Flamel announces achievement of clinical development milestone with Merck Serono

Flamel Technologies (Nasdaq: FLML) announced today that it has achieved a clinical development milestone under the terms of its license agreement with Merck Serono, a division of Merck KGaA, Darmstadt, Germany, to develop an extended release formulation of interferon beta-1a using the Medusa platform. As a result, Flamel will receive a fee of € 3.0 million. Flamel and Merck Serono entered in a collaboration agreement in December 2007 to develop an extended release formulation of interferon-beta-1a.

“We are pleased with the progress that we have been able to achieve in this important development program, and believe that our Medusa platform could offer patients the same active principle as in Merck Serono's interferon beta-1a, as an extended release formulation.”

Stephen H. Willard, Flamel's chief executive officer, stated, "We are pleased with the progress that we have been able to achieve in this important development program, and believe that our Medusa platform could offer patients the same active principle as in Merck Serono's interferon beta-1a, as an extended release formulation."

Mr. Willard continued, "The Medusa platform is distinct from controlled release platforms of large and small molecules. Medusa has been shown to enable delivery of therapeutic molecules that retain full bioactivity. The applicability of Medusa to a wide range of therapeutic agents is an important advantage of the Medusa platform."

The Company also announced that it has received a 14-page response to its April 19, 2010 petition regarding the data to be required of drug product marketing applications that seek to rely on FDA's previous approval of Coreg CR. The Company's petition was granted in part and denied in part. A copy of the response is available on Flamel's website, www.flamel.com.

The Company believes that the FDA's response recognizes the importance of maintaining appropriate levels of carvedilol phosphate for the entire 24-hour period of a controlled release product dosing period, with regard to all indications treated with extended-release carvedilol products. The FDA response concludes that the Agency intends to apply the standard AUC and Cmax criteria to the bioequivalence evaluation of any ANDA's referencing Coreg CR and that it will examine Tmax and the overall pharmacokinetic profile during the review process to determine whether any difference between test and reference products may result in a lack of therapeutic equivalence.

The Company is aware that URL Mutual has submitted an ANDA for generic carvedilol phosphate extended-release capsules and that ANDA is pending before FDA. The Company continues to review the response from the FDA, and has no basis for determining the likelihood of any approval of a generic form of Coreg CR or the impact, if any, on such process as a result of Flamel's citizen's petition, or the FDA's response.