Republic of France (State or Other Jurisdiction of Incorporation) | 000-28508 (Commission File Number) | 98-0639540 (I.R.S. Employer Identification No.) | ||||
Parc Club du Moulin à Vent 33, avenue du Docteur Georges Levy 69200 Vénissieux France (Address of Principal Executive Offices) | Not Applicable (Zip Code) |
99.1 | Press release dated November 7, 2016, issued by Flamel Technologies S.A. |
99.1 | Press release dated November 7, 2016, issued by Flamel Technologies S.A. |
• | Total revenues for third quarter 2016 were $32.1 million, compared to $47.3 million during the same period last year. |
• | GAAP net loss for the third quarter was $22.3 million, or $(0.54) per diluted share, compared to GAAP net loss of $28.1 million, or $(0.69) per diluted share, during the same period last year. |
• | Adjusted operating income was $2.5 million, compared to $24.4 million in the prior year.* |
• | Adjusted net loss was $3.5 million, or $(0.08) per diluted share, compared to an adjusted net income of $13.1 million, or $0.32 per diluted share, during the same period last year. * |
• | Cash and marketable securities at September 30, 2016 were $149.7 million, compared to $154.9 million at June 30, 2016 and $144.8 million at December 31, 2015. |
• | Protocol for REST-ON Phase III trial of once-nightly Micropump sodium oxybate approved by the U.S. Food & Drug Administration (FDA) through a Special Protocol Assessment (SPA) and trial initiated in Europe and Canada. |
* | Non-GAAP financial measure. Descriptions of Flamel’s non-GAAP financial measures are included under the caption “Non-GAAP Disclosures and Adjustments” included within this document and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the “Supplemental Information” section within this document. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Product sales and services | $ | 31,340 | $ | 47,313 | $ | 104,858 | $ | 128,441 | |||||||
License and research revenue | 747 | — | 2,303 | — | |||||||||||
Total | 32,087 | 47,313 | 107,161 | 128,441 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of products and services sold | 2,844 | 2,087 | 10,657 | 8,473 | |||||||||||
Research and development expenses | 8,143 | 7,221 | 21,135 | 20,447 | |||||||||||
Selling, general and administrative expenses | 12,740 | 4,568 | 33,491 | 14,904 | |||||||||||
Intangible asset amortization | 3,702 | 3,141 | 10,918 | 9,423 | |||||||||||
Changes in fair value of related party contingent consideration | 20,848 | 44,782 | 52,989 | 82,036 | |||||||||||
Total | 48,277 | 61,799 | 129,190 | 135,283 | |||||||||||
Operating loss | (16,190 | ) | (14,486 | ) | (22,029 | ) | (6,842 | ) | |||||||
Investment income, net | 490 | 197 | 1,080 | 1,171 | |||||||||||
Interest expense, net | (264 | ) | — | (702 | ) | — | |||||||||
Other expense - changes in fair value of related party payable | (1,828 | ) | (6,644 | ) | (6,135 | ) | (9,629 | ) | |||||||
Foreign exchange gain (loss) | (1,054 | ) | 160 | (2,315 | ) | 8,096 | |||||||||
Loss before income taxes | (18,846 | ) | (20,773 | ) | (30,101 | ) | (7,204 | ) | |||||||
Income tax provision | 3,451 | 7,302 | 18,212 | 24,516 | |||||||||||
Net loss | $ | (22,297 | ) | $ | (28,075 | ) | $ | (48,313 | ) | $ | (31,720 | ) | |||
Net loss per share - basic | $ | (0.54 | ) | $ | (0.69 | ) | $ | (1.17 | ) | $ | (0.79 | ) | |||
Net loss per share - diluted | $ | (0.54 | ) | $ | (0.69 | ) | $ | (1.17 | ) | $ | (0.79 | ) | |||
Weighted average number of shares outstanding - basic | 41,241 | 40,625 | 41,241 | 40,397 | |||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 40,625 | 41,241 | 40,397 |
