UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
______________________
FORM 6-K
Report of Foreign
Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For
the month of September 2012
Commission File Number
000-28508
Flamel
Technologies S.A.
(Translation of registrant's
name into English)
Parc Club du Moulin
à Vent
33 avenue du Dr. Georges
Levy
69693 Vénissieux
Cedex France
(Address of principal
executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F
x
Form 40-F
¨
Indicate by check mark whether registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes
¨
No
x
If "Yes"
is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-____________
Index
FLAMEL TECHNOLOGIES
S.A.
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Page
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Part I – FINANCIAL INFORMATION
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Item 1. Condensed Consolidated Financial Statements (unaudited)
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|
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a) Condensed Consolidated Statement of Operations for the Three months ended March 31, 2011 and 2012
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2
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b) Condensed Consolidated Balance Sheet as of December
31, 2011 and March 31, 2012
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3
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|
|
c) Condensed Consolidated Statement of Cash Flows for
the Three months ended March 31, 2011 and 2012
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4
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|
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d) Consolidated Statement of Shareholders’ Equity
for the Three months ended March 31, 2012
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5
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e) Notes to Condensed Consolidated Financial Statements
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6
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14
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PART II – OTHER INFORMATION
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Item 1. Legal Proceedings
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16
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Item 1A. Risk Factors
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17
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Item 5 Other Information
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20
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Item 9 List of Exhibits
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21
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FLAMEL TECHNOLOGIES
S.A.
PART 1. FINANCIAL
INFORMATION
Item 1. Condensed
Consolidated Financial Statements – Unaudited
Condensed Consolidated
Statement of Operations
(Unaudited)
(Amounts in thousands
of dollars, except per share data)
|
|
Three months ended March 31,
|
|
|
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2011
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|
2012
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|
Revenue:
|
|
|
|
|
|
|
|
|
License and research revenue
|
|
$
|
3,214
|
|
|
$
|
2,110
|
|
Product sales and services
|
|
|
1,624
|
|
|
|
3,378
|
|
Other revenues
|
|
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1,926
|
|
|
|
1,872
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|
Total revenue
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6,764
|
|
|
|
7,360
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|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of goods and services sold
|
|
|
(1,371
|
)
|
|
|
(1,318
|
)
|
Research and development
|
|
|
(7,758
|
)
|
|
|
(5,985
|
)
|
Selling, general and administrative
|
|
|
(2,526
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)
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|
|
(5,183
|
)
|
Remeasurement of acquisition liabilities
|
|
|
-
|
|
|
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5,080
|
|
Total
|
|
|
(11,655
|
)
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|
|
(7,406
|
)
|
|
|
|
|
|
|
|
|
|
Profit (loss) from operations
|
|
|
(4,891
|
)
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|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
Interest income net
|
|
|
128
|
|
|
|
166
|
|
Foreign exchange gain (loss)
|
|
|
(240
|
)
|
|
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(133
|
)
|
Other income (loss)
|
|
|
99
|
|
|
|
67
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|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(4,904
|
)
|
|
|
54
|
|
Income tax
|
|
|
(23
|
)
|
|
|
(42
|
)
|
Net income (loss)
|
|
$
|
(4,927
|
)
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per ordinary share
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
Diluted earnings (loss) per share
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding (in thousands) :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
24,646
|
|
|
|
25,012
|
|
Diluted
|
|
|
24,646
|
|
|
|
25,012
|
|
See
notes to condensed consolidated financial statements
FLAMEL TECHNOLOGIES
S.A.
Condensed Consolidated
Balance Sheet
(Unaudited)
(Amounts
in thousands of dollars, except share data)
|
|
December 31,
2011
|
|
|
March 31,
2012
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,456
|
|
|
$
|
4,348
|
|
Marketable securities
|
|
|
21,035
|
|
|
|
18,376
|
|
Accounts receivable
|
|
|
7,765
|
|
|
|
5,580
|
|
Inventory
|
|
|
1,675
|
|
|
|
1,903
|
|
Research and development tax credit receivable short term
|
|
|
79
|
|
|
|
-
|
|
Prepaid expenses and other current assets
|
|
|
2,642
|
|
|
|
2,397
|
|
Total current assets
|
|
|
36,652
|
|
|
|
32,604
|
|
|
|
|
|
|
|
|
|
|
Goodwill, net
|
|
|
-
|
|
|
|
20,461
|
|
Property and equipment, net
|
|
|
19,383
|
|
|
|
19,645
|
|
Intangible assets
|
|
|
-
|
|
|
|
49,250
|
|
Other assets:
|
|
|
|
|
|
|
|
|
Research and development tax credit receivable long term
|
|
|
13,203
|
|
|
|
15,276
|
|
Other long-term assets
|
|
|
164
|
|
|
|
175
|
|
Total other assets
|
|
$
|
13,367
|
|
|
$
|
15,451
|
|
Total assets
|
|
$
|
69,402
|
|
|
$
|
137,411
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
2,026
|
|
|
|
2,092
|
|
Current portion of capital lease obligations
|
|
|
97
|
|
|
|
88
|
|
Accounts payable
|
|
|
3,920
|
|
|
|
4,675
|
|
Current portion of deferred revenue
|
|
|
2,836
|
|
|
|
2,980
|
|
Advances from customers
|
|
|
1,962
|
|
|
|
408
|
|
Accrued expenses
|
|
|
5,478
|
|
|
|
5,098
|
|
Other current liabilities
|
|
|
1,995
|
|
|
|
1,835
|
|
Total current liabilities
|
|
|
18,314
|
|
|
|
17,176
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
1,689
|
|
|
|
47,763
|
|
Capital lease obligations, less current portion
|
|
|
251
|
|
|
|
240
|
|
Deferred revenue, less current portion
|
|
|
1,531
|
|
|
|
1,498
|
|
Deferred tax liabilities
|
|
|
-
|
|
|
|
20,859
|
|
Other long-term liabilities
|
|
|
17,823
|
|
|
|
17,890
|
|
Total long-term liabilities
|
|
|
21,294
|
|
|
|
88,250
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies:
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Ordinary shares: 24,962,250 issued and outstanding at December 31, 2011 and 25,157,250, at March 31, 2012 (shares authorised 29,745,490) at nominal value of 0.122 euro
|
|
|
3,641
|
|
|
|
3,673
|
|
Additional paid-in capital
|
|
|
205,489
|
|
|
|
206,757
|
|
Accumulated deficit
|
|
|
(189,393
|
)
|
|
|
(189,381
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
10,057
|
|
|
|
10,936
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
29,794
|
|
|
|
31,985
|
|
Total liabilities and shareholders' equity
|
|
$
|
69,402
|
|
|
$
|
137,411
|
|
See
notes to condensed consolidated financial statements
FLAMEL TECHNOLOGIES
S.A.
