GUILFORD — In a move that will give it access to $40 million of its own money, Baltimore's Guilford Pharmaceuticals Inc. said yesterday that it has refinanced a restrictive lease on its research-and-development facility in Holabird Industrial Park.
Guilford - which has been on a roller-coaster of good and bad news in recent years - said the $18.8 million loan agreement with Wachovia Bank will help it in two ways.
First, the agreement essentially provides a $40 million boost in working capital by removing lease covenants that had restricted its maneuverability, said Andrew R. Jordan, Guilford's executive vice president and chief financial officer.
Second, it simplifies the balance sheet portion of the firm's financial statements, Jordan said.
"By completing this financing, we've accomplished [those] two major objectives," he said in a statement.
Guilford used the Wachovia loan to purchase Guilford Realty Trust, the technical owner of the R&D facility in the Holabird Industrial Park. The lease, established in 1998 to finance construction of the facility, required Guilford to maintain more than $50 million in cash. But the new deal in essence frees up $40 million of that money.
The R&D facility was completed in June 1999.
Guilford received needed good news in late February when it said the Food and Drug Administration approved the use of its Gliadel wafer as a first-time treatment for malignant brain tumors.
Earlier that month, the company announced a fourth-quarter loss of $14.3 million - a figure that would have been higher if the firm hadn't canceled $700,000 in incentive payments.
The firm's travails started in July 2001 when Guilford announced that its treatment for Parkinson's disease - licensed to Amgen Inc. - did not help patients enrolled in clinical trials. Amgen gave up on the treatment, and returned it and its related therapies to Guilford in September 2001.
Guilford shares yesterday rose 26 cents to close at $5.35.