Guilford's loss grows to $18 million

Red ink is attributed to larger sales staff, developing new drugs

May 11, 2004|By William Patalon III | William Patalon III,SUN STAFF

Guilford Pharmaceuticals Inc. reported yesterday a first-quarter loss that was much larger than expected, but attributed the additional red ink to investments in new products and a larger sales force.

The Baltimore drugmaker reported a net loss of $18.1 million, or 53 cents a share, for the three months that ended March 31. Analysts had anticipated a net loss of 39 cents, according to a survey conducted by Zacks Investment Research.

Guilford lost $11.2 million, or 37 cents per share, in the first quarter last year. Its shares fell 30 cents, or nearly 5 percent, to close at $5.78.

Revenue soared 158 percent to $8.93 million, up from $3.4 million reported for the first quarter of last year, according to Guilford.

"This ... has been an active period for our commercial organization," said Craig R. Smith, Guilford's president and chief executive officer.

That activity translated into higher costs for the company -and the widened loss despite the big boost in sales - as Guilford moved to capitalize on both current and future product opportunities.

The firm right now markets two commercial products: the Gliadel Wafer for brain cancer, and the Aggrastat Injection, which treats heart-attack patients. Guilford bought Aggrastat from Merck & Co. Inc. last fall for $84 million.

Costs related to the marketing of Gliadel and Aggrastat were $6.9 million in the first quarter this year. The amount was more than double the $2.7 million spent during the first quarter of 2003, when it was only marketing Gliadel.

Guilford said the increased expenses were chiefly related to expanding and training its sales force, although marketing costs associated with the first-quarter product re-launch of Aggrastat also contributed.

Total costs and expenses swelled to $23.8 million in this year's first quarter from $15.4 million in the first three months of 2003.

Research and development costs also were higher, climbing from $7.8 million in the first quarter of last year to $9.4 million in the first three months of this year, the company said.

Some of the increase stemmed from the clinical trials for the Aquavan Injection, a new hypnotic sedative the company is working to get approved.

Biotechnology analyst Jason Y. Zhang said Guilford appears to be moving in the right direction, despite the larger-than-anticipated loss. The money the firm is funneling into a bigger sales force and product-oriented research and development should be viewed as "strategic" spending, said Zhang, who covers Guilford for Independent Research Group in New York.

"Clearly, the company wants to sell more," Zhang said. "And to do that, it needs to increase its sales force ... and to add new products."

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.