To look at Guilford Pharmaceuticals today, it's easy to mistake this as a fledgling pharmaceuticals company touched by nothing but good fortune.
The Baltimore-based company's stock has rocketed from its 52-week low of $4.75 to $31 Friday. Its first Food and Drug Administration product approval -- for a potential breakthrough way to treat brain cancer -- is expected this year, just two years after the company went public.
And, to many industry analysts' approval, Guilford is that rare animal in biopharmaceuticals: a young company blessed with a broad, promising pipeline of drugs and diagnostics. In Guilford's case the pipeline is generally targeted at neurological disorders and afflictions, like Parkinson's disease and cocaine addiction that have large potential markets.
But it hasn't been all that long ago, recalled Dr. Craig Smith, Guilford's easy-going and erudite chief executive officer, since there were some very dark days for the company.
Like the discouraging period when Smith and other company executives went unsuccessfully pitching local venture capitalists and investment bankers for start-up capital.
Or that grim September day in 1994, shortly after the company went public, that the company's lead investment banker, the once well-regarded David Blech, went belly-up. The news sent Wall Street into a panic and Guilford's stock into a nose-dive, from $8 to $2.25. "We were set adrift overnight," said Smith.
Today, things look brighter for the company -- if no less hectic for Smith.
"This has been like building a car while trying to drive it 70 miles an hour up the interstate," said Smith, whose career includes 12 years on the faculty of the Johns Hopkins School of Medicine in internal medicine and a stint as an executive at Centacor, a Malvern, Pa., biotechnology company. He was tapped to head up Guilford's launch in 1993 when publicly held Scios-Nova -- now Scios -- decided to spin off a drug-delivery technology involving biodegradable polymers that it had acquired when it bought Baltimore-based Nova Pharmaceutical Co. the year before.
The start-up also licensed a promising technology to accurately diagnose Parkinson's disease from researchers in North Carolina, and it licensed nerve regeneration and protection discoveries from Johns Hopkins Medical School and Dr. Solomon Snyder, director of Johns Hopkins Department of Neuroscience. Guilford has since formed a close research alliance with Dr. Snyder, whose work formed the core of Nova's research and who sits on Guilford's board.
Despite the sometimes hair-raising down drafts, Smith said he's tried to stay focused on the company's research and product development while keeping in mind the advice of his father, a self-made businessman: learn the business, and treat every penny as if it were your own.
These days, worries about pennies are not so pressing for Smith and Guilford (named after the Baltimore neighborhood that's home to the Snyders).
For one, the company, which reported a net loss of $12.6 million in 1995, now has a market value of $250 million, a sight better than the days when, if it wasn't for angels like the State of Maryland and the Hopkins medical school, Guilford may never have been born.
And this year alone, the company has raised $66 million in two successful stock offerings.
The first of these, which raised $19.5 million, brought in 20 new institutional investors, and prompted Baltimore-based T. Rowe Price's high-flying New Horizons mutual fund to increase its stake.
Alex Zisson, a biotechnology analyst who follows Guilford for Hambrecht & Quist, believes Guilford is well positioned for growth because of its promising pipeline and the expected FDA approval its Gliadel wafer. The wafer would give neurosurgeons a new treatment for brain cancer, which is notoriously difficult to treat.
The FDA's Oncologic Drugs Advisory Committee announced May 9 that it would hold a hearing June 14 on Gliadel.
"We really like this company. They have hung tough and kept their eye on the ball through some rough times. Overall they have a pretty attractive profile," said Zisson.
Guilford also is expected to land a major pharmaceutical company as a marketing partner in Europe for Gliadel this year, said Zisson. The company also may sign a U.S. marketing partner -- though it might try to tackle that market on its own, say analysts.
Other signs of growth: Guilford is close to completing a major manufacturing and R&D expansion at its Fort Holabird Industrial Park headquarters in east Baltimore and staffing has been more than doubled this past year to 78.
Profitability predicted
Like most pharmaceutical and biotech start-ups, Guilford has posted net losses since it went public. But analysts estimate it should start seeing a strong revenue stream in 1997 from Gliadel. The product, estimates Zisson, has a market value of $150 million annually worldwide.
