Mar 9, 2010
Executives
Stephen Willard – CEO Siân Crouzet – Principal Financial Officer
Analysts
Matt Kaplan – Ladenburg Peter Butler – Glen Hill Investments Edward Nash – Roth Capital Partners David Moskowitz – Madison Williams
Operator
Good morning, ladies and gentlemen and welcome to the Flamel Technologies fourth quarter and 2010 earnings conference call. Please note that this call is being recorded.
I'd now like to turn the call over to Stephen Willard, CEO of Flamel Technologies.
Stephen Willard
Thank you very much, Camille and good morning, ladies and gentlemen. We open as always with the forward-looking statement language, which is set out at the conclusion of yesterday's press release.
All statements made on this call are subject to a variety of future events and risk factors, including those set forth in our filings with the SEC, particularly our Form 20-F, which are all publicly available. Please review them as they are directly applicable to every element of this call.
2009 was an excellent year for Flamel. We signed license agreements with Merck Serono and Pfizer and made important progress on a number of programs for new and existing molecules that we are working on with now eight of the top 25 pharmaceutical companies in the world.
Based on current negotiations we have ongoing, we expect this number to increase in the near term. We are working on multiple molecules with five of these companies, which we believe is an important indication of the quality of the relationships we have established.
Just as important in my opinion is the fact that this gives us a measure of diversification of opportunity that is essential to the successful execution of our business model. Our highlights during the fourth quarter included Pfizer's decision to exercise the option to license Medusa for development of a controlled-release version of an already marketed molecule, which we had previously been working on with Wyeth.
We are pleased that Pfizer chose to exercise the option to license our Medusa platform so quickly after the merger closed with Wyeth and particularly so given the many existing programs that Wyeth had been working on, which have been discontinued. This is the first license agreement we have concluded for the application of the Medusa platform in the intravenous setting.
Intravenous controlled-release involves new challenges from a technical perspective and it also represents an important new field of applications for the entire Medusa platform. We continued to expand our relationships with top pharmaceutical companies in the fourth quarter as well.
We agree to undertake a Medusa study with a top five pharmaceutical company with which we have been developing one of our Micropump projects. This was the first Medusa program that we have entered into with this company.
In addition, we began working on two molecules with a second new top 10 partner using Medusa. Also in the fourth quarter, we announced that the ANRS, a French government agency that focuses on viral disease, had initiated a Phase II study of Interferon-alpha XL plus ribavirin versus PegIntron plus ribavirin in genotype-1 treatment-naïve and non-responder patients.
And of course we were strongly cash flow positive for the year. I will discuss all of these further, but first I would like to ask Siân Crouzet to discuss our fourth quarter and 2009 annual results.
Siân Crouzet
Thank you, Steve. Our fourth quarter and 2009 annual results demonstrate a continued success in growing our revenues, strictly controlling our operating expenses, and maintaining a cash position.
During the fourth quarter, we grew license and research revenues by $1.25 million year-over-year. On an annual basis, license and research revenues have increased by $7.6 million, such that they account to almost half of our revenues as compared with less than 30% two years ago.
This strong increase is the reflection of the strategy we have adopted to diversify our client and project portfolio and to commence our partnerships and revenue generation at the feasibility stage. Over the coming months and quarters, we will be working to convert a number of these projects into license and development agreements, while maintaining a sufficient pipeline of early-stage programs, which will be secured by external funding.
In the last quarter of 2009, royalty income declined from $3.4 million to $1.7 million. This is largely a result of one-off factors since IMS scrip data for the fourth quarter were roughly in line with those of the third quarter.
Costs and expenses during the quarter were $16.5 million compared to $12.4 million in the year-ago period. It is important to note that the fourth quarter of 2008 included the reversal of an accrual for $2 million in SG&A.
SG&A in the fourth quarter of 2008 was $2.3 million compared to $4 million in the fourth quarter of 2009. For purposes of comparison, absent the reversal of the accrual in the year-ago period, the 2008 fourth quarter SG&A expenses would have been $4.3 million.
Research and development expenses were $9 million in the fourth quarter of 2009 compared to $7.8 million in the year-ago period. In light of current developments on reporting of tax incentives and grants, we have classified the R&D tax credit of $6.5 million as an offset to R&D expenses rather than income tax.
In 2008, the R&D tax credit of $7 million has equally been offset to R&D expenses for comparative purposes. Overall, costs and expenses during 2009 increased slightly to $53.9 million compared to $51.8 million in the year-ago period.
