Prepared By R.R. Donnelley Financial -- Form 8-K

Exhibit No.		Description
EX-99.1		Press release dated November 7, 2006
EX-99.2		Third Quarter 2006 Earnings Conference Call Transcript

EX-99.1 2 rrd136082_16934.htm PRESS RELEASE DATED NOVEMBER 7, 2006 Exhibit 99 Exhibit 99.1

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 royalty rate increases from 10% to 12%

MORRISVILLE, N.C. -- November 7, 2006 -- Trimeris, Inc. (Nasdaq: TRMS) 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 of FUZEON outside the United States and Canada. This new rate will remain in effect for the duration of our collaboration 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," 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 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 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. Trimeris is developing FUZEON and future generations of peptide 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 with 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 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. Th e 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 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. For a detailed description of these factors, see Trimeris' Form 10-K filed with the Securitie s and Exchange Commission on March 10, 2006 and its periodic reports filed with the SEC.

Trimeris, Inc.

Statements of Operations
[in thousands, except per share amounts]

(unaudited)

	Three Months Ended September 30,		Nine Months Ended September 30,
	2006	2005	2006	2005
Milestone revenue [1]	$ 789	$ 431	$ 2,900	$ 1,292
Royalty revenue	3,391	1,886	8,379	6,289
Collaboration income [2]	5,559	2,243	13,168	3,520
Total revenue and collaboration income	9,739	4,560	24,447	11,101

Operating expenses:

Research and development:
Non-cash compensation [3] [4]	492	111	1,917	319
Other research and development	3,348	5,323	12,064	15,720
Total research and development expense	3,840	5,434	13,981	16,039
General and administrative:
Non-cash compensation [3] [4]	679	113	2,343	336
Other general and administrative	1,979	2,442	6,398	6,959
Total general and administrative expense	2,658	2,555	8,741	7,295

Total operating expenses	6,498	7,989	22,722	23,334

Operating income (loss)	3,241	(3,429)	1,725	(12,233)
Other income (expense)
Interest income	519	332	1,407	922
Gain (loss) on sale of equipment	7	(16)	7	(10)
Interest/accretion expense	(196)	(188)	(582)	(556)
	330	128	832	356

Net income (loss) before income taxes and cumulative effect of change in accounting principle	3,571	(3,301)	2,557	(11,877)
Income tax provision	124	--	124	--
Net income (loss) before cumulative effect of change in accounting principle	3,447	(3,301)	2,433	(11,877)
Cumulative effect of change in accounting principle [4]	--	--	252	--

Net income (loss)	$ 3,447	$ (3,301)	$ 2,685	$ (11,877)

Basic net income (loss) per share before cumulative effect of accounting change	$ 0.16	$ (0.15)	$ 0.11	$ (0.55)
Diluted net income (loss) per share before cumulative effect of accounting change	0.16	(0.15)	0.11	(0.55)

Accounting change	--	--	0.01	--

Basic net income (loss) per share	0.16	(0.15)	0.12	(0.55)
Diluted net income (loss) per share	$ 0.16	$ (0.15)	$ 0.12	$ (0.55)

Weighted average shares outstanding -- basic	21,911	21,740	21,889	21,726

Weighted average shares outstanding -- diluted	22,037	21,740	22,056	21,726

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 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.

	Three Months Ended	Nine Months Ended
	September 2006 [in thousands] (unaudited)	September 2006 [in thousands] (unaudited)
Net Income (GAAP)	$ 3,447	$ 2,685
Cumulative effect of change in accounting principle*	--	(252)
Employee stock option expense:
Research and development	377	1,583
General and administrative	555	2,038
Net Income excluding employee stock option expense and cumulative effect of change in accounting principle (Non- GAAP)	$ 4,379	$ 6,054

* 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 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.

Trimeris, Inc.

Condensed Balance Sheets
[$ in thousands]

	September 30, 2006 (unaudited)	December 31, 2005
Assets
Cash, cash equivalents and investment securities available-for-sale	$ 44,505	$ 36,889
Other current assets	11,418	11,923
Total current assets	55,923	48,812
Property, furniture and equipment -- net	2,386	2,640
Total other assets	9,463	8,690
Total assets	$ 67,772	$ 60,142
Liabilities and Stockholders' Equity
Total current liabilities	$ 8,830	$ 8,079
Long term portion of deferred revenue	9,681	10,477
Accrued marketing costs	17,089	16,507
Other liabilities	712	706
Total liabilities	36,312	35,769

Total stockholders' equity	31,460	24,373
Total liabilities and stockholders' equity	$ 67,772	$ 60,142

FUZEON Net Sales

(Recognized by Roche, our collaborative partner)
[$ in millions]

(unaudited)

	Three Months Ended,		Nine Months Ended,
	September 30, 2006	September 30, 2005	September 30, 2006	September 30, 2005

United States and Canada	$ 33.5	$ 28.4	$ 92.0	$ 76.9
Rest of World	29.5	20.5	83.7	68.4
Worldwide Total	$ 63.0	$ 48.9	$ 175.7	$ 145.3

--end--

Contacts:

Andrew Graham

Director of Finance

Michael A. Recny, Ph.D.

