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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 March 31, 2009



| ̈ | 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.)

2530 Meridian Parkway, 2ndFloor

Durham, North Carolina 27713

(Address of principal executive offices, including zip code)

Registrants telephone number, including area code: (919) 806-4682





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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

The number of shares outstanding of the registrants common stock as of April 27, 2009 was 22,349,841.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a smaller reporting company or a non-accelerated filer.
See definition of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (do not check if a smaller reporting company) |  | Smaller Reporting Company |  | x









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TRIMERIS, INC.

FORM 10-Q

March 31, 2009

INDEX



|               |  |                                                                                       |  |     
|-------------- |  | ------------------------------------------------------------------------------------- |  | ----
|               |  |                                                                                       |  | Page
|PART I.        |  | FINANCIAL INFORMATION                                                                 |  |     
|               |  |                                                                                      
|Item 1.        |  | Financial Statements (unaudited)                                                      |  | 3   
|               |  |                                                                                      
|               |  | Condensed Balance Sheets as of March 31, 2009 and December 31, 2008                   |  | 3   
|               |  |                                                                                      
|               |  | Condensed Statements of Operations for the Three Months Ended March 31, 2009 and 2008 |  | 4   
|               |  |                                                                                      
|               |  | Condensed Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 |  | 5   
|               |  |                                                                                      
|               |  | Notes to Condensed Financial Statements                                               |  | 6   
|               |  |                                                                                      
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 13  
|               |  |                                                                                      
|Item 3.        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 21  
|               |  |                                                                                      
|Item 4.        |  | Controls and Procedures                                                               |  | 21  
|               |  |                                                                                      
|PART II.       |  | OTHER INFORMATION                                                                     |  |     
|               |  |                                                                                      
|Item 1.        |  | Legal Proceedings                                                                     |  | 23  
|               |  |                                                                                      
|Item 1A.       |  | Risk Factors                                                                          |  | 23  
|               |  |                                                                                      
|Item 2.        |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 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                                                                              |  | 25  
|               | 
|Signature Page |  | 26                                                                                   
|               | 
|Exhibit Index  |  | 27                                                                                   



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PART I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

TRIMERIS, INC.

CONDENSED BALANCE SHEETS

(in thousands, except par value)

(unaudited)



|                                                                                                                     |  |               |          |   |                  |   |          |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | - | ---------------- | - | -------- | -
|                                                                                                                     |  | March 31,2009 |          |   | December 31,2008 |  
|Assets                                                                                                               |  |               |          |   |                  |   |          |  
|Current assets:                                                                                                      |  |               |          |   |                  |   |          |  
|Cash and cash equivalents                                                                                            |  | $             | 18,834   |   |                  | $ | 14,389   |  
|Investment securities available-for-sale                                                                             |  |               | 12,506   |   |                  |   | 14,361   |  
|Accounts receivableRoche                                                                                            |  |               | 2,446    |   |                  |   | 2,840    |  
|Other receivables                                                                                                    |  |               | 38       |   |                  |   | 36       |  
|Prepaid expenses                                                                                                     |  |               | 2,139    |   |                  |   | 458      |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total current assets                                                                                                 |  |               | 35,963   |   |                  |   | 32,084   |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Long-term investment securities available-for-sale                                                                   |  |               | 1,798    |   |                  |   | 2,827    |  
|                                                                                                                     |  |              
|Other assets:                                                                                                        |  |               |          |   |                  |   |          |  
|Patent costs, net                                                                                                    |  |               | 1,748    |   |                  |   | 1,750    |  
|Advanced paymentRoche                                                                                               |  |               | 6,804    |   |                  |   | 6,706    |  
|Deposits and other assets                                                                                            |  |               | 344      |   |                  |   | 339      |  
|Deferred tax asset                                                                                                   |  |               | 506      |   |                  |   | 506      |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total other assets                                                                                                   |  |               | 9,402    |   |                  |   | 9,301    |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total assets                                                                                                         |  | $             | 47,163   |   |                  | $ | 44,212   |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Liabilities and Stockholders Equity                                                                                 |  |               |          |   |                  |   |          |  
|Current liabilities:                                                                                                 |  |               |          |   |                  |   |          |  
|Accounts payable                                                                                                     |  | $             | 1,455    |   |                  | $ | 325      |  
|Accrued compensation                                                                                                 |  |               | 615      |   |                  |   | 910      |  
|Deferred revenueRoche                                                                                               |  |               | 265      |   |                  |   | 265      |  
|Accrued expenses                                                                                                     |  |               | 1,690    |   |                  |   | 2,041    |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total current liabilities                                                                                            |  |               | 4,025    |   |                  |   | 3,541    |  
|                                                                                                                     |  |              
|Deferred revenueRoche                                                                                               |  |               | 1,238    |   |                  |   | 1,304    |  
|Accrued marketing costs                                                                                              |  |               | 18,335   |   |                  |   | 18,271   |  
|Accrued compensation-long-term                                                                                       |  |               | 13       |   |                  |   | 74       |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total liabilities                                                                                                    |  |               | 23,611   |   |                  |   | 23,190   |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Stockholders equity:                                                                                                |  |               |          |   |                  |   |          |  
|Preferred Stock at $.001 par value per share, 10,000 shares authorized, zero shares issued and outstanding           |  |               |         |   |                  |   |         |  
|Common Stock at $.001 par value per share, 60,000 shares authorized, 22,350 and 22,300 shares issued and outstanding |  |               | 22       |   |                  |   | 22       |  
|Additional paid-in capital                                                                                           |  |               | 356,879  |   |                  |   | 356,600  |  
|Accumulated deficit                                                                                                  |  |               | (333,519 | ) |                  |   | (335,652 | )
|Accumulated other comprehensive income                                                                               |  |               | 170      |   |                  |   | 52       |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total stockholders equity                                                                                           |  |               | 23,552   |   |                  |   | 21,022   |  
|                                                                                                                     |  |               |          |   |                  |   |          |  
|                                                                                                                     |  |              
|Total liabilities and stockholders equity                                                                           |  | $             | 47,163   |   |                  | $ | 44,212   |  
|                                                                                                                     |  |               |          |   |                  |   |          |  

See accompanying notes to condensed financial statements.



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TRIMERIS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)



|                                                               |  |                                     |        |   |      |   |        |  
|-------------------------------------------------------------- |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                                               |  | For the Three Months EndedMarch 31, |       
|                                                               |  | 2009                                |        |   | 2008 |  
|Revenue:                                                       |  |                                     |        |   |      |   |        |  
|Milestone revenue                                              |  | $                                   | 66     |   |      | $ | 66     |  
|Royalty revenue                                                |  |                                     | 1,969  |   |      |   | 2,840  |  
|Collaboration income                                           |  |                                     | 2,442  |   |      |   | 2,392  |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Total revenue and collaboration income                         |  |                                     | 4,477  |   |      |   | 5,298  |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Operating expenses:                                            |  |                                     |        |   |      |   |        |  
|Research and development                                       |  |                                     |       |   |      |   | 1,429  |  
|General and administrative                                     |  |                                     | 1,457  |   |      |   | 1,692  |  
|Gain on disposal of equipment                                  |  |                                     | (23    | ) |      |   | (418   | )
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Total operating expenses                                       |  |                                     | 1,434  |   |      |   | 2,703  |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Operating income                                               |  |                                     | 3,043  |   |      |   | 2,595  |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Other income (expense):                                        |  |                                     |        |   |      |   |        |  
|Interest income                                                |  |                                     | 164    |   |      |   | 822    |  
|Gain/(loss) on investments                                     |  |                                     | 34     |   |      |   | (738   | )
|Interest expense                                               |  |                                     | (64    | ) |      |   | (94    | )
|                                                               |  |                                     |        |   |      |   |        |  
|Total other income (expense)                                   |  |                                     | 134    |   |      |   | (10    | )
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Income before taxes                                            |  |                                     | 3,177  |   |      |   | 2,585  |  
|Income tax provision                                           |  |                                     | 1,044  |   |      |   | 257    |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Net income                                                     |  | $                                   | 2,133  |   |      | $ | 2,328  |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Basic net income per share                                     |  | $                                   | 0.10   |   |      | $ | 0.11   |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Diluted net income per share                                   |  | $                                   | 0.10   |   |      | $ | 0.10   |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Weighted average shares used in basic per share computations   |  |                                     | 22,249 |   |      |   | 22,167 |  
|                                                               |  |                                     |        |   |      |   |        |  
|                                                               |  |                                    
|Weighted average shares used in diluted per share computations |  |                                     | 22,249 |   |      |   | 22,252 |  
|                                                               |  |                                     |        |   |      |   |        |  

See accompanying notes to condensed financial statements.



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TRIMERIS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)