Condensed Consolidated
Statement of Cash Flows
(Unaudited)
|
|
Three months ended
March 31,
|
|
|
|
2011
|
|
|
2012
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(4,927
|
)
|
|
$
|
12
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
1,028
|
|
|
|
708
|
|
Loss (gain) on disposal of property and equipment
|
|
|
(11
|
)
|
|
|
(67
|
)
|
Gains on sales of marketable securities
|
|
|
(12
|
)
|
|
|
(4
|
)
|
Grants recognized in other income and income from operations
|
|
|
(50
|
)
|
|
|
(397
|
)
|
Remeasurement of acquisition liabilities
|
|
|
-
|
|
|
|
(5,080
|
)
|
Stock compensation expense
|
|
|
519
|
|
|
|
685
|
|
Increase (decrease) in cash from:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
535
|
|
|
|
2,735
|
|
Inventory
|
|
|
60
|
|
|
|
(133
|
)
|
Prepaid expenses and other current assets
|
|
|
1,025
|
|
|
|
702
|
|
Research and development tax credit receivable
|
|
|
347
|
|
|
|
(1,537
|
)
|
Accounts payable
|
|
|
(463
|
)
|
|
|
373
|
|
Deferred revenue
|
|
|
(886
|
)
|
|
|
(1,617
|
)
|
Accrued expenses
|
|
|
(1,283
|
)
|
|
|
(677
|
)
|
Other current liabilities
|
|
|
163
|
|
|
|
24
|
|
Other long-term assets and liabilities
|
|
|
(375
|
)
|
|
|
(312
|
)
|
Net cash provided by (used in) operating activities
|
|
|
(4,330
|
)
|
|
|
(4,585
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(901
|
)
|
|
|
(336
|
)
|
Proceeds from disposal of property and equipment
|
|
|
11
|
|
|
|
67
|
|
Purchase of marketable securities
|
|
|
(3,689
|
)
|
|
|
(339
|
)
|
Proceeds from sales of marketable securities
|
|
|
7,985
|
|
|
|
3,618
|
|
Cash transferred on acquisition
|
|
|
-
|
|
|
|
1,631
|
|
Net cash provided by (used in) investing activities
|
|
|
3,406
|
|
|
|
4,641
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from loan or conditional grants
|
|
|
-
|
|
|
|
170
|
|
Reimbursment of loans or conditional grants
|
|
|
(1,818
|
)
|
|
|
-
|
|
Principal payments on capital lease obligations
|
|
|
(20
|
)
|
|
|
(31
|
)
|
Cash proceeds from issuance of ordinary shares and warrants
|
|
|
-
|
|
|
|
602
|
|
Net cash provided by (used in) financing activities
|
|
|
(1,838
|
)
|
|
|
741
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
409
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(2,353
|
)
|
|
|
892
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
8,184
|
|
|
|
3,456
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
5,831
|
|
|
$
|
4,348
|
|
The supplemental schedule
of non cash investing and financing activities is as follows
Fair value of assets acquired:
|
|
$
|
50,927
|
|
Liabilities assumed:
|
|
$
|
50,927
|
|
See
notes to condensed consolidated financial statements
FLAMEL TECHNOLOGIES
S.A.
Consolidated
Statement of Shareholders’ Equity
(Unaudited)
(Amounts
in thousands of dollars)
|
|
Ordinary Shares
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Accumulated
Other
Comprehen-
sive Income
|
|
|
Shareholders'
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
(Loss)
|
|
|
Equity
|
|
Balance at January 1, 2012
|
|
|
24,962,250
|
|
|
$
|
3,641
|
|
|
$
|
205,489
|
|
|
$
|
(189,393
|
)
|
|
$
|
10,057
|
|
|
$
|
29,794
|
|
Issuance of ordinary shares on exercise of stock -options
|
|
|
195,000
|
|
|
|
32
|
|
|
|
570
|
|
|
|
|
|
|
|
|
|
|
|
602
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
698
|
|
|
|
|
|
|
|
|
|
|
|
698
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
879
|
|
|
|
879
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
891
|
|
Balance at March 31, 2012
|
|
|
25,157,250
|
|
|
$
|
3,673
|
|
|
$
|
206,757
|
|
|
$
|
(189,381
|
)
|
|
$
|
10,936
|
|
|
$
|
31,985
|
|
See
notes to condensed consolidated financial statements
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
1.
SUMMARY OF SIGNIFICANT accounting policies
In the opinion of the management
of Flamel Technologies S.A. (the “Company”), the accompanying unaudited, condensed, consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements.
Accordingly, these Financial Statements do not include all of the information and footnotes required for complete annual financial
statements, since certain footnotes and other financial information required by generally accepted accounting principles in the
United States (or US GAAP) can be condensed or omitted for interim reporting requirements. In the opinion of management, all adjustments
(consisting of only normal recurring accruals) considered necessary for a fair presentation of our financial position and operating
results have been included.
The preparation of consolidated
financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Operating results for the
three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the full year ending December
31, 2012. These condensed consolidated interim financial statements should be read in conjunction with the Company's audited annual
financial statements.
