Drug company's loss smaller than expected

Guilford Pharmaceuticals cites cancer treatment use

May 10, 2002|By Julie Bell | Julie Bell,SUN STAFF

Guilford Pharmaceuticals Inc. said yesterday that its first-quarter loss narrowed as sales of its Gliadel treatment for brain cancer grew.

The Baltimore-based company also told investors in a conference call that it was discontinuing development of its Lidomer treatment for post-surgical pain and narrowing the focus of its efforts to develop the cancer treatment Paclimer as part of cost-cutting moves.

Guilford reported a net loss of $13.5 million, or 45 cents a share, on revenue of $6.2 million. That compares with a loss of $14.6 million, or 55 cents a share, on revenue of $4.7 million in the first quarter of 2001.

Analysts had projected a 52 cent loss, according to the average estimate of five analysts surveyed by Thomson Financial/First Call. Guilford's shares fell 44 cents to $7.02 on the Nasdaq stock market.

Guilford has been on a push to cut costs and find other pharmaceutical companies to help it foot the bills for developing some of its drugs. The emphasis comes after Amgen decided last year to quit supporting the development of Guilford's family of nerve-regeneration drugs.

This year, Guilford received another unexpected blow when the Food and Drug Administration decided not to allow it to expand the uses of Gliadel.

Gliadel is a small, biodegradable wafer packed with a chemotherapy drug that's approved as a treatment for malignant glioma, a particularly aggressive kind of brain cancer. The wafer is implanted in the cavity left when a brain tumor is removed during surgery.

But Gliadel is approved in the United States only for use in second surgeries - those made necessary because a tumor has grown back after initial surgery.

Yesterday, Guilford Chief Executive Officer Craig R. Smith told investors that the company hasn't given up on getting approval to expand Gliadel's use.

"We intend to meet with the FDA later this month," Smith said. "We believe the clinical trials have adequately demonstrated the benefit of this therapy as a first-line treatment."

Smith told investors the company will continue developing Paclimer, but only as a treatment for lung cancer when the cells aren't small.

Paclimer is made up of a tiny, biopolymer sphere carrying the chemotherapy drug Paclitaxel. The sphere is suspended in fluid and can be injected at the site of the cancer, reducing the side effects that come with systemic treatments.

The company also continues to develop Aquavan, an anesthetic, and to look for drugs used in hospitals that its sales force can sell along with Gliadel.

Guilford, which spent $12.3 million of its cash reserves in the first quarter, reported $134.2 million of cash and cash equivalents as of March 31.

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