|                                                                                  |  |                             |        |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------- | -
|                                                                                  |  | Three Months EndedMarch 31, |       
|                                                                                  |  | 2009                        |        |   | 2008 |  
|Cash flows from operating activities:                                             |  |                             |        |   |      |   |         |  
|Net income                                                                        |  | $                           | 2,133  |   |      | $ | 2,328   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |        |   |      |   |         |  
|Depreciation and amortization of property, furniture and equipment                |  |                             |       |   |      |   | 96      |  
|Gain on disposal of equipment                                                     |  |                             | (23    | ) |      |   | (418    | )
|Patent/license amortization                                                       |  |                             | 63     |   |      |   | 26      |  
|Patent costs expensed                                                             |  |                             | 43     |   |      |   | 50      |  
|Amortization of deferred revenueRoche                                            |  |                             | (66    | ) |      |   | (66     | )
|Stock compensation expense                                                        |  |                             | 279    |   |      |   | 376     |  
|Accrued marketing costs                                                           |  |                             | 64     |   |      |   | 94      |  
|Decrease (increase) in assets:                                                    |  |                             |        |   |      |   |         |  
|Accounts receivableRoche                                                         |  |                             | 394    |   |      |   | 8,679   |  
|Other receivables                                                                 |  |                             | (2     | ) |      |   | (118    | )
|Prepaid expenses                                                                  |  |                             | (1,681 | ) |      |   | 191     |  
|Advanced paymentRoche                                                            |  |                             | (98    | ) |      |   | (47     | )
|Deposits and other assets                                                         |  |                             | (12    | ) |      |   | 7       |  
|Increase (decrease) in liabilities:                                               |  |                             |        |   |      |   |         |  
|Accounts payable                                                                  |  |                             | 1,130  |   |      |   | (472    | )
|Accrued compensation                                                              |  |                             | (356   | ) |      |   | (1,889  | )
|Accrued expenses                                                                  |  |                             | (351   | ) |      |   | 580     |  
|Other liabilities                                                                 |  |                             |       |   |      |   | (5      | )
|                                                                                  |  |                             |        |   |      |   |         |  
|                                                                                  |  |                            
|Net cash provided by operating activities                                         |  |                             | 1,517  |   |      |   | 9,412   |  
|                                                                                  |  |                             |        |   |      |   |         |  
|                                                                                  |  |                            
|Cash flows from investing activities:                                             |  |                             |        |   |      |   |         |  
|Purchases of investment securities available-for-sale                             |  |                             |       |   |      |   | (28,964 | )
|Sales of investment securities available-for-sale                                 |  |                             | 650    |   |      |   |        |  
|Maturities of investment securities available-for-sale                            |  |                             | 2,352  |   |      |   | 23,602  |  
|Proceeds from the sale of equipment                                               |  |                             | 23     |   |      |   | 788     |  
|Patent costs                                                                      |  |                             | (97    | ) |      |   | (33     | )
|                                                                                  |  |                             |        |   |      |   |         |  
|                                                                                  |  |                            
|Net cash provided (used) by investing activities                                  |  |                             | 2,928  |   |      |   | (4,607  | )
|                                                                                  |  |                             |        |   |      |   |         |  
|                                                                                  |  |                            
|Net cash (used) provided by financing activities                                  |  |                             |       |   |      |   |        |  
|                                                                                  |  |                             |        |   |      |   |         |  
|                                                                                  |  |                            
|Net increase in cash and cash equivalents                                         |  |                             | 4,445  |   |      |   | 4,805   |  
|Cash and cash equivalents, beginning of period                                    |  |                             | 14,389 |   |      |   | 32,702  |  
|                                                                                  |  |                             |        |   |      |   |         |  
|Cash and cash equivalents, end of period                                          |  | $                           | 18,834 |   |      | $ | 37,507  |  
|                                                                                  |  |                             |        |   |      |   |         |  

See accompanying notes to condensed financial statements.



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TRIMERIS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

Trimeris, Inc.
(Trimeris or the Company) is a biopharmaceutical company primarily engaged in the commercialization of a new class of antiviral drug treatments called fusion inhibitors. Fusion inhibitors prevent viral fusion, a complex
process by which viruses attach to, penetrate and infect host cells. If a virus cannot enter a host cell, the virus cannot replicate. By inhibiting the fusion process of particular types of viruses, like the Human Immunodeficiency Virus
(HIV), our first commercial product and our development-stage compound offer a novel mechanism of action to treat and potentially prevent the transmission of HIV.

Trimeris has a worldwide agreement (the Development and License Agreement) with F. Hoffmann-La Roche Ltd., (Roche) to develop and
market T-20, marketed as FUZEON, whose generic name is enfuvirtide. FUZEON is manufactured and distributed by Roche through Roches sales and distribution network throughout the world in countries where regulatory approval has been received.
The Company shares gross profits equally from the sale of FUZEON in the United States and Canada with Roche, and receives a royalty based on net sales of FUZEON outside the United States and Canada.

The Development and License Agreement with Roche accounted for 100% of the Companys royalty revenue for the three months ended March 31, 2009
and 2008. The Development and License Agreement also provides substantially all of the Companys collaboration and milestone revenue. Substantially all of the accounts receivable at March 31, 2009 and December 31, 2008 is comprised of
receivables from Roche owing under the Development and License Agreement.

The accompanying unaudited condensed financial statements have
been prepared in accordance with United States generally accepted accounting principles and applicable Securities and Exchange Commission (the SEC) regulations for interim financial information. Certain information and footnote
disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to the SEC rules and regulations. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of financial position and results of operations have been made. Operating results for interim periods are not necessarily indicative of results that may
be expected for a full year. The information included in this Form 10-Q should be read in conjunction with the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations
sections and the 2008 financial statements and notes thereto included in the Companys 2008 Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on March 13, 2009.

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

2. BASIC AND DILUTED NET INCOME PER SHARE

In accordance with SFAS No. 128, Earnings Per Share (SFAS No. 128), basic net income per common share is calculated by
dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the maximum dilutive effect of common stock issuable upon exercise of stock options, restricted stock, stock
warrants and purchases under the Companys Employee Stock Purchase Plan (the Employee Stock Purchase Plan). The dilutive effect of outstanding options, restricted stock, stock warrants and purchases under the Employee Stock Purchase
Plan is reflected in diluted earnings per share by application of the treasury stock method, which includes consideration of stock-based compensation required by SFAS No. 123 (revised), Share-Based Payment. The following table sets
forth the computation of basic and diluted net income per share for the three months ended March 31, 2009 and 2008 (in thousands, except per share amounts):



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|                                            |  |                                  |        |                                  |   |       
|------------------------------------------- |  | -------------------------------- | ------ | -------------------------------- | - | ------
|                                            |  | Three Months EndedMarch 31, 2009 |        | Three Months EndedMarch 31,
2008
|Numerator:                                  |  |                                  |        |                                  |   |       
|Net income                                  |  | $                                | 2,133  |                                  | $ | 2,328 
|                                            |  |                                 
|Denominator:                                |  |                                  |        |                                  |   |       
|Weighted average common shares              |  |                                  | 22,249 |                                  |   | 22,167
|                                            |  |                                  |        |                                  |   |       
|Denominator for basic calculation           |  |                                  | 22,249 |                                  |   | 22,167
|Restricted stock and restricted stock units |  |                                  |       |                                  |   | 85    
|                                            |  |                                  |        |                                  |   |       
|Denominator for diluted calculation         |  |                                  | 22,249 |                                  |   | 22,252
|                                            |  |                                  |        |                                  |   |       
|                                            |  |                                 
|Net income per share:                       |  |                                  |        |                                  |   |       
|Basic                                       |  | $                                | 0.10   |                                  | $ | 0.11  
|                                            |  |                                  |        |                                  |   |       
|                                            |  |                                 
|Diluted                                     |  | $                                | 0.10   |                                  | $ | 0.10  
|                                            |  |                                  |        |                                  |   |       

The calculation of diluted net income per share excludes all anti-dilutive shares. For the three
months ended March 31, 2009 and 2008, the number of anti-dilutive shares issuable upon exercise of options that were excluded, as calculated based on the weighted average closing price of the Companys common stock for these periods,
amounted to approximately 2.5 million and 2.8 million, respectively. Also excluded for the three months ended March 31, 2009 and 2008 were 362,000 warrants to purchase common stock, due to their anti-dilutive effect.

At March 31, 2009, there were 2,500,000 options to purchase common stock, 30,000 shares of restricted stock that vest in August 2011, and 362,000
warrants to purchase common stock outstanding. At March 31, 2008, there were 2,755,000 options to purchase common stock, 85,000 shares of restricted stock/restricted stock units that vested in March 2009 and 362,000 warrants to purchase common
stock outstanding.

3. STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2009 and 2008, approximately $64,000 and $94,000, respectively, was charged to interest expense for the accretion of the liability resulting from the Companys share of estimated selling and
marketing expenses. The Company recorded a liability of $15.6 million during 2004, as part of collaboration loss, which represented the net present value of the Companys estimated share of these expenses, based on the expected timing and terms
of payment under the Development and License Agreement, as amended July 12, 2004. No cash was paid for interest during the three months ended March 31, 2009 and 2008.

4. ROCHE COLLABORATION

The Development and License Agreement

In July 1999, the Company entered into a Development and License Agreement with Roche to develop and commercialize T-20, currently marketed as FUZEON,
whose generic name is enfuvirtide, and T-1249, or a replacement compound. The Development and License Agreement has been amended several times; most recently in March 2007, the agreement was amended to cover only the development and
commercialization of FUZEON. The Development and License Agreement will effectively terminate upon the expiration of the last relevant patent covering FUZEON. Our present understanding is that this expiration date will occur in 2021.

The Development and License Agreement, as amended, grants Roche an exclusive, worldwide license for FUZEON. Under this agreement, a joint management
committee consisting of members from Trimeris and Roche oversees the strategy for the collaboration. Roche may terminate its license for a particular country in its sole discretion with advance notice. In addition, the Development and License
Agreement gives Roche significant control over important aspects of the commercialization of FUZEON, including but not limited to pricing, sales force activities and promotional activities. Under the Development and License Agreement, Roche cannot
adopt a budget for the marketing of FUZEON above certain limits without the agreement of the Company.

As mentioned above, in March 2007,
the Company entered into an agreement with Roche that amended the terms of both the Development and License Agreement and the Research Agreement (defined below). This amendment provided that all intellectual property that was formerly shared between
the companies, other than intellectual property related to FUZEON, would now belong solely to Trimeris. The returned intellectual property covers both research and development stage molecules, including T-1249. Currently, there are no patients being
treated with T-1249. Following the March 2007 amendment, Roche is responsible for only one remaining $5.0 million milestone under the Development and License Agreement payable upon the achievement of a certain cumulative twelve-month sales threshold
for FUZEON in the United States and Canada.



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Collaboration Income

Product sales of FUZEON began in the United States in March 2003 and are recorded by Roche. Under the Development and License Agreement with Roche, the Company shares gross profits from the sale of FUZEON in the
United States and Canada equally with Roche. Collaboration income is calculated as follows: Total gross sales of FUZEON in the United States and Canada is reduced by any discounts, returns or rebates resulting in total net sales. Net sales are
reduced by costs of goods sold resulting in gross profit. Gross profit is reduced by certain selling, marketing, and other expenses and post-marketing commitments related to the sale of FUZEON resulting in operating income or loss. The
Companys share of the operating income or loss is reported as collaboration income or loss as a component of revenue. Total net sales of FUZEON in the United States and Canada were $10.0 million and $17.0 million during the three months ended
March 31, 2009 and 2008, respectively. During the three months ended March 31, 2009 and 2008, the gross profit from the sale of FUZEON exceeded the sales, marketing and other expenses resulting in the Companys share of operating
profit from the sale of FUZEON in the United States of $2.4 million and $2.4 million, respectively. Revenue is recognized when Roche ships the drug and title and risk of loss passes to wholesalers. FUZEON is widely available through retail
pharmacies and wholesalers across North America.