Clearly, as our project portfolio develops, we need to ensure sufficient resources are available to execute the projects in line with objectives and timelines that we have been – that we have agreed with our partners. Consequently, we have increased our investment in R&D.
That said, we are committed to securing our revenues prior to increasing our expenditure, as evidenced by the lower rates of increase in expenses compared with revenues year-on-year. As of the end of the fourth quarter, our cash and marketable securities totaled $44.1 million compared to $37.1 million at the end of 2008.
Our cash grew over the year from the success we enjoyed in increasing our projects in development as reflected in our research and development revenues and through strict control of our expenditure. We have equally leveraged tax incentives on R&D expenditure and government grants to assist financing of the fundamental research programs.
This combination of a strong cash position coupled with growing R&D revenues and increased government focus on research funding sets us in a strong position for continued success in 2010.
Stephen Willard
Thank you very much, Siân. We are pleased with the progress that we made in 2009 and it's best demonstrated by the 57% growth in research and development revenues.
We were cash flow positive in 2009 and the budget that we have presented to our Board of Directors for 2010 expects that we will be cash flow positive in 2010 as well. We now have five projects in or going into human clinical trials.
These include novel molecules, as well as already marketed molecules that we are working on with partners. As delineated in our presentation which is available online, we already marketed classes of large molecules that we are working on with partners, had $16.3 billion of revenues in 2009.
Medusa is being applied to make our partners' molecules more efficacious, safer, and easier to use. So we think that we could increase market share and grow markets for our partners.
While Medusa is especially exciting, our Micropump business also continues to grow. As our results demonstrate, our company has made great strides in the diversification of revenue and creating a diversified portfolio.
The pharmaceutical and biotechnology industry is characterized by high risk and high rewards. To the extent that we are working on some already marketed molecules with our technology platforms, we can mitigate that risk.
The majority of our projects in development are for new molecules, which by definition carry a greater risk. That is why it is so important that we maintain a full pipeline of projects as we work to progress our existing projects into additional human clinical trials, which will be above and beyond the five clinical trials I previously mentioned.
A key element of the license agreements that we are working to sign this year will be the ability to share details of the work in progress. Our success over the past three years in building the relationships that we now enjoy with our partners puts us in a better position to structure licenses where we maintain the ability to communicate about the advance of our partnered projects with our shareholders.
Recent examples of this include Pfizer, Baxter, and Merck Serono. That is an area of focus for us as we conduct the discussions in which we are currently engaged.
One of the reasons that we are excited that the ANRS has sponsored the comparison of Interferon-alpha XL plus ribavirin versus PegIntron plus ribavirin in a Phase II study is that we believe the results will be helpful to investors and new and existing partners to evaluate further the benefits of the Medusa platform with respect to safety and efficacy. Medusa offers other important advantages such as the ability to resolve basic formulation challenges of poor solubility or aggregation.
But safety and efficacy are the two most basic criteria for a successful medication and Interferon-alpha is a well characterized molecule. So it will be clear from the trial that any advantages we see when we have the results will come from the Medusa platform.
We think that Medusa serves to make existing and novel molecules better so as to address unmet medical needs and to add real value for patients. This is a great way to prove that and because the data will be publicly available, everyone can have a greater insight into the advantages of our Medusa technology.
We continue to believe that the Interferon-alpha program can create a lot of value for the company. As a standalone proposition, Interferon-alpha XL has the promise to deliver greater efficacy in the treatment of a serious chronic illness where more than half of the most serious cases, genotype-1s, are not cured.
We also believe that Interferon-alpha can be used by patients with fewer side effects as we saw in the two-week trial results versus PegIntron. As we are generating these results with the financial support of the French government, it fits our strategy to develop products through a proof-of-concept and to work in partnership, but it certainly will be helpful in those partnership efforts as well for the product itself, but also in working to attract new partners for the development of improved biotherapeutics for novel large molecules.
And we are once again pleased that the results will be in the public domain, allowing for a greater appreciation of the value of the Medusa platform by the investment community. The results that we have achieved in 2009 clearly show the progress that Flamel has made and continues to make in growing and diversifying our revenue stream.
License and research revenues are a leading indicator for the company. These are the revenues we receive from working with partners on developing products for eventual approval, marketing, and royalties.
