Flamel Technologies Announces Third Quarter 2012 Results and

Flamel Technologies Announces Third Quarter 2012 Results and Other
Updates 
Conference Call With Management to Take Place at 8:30 AM EST on
November 5, 2012 
LYON, FRANCE -- (Marketwire) -- 11/05/12 --  Flamel Technologies
(NASDAQ: FLML) today announced its financial results for the third
quarter of 2012. Highlights from the quarter and subsequent period
include: 


 
--  Flamel's New Drug Application (NDA) was accepted by the FDA in October
    2012 with Prescription Drug User Fee Act (PDUFA) target action date of
    May 31, 2012.
--  If approved, this new hospital-based product under FDA review is
    expected to have peak annual revenue potential of $25 to $35 million
    with gross margins comparable to those generated in the proprietary
    pharmaceutical business.
--  On November 2, 2012, Flamel received notice from Merck Serono that it
    has decided to terminate for convenience its development and license
    agreement with Flamel for long-acting interferon beta-1a (IFN-β
    XL).
--  Management is continuing to advance internal pipeline and aggressive
    pursuit of external business development opportunities.
--  Flamel had $15.6 million of cash and marketable securities as of
    September 30, 2012.

  
"The recent acceptance of our NDA is an important milestone in our
transition into a more independent commercial-stage company," stated
Mike Anderson, Flamel's chief executive officer. Mr. Anderson
continued, "Unfortunately, we believe that while the technology was
progressing, the IFN-β XL product's profile and its development
timelines no longer met Merck Serono's commercial needs. Despite this
termination, we will continue to work toward making steady progress
in both the innovative and project-based sides of our business, and
look forward to sharing updates in the future. We recognize that the
ability to complement our core revenue streams with new proprietary
products is key to providing both sustainable revenue and earnings
growth for Flamel." 
Flamel's Third Quarter Results 
Flamel reported total revenues during the third quarter of 2012 of
$5.4 million versus $10.4 million in the year-ago period. The
decrease was primarily driven by lower product sales and services, as
the third quarter 2011 included an up-front payme
nt and modified
pricing structure for purchases of Coreg CR's microparticles that
resulted from the signing of a new supply agreement with GSK. License
and research revenues were $1.7 million during the third quarter of
2012 versus $2.7 million in the third quarter of 2011, reflecting in
part the aforementioned slowdown in development efforts for
IFN-β XL. Product sales and services during the third quarter of
2012 were $2.1 million versus $5.2 million during the year-ago
quarter. Other revenues in the third quarter of 2012, consisting
primarily of royalty income from GSK on the sales of Coreg CR, were
$1.6 million versus $2.5 million in the third quarter of 2011. 
Total costs and expenses during the third quarter of 2012 increased
to $10.4 million versus $9.2 million in the year-ago period. Costs of
goods and services sold for the third quarter of 2012 were $1.5
million compared to $1.1 million in the third quarter of 2011.
Research and development costs in the third quarter of 2012 totaled
$6.2 million versus $5.5 million in the year-ago period. This
increase was primarily a result of increased spending to support the
Company's expanded proprietary pipeline. Selling, general, and
administrative costs were $3.1 million in the third quarter of 2012
versus $2.6 million in the third quarter of 2011, primarily resulting
from to $0.7 million in Eclat-related expenses in the third quarter
of 2012 not present during the prior-year period, partially offset by
certain cost-saving measures. Total interest expense of $1.4 million
includes $1.5 million of non-cash expense related to calculated
interest expense on the consideration payable on the Eclat
transaction, partially offset by interest earned on our cash balance. 
Net loss for the third quarter of 2012 was $6.4 million versus a net
income of $1.7 million in the year-ago period. Net loss per share
(basic and diluted) was $0.26 versus earnings per share (basic and
diluted) of $0.07 in the third quarter of 2011. Net loss and loss per
share (basic and diluted) for the third quarter of 2012 excluding the
impact of the re-measurement of the fair value of acquisition
liabilities was $5.3 million and $0.21, respectively. 
A conference call to discuss these results and other updates is
scheduled for 8:30 AM Eastern Standard Time Monday, November 5, 2012.
A question and answer period will follow management's prepared
remarks. To participate in the conference call, investors are invited
to dial 888-438-5524. The conference ID number is 9243089. The
conference call webcast may be accessed at www.flamel.com. A replay
of the call will be available for 14 days, within a few hours after
the call ends. Investors may listen to the replay of the call by
dialing 888-203-1112 (U.S.) or +1-719-457-0820 (international), with
the passcode 9243089. A replay of the webcast will also be archived
on Flamel's website for 90 days following the call. To access the
webcast, please use the following link:
http://www.visualwebcaster.com/event.asp?id=90493. 
About Flamel Technologies. Flamel Technologies SA's (NASDAQ: FLML)
business model is to blend high-value internally developed products
with its leading drug delivery capabilities. The Company has a
proprietary pipeline of niche specialty pharmaceutical products,
while its drug delivery platforms are focused on the goal of
developing safer, more efficacious formulations of drugs to address
unmet medical needs. Its partnered pipeline includes biological and
chemical drugs formulated with its Medusa(R) and Micropump(R) (and
its applications to the development of liquid formulations, i.e.
LiquiTime(TM) and of abuse-deterrent formulations Trigger Lock(TM))
proprietary drug delivery platforms. Several Medusa-based products
have been successfully tested in clinical trials; Medusa's lead
internal product candidate IFN-alpha XL (long-acting interferon
alpha-2b) is completing a Phase 2 trial in HCV patients for which the
latest results will be presented at the American Association for the
Study of Liver Diseases (AASLD 2012) held on Nov. 9-13 in Boston. The
Company has developed products and manufactures Micropump-based
microparticles under FDA-audited GMP guidelines. Flamel Technologies
has collaborations with a number of leading pharmaceutical and
biotechnology companies, including GlaxoSmithKline (Coreg CR(R),
carvedilol phosphate). The Company is headquartered in Lyon, France
and has operations in St. Louis, Missouri, USA, and manufacturing
facilities in Pessac, France. Additional information may be found at
www.flamel.com. 
This release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including
certain plans, expectations, goals and projections regarding
financial results, product developments and technology platforms. All
statements that are not clearly historical in nature are
forward-looking, and the words "anticipate," "assume," "believe,"
"expect," "estimate," "plan," "will," "may," and similar expressions
are generally intended to identify forward-looking statements. All
forward-looking statements involve risks, uncertainties and
contingencies, many of which are beyond our control that could cause
actual results to differ materially from those co
ntemplated in such
forward-looking statements. These risks include risks that the
acquisition of Eclat Pharmaceuticals may not be successfully
integrated or that certain payment acceleration events may be
triggered; the new hospital-based product under FDA review may not be
approved or such approval may be delayed; the reacquisition of the
exclusive rights to rights to develop and commercialize IFN-β XL
worldwide and identification of an alternative strategic partner for
the program may not be successful; the identified opportunities will
not result in shorter-term, high value results; clinical trial
results may not be positive or our partners may decide not to move
forward; management transition to a new chief executive officer may
be disruptive or not succeed as planned; products in the development
stage may not achieve scientific objectives or milestones or meet
stringent regulatory requirements; products in development may not
achieve market acceptance; competitive products and pricing may
hinder our commercial opportunities; we may not be successful in
identifying and pursuing opportunities to develop our own product
portfolio using Flamel's technology; and the risks associated with
our reliance on outside parties and key strategic alliances. These
and other risks are described more fully in Flamel's Annual Report on
Form 20-F for the year ended December 31, 2011 that has been filed
with the Securities and Exchange Commission (SEC). All
forward-looking statements included in this release are based on
information available at the time of the release. We undertake no
obligation to update or alter our forward-looking statements as a
result of new information, future events or otherwise. 


