Flamel Technologies Announces Second Quarter Results and New Medusa Contracts


LYON, France—August 6, 2008--Flamel Technologies (Nasdaq:FLML) today announced
its financial results for the second quarter of 2008 as well as the signing of two further
Medusa contracts with two current partners. Flamel currently is working on Medusa projects
with four of the top-ten and six of the top-twenty pharmaceutical companies in the world.
Flamel reported total revenues of $9.2 million, compared to $7.4 million in the second
quarter of 2007. Product sales and services totaled $3.2 million during the quarter versus
$4.8 million in the second quarter, 2007. License and research revenues were $3.2 million
versus $1.8 million in the year-ago period. Other revenues, including royalties on the sale of
Coreg CR™ were $2.8 million versus $0.8 million in the year-ago period.
Costs and expenses during the second quarter were $(14.9) million versus $(21.5) million in
the year-ago period. Costs of goods and services sold in connection with the manufacture of
Coreg CR microparticles totaled $(2.2) million versus $(3.7) million in the second quarter of
2007. Research and development expenses were $(9.0) million versus $(13.2) million in the
second quarter of 2007. SG&A declined to $(3.7) million from $(4.6) million in the year-ago
period.
Net loss in the second quarter of 2008 was $(3.4) million, compared to a net loss of $(13.6)
million in the second quarter of last year. Net loss per share (basic) for the second quarter of
2008 was ($0.14), compared to a net loss per share (basic) in the year-ago period of ($0.57).
Cash and marketable securities at the end of the second quarter totaled $34.5 million versus
$47.0 million at the end of the second quarter, 2007.
For the first half of 2008, Flamel reported total revenues of $20.0 million versus $17.1
million in the first half of 2007. License and research revenues during the period were $6.7
million versus $4.9 million in the year-ago period. Product sales and services during the first
six months of 2008 were $7.9 million versus $10.2 million in the first half of 2007. Other
revenues during the first six months of 2008 were $5.4 million versus $1.9 million in the
year-ago period.


During the first six months of 2008, total costs and expenses declined $10 million versus the
year-ago period, from $(40.6) million to $(30.6) million. Costs of goods and services sold
relating to the manufacture of Coreg CR microparticles totaled $(4.7) million versus $(8.2)
million in the year-ago period. Research and development expenses during the first half of
2008 were $(18.2) million versus $(23.8) million during the year-ago period. SG&A for the
first six months of 2008 amounted to $(7.8) million versus $(8.7) million in the year-ago
period.
Net loss in the first half of 2008 was $(7.1) million, compared to a net loss of $(22.7) million
in the first half of last year. Net loss per share (basic) for the first half of 2008 was $(0.29),
compared to net loss per share (basic) in the year-ago period of $(0.95).
“As our results show, we are rapidly diversifying our relationships with the largest
pharmaceutical companies and maintaining our research and development, while significantly
reducing our expenses. We can do this as our partners assume much of the clinical and
preclinical work which we had funded previously,” said Stephen Willard, Flamel’s Chief
Executive Officer. “We are also very pleased to be signing additional projects with large
pharmaceutical companies with whom we already have initial projects. These new contracts
with current partners confirm their view of our technology and show recognition of our
ability to solve a variety of challenges. We are working actively to further diversify the
partners and projects on which we are working and expect success in that regard in the
coming months.”
A conference call to discuss earnings is scheduled for 8:30 AM EDT August 7, 2008. The
dial-in number (for investors in the U.S. and Canada) is 1-800-374-1498; the conference ID
number is 57373983. 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 and peptides.

Charles Marlio, Director of Strategic Planning and Investor Relations
Tel: (33)(0)4-7278-3434
Fax: (33)(0)4-7278-3435
Marlio@flamel.com


Schedule attached

Financial Statements (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Amounts in thousands of dollars except share data)