The reporting currency
of the Company and its wholly-owned subsidiary is the U.S. dollar as permitted by the SEC for a foreign private issuer (S-X Rule
3-20(a)). All assets and liabilities in the balance sheets of the Company, whose functional currency is the Euro, except those
of the U.S. subsidiary whose functional currency is the U.S. dollar, are translated into U.S. dollar equivalents at exchange rates
as follows: (1) asset and liability accounts at period-end rates, (2) income statement accounts at weighted average exchange rates
for the period, and (3) shareholders' equity accounts at historical rates. Corresponding translation gains or losses are recorded
in shareholders' equity as Currency Translation Adjustments.
2. ACQUISITION
Effective March 13, 2012,
Flamel acquired, through its wholly owned subsidiary Flamel US Holdings, Inc., or Flamel US, all of the membership interests of
Éclat Pharmaceuticals, LLC, or Éclat Pharmaceuticals, from Éclat Holdings, LLC, or Éclat Holdings,
an affiliate of Flamel’s largest shareholder Deerfield Capital L.P. Éclat Pharmaceuticals is a specialty pharmaceuticals
business focused on the development, approval and commercialization of niche brands and generic pharmaceutical products. In exchange
for all of the issued and outstanding membership interests of Éclat Pharmaceuticals, Flamel US provided consideration consisting
of:
|
-
|
a $12 million senior, secured six-year note that is guaranteed by the Company and its subsidiaries and secured
by the equity interests and assets of Éclat;
|
|
-
|
two warrants to purchase a total of 3,300,000 American Depositary Shares, each representing one
ordinary share
of Flamel (“ADSs”); and
|
|
-
|
a commitment to make earn out payments of 20% of any gross profit generated by certain Éclat
Pharmaceuticals launch products and to pay 100% of any gross profit generated by Hycet® up to a maximum of $1 million. The
Purchase Agreement also contains certain representations and warranties, covenants, indemnification and other customary provisions.
|
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
Flamel
US issued the note pursuant to a Note Agreement among Flamel, Flamel US and Éclat Holdings dated March 13, 2012. The note
is payable over six years only if certain contingencies are satisfied, namely that: (a) two or more Éclat Pharmaceuticals
launch products are approved by the FDA, or (b) one Éclat Pharmaceuticals launch product is approved by the FDA and has
generated $40 million or more in cumulative net sales. These contingencies are referred to as thresholds. If either Threshold is
satisfied, Flamel US will pay 25% of the original principal amount due under the note on each of the third, fourth, fifth and sixth
anniversaries of the date of the note. The note accrues interest at an annual rate of 7.5%
(calculated
on the basis of the actual number of days elapsed in each month)
and i
s payable quarterly
in arrears commencing on July 2, 2012 and on the first business day of each October, January, April and July thereafter; provided,
however, that if on any such interest payment date, at least
one Éclat Pharmaceuticals launch product has not been
approved by the FDA
, the interest payable on such date will not be payable, but will be added on such
date to the outstanding principal amount of the note. Flamel must pay any interest so accrued no later than nine months after such
FDA approval and, upon such payment; such outstanding principal amount of the note will be reduced by the amount thereof.
In
addition to the note, two six year warrants were issued to purchase an aggregate of 3,300,000 ADSs, each representing one ordinary
share, of Flamel. One warrant is exercisable for 2,200,000 ADSs at an exercise price of $7.44 per ADS, and the other warrant is
exercisable for 1,100,000 ADSs at an exercise price of $11.00 per ADS.
. The warrants provide that they may only be
exercised for six years following the approval, for the purposes of French law, by the holders of a majority of Flamel’s
ordinary shares, of the authorization and issuance of the warrants and the ordinary shares underlying the warrants and the
waiver
of all preferential subscription rights of holders of ordinary shares (and ADSs) with respect to the warrant and the underlying
shares
. On June 22, 2012, the authorization and issuance and waiver were approved by the holders of the requisite
number of ordinary shares.
The acquisition-date fair
value of the consideration transferred totaled $50,927,000 which consisted of the following:
(Amounts in thousands
of USD)
|
|
|
|
Note
|
|
$
|
5,625
|
|
Warrants
|
|
|
12,065
|
|
Deferred consideration
|
|
|
33,237
|
|
Total acquisition liabilities
|
|
$
|
50,927
|
|
The fair value of the note
was estimated using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs
not observable in the market and thus represents a level 3 measurement as defined in ASC 820. The key assumptions are as follows:
20% discount rate, 72% probability of success.
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
The fair value of the warrants
was determined by using a Black-Scholes option pricing model with the following assumptions:
Share price
|
|
$
|
7.29
|
|
Risk-free interest rate
|
|
|
2.00
|
%
|
Dividend yield
|
|
|
-
|
|
Expected volatility
|
|
|
56.26
|
%
|
Expected term
|
|
|
6.0 years
|
|
The deferred consideration
fair value was estimated by using a discounted cash flow model based on probability adjusted annual gross profit of each of the
Éclat Pharmaceuticals products. A discount rate of 20% has been used, except for Hycet for which a discount rate of 13%
has been retained.
The transaction was accounted
for as a business combination under the acquisition method of accounting and included in the consolidated unaudited financial statements
for the three month period ending March 31, 2012. Accordingly, the tangible assets and identifiable intangible assets acquired
and liabilities assumed were recorded at fair value, with the remaining purchase price recorded as goodwill.
The following table summarizes
the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The purchase price allocation
has been prepared on a preliminary basis and is subject to change as additional information becomes available concerning the fair
value and tax basis of the acquired assets and liabilities. Any adjustments to the purchase price allocation will be made as soon
as practicable, but no later than one year from March 13, 2012, the acquisition date.
