CORRECTION - Flamel Technologies Reports Third Quarter 2016 Results

LYON, FRANCE -- (Marketwired) -- 11/07/16 -- In the news release, "Flamel Technologies Reports Third Quarter 2016 Results" issued earlier today by Flamel Technologies (NASDAQ: FLML), we are advised by the company that the fourth bullet of the Third Quarter Highlights list should read "Adjusted net loss for the third quarter was $3.5 million, or $(0.08) per diluted share, compared to an adjusted net loss of $13.1 million, or $0.32 per diluted share, during the same period last year. *" rather than "Adjusted net loss for the third quarter was $3.5 million, or $(0.11) per diluted share, compared to an adjusted net loss of $13.1 million, or $0.32 per diluted share, during the same period last year. *" as originally issued. Complete corrected text follows.

Flamel Technologies Reports Third Quarter 2016 Results

Total Revenues Were $32.1 Million; 2016 Revenue Guidance Increased to $133 to $143 Million; REST-ON Phase III Trial of Micropump Sodium Oxybate Initiated

LYON, FRANCE -- Nov 7, 2016 -- Flamel Technologies (NASDAQ: FLML) today announced its financial results for the third quarter 2016.

Third Quarter Highlights Include:

  • 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 for the third quarter was $3.5 million, or $(0.08) per diluted share, compared to an adjusted net loss 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.

Michael Anderson, Flamel's Chief Executive Officer, commented, "Our base business, consisting of Bloxiverz® (neostigmine methylsulfate), Vazculep® (phenylephrine hydrochloride) and Akovaz™ (ephedrine sulfate), remained strong during the third quarter with revenues coming in just above top line consensus. Although we were able to maintain strong share in the neostigmine market at about forty percent (40%) during the third quarter, the overall market volume slightly declined. This, in addition to a small loss in price, resulted in lower quarter over quarter sales of Bloxiverz, at $15.6 million for the quarter. The phenylephrine business remained stable with third quarter 2016 sales of $9.3 million, relatively in line with the previous quarter after adjusting for our change in revenue recognition. As expected in the third quarter, we launched Akovaz, the first FDA-approved ephedrine sulfate injection. Akovaz added $5.6 million in revenues, partially offsetting some weakness in the neostigmine market which, as we outlined at the beginning of the year, was expected with increased competition. I am very pleased with the on-time and successful launch of Akovaz as it once again demonstrates our ability to identify, develop and launch commercially viable pharmaceutical products. Given that we launched later in the quarter, we are off to a good start."

Mr. Anderson continued, "In addition to our solid base business, we were pleased to host our first investor and analyst day in September, at which we announced the initiation of our Phase III trial of once nightly sodium oxybate in Canada. We have since initiated sites in Europe and received SPA approval from the FDA, which has given us further confidence as we proceed with our trial. We look forward to providing more updates on trial progress as we begin to dose patients."

Third Quarter 2016 Results

The Company generated revenues during the third quarter 2016 of $32.1 million, compared to $47.3 million during the same period last year. On a GAAP basis, the Company recorded a net loss of $22.3 million during the third quarter 2016, or $(0.54) per diluted share, compared to a net loss of $28.1 million, or $(0.69) per diluted share, for the same period last year. Included in the net loss for the third quarter 2016 were $22.7 million of charges related to changes in the fair value of related party contingent consideration and related party payables. The Company recognized a foreign currency exchange loss of $1.1 million in the third quarter 2016, compared to a foreign currency exchange gain of $0.2 million the prior year quarter. Adjusted net loss for the third quarter 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. The decline in adjusted net income and adjusted diluted EPS from the previous year was due to lower product sales resulting from increased competition for neostigmine and higher SG&A from increased headcount. Please see the Supplemental Information section within this document for a reconciliation of adjusted net income and adjusted diluted EPS to the respective GAAP amounts.

For the nine months ended September 30, 2016, cash flow from operations was $11.2 million, compared to $58.0 million in 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.

2016 Guidance

As a result of the stable market to date for both Bloxiverz and Vazculep, in addition to a strong market for Akovaz, the Company is increasing its full year 2016 revenue guidance to the range of $133 to $143 million from its previous guidance range of $125 to $140 million. The Company expects to allocate a substantial amount of its R&D expenses to its REST-ON trial and is reiterating its full year 2016 guidance in the range of $30 to $40 million.

