Synageva BioPharma (GEVA)

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Zacks.com
Questions on Trimeris\' Outlook
Monday August 20, 12:15 pm ET
By Zacks Equity Research

Though it has been trading down significantly over the past few months, Trimeris (NasdaqGM: TRMS - News) shares should continue to trade at a discount, according to the latest release from Zacks senior biotech analyst Grant Zemg, CFA:

Trimeris, Inc. develops a new class of therapeutic agents for the treatment of viral diseases based on its fusion inhibition technology that blocks viral entry into host cells. The most significant outcome of this anti-viral fusion technology is the development of Fuzeon for the treatment of HIV. Fuzeon sales have been relatively strong in the past few quarters, and the launch of the needle free device in 2008 will further boost the Fuzeon franchise.

However, the recent collaboration amendment with Roche and management change cast a shadow on the company\'s future. Therefore, we maintain our Hold rating on Trimeris with an $8.00 price target.

At this point, it\'s very difficult to value the stock. We believe qualitative factors prevail currently. There are lots of uncertainties about Trimeris. We would like to remain on the sidelines now until we gain more visibility about the company. Our $8.00 price target corresponds to a P/E [price-to-earnings] ratio of 8.8x to our 2007 EPS [earnings per share] of $0.91. This is a huge discount to biotech peers, but it\'s warranted due to the recent corporate developments and change of competitive landscape.