Flamel Technologies Announces Positive Preliminary Results of a Phase I/II Trial

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Flamel Technologies Announces Positive Preliminary Results of a Phase

I/II Trial of IFN-alpha-XL in Patients with Chronic Hepatitis C Virus

Infection

LYON, France--(BUSINESS WIRE)--Sept. 23, 2005--Flamel Technologies

(NASDAQ:FLML) today announced positive preliminary Phase I/II data

from a trial demonstrating the safety, tolerability, and long-acting

activity of IFN-alpha-XL in patients with chronic hepatitis C virus

(HCV) infection. Data also show that IFN-alpha-XL had positive

effects on viral load and interferon activity biomarkers. IFN-alpha-

XL utilizes Flamel's proprietary Medusa® nanoparticle technology to

provide a long-acting formulation of interferon alpha that may have

enhanced efficacy and reduced toxicity compared with unmodified or

PEG-modified interferon formulations. Flamel plans to present the

full data at a medical conference.

The design of the Medusa® “polypeptide-like†aminoacid polymers

allows a non-covalent capture and subsequent delivery of native

peptide or protein drugs.

The lead investigator of the study, Professor Christian Trepo (Hotel

Dieu Hospital-Lyon), remarked, " Interferon therapy is a cornerstone

in the treatment of chronic hepatitis C infection, but today its use

is limited by the significant side effects associated with approved

formulations of Interferon-alpha. These side effects are debilitating

and treatment limiting. The results of this first study of IFN-alpha-

XL are very promising, and suggest that this novel formulation of

interferon alpha may provide equivalent and possibly better

therapeutic benefit with fewer side effects in comparison to existing

interferon-alpha therapies. This would be a significant advance in

the treatment of a disease that has reached pandemic proportions in

the United States and around the world. "

The dose-escalating study was conducted in 53 subjects with chronic

hepatitis C. Thirty-nine participants were assigned to receive a

single subcutaneous injection of one of three escalating doses of IFN-

alpha-XL (12 - 14 patients per dose). The three IFN-alpha-XL groups

received an injection of 9 million international units (MIU), 18 MIU,

and 27 MIU, respectively. A cohort of 14 patients received three

subcutaneous injections of a standard dose of Viraferon® (3 MIU)

over one week as a comparator. All patients completed the study, and

no serious adverse events were reported.

Adverse events were similar to what has been reported in other

studies of interferon therapy and were transient in duration and mild

to moderate in severity. Patients receiving IFN-alpha-XL appeared to

have fewer adverse events than patients receiving Viraferon, which is

marketed in the U.S. as Intron® A, even when the weekly dosage of

IFN-alpha-XL was at its highest level. Pharmacokinetic data

demonstrate that the Medusa formulation provides sustained release of

IFN-alpha-XL over one week. Significantly, post-injection serum

concentrations (Cmax) of IFN-alpha-XL were lower or equivalent than

those observed for Viraferon. This is important in maintaining a

concentration that provides therapeutic benefit while reducing side

effects.

Dr. R. Kravtzoff, Director of preclinical and clinical development of

Flamel Technologies, said: " We are very pleased with the preliminary

results of this first clinical study of our long-acting Interferon

alpha formulation, IFN-alpha-XL. The data demonstrate that IFN-alpha-

XL was well tolerated and did not exhibit the toxicity typically

observed with Interferon alpha 2b, even at the highest dose

evaluated. The results indicate that reduction in viral load in these

high-dose patients, including traditionally hard-to-treat genotype 1

cases, was at least equivalent to that observed in the control group.

We are looking forward to sharing these results in greater detail at

an upcoming medical conference. "

Dr. Kravtzoff continued, " Patients with hepatitis C have significant

unmet medical need, with only about half of patients treated with the

current standard of care achieving a sustained, meaningful virologic

response. We believe that IFN-alpha-XL may provide a new therapeutic

option that would provide improved tolerance and patient compliance,

leading to improved clinical outcomes. "

Based on these clinical results Flamel Technologies is preparing a

Phase IIa study in hepatitis C patients, while meeting with large

pharmaceutical companies to explore partnership for this important

program. A Phase IIa study would be designed to investigate the

safety, duration of release and clinical efficacy of IFN-alpha-XL

following repeated weekly administration in hepatitis C patients,

compared with weekly administration of pegylated interferon alpha.