In 2009, license and research revenues increased by 57% over the previous year. That is how we were able to grow our cash position, while simultaneously developing the programs we believe can provide significant incremental revenues in the form of new license agreements and milestones as they advance further in the clinic.
Our expectations for 2010 are for this progress to strongly continue and we look forward to rest of the year. With that, we would now be pleased to take your questions.
Operator
Thank you, Mr. Willard.
(Operator Instructions). And our first question is from Matt Kaplan with Ladenburg.
Matt Kaplan – Ladenburg
Good morning, guys. Can you hear me?
Stephen Willard
Yes, I can hear you. There is a bit of wind here in France.
If you can hear us, we can certainly hear you.
Matt Kaplan – Ladenburg
It does sound windy. I might exceed the number of questions, I've got a few.
Stephen Willard
You – no problem.
Matt Kaplan – Ladenburg
So maybe start off, I mean, giving us a sense of kind of milestones and potential catalysts for 2010, specifically focusing on some of your newly formed agreements in 2009, Merck Serono, Pfizer, and Baxter. What should we expect this year?
Stephen Willard
Sure. The only thing – Merck Serono, we've been working with for a couple of years as with Pfizer.
Baxter is new for 2009. I would expect certainly catalysts from Merck Serono.
I would expect catalysts from all three, given the current state of our scientific work and the developments we've had to date. All three programs are going very well and I think those will be catalysts.
I think that as I mentioned, we have five projects in clinical trials or about to commence clinical trials. We expect that that number will increase over the course of the year.
As these products come out of clinical trials, there may well be milestones related to them or license agreements that we will negotiate as a result of those human clinical studies. I think those will be additional catalysts in the coming year.
And then of course, we continue to – very aggressive business development to add new projects in 2010 with new partners. I expect that we will definitely increase the number of very large pharmaceutical companies with whom we are working and to the extent that money and/or their name are involved, those might be catalysts as well.
So that's three different groups of catalysts that have potential for 2010.
Matt Kaplan – Ladenburg
And specifically with Baxter, would you expect that to make a transition from a feasibility agreement to more of a commercial agreement?
Stephen Willard
Based on what we know right now, yes.
Matt Kaplan – Ladenburg
And then (inaudible) programs in terms of – give us an update on their current status, which you did a little bit and then also milestones for 2010, specifically the Interferon program, 105, and is – if there is anything going on with growth hormone and some of the other projects that you have internally.
Stephen Willard
Sure. What was the beginning of your question?
You went in and out, Matt.
Matt Kaplan – Ladenburg
The – your internal programs, kind of the current status – current status of those programs and milestones for this year to look for.
Stephen Willard
Okay. With our – I mean internal programs by – I guess you mean by that the programs that are not yet identified in terms of partners?
Matt Kaplan – Ladenburg
I'm talking about the ones that have been probably identified so to speak in terms of –
Stephen Willard
Oh, the old – yes, okay. Alpha Interferon is – continues to be interesting.
We are in discussions with one partner with regard to that and potentially a second. The big issue of course is the freedom to operate in the United States, which is jointly shared by Roche and Merck as the successor of the Schering-Plough.
We are excited by the Phase II results because they will mean a shorter time to market for a potential partner. We have some other initiatives there.
I think that's going to be a set of conversations that will continue over the next few months. With regard to FT-105, we do have some conversations going.
That has been such a long-running project that I don't wish to raise anyone's expectations unduly, but we do have active interest in that from two parties. But I think we've proven in 2009 that we can develop a very strong company without having the two projects that we've been working on for a while be a necessary element of having an extraordinary 2010.
Operator
And our next question comes from Peter Butler with Glen Hill Investments.
Peter Butler – Glen Hill Investments
Okay. Sort of following up on the previous – it looks like you guys are – maybe have a gold mine here with the French government conducting – or the agency of the French government conducting and paying for your Phase II trials on the Alpha Interferon.
What happens next with this program? When might you fit – sign somebody for the Phase III and what is – what are the possibilities that you can really tap the French government for a lot of money to further our programs here?
Stephen Willard
The – actual – that's a great question, Peter. First of all, with regard to the specifics of the Phase II Interferon-alpha, we are delighted to be partnered with one of the top international agencies for the study and treatment of things like Hepatitis C and virology, that sort of thing.
I don't anticipate that it would be necessary for them to sponsor a Phase III, because we are hopeful to be able to partner it before that happens, but we will see what happens and we won't turn any opportunity to develop our technology and prove it to others turn that down. But I do hope that that will go commercial.
To the larger question, I think we have potentially just begun to scratch the surface of the aid that's available from the French government. We have had grants from time to time on smaller projects.
This is a very important study that the ANRS is doing, but there are a variety of funds available that we are working with a variety of parties to begin to tap that could be significantly additive to our commercial work. And if successful, we expect to be talking about the type of additional resources available from governmental entities in the months to come.
Peter Butler – Glen Hill Investments
Sounds good. Second subject, Flamel has disclosed that it expects to have commercial launches on two Micropump deals next year and three Medusa projects by 2013.
Stephen Willard
That's correct.
Peter Butler – Glen Hill Investments
While 2011 is around the corner, are these drugs new entities or retrofits with the Flamel delivery system and if they are existing drugs, could you fill in some of the blanks on the sales of each one last year or the expected sales of the new entities? Presumably, if they are new entities, you are talking blockbusters and my understanding is the royalty rates that you guys have been discussing are something like 10% for the Micropump and something over that for Medusa, possibly 15%.
Stephen Willard
Yes. There were a whole lot of questions in that.
I'll try to take them in order. Assuming things go as we would hope, we continue to hope that we could have two projects – Micropump projects on the market as early as next year.
Those are both existing molecules which are sold in the market. Both of those molecules are in the hundreds of millions of dollars, but less than $1 billion each.
With regard – we are also working, as I mentioned, our Micropump project. Well, I talk extensively about Medusa because it's so exciting.
We continue to add Micropump opportunities as well and those would go particularly where there was existing marketed molecules more quickly than things which could go through the NDA process. With regard to the Medusa program, there is a mix between new chemical entities and the existing products.
As I mentioned in my earlier remarks, we are working on existing products with current sales of $16.3 billion, which is a very significant number. If we can take just a small share of that and we are doing everything in our power given the extraordinary benefits of our technology to do that.
Operator
All right. And our next question is from Edward Nash with Roth Capital Partners.
Edward Nash – Roth Capital Partners
Hi, good morning, guys. Thanks a lot for taking my question and I think you had a great year here and quarter.
Stephen Willard
My pleasure, thank you. We would like to welcome you to the call.
Thank you very much.
Edward Nash – Roth Capital Partners
Thanks a lot. I want to maybe tap a little bit onto the Interferon-alpha program and just kind of get your thoughts as a company and being in this space.
Just – right now, we obviously have Pegasys and PegIntron currently out there. And then if I remember correctly, your Phase IIa is roughly 80, 85 patients.
And just wanted to know what your thoughts are as far as trial enrollment. Do you think given the fact there are so many trials out there currently being run with either Pegasys, PegIntron and these direct-acting antivirals that it might be harder to try to enroll patients in this kind of trial?
Stephen Willard
We have not had any indication of that at all from the ANRS because they are such a highly respected international organization. They sometimes have abilities that commercial firms don't have.
I think there are two – you are absolutely right, there are two major Interferons in the U.S. But in our Phase I study compared to PegIntron, we not only showed markedly fewer side effects, but also in a segment of the genotype-1 after just two weeks, we showed statistically significantly better control of the viral load and it appears to be cumulative, which is why the 12-week study is so exciting.
And an element of your question is, as you mentioned, not only is Interferon out there, but there are so many other drugs for Hepatitis C in development. Well, it is our view based on extensive discussions with people in the industry including Christian Trepo, who is an advisor to us, that treatment of Hepatitis C is likely to involve a combination or a cocktail of drugs.
And all of the opinion leaders that we have spoken with feel very strongly that there will continue to be a role for Alpha Interferon in the cocktail of drugs that emerges as the best treatment and if we can in fact show a reduction of viral load compared to the existing Alpha Interferons and fewer side effects, I think we will clearly have a place in that ultimately successful cocktail of drugs.
Edward Nash – Roth Capital Partners
So then that would – I get back to my question there, when – do you see that there being any IP issues for launching the product in the U.S. and then also what is your idea on – as far as the timing and partnering that program?
Stephen Willard
Sure. In the United States, with regard to Alpha Interferon-2b, there is a freedom-to-operate issue in that there is a patent jointly controlled by Roche and Merck as the successor for Schering-Plough.
Obviously, if we were to partner with one of those two companies, we would not have any issues. We are also in discussions with companies who are very large, but not part of those two companies and there are potential ways around that such that we would be able to sell in the United States.