At March 13, 2012
(Amounts in thousands
of USD)
Cash and cash equivalent
|
|
$
|
1,631
|
|
Account receivables
|
|
|
350
|
|
Inventories
|
|
|
38
|
|
Prepaid expenses and other current assets
|
|
|
431
|
|
Property and equipment, net
|
|
|
57
|
|
Intangible assets
|
|
|
49,282
|
|
Goodwill
|
|
|
20,461
|
|
Total identifiable assets acquired
|
|
|
72,250
|
|
|
|
|
|
|
Current liabilities
|
|
|
(459
|
)
|
Deferred Tax Liabilities
|
|
|
(20,858
|
)
|
Long term liabilities
|
|
|
(6
|
)
|
Total liabilities assumed
|
|
|
(21,323
|
)
|
Net identifiable assets acquired
|
|
$
|
72,250
|
|
Net assets acquired
|
|
$
|
50,927
|
|
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
Of the $49,282,000 of acquired
intangible assets, $47,309,000 was allocated to in-process research and development (IPR&D) assets that were recognised at
fair value on the acquisition date. The fair value was determined using an income approach, including a discount rate of 20%, applied
to probability adjusted after-tax cash flows. The estimated costs to complete the IPR&D projects represents management’s
best estimate of expected costs, but are subject to change based on additional information received as development activities advance.
The remaining useful life has been estimated to be four years once the products in question have been approved. The remaining $1,973,000
was allocated to the acquired product license for Hycet® (3-year useful economic life). As noted earlier, the fair value of
the acquired identifiable intangible assets is an estimate of the final valuations for these assets.
The difference between
the purchase price and the fair value of the assets acquired and liabilities assumed of $20.5 million was allocated to goodwill.
This goodwill is attributable to the remaining product opportunities identified by the acquired entity at the date of acquisition,
but for which limited development had occurred and the regulatory approval process had not commenced. None of the goodwill is expected
to be deductible for income tax purposes.
The deferred tax liability
of $20.9 million relates to temporary differences associated primarily with the IPR&D, which are not deductible for tax purposes.
The Company recognised
$635,000 of acquisition related costs that were expensed in the current period and included in SG&A expenses.
The amounts of revenues
and earnings of Éclat Pharmaceuticals included in the Company’s consolidated income statement from the acquisition
date to the period ending March 31, 2012 (in thousands) are as follows:
|
|
Revenue and earnings included in
|
|
|
|
the consolidated income statement
|
|
|
|
from March 13, 2012 to March 31,
|
|
|
|
2012
|
|
Revenues
|
|
$
|
28
|
|
Net Income/(Loss)
|
|
|
|
|
|
|
$
|
(402
|
)
|
The following supplemental
pro forma information presents Flamel’s financial results for the three month period as if the acquisition of Éclat
Pharmaceuticals had occurred on January 1, 2011 (in thousands):
|
|
Three months ended March 31,
|
|
|
|
2011
|
|
|
2012
|
|
|
|
(unaudited)
|
|
Revenues
|
|
$
|
6,764
|
|
|
$
|
7,573
|
|
Net Income/(Loss)
|
|
$
|
(6,238
|
)
|
|
$
|
(512
|
)
|
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
The above unaudited pro
forma information was determined based on the historical US GAAP results of Flamel and
Éclat
Pharmaceuticals
. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s
consolidated results of operations actually would have been if the acquisition was completed on January 1, 2011. The unaudited
pro forma consolidated net income primarily reflects adjustment of:
|
i.
|
Elimination of $0.6 million of transaction costs, which are directly attributable to the transaction,
for Flamel for the period ended March 31, 2012, and integration of these costs as if they were expensed in the period ended March
31, 2011.
|
|
ii.
|
Adjustment to record the estimated amortization expense for intangible asset. The amortization expense
was calculated using estimated useful life of three years for the Hycet product license acquired by Éclat Pharmaceuticals
in July 2011, with an estimated value of $2.0 million, considering the acquisition would have been completed on January 1, 2011.
The amortization for period ended March 31, 2011 amounts to $165,000.
|
|
iii.
|
An adjustment to record the estimated increase in amortization expense for intangible assets for the
period ended March 31, 2012. The incremental expense for the three months was $25,000.
|
Net income for the period
ended March 31, 2012 includes an income of $5.1 million representing the remeasurement of the fair value of the acquisition liabilities
as of March 31, 2012. The Company’s result of operations in future periods will be affected by the movements in the fair
value of the acquisition liabilities.
3. REVENUES
3.1 License and research
revenue
The Company recognised
license and research revenues of $2,110,000 for the first three months of 2012. Total research and development revenues amounted
to $1,639,000 and licensing fees were recognised for a total of $472,000 for the first three months of 2012.
License and research revenues
include $328,000 licensing fees in accordance with the agreement signed with Merck-Serono on December 20, 2007 and the option exercised
by Merck-Serono in February 2009 to license the Medusa technology.
Under the agreement signed
On October 12, 2011 with Eagle Pharmaceuticals, the Company recognised research revenues of $641,000 and $11,000 in licensing fees,
as amortization of the initial up-front fee, in the first three months of 2012.
The remaining license and
research revenues amounting to $1,130,000 relate to agreements with undisclosed partners.
3.2 Product sales
and services.
The Company recognised
product sales of $3,378,000 for the first quarter of 2012 primarily in connection with the supply agreement for the manufacture
of Coreg CR microparticles with GSK. Product sales and services revenues includes €650,000 (or $852,000) in connection with
payments totaling €2,600,000 (or $3,700,000) received in September and November 2011 in connection with the new supply agreement
signed with GSK in 2011.
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
3.3 Other revenues.
The Company recognised
other revenues of $1,872,000 for the three-month period ended March 31, 2012 which includes royalties from the License Agreement
with GSK with respect to Coreg CR.
4. RESEARCH TAX CREDIT
The French government
provides tax credits to companies for spending on innovative research and development. The research tax credit is considered as
a grant and is deducted from operational expenses.
For the three month
period ended March 31, 2012, the credit amounted to $1,410,000 compared to $1,911,000 for the three month period ended March 31,
2011.
5. SHAREHOLDERS'
EQUITY
During
the three month period ended March 31, 2012
, the Company issued 195,000 shares a result of exercise of stock-options.