Roche is responsible for the manufacture, sales, marketing and distribution of FUZEON.
Roche manufactures bulk quantities of FUZEON drug substance in its Boulder, Colorado facility and produces finished drug product from bulk drug substance at another Roche facility. The finished drug product is then shipped to a Roche facility for
distribution. Roches sales force is responsible for selling FUZEON. Under the Companys Development and License Agreement with Roche, the Company does not have the ability or rights to co-market this drug or field its own FUZEON sales
force. All third party contracts for manufacturing, distribution, sale, and reimbursement are between Roche and the third party. The Company is not a party to any of the material contracts in these areas. Roche provides the Company with information
on manufacturing, sales and distribution of FUZEON. Roche is responsible for estimating reductions to gross sales for expected returns of expired products, government rebate programs, such as Medicaid reimbursements, and customer incentives, such as
cash discounts for prompt payment. The Company reviews these items for accuracy and reasonableness.

Roche prepares estimates for sales
returns and allowances, discounts and rebates based primarily on its historical experience with FUZEON and other anti-HIV drugs and their estimates of the payor mix for FUZEON, updated for changes in facts and circumstances on a quarterly basis. If
actual results differ from these estimates, these estimates will be adjusted, which could have an effect on results of operations in the period of adjustment.

Accrued Marketing Costs

The Company and Roche agreed to limit the Companys actual cash
contribution to the FUZEON selling and marketing expenses in 2004 to approximately $11.2 million, even though Roche spent significantly more on these expenses. If certain cumulative levels of sales for FUZEON in the United States and Canada are
achieved, the Companys share of the additional expenses incurred by Roche during 2004 will be payable to Roche beginning at a future date over several years from that future date. During the fourth quarter of 2008, we revised our estimate of
the date that payments will begin from 2017 to 2022. During the year ended December 31, 2004, the Companys share of selling and marketing expenses exceeded $11.2 million. During 2004, the Company recorded $15.6 million as part of
collaboration loss, which represented the net present value of the Companys estimated share of the expenses that were in excess of approximately $11.2 million. This amount was determined by taking into account the expected timing and terms of
payment under the Development and License Agreement, discounted at a risk free interest rate. The Company is increasing the liability over time to the expected payment amount. For the three months ended March 31, 2009 and 2008, the Company
increased the recorded liability by $64,000 and $94,000, respectively, for accretion of interest. The total liability of $18.3 million at March 31, 2009 and December 31, 2008 is reflected on our balance sheets under the caption
Accrued marketing costs.

The accrued marketing costs apply only to the 2004 FUZEON marketing costs; with respect to both 2009
and 2008, there are no accrued marketing costs.

Advanced PaymentRoche

In September 2005, the Company entered into a Letter of Amendment (the Manufacturing Amendment) with Roche, which amended the Development and
License Agreement and set forth certain rights and responsibilities that the parties previously agreed to with respect to the manufacture and sale of FUZEON. The Company will pay Roche for the Companys share of the capital invested in
Roches manufacturing facility over a seven-year period. As a result, Roche will no longer include the depreciation related to the manufacturing facility in cost of goods sold.

Under the terms of the Manufacturing Amendment, the Companys contribution to the capital improvements made at Roches manufacturing facility
is to be reviewed on an annual basis. Following such review, the Companys contribution will be adjusted, when necessary, to reflect changes to the relative geographic distribution of FUZEON sales. During the first quarter of 2008, the Company
and Roche reviewed certain FUZEON sales data which resulted in a change in the amount of the Companys contribution to



8



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##### Table of Contents

the capital investment. Following this 2008 review, the Company expected to contribute approximately $12.1 million towards the capital investment as compared
to its previous expectation of approximately $12.8 million. At March 31, 2009, we had capitalized costs of $11.8 million, and expect to pay a final payment of approximately $285,000 during the quarter ending June 30, 2009. In the event the
Development and License Agreement is terminated, the Company would not be obligated for any unpaid amounts for capital investment.

These
payments, net of the portion allocated to cost of goods sold, are recorded as an asset presented as Advanced payment  Roche. This asset is amortized based on the units of FUZEON sold during the collaboration period in order to
properly allocate the capital investment to cost of goods sold as the related inventory is sold in future periods. Assuming all payments are made and sales of FUZEON continue, the Company estimates that this asset has a remaining useful life of
approximately 12 years. The carrying value of this asset will be evaluated annually for impairment or if an event occurs that triggers impairment.

Under the Manufacturing Amendment, if the Roche-owned facilities in Boulder, Colorado used for the manufacture of FUZEON, are used to produce other products for Roche, a credit to the collaboration will result. Through March 31, 2009,
the Companys share of this credit was approximately $1.9 million. These credits have been recorded on the Companys balance sheets as a reduction to the Advanced payment  Roche. These credits offset variances that would
otherwise have been allocated to FUZEON if the facilities had remained underutilized and will be recognized when the related FUZEON produced during these periods is sold.

Royalty Revenue

The Company receives royalties on sales of FUZEON in countries outside of the United
States and Canada. Roche is responsible for all activities related to FUZEON outside of the United States and Canada, including regulatory, manufacturing, sales and distribution. These royalties are recognized as revenue when the sales are made by
Roche. To calculate the royalty revenue, an 8% distribution charge is deducted from Roches reported net sales, from which the Company receives a 12% royalty. Royalties of $2.0 million and $2.8 million were recognized as revenue during the
three months ended March 31, 2009 and 2008, respectively.

Development Expenses

Under the Development and License Agreement, development costs for FUZEON are shared equally. Development typically includes certain clinical and
pre-clinical studies performed on a clinical candidate compound, as well as post-marketing commitments related to approved drugs. Currently only Roche incurs development costs for FUZEON. Quarterly, the companies reconcile the amounts expended and
one party pays the other party on a 50/50 basis. Roche holds the Investigational New Drug (IND) and the New Drug Application (NDA) for FUZEON and is responsible for all regulatory issues, maintenance activities and
communications with the FDA. On January 1, 2009, we adopted Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) Issue Number 07-1 Accounting for Collaborative Arrangements. As a
result, all development expenses generated at Roche related to FUZEON are included in the Companys collaboration income. Prior to January 1, 2009, such amounts were presented in research and development expenses. Prior period amounts have
been reclassified to conform to the current periods presentation.

5. COMPREHENSIVE INCOME

SFAS No. 130, Reporting Comprehensive Income, establishes rules for the reporting and display of comprehensive income or loss and its
components. Comprehensive income includes all non-owner changes in equity during a period and is divided into two broad classifications: net income and other comprehensive income (OCI). OCI includes revenue, expenses, gains, and losses
that are excluded from earnings under generally accepted accounting principles. For the Company, OCI consists of unrealized gains or losses on securities available-for-sale, and actuarial gains and losses and prior service costs for the
post-retirement health insurance plan that have not been recognized as components of net periodic post-retirement benefit costs.

The table
below presents the Companys OCI for the three months ended March 31, 2009 and 2008.



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|                                                                   |  |                             |       |      |   |      
|------------------------------------------------------------------ |  | --------------------------- | ----- | ---- | - | -----
|                                                                   |  | Three Months EndedMarch 31,
|                                                                   |  | 2009                        |       | 2008
|Net income                                                         |  | $                           | 2,133 |      | $ | 2,328
|                                                                   |  |                            
|Reclassification of realized loss on securities available-for-sale |  |                             |      |      |   | 206  
|                                                                   |  |                            
|Unrealized gain on securities available-for-sale                   |  |                             | 118   |      |   | 9    
|                                                                   |  |                             |       |      |   |      
|                                                                   |  |                            
|Other comprehensive income (OCI)                                   |  | $                           | 2,251 |      | $ | 2,543
|                                                                   |  |                             |       |      |   |      

6. INVESTMENT SECURITIES AVAILABLE-FOR-SALE

Investment securities, which consist of corporate bonds, Euro-dollar bonds, and medium and short-term notes, are classified as available-for-sale, and are
reported at fair value based on quoted market prices and other observable inputs. The cost of securities sold is determined using the specific identification method when computing realized gains and losses. Unrealized gains and losses are included
as a component of stockholders equity until realized.

In accordance with its investment policy, the Company limits the amount of
credit exposure with any one issuer and the investments are generally not collateralized.

Investment securities include an investment of
approximately $2.5 million at March 31, 2009 in Bank of America Corporations Columbia Strategic Cash Portfolio (the Fund). In December 2007, Columbia Management Group, LLC, the Funds manager, determined that the
assets of the Fund had declined in fair value and the Fund would no longer seek to maintain a net asset value (NAV) of one dollar per share. As a result, the Funds NAV began to fluctuate based on changes in the market values of the
assets owned by the Fund. The Fund ceased accepting orders for new shares and began an orderly liquidation of Fund assets for distribution to its shareholders. At March 31, 2009, the Funds NAV was $0.8336 per share. For the quarter ended
March 31, 2009, we recorded an increase of $32,000 in accumulated other comprehensive income and a realized gain of $34,000 related to this investment.

The Company adopted SFAS No. 157, Fair Value Measurements, effective January 1, 2008 for financial assets and liabilities measured on a recurring basis. SFAS No. 157 applies to all financial
assets and liabilities that are being measured and reported on a fair value basis. There was no impact to the financial statements upon the adoption of SFAS No. 157. SFAS No. 157 establishes a framework for measuring fair value and expands
disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following three categories:



|         |  |                                                                                                                                                      
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1: |  | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.           
|         | 
|Level 2: |  | Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
|         | 
|Level 3: |  | Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.                                   

A financial instruments level within the fair value hierarchy is based on the lowest level
of any input that is significant to the fair value measurement.

The Companys assets that are measured at fair value on a recurring
basis are generally classified within Level 1 or Level 2 of the fair value hierarchy. The types of instruments valued based on quoted market prices in active markets include most money market securities, corporate and euro dollar bonds, and medium
and short-term notes. Such instruments are generally classified within Level 1 of the fair value hierarchy.

The types of instruments
valued based on quoted prices in less active markets, or alternative pricing sources with reasonable levels of price transparency, include the Bank of America Corporations Columbia Strategic Cash Portfolio.

