Guilford Pharmaceuticals Inc. is looking to grow its revenue streams through an $84 million purchase of a cardiovascular drug from Merck & Co. Inc.

Baltimore-based Guilford acquired U.S. rights to Aggrastat Injection (tirofiban hydrochloride), which is indicated for all platelet-mediated cardiovascular diseases, including coronary artery, cerebrovascular and peripheral vascular diseases.

"Some time ago, we set the 2006-2007 time frame of having three marketed products, more than $100 million in sales, and several products in Phase II and Phase III testing," said Guilford Chairman, President and CEO Craig Smith. "Clearly, Aggrastat fits in by providing a bridge between Gliadel, our currently marketed product, and what we hope will be the launch of our next internally developed product, Aquavan."

He added that the drug suits the company's plans to expand its sales and marketing team that tasks hospital-based products to surgical or medical sub-specialists. Guilford expects to double its sales force to 51 in the next few months, with plans to continue to add more representatives between next year and 2006.

"Our target markets are the hospital market and the neurology market," Smith told BioWorld Today. "All of these have a central focus and require a certain type of sales professional, a person who will actually have to get into an operating room, a colonoscopy suite or a cath lab to talk turkey with the people working in those areas."

Guilford markets Gliadel for brain cancer, while its pipeline includes Aquavan, a Phase II-stage anesthetic designed as a rapid-acting sedative for patients undergoing sedation during colonoscopy, and GPI 1485, in the clinic for Parkinson's disease. GPI 1485 is expected to shortly enter clinical studies for post-prostatectomy erectile dysfunction.

Aggrastat was launched in the U.S. in 1998 and is available in 82 other countries, where Merck will continue to market the product. The Whitehouse Station, N.J.-based company also will continue to manufacture and supply Aggrastat's active pharmaceutical ingredient to Guilford through 2014.

The small molecule, which inhibits platelet aggregation, is used to treat acute coronary syndrome such as unstable angina and non-Q-wave myocardial infarction. Aggrastat also is used to treat such patients prior to undergoing angioplasty.

The glycoprotein IIb/IIIa receptor antagonist operates in a market estimated at about $550 million, though it is dominated by two competing drugs - ReoPro (abciximab, from Centocor Inc.) and Integrilin (eptifibatide, from Cor Therapeutics Inc., now merged with Millennium Pharmaceuticals Inc.). Aggrastat reached peak sales of $100 million in 2000, though that figure slipped to $70 million in 2001, the last period Merck actively promoted the drug, and has further declined in the interim. Last year's sales totaled $55 million, and Smith said Guilford paid about 2.2 times the $37.7 million trailing average of the product's 12-month sales through Sept. 30.

He added that this year's sales likely would total less than $37.7 million.

To expand sales, Guilford plans to better promote Aggrastat in its current indication and work toward expanding its label to include percutaneous coronary intervention.

"Once patients have been given their bolus dose and put on a continuous infusion of the product, and they have been on it for an hour or two, you find that Aggrastat is very effective in inhibiting platelet aggregation at 90 percent or more," Smith said. "Those are the levels necessary to get the kind of drug effect that would prevent complications in a percutaneous transluminal coronary angioplasty or stent placement in a coronary artery."

He said prior studies have shown that the use of Aggrastat in such a setting prevents complications of the coronary intervention, results akin to the use of ReoPro or Integrilin. The issue centers around the bolus dose, Smith added, in a setting such as a catheter lab.

"The real opportunity here is for us to penetrate and build the market for the existing indication," Smith added. "The second opportunity is to conduct a new trial, which we think with a higher dose of the drug is highly likely to be effective, and that would be for the percutaneous coronary intervention indication where there are dozens of articles and editorials in cardiovascular literature drawing the same conclusion - the bolus dose needs to be higher to produce a more immediate effect."

He said the company's preliminary expectations center on a non-inferiority trial vs. ReoPro scheduled to begin in the second half of next year.

As part of the acquisition, Guilford and Merck agreed to a varied royalty schedule based on net sales until December 2012. Should Aggrastat sales fail to exceed $40 million until 2007, Guilford will pay no royalties. After that date, the company will pay a 5 percent royalty on sales under $40 million. Increasing royalty tiers kick in beyond sales above $40 million, capping at about 20 percent.

"We wanted to acquire a product this year," Smith said, adding that the companies negotiated the deal for more than six months. "The timing of this has been driven by our own objectives - I don't think there was any question that Merck was public in indicating its interest in divesting the product, and the timing worked out well for both companies."

To finance the acquisition, Guilford will pay $42 million and entered a financing arrangement with New York-based Paul Capital Partners, which will provide the remaining $42 million. In return, Paul will receive a royalty from future revenues from Aggrastat and Gliadel, as well as five-year warrants to purchase 300,000 common shares at an exercise price of $9.15.

Through 2006, Paul Capital will receive 10 percent on the first $75 million of combined Aggrastat and Gliadel annual sales in the U.S., plus 2.5 percent of annual sales that exceed the $75 million threshold. From 2007 through 2012, the revenue interest increases to 17.5 percent on the first $75 million of combined annual sales and 3.5 percent of annual sales that exceed $75 million.

Should Guilford not reach certain sales totals, Paul Capital could supplement the net sales shortfall with other Guilford products, such as Aquavan and GPI 1485.

New York-based UBS Investment Bank acted as Guilford's financial advisor in connection with the transaction. Guilford's stock (NASDAQ:GLFD) dropped 5 cents Wednesday to close at $7.15.