Full Press Release Details
Flamel Technologies Announces First Quarter
Conference call with management to
take place at 8:30 AM ET on May 7, 2013
Lyon, France - May 7, 2013
- Flamel Technologies (NASDAQ: FLML) today announced its financial results for the first quarter of 2013. Highlights from the quarter
and subsequent period include:
"We continue to be pleased with our
progress in developing products from the acquired clat portfolio and are excited about the expected approval and launch
of our first product in the summer of 2013," said Mike Anderson, Chief Executive Officer of Flamel. "We are still working
to submit additional new drug applications as soon as possible and filed a second NDA in the quarter. For this second NDA, we have
received a refusal to file' letter from the FDA, citing our need to reformat parts of certain datasets in the application.
The letter does not comment on the approvability of our product and we will continue to work closely with the agency to provide
the information requested for resubmission of this application as quickly as possible. While this is disappointing, given the limited
nature of the deficiency, we have confidence in being able to resubmit our filing shortly in accordance with FDA requirements.
Moreover, we continue to push forward developing additional, innovative drugs that employ Flamel's proprietary platform of
Greater research and development spending
on these efforts is designed to build Flamel's near-term and mid-term pipeline and revenues and to build the company's
shareholder value. The company expects to perform clinical trials on two internal pipeline products in the second half of 2013.
Additionally, Flamel announced the dismissal of a 2007 class action law suit during the first quarter, resulting in the reimbursement
of the $0.5 million deductible.
"We continue to execute on our strategy
to strike a balance between our own pipeline products, where we control decisions on development, regulatory submission and marketing,
while continuing our commitment to enter into significant partnerships that employ Flamel's proprietary drug delivery platforms,"
said Mr. Anderson. "In the near term, our new strategy of funding and developing our own products could lower partner-derived
revenue, but will provide a much larger revenue base in the mid and long terms. We believe we have evolved the company into an
organization that now has three distinctive ways to create revenue: commercializing the clat projects in the shorter term,
pursuing our self-funded internal projects in the mid-term, and continuing to seek meaningful partnerships with other companies
to supplement the other initiatives."
Flamel's First Quarter Results
Flamel reported total revenues during the
first quarter of 2013 of $5.1 million versus $7.4 million in the first quarter of 2012. For the first quarter of 2013, a decrease
of $1.3 million in product sales and services was the primary driver of lower revenues versus the prior year period. License and
research revenues were $1.3 million during the first quarter of 2013 compared to $2.1 million in the prior year quarter, reflecting
the absence of new contracts. Product sales were $2.1 million in the first quarter of 2013 compared to $3.4 million in the prior
year period. The decline is primarily due to the timing of demand from GlaxoSmithKline ("GSK") and recognition in the
first quarter of 2012 of the remaining $0.9 million of indemnity payments due to the Company following the signature of a new supply
agreement in 2011. Other revenues, consisting primarily of royalty income from GSK on the sales of Coreg CR, were $1.8 million
in the first quarter of 2013 versus $1.9 million in the prior year quarter.
Total costs and expenses during the first quarter of 2013 increased
to $15.0 million versus $7.4 million in the prior year period. The total costs and expenses for the first quarter of 2013 increased
due to several items. First, the Company incurred clat expenses for the full first quarter of 2013 compared to March 13-
31, 2012 in the prior year period, resulting in an increase of $1.4 million in expenses (excluding the filing fee mentioned below)
included in both R&D and SG&A expenses. Second, Flamel incurred a $2 million filing fee for its second new drug application
NDA filed with the FDA, offset by reduced SG&A costs. Third, the value of the warrants issued for the acquisition of clat
has increased over the quarter as a result of our share price, resulting in an accounting non-cash expense of $3.0 million in the
first quarter of 2013 compared with a favorable adjustment of $5.1 million in the first quarter of 2012.
Costs of goods and services sold for the first quarter of 2013
were $1.0 million compared to $1.3 million in the first quarter of 2012 due to lower product sales. Research and development costs
in the first quarter of 2013 totaled $8.5 million versus $6.0 million in the prior year period primarily due to the Company's
expanding portfolio of new internal pipeline products in development, including the $2 million filing fee. Selling, general and
administrative expenses for the first quarter of 2013 decreased to $2.5 million compared to $5.2 million in the year-prior period
due to severance costs incurred in the first quarter of 2012 upon the departure of the Company's previous Chief Executive
Officer and legal costs associated with the acquisition of clat.
The terms of acquisition of clat in March 2012 included
the issuance of a $12 million note, whose repayment is tied to the approval and net sales of certain clat products, 3.3
million warrants, and earn-out payments based on the gross profit achieved on the clat products. These commitments are
revalued and reassessed at each balance sheet date based on information and data available at that time, including financial projections
related to the potential of the clat products, the share price and interest rates in so far as they influence the value
of the warrants. An unfavorable $3.0 million adjustment was realized in the first quarter of 2013 from the updated fair-value measurement
of these liabilities, compared to a favorable adjustment of $5.1 million in the prior year period. Excluding these adjustments,
operating expenses in the first quarter of 2013 decreased to $12.0 million compared to $12.5 million in the first quarter of 2012.
Total interest expense of $0.4 million
for the first quarter of 2013 includes interest on the debt financing completed during the quarter. In the first quarter of 2012,
the Company had interest income of $0.2 million.
Net loss for the first quarter of 2013
was $8.8 million versus net income of $12,000 in the year-ago period. Earnings per share (both basic and diluted) was $(0.35) in
the first quarter of 2013 versus $0.00 in the first quarter of 2012. Net loss and loss per share (basic and diluted) for the first
quarter of 2013, excluding the impact of the re-measurement of the fair value of acquisition liabilities, was $5.9 million and
$0.23, respectively compared with $5.1 million and $0.20 respectively in the prior year period.
A conference call to discuss these results
and other updates is scheduled for 8:30 AM Eastern Time on Tuesday, May 7, 2013. A question and answer period will follow
management's prepared remarks. To participate in the conference call, investors are invited to dial 888-428-9473 (U.S. and
Canada) or +1-719-325-2315 (international). The conference ID number
is 8200950. 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. and Canada) or +1-719-457-0820 (international), with the passcode 8200950. A replay
of the webcast will also be archived on Flamel's website for 90 days following the call.
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 and Micropump (and its applications to the
development of liquid formulations, i.e. LiquiTime and of abuse-deterrent formulations Trigger Lock ) proprietary
drug delivery platforms. Several Medusa-based products have been successfully tested in clinical trials. 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 , 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.
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 contemplated
in such forward-looking statements. These risks include risks that the acquisition of clat 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 develop and commercialize IFN- 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 may be disruptive or not