Press Releases
Lyon, France, July 29, 2004 Flamel Technologies (NASDAQ:FLML) today announced its financial results for the second quarter of 2004.
For the second quarter, Flamel reported total revenues of $9 million, compared to $5.0 million in the second quarter of 2003. Expenses increased to $11.1 million, from $6.7 million in the second quarter of 2003, largely as a result of increased research and development and clinical studies.
Net loss in the second quarter of 2004 was $(1.6) million, compared to a net loss of $(1.7) million in the second quarter of last year. Net loss per share (basic) for the second quarter of 2004 was ($0.07), compared to a net loss per share (basic) in the year-ago period of ($0.10). Cash on hand at the end of the second quarter was $100.9 million, versus $11.6 million at the end of the second quarter a year ago.
Flamel's 2004 second quarter revenues included license and research revenues of $7.5 million. License and research revenues in the second quarter of 2003 totaled $4.3 million. Revenues from product sales and services during the quarter increased to $1.2 million, compared to $0.9 million in the second quarter of 2003. Other revenues were $0.3 million during the period versus ($0.2) million in the year-ago period. Costs and expenses of Flamel's research and development increased to $8.0 million, from $4.7 million in the year-ago quarter. This increase was largely as a result of increased clinical and preclinical study work, related to projects developed internally and also with our partners. Cost of goods and services sold increased to $0.9 million, compared to $0.7 million a year ago, largely in conjunction with increasing revenues in this category. SG&A increased to $1.6 million from $1.3 million.
For the first half of 2004, Flamel reported total revenues of $23.3 million, compared to $8.5 million in the first half of 2003. Expenses increased to $21.6 million, from $12.7 million in the first half of 2003, largely as a result of increased research and development and clinical studies.
Net income in the first half of 2004 was $2.7 million, compared to a net loss of ($3.3 million) in the first half of last year. Net income per share (basic) for the first half of 2004 was $0.13, compared to a net loss per share (basic) in the year-ago period of ($0.20). Diluted earnings per share in the first half of 2004 were $0.11.
Flamel's license and research revenues during the first six months of 2004 were $20.8 million, versus $6.3 million in the year-ago period. Revenues from product sales and services during the quarter increased to $2.1 million, compared to $1.9 million in the first half of 2003. Other revenues were $0.4 million during the period, as they were in 2003. Costs and expenses of Flamel's research and development increased to $15.9 million, from $8.5 million in the first half of 2003. This increase is a reflection of the company's increased work on partnered and internal projects. Cost of goods and services sold declined to $1.7 million, compared to $1.8 million a year ago. SG&A increased from $2.4 million to $2.9 million.
During the second quarter of 2004, Flamel announced that GlaxoSmithKline ("GSK") had selected Flamel's Micropump® technology for late-stage development of a major commercial product.
"It is a notable achievement for Flamel to be selected by GSK for development of a significant commercial product," said Dr. Gerard Soula, founder, president and chief executive officer of Flamel Technologies S.A. "Not only it is the proof of the performance of Flamel's Micropump® technology but also of the capability of Flamel's team to manage fully an ambitious project. These determinations by our partners are important for moving forward to getting our technology on to the market. In addition, we have made active development for clinical testing of other projects in order to license them as soon as possible. We also continue to prepare for initial human trials with our Medusa® technology for Interferon Alpha and Interleukin-2. We continue to expect that we will initiate these trials in 2004."
Flamel also announced today that it has begun construction of a new pilot plant and manufacturing facility on vacant land adjacent to its existing development and manufacturing facilities in Pessac, France. The facility, construction of which is expected to be completed before the end of 2004, will cost approximately $10 million. Approximately half the cost of the facility is expected to be paid by Flamel's partners and contributions by the French government.
"This new facility will be very important for the ongoing development of our two technology platforms," commented Dr. Soula. "With the new facility, we will be able to scale-up polymer production for our Medusa® technology. Also, we have added additional space so that further capacity can be added for additional pilot and commercial manufacturing of Micropump®-formulated pharmaceutical products."
Stephen Willard, chief financial officer of Flamel, said: "The advantages Flamel brings to partners include our demonstrated ability not just to provide technology, but also to provide scale-up manufacturing processes and, if necessary, commercial manufacturing. This gives our partners greater confidence in our technology, a potentially-faster regulatory pathway, and the ability to defer substantial capital expenditures at their own facilities while awaiting the outcome of late stage clinical trials. Our recent investments in people, equipment, and now our new manufacturing facility should substantially increase our abilities to develop new formulations of drug and potentially to license them on better terms."
A conference call to discuss earnings is scheduled for 8:30 AM EDTJuly 30, 2004. The dial-in number (for investors in the U.S. and Canada) is 800-374-1498; the conference ID number is 8771969. International investors are invited to dial (1) 706-634-7261.
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.
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, 2003.
FLAMEL
TECHNOLOGIES S.A.
CONSOLIDATED STATEMENT OF
OPERATIONS
(Amounts in thousands, except per share
data)
|
Three months ended |
Six months ended |
| June
30 2003 |
June 30
2004 |
June
30 2003 |
June 30
2004 | |
| Revenues | ||||
|
Licence and research revenue |
4,297 |
7,537 |
6,259 |
20,838 |
|
Product sales and services |
864 |
1,169 |
1,901 |
2,118 |
|
Other revenue |
(162) |
285 |
372 |
388 |
| Total revenue | 4,999 | 8,991 | 8,532 | 23,344 |
| Costs and expenses | ||||
|
Cost of goods and services |
(717) | (878) | (1,811) |
(1,715) |
|
Research and development |
(4,682) | (8,019) | (8,525) |
(15,891) |
|
Selling, general and administrative |
(1,341) | (1,627) | (2,351) | (2,914) |
|
Stock compensation expense |
- | (552) | (4) | (1,125) |
| Total costs and expenses | (6,740) | (11,076) | (12,691) | (21,645) |
| Profit / (Loss) from operations | (1,741) | (2,085) | (4,159) | 1,699 |
|
Other income |
260 |
24 | 1,007 | 81 |
|
Interest income (expense), net |
62 |
475 | 142 | 967 |
|
Foreign exchange gain / (loss) |
(210) | 31 | (293) | 18 |
| Income / (Loss) before income taxes | (1,629) | (1,555) | (3,303) | 2,765 |
|
Income tax benefit |
(21) | - | (21) | (23) |
| Net Profit, (Loss) | (1,650) | (1,555) | (3,324) | 2,742 |
| Earnings / (loss) per share | ||||
|
Basic earnings / (loss) per ordinary share |
$ (0.10) | $ (0.07) | $ (0.20) |
$ 0.13 |
|
Diluted earnings / (loss) per ordinary share |
$ (0.10) | $ (0.07) | $ (0.20) |
$ 0.11 |
| Weighted average number of ordinary shares outstanding |
Basic |
16,327 | 21,415 | 16,327 |
21,415 |
Diluted |
16,327 | 21,415 | 16,327 |
24,120 |
