Another Prospect for Flamel

There has been a little resurgence for Flamel Technologies (Nasdaq: FLML  ) the past two days. First, partner GlaxoSmithKline (NYSE: GSK  ) announced sales numbers for Coreg CR that weren't horrible (although still way below previous expectations), and then Flamel followed that by announcing positive results for one of its internally developed drugs. 

The trial results announced yesterday were for Flamel's improved formulation of hepatitis C virus (HCV) treatment Peg-Intron from Schering-Plough (NYSE: SGP  ) .

Peg-Intron and a similar interferon compound named PEGASYS from Roche dominate hepatitis C treatment. Sales of Peg-Intron and PEGASYS were $837 million and $1.26 billion, respectively, last year, and they are both the standards of care in treating HCV in combination with ribavirin.

Flamel released no quantitative data on the phase 1 study. It only revealed that at the highest dose of its drug, patients with HCV experienced a statistically significant reduction in viral loads (the main measure of effectiveness for HCV treatments) versus Peg-Intron.

The company also said that there was a "marked" reduction in side effects as well as increased effectiveness for patients who hadn't responded to previous treatment. Because "marked" is a relatively meaningless word, we'll have to wait until the data comes out to see if Flamel's interferon drug produced clinically significant improvements in effectiveness and safety versus Peg-Intron. 

Flamel is far behind Human Genome Sciences (Nasdaq: HGSI  ) and Novartis (NYSE: NVS  ) in developing the next improved interferon: Their product, Albuferon, is already in phase 3 testing, with results expected in the spring of 2009. The Albuferon results to date have been mixed, though.

While Coreg CR hasn't become the near-term blockbuster that it was expected to be, Flamel is showing that at least its long-term future is not completely tied to the drug. Positive results from its interferon compound won't change the losses on its profit and loss statement anytime soon, but it's good to see some of Flamel's internal compounds advancing.