- Morgan Stanley comments on Trimeris (NASDAQ:TRMS) following restructuring news issued last night saying investors will likely applaud the near-term cost reductions, but given the company's already thin operating expenses and impending threats to Fuzeon (e.g. 2007 compassionate use programs for Merck's integrase inhibitor and Pfizer's CCR5 inhibitor), they do not see how the company can have its cake (invest for sustainable growth) and eat it too (near-term profits). The company gave little visibility on how it plans to achieve its goal of $1.00 per share in EPS, and given the need to invest in the next generation fusion inhibitor (entering human testing in 2007), they do not see how this level of profits is sustainable over the next few years without giving up significant long-term economics on the pipeline (unless R&D investment increases dramatically, the firm expects the company will have to take smaller profit if next-generation drug reaches the market).
They expect the stock will react positively to tonight's announcement in the short-term, but once long-term implications sink in, more sobering thoughts may prevail.
Maintains Underweight.
Notablecalls: I suspect TRMS may be a short around $12 level.
They expect the stock will react positively to tonight's announcement in the short-term, but once long-term implications sink in, more sobering thoughts may prevail.
Maintains Underweight.
Notablecalls: I suspect TRMS may be a short around $12 level.
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