A Connecticut fund becomes a major shareholder in Guilford

Durus buys 5.1% stake in Baltimore drug maker

August 20, 2002|By Julie Bell | Julie Bell,SUN STAFF

A South Norwalk, Conn., fund has acquired a 5.1 percent stake in Guilford Pharmaceuticals Inc., making it one of the company's largest shareholders.

In a form filed yesterday with the Securities and Exchange Commission, Durus Capital Management, affiliated with experienced biotechnology fund manager Scott R. Sacane, reported it had accumulated more than 1.5 million shares in the Baltimore drug maker.

The SEC form is used by passive investors - those who have no intention of taking over a company - but who have gained control of at least 5 percent of a company's shares.

Neither Sacane nor Durus Chief Operating Officer Douglas Schmidt returned calls. Guilford spokeswoman Stacey Jurchison couldn't be reached.

Durus' stake is worth $6.5 million, based on the $4.29 closing price of Guilford's shares yesterday.

Durus now holds more Guilford stock than all but two other entities, according to SEC filings tracked by Bloomberg News.

Only T. Rowe Price Associates Inc. and Wellington Management Co. hold more Guilford shares, with 2.94 million and 1.55 million, respectively, according to June filings. T. Rowe Price's holdings equal 9.9 percent of Guilford's shares, and Wellington's holdings equal 5.2 percent.

Durus also holds stakes in CollaGenex Pharmaceuticals Inc. and Curon Medical Inc., SEC filings show.

Sacane, a former biotechnology analyst for Montgomery Securities and other firms, is still listed as a managing director of merchant bank and private equity fund manager Perseus LLC on that company's Web site.

Perseus - which held 290,500 Guilford shares as of June - says on the site that it has a strategy of investing in companies that "are temporarily under performing but are fundamentally sound."

Shares of Guilford Pharmaceuticals lost 1 cent yesterday. They have lost 87 percent of their value since hitting $34 in June of last year. The decline has been linked to product disappointments, including Amgen Inc.'s decision to discontinue financial backing for a Guilford family of nerve regeneration drugs. The company laid off 60 employees last month, or 21 percent of its workers.

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