Trimeris Reports Financial Results for the Second Quarter 2011
Press Release Source: Trimeris, Inc. On Friday August 12, 2011, 5:00 pm EDT
DURHAM, N.C.--(BUSINESS WIRE)-- Trimeris, Inc. (NASDAQ:TRMS - News), today reported second quarter 2011 financial results. As previously reported, Trimeris entered into a new royalty arrangement with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (collectively, “Roche”) pursuant to an Amended and Restated Agreement dated as of May 25, 2011 and effective as of January 1, 2011 (the “New Roche Agreement”), which is described in footnote 1 to the attached statements of operations. Because the New Roche Agreement fundamentally changed the calculation of amounts payable to Trimeris, comparisons of financial results between the quarters and six month periods ended June 30, 2011 and June 30, 2010 are not directly comparable.
Net income for the quarter ended June 30, 2011 was $673,000 or $0.03 per share compared with net income of $1.3 million or $0.06 per share for the quarter ended June 30, 2010. For the six months ended June 30, 2011, Trimeris reported net income of $606,000, or $0.03 per share, compared with $2.3 million, or $0.10 per share for the six months ended June 30, 2010.
The overall decline in net income for the quarter and six months ended June 30, 2011 compared to the corresponding periods in 2010 resulted primarily from decreased worldwide net sales of FUZEON and increased general and administrative fees related to the Trimeris process to evaluate and identify a strategic partner as well as Trimeris’ proposed merger with Synageva BioPharma Corp. (“Synageva”) described below and other adjustments, offset by certain payments from Roche.
Proposed Synageva Merger
As previously reported, on June 13, 2011, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Synageva Merger Agreement”) with Synageva. Pursuant to the terms and subject to the conditions set forth in the Synageva Merger Agreement, Synageva would become a wholly-owned subsidiary of Trimeris (the “Synageva Merger”). Completion of the Synageva Merger is subject to various conditions, including the approval of the stockholders of both Trimeris and Synageva. On July 13, 2011, Trimeris and Synageva filed a Registration Statement on Form S-4 with the Securities and Exchange Commission (the “SEC”). This Registration Statement provides additional information regarding the Synageva Merger.
Cash Position
As of June 30, 2011, cash and cash equivalents totaled $52.4 million compared to $45.2 million as of December 31, 2010. The increase in cash is primarily a result of a $4.9 million settlement payment from Roche in connection with the New Roche Agreement.
Revenue
Total revenue for the quarter ended June 30, 2011 was $3.4 million compared with $3.3 million for the same period in 2010. The slight increase in revenue for the quarter was attributable to certain payments and other adjustments recognized in the second quarter as well as declining sales of FUZEON. Total revenue for the six months ended June 30, 2011 was $5.0 million compared with $6.4 million for the same period in 2010, primarily due to a decline in sales of FUZEON and other adjustments, offset by certain payments from Roche.
FUZEON Sales
The tables below illustrate net sales of FUZEON in North America and ROW on a quarterly basis. Although worldwide net sales of FUZEON during the quarter ended June 30, 2011 increased $1.7 million from worldwide net sales of FUZEON in the quarter ended March 31, 2011, Trimeris believes that this quarter-to-quarter increase in net sales is more likely due to the continuation of historical variability in FUZEON sales rather than stabilization of the recent decline in net sales of FUZEON.
In the first half of 2011 worldwide net sales declined by $21.6 million or 46% from worldwide net sales in the first half of 2010. North American net sales of FUZEON for the quarter ended June 30, 2011 were $5.7 million, down 29% from $8.0 million for the same period in 2010. ROW net sales for the second quarter of 2011 were $7.9 million, down 46% from $14.7 million from the same period last year. North American net sales for the six months ended June 30, 2011 were $12.4 million, down 18% from $15.2 million for the same period in 2010. ROW net sales for the six months ended June 30, 2011 were $13.1 million, down 59% from $31.9 million for the same period last year.
We believe that the sales declines between 2010 and 2011 in North America have resulted mainly from patients switching to a more convenient dosing alternative, while the ROW declines stem in large part from the variability in buying patterns of certain countries that either do not purchase FUZEON every quarter (Brazil) or that purchase FUZEON in quantities that vary significantly from quarter to quarter.
($ millions) 2011
Q1 Q2 Q3 Q4 Total
North America Net Sales $6.7 $5.7 $12.4
ROW Net Sales 5.2 7.9 13.1
Worldwide Net Sales $11.9 $13.6 $25.5
Brazil Purchase* - - -
2010
Q1 Q2 Q3 Q4 Total
North America Net Sales $7.2 $8.0 $9.0 $7.8 $32.0
ROW Net Sales 17.2 14.7 9.3 15.2 56.4
Worldwide Net Sales $24.4 $22.7 $18.3 $23.0 $88.4
Brazil Purchase* $7.8 $8.0 - $7.4 $23.2
*included in ROW Net Sales and Worldwide Net Sales
Operating Expenses
Operating expenses for the quarter and six months ended June 30, 2011 were $2.6 million and $4.3 million, respectively, compared with $1.1 million and $2.6 million for the same periods in 2010 reflecting increased fees payable to legal and financial advisors, as well as other administrative expenses related to the proposed Synageva Merger.
Earnings Conference Call
The Company will not be conducting a conference call in connection with this earnings release.
