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On
December 11, 2007, Trimeris Inc. (Trimeris) announced its plans
to downsize the company by scaling back its investments in
research and development (R&D) and laying off its R&D workers in
2008.
Announcing the new strategy, Martin Mattingly (Mattingly), CEO,
Trimeris, said, “The company plans to evaluate a full range of
options for maximizing shareholder value, including strategic
transactions.”1
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Established by scientists Dani Bolognesi and Tom
Mathews in 1993, Trimeris was a US-based biopharmaceutical company
specializing in fusion inhibitor technology.2
The company was in the business of developing and commercializing drugs
for the treatment of viral diseases.
Mattingly’s announcement came close on the heels of Trimeris’
announcement that it planned to launch a new version of its breakthrough
drug Fuzeon,3 called TR-1144, in
2008. Trimeris was co-marketing Fuzeon with Switzerland-based global
healthcare company Hoffmann-La Roche (Roche). Fuzeon reported sales of
US$ 200 million for the first nine months in 2007.4
Earlier in 2005, Fuzeon’s sales took a beating with losses of US$ 8.1
million.5 The losses were
attributed in part to the high price of the drug. The cost of treatment
with Fuzeon was US$ 20,000 per patient per year.
The drug’s high price was not its only drawback; Fuzeon had to be
injected twice daily. Many patients were reluctant to use Fuzeon as it
caused problematic injection-site reactions (PISR), which seemed to
persist throughout therapy.6
To make things worse, leading pharmaceutical companies such as Pfizer
Inc. (Pfizer) and Merck & Co. Inc. (Merck) announced plans to launch
improved versions of oral HIV drugs.
Edward Nash, analyst at Stifel, Nicolaus & Co., a US-based securities
and financial services company, commented, “We have learned that doctors
are inclined to prescribe Fuzeon less frequently now that superior, non-injectable
drugs are available.”7
The low sales of Fuzeon had an adverse impact on the financial
performance of Trimeris as it was the company’s only commercially
available product. In the face of increasing competition, in early 2007,
Roche terminated its agreement with Trimeris to co-market TR-1144,
adding to its problems.
In addition to this, Trimeris faced a lawsuit regarding patent
infringement from Switzerland-based pharmaceutical giant, Novartis AG (Novartis),
for Fuzeon, in November 2007. Novartis claimed that Fuzeon infringed on
one of its patent.
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1] David Ranii, “Trimeris Ending AIDS Research,”
www.newsobserver.com, December 11, 2007.
2] The core technology platform of fusion
inhibition was based on blocking viral entry into host cells.
3] Fuzeon, a breakthrough product of Hoffmann-La
Roche (Roche) and Trimeris, was used in the treatment of HIV/AIDS and was
Trimeris’ only product, as of end 2007. Considered to be a very innovative drug
when it was launched in mid 2003, the drug failed to live up to its sales
expectation.
4] “Tough Times for Small HIV Fighters,” www.fool.com,
December 13, 2007.
5] Varsha Tickoo, “Trimeris Falls after Roche Deal
Change, Exec Departures,” www.natap.org, March 16, 2007.
6] Ben Hirschler, “Roche’s AIDS Drug Fuzeon Shows
Two-Year Benefits,” www.aegis.org, July 11, 2004.
7] Varsha Tickoo, “Trimeris Falls after Roche Deal
Change, Exec Departures,” www.natap.org, March 16, 2007. |