Conference Call

A conference call to discuss these results and other updates is scheduled for 10:00 a.m. ET on Monday, November 7, 2016. A question and answer period will follow management's prepared remarks. To participate in the conference call, investors are invited to dial 800-765-0709 (U.S. and Canada) or 913-312-0726 (international). The conference ID number is 9865797. A live audio webcast and accompanying slides can be accessed by visiting the Events & Presentations page of the Company's Investor website at http://www.flamel.com/investors. A replay of the webcast will be archived on Flamel's website for 90 days following the event.

About Flamel Technologies

Flamel Technologies SA (NASDAQ: FLML) is a specialty pharmaceutical company utilizing its core competencies in formulation development and drug delivery to develop safer and more efficacious pharmaceutical products, addressing unmet medical needs and/or reducing overall healthcare costs. Flamel currently markets three branded, sterile injectable products in the United States, Bloxiverz® (neostigmine methylsulfate injection), Vazculep® (phenylephrine hydrochloride injection), and Akovaz™ (ephedrine sulfate injection). The Company also develops products utilizing its proprietary drug delivery platforms, Micropump® (oral sustained release microparticles platform), along with its tangent technologies, LiquiTime® (a Micropump-derivative platform for liquid oral products) and Trigger Lock™ (a Micropump-derivative platform for abuse-resistant opioids). Additionally, the Company has developed a long acting injectable platform, Medusa™, a hydrogel depot technology, particularly suited to the development of subcutaneously administered formulations. Applications of Flamel's drug delivery products include sodium oxybate (Micropump®), currently being studied in a Phase III trial to assess the safety and efficacy of a once nightly dose for treatment of excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy, and extended-release of liquid medicines (LiquiTime®) through a license arrangement with Elan Pharma International Limited for the U.S. Over-the-Counter market. Additionally, the Company's Trigger Lock™ technology is currently being studied with hydromorphone, and several proof of concept studies of exenatide utilizing the Medusa™ technology were completed in 2016. In February 2016, Flamel acquired FSC Pediatrics, a company that markets three pediatric pharmaceutical products - Cefaclor for oral suspension, Karbinal™ ER, and AcipHex® Sprinkle™ (rabeprazole sodium). FSC also received 510(k) clearance from the FDA in October 2014 for Flexichamber™, a collapsible holding chamber used in the administration of aerosolized medication using pressurized Metered Dose Inhalers (pMDIs) for the treatment of asthma. The Company is headquartered in Lyon, France and has operations in Dublin, Ireland and in St. Louis, Missouri. Additional information may be found at www.flamel.com.

Safe Harbor

This release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "assume," "believe," "expect," "estimate," "plan," "will," "may," and the negative of these and similar expressions generally identify forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond Flamel's control and could cause actual results to differ materially from the results contemplated in such forward-looking statements. These risks, uncertainties and contingencies include the risks relating to: our dependence on a small number of products and customers for the majority of our revenues; the possibility that our Bloxiverz®, Vazculep® and Akovaz™ products, which are not patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge for those products; the possibility that we could fail to successfully complete the research and development for the pipeline product we are evaluating for potential application to the FDA pursuant to our "unapproved-to-approved" strategy, or that competitors could complete the development of such product and apply for FDA approval of such product before us; our dependence on the performance of third parties in partnerships or strategic alliances for the commercialization of some of our products; the possibility that our products may not reach the commercial market or gain market acceptance; our need to invest substantial sums in research and development in order to remain competitive; our dependence on certain single providers for development of several of our drug delivery platforms and products; our dependence on a limited number of suppliers to manufacture our products and to deliver certain raw materials used in our products; the possibility that our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do; the challenges in protecting the intellectual property underlying our drug delivery platforms and other products; our dependence on key personnel to execute our business plan; the amount of additional costs we will incur to comply with U.S. securities laws as a result of our ceasing to qualify as a foreign private issuer; and the other risks, uncertainties and contingencies described in the Company's filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2015, all of which filings are also available on the Company's website. Flamel undertakes no obligation to update its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Non GAAP Disclosures and Adjustments

