Flamel's losses soar as it gears up for Coreg
Coreg (carvedilol) with a controlled release formulation, drug
delivery company Flamel saw its bottom line, in the absence of new
partners, shift deep into the red in the first quarter of 2006.
Flamel reported a pre-tax loss for Q1 of 2006 of $9.6m (€7.5m), a huge plunge from the $0.4m pre-tax profit in 2005, as licence and research revenues dropped 35 per cent.
Nevertheless, the French firm is looking forward to its first approved implementation of its Micropump technology, with the potential of tens of millions of dollars annually in revenues.
This is because in March the US Food and Drug Administration (FDA) accepted for review the new drug application (NDA) for Coreg CR, the controlled release formulation of GlaxoSmithKline's already approved immediate-release version of the drug.
GlaxoSmithKline posted Coreg sales in 2005 of $986m, up 32 per cent year over year.
Developed with Flamel's Micropump technology, the new formulation of the drug is designed to control dissolution and absorption of Coreg in the body, allowing for once a day dosing, whereas the formulation currently available is dosed twice a day.
Preparation for commercialisation of the drug however meant that savings made in R&D were nearly offset by expenses incurred for future supply to GlaxoSmithKline in anticipation of the projected launch later this year, as well as a change in accounting standards which added $2.3 million of options-related expense.
Revenues from product sales and services during the quarter declined year-over-year from $0.4m to $0.02m, as Flamel eliminated contract manufacturing activities in preparation for anticipated production of Coreg.
"The success of our work with GSK (GlaxoSmithKline) is attracting favourable attention from a number of potential pharmaceutical partners; we are pleased that our discussions with these companies are progressing well," Flamel CEO Stephen Willard said.
"Our goal is to develop our existing technology through partnerships which fully cover the costs of our current activity levels, such that the Coreg royalties can be used to strengthen the value of our company."
Last week Flamel announced that it has received a $1m milestone from GlaxoSmithKline, triggered by successful completion of activities relating to the manufacturing process for Coreg CR microparticles.
But Flamel will have to move fast to replace several partners it has lost in the last couple of years, including TAP Pharmaceutical Products, Biovail and Bristol-Myers Squibb.
In a press conference, Flamel highlighted existing partnerships with companies like Merck & Co and Corning, and said it signed a deal in Q1 of 2006 to develop three new products using its Micropump technology with a big pharma company, but would not name the new partner or give any details of the deal.
Flamel has two main drug delivery platforms - Micropump, for the delivery of small molecule drugs that are best absorbed in the small intestine, and Medusa, for the delivery of novel and second-generation long-acting native protein drugs.
Earlier this month, the company announced that RHEI Pharmaceuticals has licensed from Flamel the exclusive right to market Asacard, its controlled release formulation of aspirin developed on the Micropump technology platform, in the Greater China region.