The following table sets forth, by level, within the fair value hierarchy, financial assets and liabilities accounted for at fair value under SFAS
No. 157 as of March 31, 2009 (in thousands):



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|                                                                                                                                          |  |       |        |                                       |   |                                 |  |                              |       |  |   |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | ------ | ------------------------------------- | - | ------------------------------- |  | ---------------------------- | ----- |  | - | -
|                                                                                                                                          |  | Total |        | QuotedPrices inActiveMarkets(Level 1) |   | OtherObservableInputs(Level 2)* |  | Un-observableInputs(Level 3)
|Money market funds                                                                                                                        |  | $     | 21,299 |                                       | $ | 18,834                          |  | $                            | 2,465 |  | $ | 
|Corporate and euro dollar bonds                                                                                                           |  |       | 8,206  |                                       |   | 8,206                           |  |                              |      |  |   | 
|Medium and short-term notes                                                                                                               |  |       | 3,633  |                                       |   | 3,633                           |  |                              |      |  |   | 
|                                                                                                                                          |  |       |        |                                       |   |                                 |  |                              |       |  |   |  
|Total                                                                                                                                     |  | $     | 33,138 |                                       | $ | 30,673                          |  | $                            | 2,465 |  | $ | 
|                                                                                                                                          |  |       |        |                                       |   |                                 |  |                              |       |  |   |  
|                                                                                                                                         
|*  represents our investment in Bank of America Corporations Columbia Strategic Cash Portfolio, which is
discussed in more detail above.

Assets measured at fair value on a recurring basis were presented in the balance sheet as of
March 31, 2009 as follows (in thousands):



|                                 |  |       |        |                                       |   |                                |  |                              |       |  |   |  
|-------------------------------- |  | ----- | ------ | ------------------------------------- | - | ------------------------------ |  | ---------------------------- | ----- |  | - | -
|                                 |  | Total |        | QuotedPrices inActiveMarkets(Level 1) |   | OtherObservableInputs(Level 2) |  | Un-ObservableInputs(Level 3)
|Cash and cash equivalents        |  | $     | 18,834 |                                       | $ | 18,834                         |  | $                            |      |  | $ | 
|Short-term investment securities |  |       | 12,506 |                                       |   | 11,839                         |  |                              | 667   |  |   | 
|Long-term investment securities  |  |       | 1,798  |                                       |   |                               |  |                              | 1,798 |  |   | 
|                                 |  |       |        |                                       |   |                                |  |                              |       |  |   |  
|Total assets                     |  | $     | 33,138 |                                       | $ | 30,673                         |  | $                            | 2,465 |  | $ | 
|                                 |  |       |        |                                       |   |                                |  |                              |       |  |   |  

The carrying value of other financial instruments, including accounts receivable, accounts
payable, and accrued liabilities approximate fair value due to their short maturities.

7. INCOME TAXES

We recognized income tax expense of $1,044,000 in the first quarter of 2009 compared to income tax expense of $257,000 in the first quarter of 2008. For
2009, the Company believes, based on current estimates, that the effective annual blended tax rate is approximately 32.9%.

In the fourth
quarter of 2008, we recognized a deferred tax benefit of $506,000 related to the anticipated future use of some of our federal net operating loss carryovers. In the future, we may reduce the valuation allowance over our federal net operating loss
carryovers and recognize an additional deferred tax benefit. Management assesses this potential based upon all available evidence, including the last eleven quarters of profitability and forecasts. At the end of the first quarter of 2009, management
determined that it was not appropriate to reduce the valuation allowance to recognize additional benefit.

The Company continues to carry a
full valuation allowance on its other deferred tax assets, the majority of which represent net operating loss carry forwards and tax credit carryovers which we generated prior to achieving profitability.

8. COMMITMENTS AND CONTINGENCIES

Under the Development and
License Agreement, Trimeris and Roche are obligated to share equally the future development expenses for FUZEON for the United States and Canada.

In 2004, the Company entered into a sublease agreement for its office and laboratory space in Morrisville, North Carolina. The sublease called for the payment of a security deposit for which the Company has paid $126,000 as of
September 30, 2008. During the second quarter of 2008, the Company relocated its corporate offices and shut down this existing facility. As a result, the Company recorded a liability and associated expense of $939,000 for future lease
commitments for this facility.

On November 20, 2007, the Company was informed that Novartis Vaccines and Diagnostics, Inc.
(Novartis) had filed suit against Hoffman-La Roche Inc., Roche Laboratories Inc., Roche Colorado Corp., and F. Hoffman- La Roche Ltd. (collectively the Roche Entities) and Trimeris alleging infringement of Novartis U.S.
Patent No. 7,285,271 B1, entitled Antigenic Composition



11



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##### Table of Contents

Comprising an HIV gag or env Polypeptide (the 271 Patent) related to the manufacture, sale and offer for sale of FUZEON. The lawsuit
was filed in the Eastern District of Texas (Marshal Division).

The 271 Patent that is the subject of the infringement suit was
granted to Novartis on October 23, 2007. On March 7, 2008, the Company received formal service of the complaint in this case and on May 29, 2008, Roche and Trimeris filed an answer and counterclaim requesting relief on several grounds
including non-infringement, patent invalidity, unenforceability and double-patenting. Also on May 29, 2008, Roche and Trimeris filed a motion to transfer venue to the Eastern District of North Carolina or, in the alternative, dismiss Trimeris
pursuant to the Federal Rules of Civil Procedure. On July 30, 2008, Novartis filed an answer to the Roche-Trimeris counterclaims. On August 1, 2008, Roche and Trimeris filed a reply in support of Trimeris motion to transfer. On
September 3, 2008, the Court dismissed the Roche-Trimeris motion for transfer of venue without prejudice. On October 10, 2008, Roche and Trimeris filed a renewed motion to transfer. On February 3, 2009, the Court denied the renewed
Roche and Trimeris requests for transfer. On March 3, 2009, Trimeris and the Roche filed invalidity contentions with the court. No trial date has been scheduled and the outcome of this matter cannot be determined at this time. In connection
with its suit, Novartis is seeking unspecified money damages, attorneys fees and injunctive relief which, if successful, would prevent Roche and Trimeris from manufacturing and selling FUZEON.

9. REDUCTION IN WORKFORCE

During November 2006, the Company
announced a shift in strategic emphasis and reorganization to focus on FUZEON profitability and research and early stage development. With this shift in strategic emphasis, the Company reduced its workforce by approximately 25% and recognized
expense of $3.2 million for severance and other costs in the fourth quarter of 2006.

During March 2007, as a continued part of the shift
in strategic emphasis, the Company reduced its workforce by approximately 25% and recognized expense of $4.3 million for severance and other costs in the first quarter of 2007. Of this $4.3 million, $870,000 was related to the acceleration of
vesting of restricted stock and is excluded from the table below.

During April 2007, as a continued part of the shift in strategic
emphasis, the Company reduced its workforce by approximately 7% and recognized expense of $77,000 for severance and other costs in the second quarter of 2007.

During December 2007, the Company implemented a reduction in force in connection with a 2008 strategic plan to maximize cash flows from FUZEON, while also advancing TRI-1144 to a value creating milestone. In
connection with the strategic plan and as a result of the reduction in force, the Company expects that it will no longer staff any research and development functions. The Company recognized expense of $1.7 million for severance and other costs
during the fourth quarter of 2007 related to this 2008 strategic plan.

Following is a summary of activity related to the 2006 and 2007 restructuring
accruals (in thousands):



|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|----------------------------- |  | ------------------------- | ---- | - | ------------------------- | - | ------ | ----- |  | - | ------ | -
|                              |  | Severance andBenefits2006 |      |   | Severance andBenefits2007 |   |        | Total | 
|Balance at December 31, 2007  |  | $                         | 567  |   |                           | $ | 3,552  |       |  | $ | 4,119  |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Adjustments                   |  |                           | (6   | ) |                           |   | (55    | )     |  |   | (61    | )
|Payments                      |  |                           | (152 | ) |                           |   | (1,196 | )     |  |   | (1,348 | )
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Balance at March 31, 2008     |  | $                         | 409  |   |                           | $ | 2,301  |       |  | $ | 2,710  |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Adjustments                   |  |                           | 2    |   |                           |   | 36     |       |  |   | 38     |  
|Payments                      |  |                           | (123 | ) |                           |   | (538   | )     |  |   | (661   | )
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Balance at June 30, 2008      |  | $                         | 288  |   |                           | $ | 1,799  |       |  | $ | 2,087  |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Adjustments                   |  |                           | 2    |   |                           |   | 12     |       |  |   | 14     |  
|Payments                      |  |                           | (124 | ) |                           |   | (525   | )     |  |   | (649   | )
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Balance at September 30, 2008 |  | $                         | 166  |   |                           | $ | 1,286  |       |  | $ | 1,452  |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Adjustments                   |  |                           | 7    |   |                           |   | 108    |       |  |   | 115    |  
|Payments                      |  |                           | (129 | ) |                           |   | (575   | )     |  |   | (704   | )
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Balance at December 31, 2008  |  | $                         | 44   |   |                           | $ | 819    |       |  | $ | 863    |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Adjustments                   |  |                           |     |   |                           |   | 7      |       |  |   | 7      |  
|Payments                      |  |                           | (44  | ) |                           |   | (428   | )     |  |   | (472   | )
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  
|Balance at March 31, 2009     |  | $                         |     |   |                           | $ | 398    |       |  | $ | 398    |  
|                              |  |                           |      |   |                           |   |        |       |  |   |        |  



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Executive Summary

Trimeris is a biopharmaceutical company primarily engaged in the commercialization
of a class of antiviral drug treatments called fusion inhibitors. Fusion inhibitors prevent viral fusion, a complex process by which viruses attach to, penetrate and infect host cells. If a virus cannot enter a host cell, the virus cannot replicate.
By inhibiting the fusion process of particular types of viruses, like the Human Immunodeficiency Virus (HIV), our first commercial product and our development-stage compound offer a novel mechanism of action to treat and potentially
prevent the transmission of HIV.

Trimeris has a worldwide agreement (the Development and License Agreement) with F.
Hoffmann-La Roche Ltd., or Roche, to develop and market T-20, marketed as FUZEON, whose generic name is enfuvirtide. FUZEON is manufactured and distributed by Roche through Roches sales and distribution network throughout the world
in countries where regulatory approval has been received. The Company shares gross profits equally from the sale of FUZEON in the United States and Canada with Roche, and receives a royalty based on net sales of FUZEON outside the United States and
Canada.

