Guilford Pharmaceuticals Inc. brought in $40 million from the sale of2 million shares at $20 apiece, a price slightly lower than when theoffering was proposed but three times higher than the company got ina public offering eight months ago.
The Baltimore company, which has a new drug application on file forGliadel, plans to use the money to help support the introduction ofthe brain cancer product and to further development of earlier-stageprograms.
Guilford had $19.5 million in cash and equivalents on Dec. 31, 1995,and expects to spend $9 million to $9.5 million in the first half of thisyear, said Craig Smith, Guilford's president and CEO. What Guilfordspends in the second half depends on what happens in the near termregarding corporate partnerships, he said.
Smith said the company's strategy has been to issue as few shares aspossible while growing the company. This public offering, whichbrings the shares outstanding to about 8.8 million, should finance thecompany one and a half to two years, a projection that doesn't takeinto account any revenues from partners or Gliadel sales, Smith said.
"We were very pleased with the response we got to Guilford and theGuilford business plan," Smith said. "Our underwriters tell us thereaction from institutions was very strong.
"We were quite pleased at getting essentially the equivalent of ouraverage bid price over the preceding couple of months," Smith said."We understood some companies were getting deals done recently ator above the initial offering price. I think we're seeing a little respitein the market."
In August 1995 Guilford sold 3 million shares at $6.50 each. Its June1994 initial public offering of 1.88 million shares went off at $8.
The company said Friday it completed the offering. Guilford's stock(NASDAQ:GLFD) closed Friday down $1.13 at $20.13, and gainedone-eighth Monday to close at $20.25 on a day when mostbiotechnology stocks lost ground.
On Feb. 7, 1996, Guilford submitted a new drug application forGliadel, a biodegradable polymer wafer containing thechemotherapeutic drug carmustine. Following removal of a braintumor up to eight wafers are implanted at the site, where they slowlydissolve and release carmustine to kill remaining and recurringcancer cells.
Smith said Guilford is finalizing a sales and marketing plan in whichthe company would market Gliadel in the U.S. and take on a partnerfor international markets. However, the company would considerpartnering the product in the U.S. if the financial terms wereattractive enough, and the partner was strong in oncology and willingto help Guilford build a business in the area of targeted andcontrolled delivery of cancer drugs, he said.
One area of development at Guilford is increasing the amount of drugin the Gliadel wafer, which now is 4 percent. Smith said the companyis contemplating studies that would increase the dosage gradually toas much as 20 percent in an effort to extend survival further than the35 to 45 percent benefit already seen, Smith said.
Other opportunities include putting more potent chemotherapy agentsinto the wafer, and using formulations that can be implanted via aneedle.
Guilford's second product in the clinic is Dopascan injection, a smallmolecule labeled with iodine for the imaging of dopamine neurons.That product, in Phase II trials in the U.S., is being developed fordiagnosing Parkinson's disease.
Guilford is seeking partners for Dopascan everywhere (except Japan,Korea and Taiwan, where its already partnered) and for its early stageprograms. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.