Trimeris Reports Financial Results for the Third Quarter 2006.* Record Quarterly Profit of $0.16 Per Share * Record Quarterly Revenue of $9.7 Million, up 114% * FUZEON Fu·ze·on A trademark for the drug enfuvirtide. enfuvirtide Fuzeon Pharmacologic class: Human immunodeficiency-1 (HIV-1) fusion inhibitor Therapeutic class: Antiretroviral Royalty Rate Increases from 10% to 12% MORRISVILLE, N.C. -- Trimeris, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : TRMS TRMS The Rachel Maddow Show (radio program) TRMS Tightrope Media Systems TRMS Tycom Readiness Management System TRMS Training Records Management System TRMS Tuttle Risk Management Services, Inc TRMS Test Resource Management System ) today announced financial results for the three months ended September 30, 2006, reporting total revenues of $9.7 million, an increase of 114 percent, compared to the same period last year. This increase was primarily influenced by strong global sales of FUZEON which reached $63.0 million, a growth of 29 percent over the same period last year. All sales of FUZEON are recorded by F. Hoffmann-La Roche Ltd ("Roche"), Trimeris' collaborative partner. Including employee stock option expense, for the third quarter of 2006 the Company reported a net profit of $3.4 million, or $0.16 per share. Excluding employee stock option expense, earnings for the third quarter of 2006 were $4.4 million, compared with a loss of $3.3 million in the third quarter 2005 when the Company did not record employee stock option expense. For the nine months ended September 30, 2006, the Company reported a net profit of $2.7 million, or $0.12 per share, including employee stock option expense. Excluding employee stock option expense, earnings for the nine months ended September 30, 2006, were $6.1 million, compared with a loss of $11.9 million for the nine months ended September 30, 2005, when the Company did not record employee stock option expense. Based on surpassing a cumulative sales milestone, the royalty rate has increased from 10% to 12% on total net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of FUZEON outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada. This new rate will remain in effect for the duration of our collaboration Working together on a project. See collaborative software. with Roche. For the third quarter of 2006, the impact of this change was an increase in royalty revenue of approximately $680,000. Cash, cash equivalents and investment securities available-for-sale totaled $44.5 million at September 30, 2006, compared to $36.9 million at December 31, 2005. "We are very pleased with having achieved record profitability this quarter, which has been driven by significant top-line growth of FUZEON sales and efficient management of our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ," said Steven D. Skolsky, Chief Executive Officer of Trimeris. "This is a significant milestone for the company, which establishes the foundation for being profitable for the full year 2006, including option expense." Conference Call Trimeris will host a live conference call to discuss third quarter 2006 financial results at 5:00 p.m. Eastern Time, today. To access the live call, please dial (800) 399-8403 (U.S.) or (706) 634-6565 (international). The conference ID number is 1106152. Telephone replay is available approximately two hours after the call through 11:59 p.m. Eastern Time, November 21, 2006. To access the replay, please call (800) 642-1687 (U.S.) or (706) 645-9291 (international) using the same conference ID number (1106152). The information provided on the teleconference is only accurate at the time of the conference call, and Trimeris will take no responsibility for providing updated information. Live audio of the conference call will be simultaneously broadcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and will be available to members of the news media, investors and the general public. The webcast can be accessed by going to Trimeris' website, www.trimeris.com. About Trimeris, Inc. Trimeris, Inc. (Nasdaq: TRMS) is a biopharmaceutical company engaged in the discovery, development and commercialization of novel therapeutic agents for the treatment of viral Meaning "related or caused by a virus," with regard to computers and information technology, the term refers less to a computer virus than it does to information that spreads quickly via the Internet. See viral marketing and viral video. disease. The core technology platform of fusion inhibition inhibition In enzymology, a phenomenon in which a compound (an inhibitor), usually similar in structure to the substance on which an enzyme acts (substrate), interacts with the enzyme so that the resulting complex cannot undergo the usual reaction or cannot form the usual is based on blocking viral entry Viral entry is the earliest stage of infection in the "viral life cycle", as the virus comes into contact with the host cell and introduces viral material into the cell. The major steps involved in viral entry are:[1]