For the first quarter of 2009, the Company recorded net income of $2.1 million, or $0.10 per share, compared to $2.3 million, or
$0.10 per share, in the first quarter of 2008. This decrease was driven by decreased FUZEON sales and an increase in tax expense offset, in part, by reduced operating expenses and the credit to cost of goods sold included in collaboration income.

2009 will continue to be a year of transition for Trimeris:



| |  |  | Strategic Alternatives  We will continue to evaluate strategic alternatives to enhance shareholder value.
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | Profitability We will focus our efforts on maintaining profitability based on FUZEON sales.
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Competition  Recently, weekly prescription trends for FUZEON have begun to stabilize. Future FUZEON prescription trends will depend on the further refinement
of the optimal regimen for treatment experienced patients and the role of FUZEON in these regimens.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | FUZEON Sales and Marketing  We believe that our selling and marketing expense in 2009 will be lower than 2008, as we have exercised again our right under our
Development and License Agreement with Roche that prevents Roche from adopting a budget for the marketing of FUZEON above a certain limit without our consent.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Novartis Litigation  We, along with our partner Roche, are working with outside counsel to come to the most expedient and satisfactory resolution of the
patent infringement suit brought by Novartis Vaccines and Diagnostics, Inc.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cost of Goods Sold  We have exercised our rights under the Development and License Agreement and entered into negotiations with Roche related to excess
capacity charges and cost of goods sold variances for 2008 and overall cost of goods sold for 2009. Accordingly, we cannot accurately determine if cost of goods sold as a percentage of net sales will increase, decrease or remain the same in the
future. Although active discussions are on-going, we cannot be certain when a final resolution will be reached. Depending upon the resolution of our negotiations with Roche, cost of goods sold may significantly increase.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

RESULTS OF OPERATIONS

Comparison Of Three Months Ended March 31, 2009 and 2008

Revenues

The table below presents our revenue sources for the three months ended March 31, 2009 compared to the three months ended March 31, 2008.



|                                       |  |                             |       |                    |   |       |  |   |      |  
|-------------------------------------- |  | --------------------------- | ----- | ------------------ | - | ----- |  | - | ---- | -
|(in thousands)                         |  | Three Months EndedMarch 31, |       | Increase(Decrease) |  
|                                       |  | 2009                        |       | 2008               |  
|Milestone revenue                      |  | $                           | 66    |                    |   | 66    |  | $ |     |  
|Royalty revenue                        |  |                             | 1,969 |                    |   | 2,840 |  |   | (871 | )
|Collaboration income                   |  |                             | 2,442 |                    |   | 2,392 |  |   | 50   |  
|                                       |  |                             |       |                    |   |       |  |   |      |  
|                                       |  |                             |      
|Total revenue and collaboration income |  | $                           | 4,477 |                    | $ | 5,298 |  | $ | (821 | )
|                                       |  |                             |       |                    |   |       |  |   |      |  

Milestone revenue: Total milestone revenue represents the amortization of achieved
milestones under our collaboration with Roche.

The table below presents certain achieved milestones from Roche as of March 31,
2009. We are recognizing the milestones with remaining unrecognized balances on a straight-line basis over the estimated commercial period of FUZEON.



|               |  |                |       |               |      |                                              |      |                                                           |   |                          |  |   |    |  |              
|-------------- |  | -------------- | ----- | ------------- | ---- | -------------------------------------------- | ---- | --------------------------------------------------------- | - | ------------------------ |  | - | -- |  | -------------
|(in thousands) |  | MilestoneTotal |       | Date Achieved |      | Total RevenueRecognizedThroughMarch 31, 2009 |      | RevenueRecognized for theThree Months EndedMarch 31, 2009 |   | End of RecognitionPeriod
|               |  |                | 2,500 |               | June |                                              | 2003 |                                                           |   | 1,371                    |  |   | 50 |  | November 2014
|               |  |                |       |               |      |                                             
|               |  |                | 750   |               | June |                                              | 2004 |                                                           |   | 376                      |  |   | 16 |  | November 2014
|               |  |                |       |               |      |                                              |      |                                                           |   |                          |  |   |    |  |              
|               |  |                |       |               |      |                                             
|Total          |  | $              | 3,250 |               |      |                                              |      |                                                           | $ | 1,747                    |  | $ | 66 |  |              
|               |  |                |       |               |      |                                              |      |                                                           |   |                          |  |   |    |  |              

Royalty revenue: Royalty revenue represents the royalty payments earned from Roche
based on total net sales of FUZEON outside the United States and Canada and will continue until all patents covering FUZEON, licensed to Roche, on a country by country basis have expired. Sales of FUZEON outside the United States and Canada began in
June 2003. To calculate the royalty revenue, an 8% distribution charge is deducted from Roches reported net sales, from which the Company receives a 12% royalty. Royalty revenue decreased for the three months ended March 31, 2009 as
compared to the three months ended March 31, 2008 as a result of decreased net sales of FUZEON outside the U.S. and Canada. Net sales of FUZEON outside the U.S. and Canada for the three months ended March 31, 2009 and 2008, were $17.8
million and $25.7 million, respectively.

Collaboration income:The table below presents our collaboration income (United States and
Canada) for the three months ended March 31, 2009 compared to the three months ended March 31, 2008. Collaboration income is reported on our Statements of Operations as a component of revenue. Under our Development and License Agreement
with Roche, we share gross profits equally from the sale of FUZEON in the United States and Canada. The sharing of expenses is according to contractual arrangements and is not equal in all cases. FUZEON was launched commercially in March 2003.



14



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##### Table of Contents

|                                        |  |                             |        |   |        |   |        |   |  |   |        |  
|--------------------------------------- |  | --------------------------- | ------ | - | ------ | - | ------ | - |  | - | ------ | -
|(in thousands)                          |  | Three Months EndedMarch 31, |        |   | Change |  
|                                        |  | 2009                        |        |   | 2008   |   |       
|Gross FUZEON sales by Roche             |  | $                           | 12,163 |   |        | $ | 20,710 |   |  | $ | (8,547 | )
|Less sales adjustments                  |  |                             | (2,208 | ) |        |   | (3,712 | ) |  |   | 1,504  |  
|Sales adjustments as a % of Gross Sales |  |                             | 18     | % |        |   | 18     | % |  |   |        |  
|                                        |  |                             |        |   |        |   |        |   |  |   |        |  
|                                        |  |                             |       
|Net sales                               |  |                             | 9,955  |   |        |   | 16,998 |   |  |   | (7,043 | )
|Cost of goods sold                      |  |                             | (1,322 | ) |        |   | (6,214 | ) |  |   | 4,892  |  
|Cost of goods sold as a % of Net Sales  |  |                             | 13     | % |        |   | 37     | % |  |   |        |  
|                                        |  |                             |        |   |        |   |        |   |  |   |        |  
|                                        |  |                             |       
|Gross profit                            |  |                             | 8,633  |   |        |   | 10,784 |   |  |   | (2,151 | )
|Gross profit as a % of Net Sales        |  |                             | 87     | % |        |   | 63     | % |  |   |        |  
|Selling and marketing expenses          |  |                             | (2,977 | ) |        |   | (6,194 | ) |  |   | 3,217  |  
|Roche development expenses              |  |                             | (583   | ) |        |   | (580   | ) |  |   |        |  
|Other costs                             |  |                             | (674   | ) |        |   | (655   | ) |  |   | (19    | )
|                                        |  |                             |        |   |        |   |        |   |  |   |        |  
|                                        |  |                             |       
|Total shared profit                     |  |                             | 4,399  |   |        |   | 3,355  |   |  |   | 1,044  |  
|Trimeris share *                        |  |                             | 2,521  |   |        |   | 2,557  |   |  |   | (36    | )
|Costs exclusive to Trimeris             |  |                             | (79    | ) |        |   | (165   | ) |  |   | 86     |  
|                                        |  |                             |        |   |        |   |        |   |  |   |        |  
|                                        |  |                             |       
|Net income from collaboration           |  | $                           | 2,442  |   |        | $ | 2,392  |   |  | $ | 50     |  
|                                        |  |                             |        |   |        |   |        |   |  |   |        |  



|* | We have exercised our right under our Development and License Agreement with Roche that prevents Roche from adopting a budget for the marketing of FUZEON above a certain limit
without our consent. As a result, the Companys and Roches share of the collaboration income was not equal in the first quarter of 2009 or 2008. Depending on the level of marketing expenses for 2009, our share of the collaboration profit
may continue to be greater than that of Roche.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross FUZEON sales by Roche: Revenue is recognized when Roche ships
drug and title and risk of loss passes to wholesalers.

The table below presents the number of kits shipped to wholesalers in the U.S. and
Canada during 2009 and 2008.



|             |  |       |  |       
|------------ |  | ----- |  | ------
|Kits Shipped |  | 2009  |  | 2008  
|Q1           |  | 5,000 |  | 9,600 
|Q2           |  |      |  | 9,000 
|Q3           |  |      |  | 7,900 
|Q4           |  |      |  | 9,500 
|             |  |       |  |       
|Total        |  | 5,000 |  | 36,000
|             |  |       |  |       

Sales adjustments:Sales adjustments are recorded by Roche based on their experience with
selling FUZEON. Based on discussions with Roche, we expect sales adjustments for 2009 to fall within a range of 16% to 18% of gross sales for 2009.

Cost of goods sold:We have exercised our rights under the Development and License Agreement and entered into negotiations with Roche related to excess capacity charges and cost of goods sold variances for 2008 and overall cost of
goods sold for 2009. Accordingly, we cannot accurately determine if cost of goods sold as a percentage of net sales will increase, decrease or remain the same in the future. Although active discussions are on-going, we cannot be certain when a final
resolution will be reached. Depending upon the resolution of our negotiations with Roche, cost of goods sold may significantly increase.

During 2008, we recorded a reserve for 2008 excess capacity charges in the amount of $4.1 million to be shared equally between Roche and Trimeris. Recently, Roche informed us that actual excess capacity charges for 2008 were $1.9 million.
The difference of $2.2 million has been recorded as a credit to cost of goods sold for the first quarter of 2009. Trimeris share of this credit was $1.1 million. We are disputing with Roche the remainder of the excess capacity charges for 2008. The
resolution of this dispute may result in an additional credit to cost of goods sold for the collaboration in the amount of $1.9 million.



