Trimeris

(TRMS)

, an obscure biotech outfit, reported early-stage data suggesting its newfangled AIDS drug has promise.

So far, many analysts and investors have treated the company's so-called fusion inhibitor for AIDS with skepticism. Why? The drug, T-20, has a name out of a James Cameron flick, for one. For another, it's a peptide designed to inhibit HIV's transmission by blocking the fusion of the viral envelope with the cell membrane. No other company has a fusion inhibitor in development that Trimeris knows about, making investors wary about the approach. Also, the drug has seemed unappealing because, initially, patients taking the drug were going to have to lug around a pump all day that would infuse the drug into them.

But now in a 78-patient study, the drug has shown potency in a group of patients who have failed other therapies, the company says. Not only that, but the drug appears to have worked as well with injections under the skin as with a continuous pump. The company had not expected that finding. Patients have preferred self-administered daily injections to carrying around a pump.

"This is a big event for us," says CEO and President Ross Johnson.

The company plans to present the data from the first multipatient efficacy trial of T-20 at the

Sixth Conference of Retroviruses and Opportunistic Infections

early next month in Chicago. An abstract, or summary of the study, was mailed Friday to attendees.

The drug was given to patients with 5,000 copies per milliliter of virus or greater -- a high amount. The patients were stable or not on drug therapy because the drugs had failed to work. A full 98% had taken protease inhibitors, which were not effective. The drug was given for 28 days, either twice a day or by continuous infusion.

The study showed a dose-related suppression of HIV. The patients' HIV reduction ranged from a relatively modest 0.3 log reduction to a sizable 1.6 reduction. According to the abstract, no patient had a serious toxic reaction to T-20. Two patients withdrew because of adverse events.

The company will now embark on a 60-patient Phase II study to test T-20 given in below-the-skin injections compared with the standard of care. If that study shows promise, the company will start a pivotal trial by the end of the summer, says Johnson. The company is hoping to find a partner for the drug, probably a mid-size pharmaceutical company or large-cap biotech. That could happen in this year's first half.

The drug would be targeted as a salvage therapy, which, alas, is a growing market as patients increasingly seem to be developing resistance to their current regimens.

Trimeris closed on Friday at 15 1/8, up 1/4, giving it a market cap of about $160 million.

Murky

"Merck Makes Announcement," read a press release the drug behemoth put out slightly after 3:30 Friday afternoon. When a company puts out a press release with a headline that bland, sell first and ask questions later.

The release employed the time-honored, but ineffective, PR technique called burying the lead. The first paragraph of the curt press release was irrelevant.

However, the second paragraph said

Merck

(MRK) - Get Report

had discontinued development of its "substance P" antagonist that was supposed to treat depression in a whole new way. The drug was slated to be a blockbuster and had been unveiled with fanfare in late 1997. It also was supposed to be a major weapon to fight patent expirations that will beset the company at the beginning of the next decade.

The stock was hit immediately, dropping 5 1/4 in late trading to close at 139, making those who left their offices early on Friday deeply regretful.

A Merck spokeswoman says the company made the decision midday Friday and put out the release as soon as it could. "We felt required to disclose" the news as a material event, she says.

For depression, the company is pinning its hopes on the second-generation substance P inhibitors. But for depressed investors, Merck offers nothing immediate.