Flamel Technologies Announces Fourth Quarter and Year-End 2008 Results Fourth quarter highlights include further diversification through new Medusa and Micropump partnered agreements; significantly improved financial per

Flamel Technologies Announces Fourth Quarter and

Year-End 2008 Results

Fourth quarter highlights include further

diversification through

new Medusa and Micropump partnered agreements; significantly

improved financial performance

Lyon, France March 4, 2009 Flamel Technologies (NASDAQ: FLML) today announced its financial

results for the fourth quarter and year ended December 31, 2008. Significant achievements were

reached during the fourth quarter:

Stephen H. Willard, Flamel s chief executive officer, stated, Flamel continued its success by

signing two new feasibility study projects in the fourth quarter. One of these was with an

existing partner to work on therapeutic vaccines using Medusa, while the other was with a new

partner utilizing the Micropump platform for a combination product. The recent decision by Merck

Serono to exercise a license for the Medusa platform marks another step forward in validating our

business strategy and laying a foundation to build long-term value for our shareholders. Many of

our other diversified feasibility projects have demonstrated compelling results that we believe may

serve as catalysts for further licenses being signed for our technology platforms.

Mr. Willard continued, During 2008, we maintained our focus on preserving a solid financial

foundation for future growth. We are pleased to have finished the year with $37.1 million in cash

and marketable securities compared to $41.1 million at the end of 2007. We believe that our

financial strength is especially important as we negotiate with partners in the challenging current

Flamel s Fourth Quarter Results

Flamel reported total revenues for the fourth quarter 2008 of $9.5 million versus total revenues of

$10.6 million in the year-ago period. License and research revenue totaled $3.4 million during the

fourth quarter of 2008; 2007 fourth quarter license and research revenue also totaled $3.4 million,

and included receipt of a $2 million milestone payment from GSK. Product sales and services during

the period were $2.6 million versus $4.7 million during the year-ago period. Other revenues,

consisting primarily of royalty income from GSK on the sales of Coreg CR, increased to $3.4 million

during the period from $2.4 million in the fourth quarter 2007.

Total costs and expenses during the quarter were $14.4 million and included FAS 123R

options-related expense of $2.0 million; total costs and expenses in the fourth quarter of 2007

were $18.6 million. Costs of goods and services sold were $2.4 million in the fourth quarter of

2008 versus $4.9 million in the year-ago period. Research and development costs in the fourth

quarter totaled $9.8 million versus $9.9 million in the year-ago period. Selling, general, and

administrative costs declined from $3.8 million in the year-ago period to $2.3 million in the

fourth quarter of 2008.

Net loss for the fourth quarter of 2008 was ($2.7 million) versus a net loss of ($5.9 million) in

the year-ago period. Net loss per share (basic) was ($0.11) versus ($0.25) in the fourth quarter

Flamel s 2008 Annual Results

For the calendar year 2008, Flamel reported total revenue of $38.6 million, compared to $36.7

million in 2007. License and research revenue was $13.2 million in 2008, compared to $10.3

million in 2007. Product sales and services for the year 2008 were $13.5 million, compared to

$19.8 million in the year-ago period. Other revenues, consisting primarily of royalty income from

sales of Coreg CR by GSK, increased to $11.8 million in 2008 from $6.6 million in 2007.

Total costs and expenses in 2008 were $58.8 million and included FAS 123R non-cash compensation

expense of $8.3 million. Total costs and expenses in 2007 totaled $77.5 million. Costs of goods

and services sold were $9.6 million in 2008 versus $17.3 million in 2007. SG A in 2008 declined to

$12.9 million versus $16.6 million in 2007. Research development expenses were $36.2 million

versus $43.6 million in 2007.

The Company reported a net loss for the year 2008 of ($12.1 million) or ($0.50) per share versus a

net loss in 2007 of ($37.7 million), or ($1.57) per share. Flamel signed six new agreements with

partners in 2008 and finished 2008 with $37.1 million in cash and marketable securities.

About Flamel Technologies

Flamel Technologies is a drug delivery company with two intellectual property platforms: Micropump,

for the controlled release of drugs best absorbed in the small intestine; and Medusa, for the

controlled release of proteins, peptides, and other molecules injected subcutaneously. Both of

these platforms offer potential advantages with respect to efficacy and the reduction of

side-effects, in addition to the obvious benefits associated with more convenient dosing regimens.

For detailed company information, including copies of this and other press releases, see Flamel s

web site: www.flamel.com.

A conference call to discuss these results is scheduled for 8:30 AM Eastern Standard Time March 5,

2009. The dial-in number is (1) 800-374-1498 (Conference ID number: 87424852). International

callers are invited to dial-in (1) 706-634-7261. The live

webcast and archived replay can be accessed on the Company s

website at www.flamel.com.

Charles Marlio, Director of Strategic Planning and Investor Relations

Tel: (011) (33) 4-7278-3434

Fax: (011) (33) 4-7278-3435

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. We undertake no obligation to update these forward-looking statements as a

result of new information, future events or otherwise. You should not place undue reliance on these

forward-looking statements. For further information on the Company, please review Flamel s Annual

Report on the Securities and Exchange Commission Form 20-F for the year ended December 31, 2007.

Condensed Consolidated Statements of Operations

(amounts in thousands, except per share data)