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##### Table of Contents

Selling and marketing expenses: We have exercised our right under our Development and License
Agreement with Roche that prevents Roche from adopting a budget for the marketing of FUZEON above a certain limit without our consent. As a result, the Companys and Roches share of the collaboration income was not equal in the first
quarter of 2009 or 2008. Depending on the level of marketing expenses for 2009, our share of the collaboration profit may continue to be greater than that of Roche.

Roche development expenses: On January 1, 2009, we adopted Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) Issue Number 07-1 Accounting for
Collaborative Arrangements. As a result all development expenses, generated at Roche, related to FUZEON are included in the Companys collaboration income. Prior to January 1, 2009, such amounts were presented in research and
development expenses. Prior period amounts have been reclassified to conform to the current periods presentation.

Under the
Development and License Agreement, development costs for FUZEON are shared equally with Roche. Development typically includes certain clinical and pre-clinical studies performed on a clinical candidate compound, as well as post-marketing commitments
related to approved drugs. Currently only Roche incurs development costs for FUZEON. Roche holds the Investigational New Drug (IND) and the New Drug Application (NDA) for FUZEON and is responsible for all regulatory issues,
maintenance activities and communications with the FDA.

Other costs:Other costs for the three months ended March 31, 2009 and
2008 include general and administrative costs and distribution charges. The Company is responsible for 50% of these costs under the Development and License Agreement.

Costs exclusive to the Company:Costs exclusive to the Company includes license fees, based on net sales of FUZEON, for certain technology paid to a third party.

Research and Development Expenses

The table below presents our research and development expenses for the three months ended March 31, 2009 compared to the three months ended March 31, 2008.



|                                        |  |                             |   |                    |   |       |  |   |        |  
|--------------------------------------- |  | --------------------------- | - | ------------------ | - | ----- |  | - | ------ | -
|(in thousands)                          |  | Three Months EndedMarch 31, |   | Increase(Decrease) |  
|                                        |  | 2009                        |   | 2008               |   |       | 
|Total research and development expenses |  | $                           |  |                    | $ | 1,429 |  | $ | (1,429 | )
|                                        |  |                             |   |                    |   |       |  |   |        |  

On January 1, 2009, we adopted EITF 07-1 Accounting for Collaborative
Arrangements. As a result, we reclassified $290,000 from research and development expenses in 2008 to collaboration income (see discussion above Collaboration Income).

Total research and development expenses for 2008 primarily related to the preclinical development of the next generation HIV fusion inhibitor peptide
TRI-1144 for which the Company has subsequently discontinued research and development. The Company no longer incurs any research and development expenses.

General and Administrative Expenses

The table below presents our general and administrative
expenses for the three months ended March 31, 2009 compared to the three months ended March 31, 2008.



|                                          |  |                             |       |                    |   |       |  |   |      |  
|----------------------------------------- |  | --------------------------- | ----- | ------------------ | - | ----- |  | - | ---- | -
|(in thousands)                            |  | Three Months EndedMarch 31, |       | Increase(Decrease) |  
|                                          |  | 2009                        |       | 2008               |   |       | 
|Total general and administrative expenses |  | $                           | 1,457 |                    | $ | 1,692 |  | $ | (235 | )
|                                          |  |                             |       |                    |   |       |  |   |      |  

Total general and administrative expenses: Total general and administrative expenses decreased for
the three months ended March 31, 2009 compared to the three months ended March 31, 2008, primarily as a result of decreases in employee costs and other expenses as a result of reduced headcount and general business activities, offset in
part by, increased share-based compensation expense.



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##### Table of Contents

We expect general and administrative expenses to decrease in 2009, when compared to 2008, as a result of
the 2008 strategic plan which eliminated most general and administrative personnel at Trimeris after June 30, 2008 and reduced operating lease expenses.

Gain on disposal of equipment:The table below presents the gain on the disposal of equipment for the three months ended March 31, 2009 and 2008.



|                              |  |                             |     |   |                    |   |      |   |  |   |    
|----------------------------- |  | --------------------------- | --- | - | ------------------ | - | ---- | - |  | - | ---
|(in thousands)                |  | Three Months EndedMarch 31, |     |   | Increase(Decrease)
|                              |  | 2009                        |     |   | 2008               |   |     
|Gain on disposal of equipment |  | $                           | (23 | ) |                    | $ | (418 | ) |  | $ | 395
|                              |  |                             |     |   |                    |   |      |   |  |   |    

The gain on disposal of equipment for 2009 is due to the Company selling equipment that was
written off during 2008. The gain on disposal of equipment for 2008 is due to the Company selling a majority of its property, furniture or equipment in anticipation of relocating its corporate office and shutting down the previous laboratory and
office space.

Other Income (Expense):The table below presents our other income (expense) for the three months ended March 31,
2009 and 2008.



|                                   |  |                             |     |   |                    |   |      |   |  |   |      |  
|---------------------------------- |  | --------------------------- | --- | - | ------------------ | - | ---- | - |  | - | ---- | -
|(in thousands)                     |  | Three Months EndedMarch 31, |     |   | Increase(Decrease) |  
|                                   |  | 2009                        |     |   | 2008               |   |     
|Interest income                    |  | $                           | 164 |   |                    | $ | 822  |   |  | $ | (658 | )
|Gain/(loss) on investments         |  |                             | 34  |   |                    |   | (738 | ) |  |   | 772  |  
|Interest expense                   |  |                             | (64 | ) |                    |   | (94  | ) |  |   | 30   |  
|                                   |  |                             |     |   |                    |   |      |   |  |   |      |  
|                                   |  |                             |    
|Total other income (expenses), net |  | $                           | 134 |   |                    | $ | (10  | ) |  | $ | 144  |  
|                                   |  |                             |     |   |                    |   |      |   |  |   |      |  

Interest income decreased for the three months ended March 31, 2009 primarily due to lower
cash balances as a result of the special dividends paid in 2008.

There was a realized gain on investments for the three months ended
March 31, 2009 as a result of our redemptions of our investment in Bank of America Corporations Columbia Strategic Cash Portfolio (the Fund). In December 2007, Columbia Management Group, LLC, the Funds manager,
determined that the assets of the Fund had declined in fair value and the Fund would no longer seek to maintain a net asset value (NAV) of one dollar per share. As a result, the Funds NAV began to fluctuate based on changes in the
market values of the assets owned by the Fund. The Fund ceased accepting orders for new shares and began an orderly liquidation of Fund assets for distribution to its shareholders. At March 31, 2009, the Funds NAV was $0.8336 per share.
For the quarter ended March 31, 2009, we recorded an increase of $32,000 in accumulated other comprehensive income and a realized gain of $34,000 related to this investment. For the quarter ended March 31, 2008, the NAV was $0.9701 which
had decreased from $0.9874 at December 31, 2007 and the Company recorded a loss in the amount of $738,000. In addition, the Companys holdings of this investment have been significantly reduced through redemptions since December 31,
2007.

Interest expense relates to the accretion of the excess marketing expenses recorded on the balance sheets as Accrued marketing
costs. Our actual cash contribution to certain selling and marketing expenses for FUZEON in 2004 was limited, even though Roche spent significantly more on these expenses. If certain cumulative levels of sales for FUZEON in the United States
and Canada are achieved, our share of any additional expenses incurred by Roche during 2004 will be payable to Roche beginning at a future date over several years from that future date. We are increasing the liability over time to the expected
payment amount. During the fourth quarter of 2008, the Company revised the estimated date that payments will begin from 2017 to 2022. As a result, we will accrete the marketing debt over a longer period of time resulting in lower interest expense in
any particular period.



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##### Table of Contents

Income Tax Provision

We recognized income tax expense of $1,044,000 in the first quarter of 2009 compared to income tax expense of $257,000 in the first quarter of 2008. For 2009, the Company believes, based on current estimates, that the
effective annual blended tax rate is approximately 32.9%.

In the fourth quarter of 2008, we recognized a deferred tax benefit of $506,000
related to the anticipated future use of some of our federal net operating loss carryovers. In the future, we may reduce the valuation allowance over our federal net operating loss carryovers and recognize an additional deferred tax benefit.
Management assesses this potential based upon all available evidence, including the last eleven quarters of profitability and forecasts. At the end of the first quarter of 2009, management determined that it was not appropriate to reduce the
valuation allowance to recognize additional benefit.

The Company continues to carry a full valuation allowance on its other deferred tax
assets, the majority of which represent net operating loss carry forwards and tax credit carryovers which we generated prior to achieving profitability.

RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

The table below presents our cash flows for the three months ended March 31, 2009 as compared to the three months ended March 31, 2008.



|                                                 |  |                             |        |                |   |        |  
|------------------------------------------------ |  | --------------------------- | ------ | -------------- | - | ------ | -
|                                                 |  | Three Months EndedMarch 31, |       
|                                                 |  | 2009                        |        | 2008           |  
|                                                 |  |                             |        | (in thousands) |  
|Net cash provided by operating activities        |  | $                           | 1,517  |                | $ | 9,412  |  
|Net cash provided (used) by investing activities |  |                             | 2,928  |                |   | (4,607 | )
|Net cash provided by financing activities        |  |                             |       |                |   |       |  
|                                                 |  |                             |        |                |   |        |  
|                                                 |  |                            
|Net increase in cash and cash equivalents        |  |                             | 4,445  |                |   | 4,805  |  
|Cash and cash equivalents, beginning of period   |  |                             | 14,389 |                |   | 32,702 |  
|                                                 |  |                             |        |                |   |        |  
|Cash and cash equivalents, end of period         |  | $                           | 18,834 |                | $ | 37,507 |  
|                                                 |  |                             |        |                |   |        |  

Operating Activities. Since inception, we have financed our operations primarily through
private placements and public offerings of common stock, equipment lease financing and payments under our Development and License Agreement with Roche.

For the three months ended March 31, 2009, cash provided by operating activities primarily resulted from net income primarily due to decreased operating expenses offset, in part, by an increase in prepaid
expenses.

During the remainder of 2009, cash provided by operating activities will depend on several factors, primarily the sales, cost of
sales and commercialization expenses and post-marketing commitments related to the sale of FUZEON (profitability of the collaboration with Roche), and expenses related to the patent infringement suit brought by Novartis Vaccines and Diagnostics,
Inc.

Investing Activities. The amount provided (used) by investing activities for the three months ended March 31, 2009 and
2008 primarily relates to the net maturities (purchases) of investment securities available-for-sale. The purchase and maturity of investment securities available-for-sale was due to the normal maturities of investments.

