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Flamel Technologies (NASDAQ:FLML) today announced its financial
results for the fourth quarter and year ended December 31, 2007. The
major achievements of the fourth quarter were the completion of
clinical trials on FT-105 basal insulin and IFN-Alpha XL, as well as
the announcement that Flamel and Merck Serono had entered into a
development agreement on a Merck Serono therapeutic protein.

Stephen H. Willard, Flamel’s chief executive officer, stated,
“From both the business development and the scientific perspective,
2007 was an important year for Flamel. In March, our partner GSK
launched Coreg CR(TM), the first marketed drug using Flamel’s drug
delivery technology. We believe that COREG CR is well positioned to be
a significant contributor to our future results because of its
strengths as a product.”

Mr. Willard continued, “During 2007, a major focus of our Company
was to establish new relationships with interested partners and to
develop our internal projects and technology platforms. We succeeded
in re-establishing and strengthening the Medusa(R) platform by
creating 10 new Medusa relationships, including those with Merck
Serono and Wyeth. These relationships are a strong, well-diversified
foundation for us to build the Medusa platform. Most importantly, the
results of the two clinical trials we completed in October on FT-105
basal insulin and Interferon Alpha XL are compelling proof of concept
for those two products and we are actively seeking to license these
products.”

Flamel’s Fourth Quarter Results

Flamel reported total revenues for the fourth quarter 2007 of
$10.6 million, versus total revenues of $7.8 million in the year-ago
period. License and research revenue totaled $3.4 million during the
fourth quarter versus $5.6 million during the year-ago period. Fourth
quarter license and research revenue in 2006 included the receipt of a
$3 million milestone from GSK; license and research revenue in Q4 2007
included receipt of $2 million in milestone payments from GSK. Product
sales and services during the period were $4.7 million versus $2.1
million during the year-ago period. Other revenues were $2.4 million
and consisted primarily of royalty income from GSK on the sales of
COREG CR; other revenues in the fourth quarter of 2006 were $0.1
million.

Total costs and expenses during the quarter were $18.1 million and
included FAS 123R options-related expense of $2.2 million; total costs
and expenses in the fourth quarter of 2006 were $16.2 million. Costs
of goods and services sold were $4.9 million in the fourth quarter of
2007 versus $1.4 million in the year-ago period. Research and
development costs in the fourth quarter totaled $9.6 million versus
$10.3 million in the year-ago period. Selling, general, and
administrative costs declined to $3.6 million in the period from $4.6
million in the fourth quarter of 2006.

Net loss for the fourth quarter of 2007 was ($5.4 million) versus
a net loss of ($5.9 million) in the year-ago period. Net loss per
share (basic) was ($0.23) versus ($0.25) in the fourth quarter of
2006.

Flamel’s cash and marketable securities were $41.1 million at the
end of the fourth quarter.

Flamel’s 2007 Annual Results

For the calendar year 2007, Flamel reported operating revenue of
$36.7 million, as compared to $23.0 million in 2006. License and
research revenue was $10.3 million in 2007, as compared to $20.3
million in 2006. Product sales and services for the year 2007 were
$19.8 million, compared to $2.1 million in the year-ago period. Other
revenues, consisting primarily of royalty income from sales of COREG
CR by GlaxoSmithKline, were $6.6 million in 2007; other revenues in
2006 totaled $0.7 million.

Expenses in 2007 were $77.0 million and included FAS 123R
options-related expenses of $11.5 million