6. STOCK
COMPENSATION EXPENSE
During
the three month period ended March 31, 2012
, 275,000 options were granted by the Company to the new Chief Executive Officer
with a vesting schedule of 100,000 after 6 months, 100,000 after 18 months and 75,000 after 30 months.
ASC 718-10-S99-1 expresses
the view that “the use of a simplified method is not allowed if the Company may have sufficient historical exercise data
for some of its share options grants and therefore, accepts the use of simplified method for only some grants but not all share
options grants”.
The Company decided to
use the simplified method to estimate the expected term of the stock-options. The Company considers that insufficient historical
exercise data are available for stock-options which are granted to a limited number of beneficiaries together with few exercises
over the past years; in addition, the vesting schedule and contractual terms having been changed over time. Consequently, the Company
believes that prior exercise patterns would not reflect accurately future exercises.
The grant date fair value
of the stock-options granted is calculated using the Black-Scholes option-pricing model with the following weighted average assumptions.
|
|
Three months ended
March 31, 2012
|
|
Risk-free interest rate
|
|
|
1.10
|
%
|
Dividend yield
|
|
|
-
|
|
Expected volatility
|
|
|
62
|
%
|
Expected term
|
|
|
5.7 years
|
|
Forfeiture rate
|
|
|
-
|
|
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
Net income (loss) before
and after stock-based compensation is as follows:
|
|
Three months ended
|
|
(in thousands except per share data)
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2012
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(4,927
|
)
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
Diluted
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Number of shares used for computing
|
|
|
|
|
|
|
|
|
Basic
|
|
|
24,646
|
|
|
|
25,012
|
|
Diluted
|
|
|
24,646
|
|
|
|
25,012
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation (ASC 718)
|
|
|
|
|
|
|
|
|
Cost of products and services sold
|
|
|
18
|
|
|
|
14
|
|
Research and development
|
|
|
206
|
|
|
|
254
|
|
Selling, general and administrative
|
|
|
295
|
|
|
|
417
|
|
Total
|
|
|
519
|
|
|
|
685
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before stock-based compensation
|
|
|
(4,408
|
)
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before stock-based compensation per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
Diluted
|
|
$
|
(0.18
|
)
|
|
$
|
0.03
|
|
7.
Remeasurement
of Acquisition Liabilities
The following table provides
a reconciliation of fair value for which the Company used Level 3 inputs:
|
|
Acquisition
|
|
|
|
Liabilities
|
|
Liability recorded upon acquisition
|
|
$
|
(50,927
|
)
|
|
|
|
|
|
Income
|
|
$
|
5,080
|
|
|
|
|
|
|
Balance at March 31, 2012
|
|
$
|
(45,847
|
)
|
The acquisition liabilities,
consisting of the note, warrants and deferred consideration, and classified as long-term debt, are measured at fair value and
the income or expense may change significantly as assumptions regarding the valuations and probability of successful development
and approval of products in development vary. As such the assumptions used in estimating the fair value require significant judgment
and changes could materially impact the Company’s results of operation in future periods. For the period ended March 31,
2012 the income of $5.1 million represents the remeasurement of the fair value measurement of the warrants as of March 31, 2012
determined by using a Black-Scholes option pricing model with the following assumptions:
FLAMEL TECHNOLOGIES
S.A.
Notes to Condensed
Consolidated Financial Statements
(Unaudited)
Share price
|
|
$
|
5.13
|
|
Risk-free interest rate
|
|
|
2.00
|
%
|
Dividend yield
|
|
|
-
|
|
Expected volatility
|
|
|
56.26
|
%
|
Expected term
|
|
|
6.0 years
|
|
As of March 31, 2012 the
fair value of the Note and Deferred Consideration is comparable with the fair value at acquisition date given the short time lag
between the acquisition date and period end date.
Net income (loss) before
and after remeasurement of acquisition liabilities is as follows:
|
|
Three months ended
|
|
(in thousands except per share data)
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2011
|
|
|
2012
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(4,927
|
)
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
Diluted
|
|
$
|
(0.20
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Number of shares used for computing
|
|
|
|
|
|
|
|
|
Basic
|
|
|
24,646
|
|
|
|
25,012
|
|
Diluted
|
|
|
24,646
|
|
|
|
25,012
|
|
|
|
|
|
|
|
|
|
|
Remeasurement of Acquisition Liabilities:
|
|
|
|
|
|
|
|
|
Fair Value of Warrants
|
|
|
-
|
|
|
|
(5,080
|
)
|
Total
|
|
|
-
|
|
|
|
(5,080
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) before remeasurement of acquisition
liabilities
|
|
|
(4,927
|
)
|
|
|
(5,068
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) before remeasurement of acquisition
liabilities per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
Diluted
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
FLAMEL TECHNOLOGIES
S.A.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking
Statements
This report on Form 6-K
contains forward-looking statements. We may make additional written or oral forward-looking statements from time to time in filings
with the Securities and Exchange Commission or otherwise. The words ‘believe,’ ‘expect,’ ‘anticipate,’
‘project,’ ‘will,’ ‘continue’ and similar expressions identify forward-looking statements,
which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe
that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, our
business is subject to significant risks and there can be no assurance that actual results of our development and manufacturing
activities and our results of operations will not differ materially from our expectations.
Forward-looking statements
are subject to inherent risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results
could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. 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. Factors that could cause actual results to differ from expectations
include, among others, those listed in Part II, Item 1A, Risk Factors of this Form 6-K and set forth in more detail in “Risk
Factors” in our Form 20-F for the fiscal year ended December 31, 2011.
RESULTS OF OPERATIONS
For the three months ended
March 31, 2012, Flamel reported total revenues of $7.4 million compared to $6.8 million for the first three months of 2011, primarily
as a result of the increase in product sales and services.
License and research
revenues for the three months ended March 31, 2012 were $2.1 million compared to $3.2 million for the first three months of 2011.
