SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 20, 2005

GUILFORD PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

Delaware	0-23736	52-1841960
(State or other	(Commission File	(I.R.S. Employer
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
jurisdiction of	Number)	Identification No.)
incorporation or
organization)


6611 Tributary Street Baltimore, Maryland		21224


(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (410) 631-6300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

~~Item~~Section 1 ~~8.01.Other~~– ~~Items.~~Registrant’s Business and Operations

OnItem ~~July 20, 2005, Guilford Pharmaceuticals Inc~~1.,01. aEntry ~~Delaware corporation (“Guilford”) entered~~ into a ~~definitive~~ ~~Agreement~~Material ~~and~~Definitive ~~Plan of Merger (the “Merger~~ Agreement~~”) with MGI PHARMA, Inc~~., a Minnesota corporation (“MGI PHARMA”), and Granite Acquisition, Inc. (“Merger Sub”), a wholly owned subsidiary of MGI PHARMA. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Guilford, with Guilford continuing as the surviving corporation as a wholly-owned subsidiary of MGI PHARMA (the “Merger”).

~~The~~On ~~Merger~~July 20, ~~Agreement~~2005, ~~has~~Guilford ~~been~~Pharmaceuticals ~~approved~~Inc., bya ~~the~~Delaware ~~Boards~~corporation of(“Guilford”) ~~Directors~~entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with MGI PHARMA, ~~and Guilford~~Inc., ~~and~~a Minnesota iscorporation ~~subject~~(“MGI toPHARMA”), ~~customary~~and ~~closing~~Granite ~~conditions~~Acquisition, ~~including~~Inc. ~~approval~~(“Merger bySub”), ~~Guilford’s~~a ~~stockholders,~~wholly ~~absence~~owned subsidiary of ~~any~~MGI ~~law~~PHARMA. orThe ~~order~~Merger ~~prohibiting~~Agreement ~~the~~provides ~~consummation~~that, ofupon the ~~Merger,~~terms and ~~expiration~~subject orto ~~termination~~the ofconditions set forth in the ~~applicable~~Merger ~~Hart-Scott-Rodino~~Agreement, ~~waiting~~Merger ~~period.~~Sub Awill ~~copy~~be ofmerged ~~the~~with ~~press~~and ~~release~~into ~~announcing~~Guilford, ~~the~~with ~~Merger~~Guilford iscontinuing ~~attached~~as ~~hereto~~the surviving corporation as ~~Exhibit 99.1~~a ~~and~~wholly-owned ~~incorporated~~subsidiary byof ~~reference~~MGI ~~herein~~PHARMA (the “Merger”).

~~Additionally,~~Merger ~~Guilford hereby files the Employee Letter and Employee Presentation attached hereto~~Agreement ~~as Exhibit 99.2 and the script of the investor conference call dated July 21, 2005 attached~~ ~~hereto as Exhibit 99.3.~~

~~Additional~~Pursuant ~~Information~~to ~~About~~the terms of the Merger Agreement, MGI PHARMA will acquire all of the outstanding shares of Guilford common stock for $3.75 per share in a taxable merger. The Merger consideration consists of a fractional share of MGI PHARMA common stock valued at $2.625 and $1.125 in cash. The stock portion of this consideration is subject to a collar such that Guilford shareholders will receive total consideration of $3.75 per share, consisting of a fractional share of MGI PHARMA common stock worth $2.625, as determined over the five day trading period ending three trading days prior to closing of the Merger (the “average closing price”), plus $1.125 in cash, if MGI PHARMA’s common stock price increases or decreases by less than 15% prior to the close of the Merger. If the average closing price of MGI PHARMA common stock is equal to or more than $31.71, each share of Guilford common stock will be exchanged for 0.0828 of a share of MGI PHARMA common stock plus $1.125 in cash. If the average closing price of MGI PHARMA common stock is equal to or less than $23.43, each share of Guilford common stock will be exchanged for 0.1120 of a share of MGI PHARMA common stock plus $1.125 in cash.

