Guilford stock placement raises $27.4 million

Proceeds to fund test of heart-treatment drug

December 11, 2003|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Baltimore-based Guilford Pharmaceuticals Inc. has raised $27.4 million through a private stock placement to fund a clinical trial of a heart-treatment drug it acquired in October from Merck & Co.

Guilford said yesterday that it has placed 4.8 million shares of its common stock with institutional investors at a price of $5.67 per share. The company also issued seven-year warrants to the investors to purchase about 960,000 shares of stock at an exercise price of $7.55 per share.

The proceeds are to be used to fund the final round of human testing of the Aggrastat injection to treat heart attacks. The drug is currently approved and marketed to treat acute coronary syndrome, or patients suffering from chest pains who are at risk of having heart attacks.

In October, Guilford paid $84 million in cash and future royalties for the product's U.S. rights, betting on rejuvenating annual sales that had slipped from a high of $60 million in 2000 to $37 million in the 12 months before the acquisition. The acquisition brought the number of drugs Guilford is marketing commercially to two, including the Gliadel wafer, a brain cancer treatment.

Through the upcoming clinical trial of Aggrastat, which could begin by middle of next year, Guilford hopes to win a broadened FDA approval to include patients who are suffering from myocardial infarctions, or heart attacks, said Stacey Jurchison, a company spokeswoman. The drug had failed to win FDA approval to treat patients in that setting after results of a previous Phase III clinical trial conducted by Merck were released in 2000. But Guilford believes the drug has untapped promise.

"We think at the time the [Merck] study was conducted, the dose ... of Aggrastat was too low," Jurchison said. "We think a higher dose may be effective, and we'd like to test that premise in a clinical setting."

Aggrastat and two other drugs on the market, ReoPro and Integrilin, help block development of blood clots in heart-treatment patients by keeping blood platelets from sticking to artery walls. There is currently a $650 million market for such drugs, with about three-fourths of patients in that market representing the setting for which Aggrastat has already won approval.

The clinical trial would likely include between 5,000 and 8,000 patients and be conducted over two years, Jurchison said.

"In the meantime, we will concentrate on growing the market share for Aggrastat in the [acute coronary syndrome] setting where we have approval," she said.

Guilford expects that with improved marketing, Aggrastat could regain its annual sales level of $60 million. If the upcoming clinical trial succeeds in paving the way for FDA approval, annual sales could shoot to $100 million, Jurchison said.

For fiscal 2002, Guilford reported a loss of $59.3 million, or $1.99 per share. The company's shares closed yesterday at $5.81, down 22 cents.

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