Preventing HIV from Breaking and Entering


By Amy Tsao By Amy Tsao By Amy Tsao By Amy Tsao By Amy Tsao By Amy Tsao In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. In the last five years, powerful new drugs have been able to win battles against HIV, the elusive virus that causes AIDS. But the war is far from over. The deadly virus has been fighting back, mutating into new strains that resist the medicines. And doctors are increasingly discovering that the drugs can be nearly as bad as the disease itself. Patients are beginning to suffer from a host of serious side effects, from diabetes to heart disease. "We need new, improved drugs," says Dr. Roy Gulick, director of the Cornell Clinical Trials Unit.

That's why a race is on to develop new weapons capable of outwitting HIV. One of the most promising is coming from Trimeris (TRMS), a small biotech company in Durham, N.C. Trimeris is on its way to introducing the first examples of a new whole new class of HIV/AIDS drugs (see BW Online, 2/6/01, "Attacking HIV Every Which Way").

The existing 21 approved HIV treatments all work by preventing the virus from copying itself once it has infected cells. That approach is a bit like trying to kill a potential murderer after he has broken into your house. In contrast, Trimeris' drugs seek to keep the bad guy from getting inside in the first place, leaving him to stomp around harmlessly outside.

ELEGANT. Specifically, the idea is to block a step in the infection process called fusion. As HIV approaches a cell, it first latches onto a molecule, called CD4, that sticks out from the cell's surface like a pole. Once attached, the virus begins a remarkable transformation. It first changes shape in a way that allows it to grab onto a second receptor, called CCR5.

Then the real action begins. The second binding triggers the unleashing of a molecular harpoon. Called gp41, the harpoon shoots out, spearing the cell membrane. Once anchored, the harpoon then folds into a hairpin shape, putting the guts of the virus down to the cell surface. From there, the cell is doomed. The virus fuses with the cell, spewing its deadly cargo of genes into its victim.

Trimeris scientists have cleverly devised a drug, called T-20, that can bind to gp41 -- and thus prevent HIV from breaching the cell's defenses. Conceptually elegant, T-20 and a more advanced version in development known as T-1249, will likely be the first AIDS treatments that stop the virus by barring the door to cells. "The importance of T-20 is that it has a unique mode of action," explains John Sonnier, an analyst at Prudential Vector Securities. "If you're resistant to multiple other drugs, the virus will still be sensitive to T-20."

REPETITIOUS STORY. Convincing doctors and analysts that a whole new tack to fighting HIV will work hasn't been easy for the company. "With the identification of a new target for HIV therapy comes a good deal of skepticism," says Dani Bolognesi, CEO of Trimeris. "For folks to realize there were extracellular targets, it has taken telling the story repeatedly for them to come to accept that."

So Trimeris is using a highly focused strategy to win over doubters and get the drug to market as fast as possible. The idea is to prove T-20 offers new hope to the estimated one-third of AIDS/HIV patients for whom the existing drugs don't work. Since these patients have no other options, the Food & Drug Administration is likely to put T-20 on the fast track for approval.

Trimeris, with its partner Hoffmann-La Roche, is already starting Phase III (or late-stage) trials in patients who have failed to respond to other treatment alternatives. These trials are expected to wrap up at the end of 2001, and a submission to the FDA should be in the works for the spring of 2002. The FDA could approve the product as early as the fall of next year.

LARGE PROTEIN. But Trimeris also sees a wider use for the drug -- adding it to the potent drug cocktails being taken by many other AIDS patients. The company has begun trials to demonstrate that T-20 offers benefits even when existing drugs still work. At an HIV research meeting in Chicago in early February, the company released data that showed T-20 given with a cocktail of oral drugs was shown to be well tolerated and caused higher decreases in viral load than patients who were given the cocktail alone.

