Guilford Pharmaceuticals' loss fell to $16.8 million in 2nd quarter

Company notes cost cuts, sales of cancer treatment

August 09, 2002|By Julie Bell | Julie Bell,SUN STAFF

Guilford Pharmaceuticals Inc. said yesterday that its second-quarter net loss fell to $16.8 million as sales of its brain-cancer treatment rose and cost-cutting efforts began to show results.

But the Baltimore company, which laid off 60 workers last week and began cutting spending on certain research programs this year, still lost more than analysts had expected.

Guilford said the loss amounted to 57 cents a share. Analysts had expected a loss of 53 cents a share, according to the average estimate of five analysts surveyed by Thomson Financial/First Call.

The company reported a net loss of $18.2 million, or 67 cents per share, for last year's second quarter.

Raymond James analyst Brian Rye said the company missed his earnings estimate by only a penny and called the quarterly earnings report a "nonevent."

It won't be known whether the company's paring-down strategy is working, he said, until more advanced clinical-trial results come in for the two drugs Guilford is focusing on, GPI 1485 for Parkinson's disease and its Aquavan anesthetic.

"Based on what we know at this point, these are the steps the company should be taking," he said.

Wall Street seemed to agree. Guilford's shares rose 34 cents, or 7.7 percent, yesterday amid broader market gains. The shares closed at $4.76 on the Nasdaq stock market.

Guilford took the cost-cutting steps, including trimming its work force by 21 percent, after two major product setbacks. First, Amgen Inc. dropped its financial backing for a family of Guilford nerve-regeneration drugs last fall after one of them failed to reverse the motor symptoms of Parkinson's disease patients in a clinical trial.

Then, this spring, the Food and Drug Administration rejected Guilford's request to expand uses of its only approved drug, the Gliadel treatment for brain cancer.

Guilford President David P. Wright said yesterday during a conference call for investors that the company continues to focus on ways to increase sales of Gliadel. One way is working with doctors studying how well Gliadel works when combined with other brain-cancer treatments. The company also said it recently signed agreements for distribution of the treatment in the United Kingdom, Ireland, Italy, Greece, New Zealand and Australia.

Gliadel is a dime-sized, chemotherapy-packed wafer that is inserted during surgery into the cavity left when a brain tumor is removed. The treatment is approved in the United States for use only during second surgeries made necessary when a particularly aggressive kind of brain tumor has grown back.

Though the FDA has rejected Guilford's bid to market the treatment for use during initial surgeries, Wright said the company continues to believe that clinical trials data supports doing so.

"We are hopeful we may still reach agreement with the FDA on this issue," Wright said during the conference call.

Guilford reported second-quarter research and development expenses of $12.6 million, down from $14.6 million. Total revenue grew to $3.6 million from $3.1 million in last year's second quarter. Revenue was almost entirely attributable to sales of Gliadel.

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