Flamel discloses certain non-GAAP financial measures, including adjusted net income and loss and adjusted net income and loss per diluted share and earnings before interest, taxes, depreciation and amortization (EBITDA) as management believes that a comparison of its current and historical results would be difficult if the disclosures were limited to financial measures prepared only in accordance with generally accepted accounting principles (GAAP) in the U.S. In addition to reporting its financial results in accordance with GAAP, Flamel reports certain non-GAAP results that exclude, if any, fair value remeasurements of its contingent consideration, impairment of intangible assets, amortization of intangible assets, effects of accelerated reimbursement of certain debt instruments, foreign exchange gains and losses on assets and liabilities denominated in foreign currency, the net income (loss) from discontinued operations and related tax effects, but includes the operating cash flows plus any unpaid accrued amounts associated with the contingent consideration, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance. The Company's management uses these non-GAAP measures internally for forecasting, budgeting and measuring its operating performance. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely applicable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. The table provided within the following "Supplemental Information" section reconciles GAAP net income and loss and diluted earnings or loss per share to the corresponding adjusted amounts.
*******

                          FLAMEL TECHNOLOGIES S.A.
             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
                    (In thousands, except per share data)

                                     Three Months Ended   Nine Months Ended
                                       September 30,        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

                          FLAMEL TECHNOLOGIES S.A.
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                    (In thousands, except per share data)

                                                 September 30,  December 31,
                                                     2016           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
                                                ============== =============

                          FLAMEL TECHNOLOGIES S.A.
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In thousands)

                                             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
                                            ================ ===============

                          FLAMEL TECHNOLOGIES S.A.
                     UNAUDITED SUPPLEMENTAL INFORMATION
                    (In thousands, except per share data)

                                     Three Months Ended   Nine Months Ended
                                       September 30,        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
                                           ----------------------------
                                             Intangible      Foreign
                                                asset        exchange
                                   GAAP     amortization   (gain)/loss
                                ---------- -------------- -------------

    Revenues:
     Product sales and services $  31,340  $          --  $          --
     License and research
      revenue                         747             --             --
                                ---------- -------------- -------------
    Total                          32,087             --             --
    Operating expenses:
     Cost of products and
      services sold                 2,844             --             --
     Research and development
      expenses                      8,143             --             --
     Selling, general and
      administrative expenses      12,740             --             --
     Intangible asset
      amortization                  3,702         (3,702)            --
     Changes in fair value of
      related party contingent
      consideration                20,848             --             --
                                ---------- -------------- -------------
    Total                          48,277         (3,702)            --
                                ---------- -------------- -------------
    Operating (loss) income       (16,190)         3,702             --
     Investment income, net           490             --             --
     Interest expense, net           (264)            --             --
     Other expense - changes in
      fair value of related
      party payable                (1,828)            --             --
     Foreign exchange gain
      (loss)                       (1,054)            --          1,054
                                ---------- -------------- -------------
    (Loss) income before income
     taxes                        (18,846)         3,702          1,054
     Income tax provision
      (benefit)                     3,451          1,329             --
                                ---------- -------------- -------------
    Net (loss) income           $ (22,297) $       2,373  $       1,054
                                ========== ============== =============

    Net (loss) income per share
     - diluted                  $   (0.54)          0.06           0.03

    Weighted average number of
     shares outstanding -
     diluted                       41,241         41,241         41,241



                           ----------------------------
                             Adjustments for the three
                            months ended, September 30,
                                       2016
                           ----------------------------
                               Exclude        Include
                           --------------- ------------
                              Contingent    Contingent
                             related party    related
                             payable fair      party
                                 value        payable      Total    Adjusted
                            remeasurements paid/accrued adjustments   GAAP
                            -------------- ------------ ----------- --------

Revenues:
 Product sales and services $          --  $        --  $       --  $31,340
 License and research
  revenue                              --           --          --      747
                            -------------- ------------ ----------- --------
Total                                  --           --          --   32,087
Operating expenses:
 Cost of products and
  services sold                        --           --          --    2,844
 Research and development
  expenses                             --           --          --    8,143
 Selling, general and
  administrative expenses              --           --          --   12,740
 Intangible asset
  amortization                         --           --      (3,702)      --
 Changes in fair value of
  related party contingent
  consideration                   (20,848)       5,884     (14,964)   5,884
                            -------------- ------------ ----------- --------
Total                             (20,848)       5,884     (18,666)  29,611
                            -------------- ------------ ----------- --------
Operating (loss) income            20,848       (5,884)     18,666    2,476
 Investment income, net                --           --          --      490
 Interest expense, net                 --           --          --     (264)
 Other expense - changes in
  fair value of related
  party payable                     1,828         (785)      1,043     (785)
 Foreign exchange gain
  (loss)                               --           --       1,054       --
                            -------------- ------------ ----------- --------
(Loss) income before income
 taxes                             22,676       (6,669)     20,763    1,917
 Income tax provision
  (benefit)                         1,021         (385)      1,965    5,416
                            -------------- ------------ ----------- --------
Net (loss) income           $      21,655  $    (6,284) $   18,798  $(3,499)
                            ============== ============ =========== ========

Net (loss) income per share
 - diluted                           0.53        (0.15)       0.46    (0.08)

Weighted average number of
 shares outstanding -
 diluted                           41,241       41,241      41,241   41,241


                                           ----------------------------
                                             Adjustments for the three
                                            months ended, September 30,
                                                       2015
                                           ----------------------------
                                                      Exclude
                                           ----------------------------
                                             Intangible      Foreign
                                                asset        exchange
                                   GAAP     amortization   (gain)/loss
                                ---------- -------------- -------------

    Revenues:
     Product sales and services $  47,313  $          --  $         --
     License and research
      revenue                          --             --            --
                                ---------- -------------- -------------
    Total                          47,313             --            --
    Operating expenses:
     Cost of products and
      services sold                 2,087             --            --
     Research and development
      expenses                      7,221             --            --
     Selling, general and
      administrative expenses       4,568             --            --
     Intangible asset
      amortization                  3,141         (3,141)           --
     Changes in fair value of
      related party contingent
      consideration                44,782             --            --
                                ---------- -------------- -------------
    Total                          61,799         (3,141)           --
                                ---------- -------------- -------------
    Operating (loss) income       (14,486)         3,141            --
     Investment income, net           197             --            --
     Interest expense, net             --             --            --
     Other expense - changes in
      fair value of related
      party payable                (6,644)            --            --
     Foreign exchange gain
      (loss)                          160             --          (160)
                                ---------- -------------- -------------
    (Loss) income before income
     taxes                        (20,773)         3,141          (160)
     Income tax provision
      (benefit)                     7,302          1,099           (48)
                                ---------- -------------- -------------
    Net (loss) income           $ (28,075) $       2,042  $       (112)
                                ========== ============== =============

    Net (loss) income per share
     - diluted                  $   (0.69) $        0.05  $         --

    Weighted average number of
     shares outstanding -
     diluted                       40,625         40,625        40,625



                           ----------------------------
                             Adjustments for the three
                            months ended, September 30,
                                       2015
                           ----------------------------
                               Exclude        Include
                           --------------- ------------
                              Contingent    Contingent
                             related party    related
                             payable fair      party
                                 value        payable      Total    Adjusted
                            remeasurements paid/accrued adjustments   GAAP
                            -------------- ------------ ----------- --------

Revenues:
 Product sales and services $          --  $        --  $       --  $47,313
 License and research
  revenue                              --           --          --       --
                            -------------- ------------ ----------- --------
Total                                  --           --          --   47,313
Operating expenses:
 Cost of products and
  services sold                        --           --          --    2,087
 Research and development
  expenses                             --           --          --    7,221
 Selling, general and
  administrative expenses              --           --          --    4,568
 Intangible asset
  amortization                         --           --      (3,141)      --
 Changes in fair value of
  related party contingent
  consideration                   (44,782)       9,027     (35,755)   9,027
                            -------------- ------------ ----------- --------
Total                             (44,782)       9,027     (38,896)  22,903
                            -------------- ------------ ----------- --------
Operating (loss) income            44,782       (9,027)     38,896   24,410
 Investment income, net                --           --          --      197
 Interest expense, net                 --           --          --       --
 Other expense - changes in
  fair value of related
  party payable                     6,644       (1,211)      5,433   (1,211)
 Foreign exchange gain
  (loss)                               --           --        (160)      --
                            -------------- ------------ ----------- --------
(Loss) income before income
 taxes                             51,426      (10,238)     44,169   23,396
 Income tax provision
  (benefit)                         2,325         (424)      2,952   10,254
                            -------------- ------------ ----------- --------
Net (loss) income           $      49,101  $    (9,814) $   41,217  $13,142
                            ============== ============ =========== ========