InThe ~~connection~~Merger ~~with~~Agreement ~~the~~contains ~~Merger,~~customary ~~MGI~~representations and warranties of both Guilford and MGI PHARMA. ~~will~~These ~~file~~representations ~~with~~and ~~the~~warranties ~~SEC~~were amade ~~registration~~as ~~statement~~of onspecific ~~Form S-4 containing~~dates, amay ~~Proxy~~be ~~Statement/Prospectus.~~subject ~~Investors~~to important ~~are~~qualifications ~~urged~~and limitations agreed to ~~read~~by ~~the~~Guilford ~~registration~~and ~~statement,~~MGI PHARMA in connection with negotiating the ~~Proxy~~terms ~~Statement/Prospectus~~of ~~when~~the itMerger isAgreement, ~~available~~ and ~~all~~may ~~other~~have ~~relevant~~been ~~documents~~included ~~filed~~in orthe toMerger beAgreement ~~filed~~for ~~with~~ the ~~SEC~~purpose ~~because~~of ~~they~~allocating ~~contain~~risk ~~important~~between ~~information~~Guilford ~~about~~and MGI PHARMA, ~~Guilford~~rather ~~and~~than ~~the~~establishing matters ~~Merger~~as facts. ~~The~~Accordingly, ~~final~~the ~~Proxy~~Merger ~~Statement/Prospectus~~Agreement ~~will~~is beincluded ~~mailed~~with tothis ~~Guilford~~filing ~~stockholders~~only ~~after~~to ~~the~~provide investors ~~registration~~with ~~statement~~information isregarding ~~declared~~the ~~effective~~terms byof the ~~SEC.~~Merger ~~Guilford~~Agreement, ~~stockholders~~and ~~will~~not beto ~~able~~provide toinvestors with any ~~obtain~~other ~~the~~factual ~~registration~~information ~~statement,~~regarding the ~~Proxy~~parties ~~Statement/Prospectus~~or ~~and~~their ~~any~~respective ~~other~~businesses. ~~relevant~~The ~~filed~~Merger ~~documents~~Agreement ~~for~~should ~~free~~not atbe read alone, but should instead be read in conjunction with the ~~SEC’s~~other information ~~website~~regarding ~~(www.sec.gov).~~the ~~These~~companies ~~documents~~and ~~can~~the ~~also~~Merger that will be ~~obtained~~contained ~~for~~in, or incorporated by ~~free~~reference ~~from~~into, ~~MGI~~the ~~PHARMA~~proxy bystatement/prospectus ~~directing~~that athe ~~request~~parties towill ~~MGI~~be ~~PHARMA~~filing ~~Investor~~in ~~Relations~~connection atwith the ~~952~~Merger, as well as in the Forms 10-~~346~~K, Forms 10-~~4700~~Q and ~~for~~ ~~free~~other ~~from~~filings ~~Guilford~~that byeach ~~directing~~of aGuilford ~~request~~and MGI toPHARMA ~~Guilford~~make ~~Investor~~with ~~Relations~~the ~~at 410-631-5022~~SEC.

~~Participants~~In addition, Guilford has agreed, among other things and subject to certain exceptions as described in the Merger Agreement, (i) to conduct its business in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and consummation of the Merger, (ii) not to engage in certain transactions during such period, (iii) to cause a stockholder meeting to be held to consider approval of the Merger and the other transactions contemplated by the Merger Agreement, (iv) not to solicit proposals relating to alternative business combination transactions, and (v) not to enter into discussions concerning, or provide confidential information in connection with, alternative business combination transactions. All of Guilford’s outstanding stock options and restricted stock units granted under Guilford’s stock plans and under agreements with consultants shall vest in full prior to the Merger.

~~MGI~~At ~~PHARMA, Guilford and their directors and officers may be deemed to be participants in~~ the ~~solicitation~~ ofeffective ~~proxies~~time ~~from Guilford shareholders in respect~~ of the ~~proposed transaction. Information regarding MGI PHARMA’s participants is available in MGI PHARMA’s Annual Report on Form 10-K for the year ended December 31~~Merger, ~~2004~~all ~~and its proxy statement for its 2005 Annual Meeting~~ of ~~stockholders,~~ ~~which are filed with~~ the ~~SEC. Information regarding Guilford~~company’s ~~participants~~outstanding ~~is available~~stock inoptions ~~Guilford’s Annual Report on Form 10-K for the year ended December 31, 2004~~ and ~~the~~restricted ~~proxy~~stock ~~statement~~units ~~for~~shall ~~its 2005 Annual Meeting of stockholders, which are filed with the SEC. Additional information regarding interests of such participants will~~ be ~~included in the registration statement containing the Proxy Statement/Prospectus that will be filed with the SEC~~terminated. ~~You can obtain free copies of these documents from MGI PHARMA and Guilford using the contact~~ ~~information above.~~

~~Forward-Looking~~The ~~Statements~~Merger Agreement also provides, among other things, that MGI PHARMA will, prior to completion of the Merger, take the actions required to appoint an individual nominated by Guilford’s Board of Directors to MGI PHARMA’s Board of Directors.

