Guilford Pharmaceuticals Inc., in its first 10 years often marked as a company long on innovation but short on commercialization, chose a veteran pharmaceutical executive as its new chief executive and charged him with transforming the Baltimore biotechnology company into more than a two-product business.
Guilford said yesterday that Dean J. Mitchell, 48, a Bristol-Myers Squibb executive with more than 25 years in the pharmaceutical industry, will take over as president and chief executive officer Dec. 1. He will replace Dr. Craig R. Smith, a Guilford co-founder and CEO, who announced retirement plans in September.
George L. Bunting Jr., Guilford's lead independent director, will become chairman when Mitchell starts his new job, the company said.
Mitchell, a vice president for strategy for Bristol-Myers, conceded that there is a risk in trading the security of a major pharmaceutical company for the top job at a small biotech company with an erratic track record. But "our industry is based upon taking risks," he said.
He said Guilford is a calculated risk with the odds heavily in his favor and that his new employer's storehouse of technology "is almost an embarrassment of riches."
"Guilford is a great company," Mitchell said. "They've developed a lot of exciting technology over the last couple of years. ... The strategy will be to help develop that into a portfolio of products."
The appointment was made at a key juncture for Guilford, the company and an analyst agree. Smith is a scientist and innovator, but Mitchell has a record of developing clinical and commercial strategies, building product portfolios, creating and managing partnerships and crafting financial deals.
Janney Montgomery Scott analyst Brian D. Rye, who has followed Guilford for years, said, "We have long felt that Guilford needed this kind of leadership" somewhere in its upper-executive echelon. Turning to someone with Mitchell's experience is a sound move, Rye said.
"We feel it makes sense for the company to have brought in someone with more of an operational background, given the company's current status" with two drugs on the market and several more in later-stage clinical trials, Rye said.
Smith and fellow Johns Hopkins researcher Solomon H. Snyder founded Guilford in 1993, and the company celebratied its 10th anniversary last year. But others reasons to celebrate have been few and far between.
Although Guilford had for many years been well regarded for the intellectual property it had developed, the company in some ways still resembles an early-stage biotech business because it has only two products on the market, one of which it developed.
After a slow start, the Gliadel wafer therapy for combating brain cancer seems to be gaining momentum after getting approvals for broader use in surgeries to remove brain tumors.
But Aggrastat, a heart attack treatment purchased for $84 million from Merck & Co. last fall, hasn't panned out, and in June the company reduced its sales forecast for the drug. Guilford recently said sales have stabilized.
Guilford has never turned an annual profit. In the past five years, losses have totaled nearly $130 million. Weeks ago, the company reported a third-quarter net loss of $14.5 million, bigger than the $13.3 million loss a year earlier, although revenue more than tripled to $17.3 million.
Shares, which closed up 32 cents yesterday at $4.97, are down 26.7 percent this year.
The company has promising drugs, including Aquavan, a product for anesthesia and sedation that is in late-stage clinical trials and could become a $200 million-a-year drug, Rye said.
Mitchell, who said he was approached several months ago by an executive search firm, said his industry experience equips him with skills to help him make Guilford a commercial success.
As an executive with Glaxo- SmithKline and its predecessor firms, his employer for 15 years before he joined Bristol-Myers in 2001, Mitchell said, he and his team took that company's AIDS-related business from virtual start-up to $1 billion in sales in about four years.
It is too early to say what his plans are for Guilford, but Mitchell said his priorities are finding additional technologies to commercialize, managing current clinical-trials programs and securing the resources needed. That could entail finding partners who will share the risk and cost of bringing a product to market, he said.
"You probably realize that Guilford doesn't have the resources to do this all by itself," he said. "But there are creative ways" to achieve his goals.