Net (loss) income per share
 - diluted                  $        1.21  $     (0.24) $     1.01  $  0.32

Weighted average number of
 shares outstanding -
 diluted                           40,625       40,625      40,625   40,625

                                      -------------------------------------
                                         Adjustments for the nine months
                                            ended, September 30, 2016
                                      -------------------------------------
                                                     Exclude
                                      -------------------------------------
                                                                 Purchase
                                       Intangible    Foreign    accounting
                                          asset      exchange   adjustments
                               GAAP   amortization (gain)/loss     - FSC
                            --------- ------------ ----------- ------------

Revenues:
 Product sales and services $104,858  $        --  $        -- $        --
 License and research
  revenue                      2,303           --           --          --
                            --------- ------------ ----------- ------------
Total                        107,161           --           --          --
Operating expenses:
 Cost of products and
  services sold               10,657           --           --      (1,525)
 Research and development
  expenses                    21,135           --           --          --
 Selling, general and
  administrative expenses     33,491           --           --          --
 Intangible asset
  amortization                10,918      (10,918)          --          --
 Changes in fair value of
  related party contingent
  consideration               52,989           --           --          --
                            --------- ------------ ----------- ------------
Total                        129,190      (10,918)          --      (1,525)
                            --------- ------------ ----------- ------------
Operating (loss) income      (22,029)      10,918           --       1,525
 Investment income, net        1,080           --           --          --
 Interest expense, net          (702)          --           --          --
 Other expense - changes in
  fair value of related
  party payable               (6,135)          --           --          --
 Foreign exchange gain
  (loss)                      (2,315)          --        2,315          --
                            --------- ------------ ----------- ------------
(Loss) income before income
 taxes                       (30,101)      10,918        2,315       1,525
 Income tax provision
  (benefit)                   18,212        3,920           --         533
                            --------- ------------ ----------- ------------
Net (loss) income           $(48,313) $     6,998  $     2,315 $       992
                            ========= ============ =========== ============

Net (loss) income per share
 - diluted                  $  (1.17) $      0.17  $      0.06 $      0.02

Weighted average number of
 shares outstanding -
 diluted                      41,241       41,241       41,241      41,241


                           ----------------------------
                             Adjustments for the nine
                            months ended, September 30,
                                       2016
                           ----------------------------
                               Exclude        Include
                           --------------- ------------
                              Contingent    Contingent
                             related party    related
                             payable fair      party
                                 value        payable      Total    Adjusted
                            remeasurements paid/accrued adjustments   GAAP
                            -------------- ------------ ----------- --------

Revenues:
 Product sales and services                                          104,85
                            $          --  $        --  $       --  $     8
 License and research
  revenue                              --           --          --    2,303
                            -------------- ------------ ----------- --------
Total                                                                107,16
                                       --           --          --        1
Operating expenses:
 Cost of products and
  services sold                        --           --      (1,525)   9,132
 Research and development
  expenses                             --           --          --   21,135
 Selling, general and
  administrative expenses              --           --          --   33,491
 Intangible asset
  amortization                         --           --     (10,918)      --
 Changes in fair value of
  related party contingent
  consideration                   (52,989)      19,321     (33,668)  19,321
                            -------------- ------------ ----------- --------
Total                             (52,989)      19,321     (46,111)  83,079
                            -------------- ------------ ----------- --------
Operating (loss) income            52,989      (19,321)     46,111   24,082
 Investment income, net                --           --          --    1,080
 Interest expense, net                 --           --          --     (702)
 Other expense - changes in
  fair value of related
  party payable                     6,135       (2,618)      3,517   (2,618)
 Foreign exchange gain
  (loss)                               --           --       2,315       --
                            -------------- ------------ ----------- --------
(Loss) income before income
 taxes                             59,124      (21,939)     51,943   21,842
 Income tax provision
  (benefit)                         2,986       (1,165)      6,274   24,486
                            -------------- ------------ ----------- --------
Net (loss) income           $      56,138  $   (20,774) $   45,669  $(2,644)
                            ============== ============ =========== ========