~~This~~Consummation ~~Current~~of ~~Report~~the onMerger ~~Form 8-K~~is ~~contains~~subject ~~certain~~to ~~“forward-looking”~~a ~~statements~~number ~~within~~of ~~the~~conditions, ~~meaning~~including ofapproval by Guilford’s stockholders, absence of any law or order prohibiting the ~~Private~~consummation ~~Securities~~of ~~Litigation~~the ~~Reform~~Merger, ~~Act~~expiration or termination of ~~1995.~~the ~~These~~applicable ~~statements~~Hart-Scott-Rodino ~~are~~waiting ~~typically~~period, ~~preceded~~and ~~by words~~certain ~~such~~other customary conditions.

asThe ~~“believes,”~~Merger “Agreement ~~expects,”~~prohibits ~~“anticipates,”~~Guilford ~~“intends,”~~from ~~“will,”~~soliciting ~~“may,”~~or ~~“should,”~~entertaining oralternative ~~similar~~transaction ~~expressions.~~offers, ~~These~~subject ~~forward-looking~~to ~~statements~~certain ~~are~~exceptions, ~~not~~and ~~guarantees~~contains ofcertain ~~MGI~~termination ~~PHARMA’s~~rights orfor both Guilford’s ~~future performance~~ and ~~involve~~MGI aPHARMA. ~~number~~Either ofparty ~~risks and uncertainties that~~ may ~~cause~~terminate ~~actual results to differ materially from~~ the ~~results~~Merger ~~discussed~~Agreement inif ~~these~~it ~~statements.~~is ~~Factors~~not ~~that~~closed ~~might cause either company’s results to differ materially from those expressed or implied~~ by ~~such forward-looking~~December ~~statements include~~31, ~~but are not limited to~~2005, ~~the~~if ~~ability~~it ofis ~~MGI~~not ~~PHARMA~~approved ~~and~~by Guilford’s ~~product candidates~~shareholders toor beupon ~~proven~~other ~~safe~~customary ~~and~~events. ~~effective in humans, to receive marketing authorization from~~MGI ~~regulatory~~PHARMA ~~authorities,~~may ~~and~~terminate tothe ~~ultimately~~Merger ~~compete~~Agreement ~~successfully~~if ~~with other therapies; continued sales of MGI PHARMA and~~ Guilford’s ~~marketed~~Board ~~products;~~of ~~development~~Directors changes or ~~acquisition~~does ~~of additional~~not ~~products;~~reaffirm ~~reliance~~its onrecommendation ~~contract~~of ~~manufacturing;~~the ~~changes~~Merger. inGuilford ~~strategic~~may ~~alliances;~~terminate ~~continued~~the ~~access~~Merger to ~~capital;~~ ~~ability~~accept ofan alternative ~~MGI~~proposal ~~PHARMA~~that ~~and~~is ~~Guilford~~found to ~~complete~~be ~~the~~superior ~~transaction~~by onits ~~the~~Board ~~proposed~~of ~~terms;~~Directors. ~~the risk~~Upon ~~that~~termination of the ~~perceived~~Merger ~~advantages~~Agreement ofunder ~~the~~specified ~~transaction~~circumstances, ifGuilford ~~consummated,~~ may ~~not~~ be ~~achieved;~~required ~~and other risks and uncertainties detailed from time~~ to ~~time~~pay inMGI ~~the~~PHARMA ~~companies’ filings with the SEC~~a ~~including~~termination ~~their~~fee ~~most~~of ~~recently filed Form~~$7 ~~10-Q~~million orand ~~10-K.~~ MGI PHARMA ~~and~~may ~~Guilford~~be ~~undertake~~required ~~no duty~~ to ~~update~~pay ~~any~~Guilford ofa ~~these~~termination ~~forward-looking~~fee ~~statements to conform them to actual results~~of $6 million.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference.

