Synageva BioPharma (GEVA)

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Drug maker trims losses
Trimeris profitable in fourth quarter

http://www.newsobserver.com/104/story/416494.html

Sabine Vollmer, Staff Writer

Analysts had expected Trimeris to become profitable in the fourth quarter, but just barely.

The Morrisville drug company surprised them.

Record sales of Fuzeon, the HIV/AIDS drug developed by Trimeris and its Swiss partner Roche, helped generate a profit of $3.8 million, or 17 cents per share. That exceeded analysts' most optimistic expectations.

Trimeris, which reported fourth-quarter and annual results late Thursday, is finally catching up to the high hopes that investors had when Fuzeon came to market in the spring of 2003.

"We've achieved an important milestone," Steven Skolsky, Trimeris' chief executive, told analysts during a conference call Thursday evening. "That's a significant turning point. That's a big achievement."

He predicted that the company will be profitable this year.

Trimeris shares closed at $11.74 Thursday, up 1 cent. In late trading after the financial results came out, the stock traded as high as $13.11.

New drugs in pipeline

But analysts weren't sure whether Trimeris would continue to generate profits after this year. The company plans to begin testing at least one of two follow-up HIV/AIDS drugs in humans in 2007.

Both experimental drugs could be even more potent than Fuzeon and require only once-weekly injections.

Fuzeon must be injected twice daily. That and its price tag -- about $22,000 a year -- initially hurt the drug's acceptance among patients and doctors.

Skolsky declined to predict how much research and development costs would rise once Trimeris starts costly human trials.

"Overall, ... [Trimeris] is still a wait-and-see story," said Sharon Seiler, an analyst with Punk Ziegel. The question remains whether Fuzeon sales will pick up enough to make up for increased research spending, Seiler said.

Trimeris, which employs about 100, generated fourth-quarter revenue of about $8 million. The figure includes about $5 million from Trimeris' collaboration with Roche. Under the collaboration agreement, the partners split costs to market Fuzeon and profits from sales in North America. Trimeris receives royalty payments on Fuzeon sales elsewhere.

The company reported revenue of $536,000 in the fourth quarter of 2004.

Trimeris lost $8.1 million last year, down from a $40.1 million loss in 2004.