Guilford Pharmaceuticals Inc. said yesterday that its net loss more than doubled in the fourth quarter as it prepared to expand human testing of its drugs this year and raise spending on sales and marketing.
But the Baltimore developer of biopharmaceuticals painted an upbeat picture, saying sales of its treatment for brain cancer were off to a good start in 2001.
Guilford reported a fourth-quarter net loss of $11.6 million, or 49 cents a share, on revenue of $5.2 million. That compared with a net loss of $4.5 million, or 20 cents a share, on revenue of $8.2 million in the year-ago period.
For the year, the company reported a net loss of $47.1 million, or $2 per share, on $18.1 million in revenue. For 1999, it posted a net loss of $26.9 million, or $1.31 a share, on revenue of $21.6 million.
Shares of Guilford fell 50 cents to close at $19.44 on the Nasdaq stock market.
The results for both the fourth quarter and the year were adjusted for a change in accounting rules that resulted in the company spreading out certain contractual revenues over the life of the contracts. Many companies previously had posted the revenue when the cash payments came due.
"Last year marked a turning point for Guilford," said Guilford Chief Executive Officer Craig R. Smith.
The company reacquired rights to sell and retain profits from its top product, the Gliadel anti-cancer wafer, from Aventis Pharma at year's end. The wafer, which contains a chemotherapy drug, is inserted into the cavity left after brain tumors are removed. As the wafer dissolves, it releases the chemotherapy.
But Guilford is facing increased costs from establishing its own sales and marketing force. The sales force, which is being organized and initially employed by Cardinal Health under a contract with Guilford, now stands at 21 and is beginning to go to work selling to hospitals. As a result, sales, general and administrative costs rose to $14.1 million in 2000 compared with $11.3 million in 1999.
The company also is facing increased research and development costs as it accelerates development of GPI-15715, a reformulation of a widely used anesthetic, propofol. The reformulation is expected to cause fewer side effects. The company licensed the drug from ProQuest Pharmaceuticals in March.
Research costs rose to $46.9 million last year, compared with $41.9 million in 1999.
By year's end, Smith said, Guilford could have as many as six drugs in human testing. In addition, it is poised to apply to expand the number of surgeries for which Gliadel wafer can be used.
Currently, the wafer can be used only in patients who previously have had brain tumors that grew back, requiring second surgeries.
Guilford expects to apply in the first half of this year to use the wafer with the initial brain tumor surgery. This would push the number of potential uses of the product from 3,000 surgeries per year to as many as 12,000 in the United States.
The company estimated sales of the Gliadel wafer would reach $22 million this year.