Line of Credit Agreement

On July 20, 2005, MGI PHARMA and Guilford entered into a line of credit agreement (“Line of Credit Agreement”), pursuant to which, commencing October 1, 2005, until the earlier of December 31, 2005 and the termination of the Merger Agreement (“Advance Termination Date”), MGI PHARMA has agreed to advance Guilford up to an aggregate amount not to exceed $18 million (“Loan”). Unless due sooner pursuant to the terms of the Line of Credit Agreement, the outstanding principal and interest with respect to the Loan will be due on December 31, 2006.

The Loan will bear interest at a rate equal to 14% per annum, payable in arrears on the first day of each month, commencing January 1, 2006. Interest accruing on the Loan will be added to the principal thereof on the Advance Termination Date. The Line of Credit Agreement also contains certain covenants made by Guilford, which remain in effect so long as the Loan remains unpaid, including Guilford’s agreement not to merge, consolidate with or into, or convey, transfer, lease or otherwise dispose of all or substantially all of its assets to any person (except in accordance with the Merger Agreement) and to maintain available cash, cash equivalents, marketable securities and investments in excess of $30 million.

Additionally, for a period of ninety days following the termination of the Merger Agreement, Guilford shall have the right to sell to MGI PHARMA, and MGI PHARMA shall have the obligation to purchase from Guilford, the Gliadel Assets (as defined in the Line of Credit Agreement) for a purchase price of $90 million.

To secure its obligations under the Line of Credit Agreement, Guilford has agreed to grant to MGI PHARMA, pursuant to a security agreement, a first priority security interest in (i) the NAALDase Inhibitor Compounds and PARP Inhibitor Compounds and (ii) Aquavan intellectual property and related assets; provided that such security interest shall not attach to any property in which Paul Royalty (as defined below) has a security interest.

The foregoing description of the Line of Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Line of Credit Agreement, which is filed as Exhibit 10.1, and is incorporated into this report by reference.

Letter Agreement with Paul Royalty Fund, L.P. and Paul Royalty Fund Holdings II

In October 2003, Guilford acquired from Merck and Co., Inc. the rights to Aggrastat® in the United States and its territories. In order to partially finance this acquisition, Guilford entered into a revenue interest financing arrangement with Paul Royalty Fund, L.P., and Paul Royalty Fund Holdings II (“Paul Royalty”). Pursuant to the terms and conditions of the Revenue Interest Assignment Agreement dated October 29, 2003 (the “RIAA”) among Artery, LLC, Guilford, GPI Holdings, Inc., and Paul Royalty, which agreement is filed as Exhibit 10.26 to Guilford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, in the event of a change of control Paul Royalty may require Guilford to repurchase Paul Royalty’s revenue interest granted under the RIAA.

On July 20, 2005, Guilford entered into a letter agreement (the “Letter Agreement”) with Paul Royalty and MGI PHARMA whereby Paul Royalty agreed to sell, and on or before the consummation of the Merger MGI PHARMA agreed to repurchase, Paul Royalty’s revenue interest granted under the RIAA for an amount calculated in accordance with Schedule A of the Letter Agreement. In the event the Merger is not consummated, the Letter Agreement will terminate.

The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the Letter Agreement, which is filed as Exhibit 10.2 hereto, and is incorporated into this report by reference.

Amendment to Rights Agreement

On July 20, 2005, Guilford and American Stock Transfer & Trust Company entered into Amendment No. 2 (the “Amendment”) to Rights Agreement, dated as of September 26, 1995, as amended as of October 15, 1998 (the “Rights Agreement”) for the purpose of amending the Rights Agreement to render it inapplicable to the Merger and the transactions contemplated by the Merger Agreement. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 4.1 hereto and is incorporated herein by reference.

Additional Information About The Merger

In connection with the Merger, MGI PHARMA will file with the SEC a registration statement on Form S-4 containing a Proxy Statement/Prospectus. Investors are urged to read the registration statement, the Proxy Statement/Prospectus when it is available and all other relevant documents filed or to be filed with the SEC because they contain important information about MGI PHARMA, Guilford and the Merger. The final Proxy Statement/Prospectus will be mailed to Guilford stockholders after the registration statement is declared effective by the SEC. Guilford stockholders will be able to obtain the registration statement, the Proxy Statement/Prospectus and any other relevant filed documents for free at the SEC’s website (www.sec.gov). These documents can also be obtained for free from MGI PHARMA by directing a request to MGI PHARMA Investor Relations at 952-346-4700 and for free from Guilford by directing a request to Guilford Investor Relations at 410-631-5022.

Participants in the Merger

MGI PHARMA, Guilford and their directors and officers may be deemed to be participants in the solicitation of proxies from Guilford shareholders in respect of the proposed transaction.

Information regarding MGI PHARMA’s participants is available in MGI PHARMA’s Annual Report on Form 10-K for the year ended December 31, 2004 and its proxy statement for its 2005 Annual Meeting of stockholders, which are filed with the SEC. Information regarding Guilford’s participants is available in Guilford’s Annual Report on Form 10-K for the year ended December 31, 2004 and the proxy statement for its 2005 Annual Meeting of stockholders, which are filed with the SEC. Additional information regarding interests of such participants will be included in the registration statement containing the Proxy Statement/Prospectus that will be filed with the SEC. You can obtain free copies of these documents from MGI PHARMA and Guilford using the contact information above.

Forward-Looking Statements

This Current Report on Form 8-K contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are typically preceded by words such as “believes,” “ expects,” “anticipates,” “intends,” “will,” “may,” “should,” or similar expressions. These forward-looking statements are not guarantees of MGI PHARMA’s or Guilford’s future performance and involve a number of risks and uncertainties that may cause actual results to differ materially from the results discussed in these statements. Factors that might cause either company’s results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the ability of MGI PHARMA and Guilford’s product candidates to be proven safe and effective in humans, to receive marketing authorization from regulatory authorities, and to ultimately compete successfully with other therapies; continued sales of MGI PHARMA and Guilford’s marketed products; development or acquisition of additional products; reliance on contract manufacturing; changes in strategic alliances; continued access to capital; ability of MGI PHARMA and Guilford to complete the transaction on the proposed terms; the risk that the perceived advantages of the transaction, if consummated, may not be achieved; and other risks and uncertainties detailed from time to time in the companies’ filings with the SEC including their most recently filed Forms 10-Q or 10-K. MGI PHARMA and Guilford undertake no duty to update any of these forward-looking statements to conform them to actual results.

Section 2 – Financial Information

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.

As described above, Guilford and MGI PHARMA entered into a Line of Credit Agreement on July 20, 2005. The material terms of this transaction are described in Item 1.01 above and are incorporated herein by reference.

Section 3 – Securities and Trading Markets

Item 3.03. Material Modification to Rights of Security Holders.

As described above, Guilford and American Stock Transfer & Trust Company entered into the Amendment to Rights Agreement. The material terms of this transaction are described in Item 1.01 above and are incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(c)

Exhibits

	99.1		Press release issued by Guilford Pharmaceuticals Inc. announcing the Agreement and Plan of Merger.
	2.1		Agreement and Plan of Merger dated as of July 20, 2005, by and among MGI PHARMA, Inc., a Minnesota corporation, Granite Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of MGI PHARMA, Inc., and Guilford Pharmaceuticals Inc., a Delaware corporation.*
	99.2		Employee Letter and Employee Presentation of Guilford Pharmaceuticals Inc. dated July 21, 2005.
	4.1		Second Amendment to Rights Agreement dated as of July 20, 2005, between Guilford Pharmaceuticals Inc., a Delaware corporation, and American Stock Transfer & Trust Company.
	99.3		Script of investor conference call dated July 21, 2005.
	10.1		Line of Credit Agreement by and between Guilford Pharmaceuticals Inc., a Delaware corporation, and MGI PHARMA, Inc., a Minnesota corporation, dated July 20, 2005.
	10.2		Letter Agreement dated July 20, 2005 by and between Paul Royalty Fund, L.P., Paul Royalty Fund Holdings II, Guilford Pharmaceuticals Inc. and MGI PHARMA, Inc.

The Company has omitted certain schedules in accordance with Regulation S-K 601(b)(2). The Company will furnish the omitted schedules to the Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Guilford Pharmaceuticals Inc.
Date: July 21, 2005	By:	/s/ Asher M. Rubin
Date: July 22, 2005	By:	/s/ Asher M. Rubin
		Asher M. Rubin Senior Vice President, General Counsel and Secretary
		Asher M. Rubin
		Senior Vice President, General Counsel and Secretary

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