Net (loss) income per share
 - diluted                  $        1.36  $     (0.50) $     1.11  $ (0.06)

Weighted average number of
 shares outstanding -
 diluted                           41,241       41,241      41,241   41,241


                                       ----------------------------
                                         Adjustments for the nine
                                        months ended, September 30,
                                                   2015
                                       ----------------------------
                                                  Exclude
                                       ----------------------------
                                         Intangible      Foreign
                                            asset        exchange
                               GAAP     amortization   (gain)/loss
                            ---------- -------------- -------------

Revenues:
 Product sales and services $ 128,441  $          --  $         --
 License and research
  revenue                          --             --            --
                            ---------- -------------- -------------
Total                         128,441             --            --
Operating expenses:
 Cost of products and
  services sold                 8,473             --            --
 Research and development
  expenses                     20,447             --            --
 Selling, general and
  administrative expenses      14,904             --            --
 Intangible asset
  amortization                  9,423         (9,423)           --
 Changes in fair value of
  related party contingent
  consideration                82,036             --            --
                            ---------- -------------- -------------
Total                         135,283         (9,423)           --
                            ---------- -------------- -------------
Operating (loss) income        (6,842)         9,423            --
 Investment income, net         1,171             --            --
 Interest expense, net             --             --            --
 Other expense - changes in
  fair value of related
  party payable                (9,629)            --            --
 Foreign exchange gain
  (loss)                        8,096             --        (8,096)
                            ---------- -------------- -------------
(Loss) income before income
 taxes                         (7,204)         9,423        (8,096)
 Income tax provision
  (benefit)                    24,516          3,298        (2,429)
                            ---------- -------------- -------------
Net (loss) income           $ (31,720) $       6,125  $     (5,667)
                            ========== ============== =============

Net (loss) income per share
 - diluted                  $   (0.79) $        0.15  $      (0.14)

Weighted average number of
 shares outstanding -
 diluted                       40,397         40,397        40,397



                           ----------------------------
                             Adjustments for the nine
                            months ended, September 30,
                                       2015
                           ----------------------------
                               Exclude        Include
                           --------------- ------------
                              Contingent    Contingent
                             related party    related
                             payable fair      party
                                 value        payable      Total    Adjusted
                            remeasurements paid/accrued adjustments   GAAP
                            -------------- ------------ ----------- --------

Revenues:
 Product sales and services                                          128,44
                            $          --  $        --  $       --  $     1
 License and research
  revenue                              --           --          --       --
                            -------------- ------------ ----------- --------
Total                                                                128,44
                                       --           --          --        1
Operating expenses:
 Cost of products and
  services sold                        --           --          --    8,473
 Research and development
  expenses                             --           --          --   20,447
 Selling, general and
  administrative expenses              --           --          --   14,904
 Intangible asset
  amortization                         --           --      (9,423)      --
 Changes in fair value of
  related party contingent
  consideration                   (82,036)      23,923     (58,113)  23,923
                            -------------- ------------ ----------- --------
Total                             (82,036)      23,923     (67,536)  67,747
                            -------------- ------------ ----------- --------
Operating (loss) income            82,036      (23,923)     67,536   60,694
 Investment income, net                --           --          --    1,171
 Interest expense, net                 --           --          --       --
 Other expense - changes in
  fair value of related
  party payable                     9,629       (3,291)      6,338   (3,291)
 Foreign exchange gain
  (loss)                               --           --      (8,096)      --
                            -------------- ------------ ----------- --------
(Loss) income before income
 taxes                             91,665      (27,214)     65,778   58,574
 Income tax provision
  (benefit)                         3,370       (1,152)      3,087   27,603
                            -------------- ------------ ----------- --------
Net (loss) income           $      88,295  $   (26,062) $   62,691  $30,971
                            ============== ============ =========== ========

Net (loss) income per share
 - diluted                  $        2.19  $     (0.65) $     1.55  $  0.77

Weighted average number of
 shares outstanding -
 diluted                           40,397       40,397      40,397   40,397

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