Flamel Technologies Announces First Quarter of Fiscal Year 2014
Results
Company Recognized Revenue From Initial Sales of FDA-Approved
Bloxiverz(TM); Conference Call With Management to Take Place at
10:00 AM ET on May 12, 2014
LYON, FRANCE--(Marketwired - May 12, 2014) - Flamel Technologies
(NASDAQ: FLML) today announced its financial results for the first
quarter of fiscal year 2014. Highlights from the quarter
include:
- Recognized revenue from its first-FDA approved Éclat product,
Bloxiverz™, the first FDA-approved version of neostigmine
methylsulfate
- Announced positive results from First-in-Man clinical study
using Micropump® technology applied to sodium oxybate for
narcolepsy patients
- The Company closed the sale of 12.4 million American Depositary
Shares (ADSs) for approximately $113 million of net proceeds in
March 2014. After repayment of virtually all outstanding debt and
credit lines, and the first quarter cash needs, the Company had
$83.5 million of cash and marketable securities as of March 31,
2014
"We are pleased to report growth in our revenues due to the
recognition of revenue from Bloxiverz for the first time in the
first quarter of 2014. Bloxiverz is the company's first NDA
approval from our line of products acquired from Éclat, and is the
first FDA-approved version of neostigmine currently available in
the marketplace," said Mike Anderson, Chief Executive Officer of
Flamel. "We will continue to work with the FDA as they consider
removing the currently available unapproved versions of neostigmine
from the marketplace."
In addition to the first quarter 2014 results, the Company last
month announced positive results from its First-in-Man (FIM)
clinical study in healthy volunteers using its proprietary
Micropump technology applied to sodium oxybate. The study
identified formulations that demonstrate the potential to eliminate
the second nighttime dose for patients suffering from narcolepsy
and instead administer only a single dose before bedtime.
"The results from our First-in-Man trial using Micropump sodium
oxybate are an important accomplishment for us. We will look to
complete the extension phase of our first trial which will test two
formulations at doses above 6 grams as well as begin a new clinical
study before year-end 2014. This new study will be in a larger
number of patients to further evaluate these formulations as well
as certain pharmacodynamic endpoints in patients suffering from
narcolepsy. We plan to meet with regulatory authorities prior to
embarking upon studies required for registration, which we expect
to begin before the end of 2015.
On April 28th, the FDA issued Flamel a complete response letter
(CRL) for the Company's second New Drug Application (NDA) from the
Éclat portfolio. In the CRL, the FDA cited issues related to the
active pharmaceutical ingredient (API) supplier. "While we are
disappointed having received this CRL for our second product
candidate in the Éclat portfolio, we will work diligently with the
FDA and our API supplier to satisfy the issue that was raised in
the CRL. At this moment, based upon the information available to
us, we expect to submit our response to the CRL prior to the end of
2014," said Mr. Anderson.
Flamel's First Quarter
Results
Flamel reported total revenues during the first quarter of 2014
of $9.2 million, which reflected the initial recognition of sales
of Bloxiverz, compared to $5.1 million in the first quarter of
2013, an increase of 78.5% compared to the year-ago period. Product
sales and services revenues in the first quarter of 2014 of were
$5.9 million, compared to $2.1 million in the prior year quarter as
the Company continues its successful transition from a drug
delivery company to a self-funded specialty pharmaceutical
company.
Costs of goods and services sold for the first quarter of 2014
were $2.0 million compared to $995,000 in the first quarter of
2013, principally due to initial sales of Bloxiverz and the
corresponding costs of inventory. Research and development costs in
the first quarter of 2014 totaled $7.1 million versus $8.5 million
in the prior year period because the Company paid an NDA filing fee
in the first quarter of 2013 that did not recur this quarter.
Selling, general and administrative costs were $3.6 million in the
first quarter of 2014 versus $2.5 million in the first quarter of
2013. This increase resulted from additional selling and marketing
costs to support the launch of Bloxiverz, the cost of
post-marketing studies requested by the FDA, and increased legal
costs. For the first time, amortization of R&D assets
associated with the development of Bloxiverz was accounted for in
the first quarter of 2014 for a total of $2.9 million.
Total interest expense was $5.5 million in the first quarter of
2014 compared to interest expense of $429,000 in the first quarter
of 2013. Virtually all of the company's debt and lines of credit,
which totaled $32 million, were repaid as of March 24, 2014 using
the proceeds from the offering of ADSs.
Net loss for the first quarter of 2014 was $26.6 million versus
net loss of $8.8 million in the year-ago period. Earnings per share
(both basic and diluted) was $(0.94) in the first quarter of 2014
versus $(0.35) in the first quarter of 2013.
Adjusted net loss for the first quarter of 2014 was $4.2 million
versus an adjusted net loss of $5.9 million in the first quarter of
2013. Adjusted loss per share (both basic and diluted) was $(0.15)
in the first quarter of 2014 compared to an adjusted loss per share
of $(0.23) in the prior year period.
The Company's cash position as of March 31, 2014 was $83.5
million, which includes the net proceeds from the sale of 12.4
million ADSs less the repayment of debt and lines of credit.
Flamel is disclosing non-GAAP financial measures when providing
financial results, including adjusted net loss. Flamel believes
that an evaluation of its ongoing operations (and comparison of
current operations with historical and future operations) would be
difficult if the disclosure of its financial results were limited
to financial measures prepared only in accordance with generally
accepted accounting principles (GAAP) in the U.S. In addition to
disclosing its financial results in accordance with GAAP, Flamel is
disclosing certain non-GAAP results that exclude fair value
remeasurements, impairment of intangible assets, amortization
expense of intangible assets and effects of accelerated
reimbursement of certain debt instruments and include operating
cash flows associated with the acquisition liabilities and Royalty
Agreements, in order to supplement investors' and other readers'
understanding and assessment of the Company's financial
performance. The Company's management uses these non-GAAP measures
internally for forecasting, budgeting and measuring its operating
performance. Investors and other readers are encouraged to review
the related GAAP financial measures and the reconciliation of
non-GAAP measures to their most closely applicable GAAP measure set
forth below and should consider non-GAAP measures only as a
supplement to, not as a substitute for or as a superior measure to,
measures of financial performance prepared in accordance with
GAAP.
Below is a reconciliation of GAAP net losses attributable to
Flamel and diluted GAAP losses per share to adjusted net losses
attributable to Flamel and adjusted diluted losses per share for
the three months ended March 31, 2014 and 2013 (in thousands except
per share amounts).
|
|
|
|
|
Three months ended March 31, |
|
|
2013 |
|
2014 |
GAAP
Net income (loss) and diluted earnings (loss) per share |
|
($8,829) |
|
($0.35) |
|
($26,638) |
|
($0.94) |
|
|
|
|
|
|
|
|
|
Fair
value remeasurement of acquisition liabilities* |
|
2,976 |
|
|
|
14,626 |
|
|
Fair
value remeasurement of royalty agreements |
|
- |
|
|
|
156 |
|
|
Amortization of Intangible R&D Assets |
|
- |
|
|
|
2,937 |
|
|
Accelerated reimbursement of acquisition note |
|
- |
|
|
|
3,013 |
|
|
Accelerated reimbursement of facility agreements |
|
- |
|
|
|
4,741 |
|
|
Tax
effects of the above items |
|
(15) |
|
|
|
(2,338) |
|
|
|
|
|
|
|
|
|
|
|
Earn-out acquisition payment payable |
|
(9) |
|
|
|
(611) |
|
|
Royalty payable |
|
- |
|
|
|
(92) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (Loss) and adjusted diluted earnings (loss) per
share |
|
($5,876) |
|
($0.23) |
|
($4,206) |
|
($0.15) |
|
|
|
|
|
|
|
|
|
*Earn out due and warrants issued in relation to the Éclat
acquisition.
A conference call to discuss these results and other updates is
scheduled for 10:00 AM ET on Monday, May 12, 2014. A question and
answer period will follow management's prepared remarks. To
participate in the conference call, investors are invited to dial
888-542-1086 (U.S.) or 1+719-325-2109 (international). The
conference ID number is 9667665. The conference call webcast may be
accessed at www.flamel.com. A replay of the webcast will be
archived on Flamel's website for 90 days following the call.
About Flamel Technologies. Flamel Technologies SA's (NASDAQ:
FLML) business model is to blend high-value internally developed
products with its leading drug delivery capabilities. The company
markets Bloxiverz™ (neostigmine methylsulfate) in the USA and
manufactures Micropump-based microparticles under FDA-audited GMP
guidelines for Coreg CR® (carvedilol phosphate), marketed in the
USA by GlaxoSmithKline. The Company has a proprietary pipeline of
niche specialty pharmaceutical products, while its drug delivery
platforms are focused on the goal of developing safer, more
efficacious formulations of drugs to address unmet medical needs.
Its pipeline includes chemical and biological drugs formulated with
its Micropump® (and its applications to the development of liquid
formulations, i.e. LiquiTime® and of abuse-deterrent formulations
Trigger Lock™) and Medusa™ proprietary drug delivery platforms.
Several Medusa-based products have been successfully tested in
clinical trials. The Company is headquartered in Lyon, France and
has operations in St. Louis, Missouri, USA, and manufacturing
facilities in Pessac, France. Additional information may be found
at www.flamel.com.
This release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including certain plans, expectations, goals and projections
regarding financial results, product developments and technology
platforms. All statements that are not clearly historical in nature
are forward-looking, and the words "anticipate," "assume,"
"believe," "expect," "estimate," "plan," "will," "may," and similar
expressions are generally intended to identify forward-looking
statements. All forward-looking statements involve risks,
uncertainties and contingencies, many of which are beyond our
control that could cause actual results to differ materially from
those contemplated in such forward-looking statements. These risks
include risks that Bloxiverz will not be as successful as
anticipated; our ability to bring other R&D projects of the
former Éclat Pharmaceuticals to market may be unsuccessful; FDA may
not take action on the status of unapproved versions of neostigmine
still on the market; we may not be able to quickly resolve the
issue raised in the CRL issued by the FDA; clinical trial results
may not be positive or our partners may decide not to move forward;
products in the development stage may not achieve scientific
objectives or milestones or meet stringent regulatory requirements;
products in development may not achieve market acceptance;
competitive products and pricing may hinder our commercial
opportunities; we may not be successful in identifying and pursuing
opportunities to develop our own product portfolio using Flamel's
technology; and the risks associated with our reliance on outside
parties and key strategic alliances. These and other risks are
described more fully in Flamel's Annual Report on Form 20-F for the
year ended December 31, 2013 that has been filed with the
Securities and Exchange Commission (SEC). All forward-looking
statements included in this release are based on information
available at the time of the release. We undertake no obligation to
update or alter our forward-looking statements as a result of new
information, future events or otherwise.
|
Condensed Consolidated Statements of Operations |
(Amounts in thousands, except per share data) |
|
|
|
|
Three months ended March 31, |
|
|
|
2013 |
|
|
2014 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
License and research revenue |
|
$ |
1,273 |
|
|
$ |
1,433 |
|
|
Product sales and services |
|
|
2,107 |
|
|
|
5,940 |
|
|
Other revenues |
|
|
1,760 |
|
|
|
1,802 |
|
|
|
Total
revenue |
|
|
5,140 |
|
|
|
9,175 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Cost of goods and services sold |
|
|
(995 |
) |
|
|
(1,952 |
) |
|
Research and development |
|
|
(8,529 |
) |
|
|
(7,094 |
) |
|
Amortisation of intangible R&D assets |
|
|
- |
|
|
|
(2,937 |
) |
|
Selling, general and administrative |
|
|
(2,491 |
) |
|
|
(3,555 |
) |
|
Fair value remeasurement of acquisition
liabilities |
|
|
(2,976 |
) |
|
|
(14,626 |
) |
|
Reimbursement of acquisition Note |
|
|
- |
|
|
|
(3,013 |
) |
|
|
Total |
|
|
(14,991 |
) |
|
|
(33,177 |
) |
|
|
|
|
|
|
|
|
|
Profit (loss) from operations |
|
|
(9,851 |
) |
|
|
(24,002 |
) |
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
(429 |
) |
|
|
(5,508 |
) |
Interest expense on the debt related to the royalty
agreement |
|
|
- |
|
|
|
(156 |
) |
Foreign exchange gain (loss) |
|
|
24 |
|
|
|
179 |
|
Other income (loss) |
|
|
(35 |
) |
|
|
52 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
(10,291 |
) |
|
|
(29,435 |
) |
Income tax benefit (expense) |
|
|
1,462 |
|
|
|
2,797 |
|
|
Net income (loss) |
|
$ |
(8,829 |
) |
|
$ |
(26,638 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per ordinary share |
|
$ |
(0.35 |
) |
|
$ |
(0.94 |
) |
|
Diluted earnings (loss) per share |
|
$ |
(0.35 |
) |
|
$ |
(0.94 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding (in
thousands) : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
25,415 |
|
|
|
28,200 |
|
|
Diluted |
|
|
25,415 |
|
|
|
28,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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