Trimeris, a once-promising AIDS-drug company that has been seeking a buyer for years, has agreed to be acquired by a Massachusetts drug-development company.
Under the all-stock deal announced Monday, the owners of Synageva BioPharma, a privately held company that is years away from getting a product to market, will own 75 percent of the combined company's outstanding shares. (Shareholders of Durham-based Trimeris will own the remaining 25 percent.)
Synageva doesn't plan to maintain a presence in Durham after the deal is completed, spokeswoman Kelley Forrest said.
Trimeris once employed 150 workers and appeared to have a bright future, but it has dwindled to fewer than five workers. Forrest declined to say whether any Trimeris employees will be offered jobs with the combined business.
The deal is technically a merger, but the combined company will be run by the Synageva management team led by Sanj K. Patel, who will be president and CEO - the same titles he holds at Synageva. The combined company, which will be publicly traded, also will be called Synageva BioPharma. There was no word on what the ticker symbol might be.
The business will focus on developing new medicines for patients with rare diseases, which is Synageva's current focus. Since 2008, Synageva has raised $70 million in venture capital to develop new drugs.
'Attractive opportunities'
Trimeris remains profitable because of the royalties it receives from sales of its potent AIDS drug Fuzeon, which was launched in 2003. But Fuzeon sales never met shareholders' and management's lofty expectations because of its high price - $20,000 a year - and patient resistance to a treatment delivered by injection that triggers side effects such as inflammation. Although it initially filled a crucial gap for AIDS patients who had developed resistance to other HIV drugs, Fuzeon has been eclipsed by newer AIDS drugs that are taken orally.
Trimeris posted a profit of $20 million last year. Sales of Fuzeon, which is sold and marketed by Swiss pharmaceutical giant Roche, totaled $88.4 million last year - down from $112.2 million in 2009.
Roche pays royalties on the sale of Fuzeon. The royalty rate recently was changed to a flat 16 percent on all sales worldwide.
Previously, Roche paid different royalty rates for sales in the United States, Canada and elsewhere.
Trimeris' board of directors, which approved the deal, essentially has concluded that shareholders are better off betting on a company with an uncertain-but-promising future than sticking with a business whose future is behind it.
"We believe this newly combined company will have a dramatic upside," Trimeris CEO Martin Mattingly said in a prepared statement. "The rare disease space offers very attractive opportunities for success due to the absence of effective therapies, the relatively small clinical trials, and the faster path to commercialization."
Trimeris officials couldn't be reached for additional comment.
Stock advantages
The deal gives Synageva the ability to raise money by selling stock directly to the public, which is preferable to relying on venture capitalists. Synageva also gets Trimeris' revenue stream and the company's considerable cash: $47.3 million as of March 31.
"It's a very exciting time for Synageva," Forrest said. "This is obviously going to allow us to advance our lead (drug-development) program and the other strong programs we have in place."
Trimeris shares closed Monday at $2.56 - 28 cents. Its all-time high was more than $30, which it reached in 2000.
Trimeris almost was sold in 2009, but a South Korean's company plan to buy the business for $81 million fell through.
Synageva's most advanced experimental drug is a treatment for Lyosomal Acid Lipase Deficiency, a rare disease that causes fatty material to build up in the liver, spleen and blood vessel walls, and which can be fatal.
The company's drug is in the first of the three phases of clinical trials required before regulators will consider approving it for patients.
Synageva also is working on four medicines that are still in the pre-clinical stage.
Synageva's roots trace back to AviGenics, an Atlanta company founded in 1996 by the head of the genetics department at the University of Georgia.
The company morphed into Synageva in 2008 when it moved its headquarters to Lexington, Mass., a suburb of Boston.
