Guilford acquires U.S. rights to heart drug from Merck

Company gets Aggrastat in an $84 million deal

October 30, 2003|By William Patalon III | William Patalon III,SUN STAFF

Baltimore-based Guilford Pharmaceuticals Inc., has made an $84 million bet that it can rejuvenate the sales of a once-promising heart-treatment drug, announcing yesterday it had acquired the product's U.S. rights from giant Merck & Co. for cash and future royalties.

The drug, Aggrastat, was projected to evolve quickly into a $500-million-a-year blockbuster when Merck introduced it in 1998. But Aggrastat's sales plummeted after a Merck study released in 2000 found that Johnson & Johnson's rival drug ReoPro was more effective in preventing subsequent heart problems.

ReoPro occupies the No. 2 spot behind industry leader, Integrilin, marketed jointly by Schering-Plough Corp., and Millennium Pharmaceuticals Inc.

Guilford views the Aggrastat deal as one with strong odds for success, Chief Executive Officer Craig Smith said in an interview yesterday. The product not only promises to boost revenue in the short run, but it will also help the 10-year-old drug-development company - which has just one product on the market - bridge the gap until 2006 or 2007, when other products in clinical trials should be ready to introduce, Smith said.

"I think this is the major missing piece" Guilford needed to achieve that strategic goal, Smith said. "We can take advantage of our [marketing] capability to build our top-line revenue, and drive profits, too. ... It's a critical piece of our strategy, and we're glad to have it."

Aggrastat, ReoPro and Integrilin help block development of blood clots in heart-treatment patients by keeping blood platelets from sticking to artery walls, said Dr. Jon R. Resar, associate professor of medicine at Johns Hopkins. That, in turn, reduces the chances of a heart attack. Initially, Merck had targeted Aggrastat at emergency rooms and coronary care units, while ReoPro and Integrilin were aimed at the catheter labs, where heart-treatment procedures are conducted, Smith said.

It was a rare marketing misstep for Merck, which then tried to refocus on the more-lucrative heart-procedure market. The study that pitted Aggrastat against ReoPro was an attempt to enhance that marketing push. The findings in favor of ReoPro hurt Aggrastat's standing, starting a sales slide that has continued this year: Aggrastat's sales were $17 million in the first nine months of this year, less than half the sales in last year's corresponding period.

Merck has done little to market Aggrastat for the past two years, Smith said, noting that Guilford will make a marketing push to reverse the slide and then perhaps to start building sales. Guilford probably also will begin studies and clinical trials to reassess Aggrastat's performance vs. rival drugs, including ReoPro; many industry experts say the dosages of Aggrastat in the earlier tests were too low to be fully effective.

Strong marketing and more-positive clinical test results could well put Aggrastat on a growth track, said Brian D. Nye, a biotechnology analyst who follows Guilford for Janney Montgomery Scott in Philadelphia.

Smith and other industry experts say that Aggrastat has a price advantage over its two rivals: The average treatment with Aggrastat costs about $550, compared with $600 to $650 for ReoPro and $1,300 for Integrilin, according to Guilford.

Guilford shares were down 5 cents yesterday to close at $7.15.

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