Full Press Release Details
Flamel Technologies Reports Second Quarter
Total Revenues of $38.9 Million
2016 Revenue Guidance Increased to
$125 to $140 Million
Akovaz to Launch in August
Lyon, France - August 8, 2016
- Flamel Technologies (NASDAQ: FLML) today announced its financial results for the second quarter 2016.
Second Quarter Highlights Include:
Michael Anderson, Flamel's Chief
Executive Officer, commented, "We are particularly pleased with our second quarter results. Bloxiverz averaged over
40% share of the neostigmine market during the quarter, and Vazculep continued to build share to 32% of the 1mL market volume,
while holding all of the 5mL and 10mL markets. We generated revenue of $38.9 million for the quarter and we look forward to launching
our third sterile injectable product, Akovaz , this month. We believe the market potential for Akovaz is the largest yet
from our portfolio of previously unapproved marketed drugs, or UMDs."
Mr. Anderson continued, "In addition
to our strong UMD business, we continue to advance our pipeline of proprietary products forward. We received positive data from
our Phase 1b trial with Medusa exenatide and, following guidance from FDA, we will be conducting an alcohol interaction
study in the second half of 2016 with our Trigger Lock hydromorphone product to further test its abuse-deterrent capabilities."
"In regards to our most important
project, Micropump sodium oxybate, we have been in dialogue with FDA and look forward to finalizing the Special Protocol Assessment
for our Phase III trial in the very near term. We continue to make all the necessary preparations associated with running the trial,
including registering clinical sites and preparing clinical supplies, in order to hit the ground running once we begin patient
enrollment. Our once nightly version of sodium oxybate is a very exciting opportunity for us, and we are on track to complete our
study in approximately one year, with the goal of filing a New Drug Application by the end of 2017 or early 2018," concluded
Second Quarter 2016 Results
The Company achieved revenues during the
second quarter 2016 of $38.9 million, compared to $48.6 million during the same period last year. In the second quarter 2016, the
Company determined that it is now able to estimate the ultimate net selling price of its products at the time of shipment from
its warehouse. Previously, the Company was unable to completely estimate certain gross to net deductions that occur throughout
the selling channel due to a lack of historical data. . This sales through accounting method resulted in an approximate one month
lag between the time product was shipped from the Company's warehouse until it reached the final customer. As a result of
this change, the Company recorded approximately $5.9 million of additional revenue in the second quarter 2016.
a GAAP basis, the Company recorded a net loss of ($20.0) million during the second quarter 2016, or ($0.48) per diluted share,
compared to a net loss of ($16.9) million, or ($0.42) per diluted share, for the same period last year. Included in the net loss
for the second quarter 2016 was $23.9 million of charges related to the change in the fair value of related party contingent consideration.
Adjusted net loss for the second quarter was ($985,000), or ($0.02) per diluted share, compared to an adjusted net income of $11.5
million, or $0.29 per diluted share, during the same period last year. The decline in adjusted net income and adjusted diluted
EPS from the previous year was due to lower product sales resulting from increased competition and higher SG&A from investments
in infrastructure, people, and expenses related to the Company's planned cross-border merger to Ireland from France. The
Company recognized a foreign currency exchange gain of $1.7 million in the second quarter 2016, compared to a foreign currency
exchange loss of ($3.6) million in the prior year quarter. Please see the Supplemental Information section within this document
for a reconciliation of adjusted EBITDA, adjusted net income and
adjusted diluted EPS to the respective GAAP amounts.
Sales for the FSC product line were below
the Company's expectations for the second quarter 2016 as the Company continues to work on improving product distribution,
increasing third party payer access, and refining territories to maximize representative effectiveness. The Company expects to
continue making progress throughout the remainder of the year in this business segment. It recently closed the Charlotte office
facility and has strengthened the sales management team.
For the six months ended June 30, 2016
cash flow from operations was $15.9 million, compared to $40.3 million in the same period last year. Cash and marketable securities
at June 30, 2016 were $154.9 million, compared to $160.0 million at March 31, 2016.
