
| Income tax benefit | - | - | - | (20) |
| Net Profit, (Loss) | 2,373 | (1,869) | 3,332 | (5,192) |
| Net Income/Loss) per ordinary share | ||||
| Basic | 0.15 | (0.11) | 0.21 | $(0.27) |
| Diluted | 0.14 | (0.11) | 0.19 | (0.27) |
| Weighted average number of ordinary shares outstanding | ||||
| Basic | 16,198 | 19,292 | 16,198 | 19,292 |
| Diluted | 16,711 | 19,292 | 16,711 | 19,292 |