September 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 18,780 | $ | 65,064 | |||
Marketable securities | 130,887 | 79,738 | |||||
Accounts receivable | 15,395 | 7,487 | |||||
Inventories | 3,909 | 3,666 | |||||
Research and development tax credit receivable | — | 2,382 | |||||
Prepaid expenses and other current assets | 8,883 | 8,064 | |||||
Total current assets | 177,854 | 166,401 | |||||
Property and equipment, net | 3,186 | 2,616 | |||||
Goodwill | 19,134 | 18,491 | |||||
Intangible assets, net | 25,508 | 15,825 | |||||
Research and development tax credit receivable | 4,240 | — | |||||
Income tax deferred charge | 11,243 | 11,581 | |||||
Other | 6,820 | 167 | |||||
Total assets | $ | 247,985 | $ | 215,081 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 286 | $ | 434 | |||
Current portion of long-term related party payable | 33,359 | 25,204 | |||||
Accounts payable | 8,966 | 5,048 | |||||
Deferred revenue | 3,115 | 5,121 | |||||
Accrued expenses | 13,032 | 9,308 | |||||
Other | 427 | 133 | |||||
Total current liabilities | 59,185 | 45,248 | |||||
Long-term debt, less current portion | 734 | 684 | |||||
Long-term related party payable, less current portion | 146,926 | 97,489 | |||||
Other | 4,307 | 2,526 | |||||
Total liabilities | 211,152 | 145,947 | |||||
Shareholders' equity: | |||||||
Ordinary shares, nominal value of 0.122 euro per share; 53,178 shares authorized; 41,241 issued and outstanding at September 30, 2016 and December 31, 2015 | 6,331 | 6,331 | |||||
Additional paid-in capital | 374,724 | 363,984 | |||||
Accumulated deficit | (326,837 | ) | (278,524 | ) | |||
Accumulated other comprehensive loss | (17,385 | ) | (22,657 | ) | |||
Total shareholders' equity | 36,833 | 69,134 | |||||
Total liabilities and shareholders' equity | $ | 247,985 | $ | 215,081 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (48,313 | ) | $ | (31,718 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 11,555 | 9,800 | |||||
Loss on disposal of property and equipment | 110 | — | |||||
Loss on sale of marketable securities | 666 | 635 | |||||
Unrealized exchange loss (gain) | 2,315 | (7,248 | ) | ||||
Grants recognized in research and development expenses | (70 | ) | (1,086 | ) | |||
Remeasurement of related party acquisition-related contingent consideration | 52,989 | 82,036 | |||||
Remeasurement of related party financing-related contingent consideration | 6,135 | 9,628 | |||||
Change in deferred tax and income tax deferred charge | (5,680 | ) | (714 | ) | |||
Stock-based compensation expense | 10,541 | 5,485 | |||||
Increase (decrease) in cash from: | |||||||
Accounts receivable | (7,594 | ) | (1,553 | ) | |||
Inventories | 2,080 | 1,543 | |||||
Prepaid expenses and other current assets | 671 | (4,293 | ) | ||||
Research and development tax credit receivable | (1,794 | ) | 2,481 | ||||
Accounts payable & other current liabilities | 1,291 | (4,231 | ) | ||||
Deferred revenue | (2,198 | ) | (1,317 | ) | |||
Accrued expenses | 2,700 | (1,094 | ) | ||||
Accrued income taxes | — | (490 | ) | ||||
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value | (14,488 | ) | — | ||||
Royalty payments for related party payable in excess of original fair value | (1,790 | ) | — | ||||
Other long-term assets and liabilities | 2,033 | 131 | |||||
Net cash provided by operating activities | 11,159 | 57,995 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (1,000 | ) | (1,065 | ) | |||
Acquisitions of businesses | 628 | — | |||||
