Guilford quarter loss is $2 million

March 11, 1995|By Alec Matthew Klein | Alec Matthew Klein,Sun Staff Writer

Guilford Pharmaceuticals Inc. reported yesterday a $2 million loss for the fourth quarter, but completed a deal to develop a treatment for cocaine addiction.

The nascent Baltimore-based biotechnology company is joining with the Abell Foundation, a private philanthropy, to create GELL Pharmaceuticals Inc., which will work to develop the drug treatment.

The Abell Foundation in Baltimore has agreed to invest $2.5 million in GELL and will own 80 percent of the company; Guilford will own the remainder and provide the research aimed at tackling an addiction that afflicts more than 1 million Americans.

"It's about time somebody attempted to do what we're doing," said Guilford President and Chief Executive Officer Craig R. Smith.

A cocaine treatment could lead to other breakthroughs, Mr. Smith said, if researchers can identify pathways in the brain that control addictive behavior.

Guilford has already "received several overtures" from drug companies and research institutes that want to collaborate on the cocaine treatment, he said.

For now, however, Guilford's earnings reflected a company building on its foundation.

Created in July 1993, Guilford has no sales because it is still developing its products.

For the three months ended Dec. 31, 1994, Guilford's loss amounted to 55 cents a share, compared to a loss of $1.4 million, or 36 cents a share, for the quarter ended Sept. 30.

The company recorded a loss of $5.9 million, or $2.04 a share, last year. Comparable figures for the previous year were not reported.

With a 48-member work force, Guilford spent $1.3 million on research and development in the latest period, up from $700,000 for the prior quarter. For the year, the company spent $2.9 million on research and development.

The only income reported -- $336,000 for the year -- was derived from its interest earned on cash or cash equivalents, which amounted to $11.8 million as of Dec. 31. Guilford raised $15 million in an initial stock offering to the public last June.

The numbers, however, demonstrate little for a fledgling biotech company, said Franklin M. Berger, an analyst with Josephthal Lyon & Ross in New York.

"The first thing I look at is their product pipeline," he said.

Guilford is developing a treatment for brain cancer, a diagnostic test for Parkinson's disease and a drug to combat strokes. Combined, these three products could tap into a market worth more than $600 million, according to Mr. Berger.

The potential for the company's cocaine research is less certain.

"It's too early to say," Mr. Berger said. "I see this as being pure research at this point."

Regardless, the analyst forecasted Guilford would be profitable by late 1997 or early 1998. Guilford's chief executive doesn't disagree.

"We are a going concern," Mr. Smith said, ". . . with adequate resources to carry us through to some important milestones."

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