TRIMERIS INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-23155

TRIMERIS, INC.

(Exact name of registrant as specified in its charter)

Delaware

56-1808663

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3518 Westgate Drive

Durham, North Carolina 27707

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (919) 419-6050

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). x Yes ¨ No

The number of shares outstanding of the registrant’s common stock as of August 5, 2004 was 21,807,860.

TRIMERIS, INC.

FORM 10-Q

For the Six Months Ended June 30, 2004

INDEX


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Balance Sheets as of December 31, 2003 and June 30, 2004 (unaudited)	1

	Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2003 and 2004	2

	Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2003 and 2004	3

	Notes to Financial Statements (unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Submission of Matters to a Vote of Security Holders	25

Item 5.	Other Information	25

Item 6.	Exhibits and Reports on Form 8-K	25

Signature Page		27

Exhibit Index		28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TRIMERIS, INC.

BALANCE SHEETS

(in thousands, except par value)


	December 31, 2003			June 30, 2004
				(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	85,714		$	54,130
Short-term investments		6,484			12,762
Accounts receivable		1			—
Prepaid expenses		2,105			1,092

Total current assets		94,304			67,984

Property, furniture and equipment, net		2,578			2,584

Other assets:
Patent costs, net		1,650			1,757
Advanced payment - Roche		—			4,007
Equipment deposits		68			60

Total other assets		1,718			5,824

Total assets	$	98,600		$	76,392

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	893		$	1,070
Accounts payable – Roche		11,029			10,018
Current installments of capital lease obligations		274			94
Accrued compensation		1,739			2,964
Deferred revenue – Roche		3,954			2,185
Accrued expenses		674			644

Total current liabilities		18,563			16,975

Deferred revenue - Roche		11,369			12,828
Accrued marketing costs		—			3,678

Total liabilities		29,932			33,481

Commitments and contingencies
Stockholders’ equity:
Series A, B, C, and D preferred stock at $.001 par value per share, 10,000 shares authorized, zero shares issued and outstanding at December 31, 2003 and June 30, 2004 (unaudited)		—			—
Common Stock at $.001 par value per share, 60,000 shares authorized, 21,573 and 21,808 shares issued and outstanding at December 31, 2003 and June 30, 2004 (unaudited)		22			22
Additional paid-in capital		398,925			401,974
Accumulated deficit		(330,276	)		(356,372	)
Deferred compensation		—			(2,688	)
Accumulated other comprehensive loss		(3	)		(25	)

Total stockholders’ equity		68,668			42,911

Total liabilities and stockholders’ equity	$	98,600		$	76,392

See accompanying notes to financial statements.

TRIMERIS, INC.

STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2003			2004			2003			2004
Revenue:
Milestone revenue	$	750		$	534		$	986		$	1,060
Royalty revenue		87			1,109			87			1,910

Total revenue		837			1,643			1,073			2,970

Operating expenses:
Collaboration loss		5,763			9,850			10,215			12,396

Research and development:
Non-cash compensation		203			(2	)		143			(53	)
Other research and development expense		10,694			5,382			20,377			11,682

Total research and development expense		10,897			5,380			20,520			11,629

General and administrative:
Non-cash compensation		233			12			645			12
Other general and administrative expense		2,399			2,818			4,567			5,484

Total general and administrative expense		2,632			2,830			5,212			5,496

Total operating expenses		19,292			18,060			35,947			29,521

Operating loss		(18,455	)		(16,417	)		(34,874	)		(26,551	)

Other income (expense):
Interest income		414			199			920			460
Interest expense		(11	)		(2	)		(26	)		(5	)

Total other income (expense)		403			197			894			455

Net loss	$	(18,052	)	$	(16,220	)	$	(33,980	)	$	(26,096	)

Basic and diluted net loss per share	$	(0.84	)	$	(0.75	)	$	(1.59	)	$	(1.21	)

Weighted average shares used in per share computations		21,418			21,610			21,397			21,596

See accompanying notes to financial statements.

TRIMERIS, INC.

STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Six Months Ended June 30,
	2003			2004
Cash flows from operating activities:
Net loss	$	(33,980	)	$	(26,096	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		866			706
Other amortization		39			29
Amortization of deferred revenue – Roche		(986	)		(1,060	)
Non-cash compensation		788			(41	)
Changes in operating assets and liabilities:
Accounts receivable		(1	)		1
Prepaid expenses		278			1,013
Other assets		47			8
Accounts payable		(708	)		177
Accounts payable – Roche		(9,261	)		(1,011	)
Accrued compensation		(521	)		1,225
Accrued expenses		747			(30	)
Advanced payment - Roche		—			(4,007	)
Deferred revenue – Roche		15,500			750

Net cash used by operating activities		(27,192	)		(28,336	)

Cash flows from investing activities:
Purchases of short-term investments		(7,445	)		(14,679	)
Maturities of short-term investments		26,368			8,379
Purchases of property and equipment		(425	)		(712	)
Patent costs		(412	)		(136	)

Net cash provided (used) by investing activities		18,086			(7,148	)

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