Trimeris, Inc. (Nasdaq: TRMS) today announced financial results
for the quarter ended March 31, 2010, reporting net income of
$988,000, or $0.04 per share compared with $2.1 million, or $0.10
per share for the quarter ended March 31, 2009. Comparisons of net
income between the periods are affected by a one-time adjustment in
the first quarter of 2009 that increased collaboration income for
that period by $1.1 million, as described below. Excluding the
one-time adjustment, the Company would have reported adjusted net
income of $1.0 million or $0.05 per share in the first quarter of
2009. A reconciliation and explanation of the differences between
net income and adjusted net income is detailed in the table
below.
Royalty revenue for the quarter ended March 31, 2010 was $1.9
million compared with $2.0 million for the quarter ended March 31,
2009. This decrease was driven by a decrease in net FUZEON® sales
outside the U.S. and Canada. Net sales of FUZEON® outside the U.S.
and Canada for the first quarter of 2010 were $17.3 million, down 3
percent from $17.8 million in the first quarter of 2009.
Collaboration income for the quarter ended March 31, 2010 was
$1.2 million compared with income of $2.4 million for the quarter
ended March 31, 2009. Comparisons of collaboration income between
the periods are affected by a one-time adjustment in the first
quarter of 2009 that increased collaboration income for that period
by $1.1 million. Excluding the one-time adjustment from
collaboration income in the first quarter of 2009; the decrease in
collaboration income between periods was primarily driven by a
decrease in net sales of FUZEON® in the U.S and Canada offset, in
part, by reduced selling and marketing expenses. Net sales of
FUZEON® in the U.S. and Canada for the first quarter of 2010 were
$7.2 million, down 28 percent from $10.0 million in the first
quarter of 2009.
Operating expense for the quarters ended March 31, 2010 and
March 31, 2009 was $1.4 million for each quarter.
Cash, cash equivalents and investment securities
available-for-sale totaled $47.7 million at March 31, 2010,
compared to $48.4 million at December 31, 2009.
Earnings Conference Call
The Company will not be conducting a conference call in
connection with this earnings release.
About Trimeris, Inc.
Trimeris, Inc. (Nasdaq: TRMS) is a biopharmaceutical company
engaged in the commercialization of therapeutic agents for the
treatment of viral disease. The core technology platform of fusion
inhibition is based on blocking viral entry into host cells.
FUZEON®, approved in the U.S., Canada and European Union, is the
first in a new class of anti-HIV drugs called fusion inhibitors.
For more information about Trimeris, please visit the Company's
website at http://www.trimeris.com.
Statement Regarding Adjusted (Non-GAAP) Financial
Information
In addition to disclosing financial results calculated in
accordance with Generally Accepted Accounting Principles (“GAAP”),
the Company has reported adjusted net income and adjusted net
income per share for the first quarter of 2009 to allow investors
to make meaningful comparisons of the Company’s operating
performance between periods. Adjusted net income and adjusted net
income per share are not a substitute for or superior to net income
calculated in accordance with GAAP.
Specifically, we adjusted our net income for the three months
ended March 31, 2009 to eliminate the cost of goods sold credit
included in collaboration income. We made no adjustments to net
income for the three months ended March 31, 2010. See the table and
accompanying footnotes below for a detailed reconciliation of GAAP
and adjusted earnings.
Three Months
Ended
March 31, 2009
[in thousands except per share
amounts]
(unaudited)
Net income (GAAP) $ 2,133 One-time Cost of Goods Sold Credit, which
increased Collaboration Income [1] (1,081 ) Net income
(Non-GAAP) $ 1,052 Diluted net income per share (GAAP) $
0.10 Diluted net income per share (Non-GAAP) $ 0.05
[1] During 2008, the Company recorded a reserve for 2008 excess
capacity charges in the amount of $4.1 million to be shared equally
between Roche and the Company. In the first quarter of 2009, Roche
informed the Company that actual excess capacity charges for 2008
were $1.9 million. The difference of $2.2 million was recorded by
the collaboration as a credit to cost of goods sold for the first
quarter of 2009. The Company’s share of this credit was $1.1
million. This amount was recorded by the Company in the first
quarter of 2009, which had the effect of increasing collaboration
income in that period. The Company is disputing with Roche the
remainder of the excess capacity charges for 2008 and 2009. The
resolution of this dispute may result in an increase or decrease to
cost of goods sold for the collaboration in future periods.