During the remainder of 2009, cash provided by investing activities will depend primarily on the net purchases/maturities of investments. We do not
expect to purchase any property and equipment in 2009. We expect patent costs in 2009 to be less than 2008.

Financing Activities.
There was no cash provided by or used by financing activities for the three months ended March 31, 2009 or 2008.

Total Cash, Cash
Equivalents and Investment Securities Available-for-Sale. As of March 31, 2009, we had $33.1 million in cash and cash equivalents and investment securities available-for-sale, compared to $31.6 million as of December 31, 2008.



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##### Table of Contents

Future Capital Requirements.We have expended, and expect to continue to expend in the future,
substantial funds in the following areas:



| |  |  | expenditures for marketing activities related to FUZEON; and
| | - |  | ------------------------------------------------------------



| |  |  | legal costs to defend the patent infringement suit brought by Novartis Vaccines and Diagnostics, Inc.
| | - |  | -----------------------------------------------------------------------------------------------------

Based on expected sales levels of FUZEON, expenses related to the sale of FUZEON, the costs involved in preparing, filing, processing, maintaining,
protecting and enforcing patent claims and other intellectual property rights, and litigation expenses, we expect that our existing capital resources, together with the interest earned thereon, will be adequate to fund our operating expenses for the
foreseeable future.

Contractual Obligations.The following table summarizes our material contractual commitments at March 31,
2009 for the remainder of 2009 and subsequent years (in thousands):



|                                                                |  |      |       |      |   |       |  |      |       |      |   |            |  |       |       |  |   |        |  |   |       
|--------------------------------------------------------------- |  | ---- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | ----- | ----- |  | - | ------ |  | - | ------
|Contractual Obligation****                                      |  | 2009 |       | 2010 |   | 2011  |  | 2012 |       | 2013 |   | Thereafter |  | Total
|Operating leases*                                               |  | $    | 1,177 |      | $ | 1,600 |  | $    | 1,632 |      | $ | 1,666      |  | $     | 1,698 |  | $ | 1,877  |  | $ | 9,650 
|                                                                |  |      |       |      |   |       | 
|Other contractual obligations**                                 |  |      | 285   |      |   |      |  |      |      |      |   |           |  |       |      |  |   |       |  |   | 285   
|                                                                |  |      |       |      |   |       | 
|Reduction in workforce***                                       |  |      | 398   |      |   |      |  |      |      |      |   |           |  |       |      |  |   |       |  |   | 398   
|                                                                |  |      |       |      |   |       | 
|Other long-term liabilities reflected on the Balance Sheet **** |  |      |      |      |   |      |  |      |      |      |   |           |  |       |      |  |   | 22,204 |  |   | 22,204
|                                                                |  |      |       |      |   |       |  |      |       |      |   |            |  |       |       |  |   |        |  |   |       
|                                                                |  |      |       |      |   |       | 
|Total                                                           |  | $    | 1,860 |      | $ | 1,600 |  | $    | 1,632 |      | $ | 1,666      |  | $     | 1,698 |  | $ | 24,081 |  | $ | 32,537
|                                                                |  |      |       |      |   |       |  |      |       |      |   |            |  |       |       |  |   |        |  |   |       



|* | Includes payments due under a sublease signed during June 2004, which commenced on January 1, 2005, on an existing office and laboratory space. In the second quarter of 2008,
the Company relocated its corporate offices and shut down this facility. The Company is liable for all remaining lease payments if it does not sublease the facility and is actively looking for a sublease tenant for the offices and laboratory space.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | We are making advance payments to Roche for our share of the cost of the capital improvements made at Roches Boulder manufacturing facility where FUZEON drug substance is
produced. In 2005, we reached an agreement with Roche whereby we will pay Roche for our share of the capital invested in Roches manufacturing facility over a seven-year period. Under the terms of the agreement, our contribution to the capital
improvements made at the Boulder manufacturing facility will be reviewed on an annual basis using sales data from the previous four quarters. During the first quarter of 2008, the Company and Roche reviewed the appropriate sales data resulting in a
change to our share of the capital investment from approximately $12.8 million to approximately $12.1 million. At March 31, 2009, we have capitalized costs of $11.8 million, and expect to pay a final payment of approximately $285,000 during the
quarter ending June 30, 2009. This amount, net of charges to cost of goods sold as the related inventory is sold, is recorded as an asset on our balance sheets under the caption Advanced paymentRoche. In the event our
Development and License Agreement is terminated, we would not be obligated for any unpaid amounts for capital investment.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | During 2006 and 2007, the Company reduced its workforce and accrued amounts related to severance and other costs. It is the current intention of the Company to pay all of these
costs by the end of 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|**** | Our cash contribution to the selling and marketing expenses for FUZEON in 2004 was limited to approximately $11.2 million, even though Roche spent significantly more on these
expenses. If certain cumulative levels of sales for FUZEON in the United States and Canada are achieved, our share of these additional expenses incurred by Roche during 2004 will be payable to Roche beginning at a future date over several years from
that future date. During the fourth quarter of 2008, the Company revised the estimated date that payments will begin from 2017 to 2022.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the year ended December 31, 2004, we reached the $11.2 million limitation for the year. We recorded a liability of approximately $15.6 million as part of collaboration loss during the year ended
December 31, 2004. This represented the net present value of our estimated share of the additional expenses, discounted at a risk-free interest rate from the expected payment date based on achievement of the sales milestones in the agreement.
We are increasing the liability over time to the expected payment amount. During the three months ended March 31, 2009, we increased this liability by $64,000. The total liability of $18.3 million at March 31, 2009, is reflected on our
balance sheet under the caption Accrued marketing costs. The amount reflected in the above table represents the undiscounted value of the obligation.

The Company also has contractual obligations to the New York Blood Center pursuant to a license agreement that requires the Company to make payments based on a contracted term.



19



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##### Table of Contents

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements other than an operating lease, which the Company is looking to sublease, for our property.

Accounting and Other Matters

In November 2007, the Financial Accounting Standards Board
(FASB) Emerging Issues Task Force approved Issue No. 07-1 Accounting for Collaborative Arrangements The objective of this Issue is to define collaborative arrangements and to establish reporting requirements for
transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. This issue is effective for fiscal years beginning after December 15, 2008. We adopted this Issue as of
January 1, 2009 and as a result, reclassified $290,000 from research and development expense into collaboration income for the quarter ended March 31, 2008. During the quarter ended March 31, 2009, $292,000 was recorded in
collaboration income.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS No. 141 (R)).
SFAS No. 141 (R) replaces SFAS No. 141, Business Combinations (SFAS No. 141), and establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase, and determines what
information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141 (R) is effective for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after December 15, 2008 and earlier adoption is prohibited. The Company will apply the provisions of SFAS No. 141 to the extent that it enters into business
combinations in the future.

In February 2008, the FASB issued Staff Position FAS 157-2, Effective Date of FASB Statement
No. 157(FSP No. 157-2), which deferred the effective date of SFAS No. 157 for non-financial assets and liabilities, except for items that are recognized or disclosed at fair value on a recurring basis, to fiscal
years beginning after November 15, 2008 and interim periods within those fiscal years. The Company elected the deferral option permitted by FSP No. 157-2 for its non-financial assets and liabilities initially measured at fair value which
principally relate to the measurement of impairment of patent costs. The Company adopted the provisions of SFAS No. 157 with respect to impairment measurements as of January 1, 2009 which did not impact the consolidated financial
statements as of and for the three months ended March 31, 2009.

In April 2009, the FASB decided to issue three related Staff
Positions to clarify the guidance in Statement 157 for fair-value measurements in inactive markets, modify the recognition and measurement of other-than-temporary impairments of debt securities, and require companies to disclose the fair values of
financial instruments in interim periods. These Staff Positions will be effective for interim and annual periods ending after June 15, 2009. The Company is currently assessing the impact of these Staff Positions on our financial statements.

The FASB also issues exposure drafts for proposed statements of financial accounting standards. Such exposure drafts are subject to
comment from the public, to revisions by the FASB and to final issuance by the FASB as Statements of Financial Accounting Standards. Management considers the effect of the proposed FASB statements on our financial statements and monitors the status
of changes to issued exposure drafts and to proposed effective dates.

Net Operating Loss Carryforwards

As of December 31, 2008, we had a net operating loss carryforward for federal tax purposes of approximately $302.4 million. During the fourth quarter
of 2008, we determined that an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended, occurred during 2008. The effect of this ownership change was the imposition of a $457,000 annual limitation on the use of net
operating loss carry forwards, credit carryovers, and built-in loss items attributable to periods before the change. We have recognized a valuation allowance equal to the deferred tax assets in excess of an amount representing multiple years of
Section 382 limitation.

Critical Accounting Policies

Reference is made to Critical Accounting Policies included in our Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on March 13, 2009. As of the date of the
filing of this Quarterly Report, the Company has not identified any significant changes to the critical accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2008.

Cautionary Statements Regarding Forward Looking Statements



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##### Table of Contents

This Quarterly Report on Form 10-Q and any attachments may contain forward-looking information about the
Companys financial results and business prospects that involve substantial risks and uncertainties. These statements can be identified by the fact that they use words such as expect, project, intend,
plan, believe and other words and terms of similar meaning. Among the factors that could cause actual results to differ materially are the following: there is uncertainty regarding the success of research and development
activities, regulatory authorizations and product commercializations; we are dependent on third parties for the sale, marketing and distribution of FUZEON; the market for HIV therapeutics is very competitive with regular new product entries that
could affect the sale of our products; the results of our previous clinical trials are not necessarily indicative of any future clinical trials the Company may undertake; and our drug candidates are based upon novel technology, are difficult and
expensive to manufacture and may cause unexpected side effects. For a detailed description of these factors, see the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2009 and its
subsequent periodic reports filed with the SEC.

Undue reliance should not be placed on these forward-looking statements, which are current
only as of the date of this report. We disclaim any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results. See Risk Factors, in Part II -Item 1A in this
Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for further discussion regarding some of the reasons that actual results may be materially different from those that we anticipate.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Our exposure to market risk is primarily in our investment portfolio. We do not use derivative financial instruments for speculative or trading purposes. Substantially all of our contracts are denominated in U.S. dollars; therefore, we have
no material foreign currency risk. We have an investment policy that sets minimum credit quality standards for our investments. The policy also limits the amount of money we can invest in any one issue, issuer or type of instrument.