Proceeds from sales of marketable securities | 46,483 | 23,995 | |||||
Purchase of marketable securities | (96,199 | ) | (36,210 | ) | |||
Net cash used in investing activities | (50,088 | ) | (13,280 | ) | |||
Cash flows from financing activities: | |||||||
Earn-out payments for related party contingent consideration | (6,834 | ) | (15,497 | ) | |||
Royalty payments for related party payable | (1,117 | ) | (2,099 | ) | |||
Repayment of debt | — | (4,965 | ) | ||||
Reimbursement of conditional grants | (61 | ) | (681 | ) | |||
Cash proceeds from issuance of ordinary shares and warrants | — | 6,990 | |||||
Net cash used in financing activities | (8,012 | ) | (16,252 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 657 | (2,358 | ) |
Net increase (decrease) in cash and cash equivalents | (46,284 | ) | 26,105 | ||||
Cash and cash equivalents at January 1 | 65,064 | 39,760 | |||||
Cash and cash equivalents at September 30 | $ | 18,780 | $ | 65,865 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Revenues | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Bloxiverz | $ | 15,591 | $ | 41,243 | $ | 65,958 | $ | 114,074 | ||||||||
Vazculep | 9,340 | 5,605 | 29,167 | 12,757 | ||||||||||||
Akovaz | 5,568 | — | 5,568 | — | ||||||||||||
Other | 841 | 465 | 4,165 | 1,610 | ||||||||||||
Total product sales and services | 31,340 | 47,313 | 104,858 | 128,441 | ||||||||||||
License and research revenue | 747 | — | 2,303 | — | ||||||||||||
Total revenues | $ | 32,087 | $ | 47,313 | $ | 107,161 | $ | 128,441 |
Adjustments for the three months ended, September 30, 2016 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 31,340 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 31,340 | ||||||||||||||
License and research revenue | 747 | — | — | — | — | — | 747 | |||||||||||||||||||||
Total | 32,087 | — | — | — | — | — | 32,087 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 2,844 | — | — | — | — | — | 2,844 | |||||||||||||||||||||
Research and development expenses | 8,143 | — | — | — | — | — | 8,143 | |||||||||||||||||||||
Selling, general and administrative expenses | 12,740 | — | — | — | — | — | 12,740 | |||||||||||||||||||||
Intangible asset amortization | 3,702 | (3,702 | ) | — | — | — | (3,702 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 20,848 | — | — | (20,848 | ) | 5,884 | (14,964 | ) | 5,884 | |||||||||||||||||||
Total | 48,277 | (3,702 | ) | — | (20,848 | ) | 5,884 | (18,666 | ) | 29,611 | ||||||||||||||||||
Operating (loss) income | (16,190 | ) | 3,702 | — | 20,848 | (5,884 | ) | 18,666 | 2,476 | |||||||||||||||||||
Investment income, net | 490 | — | — | — | — | — | 490 | |||||||||||||||||||||
Interest expense, net | (264 | ) | — | — | — | — | — | (264 | ) | |||||||||||||||||||
Other expense - changes in fair value of related party payable | (1,828 | ) | — | — | 1,828 | (785 | ) | 1,043 | (785 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | (1,054 | ) | — | 1,054 | — | — | 1,054 | — | ||||||||||||||||||||
(Loss) income before income taxes | (18,846 | ) | 3,702 | 1,054 | 22,676 | (6,669 | ) | 20,763 | 1,917 | |||||||||||||||||||
Income tax provision (benefit) | 3,451 | 1,329 | — | 1,021 | (385 | ) | 1,965 | 5,416 | ||||||||||||||||||||
Net (loss) income | $ | (22,297 | ) | $ | 2,373 | $ | 1,054 | $ | 21,655 | $ | (6,284 | ) | $ | 18,798 | $ | (3,499 | ) | |||||||||||
Net (loss) income per share - diluted | $ | (0.54 | ) | 0.06 | 0.03 | 0.53 | (0.15 | ) | 0.46 | (0.08 | ) | |||||||||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 |