Product sales and services,
totaled $3.4 million for the three months ended March 31, 2012, compared to $1.6 million for the three months ended March 31,
2011.
These revenues include €650,000 (or $852,000) of amortization relating to payments totaling
€2,600,000 (or $3,700,000) received in September and November 2011 in connection with the new supply agreement signed with
GSK.
Other revenues were $1.9
million for the three months ended March 31, 2012 compared to $1.9 million for the first three months of 2011. These revenues
are derived primarily from the royalty on sales of Coreg CR.
Operating expenses decreased
to $7.4 million during the three months ended March 31, 2012 from $11.7 million for the three months ended March 31, 2011, and
includes a favorable $5.1 million non-cash adjustment based on fair-value measurement of certain liabilities associated with the
acquisition of Éclat Pharmaceuticals as of March 31, 2012. Excluding this adjustment, first quarter 2012 operating expenses
increased to $12.5 million due to the costs associated with the acquisition of Éclat Pharmaceuticals.
FLAMEL TECHNOLOGIES
S.A.
Costs of goods and services
sold were $1.3 million in the three months ended March 31, 2012, as compared to $1.4 million in the three months ended March 31,
2011.
Research and development
expenditures were $6.0 million in the three months ended March 31, 2012 compared to $7.8 million in the three months ended March
31, 2011. This decrease is due to timing year on year of the clinical and pre-clinical program and includes $0.3 million of costs
on research and development activities conducted to support the recently-acquired Éclat Pharmaceuticals portfolio.
Selling, general and administrative
expenses increased from $2.5 million in the three months ended March 31, 2011 to $5.2 million in the three months ended March
31, 2012. This increase is related to legal and advisory expenses related to the acquisition of Éclat Pharmaceuticals,
announced on March 13, 2012, and severance costs totaling $1.4 million.
Net income for the three months ended March
31, 2012 was $12,000, compared to a net loss of $(4.9) million in the three months ended March 31, 2011. Net loss per share (basic)
for the three months ended March 31, 2012 was $(0.00), compared to a net loss per share in the year-ago period of $(0.20). Net
loss and loss per share (basic and diluted) for the first quarter of 2012 excluding the impact of the re-measurement of the fair
value of acquisition liabilities was $(5.1) million and $(0.20), respectively.
Effective March 13, 2012,
Flamel acquired, through its wholly owned subsidiary Flamel US, all of the membership interests of Éclat Pharmaceuticals
from Éclat Holdings, an affiliate of Flamel’s largest shareholder Deerfield Capital L.P. Éclat Pharmaceuticals
is a specialty pharmaceuticals business focused on the development, approval and commercialization of niche brands and generic
pharmaceutical products. In exchange for all of the issued and outstanding membership interests of Éclat Pharmaceuticals,
Flamel US provided consideration primarily consisting of:
|
-
|
a $12 million senior, secured six-year note that is guaranteed
by Flamel and its subsidiaries and secured by the equity interests
and assets of Éclat Pharmaceuticals;
|
|
-
|
two warrants to purchase a total of 3,300,000 ADSs; and
|
|
-
|
a commitment to make earn out payments of 20% of any gross
profit generated by certain Éclat Pharmaceuticals launch
products and to pay 100% of any gross profit generated by Hycet
®
up to a maximum of $1 million. The Purchase Agreement also
contains certain representations and warranties, covenants, indemnification
and other customary provisions.
|
FLAMEL TECHNOLOGIES
S.A.
LIQUIDITY AND CAPITAL RESOURCES
On March 31, 2012,
the Company had $22.7 million in cash, cash equivalents and marketable securities, compared to $24.5 million on December 31, 2011.
This decrease was due primarily to the use of cash and cash equivalents to fund operations and on-going research and development
activities. In recent years, we have financed our operations and research and development efforts primarily through license and
research revenues, milestone payments and royalties from our collaborative partners.
We believe the Company
to have sufficient funds to finance operations and cash requirements for at least the next twelve months. Our cash needs may vary
materially from our current expectations based on:
|
·
|
sales
of our proprietary pipeline of products or products that incorporate
our drug delivery technologies;
|
|
·
|
financial
terms of collaborative, technology
access, license or other commercial
agreements we enter into;
|
|
·
|
results
of research and development
efforts;
|
|
·
|
changes
in the focus and direction
of our business strategy;
|
|
·
|
technological
advances;
|
|
·
|
results
of clinical testing, requirements
of the US Food and Drug Administration
(FDA) and comparable foreign
regulatory agencies;
|
|
·
|
availability
and terms of financing alternatives;
and
|
|
·
|
investments
in complementary businesses,
products or technologies
|
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
While we may be engaged
in various claims and legal proceedings in the ordinary course of business, we are not involved (whether as a defendant or otherwise)
in and we have no knowledge of any threat of, any litigation, arbitration or administrative or other proceeding which management
believes will have a material adverse effect on our consolidated financial position or results of operations.
On November 9, 2007
a putative class action was filed in the United States District Court for the Southern District of New York against the Company
and certain of its current and former officers entitled
Billhofer v. Flamel Technologies, et al
. The complaint purports
to allege claims arising under the Securities Exchange Act of 1934 based on certain public statements by the Company concerning,
among other things, a clinical trial involving Coreg CR and seeks the award of damages in an unspecified amount. By Order dated
February 11, 2008, the Court appointed a lead plaintiff and lead counsel in the action. On March 27, 2008, the lead plaintiff
filed an amended complaint that continued to name the Company and two previously named officers as defendants and asserted the
same claims based on the same events as alleged in the initial complaint. On May 12, 2008, the Company filed a motion to dismiss
the action, which the Court denied by Order dated October 1, 2009. On April 29, 2010, the lead plaintiff moved
to withdraw and substitute another individual as lead plaintiff and to amend the Case Management Order. On June 22, 2010,
the lead plaintiff voluntarily agreed to dismiss the action against one of the previously named officers. On September 20, 2010,
the Court granted the lead plaintiff’s withdraw and substitution motion and the parties proceeded to engage in fact discovery.
