Guilford cuts loss by canceling incentives

Biotechnology company restates its 4Q results

February 25, 2003|By Julie Bell | Julie Bell,SUN STAFF

Guilford Pharmaceuticals Inc. restated its fourth-quarter loss to $14.3 million yesterday, less than the $15.1 million reported earlier this month, after the company's directors decided not to award executives and employees a total of $730,000 in accrued cash incentives.

The Baltimore company's board decided at its meeting last week not to pay out cash incentives set aside in 2002, though an undisclosed amount of stock incentives earned last year still will be paid, spokeswoman Stacey Jurchison said.

"The board decided, in an effort to conserve funds, to dispense with cash incentives," Jurchison said. "Granted, it's not a large amount of money, but every little bit helps."

The company said its quarterly loss now amounts to 48 cents per share, down from 50 cents reported Feb. 13. For the year, Guilford said, its restated loss amounts to $59.3 million, or $1.99 per share, down from $60 million, or $2 a share, reported earlier.

John McCamant, editor of the Berkeley, Calif.-based investment guide Medical Technology Stock Letter, said Guilford's decision to eliminate cash incentives was unusual, even among struggling biotechnology companies.

"In these kinds of tough times, to cut incentives with executives is sharing the pain with investors," McCamant said. "I think that's the right message to send in a difficult market."

Guilford laid off 60 employees, or about 20 percent of its work force, in July after the Food and Drug Administration rejected its application to expand marketing of its Gliadel brain cancer treatment. It also has been looking for other ways to raise money or cut costs, including by trying to sell to another company at least some rights to its Naaladase inhibitors for the nerve disorder diabetic neuropathy and other problems related to nerve degeneration.

The FDA is reconsidering its decision to reject Guilford's application for expanded uses of Gliadel. Guilford executives said they are hopeful that, this time, the expansion will be approved.

Guilford's shares rose 5 cents to close yesterday at $2.87 on the Nasdaq stock market.

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