Adjustments for the three months ended, September 30, 2015 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 47,313 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 47,313 | ||||||||||||||
License and research revenue | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 47,313 | — | — | — | — | — | 47,313 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 2,087 | — | — | — | — | — | 2,087 | |||||||||||||||||||||
Research and development expenses | 7,221 | — | — | — | — | — | 7,221 | |||||||||||||||||||||
Selling, general and administrative expenses | 4,568 | — | — | — | — | — | 4,568 | |||||||||||||||||||||
Intangible asset amortization | 3,141 | (3,141 | ) | — | — | — | (3,141 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 44,782 | — | — | (44,782 | ) | 9,027 | (35,755 | ) | 9,027 | |||||||||||||||||||
Total | 61,799 | (3,141 | ) | — | (44,782 | ) | 9,027 | (38,896 | ) | 22,903 | ||||||||||||||||||
Operating (loss) income | (14,486 | ) | 3,141 | — | 44,782 | (9,027 | ) | 38,896 | 24,410 | |||||||||||||||||||
Investment income, net | 197 | — | — | — | — | — | 197 | |||||||||||||||||||||
Interest expense, net | — | — | — | — | — | — | — | |||||||||||||||||||||
Other expense - changes in fair value of related party payable | (6,644 | ) | — | — | 6,644 | (1,211 | ) | 5,433 | (1,211 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | 160 | — | (160 | ) | — | — | (160 | ) | — | |||||||||||||||||||
(Loss) income before income taxes | (20,773 | ) | 3,141 | (160 | ) | 51,426 | (10,238 | ) | 44,169 | 23,396 | ||||||||||||||||||
Income tax provision (benefit) | 7,302 | 1,099 | (48 | ) | 2,325 | (424 | ) | 2,952 | 10,254 | |||||||||||||||||||
Net (loss) income | $ | (28,075 | ) | $ | 2,042 | $ | (112 | ) | $ | 49,101 | $ | (9,814 | ) | $ | 41,217 | $ | 13,142 | |||||||||||
Net (loss) income per share - diluted | $ | (0.69 | ) | $ | 0.05 | $ | — | $ | 1.21 | $ | (0.24 | ) | $ | 1.01 | $ | 0.32 | ||||||||||||
Weighted average number of shares outstanding - diluted | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 | 40,625 |
Adjustments for the nine months ended, September 30, 2016 | ||||||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Purchase accounting adjustments - FSC | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Product sales and services | $ | 104,858 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 104,858 | ||||||||||||||||
License and research revenue | 2,303 | — | — | — | — | — | — | 2,303 | ||||||||||||||||||||||||
Total | 107,161 | — | — | — | — | — | — | 107,161 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Cost of products and services sold | 10,657 | — | — | (1,525 | ) | — | — | (1,525 | ) | 9,132 | ||||||||||||||||||||||
Research and development expenses | 21,135 | — | — | — | — | — | — | 21,135 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 33,491 | — | — | — | — | — | — | 33,491 | ||||||||||||||||||||||||
Intangible asset amortization | 10,918 | (10,918 | ) | — | — | — | — | (10,918 | ) | — | ||||||||||||||||||||||
Changes in fair value of related party contingent consideration | 52,989 | — | — | — | (52,989 | ) | 19,321 | (33,668 | ) | 19,321 | ||||||||||||||||||||||
Total | 129,190 | (10,918 | ) | — | (1,525 | ) | (52,989 | ) | 19,321 | (46,111 | ) | 83,079 | ||||||||||||||||||||
Operating (loss) income | (22,029 | ) | 10,918 | — | 1,525 | 52,989 | (19,321 | ) | 46,111 | 24,082 | ||||||||||||||||||||||
Investment income, net | 1,080 | — | — | — | — | — | — | 1,080 | ||||||||||||||||||||||||
Interest expense, net | (702 | ) | — | — | — | — | — | — | (702 | ) | ||||||||||||||||||||||
Other expense - changes in fair value of related party payable | (6,135 | ) | — | — | — | 6,135 | (2,618 | ) | 3,517 | (2,618 | ) | |||||||||||||||||||||
Foreign exchange gain (loss) | (2,315 | ) | — | 2,315 | — | — | — | 2,315 | — | |||||||||||||||||||||||
(Loss) income before income taxes | (30,101 | ) | 10,918 | 2,315 | 1,525 | 59,124 | (21,939 | ) | 51,943 | 21,842 | ||||||||||||||||||||||
Income tax provision (benefit) | 18,212 | 3,920 | — | 533 | 2,986 | (1,165 | ) | 6,274 | 24,486 | |||||||||||||||||||||||
Net (loss) income | $ | (48,313 | ) | $ | 6,998 | $ | 2,315 | $ | 992 | $ | 56,138 | $ | (20,774 | ) | $ | 45,669 | $ | (2,644 | ) | |||||||||||||
Net (loss) income per share - diluted | $ | (1.17 | ) | $ | 0.17 | $ | 0.06 | $ | 0.02 | $ | 1.36 | $ | (0.50 | ) | $ | 1.11 | $ | (0.06 | ) | |||||||||||||
Weighted average number of shares outstanding - diluted | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 | 41,241 |
Adjustments for the nine months ended, September 30, 2015 | ||||||||||||||||||||||||||||
Exclude | Include | |||||||||||||||||||||||||||
GAAP | Intangible asset amortization | Foreign exchange (gain)/loss | Contingent related party payable fair value remeasurements | Contingent related party payable paid/accrued | Total adjustments | Adjusted GAAP | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Product sales and services | $ | 128,441 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 128,441 | ||||||||||||||
License and research revenue | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 128,441 | — | — | — | — | — | 128,441 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Cost of products and services sold | 8,473 | — | — | — | — | — | 8,473 | |||||||||||||||||||||
Research and development expenses | 20,447 | — | — | — | — | — | 20,447 | |||||||||||||||||||||
Selling, general and administrative expenses | 14,904 | — | — | — | — | — | 14,904 | |||||||||||||||||||||
Intangible asset amortization | 9,423 | (9,423 | ) | — | — | — | (9,423 | ) | — | |||||||||||||||||||
Changes in fair value of related party contingent consideration | 82,036 | — | — | (82,036 | ) | 23,923 | (58,113 | ) | 23,923 | |||||||||||||||||||
Total | 135,283 | (9,423 | ) | — | (82,036 | ) | 23,923 | (67,536 | ) | 67,747 | ||||||||||||||||||
Operating (loss) income | (6,842 | ) | 9,423 | — | 82,036 | (23,923 | ) | 67,536 | 60,694 | |||||||||||||||||||
Investment income, net | 1,171 | — | — | — | — | — | 1,171 | |||||||||||||||||||||
Interest expense, net | — | — | — | — | — | — | — | |||||||||||||||||||||
Other expense - changes in fair value of related party payable | (9,629 | ) | — | — | 9,629 | (3,291 | ) | 6,338 | (3,291 | ) | ||||||||||||||||||
Foreign exchange gain (loss) | 8,096 | — | (8,096 | ) | — | — | (8,096 | ) | — | |||||||||||||||||||
(Loss) income before income taxes | (7,204 | ) | 9,423 | (8,096 | ) | 91,665 | (27,214 | ) | 65,778 | 58,574 | ||||||||||||||||||
Income tax provision (benefit) | 24,516 | 3,298 | (2,429 | ) | 3,370 | (1,152 | ) | 3,087 | 27,603 | |||||||||||||||||||
Net (loss) income | $ | (31,720 | ) | $ | 6,125 | $ | (5,667 | ) | $ | 88,295 | $ | (26,062 | ) | $ | 62,691 | $ | 30,971 | |||||||||||
Net (loss) income per share - diluted | $ | (0.79 | ) | $ | 0.15 | $ | (0.14 | ) | $ | 2.19 | $ | (0.65 | ) | $ | 1.55 | $ | 0.77 | |||||||||||
Weighted average number of shares outstanding - diluted | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 | 40,397 |
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