PARIS ¿ Flamel Technologies SA has reported a 17.3 percent increase in turnover in 1998, with revenues rising to $9.5 million from $8.16 million in 1997, although in the fourth quarter they were 14.2 percent down at $2.88 million, as compared to $3.35 million in the last three months of 1997. With research and development outlays rising a little to $10.6 million in 1998, from $10.1 million in 1997, the net loss increased to $7.8 million last year, from $6.8 million in 1997.
In the fourth quarter in particular, Flamel showed a net loss of just over $1.6 million, as compared to a small profit of $15,000 in the corresponding period of 1997. The company attributes that reversal not only to the fall in revenues, but also to an increase in external costs due to the completion in October of Phase III clinical trials of Genvir, its controlled-release formulation of acyclovir, as well as a drop in investment income and a reduced investment tax credit.
The difference in revenues between the fourth quarters of 1997 and 1998 reflects a payment of $1.5 million made by St. Louis-based Monsanto Co. on signing a licensing agreement with Flamel in December 1997 and a drop in sub-contracted manufacturing for SmithKline Beecham plc, of London.
At the end of 1998, Flamel had financial reserves (cash and short-term investments) of $11.7 million, as compared to $10.5 million a year earlier. Last June, it received a $10 million injection of capital through a private placement of 2 million shares with Financihre et Industrielle Gaz et Eaux, a French holding company affiliated with the Lazard group, which thereby acquired a 14 percent stake in Flamel.
Results In Line With Expectations
Chief Financial Officer Barbara Sherrill told BioWorld International that the annual results were broadly in line with expectations, although the company had hoped that revenues from partners might have been higher. Research and development spending would continue at much the same rate in 1999, she said, and the company hoped to move into profit in 2000, when it would have three products on the market.
Based near Lyon, in southeastern France, Flamel is developing a range of polymer-based materials for life-science applications and has patented two drug-delivery systems, Micropump and Medusa, and an agrochemical delivery system (Agsome), as well as biomedical devices utilizing biomaterials (under the ColCys name), and photochromic materials for organic ophthalmic lenses.
Apart from the positive trial results for Genvir, which uses Flamel¿s Micropump technology and is indicated for the treatment of acute genital herpes, another significant success for Flamel in 1998 was the granting of marketing approval in the U.K. for Asacard, a 162.5-milligram cardiovascular aspirin product, for the prevention of myocardial infarction and stroke. Asacard will be marketed in most European countries by Searle & Co., a Monsanto subsidiary, which will also manufacture the final product using controlled-release microparticles containing aspirin supplied by Flamel.
Flamel will receive royalties from Searle¿s sales of the product, as well as milestone payments, but to Flamel¿s disappointment, its licensee did not launch Asacard in the U.K., deciding instead to undertake Phase IV trials at the same time as applying for marketing approval to be extended to the whole of the European Union, under the mutual-recognition procedure. Meanwhile, Flamel is developing a high-dose formulation of Asacard for the treatment of chronic pain and inflammation.
Flamel¿s revenues were also depressed by the fact that Corning Inc. delayed the launch of new products incorporating its technology, said Sherrill, although Flamel sold $2.5 million worth of photochromic colorings to Corning last year. Flamel has a longstanding research and development collaboration with Corning for the development and production of new materials derived from Flamel¿s research into polymers. In January, the two companies renewed and enlarged their agreement, putting it onto a long-term basis with no fixed term. n