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Durham, N.C.-Based Trimeris Gets FDA Approval for AIDS Drug

By Anne Krishnan
March 14, 2003

Trimeris' groundbreaking AIDS drug Fuzeon won approval from regulators Thursday, giving new hope to tens of thousands of patients who are losing their fight against the fatal disease.

The treatment, which should be in pharmacies by the end of this month, is Durham-based Trimeris' first drug to receive approval from the U.S. Food and Drug Administration. It's also the first drug to come out of the area's growing cluster of biotech firms.

"We're overwhelmed. This clearly is a very special day," said Trimeris CEO Dani Bolognesi, who was in the lab with Trimeris co-founder Tom Matthews when he heard late Thursday afternoon that Fuzeon had been approved.

"This is the culmination of a lot of work by good people who have given their minds and energy to this," Bolognesi continued. "We've very happy to be able to produce a drug like this and make available a medicine that gives so much hope to patients right now who are really in need of a new option."

Fuzeon is the first in a new class of therapies called fusion inhibitors, which are designed to keep HIV from entering immune system cells. All other AIDS drugs fight the disease after it has already entered cells. Regulators approved the drug for use in conjunction with other HIV treatments in adults and children ages 6 years and older. Patients take Fuzeon twice a day by injection.

The approval marks Trimeris' arrival among major biotech companies, said Sharon Seiler, a biotechnology analyst with Punk Zeigel & Co., which has had a banking relationship with Trimeris.

"There aren't that many biotechnology companies out there even now that have approved products and generate revenue from sales," she said. The analyst projects Fuzeon will generate revenue of $ 19 million for Trimeris this year, $ 89 million in 2004 and $ 170 million in 2005. Analysts predict that worldwide sales of Fuzeon will eventually grow to more than $ 600 million.

Trimeris will split evenly the costs and proceeds from sales of Fuzeon in the United States and Canada with its giant pharmaceutical partner Roche, and Trimeris will receive royalties for Fuzeon's worldwide sales.

But the drug won't come cheap for patients. In February, Roche set a European price tag for the drug of $ 56 per day, or more than $ 20,000 per year. That's more than twice as much as any other single AIDS drug on the market.

Trimeris and Roche haven't released the U.S. price yet, but an analyst predicted Fuzeon's price tag will be slightly less here. "While people aren't going to be happy, I think they'll understand that it takes a lot to make this stuff, and with time that should improve," said Mike King, managing director of biotechnology research with Banc of America Securities, which has a banking relationship with Trimeris.

To make Fuzeon, 36 amino acids are threaded into three separate molecules, which then are assembled to create a fragile chain. Most drugs consist of only a few amino acids and can be manufactured in just eight or 10 steps; Fuzeon takes 106 steps.

Roche and Trimeris have manufactured 2 metric tons of Fuzeon in the first year under production but demand is still higher, Bolognesi said. To help address the expected shortage, Roche and Trimeris are finalizing a progressive distribution plan to ensure uninterrupted supply to patients once they begin therapy. "We're playing catch-up, but we're gaining fast," he said.

There are an estimated 850,000 to 950,000 people currently living with HIV in the United States, according to an FDA release. About 100,000 people may be candidates for the drug, having exhausted other options, according to published reports.

Trimeris built its business around Bolognesi's and Matthews' research at the Duke University Center for AIDS Research. The company began in 1993 and by 1995 it had 34 employees. That number has since grown to 130. In October 1997, the Company completed its initial public offering of common stock at $ 12 per share, raising $ 34.5 million.

The company would turn to the markets six more times to raise money for the development of its centerpiece compound, T-20 -- later renamed Fuzeon -- raising about $ 324 million through stock sales. And the company has needed the money. As of the end of September, Trimeris has burned through $ 241 million taking Fuzeon through the complex and expensive steps of proving it is a safe and effective therapy -- the key factors the FDA considers before approving a new drug.

In March 1999, after the compound won a fast-track designation from the FDA, Trimeris' stock went above $ 20 for the first time. In 2000, Trimeris' stock hit $ 79 before dropping down to the $ 40 to $ 50 range where it has been since 2001. And on Thursday, Trimeris closed at $ 43.95, up 98 cents. The FDA announced its approval after the market closed.

Trimeris is the first of several young biotech companies in the Triangle to have its lead compound receive marketing approval. Bolognesi offered advice Thursday to his local colleagues.

"Believe in your drug and keep pushing," he said. "If you've got a good drug, it'll all work out."