Synageva BioPharma (GEVA)

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http://biz.yahoo.com/zacks/071029/9968.html?.v=1

Downgrading TRMS from Hold to Sell
Monday October 29, 5:07 pm ET
By Zacks Equity Research

Zacks senior pharmaceutical analyst Grant Zeng, CFA has decided to downgrade the shares of healthcare company Trimeris, Inc. (NasdaqGM: TRMS - News) from a Hold to Sell. Here we bring you some of the reasons behind his argument:

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\'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. We are concerned about the decline in the U.S. sales of Fuzeon. Additionally, withdrawal of the supplemental New Drug Application (sNDA) for Biojector 2000 together with approvals of competitors Selzentry and Isentress are expected to adversely impact Fuzeon sales going forward.

\'We downgrade the shares of Trimeris from Hold to Sell with a target price of $5.50 based on the management change in March 2007, collaboration amendment with Roche (Other OTC: RHHBY.PK - News), withdrawal of the sNDA application for Biojector 2000 and declining U.S. sales of Fuzeon. To add to the company's woes, the impressive growth in ex-U.S. sales of Fuzeon is being driven by the bulk orders placed by the Brazilian government.

\'We remain concerned about the competition especially from Pfizer's (NYSE: PFE - News) Selzentry and Merck's (NYSE: MRK - News) Isentress. Selzentry has been approved in both the U.S. and European markets while Isentress received FDA approval in October 2007.

\'At this point, it's very difficult to value the stock. We believe qualitative factors prevail currently. There are many uncertainties about Trimeris due to the management change and collaboration amendment with Roche. As such, we downgrade Trimeris from Hold to Sell given the lack of visibility on the company's long-term growth prospects.

\'EPS should decline to $0.14 in 2009 from $0.67 in 2007. Our $5.50 price target corresponds to a P/E ratio of 8.2x to our 2007 EPS of $0.67 and 39 x our estimated EPS of $0.14 in 2009. This is a huge discount to biotech peers, but it is warranted due to the recent corporate developments and changes in the competitive landscape.\