Trimeris Hurt by Competition

Trimeris, Inc. (TRMS) develops therapeutic agents for the treatment of viral diseases based on its fusion inhibition technology that blocks viral entry into host cells. Sales of its lead drug Fuzeon have been declining dramatically since 1Q08 due to fierce competition from Selzentry and Isentress.

The collaboration amendment with Roche and several management changes further cast a shadow on the company's future. We maintain our Sell rating on Trimeris with a $2.00 price target.

At this point, it is very difficult to value the stock. We believe qualitative factors prevail currently. There are many uncertainties about Trimeris due to the management change and collaboration amendment with Roche. The company is profitable but will find it tough to stay so if Fuzeon sales continue their downward slide.

We don't thinks the dividend and share repurchase are creating value for shareholders. As long as the company can not find a solution to its top line shrinkage problem, shares of Trimeris will continue to be under pressure. From a long-term investment perspective, we think pipeline buildup is the most important factor to impact the company's outlook. But we don't see any positive steps by the management so far.

Read the full analyst report on TRMS.

Read the full analyst report on TRMS