- The Washington Times - Tuesday, October 8, 2002

Stocks for Guilford Pharmaceuticals Inc. continued to rebound this week after the Baltimore drug company posted favorable patient results for its highest-selling drug.
Guilford stocks are up $1.21 from a six-month low last month of $3.50. The U.S. Food and Drug Administration had rejected Guilford's bid to broaden the use of its Gliadel Wafer drug, which treats recurring brain tumors, to treat patients in their initial brain tumor surgery.
The company's shares closed yesterday at $4.71, dipping 13 cents from $4.84 last week.
Dr. Craig Smith, chairman and CEO for Guilford, said the third research phase for Gliadel, which included more than 500 patients, showed "definitively that the drug works in larger and broader patient cases."
In the next four to six months, Dr. Smith said Guilford will license two to three additional medicines for operation, which he would not name, as well as focus on the development of two new drugs in the early stages of research.
Guilford's Aquavan, an anesthetic for patients having colon or cardiac surgery, and GI 1485, a drug being developed to halt the progression of Parkinson's disease, were the only two programs the company did not cut to limit operating expenses last year, Dr. Smith said.
"Success for either one in the market would help move the company toward sustainable profit and allow us to look at research for other patented drugs," Dr. Smith said, adding that Guilford plans to have more conclusive results for the drugs by next year. "But investors are liking the fact that we've reacted frugally during this difficult economic time and focused on two programs instead of spreading ourselves too thin."
Despite an overall drop in biotechnology stocks in the past year, Brian Rye, biotech analyst with Raymond James Financial Inc., rated the company as a strong buy. He said the company has increased its revenue while minimizing losses in the second quarter ended June 30.
The company showed a 9 percent decrease in losses to $32.8 million ($1.02 per share) from $35.9 million ($1.22) a year earlier.
"Guilford has improved its standing with the FDA, especially since phase three of Gliadel yielded good, tangible results last week," Mr. Rye said. "If the company can get approval to treat patients getting initial surgery for brain tumors, they look to at least triple sales of Gliadel."
Sales from Gliadel were $9.6 million for 2002, up 23 percent from $7.8 million a year earlier.
The increase in sales and potential expansion in the hospital medicine market could help the company break even by the end of 2003, Mr. Rye said. "It might not be very profitable, but psychologically an approval from the FDA would give Guilford more investor confidence in a capital scarce industry."
Matthew Geller, analyst with CIBC World Markets, said while the company had several "interesting programs that have good capabilities of increasing company revenue," he put the stock at a sector performance, or neutral, rating.
"Guilford has a lot of promising prospects in the future with a possible patent expansion for its main drug and the development of drugs that would be snatched up in the hospital marketplace," Mr. Geller said. "But, the company needs to show more results and get the FDA approval before investors will have the confidence to invest in a high-risk stock."

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