European Community , is the first in a new class of anti-HIV drugs called fusion inhibitors fusion inhibitor n. A drug that interferes with the entry of HIV into helper T cells by inhibiting the fusion of the viral and cell membranes. . Trimeris is developing FUZEON and future generations of peptide peptide, organic compound composed of amino acids linked together chemically by peptide bonds. The peptide bond always involves a single covalent link between the α-carboxyl (oxygen-bearing carbon) of one amino acid and the amino nitrogen of a second amino acid. fusion inhibitors in collaboration with F. Hoffmann-La Roche Ltd. For more information about Trimeris, please visit the Company's website at http://www.trimeris.com. Non-GAAP Financial Information In addition to disclosing financial results calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), we have included certain non-GAAP financial measures that exclude the effect of non-cash stock compensation expense as a result of the Company's adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123 (revised). The Company believes that the presentation of results excluding non-cash employee stock compensation expense provides meaningful supplemental information regarding our financial results for the three and nine months ended September 30, 2006 as compared to the same periods in 2005 since our financial statements issued prior to January 1, 2006 did not change as a result of adopting SFAS No. 123 (revised). We believe that this financial information is useful to management and investors in assessing our historical performance and results. The Company will use these non-GAAP financial measures when evaluating its financial results, as well as for internal planning and forecasting purposes. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Trimeris Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 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 Side effects Effects of a proposed project on other parts of the firm. . For a detailed description of these factors, see Trimeris' Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on March 10, 2006 and its periodic reports filed with the SEC. [TABLE OMITTED] Notes: [1] Milestone revenue - Included in milestone revenue is the amortization of a payment received from Roche in January 2006 of $2.5 million for the results of research that was performed outside the research plan during 2005. This payment did not become due until January 2006 upon the next generation peptides passing Roche's internal review and is distinct from the milestone payments that were made under the Collaboration Agreement. In February 2006, Trimeris received this payment. We were recognizing this payment over 2006. However, during the third quarter of 2006, we extended our research agreement with Roche from January 1, 2007 to December 31, 2008. As a result we will recognize the remainder of this milestone over the extended period. The impact of this change lowered our total milestone revenue in the third quarter of 2006 by $266,000 when compared to the second quarter of 2006. Total milestone revenue for the fourth quarter of 2006 is expected to be approximately $500,000. [2] Collaboration income represents our share of the net operating results from the sale of FUZEON in the United States and Canada under our collaboration agreement with Hoffmann-La Roche, Inc., our collaborative partner. These net operating results consist of net sales less cost of goods (gross margin), less selling and marketing expenses and other costs related to the sale of FUZEON. [3] In 2006, non-cash compensation is primarily comprised of employee stock option expense recorded under SFAS No. 123 (revised), amortization expense for restricted stock issued to employees and non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. or credits related to stock options granted to non-employees. In 2005, non-cash compensation is primarily comprised of amortization expense for restricted stock issued to employees and non-cash charges or credits related to stock options granted to non-employees. For the three months ended September 30, 2006, the Company recorded an additional $932,000 in employee stock option expense compared to the three months ended September 30, 2005. For the nine months ended September 30, 2006, the Company recorded an additional $3.6 million in employee stock option expense compared to the nine months ended September 30, 2005. [4] On January 1, 2006, we adopted SFAS No. 123 (revised) and recorded employee stock option expense during the three and nine months ended September 30, 2006. The following is a reconciliation of our GAAP and non-GAAP net income. [TABLE OMITTED] (a) The cumulative effect of change accounting principle relates to the difference in accounting for the restricted stock grants under SFAS No. 123 (revised). Under SFAS No. 123 (revised) we are required to estimate a forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. rate for the restricted stock grants and apply that forfeiture rate from the date of grant. Prior to SFAS No. 123 (revised) we did not estimate forfeitures and only accounted for forfeitures as they occurred. The difference in these two methods results in the cumulative effect of change in accounting principle. [TABLE OMITTED] [TABLE OMITTED] |
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