AIDS drug maker likely seeking a buyer

Trimeris struggling after disappointing sales of Fuzeon

Little doubt remained Monday that Trimeris, once one of the Triangle's most promising young biotechnology companies, is for sale.

The Morrisville company, which has struggled since its AIDS drug fell short of expectations, said it had fulfilled a request by its largest investor, HealthCor Management, and appointed two of the firm's founders to the Trimeris board of directors.

HealthCor, which owns nearly 18 percent of Trimeris, has agitated for months that Trimeris be sold.

"The question is, are they going to find somebody to buy the company," said Sharon Seiler, an analyst with Punk Ziegel who has tracked the AIDS drug company for years.

The appointments of Arthur B. Cohen and Joseph P. Healey were a response to a Feb. 1 letter that HealthCor filed with the Securities and Exchange Commission. In the letter, HealthCor expresses concern that Trimeris might decide to make an acquisition rather than put itself up for sale.

Seiler considered the appointments another step toward a sale. She said she talked to Trimeris' new chief executive, Martin Mattingly, about a week ago, and Mattingly told her that he is also interested in selling the company. Mattingly, Trimeris' fourth CEO in 18 months, joined the company in December.

Fuzeon, Trimeris' AIDS drug, never fulfilled expectations. Sales were hampered by the drug's steep price -- $22,000 for a year's supply -- and resistance from patients who disliked injecting the drug twice a day.

It is unclear what HealthCor saw in Trimeris to rapidly buy the stock last year, Seiler said. "They see something I'm missing."

Executives with HealthCor and Trimeris didn't return phone calls Monday.

Following executive changes, layoffs and the termination of most research and development, Trimeris now faces a new challenge.

Sales growth of Fuzeon fell to 7 percent last year, from a 20 percent growth rate two years ago, after the introduction of two new medicines that compete with the Trimeris drug.

Trimeris won't report fourth-quarter earnings until early March. But based on the number of Fuzeon prescriptions filled in November and December, Seiler projects a decline in revenue.

To attract a buyer, she said, Trimeris must conserve cash, maximize profits and stabilize revenue. Results from a clinical trial that are expected by midyear also could help, Seiler said. Trimeris is testing a next-generation Fuzeon in healthy volunteers to see whether the newer version has fewer side effects and requires fewer injections.

Trimeris shares closed at $6.46 Monday, down 7 cents.