About IFN-alpha-XL

IFN-alpha-XL is a new formulation of recombinant Interferon alpha-2b

based on Flamel's proprietary Medusa® nanoparticle delivery system.

Medusa® is a versatile protein carrier for the development of novel

and second-generation long-acting native protein drugs. IFN-alpha-XL

is designed to provide patients with a longer acting and more

tolerable approach to interferon therapy compared with approved

interferon regimens.

http://www.flamel.com/techAndProd/medusa.shtml

Flamel's Medusa® technology consists of naturally occurring

aminoacids (Leu hydrophobic and Glu hydrophilic), which form stable

nanoparticles spontaneously in water. The amphiphilic character of

the poly-aminoacid polymers drives the self-assembling of the

nanoparticles in water; the poly-Leu chains are packed inside the

structure, whereas those of Glu aminoacids are exposed to water. The

nanoparticles, which are 20-50 nanometers in diameter, are composed

of 95% water and 5% Leu-Glu polymer. They are robust over a wide

range of pH values and can be stored as either stable liquid or

stable dry forms.

Once injected in the body, the nanoparticles release the captured-

drugs in a controlled manner and over an extended period of time.

Both processes (capture and release) are non-denaturing, which

preserves structural integrity - and hence the biological activity -

of the drug. The transient non-covalent interactions dictate the

pharmaco-kinetic profile (Cmax and AUC, in particular) of the

released drugs.

Performance

* Reduces 5- to 10-fold the intensity of the peak (i.e., the

maximal concentration or Cmax) after administration, which is the

cause of intense side-effects;

* Maintains the concentration of native protein drugs (integrity

of the drug structure preserved) for at least two weeks or more (in

dog models), offering a long duration of action with improved

efficacy;

* Improves the compliance of the treatment with a twice-a-month

and, in some cases, once-a-month regimen; and,

* Improves the solubility-viscosity of insoluble protein drugs

(e.g. IL-2).

About Hepatitis C

Hepatitis C virus is a blood-borne pathogen that causes inflammation

of the liver. According to the U.S. Centers for Disease Control and

Prevention (CDC) hepatitis C virus (HCV), more than 75 percent of

people infected with HCV will develop chronic infections; and 60 to

70 percent of these people will subsequently develop chronic

hepatitis. HCV infection is the most common blood-borne viral

infection in the United States. Approximately 4 million people in the

United States are infected with HCV and the World Health Organization

estimates that 170 million people worldwide - 3 percent of the

world's population - are infected with HCV.

Current treatment regimens require frequent administration of

Interferon-alpha for periods of several months to a year or longer.

Thus, frequent dosing of Interferon-alpha has been considered

necessary for sustained efficacy. Furthermore, treatment with

Interferon-alpha is associated with dose-dependent adverse events

that can be classified as either acute or of later onset. The typical

acute toxicity profile tends to occur after every injection and thus

causes difficulties for repeated administration. The decrease of

Interferon-alpha side effects, especially long-term side effects such

as psychological depression and myelosuppression, the decrease of

frequency of administration, and the improvement of clinical

efficiency, are thus major issues for Interferon-alpha based therapy.

Flamel Technologies, S.A. is a biopharmaceutical company principally

engaged in the development of two unique polymer-based delivery

technologies for medical applications. Micropump® is a controlled

release and taste- masking technology for the oral administration of

small molecule drugs. Flamel's Medusa® technology is designed to

deliver controlled-release formulations of therapeutic proteins.

This document contains a number of matters, particularly as related

to the status of various research projects and technology platforms,

that constitute forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995.

This document reflects the current view of management with respect to

future events and is subject to risks and uncertainties that could

cause actual results to differ materially from those contemplated in

such forward-looking statements.

These risks include risks that products in the development stage may

not achieve scientific objectives or milestones or meet stringent

regulatory requirements, uncertainties regarding market acceptance of

products in development, the impact of competitive products and

pricing, and the risks associated with Flamel's reliance on outside

parties and key strategic alliances.

These and other risks are described more fully in Flamel's Annual

Report on the Securities and Exchange Commission Form 20-F for the

year ended December 31, 2004.

Viraferon® and Intron® A are registered trademarks of Schering-

Plough Corporation.