Guilford licenses U.K.'s Link to market Gliadel in Europe

Baltimore company seeks more sales outside U.S. for brain cancer therapy

May 18, 2004|By William Patalon III | William Patalon III,SUN STAFF

Guilford Pharmaceuticals Inc. has signed a licensing deal to distribute its Gliadel brain-cancer therapy in Europe, an agreement that could generate up to $2.5 million in fees and royalty payments while helping the Baltimore company boost its presence in that overseas market.

In its announcement yesterday, Guilford said it had granted United Kingdom-based Link Pharmaceuticals Ltd. exclusive rights to market Gliadel in Germany, France, Belgium, the Netherlands, Luxembourg, Austria and Switzerland. Link already holds marketing rights for Guilford's cancer treatment in the United Kingdom.

"Guilford's second agreement with Link expands our network of international partners in major global health care markets and is a key component of our ability to increase sales of Gliadel outside the United States," said Craig R. Smith, the Baltimore company's chairman, president and chief executive officer.

Guilford said it received an immediate payment of $500,000 when the deal was signed, and could net additional milestone payments of up to $2 million as Link negotiates pricing approvals with the countries named in the agreement. Those potential milestone payments include one of $750,000 if Link is able to get Gliadel approved for initial-surgery use in France and Germany, according Guilford.

Gliadel, a dime-sized wafer containing cancer-fighting medicines, is approved for use in both initial and follow-up brain cancer surgeries in the United States and Canada. However, in 13 countries abroad, Gliadel is approved only for treatment of recurrences of brain cancer. The agreement with Link comes as Guilford is negotiating with European regulatory authorities to approve the use of Gliadel with patients who are being operated on for the first time, Smith said.

Link specializes in marketing niche pharmaceutical products to the U.K. market, by either licensing products from the manufacturer or purchasing them outright. More recently, Link has been working to expand its presence in the rest of the European market.

Guilford declined to provide sales or market-share figures for Gliadel in Europe, noting only that "it's a very large, important market for us," according to Stacey Jurchison, director of corporate communications.

The company markets Gliadel in Australia and New Zealand.

Guilford recently announced a larger-than-expected loss of $18.1 million for its first quarter, which ended March 31, attributing the additional red ink - in part - to investments it was making in a bigger sales force to market Gliadel, as well as Aggrastat, a heart-attack drug Guilford bought last year from Merck & Co.

Rather than invest even more to build a similar sales force abroad, Guilford thought it better to find a licensing partner with a presence in Europe - a presence that includes needed contacts with regulators and health care customers in that market, the company said.

Guilford Pharmaceuticals' shares lost 9 cents in trading on the Nasdaq stock market yesterday to close at $5.74.

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