Unlike existing drugs, which are small chemicals, T-20 is a relatively large protein -- in fact, it's a piece of gp41 itself. That has advantages and disadvantages. On the plus side, because of the large size, T-20 doesn't enter cells -- healthy or not. As a result, it seems to cause fewer of the debilitating side effects that AIDS patients get from the available pill treatments. "We see no systemic side effects nor any reactions with other treatments," Bolognesi says. "There are some really solid advantages that go with this molecule."

T-20 is hard to make, and hard to take. Patients will have to inject it

On the minus side, T-20 structure brings two problems. For one thing, the drug is hard to make. Because T-20 is a long, complex peptide, it cannot be manufactured easily by the methods used to produce other protein drugs. The extra length makes it hard to keep the chemical synthesis stable. As a result, analysts worry that mass production of T-20 will be very complicated and expensive. "There is no other peptide [being produced] on this scale that I know of," said Joe Dougherty of Lehman Brothers.

Trimeris claims it can meet the manufacturing challenge. In a separate agreement with Roche, the big drug company will make T-20 in one of its facilities, located in Boulder, Colo. The companies are able to make enough for the trials, and Dougherty expects they are "within striking distance" of the scale needed for commercialization.

A NEEDLE A DAY. The other big disadvantage is that T-20 can't be swallowed like a pill. Instead, it must be injected. In its original formulation, the drug had to be injected four times a day. Some patients dropped out of the clinical trials because they couldn't face that many needles. Trimeris has changed the formulation so that the drug requires only twice-daily subcutaneous injections. And its second-generation entry-inhibitor drug, T-1249, needs to be given only once a day.

If the drugs work as well as hoped, patients will be able to tolerate sticking themselves with needles every day, doctors say. "If you don't have a choice, then you will go with the subcutaneous," says Dr. Pablo Tebas, a researcher and clinician at Washington University School of Medicine at St. Louis, who has helped to conduct trials of T-20.

That's why analysts predict that T-20 should be a financial success, if not a blockbuster drug. Because of the manufacturing difficulties, Dougherty expects the companies will have to charge between $10,000 and $12,000 for an annual supply of T-20, about twice what each of the existing drugs costs. Profit margins will also not be as attractive as for a typical pharmaceutical, Dougherty adds, again because of manufacturing costs.

HURDLE PAYMENTS. But Trimeris should do quite well. Sonnier expects the first full year of T-20 sales to start in 2003, with $68 million in the first year, $135 million in 2004 and $222 million in 2005. Dougherty is bullish too, projecting that the drug will reach around $400 million at peak sales.

Under terms of the Roche deal, Trimeris gets 50% of profits in the U.S., royalties on European sales, and milestone payments of up to $78 million as it jumps certain hurdles. Given the potential sales and the favorable deal, Sonnier has a strong buy rating on Trimeris' stock and a $75 price target. Dougherty rates Trimeris a buy, with a $90 price target. On Feb. 13, the stock was at $43.88, down from its 52-week high of $80.

To succeed, Trimeris, like all biotechs of its size (market cap: $700 million), needs substantial funding to keep moving forward on its research projects. The company has just under $100 million in cash reserves, and it will burn through $60 million by the end of 2001, Sonnier estimates. Trimeris will likely need to seek out financing sometime this year, Dougherty adds.

SIZABLE ADVANCE. The company also has competition. Pharmaceutical giant Schering-Plough has several entry-inhibitor drug candidates in development that aim to block CCR5, the second cell receptor that HIV latches onto before the fusion process begins. Others biotechs, like Progenics (PGNX) also have candidates.

Yes, Trimeris stock is still fraught with the risks of your typical tiny biotech, but if the company's products prove to work, they'll be a sizable advance for HIV patients. Given that the only way to fight the disease now is to come at it from all possible angles, Trimeris' T-20 opens up a new battle front -- for AIDS sufferers, doctors, and investors. Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online Tsao covers biotechnology issues for BusinessWeek Online. Follow The Biotech Beat every week, only on BW Online


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus