Thursday, November 16, 2006

Next Bio Take Over?

Is another biotech getting ready to be bought out? The market thinks Trimeris (Ticker: TRMS), which sells Fuzeon – an HIV inhibitor, is in play. The CEO just got the boot and they’re aggressively cutting costs with layoffs. The company is looking to earn $1.00 and generate $20 million in cash in 2007. The stock is trading around $11.80 and it is very cheap if the company can earn $1 in 2007. The bet is that Roche may make a move on this company since they already have a marketing agreement to sell Fuzeon. If there is a buyout, it’ll happen soon. Here’s what one of the analyst thinks about this potential buyout: "If this hasn't been resolved by [the fourth-quarter conference call], I'm going back to a sell' rating," said Jindal (analyst with ThinkEquity Growth Partners), who rated Trimeris "accumulate". It’s an interesting speculation, but as a rule I NEVER EVER invest in potential takeovers.


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