For competitive reasons, I don't want to share that, but – and I would also point out that the market for Hepatitis C is huge in the rest of the world, not just United States, but in our discussions with partners who are not one of the two who share that freedom to operate, we have been discussing ways of getting into the United States without having a freedom-to-operate issue.
Operator
Our next question is a follow-up question from Matt Kaplan with Ladenburg.
Matt Kaplan – Ladenburg
Hi, thanks for taking my follow-up.
Stephen Willard
Hey, Matt.
Matt Kaplan – Ladenburg
So talk a little bit about the – you mentioned previously the OTC product that was in development. Can you give us a status update on where that is and what the expected share as well?
Stephen Willard
Sure. Again, that is a product that is very exciting for a number of reasons.
First of all, we think it could potentially get to market as early as next year. A second – in the event that it were to do so, there would be catalysts obviously coming off this year and benefits in terms of visibility, as well as moving us toward next year when we would hope to have that available if everything breaks our way.
Also and equally significantly, this is a liquid formulation and it is one of very few successful liquid formulation technologies for the delivery of small molecules. And the success of this project has very significant implications because we do have access to the data from that, which we have to use privately with our customers, but it does open up a whole additional field of pediatric applications for a large number of products.
And we are also in discussions with regard to using the same liquid suspension technology for geriatric applications, which could be significantly larger than even the pediatric market. So I think that's one of the most exciting products we have in development this year.
Matt Kaplan – Ladenburg
Great. And then going back to some of your comments with respect to revenues and R&D – specifically R&D revenues, do you expect those to continue to grow going forward?
I guess they grew to over $20 million this year from $13 million last year. And then also, give us a sense on the other side of the equation in terms of expenses.
Where – do you – will those continue to grow as well?
Stephen Willard
I mean, I think our revenues will continue to grow. It certainly is a very worthy goal to try to meet or exceed what we did in 2009.
I see no reason we couldn’t do that because we will certainly hope to be getting larger and larger amounts in terms of milestones and things like that, as well as adding additional relationships with other parties. With regard to expenses, I think we've had very careful control of expenses as Siân mentioned, although – for example, SG&A was actually less when you back out the reversal of an accrual in 2009 and I think we will be able to continue to achieve revenue growth without a significant increase in expenses.
Operator
(Operator Instructions). And our next question is from David Moskowitz with Madison Williams.
David Moskowitz – Madison Williams
Hi, good morning. Can you hear me?
Stephen Willard
Yes, I can, David. Thank you and welcome to the call.
David Moskowitz – Madison Williams
Thanks – thanks, Stephen. Now, you guys have a very interesting collection of assets, I have to admit.
And first question I have is on Coreg CR, the current regenerator. So Hatch-Waxman exclusivity expires on April 20th.
I know there has been a patent challenge and Glaxo has basically abandoned their side of the case. So number one, do you think there will be generic launches after April 20th and if there are, do you believe you will be able to maintain your cash flow positive status on outlook for 2010?
Stephen Willard
Thank you for your question. First of all, I think it's probably an overstatement that Glaxo has abandoned it, but Flamel Technologies certain hasn't – certainly hasn't abandoned the fight and we are committed to that project with Glaxo.
The company in question, Mutual, filed its dossier with the FDA almost 20 months ago, if memory serves, and they have not had anything from the FDA. While it's a zero-one kind of thing on the 20th of April, it is my personal belief and our projections are that we will continue to have constant royalties from Coreg CR and potentially based on some other initiatives, we have potentially increasing revenues – royalty revenues from Coreg CR.
But obviously if Mutual surprises me and there can be no assurance that they might not get approval after 20 months, that would be a negative to our cash position that we would need to overcome with other things.
David Moskowitz – Madison Williams
And do you think you would be able to do that? If you look at the models onto those different scenarios, would you still be able to maintain cash flow neutrality or even positivity after – if that event went against you?
Stephen Willard
A very fair question, but it depends on – we have a number of things in negotiation and a number of things in clinical trials. It would really depend on how a variety of factors, seven or eight factors shook out.
It's possible that we could do it, it's possible that we might burn a little cash.
Operator
Our next question is a follow-up question from Edward Nash with Roth Capital Partners.
Edward Nash – Roth Capital Partners
Hi, thanks. Just wanted to follow up on the Medusa program.