 
                                                                            
                                                                            
                                                                            
               Condensed Consolidated Statements of Operations              
                (amounts in thousands, except per share data)               
                                                                            
                                  Three months ended    Nine months ended   
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2011       2012       2011       2012   
                                 ---------  ---------  ---------  --------- 
Revenue:                                                                    
  License and research revenue   $   2,700  $   1,710  $   8,396  $   5,874 
  Product sales and services         5,239      2,063      9,153      7,494 
  Other revenues                     2,495      1,625      6,402      5,423 
                                 ---------  ---------  ---------  --------- 
    Total revenue                   10,434      5,398     23,951     18,791 
                                 ---------  ---------  ---------  --------- 
Costs and expenses:                                                         
  Cost of goods and services                                                
   sold                             (1,129)    (1,500)    (4,434)    (4,365)
  Research and development          (5,475)    (6,246)   (19,179)   (19,953)
  Selling, general and                                                      
   administrative                   (2,590)    (3,107)    (7,644)   (11,203)
  Remeasurement of acquisition                                              
   liabilities                           -        417          -      7,172 
                                 ---------  ---------  ---------  --------- 
    Total                           (9,194)   (10,436)   (31,257)   (28,349)
                                 ---------  ---------  ---------  --------- 
                                                                            
Profit (loss) from operations        1,240     (5,038)    (7,306)    (9,558)
                                                                            
Interest income (loss) net (1)         147     (1,355)       472     (2,796)
Foreign exchange gain (loss)           375        (95)       155        (72)
Other income (loss)                    (12)        15        129         91 
                                                                            
                                 ---------  ---------  ---------  --------- 
Income (loss) before income                                                 
 taxes                               1,750     (6,473)    (6,550)   (12,335)
Income tax benefit (expense)           (47)        48       (133)         5 
                                 ---------  ---------  ---------  --------- 
  Net income (loss)              $   1,703  $  (6,425) $  (6,683) $ (12,330)
                                 =========  =========  =========  ========= 
                                                                            
Earnings (loss) per share                                                   
                                                                            
  Basic earnings (loss) per                                                 
   ordinary share                $    0.07  $   (0.26) $   (0.27) $   (0.49)
  Diluted earnings (loss) per                                               
   share                         $    0.07  $   (0.26) $   (0.27) $   (0.49)
                                                                            
Weighted average number of                                                  
 shares outstanding (in                                                     
 thousands) :                                                               
                                                                            
  Basic                             24,646     25,157     24,646     25,109 
  Diluted                           24,971     25,157     24,646     25,109 
                                                                            
                                                                            
(1) Includes impact of passage of time on valuation of acquisition          
 liabilities.                                                               

  
Contact: 
Michael S. Anderson
Phone: 33 (0) 4 72 78 34 34
Fax: 33 (0) 4 72 78 34 35
E-mail: anderson@flamel.com 
 
 
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