France's Flamel Technologies reported revenues of $5.4 million (€4.7m) in the third quarter of 2003, down from $6.3 million a year earlier when the company booked a $4 million milestone payment from Servier.
The company's expenses increased to $7.3 million from $4.1 million as a result of increased R&D and clinical studies, for a net loss of $1.87 million in the quarter. In the same period of 2002, Flamel posted a net profit of $2.4 million.
Flamel Technologies is principally engaged in the development of two polymer-based delivery technologies for medical applications. Its Medusa technology is designed to deliver therapeutic proteins and peptides while its Micropump product is a controlled release and taste-masking technology for the oral administration of small molecule drugs.
The company has a range of partner for Micropump but recently signed a deal for its first Medusa formulation, Basulin (insulin) with Bristol-Myers Squibb. Phase IIa trials for this product have just got underway, according to Dr Gerard Soula, Flamel's chief executive.
Flamel's third quarter revenues included license and research revenues of $4.2 million, which included revenues from research contracts, but no milestones. This reflects a considerable firming of the company's income stream in which more revenues come from ongoing licensing partnerships and there is less emphasis on milestones.
Revenues from product sales and services increased slightly to $0.9 million, compared to $0.7 million in the third quarter of 2002, but once again reflected the company's diminished services to Corning and increasing contract manufacturing revenues. Other revenues remained stable at $0.2 million.
Most of the hike in R&D spending came from a boost in internal projects, according to the company, although it noted that currency effects also swelled the total.
Stephen Willard, Flamel's chief financial officer, noted that the firm's cash position has improved significantly. Cash on hand at the end of the third quarter was $22.1 million, with an additional $4.3 million in accounts receivable, versus $14.6 million and $2.9 million respectively a year ago.
Moreover, the exercise of warrants, as well as the addition of approximately $61 million from a recent secondary offering and a $20 million upfront payment from BMS (expected shortly) will give the company around $100 million in cash on its balance sheet.
"On an operating basis, we expect to be cash flow positive for the year 2003", noted Mr Willard.