On March 6, 2012, the Court issued its opinion granting the lead plaintiff’s motion for class certification, which was originally
filed in October 2010 and opposed by the Company. On July 30, 2012, the Court issued an opinion denying the lead plaintiff’s
motion, filed on December 15, 2011, to further amend his complaint, which motion sought to substantially revise plaintiff’s
asserted basis for contending that the defendants should be found liable for the statements at issue. In its opinion, the
Court held that the proposed amended complaint failed to properly plead a viable claim. The Company intends to vigorously
defend itself in the action.
FLAMEL TECHNOLOGIES
S.A.
In May 2011, we
announced the filing of a lawsuit in the U.S. District Court for the District of Columbia against Lupin for infringement of
our US Patent No. 6,022,562, which is held by the Company and associated with Coreg CR. The lawsuit was dismissed in favor of
a lawsuit involving the same parties for infringement of the same patent that was lodged in the U.S. District Court for the
District of Maryland in May 2011. GSK is a third party defendant in the Maryland lawsuit. The lawsuit is based on the
Abbreviated New Drug Application (ANDA) filed by Lupin seeking permission to manufacture and market a generic version of
Coreg CR before the expiration of the patent. In August 2012, the Company concluded a settlement agreement with Lupin and the
parties filed a joint stipulation of dismissal on September 11, 2012.
In September 2011, Flamel
filed a lawsuit in the U.S. District Court for the District of Maryland against Anchen Pharmaceuticals, Inc., for infringement
of the same patent. The lawsuit is based on the ANDA filed by Anchen seeking permission to manufacture and market a generic version
of Coreg CR before the expiration of the patent. In May 2012, the Company concluded an agreement whereby Anchen agrees to pay
the sum of $400,000 in settlement of the claim.
Item 1A. Risk Factors
Item 3, “Key Information
- Risk Factors,” of our Annual Report on Form 20-F for the year ended December 31, 2011 describes some of the risks and
uncertainties associated with our business. The risk factors set forth below highlight some of these risk disclosures. Other factors
may also exist that we cannot anticipate or that we currently do not consider to be significant based on information that is currently
available. In addition to the other information in our SEC filings, you should consider carefully the following risk factors.
The occurrence of any one or more of the risks or uncertainties described below or in our Form 20-F could have a material adverse
effect on our business, financial condition and results of operations, cash flows and future results:
|
•
|
we depend on a small number
of customers for the majority of the revenues related to
our drug delivery technologies, and the loss of any one
of these customers could reduce our revenues significantly.
|
|
•
|
our revenues from our drug delivery technology business
primarily depend on pharmaceutical and biotechnology companies
successfully developing products that incorporate our drug
delivery technologies.
|
|
•
|
although products that incorporate our drug delivery
technologies and development products acquired from Éclat
Pharmaceuticals may appear promising at their early stages
of development and in clinical trials, none of these potential
products may reach the commercial market for a number of
reasons.
|
FLAMEL TECHNOLOGIES
S.A.
|
•
|
we must invest substantial sums in research and development
in order to remain competitive, and we may not fully recover
these investments.
|
|
•
|
we must comply with various covenants and obligations
under the note agreement with Éclat Holdings, and
our failure to do so could adversely affect our ability
to operate our business, develop our product portfolio or
pursue certain opportunities.
|
|
•
|
management transition to a new Chief Executive Officer
may be disruptive to our business and personnel.
|
|
•
|
we depend upon a single site to manufacture our drug
delivery products, and any interruption of operations could
have a material adverse effect on our business.
|
|
•
|
we depend on a limited number of suppliers for certain
raw materials used in our drug delivery technologies, and
any failure to deliver sufficient supplies or our inability
to identify and contract with another source could interrupt
our production process and have a material adverse effect
on our business.
|
|
•
|
if our competitors develop and market technologies or
products that are more effective than ours, or obtain regulatory
approval and market such technology or products before we
do, our commercial opportunity will be diminished or eliminated.
|
|
•
|
if we cannot keep pace with the rapid technological
changes in our industry, we may lose business, and our drug
delivery systems could become obsolete or noncompetitive.
|
|
•
|
if we cannot adequately protect our technology and proprietary
information, we may be unable to sustain a competitive advantage.
|
|
•
|
even if we and our partners obtain necessary regulatory
approvals, our products and technologies may not gain market
acceptance.
|
|
•
|
our collaborative arrangements may give rise to disputes
over commercial terms, contract interpretation and ownership
of our intellectual property and may adversely affect the
commercial success of our products.
|
|
•
|
third parties may claim, that our technologies, or the
products in which they are used, infringe on their rights,
and we may incur significant costs resolving these claims.
|
|
•
|
we can offer no assurance that any patents issued to
us will provide us with competitive advantages or will not
be infringed, challenged, invalidated or circumvented by
others, or that the patents or proprietary rights of others
will not have an adverse effect on our ability to do business.
|
|
•
|
if our third party collaborative partners face generic
competition for their products, our revenues and royalties
from such products may be adversely affected.
|
|
•
|
healthcare reform and restrictions on reimbursements
may limit our financial returns.
|
|
•
|
fluctuations in foreign currency exchange rates and
the impact of the European sovereign debt crisis may cause
fluctuations in our financial results.
|
|
•
|
products that incorporate our drug delivery technologies
and development products acquired from Éclat Pharmaceuticals
are subject to regulatory approval. If our pharmaceutical
and biotechnology company partners do not obtain such approvals,
or if such approvals are delayed, our revenues may be adversely
affected.
|
|
•
|
we are subject to federal and state laws prohibiting
“kickbacks” and false claims that, if violated,
could subject us to substantial penalties, and any challenges
to or investigation into our practices under these laws
could cause adverse publicity and be costly to respond to,
and thus could harm our business.
|
FLAMEL TECHNOLOGIES
S.A.