It’s – I wanted to get an idea of the number of programs right now that are IV versus subcutaneous. It looks like you right now have more that are on the IV side and if that's the case, I just wanted to know why that is the case.
Stephen Willard
Yes. No, it's a great question and it's a function of the fact that I talk a lot about the intravenous because it's so exciting to me.
There really isn’t much in terms of the ability of drug formulators to be able to create long-acting intravenous. And so we have – we are very excited by our success and we do have a number of projects in the intravenous space, as well and potentially even more significant, we have through our Medusa technology the ability not only to deliver intravenous drug intravenously, but also potentially to take intravenous drugs and make them subcu, which will have a very beneficially impact on the lives of patients.
And so I would say a majority of our projects is subcutaneous, some of them taking intravenous drugs that are currently presented as intravenous drugs and making them subcu, but also we have several projects where we continue to preserve the intravenous profile, but substantially improve the results of the drug in the body.
Edward Nash – Roth Capital Partners
Okay. And my last question is would we expect to see any data from the Interferon drug coming out at ECIL [ph] in April –
Stephen Willard
Yes, I can't promise ECIL, not to say that it won't – wouldn't. It will depend on the ANRS and what their peer-review process and all of that goes and where they want to propose it.
But based on everything we have heard thus far, we still think that there will be data available this year for the review of the scientific, medical, and investor communities.
Operator
Our next follow-up question is from David Moskowitz with Madison Williams.
David Moskowitz – Madison Williams
Hi, I have two follow-up questions. One is, the Interferon product, can you remind us what the advantage is of that product versus other Alpha Interferon products on the market?
And then just a short question, could you update us on the NOLs that you guys have accrued thus far?
Stephen Willard
Absolutely. We – based on the Phase I data that we have made publicly available, we showed – and we actually have on our website information that shows a very important reduction in side effects with regard – sort of head to head between our formulation of Alpha Interferon and PegIntron, which is one of the two being sold in the United States in a major way.
And side effects are a major reason, as you know, that people give up treatment of Hepatitis C. And so by significantly reducing side effects, we think that we can encourage and have patients stay on the regimen much longer and more successfully.
A second element that was demonstrated in just that Phase – two-week Phase I trial was in a subset of genotype-1 patients, which as you know, are the most difficult to treat, we actually were able to show a statistically significant reduction in viral load and it appears to be cumulative if you look at week two results versus the week one results. If it continues to be cumulative, it could be quite important as part of this 12-week trial.
And again, the significance if we are successful is an Alpha Interferon that is – has major comparative advantages against the existing Interferon-alphas, both with regard to side effects, which are very important for patients and statistically better control of viral load, which of course is the reason you take the therapy. And then the second question was NOLs.
And we have approximately EUR100 million of NOLs, about $135 million at the current exchange rate and those are perpetual in that they do not expire over time.
Operator
Our next question is from Matt Kaplan with Ladenburg.
Matt Kaplan – Ladenburg
Hi, just one quick follow-up question. One of the things you provided in the past is a metric on the number of – total number of Medusa products – projects and Micropump projects.
Can you give us an update on that? And then also give us a sense in terms of the number of projects that have been added and – or lost, give us that net number.
Stephen Willard
Certainly. We just put up this morning on our website an update of those metrics.
The – we are about two-thirds in Medusa and a third in – I'm sorry, 19 Medusa and five Micropump. And we will continue to update those metrics on a continuous basis, at least as frequently as our conference calls.
Matt Kaplan – Ladenburg
All right. Thank you – thanks.
Stephen Willard
Thank you, Matt.
Operator
And that does conclude our question-and-answer session. I would like to turn the call back over to Mr.
Willard for closing remarks and comments.
Stephen Willard
Yes. Thank you, Camille and I would like to very much thank all of you for listening.
I would like to thank the questioners. Those were fascinating questions for me to answer and a great opportunity for me to expand on the success that we are having at Flamel.
Our science is really cutting edge and we are finally to the point where I think the significant majority of big pharma is understanding the major advantages we have over other delivery systems and is doing business with us. That business is beginning to move into critical stages as we move into human clinical trials on a wide variety of projects.
We've had a very strong 2009 for the reasons we have identified and we believe there is ample reason to think that 2010 can and will be even stronger. I thank you once again for your interest in Flamel Technologies and we look forward to speaking with you again soon.
Operator
That does conclude today's conference. We appreciate your participation.