Trimeris Safe Harbor Statement
This document and any attachments may contain forward-looking
information about the Company's financial results and business
prospects that involve substantial risks and uncertainties. These
statements can be identified by the fact that they use words such
as "expect," "project," "intend," "plan," "believe" and other words
and terms of similar meaning. Among the factors that could cause
actual results to differ materially are the following: there is
uncertainty regarding the success of research and development
activities, regulatory authorizations and product
commercializations; we are dependent on third parties for the sale,
marketing and distribution of our drug candidates; the market for
HIV therapeutics is very competitive with regular new product
entries that could affect the sales of our products; the results of
our previous clinical trials are not necessarily indicative of
future clinical trials; and our drug candidates are based upon
novel technology, are difficult and expensive to manufacture and
may cause unexpected side effects. For a detailed description of
these factors, see Trimeris' Form 10-K filed with the Securities
and Exchange Commission on March 16, 2010.
Trimeris, Inc.
Statements of
Operations
[in thousands, except per share
amounts]
Three Months Ended March 31,
(unaudited)
2010
2009 Milestone revenue $ 66 $ 66 Royalty
revenue 1,905 1,969 Collaboration income [1] 1,161
2,442 Total revenue and collaboration income
3,132 4,477 Operating
expenses: General and administrative expense 1,432
1,434 Total operating expenses
1,432 1,434 Operating income
1,700 3,043 Other
(expense) income Interest income 14 164 Gain on investments - 34
Interest/accretion expense (65 ) (64 ) Total
other (expense) income (51 ) 134
Income before income taxes 1,649 3,177 Income tax provision
661 1,044 Net income $ 988
$ 2,133 Basic net income
per share $ 0.04 $ 0.10 Diluted
net income per share $ 0.04 $ 0.10
Weighted average
shares outstanding – basic
22,320
22,249
Weighted average
shares outstanding – diluted
22,323
22,249
Notes:
[1] Collaboration income represents the Company’s share of the
net operating results from the sale of FUZEON® in the United States
and Canada under the Company’s Development and License Agreement
with F.Hoffmann-La Roche, Ltd. (“Roche”), the Company’s
collaboration partner. These net operating results consist of net
sales less cost of goods (gross margin), less selling and marketing
expenses, other costs related to the sale of FUZEON® and
development expenses or post marketing commitments.
The Company entered into negotiations with Roche, in accordance
with the Development and License Agreement, related to excess
capacity charges and cost of goods sold variances for 2008 and
overall cost of goods sold for 2009 and 2010. These negotiations
are ongoing today. Accordingly, the Company cannot accurately
determine if cost of goods sold as a percentage of net sales will
increase, decrease or remain the same in the future and the Company
cannot be certain when a final resolution will be
reached. Depending upon the resolution of the Company’s
negotiations with Roche, cost of goods sold may increase or
decrease in future periods.
During 2008, the Company recorded a reserve for 2008 excess
capacity charges in the amount of $4.1 million to be shared equally
between Roche and the Company. In the first quarter of 2009, Roche
informed the Company that actual excess capacity charges for 2008
were $1.9 million. The difference of $2.2 million was recorded by
the collaboration as a credit to cost of goods sold for the first
quarter of 2009. The Company’s share of this credit was $1.1
million. This amount was recorded by the Company in the first
quarter of 2009, which had the effect of increasing collaboration
income in that period. The Company is disputing with Roche the
remainder of the excess capacity charges for 2008 and 2009. The
resolution of this dispute may result in an increase or decrease to
cost of goods sold for the collaboration in future periods.
Trimeris, Inc.
Condensed Balance
Sheets
[$ in thousands]
March 31,
2010
December 31,
2009
Assets Cash, cash equivalents and short-term
investment securities available-for-sale $ 47,652 $ 48,440 Other
current assets 2,827 2,782 Total current
assets 50,479 51,222 Total other assets 8,975
9,036 Total assets $ 59,454 $ 60,258
Liabilities and
Stockholders’ Equity Total current liabilities $ 4,007 $ 6,017
Long term portion of deferred revenue 973 1,039 Accrued marketing
costs 18,593 18,528 Accrued compensation – long-term 97
142 Total liabilities 23,670
25,726 Total stockholders’ equity 35,784
34,532 Total liabilities and stockholders’ equity $ 59,454
$ 60,258
FUZEON® Net Sales
(Recognized by Roche, our
collaborative partner)
[$ in millions]
Three Months Ended
March 31,
(unaudited)
2010 2009 United States
and Canada $ 7.2 $ 10.0 Rest of World 17.3
17.8 Worldwide Total $ 24.4 $ 27.8
(numbers may not add due to
rounding)
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