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Chelsea Therapeutics Reports Third Quarter 2013 Financial Results

Chelsea Therapeutics Logo

CHARLOTTE, N.C., Nov. 5, 2013 (GLOBE NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the third quarter ended September 30, 2013.

"The third quarter of 2013 was marked by the successful resubmission of our New Drug Application for NORTHERA™ and its acceptance by the U.S. Food and Drug Administration (FDA)," said Joseph G. Oliveto, Interim CEO of Chelsea. "We are actively preparing for our Advisory Committee Meeting in mid-January 2014, followed by our expected PDUFA goal date in mid-February 2014. Chelsea continues to diligently manage its financial resources, which are now projected to fund operating expenses into the first quarter of 2015."

Third Quarter 2013 and Recent Highlights

  • In October 2013, Chelsea announced that the FDA had notified the Company that its NDA seeking approval to market NORTHERA™ (droxidopa) will be reviewed by the Cardiovascular and Renal Drug Advisory Committee (CRDAC). The meeting is tentatively scheduled for January 14, 2014.
  • In September 2013, Chelsea announced that the FDA acknowledged receipt of its New Drug Application (NDA) resubmission seeking approval to market Northera for the treatment of symptomatic NOH. The FDA deemed the resubmission a complete response to its March 28, 2012 Complete Response Letter and assigned a new Prescription Drug User Fee Act (PDUFA) goal date of February 14, 2014.

Financial Results for the Third Quarter

For the quarter ended September 30, 2013, Chelsea reported a net loss of $3.8 million or ($0.06) per share versus a net loss of $6.1 million or ($0.09) per share for the same period in 2012. For the first nine months of 2013, Chelsea reported a net loss of $11.1 million or ($0.17) per share compared to a net loss of $29.5 million or ($0.44) per share for the first nine months of 2012.

Research and development (R&D) expenses for the quarter ended September 30, 2013 were $2.6 million, compared to $2.5 million for the same period in 2012. The increase was primarily due to initial costs related to the start-up for Study 401, the NORTHERA™ NDA and Advisory Committee meeting preparation activities. For the nine months ended September 30, 2013, research and development expenses were $6.4 million versus $15.9 million for the comparable prior-year period. The reduction in R&D costs for the nine months period is primarily due to the completion of multiple studies in both the droxidopa and antifolate development programs reflecting significantly reduced clinical activity in 2013 when compared to 2012. Droxidopa-related research and development costs during the remainder of 2013 are estimated at approximately $4.2 million and include estimated costs for Study 401, the planned new trial of NORTHERA™, which the Company expects will begin enrolling patients in the fourth quarter of 2013, costs to prepare for the January 2014 meeting of the CRDAC, and operating costs for research and development activities including compensation and related costs.

Selling, general and administrative (SG&A) expenses were $1.3 million for the three months ended September 30, 2013, compared to $1.4 million for the same period in 2012. For the nine months ended September 30, 2013, SG&A expenses were $4.7 million versus $11.5 million for the comparable prior-year period. The reduction is SG&A expenses were primarily due to decreases in compensation and related costs associated with the reduction in force that occurred in July 2012. Costs incurred in 2013 included compensation and related expenses for our continuing administrative and business development efforts, legal fees and other professional fees.

Chelsea ended the quarter with $20.9 million in cash and cash equivalents compared to $28.4 million as of December 31, 2012. This includes approximately $2.8 million of net proceeds, after expenses, raised through the Company's ATM.

As of November 1, 2013 the Company had raised total net proceeds, after expenses, of $10.4 million under its ATM. On November 1, 2013, Chelsea elected to terminate the ATM sales agreement and, pursuant to that agreement, notified the bank of our intent to terminate effective November 11, 2013. No further sales will be made under the ATM. Chelsea anticipates that its cash and cash equivalents on hand at September 30, along with the proceeds raised from its ATM as more fully described above, should fund the Company's operations into the first quarter of 2015. This current forecast does not include significant costs related to commercialization or other activities and events that are related to and would follow an NDA approval from the FDA.

