Fresh from a promising deal with Pfizer Inc. for drugs aimed at neurodegenerative disease, Guilford Pharmaceuticals Inc. said it plans to raise about $50 million in an offering of five-year subordinated notes convertible to common stock.
Although the interest rate, conversion price and offering price are yet to be determined by negotiations between Guilford and the initial note buyers, the company said it will raise up to $7.5 million more if an option given the initial buyers is exercised.
Stacey Jurchison, director of corporate communications, said there was "very little we can say" because of the ongoing negotiations.
Guilford expects to use up to $10 million of the net proceeds to concurrently repurchase shares of the company's common stock sold short by certain note buyers, with the rest going for general corporate purposes.
"We have a program in Phase II clinical development and part of these funds will be directed toward that program," Jurchison told BioWorld Today, referring to the Aquavan injection anesthetic - a patented, water-soluble prodrug of the approved sedative/hypnotic agent propofol - in cardiac surgery and another in colonoscopy patients.
The company is expected to discuss the cardiac surgery study results at the end of the third quarter or early fourth quarter, with results from one part of the colonoscopy trial also in the third quarter. A double-blind comparison with midazolam in colonoscopy is expected to complete enrollment and produce results by the end of the year or early next year.
"We're also looking at bringing in an additional marketed product" through licensing, Jurchison said. Guilford has one marketed product now: the Gliadel Wafer for the treatment of brain cancer, sold by its 45-person force.
The wafer is designed to deliver chemotherapy directly to the site of the cancer, bypassing the blood-brain barrier and minimizing drug exposure to other areas of the body.
In February, the FDA approved Gliadel as a first-line therapy for patients with high-grade malignant glioma. It had been approved previously as an adjunct to surgery in patients with recurrent glioblastoma multiforme. (See BioWorld Today, Feb. 27, 2003.)
Guilford's deal with New York-based Pfizer, entered last month, calls for $5 million up front in exchange for an exclusive license to develop Guilford's N-acetylated-alpha-linked-acidic-dipeptidase inhibitors worldwide, with $10 million by next March 31, or earlier, if a lead compound is selected. (See BioWorld Today, May 9, 2003.)
Guilford's stock (NASDAQ:GLFD) closed Wednesday at $4.78, down 80 cents.