RESEARCH TRIANGLE PARK, N.C. – HealthCor, a New York investment firm with some $1.8 billion under management, is calling for the board of directors at Trimeris to change direction.

Citing risks and expenses associated with further research into a new AIDS drug, HealthCor told the board it’s time to sell all or part of the firm and to stop further research and development.

“We are absolutely AGAINST this decision as it all but eliminates the growth prospects for the Company,” HealthCor’s co-chief executives wrote, referring to Trimeris’ decision to continue R&D.

“We believe that the market agrees with our assessment,” they said. “We note that TRMS has been one of the worst performing biotech stocks over the past four years. During this time period, in spite of the fact that the revenues of the Company have steadily increased, the share price has plummeted from $54.57 per share (reached on July 15, 2003) to its current price of $6.65 per share, as of August 10, 2007, a decline of 88%. This decline is in the context of the Amex BTK Index increasing 61% and the Nasdaq increasing 45% during the same time period. In addition, there are five brokerage firms providing analyst coverage of TRMS and not a single one rates the stock as a ‘Buy.’ Clearly, some dramatic changes need to be made.

“This precipitous drop in value of TRMS is unacceptable.”

Trimeris shares have indeed fallen sharply to a 52-week low of $5.34 against a 52-week high of $13.85. Shares traded Tuesday at $6.89, down 22 cents.

Interestingly, HealthCor didn’t become a major stockholder in Trimeris until June. Trimeris announced its decision in March. Roche, its partner in development and sales of the AIDS drug Fuzeon, pulled out of further fusion inhibitor research with Trimeris and returned all rights to the Morrisville-based biopharmaceutical firm.

Since June 8, HealthCor has built a 15-percent stake in Trimeris (Nasdaq: TRMS), buying 3.34 million shares. It went on a buying spree on Aug. 9 and 10 and 13, buying 1.2 million of those shares as Trimeris reported a profitable quarter of $4.7 million on the 9th.

Press reports broke about HealthCor wanting a meeting with management at about the same time. And on Monday, when Trimeris interim chief executive E. Lawrence Hill, Jr. had not yet responded to HealthCor’s contacts, HealthCor took its complaints public in the form of a stinging letter sent to the board. The letter also was filed with the Securities and Exchange Commission, thus making it available for public access.

“HealthCor has attempted to engage in discussions with the Issuer’s management concerning alternatives to the current business plan,” HealthCor said in the Aug. 13 SEC filing. “As the Issuer’s management has been non-responsive to date, HealthCor has forwarded a letter to the Issuer’s Board of Directors specifying its concerns and recommendations.”

HealthCor, which has been actively involved in the battle for Bausch & Lomb, said Trimeris is undervalued and is “concerned” that the current Trimeris plan to develop a new HIV drug “have the effect of severely depressing the value of the company shares.”

It’s HealthCor’s “belief” that the Trimeris board should “consider alternatives to the current business plan, including strategic alternatives such as a sale of all or a part of the business in order to maximize shareholder value.”

In the letter, HealthCor said Hill “did not respond to our phone calls or our letter.”

For the entire letter, see the Web link to the SEC filing: