Bill, please take my comments with the proverbial grain of salt, since I am quite bullish on Guilford.
You are quite right, the cash hoard is impressive. Luckily, the lessons of the many cash-starved disasters of biotech have not been lost on these guys.
I am glad that they have all this money. First of all, it makes it unlikely that there will need to be a dilutive secondary offering in the future. Secondly, I am not sure that Guilford is "so close to profitability." Gliadel revenues were only $861,000 last quarter, and less than $6 million for the year. These numbers could rise in the future, I would hope, but probably not so much that Guilford could attain profitability thanks to this, alone.
The real potential here is not in the polymer drug delivery business, but in the neurological disorders markets. Stroke, head trauma, Alzheimer's, Parkinson's, etc. These are phenomenally large markets, with patients presenting highly debilitating symptoms (extreme quality of life impairment,) and no satisfactory treatments are currently available. The upside of a successful neuroimmunophilin drug or two is huge... but, it is still some time in the future.
My personal heuristic for investing in biotech companies is that three things are necessary:
1. Sufficient cash / partnering commitments to fund the (seemingly endless) research.
2. Good scientists / important patents / promising platforms.
3. Target indications with large markets / good revenue potential.
Guilford passes my test with flying colors.
Good luck, Bill, whichever way you decide to go with this. If you take the leap, as it were, I think you will not be disappointed.
RB |
