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Trimeris ends HIV research activities

Troubled US-based Trimeris says will halt its HIV and AIDS R&D activities and lay off staff in 2008

Troubled US-based pharmaceutical company Trimeris has revealed it will halt its HIV and AIDS R&D activities and lay off staff in 2008.

The change of focus and cost-cutting exercises follow the October 2007 appointment of a new CEO, the fourth at the company in 2007.

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

According to local media reports, the strategy shift was caused by pressure from Trimeris' largest shareholder, New York investment firm HealthCor, which has been pushing Trimeris to halt new research and consider putting itself up for sale.

The reason for the cuts and change in focus is due to disappointing sales of Trimeris' HIV fusion inhibitor drug, Fuzeon (enfuvirtide). The injectable treatment is expensive (USD 20,000 per year) and causes injection site side-effects.

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

In 2006, Trimeris initiated a restructuring that led to layoffs and a management overhaul. In October 2007, both Trimeris and Roche withdrew an application to sell a needle-free device for injecting Fuzeon after federal regulators asked for more data.

Trimeris has said it will begin a clinical trial for a next-generation version of Fuzeon called TRI-1144 in 2008. However, it added that after the initial stage of tests is completed, the company ìwill no longer staff any research or development functions.î

The first stage of clinical trials involves a small number of volunteers and is designed to demonstrate that a drug is safe for human use. Positive trial results could increase the value of TRI-1144, which Trimeris says is more potent than Fuzeon and less likely to cause injection site reactions.

IN Q3 FY07, Trimeris reported profits of USD 5.5m, which exceeding analysts' estimates. The company had about USD 57m in cash and investments as of 30 September 2007.

11th December 2007

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