2016 Revenue and R&D Spending Guidance
As a result of the stronger than expected
market share for Bloxiverz, slightly better expected market conditions for Akovaz and the change in the Company's ability
to better estimate net selling price upon shipment of product from its warehouse, the Company is increasing its full year 2016
revenue guidance to the range of $125 to $140 million from its previous guidance range of $110 to $130 million. The Company expects
to allocate a substantial amount of its R&D expenses on its sodium oxybate trial; however, timing of the spend will be slightly
shifted to 2017 and, as a result, has lowered its 2016 R&D spending guidance to the range or $30 to $40 million from the range
of $35 to $50 million.
Clinical Pipeline Updates
Flamel received positive results from a
Phase 1b clinical trial of FT228, a once-weekly subcutaneous injection formulation of exenatide using its proprietary Medusa
technology. The study achieved all pharmacokinetic (PK) and pharmacodynamic (PD) objectives throughout four weekly administrations
of Medusa exenatide (FT228), and assessed the safety, steady-state PK profile and the product's potential effect on
biomarkers and surrogate endpoints upon repeated administrations. Exenatide is a GLP1 analog used to treat patients suffering from
Type 2 Diabetes Mellitus. Medusa is a hydrogel depot technology that enables the modified/controlled delivery of drugs,
and is ideally suited to the development of subcutaneously administered formulations.
One dose per week of FT228 at 140mcg was
administered to twelve Type 2 Diabetes Mellitus patients over a four week period. Following each administration, a continuous release
of exenatide was observed over a period of up to 14 days and a relative bioavailability exceeding 94% was demonstrated. The PD
performance of FT228 was comparable to current marketed products, Victoza (liraglutide IR) and Bydureon (exenatide SR).
In addition, Flamel received feedback from
the U.S. Food and Drug Administration (FDA) regarding the clinical development pathway for FT227, an abuse-deterrent, extended-release,
oral hydromorphone product using the Company's proprietary Trigger Lock drug delivery platform.
To date, the Company has completed two
pharmacokinetic (PK) studies of FT227 in 30 healthy volunteers, in addition to an independent in vitro study confirming FT227's
superior resistance to extraction/recovery in various media under several different conditions compared to both Exalgo and
Oxycontin . Following guidance from the FDA, Flamel will be conducting during the third quarter of 2016 an in vivo alcohol
interaction study, which the Company believes will provide further confirmation of the robust abuse-deterrent capabilities of Trigger
A conference call to discuss these results
and other updates is scheduled for 10:00 a.m. ET on Monday, August 8, 2016. A question and answer period will follow management's
prepared remarks. To participate in the conference call, investors are invited to dial 800-930-7616 (U.S. and Canada) or 913-312-1375
(international). The conference ID number is 9799429. Interested parties may access a live audio webcast and accompanying slides
via the events and presentations section of the Company's investor website, www.flamel.com/investors. The archived webcast
of the conference call will be available for 90 days on Flamel's website.
About Flamel Technologies
Flamel Technologies SA (NASDAQ: FLML) is
a specialty pharmaceutical company utilizing its core competencies in formulation development and drug delivery to develop safer
and more efficacious pharmaceutical products, addressing unmet medical needs and/or reducing overall healthcare costs. Flamel currently
markets two previously Unapproved Marketed Drugs ("UMDs") in the United States, Bloxiverz (neostigmine methylsulfate
injection) and Vazculep (phenylephrine hydrochloride injection), and received approval for its third, Akovaz (ephedrine
sulfate) on April 29, 2016. The Company also develops products utilizing its proprietary drug delivery platforms, Micropump
(oral sustained release microparticles platform), along with its tangent technologies, LiquiTime (a Micropump-derivative platform
for liquid oral products) and Trigger Lock (a Micropump-derivative platform for abuse-resistant opioids). Additionally,
the Company has developed a long acting injectable platform, Medusa , a hydrogel depot technology, particularly suited to
the development of subcutaneously administered formulations. Current applications of Flamel's drug delivery products include
sodium oxybate (Micropump ), extended-release of liquid medicines such as ibuprofen and guaifenesin (LiquiTime , through
a license arrangement with Elan Pharma International Limited for the U.S. Over-the-Counter market) and a current study of the delivery
of exenatide utilizing the Medusa technology. In February 2016, Flamel acquired FSC Pediatrics, a company that markets three
pediatric pharmaceutical products - Cefaclor for oral suspension, indicated for infection, Karbinal ER, indicated for allergic