Lyon, France, October 26, 205 – Flamel Technologies (NASDAQ: FLML) today announced its financial results for the third quarter of 2005.

For the third quarter, Flamel reported total revenues of $3.1 million compared to $13.3 million in the third quarter of 2004. Revenues for the third quarter of 2005 include $2.3 million of license and research revenues compared to $12.3 million in the third quarter of 2004, which included milestones and R&D revenues from Bristol-Myers Squibb Company and from TAP Pharmaceuticals. Revenues from product sales and services during the quarter decreased to $0.5 million, compared to $0.9 in the third quarter of 2004, reflecting the decision to de-emphasize contract manufacturing activities. Other revenues were $0.3 million during the period versus $0.2 million in the year-ago quarter.

Expenses for the third quarter 2005 decreased sequentially to $15.3 million from $16.1 million during the second quarter. Year-ago expenses during the quarter were $11.2 million. This year-over-year increase largely reflected the growth in research and development costs to $11.5 million versus $8.6 million in the third quarter of 2004.

Cost of goods and services sold decreased to $0.8 million, compared to $0.9 million in 2004. SG&A during the quarter totalled $3.0 million versus $1.8 million in the third quarter 2004.

Net loss in the third quarter amounted to $(11.9) million, compared to net income of $2.6 million in 2004. Net loss per share (basic) for the third quarter was ($0.50), compared to net income per share of $0.12 for the comparable period a year ago. Diluted earnings per share in the third quarter of 2004 were $0.11.

For the first nine months of 2005, Flamel reported total revenues of $17.3 million, compared to $36.7 million in 2004. License and research revenues amounted to $15.1 million during these first nine months compared to $33.1 million in 2004. Revenues from product sales and services decreased from $3.0 million in 2004 to $1.4 million in line with our strategy. Other revenues were slightly higher in the first nine months of 2005 at $0.8 million versus $0.6 million in 2004.

Year-to-date expenses increased to $47.0 million, from $32.9 million in the first nine months of 2004 mainly due to research and development. These costs amounted to $37.6 million in the first nine months of 2005 compared to $24.4 million in 2004 reflecting our additional efforts on clinical development of internal projects and increase in personnel. Cost of goods decreased from $2.6 million to $2.0 million, in line with the anticipated trend of this activity. SG&A increased to $7.4 million from $5.8 million in the prior year period.

Net loss in the first nine months of 2005 was ($20.9) million, compared to net income of $4.6 million for the same period in 2004. Net loss per share (basic) for this period was ($0.89) compared to net income per share (basic) of $0.21. Diluted earnings per share in the first nine months of 2004 were $0.19.

Cash and marketable securities at the end of the nine months totalled $89.4 million, versus $105.4 million at the end of December 2004. At comparable exchange rates Flamel's cash and marketable securities would have decreased by $4.0 million during the nine month period.

"Flamel Technologies remains very strong financially and in a good position for growing revenues while tightening expenses as shown in the third quarter," said Michel Finance, Flamel's chief financial officer.

"This has been an important week for Flamel, with the expansion of our Board of Directors to encompass additional world-class leaders, as well as today's exciting news regarding GlaxoSmithKline," said Stephen H. Willard, chief executive officer of Flamel Technologies. "There is broad interest in the pharmaceutical industry for our products and technologies and we are working actively to seek additional licenses and partnerships."

A conference call to discuss earnings is scheduled for 8:30 AM EDT October 27th, 2005. The dial-in number (for investors in the US and Canada) is 1-800-374-1478; the conference ID number is 1604996. 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. Flamel's Medusa® technology is designed to deliver controlled-release formulations of therapeutic proteins and peptides. Micropump® is a controlled release and taste-masking technology for the oral administration of small molecule drugs.

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 document 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, 2004.

Contact:
Michel Finance, Chief Financial Officer
Tel: (011) (33) 4-7278-3434
Fax: (011) (33) 4-7278-3435
Finance@flamel.com
or
Charles Marlio, Director of Strategic Planning and Investor Relations
FRANCE: (011) 33-4-72-78-34-23
US (1) (202) 862-8400
Fax: 202-862-3933
Marlio@flamel.com