About Northera

NORTHERA™ (droxidopa), the lead investigational agent in Chelsea Therapeutics' pipeline, is currently in Phase III development for the treatment of symptomatic neurogenic orthostatic hypotension (NOH) in patients with primary autonomic failure — an indication that includes a significant number of patients with Parkinson's disease, multiple system atrophy (MSA) and pure autonomic failure (PAF). Droxidopa is a synthetic catecholamine that is directly converted to norepinephrine (NE) via decarboxylation, resulting in increased levels of NE in the nervous system, both centrally and peripherally.

Droxidopa, developed by and licensed from Dainippon Sumitomo Pharma Co., Ltd. (DSP), initially received Japanese approval in 1989 for the treatment of frozen gait and dizziness on standing associated with Parkinson's Disease and for the treatment of orthostatic hypotension, syncope or dizziness on standing associated with Shy-Drager syndrome and Familial Amyloidotic Polyneuropathy. In 2000, Droxidopa received expanded marketing approval to include prevention of vertigo, dizziness and weakness associated with orthostatic hypotension in hemodialysis patients.

About Chelsea Therapeutics

Chelsea Therapeutics (Nasdaq:CHTP) is a biopharmaceutical development company that acquires and develops innovative products for the treatment of a variety of human diseases, including central nervous system disorders. Chelsea is currently pursuing FDA approval in the U.S. for Northera™ (droxidopa), a novel, late-stage, orally-active therapeutic agent for the treatment of symptomatic neurogenic orthostatic hypotension in patients with primary autonomic failure. For more information about the Company, visit www.chelseatherapeutics.com.

This press release contains forward-looking statements regarding future events including our intention to pursue the development of Northera. These statements are subject to risks and uncertainties that could cause the actual events or results to differ materially. These include reliance on key personnel and our ability to attract and/or retain key personnel; the risk that the FDA will not agree that our clinical trial results demonstrate the safety and effectiveness of droxidopa; the risk that the FDA will not accept our proposal regarding any trial or other data to support a new drug application; the risk that the FDA will not approve the resubmitted NDA; the risk that our resources will not be sufficient to conduct any study of Northera that will be acceptable to the FDA; the risk that we cannot complete any additional study for Northera without the need for additional capital; the risks and costs of drug development and that such development may take longer or be more expensive than anticipated; our need to raise additional operating capital in the future; our reliance on our lead drug candidate droxidopa; risk that we will not be able to obtain regulatory approvals of droxidopa or our other drug candidates for additional indications; risk of volatility in our stock price, related litigation, and analyst coverage of our stock; reliance on collaborations and licenses; intellectual property risks; our history of losses; competition; and market acceptance for our products if any are approved for marketing.

CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended September 30, For the nine months ended September 30,
2013 2012 2013 2012
Operating expenses:
Research and development $ 2,558,975 $ 2,479,471 $ 6,420,790 $ 15,874,135
Sales and marketing 239,083 221,399 839,506 6,943,327
General and administrative 1,047,864 1,169,157 3,849,100 4,530,435
Restructuring -- 2,218,347 -- 2,218,347
Total operating expenses 3,845,922 6,088,374 11,109,396 29,566,244
Operating loss (3,845,922) (6,088,374) (11,109,396) (29,566,244)
Interest income 3,239 12,076 13,610 58,444
Interest expense -- -- -- --
Net loss $ (3,842,683) $ (6,076,298) $ (11,095,786) $ (29,507,800)
Net loss per basic and diluted share of common stock $ (0.06) $ (0.09) $ (0.17) $ (0.44)
Weighted average number of basic and diluted common shares outstanding 67,208,361 67,040,569 67,126,686 66,837,516
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
Condensed Consolidated Balance Sheet Data
(unaudited)
September 30, December 31,
2013 2012
(in thousands)
Cash and cash equivalents $ 20,882 $ 28,425
Total assets 22,145 28,928
Total liabilities 2,954 3,011
Deficit accumulated during the development stage (226,157) (215,061)
Stockholders' equity 19,191 25,916

CONTACT: Investors: Fara Berkowitz / Susan Kim Argot Partners 212-600-1902 fara@argotpartners.com susan@argotpartners.com Media: David Connolly LaVoie Group 617-374-8800 dconnolly@lavoiegroup.com

Source:Chelsea Therapeutics