Flamel first quarter total revenues increase to $7.3 million

Flamel Technologies (NASDAQ: FLML) today announced its financial results for the first quarter of 2012.

“We expect to use Flamel's first in class technology to build our own product portfolio in addition to our traditional partnership model.”

Highlights for the quarter and subsequent time include:

• Total revenues of $7.3 million versus total revenues of $6.8 million in the year-ago period
• Continuing to maintain a strong balance sheet with $21.3 million of cash and marketable securities as of March 31^st, 2012
• Announcing the acquisition of éclat Pharmaceuticals, and moving forward with the integration of this strategic initiative
• Remaining on track to file the Company's first New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) in 2012

Flamel's First Quarter Results

Flamel reported total revenues for the first quarter 2012 of $7.3 million versus total revenues of $6.8 million in the year-ago period. The growth was driven by increased production of Coreg CR microparticles. License and research revenues were $2.1 million during the first quarter of 2012, versus $3.2 million in the first quarter of 2011. Product sales and services during the first quarter of 2012 were $3.4 million versus $1.6 million during the year-ago quarter. Other revenues, consisting primarily of royalty income from GSK on the sales of Coreg CR, were $1.9 million, a slight decrease compared to the first quarter of 2011.

Total costs and expenses during the first quarter of 2012 increased to $12.1 million versus $11.7 million in the year-ago period. Costs of goods and services sold for the first quarter of 2012 were $1.3 million, a slight decrease from $1.4 million in the first quarter of 2011. Research and development costs in the first quarter of 2012 totaled $5.7 million versus $7.8 million in the year-ago period. This decrease is due to timing year on year of our clinical and pre-clinical program. Selling, general, and administrative costs were $5.1 million in the first quarter of 2012 versus $2.5 million in the first quarter of 2011. The costs associated with the acquisition of éclat Pharmaceuticals amounted to $0.7 million, and we have incurred severance costs totaling $1.4 million.

Net loss for the first quarter of 2012 was $4.7 million versus a net loss of $4.9million in the year-ago period. Net loss per share (basic and diluted) was $0.19 versus a net loss per share (basic and diluted) of $0.20 in the first quarter of 2011. The financial results for the first quarter 2012 are not consolidated to include the activity of éclat Pharmaceuticals for the period from March 13, 2012, date of acquisition, to March 31, 2012.

During the quarter the Company acquired éclat Pharmaceuticals, a specialty pharmaceutical company focused on developing and commercializing niche brands and generic products. Flamel has continued to move forward with the integration of this strategic initiative. These efforts include a company-wide portfolio review and management transition.

Mike Anderson, Flamel's chief executive officer, stated, "While I have only been on board for a short period of time, I have been very impressed with the quality and utility of the Flamel drug delivery technology and continue to see new opportunities for the combined company. I am also extremely excited about working with a highly motivated and competent team here at Flamel and I remain focused on delivering shareholder value as we build a sustainable, vertically integrated specialty pharmaceutical company."

Mr. Anderson continued, "We expect to use Flamel's first in class technology to build our own product portfolio in addition to our traditional partnership model."