FDA rejects cancer drug expansion

Guilford sought to broaden use of Gliadel treatment

Stock down $1.49 for day

Agency said product didn't markedly cut risk of death in trial

March 21, 2002|By Julie Bell | Julie Bell,SUN STAFF

Guilford Pharmaceuticals Inc. said yesterday that the Food and Drug Administration had rejected its request to expand the use of its Gliadel brain-cancer treatment, providing the latest setback for the company and pushing its shares down 15 percent.

The stock of the Baltimore-based company traded as low as $6.50 yesterday before rallying to close at $8.14 on the Nasdaq stock market, down $1.49 for the day. The closing price, a six-month low, left the stock nearly 45 percent below its six-month high of $14.76 on Nov. 20.

Chief Executive Officer Craig R. Smith said in a conference call that Guilford is seeking a meeting with the FDA about the agency's decision to reject the use of Gliadel in initial brain-cancer surgeries. Meanwhile, he said, Guilford will continue marketing the dime-sized, implantable chemotherapy treatment for use in U.S. patients whose brain tumors have grown back, requiring second surgeries.

The dissolvable wafer is implanted in the cavity left when a particularly aggressive kind of brain tumor known as malignant glioma is surgically removed.

"We are, of course, disappointed in the position the FDA has taken," Smith said, adding that the company will continue to pursue approval for initial surgeries in the United States and Europe. But he added that "there are many other programs now at Guilford. We remain very confident about our future."

The company said the FDA's decision was based on the agency's determination that Gliadel, when compared with a placebo, did not significantly reduce patients' risk of death during a clinical trial. Guilford's analysis of its data found that patients had a 29 percent reduction in the risk of dying during the trial. The FDA came up with a 23 percent reduction and concluded that the results didn't prove Gliadel helped patients with recent diagnoses live longer.

`Nitpicking'

An FDA spokesman did not return a call about the agency's decision. Raymond James & Associates analyst Brian Rye called the decision "statistical nitpicking" and added, "It's companies with healthy balance sheets and diverse pipelines that are able to weather the storm, and we believe Guilford is in such a position."

Guilford has four other drugs in clinical trials and reported $154.7 million in cash at year's end.

The FDA's rejection follows Amgen Inc.'s decision in September to give Guilford back the rights to a family of nerve-regeneration drugs. The first drug tested, NIL-A, failed to substantially reverse the motor symptoms of Parkinson's disease in clinical trials.

Guilford has said it will continue to pursue development of the drugs. It is evaluating what to test the drugs against, including Parkinson's disease and erectile dysfunction.

The company's other drugs in clinical trials are the injectable anesthetic Aquavan, the diabetic peripheral neuropathy treatment GPI-5693, Lidomer for post-surgical pain and Paclimer for ovarian cancer.

Other goals for company

Guilford's goals this year include finding and getting the rights to a medicine, to be used primarily in hospitals, for its new marketing team to sell in addition to Gliadel. It also wants to sell rights to some of its current drugs. For example, Smith said, Guilford is in negotiations with several companies over a family of drugs - including GPI-5693 - designed to block neurodegenerative disorders.

Guilford had estimated that the market for Gliadel would expand more than threefold in the United States this year if it gained FDA approval, increasing revenue from the product to as much as $29 million from $20.4 million last year. But the company also said that withholding the launch of Gliadel as an initial treatment will save $3.5 million in marketing expenses.

Those savings and other cost savings, Smith said, mean Guilford doesn't expect increased losses as a result of the FDA's rejection.

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