Trial fizzles; Guilford's shares skid
NIL-A doesn't seem to significantly help Parkinson's patients; Stock off $5.85 to
$16.15; Drug is licensed to Amgen; continued development unclear
By Julie Bell
[Baltimore] Sun Staff
July 27, 2001
Shares of Guilford Pharmaceuticals Inc. fell more than 26 percent yesterday after the company said its experimental treatment for Parkinson's disease, licensed to Amgen Inc., didn't appear to significantly help patients enrolled in a clinical trial.
The drug, NIL-A, was the first in a family of Guilford nerve-regeneration molecules to be tested on people after showing promise in animal testing. The Baltimore company gave Amgen the rights in 1997 to develop the family of drugs for up to 10 indications, including Parkinson's; Alzheimer's disease; amyotrophic lateral sclerosis, or Lou Gehrig's disease; multiple sclerosis and traumatic head and spinal cord injuries.
Yesterday, it was unclear whether Amgen would continue development of the drug for Parkinson's or retain an interest in any of the related drugs. Amgen executives told analysts and investors in an earnings conference call that they were evaluating the large amount of data the trial had generated and had yet to make a decision.
But, said Jeff Richardson, a spokesman for the Thousand Oaks, Calif.-based company, "The study did not produce the effect we were looking for."
Shares of Guilford closed at $16.15, down $5.85, after dipping as low as $13.71 in a slide that began even before the announcement as rumors circulated about the trial's results. Nearly 6.2 million shares traded hands, almost 25 times the average daily trading volume of 249,532 shares over the last six months.
Brian Rye, a biotechnology analyst with Raymond James & Associates in Nashville, Tenn., said he was maintaining his buy rating on Guilford's stock, in part because the company has other drugs beginning clinical trials and one scheduled to be considered for an additional use by the Food and Drug Administration.
"The company still has several shots on goal," Rye said. "On a day-to-day basis, it doesn't mean a whole lot. Amgen is responsible for the clinical development of it right now. There's always a possibility Amgen could return the rights to Guilford."
Still, NIL-A is the furthest along in development of any of Guilford's drugs, with the exception of Gliadel - a chemotherapy-packed, dissolvable wafer that is implanted in the cavity left when a brain tumor is surgically removed. That drug already has been approved for use in surgeries for certain, aggressive brain tumors that have grown back. An FDA advisory committee is to consider Sept. 11 whether to recommend expanding its use to initial brain surgery.
But the company has a number of drug-development programs, including Aquavan, an injectable formulation of the widely used anesthetic propofol that is designed to cause fewer side effects. It began clinical trials in Europe in January. By year's end, even without NIL-A, the company still could have five drugs in human testing.
"All are very substantial markets," Guilford spokeswoman Stacey Jurchison said yesterday. "This wasn't sort of the 'biggest' or 'best.'"
The drugs Guilford is putting into clinical trials itself all potentially could mean more financially to Guilford, which retains the rights to them.
With NIL-A, it stands to gain payments if certain milestones in the drug's development are achieved, as well as undisclosed royalty payments should it get eventual approval.
Amgen's payments to Guilford so far have included a $35 million upfront payment in 1997, $13.5 million in research funding and a $6 million milestone payment. Guilford stood to gain another $7.5 million if Amgen were to take the drug into a Phase III trial. |
