Guilford loss hits $13.8 million in quarter

Gliadel revenue leaps, but cash burn is a worry, as are product delays

February 15, 2002|By Julie Bell | Julie Bell,SUN STAFF

Guilford Pharmaceuticals Inc. reported yesterday that its fourth-quarter loss widened by more than 19 percent as costs related to its drug-marketing efforts grew.

The Baltimore company also said it wants to gain the rights to additional products to sell to hospitals along with Gliadel, its treatment for brain cancer.

Guilford said it lost $13.8 million, or 46 cents a share, on revenue of $6.8 million in the quarter that ended Dec. 31. That compares with a loss of $11.6 million, or 49 cents a share, on revenue of $5.2 million in last year's fourth quarter.

Revenue from Gliadel totaled $6.6 million in the quarter, up from $750,000 in the corresponding period a year earlier, said Chief Financial Officer Andrew Jordan. The increases came after the firm reacquired the rights to Gliadel from Aventis Pharma and took over the marketing in January 2001.

Jordan told analysts in a conference call yesterday that management is committed to decreasing the rate at which the company spends cash reserves. Those reserves stood at $154.7 million at year's end, up from $109.5 million at the end of 2000. The company raised $99 million from stock sales during 2001. The company is dipping into cash reserves at a rate of about $15 million per quarter.

Yesterday's results were better than analysts' expectations of a 51-cent per share loss, according to the average estimate of four analysts surveyed by Thomson Financial/First Call. But analyst Stefan Loren of Legg Mason Wood Walker said he was disappointed in both Guilford's cash-burn rate and delays in moving forward some products in development.

"They've got too many balls in the air," Loren said, "almost like someone throwing things at the wall to see what sticks."

Guilford has four other drugs in clinical trials: the injectable anesthetic Aquavan, the diabetic peripheral neuropathy treatment GPI-5693, Lidomer for post-surgical pain and Paclimer for ovarian cancer. The company also unexpectedly took over development of its family of nerve-regeneration drugs after Amgen Inc. dropped it last year.

Amgen said the first of the drugs, NIL-A, failed to reverse motor symptoms of Parkinson's disease in a human test. Guilford, however, said the drug showed some other signs of effectiveness.

Chief Executive Officer Craig Smith said yesterday that the company continues to work on a development strategy for the family of drugs. It plans to push NIL-A, now known as GPI 1485, into Phase II testing as a treatment of at least one disease this year.

Gliadel is a chemotherapy-packed wafer that is implanted in the cavity left when a brain tumor is removed. It is approved in the United States for use only when a particularly aggressive kind of brain tumor has recurred, requiring a second surgery. Guilford awaits a Food and Drug Administration decision on whether it can market Gliadel for use in initial brain-tumor surgeries. Approval would expand the U.S. market for Gliadel from 3,500 treatments per year to about 12,000.

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