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Trimeris Profits Jump; Company also Commits to Development of New HIV Drug

Posted: Today at 8:09 a.m.
http://www.wral.com

Morrisville - A surge in sales of the HIV drug Fuzeon and other payments delivered handsome profits for biopharmaceutical firm Trimeris in the first quarter, the company said Wednesday.

Trimeris (NASDAQ: TRMS) shares closed at $7.61, up 10 cents, before the earnings announcement. In after-hours trading, the stock jumped 6 percent, or 46 cents.

The company reported a profit of $8.2 million, or 37 cents a share. Analysts polled by Thomson Financial had expected a 12-cent per share profit. Revenues soared to $17.4 million, nearly double analysts expectations of $9.5 million.

Trimeris said it expected modest growth in Fuzeon sales in coming months.

Under interim management since the forced retirement of co-founder and Chief Executive Officer Dani Bolognesi in March, Trimeris also disclosed its formal intention to develop a new HIV drug on its own. Roche, Trimeris' partner in production and sales of Fuzeon, recently returned all development rights for the potential treatment to Trimeris.

The drug compound is known as TRI-1144.

Expenses related to the replacement of Bolognese and other workers totaled $4.3 million in the quarter.

"Quarter over quarter Trimeris has strengthened its financial position and improved its liquidity,” said E. Lawrence Hill, who is the interim president and chief operating officer for Trimeries. “We expect this trend to continue during 2007 and look forward to providing you with further updates as the year progresses."

Trimeris Plans Better AIDS Drug than Fuzeon

The News & Observer (Raleigh) - May. 10, 2007

Seeking to clarify its strategy after two months of upheaval, Trimeris said it will push forward with an experimental AIDS therapy that corrects some of its first drug's problems.

A major restructuring in March that forced out two executives and ended an eight-year research partnership with Roche left investors uncertain about Trimeris' drug pipeline and whether the Morrisville company was for sale.

The company put some questions to rest Wednesday, announcing that it plans to start human trials early next year of a drug candidate it developed with Roche. The drug, TRI-1144, should be more convenient and have fewer side effects than Trimeris' first AIDS treatment, said Larry Hill, acting president and chief operating officer.

Like Trimeris' first drug, Fuzeon, TRI-1144 keeps the AIDS virus from entering human cells. However, it appears to be more potent than Fuzeon, Hill said.

The drug also seems less likely to cause reactions at the site of injection, a problem that -- along with its cost and the frequency of injections -- has hamstrung Fuzeon's adoption by patients.

Trimeris' shares rose as high as $8.50 in after-market trading following its 4 p.m. announcement. The stock closed up 10 cents at $7.61 Wednesday.

But Sharon Seiler, an analyst at Punk Ziegel, wasn't so enthusiastic. Rather than building a new franchise, Trimeris has chosen to develop a drug that will cannibalize sales of its existing AIDS treatment, she said.

"This is not something that helps the company grow," she said. "This is something that helps the company not shrink."

And clinical trials and drug manufacturing are expensive. If Trimeris were going to continue with TRI-1144, it would have been better off sticking with Roche's deep pockets, Seiler said. She hoped to see Trimeris announce major developments such as an oral medicine or the licensing of a different type of drug from another company.

In a conference call with analysts, the company left the door open to licensing new drugs or signing a new partner later in the drug's human trials.

Trimeris plans to spend about the same amount on research and development this year as it did in 2006, but its personnel costs will be less, Hill said. The company laid off an undisclosed number of employees during the first quarter.

Trimeris' revenue more than doubled to $17.4 million in the first quarter, including $9.2 million in past milestone payments from Roche. Trimeris would have spread the revenue over the next six years if its agreement with Roche had continued until its expected conclusion in December 2012.

Roche and Trimeris continue to work together on Fuzeon. Sales of the AIDS drug increased 16 percent during the quarter to $64.3 million. Trimeris splits the costs and revenues with Roche from drug sales in the United States and Canada and receives a royalty on sales elsewhere in the world.

The company reported net income for the quarter of $8.2 million, or 37 cents per share, up from a net loss in the first quarter of 2006 of $428,000, or 2 cents per share. Its financial results included $4.3 million in layoff-related expenses.