Vice President, Corporate Development

Trimeris, Inc.

(919) 419-6050

EX-99.2 3 rrd136082_16935.htm THIRD QUARTER 2006 EARNINGS CONFERENCE CALL TRANSCRIPT TRIMERIS, INCORPORATED Exhibit 99.2

TRIMERIS, INC.

3^rd Quarter 2006 Earnings Conference Call Transcript

Moderator: Steven Skolsky

November 7, 2006

4:00 pm CT

Operator: Good afternoon and welcome to the Trimeris Third Quarter 2006 Earnings conference call.

This conference call may contain projections, estimates and other forward-looking statements that involved a number of risks and uncertainties, including those discussed in Trimeris' filings with the Securities and Exchange Commission.

Among the factors that could cause actual results to differ materially are the following: There is uncertainty regarding the success of our research and development activities, regulatory authorizations and product commercialization. The results of our previous clinical trials are not necessarily indicative of future clinical trials. Our drug candidates are based upon novel technology, are difficult and expensive to manufacture and may cause unexpected side effects.

For a complete description of these risks, see Trimeris' Form 10-K filed with the Securities and Exchange Commission on March 10, 2006 and the company's periodic reports filed with the SEC. Actual manufacturing and commercialization results may differ from previous results and current projections.

While the information presented during this call represents management's current judgment on the future direction of the company's business, such risks and uncertainties can cause actual operating results to differ materially from any future performance suggested herein.

Trimeris undertakes no obligation to update these forward-looking statements to reflect events or circumstances arising after the date hereof.

I'll now turn the call over to Mr. Steven Skolsky, Chief Executive Officer.

Steven Skolsky: Thanks for being with us for our Third Quarter 2006 Earnings conference call. Joining me today on the call are several members of the Trimeris senior management team.

There are three key messages that I want to convey to you on this call today. And I'll provide more detail surrounding each of them later in the call.

First, we are very pleased to have reported record quarterly earnings of 16 cents per share on record quarterly revenues of $9.7 million, which represents a significant financial milestone for the company.

Second, we have strengthened our cash position to $44.5 million while continuing to both invest in the Fuzeon brand, and to advance our novel next generation HIV fusion inhibitor peptide, TRI-1144, towards human clinical studies in 2007.

And finally, we reiterate our projections for being profitable for the full year of 2006, including option expense, having now achieved profitability of 12 cents per share for the first nine months of this year.

I will now give you more details of our financial results, both before and after stock option expense.

For the third quarter 2006, we reported total revenue of $9.7 million -- an increase of 114% compared to the same period of last year.

Including option expense, we reported a net profit of $3.4 million or 16 cents per share. Excluding option expense, net income for this quarter was $4.4 million compared to a loss of $3.3 million in the same period last year.

For the first nine months of 2006, total revenues were $24.4 million -- an increase of 120% compared to the first nine months of 2005.

Including option expense, we reported a net profit of $2.7 million or 12 cents per share in this period. Excluding option expense, net income for the period was $6.1 million compared to a loss of $11.9 million in the same period last year.

Our cash position has also improved from $36.9 million as of December 31, 2005 to $44.5 million as of September 30, 2006.

The primary drivers of our improved financial results for this quarter compared to the same period last year were the following: Strong global sales of Fuzeon, which grew by 29% over the third quarter of 2005, improvements in our Fuzeon cost of goods sold and favorable gross-to-net sales adjustments, an increase to 12% in the royalty rate we are paid on net sales of Fuzeon outside the U.S. and Canada by Roche, and finally, careful management of our operating expenses across all areas of our business, while still funding commercial support for Fuzeon and our pipeline R&D programs.

We continue to make progress with our ongoing commercial and product development efforts supporting the Fuzeon brand during this quarter. Our presentations at the recent ICAAC and IDSA meetings provided new data regarding the contribution that Fuzeon, a fully active drug from a novel class, can make in creating highly suppressive HIV regimens for treatment-experienced patients.

We also reported on the benefits of needle-free administration of Fuzeon from our WAND study, showing that we achieved the primary endpoint of a 50% reduction in the incidence of painful injection site reactions with the use of the Bioject B2000 needle-free device compared to standard needle syringes.

In the fourth quarter of 2006, we expect to present further clinical data relating to once-daily administration of Fuzeon, as well as data from the switch tox study outlining the potential to improve upon HIV drug-related side effects experienced by patients who exchanged Fuzeon for one or more other drugs in their regimen.

Progress on our clinical studies, including our BOSS and BLQ trials are continuing as expected, with initial data from these studies anticipated in the first half of 2007.

