Flamel Technologies Announces Fourth Quarter and Year-End 2009 Results Fourth quarter highlights include exercise of license option by Pfizer; initiation of Phase IIa trial of Interferon-alpha XL; and increased number of

Technologies Announces Fourth Quarter and Year-End 2009 Results

quarter highlights include exercise of license option by Pfizer; initiation of

Phase IIa trial of Interferon-alpha XL; and increased number of new projects in

Lyon, France - March 8, 2010 - Flamel

Technologies (NASDAQ: FLML) today announced its financial results for the

fourth quarter and year ended December 31, 2009.

H. Willard, Flamel's chief executive officer, stated, "Flamel continued to

expand its portfolio of projects with leading pharmaceutical companies during

the fourth quarter. We are now working with eight of the top twenty-five

pharmaceutical companies in the world. We have progressed in the projects

undertaken over the past two years, and expect that these projects will be the

subject of increased communication during the coming year."

Willard continued, "In 2009, Flamel continued to strengthen its balance sheet

and to diversify its revenue stream while increasing its cash position.

The work conducted by our scientists has resulted in the advancement of many of

our development programs during the year, as reflected by the higher license and

research revenues detailed in today's announcement. The portfolio of

projects that we are currently developing is robust and reflects the progress

that we have made in expanding our intellectual property platforms and

leveraging these in partnership with leading companies such as Pfizer, Merck

Serono, Baxter, and GlaxoSmithKline, as well as others."

Flamel's Fourth Quarter

reported total revenues for the fourth quarter 2009 increased to $10.6 million

versus total revenues of $9.5 million in the year-ago period. The increase

was led by higher license and research revenue as well as product sales and

services, offset by lower Coreg CR royalties. License and research revenue

increased 37% to $4.7 million during the fourth quarter of 2009, versus $3.4

million in the fourth quarter of 2008. Product sales and services during

the period, related primarily to production of Coreg CR microparticles, were

$4.3 million versus $2.6 million during the year-ago period. Other

revenues, consisting primarily of royalty income from GSK on the sales of Coreg

CR, declined year-over-year to $1.7 million in the fourth quarter versus $3.4

million during the year-ago quarter.

costs and expenses during the quarter were $16.5 million and included non-cash

compensation-related expense of $1.2 million; total costs and expenses in the

fourth quarter of 2008 were $12.4 million. Costs of goods and services

sold were $3.6 million in the fourth quarter of 2009 versus $2.4 million in the

year-ago period. Research and development costs in the fourth quarter totaled

$9.0 million versus $7.8 million in the year-ago period. Selling,

general, and administrative costs were $4.0 million in the fourth quarter versus

$2.3 million in the fourth quarter of 2008, which period included the reversal

of an accrual for SG&A related expenses of $2.0 million.

for the fourth quarter of 2009 was ($5.7 million) versus a net loss of ($2.7

million) in the year-ago period. Net loss per share (basic) was ($0.23)

versus ($0.11) in the fourth quarter of 2008.

Flamel's 2009 Annual

calendar year 2009, Flamel reported total revenue of $42.1 million, compared to

$38.6 million in 2008. License and research revenue during 2009 increased

57% to $20.8 million in 2009, as compared to $13.2 million in 2008.

Product sales and services for the year 2009 were $11.9 million, compared to

$13.5 million in the year-ago period. Other revenues, consisting primarily

of royalty income from sales of Coreg CR by GSK, totaled $9.4 million in 2009

versus $11.8 million in 2008.

costs and expenses in 2009 were $53.9 million and included non-cash compensation

expense of $5.6 million. Total costs and expenses in 2008 totaled $51.8

million. Costs of goods and services sold were $10.1 million in 2009

versus $9.6 million in 2008. SG&A in 2009 totaled $13.3 million versus

$12.9 million in 2008. Research & development expenses were $30.4

million versus $29.3 million in 2008.

Company reported a net loss for the year 2009 of ($11.4 million) or ($0.47) per

share versus a net loss in 2008 of ($12.1 million), or ($0.50) per share.

Flamel finished 2009 with $44.1 million in cash and marketable securities as

compared to $37.1 million at the end of 2008.

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 or administered intravenously.

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.

conference call to discuss these results is scheduled for 8:30 AM Eastern

Standard Time March 9, 2010. The dial-in number is (1) 877-857-6173 (Conference

ID number: 2453008).

International callers are invited to dial-in +1 719-325-4888.

Marlio, Director of Strategic Planning and Investor Relations

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,

Consolidated Statements of Operations

in thousands, except per share data)