Flamel Technologies Announces Second Quarter Results.LYON, France -- Flamel Technologies (Nasdaq:FLML) today announced its financial results for the second quarter of 2005. For the second quarter, Flamel reported total revenues of $6.1 million, compared to $9.0 million in the second quarter of 2004. Expenses increased to $16.1 million in the second quarter of 2005, from $11.1 million in the second quarter of 2004, largely as a result of increased research and development and clinical studies. Net loss in the second quarter of 2005 was $(9.2) million, compared to a net loss of $(1.9) million in the second quarter of last year. Net loss per share (basic) for the second quarter of 2005 was ($0.41), compared to a net loss per share (basic) in the year-ago period of ($0.09). Year-ago figures have been restated to reflect the change in accounting method regarding recognition of interest income. Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at the end of the second quarter totaled $102.7 million, versus $100.9 million at the end of the second quarter a year ago. Flamel's 2005 second quarter revenues included license and research revenues of $5.4 million. License and research revenues in the second quarter of 2004 totaled $7.5 million. Revenues from product sales and services during the quarter decreased to $0.5 million, compared to $1.2 million in the second quarter of 2004, consistent with the Company's plan to de-emphasize de-em·pha·size tr.v. de-em·pha·sized, de-em·pha·siz·ing, de-em·pha·siz·es To decrease the emphasis on; minimize the importance of. de-em toll manufacturing. Other revenues were $0.2 million during the period versus $0.3 million in the year-ago period. Costs and expenses of Flamel's research and development increased to $12.6 million, from $8.0 million in the year-ago quarter, largely as a result of increased clinical and preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. study work related to projects developed internally and the addition of new employees. Cost of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. sold remained approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. flat at $0.9 million. SG&A increased to $2.6 million from $2.2 million. For the first half of 2005, Flamel reported total revenues of $14.2 million, compared to $23.3 million in the first half of 2004. Expenses increased to $31.7 million, from $21.6 million in the first half of 2004, largely as a result of additional research and development personnel and clinical studies on internal projects. Net loss in the first half of 2005 was $(9.0) million, compared to net income of $2.0 million in the first half of last year. Net loss per share (basic) for the first half of 2005 was ($0.40), compared to net income per share (basic) in the year-ago period of $0.09. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the first half of 2004 were $0.08. Flamel's license and research revenues during the first six months of 2005 were $12.8 million, versus $20.8 million in the year-ago period. Revenues from product sales and services during the first six months decreased to $0.9 million, compared to $2.1 million in the first half of 2004. Other revenues were $0.5 million during the period, as compared to $0.4 million in 2004. Costs and expenses of Flamel's research and development increased to $26.0 million, from $15.9 million in the first half of 2004. This increase was largely due to the Company's work on internal projects and its retention of additional personnel. Cost of goods and services sold declined to $1.2 million, compared to $1.7 million a year ago. SG&A increased to $4.5 million from $4.0 million in the year-ago period. "The results of the second quarter reflect the investments we have made to develop a number of products through initial proof of concept or Phase I trial," said Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and H. Willard, chief executive officer of Flamel Technologies. "We have made significant progress on our Interferon alpha Interferon alpha Potent immune-defense protein; used as an anti-cancer drug. Mentioned in: Waldenström's Macroglobulinemia trial and are moving forward with Interleukin-2. Basulin is attracting interest from large pharmaceutical partners, while our Micropump products include Genvir, augmentin Aug·men·tin A trademark for a preparation of amoxicillin and clavulanic acid. amoxicillin and clavulanate potassium , our new 'Trigger Lock' system, and a variety of other products in development. We also have made excellent progress in our work on the new facility to be used for our partnership with GlaxoSmithKline GlaxoSmithKline plc (LSE: GSK NYSE: GSK) is a British based pharmaceutical, biological, and healthcare company. GSK is a research-based company with a wide portfolio of pharmaceutical products covering anti-infectives, central nervous system (CNS), respiratory, ." Mr. Willard continued: "While we are financially a very strong company, with more than $100 million in cash and very little debt, we must grow revenues, while carefully controlling expenses. Our primary focus in the coming months will be to seek new partnerships for the formulations we have developed to date, as well as to try to engage large pharmaceutical companies in partnerships for new molecules. We have a new board of directors, technologies which can create real value for our partners, and a strong team. We are completely focused on working to get formulations of our products onto the market and I believe we have a remarkable opportunity with the Flamel technologies to make that happen." A conference call to discuss earnings is scheduled for 8:30 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT July July: see month. 28, 2005. The dial-in number (for investors in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) is 1-800-374-1498; the conference ID number is 8024635. 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(R) is a controlled release and taste-masking technology for the oral administration of small molecule molecule (mŏl`əky  l) [New Lat.,=little mass], smallest particle of a compound that has all the chemical properties of that compound. drugs. Flamel's Medusa(R)
technology is designed to deliver controlled-release formulations of
therapeutic proteins and peptides.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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , 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 December: see month. 31, 2004. Schedule attached
Financial Statements (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(Amounts in thousands of dollars except share data)
Three months ended Six months ended
June, 30 June, 30
-------------------- --------------------
2004 2005 2004 2005
(restated)* (restated)*
----------- -------- ----------- --------
Revenue:
License and research revenue $7,537 $5,354 $20,838 $12,803
Product sales and services 1,169 542 2,118 950
Other revenues 285 248 388 496
----------- -------- ----------- --------
Total revenue 8,991 6,144 23,344 14,249
----------- -------- ----------- --------
Costs and expenses:
Cost of goods and services
sold (878) (905) (1,715) (1,242)
Research and development (8,019) (12,587) (15,891) (26,042)
Selling, general and
administrative (2,179) (2,568) (4,039) (4,462)
----------- -------- ----------- --------
Total (11,076) (16,060) (21,645) (31,746)
----------- -------- ----------- --------
Profit (loss) from
operations (2,085) (9,916) 1,699 (17,497)
Interest income net 89 469 200 2,779
Foreign exchange gain (loss) 31 23 18 405
Other income (loss) 24 99 81 5,366
----------- -------- ----------- --------
Income (loss) before income
taxes (1,941) (9,325) 1,998 (8,947)
Income tax benefit (expense) 0 95 (23) (98)
----------- -------- ----------- --------
Net income (loss) ($1,941) ($9,230) $1,975 ($9,045)
=========== ======== =========== ========
Earnings (loss) per share
Basic earnings (loss) per ----------- -------- ----------- --------
ordinary share ($0.09) ($0.41) $0.09 ($0.40)
Diluted earnings (loss) per
share ($0.09) ($0.41) $0.08 ($0.40)
=========== ======== =========== ========
Weighted average number of
shares outstanding (in
thousands):
Basic 21,415 22,351 21,415 22,351
Diluted 21,415 22,351 24,120 22,351
* 2004 restatement relates to unrealized gains for marketable
securities held by the Company and recorded in other comprehensive
income instead of earnings.
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