MORRISVILLE - Trimeris, the Morrisville AIDS drug company, plans to halt its research and development efforts and lay off its R&D staffers next year.

The new strategy announced after the markets closed Monday follows last month's appointment of a new CEO -- the company's fourth chief executive in the past year -- and a steady stream of turmoil.

CEO Martin Mattingly said in a prepared statement that the company plans to "evaluate a full range of options for maximizing shareholder value, including strategic transactions."

The new direction appears to capitulate to pressure by the company's largest shareholder, New York investment firm HealthCor, which has been pushing Trimeris to halt new research and consider putting itself up for sale. HealthCor executives couldn't be reached for comment.

Mattingly and Andrew Graham, Trimeris' director of finance, also couldn't be reached for comment. Trimeris executives haven't talked much to the media during the past year.

Consequently, it's unclear how many employees the company plans to cut next year. Earlier in the year, Trimeris had 45 employees.

If the company's projected operating expenses are any indication, however, the cuts could be deep.

Trimeris said it anticipates its operating expenses will range from $10 million to $14 million in 2008, down from $21 million to $23 million this year.

Trimeris' AIDS drug Fuzeon has racked up disappointing sales, partially as a result of its steep price tag of about $20,000 a year, and the company said it expects to start a clinical trial for a next-generation version of Fuzeon called TRI-1144 next year. But after the initial stage of tests is completed, the company "will no longer staff any research or development functions."

The first stage of clinical trials involves a small number of volunteers and is designed to demonstrate that a drug is safe for human consumption. Encouraging test results could increase the value of TRI-1144, which Trimeris has said appears to be more potent than Fuzeon and less likely to cause reactions where it is injected -- a problem that has plagued Fuzeon.

Shift in direction

"While market conditions and the significant risks involved in research and development have required the company to shift strategic direction," Mattingly said, "Trimeris still possesses significant financial assets that include substantial cash and revenue streams from the sale of Fuzeon in collaboration with Roche."

Swiss pharmaceutical giant Roche manufactures and markets Fuzeon and shares profits from sales of the drug with Trimeris.

Mattingly's employment contract calls for him to receive a $100,000 bonus if the company is acquired, according to a Securities and Exchange Commission filing.

In the third quarter, Trimeris reported a $5.5 million profit -- exceeding analysts' estimates. The company had about $57 million in cash and investments as of Sept. 30.

Last year, the company initiated a restructuring that led to layoffs and a management overhaul. In October, Trimeris and Roche withdrew an application to sell a needle-free device for injecting Fuzeon after federal regulators asked for more data.

Trimeris shares closed at $6.44, up 19 cents. The shares are down about 50 percent in the past year.