Our next generation fusion inhibitor peptide candidate, TRI-1144, continues to be advanced with our partner, Roche. As previously reported, GMP chemical synthesis of this TRI-1144 at our own facilities began in the third quarter and this effort is on target to provide adequate supplies to support first-time-in-man studies with TRI-1144 in 2007.

In summary, we are very pleased with our overall financial performance this quarter and especially for having achieved record quarterly earnings of 16 cents per share on record revenues of $9.7 million.

Thank you. And I will now take your questions.

Operator: At this time I would like to remind everyone in order to ask a question, simply press star then the number 1 on your telephone keypad. If you would like to withdraw your question, press star then the number 2. Please hold one moment for the first question.

And the first question will come from the line of Gur Washwald with Piper Jaffray.

Gur Washwald: Good afternoon.

Steven Skolsky: Good afternoon, Guhr.

Gur Washwald: If I remember, on the sales call you had mentioned that you had seen an upswing in the Prezista prescriptions and a correlation, hopefully with Fuzeon on a weekly basis. I was wondering if you have continued to see that and if you have any color on that for us?

Steven Skolsky: Yeah. Thanks for the question, Gur. Actually, we have seen that continued trend. Prezista has hovered around the 700 prescriptions total-wise per week for the past several weeks. The recent return showed actually in the 600 to 700 range.

Over the past three or four weeks since we had our last call, actually we've seen an upswing in our prescriptions to pretty high levels, both on total and new basis.

We actually had our second highest weekly prescription level this past week of 359 scripts and actually had our fifth largest total script count for the past two years at a level of 1,104 scripts.

So we're seeing the beginnings of some signs of growth over that - what we consider a considerable threshold of 300 new scripts and over 1,000 total scripts.

Gur Washwald: Thank you.

Operator: Once again, everyone if you would like to ask a question, simply press star then the number 1 on your telephone keypad. Your next question comes from the line of Sharon Seiler with Punk Ziegel.

Sharon Seiler: Good afternoon. Two financial questions. One, you had mentioned in your scripted remarks the cost of goods for Fuzeon had improved and now it looks like you got about 16.5% of Roche's recorded sales in North America.

Is that a level that you think is sustainable over the next several quarters? Would you expect it to be better or to worsen?

Steven Skolsky: Sharon, not too long ago we mentioned that we would be in the 35% to 40% range during the course of the whole year. We saw some improvement in our cost of goods during this quarter as a result of the 5% price increase.

Sharon Seiler: Okay. And the second question I had was with regard to operating expenses. So your - both R&D and G&A expenses have been trending down over 2006.

Steven Skolsky: Yes.

Sharon Seiler: And again, would you expect those to go back - those expenses to start to rise again in 2007 as you enter the new inhibitor peptide into the clinic?

Steven Skolsky: Yeah. I won't speculate on the magnitude of the diminution of those expenses in coming quarters - for too far advance in the future. However, I would comment on the decrease that we've seen during the course of this quarter.

The collective decrease between our G&A expenses as well as R&D quarter on quarter has been - I mean period on period from last year - has been down around $2-1/2 million.

Close to $2 million of that is within the R&D realm and another 1/2 million was in G&A. The G&A expenses are down as a result of consolidation of our facilities. Facilities costs have come down significantly during that period of time.

And something we referred to in many conference calls, actually going back quite some time ago, at the beginning of the year was the continued decrease in our post-marketing commitments associated with T-20 support that were a basis of approval for Fuzeon with the FDA. And we're continuing to see that decline in overall expenses.

As regard to your comment around NGFI, bear in mind that again we'll be splitting those expenses with our partner, Roche, 50/50 going forward.

Sharon Seiler: Okay. Thank you.

Operator: Once again, everyone if you would like to ask a question, simply press star then the number 1 on your telephone keypad.

And at this time, sir, there are no further questions.

Steven Skolsky: Well if there are no further questions, I'd just like to close again reiterating some of my key remarks from our scripted comments.

First, we're very pleased to have reported record earnings of 16 cents per share, including option expense this quarter. And have increased our cash reserves by a total of $7.6 million since the beginning of the year.

Second, our strong financial performance this quarter has contributed to achieving record profitability of 12 cents per share over the first nine months, including option expense.

Consequently, we're confident in maintaining our guidance of being profitable for the full year of 2006, including option expense.

And finally, we are continuing to progress our novel next generation HIV fusion inhibitor peptide towards first-time-in-man studies and look forward to updating you on its progress in 2007.

Thank you for joining on this call today.

Operator: Ladies and gentlemen, this does conclude the Trimeris Third Quarter 2006 Earnings conference call. You may now disconnect.

END

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DE		561808663
(State or other jurisdiction of		(IRS Employer
incorporation)		Identification No.)

		TRIMERIS INC


Date: November 13, 2006	By:	/s/ Robert R. Bonczek
		Robert R. Bonczek
		CFO and General Counsel