Fair value is based on actively quoted market prices and other observable inputs. Our investments are generally most vulnerable to changes in short-term
interest rates in the United States. We believe that the risk of material loss of principal due to changes in interest rates is minimal.

Investment securities, which consist of corporate bonds, Euro-dollar bonds, and medium and short-term notes, are classified as available-for-sale, and are reported at fair value based on quoted market prices and other observable inputs. The
cost of securities sold is determined using the specific identification method when computing realized gains and losses. Unrealized gains and losses are included as a component of stockholders equity until realized.

In accordance with its investment policy, the Company limits the amount of credit exposure with any one issuer and the investments are generally not
collateralized.

Our exposure to credit risk relates primarily to a component of investment securities involving an investment of
approximately $2.5 million and $10.2 million at March 31, 2009 and 2008, respectively, in Bank of America Corporations Columbia Strategic Cash Portfolio (the Fund). In December 2007, Columbia Management Group, LLC, the
Funds manager, determined that the assets of the Fund had declined in fair value and the Fund would no longer seek to maintain a net asset value (NAV) of one dollar per share. As a result, the Funds NAV began to fluctuate
based on changes in the market values of the assets owned by the Fund. The Fund ceased accepting orders for new shares and began an orderly liquidation of Fund assets for distribution to its shareholders. At March 31, 2009, the Funds NAV
was $0.8336 per share. For the quarter ended March 31, 2009, we recorded an increase of $32,000 in accumulated other comprehensive income and a realized gain of $34,000 related to this investment. If the current credit environment continues to
deteriorate, our investment in the Columbia Strategic Cash Portfolio could suffer losses, which would adversely impact our financial results.



|Item 4. | Controls and Procedures
|------- | -----------------------

Our Chief Executive
Officer and our Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, with the participation of the Companys management, as of March 31, 2009. The term disclosure controls
and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that are designed to ensure that information
required to be disclosed by a company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the companys
management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated,
can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on



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the evaluation of our disclosure controls and procedures as of March 31, 2009, our Chief Executive Officer and Chief Financial Officer have each
concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

No change in the
Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), occurred during the fiscal quarter ended March 31, 2009 that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

On
November 20, 2007, the Company was informed that Novartis Vaccines and Diagnostics, Inc. (Novartis) had filed suit against Hoffman-La Roche Inc., Roche Laboratories Inc., Roche Colorado Corp., and F. Hoffman- La Roche LTD.
(collectively the Roche Entities) and Trimeris alleging infringement of Novartis U.S. Patent No. 7,285,271 B1, entitled Antigenic Composition Comprising an HIV gag or env Polypeptide (the 271
Patent) related to the manufacture, sale and offer for sale of FUZEON. The lawsuit was filed in the Eastern District of Texas (Marshal Division).

The 271 Patent that is the subject of the infringement suit was granted to Novartis on October 23, 2007. On March 7, 2008, the Company received formal service of the complaint in this case and on
May 29, 2008, Roche and Trimeris filed an answer and counterclaim requesting relief on several grounds including non-infringement, patent invalidity, unenforceability and double-patenting. Also on May 29, 2008, Roche and Trimeris filed a
motion to transfer venue to the Eastern District of North Carolina or, in the alternative, dismiss Trimeris pursuant to the Federal Rules of Civil Procedure. On July 30, 2008, Novartis filed an answer to the Roche-Trimeris counterclaims. On
August 1, 2008, Roche and Trimeris filed a reply in support of Trimeris motion to transfer. On September 3, 2008, the Court dismissed the Roche-Trimeris motion for transfer of venue without prejudice. On October 10, 2008, Roche
and Trimeris filed a renewed motion to transfer. On February 3, 2009, the Court denied the renewed Roche and Trimeris requests for transfer. On March 3, 2009, Trimeris and the Roche filed invalidity contentions with the court. No trial
date has been scheduled and the outcome of this matter cannot be determined at this time. In connection with its suit, Novartis is seeking unspecified money damages, attorneys fees and injunctive relief which, if successful, would prevent
Roche and Trimeris from manufacturing and selling FUZEON.



|Item 1A. | Risk Factors
|-------- | ------------

Other than as discussed below, there
have been no material changes in our risk factors since the filing of our most recent 10-K. Our business activities involve various elements of risk. We consider the following issues to be some of the critical risks that should be considered in
evaluating our Company and our business:



| |  |  | We face intense competition in our efforts to increase sales of FUZEON as a commercially successful drug. If we are unable to compete successfully, our business
will suffer.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If FUZEON does not maintain or increase its market acceptance, our business will be materially harmed.
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | We do not control the manufacturing and production schedule at Roches Boulder facility where FUZEON is manufactured and we cannot ensure that significant
costs associated with scheduling decisions will not be incurred.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We have been named as defendants in a lawsuit in which Novartis Vaccines and Diagnostics, Inc. has alleged infringement of a patent in connection with the
manufacture and sale of FUZEON. If we cannot resolve this lawsuit on favorable terms and at a reasonable expense, our business may be materially harmed.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to remain profitable we will need to maintain arrangements with third parties for the sale, marketing and distribution of FUZEON or expend significant
resources to develop these capabilities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If sufficient amounts of FUZEON, cannot be manufactured on a cost-effective basis, our financial condition and results of operations will be materially and
adversely affected.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | HIV is likely to develop resistance to FUZEON and our future drug candidate, which could adversely affect demand for FUZEON or our drug candidate TRI-1144 and harm
our competitive position.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our business is based on a novel technology called fusion inhibition, and unexpected side effects or other characteristics of this technology may delay or otherwise
adversely affect the development, regulatory approval and/or commercialization of our drug candidate TRI-1144.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In order to move forward with the development and commercialization of TRI-1144 we would need to partner with a
| | - |  | ---------------------------------------------------------------------------------------------------------------



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| | company that has the requisite expertise and capabilities related to the development, sale, marketing and distribution of drugs.
| | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | If we cannot maintain commercial manufacturing arrangements with third parties on acceptable terms, or if these third parties do not perform as agreed, the
commercial development of FUZEON or our drug candidate TRI-1144 could be delayed or otherwise materially and adversely affected.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If Roche does not maintain good manufacturing practices, it could negatively impact our ability to maintain necessary regulatory approvals and profitably
commercialize FUZEON.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We depend on patents and proprietary rights, which may offer only limited exclusive protection and do not protect against infringement. If we are unable to protect
our patents and proprietary rights, our assets and business could be materially harmed.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The intellectual property of our competitors or other third parties may prevent us from developing or commercializing our drug candidate TRI-1144.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Uncertainties relating to third-party reimbursement and health care reform measures could limit the amount we will be able to charge for our drugs and adversely
affect our results of operations.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If the testing or use of FUZEON or our drug candidate TRI-1144 harms people, we could face costly and damaging product liability claims far in excess of our
liability and indemnification coverage.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our quarterly operating results are subject to fluctuations. If our operating results for a particular period deviate from the levels expected by securities
analysts and investors, it could adversely affect the market price of our common stock.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If we are unable to meet or maintain the standards for maintaining internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002, our
stock price could be materially harmed.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We rely on our collaborative partner Roche to timely deliver important financial information relating to FUZEON sales and expenses. In the event that this
information is inaccurate, incomplete or not timely we will not be able to meet our financial reporting obligations as required by the SEC.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our charter requires us to indemnify our officers and directors to the fullest extent permitted by law, which obligates us to make substantial payments and to incur
significant insurance-related expenses.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Any additional financing we obtain may result in dilution to our stockholders, restrictions on our operating flexibility or the transfer of particular rights to
technologies or drug candidates.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company received a letter dated December 18, 2008 from the Nasdaq Listing Qualifications Department indicating that the Company is not in compliance with
Nasdaq Marketplace Rule 4350 with respect to audit committee composition requirements as a result of a director resignation. Consistent with Marketplace Rule 4350(d)(4), Nasdaq has provided the Company with a cure period, which runs until the
earlier of December 15, 2009 or the Companys next annual meeting of stockholders, to regain compliance. If the Company is not able to comply with this requirement by the end of the cure period, NASDAQ may delist our common stock. If our
common stock is delisted by Nasdaq, the trading market for our common stock would likely be adversely affected.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The risk factors
described in our Annual Report on Form 10-K for the year ended December 31, 2008 (See Item 1A-Risk Factors in the Form 10-K filed by Trimeris on March 13, 2009) have materially changed as follows:

Changes in the method of calculation of FUZEON cost of goods sold under our collaboration agreement with Roche could reduce our revenue and adversely
affect our results of operations.

Recently, we have entered into discussions with Roche regarding Roches proposed method of
calculating cost of goods sold, or COGS, for purposes of our collaboration agreement. Roche has proposed a method of calculating COGS that has not been agreed to by the Company at this time. It is uncertain whether FUZEON COGS will increase,
decrease or remain the same following these discussions. A higher cost of goods sold would result in reduced collaboration income and Company revenue.



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|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------

(a) Exhibits

The exhibits filed as part of this Quarterly Report on Form 10-Q are listed on the Exhibit Index and such list is incorporated herein by reference.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|             |  |  |  |                |  |                                                                     
|------------ |  |  |  | -------------- |  | --------------------------------------------------------------------
|             |  |  |  | Trimeris, Inc.
|             |  |  |  | (Registrant)  
|             |  |  | 
|May 12, 2009 |  |  |  | By:            |  | /s/ MARTIN A. MATTINGLY                                             
|             |  |  |  |                |  | Martin A. Mattingly Chief Executive
Officer                         
|             |  |  | 
|May 12, 2009 |  |  |  | By:            |  | /s/ ANDREW L. GRAHAM                                                
|             |  |  |  |                |  | Andrew L. Graham                                                    
|             |  |  |  |                |  | Chief Financial Officer and Secretary (Principal
Accounting Officer)



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EXHIBIT INDEX



|       |  |                                                                                
|------ |  | -------------------------------------------------------------------------------
|Number |  | Description                                                                    
|31.1   |  | Rule 13a-14(a) Certification by Martin A. Mattingly as Chief Executive Officer.
|       | 
|31.2   |  | Rule 13a-14(a) Certification by Andrew L. Graham as Chief Financial Officer.   
|       | 
|32.1   |  | Section 1350 Certification by Martin A. Mattingly as Chief Executive Officer.  
|       | 
|32.2   |  | Section 1350 Certification by Andrew L. Graham as Chief Financial Officer.     



27