|
•
|
companies to which we have licensed our technology are
subject to extensive regulation by the FDA and other regulatory
authorities. Their failure to meet strict regulatory requirements
could adversely affect our business.
|
|
•
|
we may face product liability claims related to participation
in clinical trials or the use or misuse of our products
or products that incorporate our technologies.
|
|
•
|
if we use biological and hazardous materials in a manner
that causes injury, we may be liable for significant damages.
|
|
•
|
we may fail to realize the anticipated benefits expected
from the acquisition of Éclat Pharmaceuticals and
its portfolio of pipeline products
|
|
•
|
if we choose to acquire new and complementary businesses,
products or technologies, we may be unable to complete these
acquisitions or to successfully integrate them in a cost
effective and non-disruptive manner.
|
|
•
|
our share price has been volatile and may continue to
be volatile.
|
|
•
|
because we have limited commercial sales, investors
in our shares may have difficulty evaluating our prospects.
|
|
•
|
if we are not profitable in the future, the value of
our shares may fall.
|
|
•
|
our operating results may fluctuate, which may adversely
affect our share price.
|
|
•
|
we currently do not intend to pay dividends and cannot
assure shareholders that we will make dividend payments
in the future.
|
|
•
|
our largest shareholders own a significant percentage
of the share capital and voting rights of the Company through
such ownership.
|
FLAMEL TECHNOLOGIES
S.A.
Item 5 Other Information
SUBMISSION OF MATTERS TO VOTE OF SECURITY
HOLDERS
|
·
|
a)
On Friday, June
22, 2012, we held
our annual shareholders’
meeting to vote
on twenty proposals.
|
|
·
|
b)
The following matters
were voted upon
at the annual meeting:
|
Proposal
|
|
|
Votes For
|
|
|
|
Votes
Against/Abstain
|
|
|
Broker
Non-Votes
|
|
Approval of Statutory Accounts for year ended
December 31, 2011.
|
|
|
24 583 109
|
|
|
|
69 596
|
|
|
|
0
|
|
Allocation of results to retained earnings.
|
|
|
24 396 699
|
|
|
|
256 003
|
|
|
|
0
|
|
Renewal of Mrs. Catherine Bréchignac as Director.
|
|
|
24 293 425
|
|
|
|
359 277
|
|
|
|
0
|
|
Renewal of Mr. Guillaume Cerutti as Director.
|
|
|
24 276 671
|
|
|
|
376 031
|
|
|
|
0
|
|
Renewal of Mr. Francis JT Fildes as Director.
|
|
|
24 289 771
|
|
|
|
362 931
|
|
|
|
0
|
|
Renewal of Ambassador. Craig Stapleton as Director.
|
|
|
24 278 789
|
|
|
|
373 913
|
|
|
|
0
|
|
Renewal of Mr. Elie Vannier as Director.
|
|
|
24 280 285
|
|
|
|
372 417
|
|
|
|
0
|
|
Renewal of Mr. Stephen H. Willard as Director.
|
|
|
24 090 684
|
|
|
|
562 018
|
|
|
|
0
|
|
Appointment of Michael S. Anderson as Director
|
|
|
24 543 254
|
|
|
|
109 448
|
|
|
|
0
|
|
Determination of the annual amount of Directors’ attendance fees.
|
|
|
23 975 018
|
|
|
|
677 684
|
|
|
|
0
|
|
Approval of agreements referred to in article L. 225-38
et seq.
of the Commercial Code
|
|
|
19 967 372
|
|
|
|
4 685 330
|
|
|
|
0
|
|
Authorization to be granted to the Board of Directors to allocate one million (1,000,000) stock options and taking note of the resulting capital increases.
|
|
|
20 124 459
|
|
|
|
4 528 243
|
|
|
|
0
|
|
Authorization to be granted to the Board of Directors to allocate two hundred thousand (200,000) shares at no cost (“free shares”) and taking note of the resulting capital increases.
|
|
|
20 131 620
|
|
|
|
4 521 082
|
|
|
|
0
|
|
Modification of terms and conditions for exercise of warrants issued in 2009.
|
|
|
20 156 905
|
|
|
|
4 495 796
|
|
|
|
0
|
|
Modification of terms and conditions for exercise of warrants issued in 2010.
|
|
|
20 156 906
|
|
|
|
4 495 795
|
|
|
|
0
|
|
Modification of terms and conditions for exercise of warrants issued in 2011.
|
|
|
20 158 505
|
|
|
|
4 494 197
|
|
|
|
0
|
|
Issuance of a total of two million two hundred thousand (2,200,000) stock warrants (“bons souscriptions d’actions” or “BSAs”) to Éclat Holdings, LLC; authorization to be granted to the Board of Directors for carrying out the resulting capital increases.
|
|
|
23 950 814
|
|
|
|
701 888
|
|
|
|
0
|
|
Issuance of a total of one million one hundred thousand (1,100,000) stock warrants (“bons souscriptions d’actions” or “BSAs”) to Éclat Holdings, LLC; authorization to be granted to the Board of Directors for carrying out the resulting capital increases.
|
|
|
23 945 414
|
|
|
|
707 288
|
|
|
|
0
|
|
Authorization to be granted to the Board of Directors for increasing the share capital by issues of shares reserved for the members of a company saving plan established in application of Articles L.3332-18 et seq. of the Labour Code.
|
|
|
7 485 020
|
|
|
|
17 167 682
|
|
|
|
0
|
|
Powers for formalities.
|
|
|
24 128 304
|
|
|
|
524 398
|
|
|
|
0
|
|
FLAMEL TECHNOLOGIES
S.A.
Item 9. Exhibits
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
4.6
|
|
First Amendment to Registration Rights Agreement
|
FLAMEL TECHNOLOGIES
S.A.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
Flamel Technologies, S.A.
|
|
|
Dated: September 13, 2012
|
/s/ Michael S. Anderson
|
|
Michael S. Anderson
|
|
Chief Executive Officer
|
EXHIBIT INDEX
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
4.6
|
|
First Amendment to Registration Rights Agreement
|
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