Trimeris, Inc., (Nasdaq: TRMS) or the “Company,” today announced
financial results for the quarter ended June 30, 2010, reporting
net income of $1.3 million, or $0.06 per share, which was unchanged
from the quarter ended June 30, 2009. Comparisons of net income
between the quarters ended June 30, 2010 and June 30, 2009 are
affected by a one-time adjustment in the second quarter of 2009
that increased operating expenses for that period by $496,000, as
described below. Excluding the one-time adjustment, the Company
would have reported adjusted net income of $1.8 million or $0.08
per share in the second quarter of 2009. A reconciliation of the
differences between net income and adjusted net income is detailed
in the table below.
For the six months ended June 30, 2010, the Company reported net
income of $2.3 million, or $0.10 per share, compared with $3.4
million, or $0.15 per share for the six months ended June 30, 2009.
Comparisons of net income between the periods are affected by two
one-time adjustments in the first half of 2009. The first
adjustment increased operating expenses by $496,000 and the second
adjustment increased collaboration income by $1.1 million, as
described below. Excluding these one-time adjustments, the Company
would have reported adjusted net income of $2.8 million or $0.13
per share in the first half of 2009. A reconciliation of the
differences between net income and adjusted net income in the six
months ended June 30, 2009 is detailed in the table below.
Royalty revenue for the quarter ended June 30, 2010 was $1.6
million compared with $2.1 million for the quarter ended June 30,
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 second quarter of 2010 were $14.6 million, down
25 percent from $19.4 million in the second quarter of 2009.
Collaboration income for the quarter ended June 30, 2010 was
$1.6 million compared with $1.4 million for the quarter ended June
30, 2009. This increase was primarily driven by a decrease in
selling and marketing expenses offset, in part, by a decrease in
net sales of FUZEON® in the U.S and Canada. Net sales of FUZEON® in
the U.S. and Canada for the second quarter of 2010 were $8.0
million, down 18 percent from $9.7 million in the second quarter of
2009.
Operating expenses for the quarter ended June 30, 2010 were $1.1
million compared with $1.7 million for the quarter ended June 30,
2009. This decrease was primarily driven by a one-time real estate
commission of $496,000 paid in connection with the release of the
Company’s obligations under the lease of the Company’s former
corporate office and research facility in the quarter ended June
30, 2009.
Cash, cash equivalents and investment securities
available-for-sale totaled $46.9 million at June 30, 2010, compared
to $48.4 million at December 31, 2009.
Earnings Conference Call and FUZEON® Sales Releases
The Company will not be conducting a conference call in
connection with this earnings release.
The Company’s collaborative partner, Roche, no longer includes
FUZEON sales results in their quarterly reports. Accordingly, the
Company will no longer issue separate press releases announcing
FUZEON® sales results. FUZEON® sales results will now be included
in the Company’s earnings releases.
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 three and six months ended June 30, 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, the Company adjusted its net income for the three
months ended June 30, 2009, to eliminate the one-time real estate
commission included in operating expenses. For the six months ended
June 30, 2009, the Company adjusted its net income to (1) eliminate
the one-time real estate commission included in operating expenses
and (2) eliminate the one-time cost of goods sold credit included
in collaboration income. The Company made no adjustments to net
income for the three and six months ended June 30, 2010. See the
table and accompanying footnotes below for a detailed
reconciliation of GAAP and adjusted earnings.
(unaudited) Three Months Ended Six Months Ended June 30,
2009
[in thousands except per share
amounts]
June 30, 2009
[in thousands except per share
amounts]
Net income (GAAP) $ 1,278 $ 3,411 One-time real estate commission,
which increased operating expenses [1]
496
496 One-time Cost of Goods Sold Credit, which increased
Collaboration Income [2] (1,081 ) Net income
(Non-GAAP) $ 1,774 $ 2,826 Diluted net income per
share (GAAP) $ 0.06 $ 0.15 Diluted net income per
share (Non-GAAP)
$
0.08
$ 0.13
[1] In May 2009, the Company entered into an agreement releasing
it from future lease obligations relating to the former corporate
office and research facility. In the second quarter of 2009, the
Company expensed a one-time real estate commission of $496,000 in
connection with this agreement.
[2] 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; the Company is dependent on third parties for
the sale, marketing and distribution of its drug candidates; the
market for HIV therapeutics is very competitive with regular new
product entries that could affect the sales of its products; the
results of its previous clinical trials are not necessarily
indicative of future clinical trials; and its 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]
(unaudited)
Three Months Ended June 30, Six Months Ended June
30, 2010 2009
2010 2009 Revenue:
Milestone revenue $ 66 $ 66 $ 132 $ 132 Royalty revenue 1,616 2,141
3,521 4,110 Collaboration income [1] 1,579
1,411 2,740 3,853 Total revenue
and collaboration income 3,261 3,618
6,393 8,095 Operating expenses:
General and administrative 1,135 1,679 2,567 3,136 Gain on disposal
of equipment -- -- (23 )
Total operating expenses 1,135 1,679
2,567 3,113 Operating (loss)
income 2,126 1,939 3,826
4,982 Other income (expense) Interest income
19 115 33 279 Gain on investments - 23 - 57 Interest expense
(65 ) (64 ) (130 ) (128 ) Total other income
(expense) (46 ) 74 (97 ) 208
Income before taxes 2,080 2,013 3,729 5,190 Income
tax expense 735 735 1,396
1,779 Net income $ 1,345 $ 1,278
$ 2,333 $ 3,411 Basic net income per share $
0.06 $ 0.06 $ 0.10 $ 0.15
Diluted net income per share $ 0.06 $ 0.06 $ 0.10
$ 0.15 Weighted average
shares outstanding – basic
22,320
22,320
22,320
22,285
Weighted average
shares outstanding - diluted
22,326
22,320
22,327
22,285
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]
(unaudited)
June 30,
2010
December 31,
2009
Assets
Cash, cash equivalents and
short-term investment securities available-for-sale
$
46,880
$
48,440
Other current assets 2,943 2,782 Total current assets
49,823 51,222 Total other assets 8,859 9,036 Total
assets $ 58,682 $ 60,258
Liabilities and Stockholders’
Equity Total current liabilities $ 1,643 $ 6,017 Long term
portion of deferred revenue 907 1,039 Accrued marketing costs
18,658 18,528 Accrued compensation – long-term 96 142
Total liabilities 21,304 25,726 Total
stockholders’ equity 37,378 34,532 Total liabilities
and stockholders’ equity $ 58,682 $ 60,258
FUZEON Net Sales
(Recognized by Roche, the
Company’s collaborative partner)
[$ in millions]
(unaudited)
The table below presents net
FUZEON sales by quarter beginning in the first quarter of 2009:
(millions) 2010 Q1
Q2 Q3 Q4 Total
U.S/Canada Net Sales
$ 7.2 $ 8.0 Ex. U.S/Canada Net Sales
17.3 14.6 Global Net Sales $ 24.4 $
22.7 Brazil Purchase* $ 7.8 $ 8.0
2009 Q1
Q2 Q3 Q4 Total U.S/Canada Net Sales $
10.0 $ 9.7 $ 10.4 $ 9.0 $ 39.1 Ex. U.S/Canada Net Sales 17.8
19.4 19.4 16.5 73.1 Global Net Sales $
27.8 $ 29.1 $ 29.8 $ 25.5 $ 112.2 Brazil Purchase* $ 7.1 $ 8.0 $
7.8 $ 7.6 $ 30.4
(numbers may not add due to
rounding)
*included in Ex. U.S/Canada Net
Sales and Global Net Sales
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