While its lead product continues to perform well, clouds over the future for biotech firm Trimeris, Inc. (TRMS) leads senior analyst Grant Zeng, CFA to rate the stock a Hold at this time. Here's what his latest research report had to say:
Trimeris, Inc. develops a new class of therapeutic agents for the treatment of viral diseases based on its fusion inhibition technology that blocks viral entry into host cells. The most significant outcome of this anti-viral fusion technology is the development of Fuzeon for the treatment of HIV. Fuzeon sales have been relatively strong in the past few quarters. The launch of the needle free device in 2008 will further boost the Fuzeon franchise.
However, the recent collaboration amendment with Roche and management change cast a shadow on the company's future. Therefore, we maintain our Hold rating on Trimeris with an $8.00 price target.
At this point, it's very difficult to value the stock. We believe qualitative factors prevail currently. There are lots of uncertainties about Trimeris due to the management change and collaboration amendment with Roche. We would like to remain on the sidelines now until we gain more visibility about the company.
Our price target corresponds to a P/E [price-to-earnings] ratio of 15.4x our 2007 EPS [earnings per share] of $0.52. This is a huge discount to biotech peers, but it's warranted due to the recent corporate developments and change in competitive landscape."
Read the analyst report on TRMS