CHARLOTTE, N.C., Jan. 11, 2005 (PRIMEZONE) -- Chelsea Therapeutics, Inc., a privately held development-stage biopharmaceutical company, completed a private placement of Series A Convertible Preferred Stock, resulting in gross proceeds to the company of $14.5 million. This reflected the maximum authorized amount, including a $4.4 million overallotment. Paramount BioCapital, Inc. acted as placement agent.
Dr. Simon Pedder, Chelsea's President and Chief Executive Officer, commented, "The successful completion of this financing is a significant milestone enabling Chelsea to aggressively move forward with its clinical development plans for its proprietary lead product candidate, CH-1504, an innovative oral antifolate that may be clinically superior to methotrexate, an agent commonly used to treat rheumatoid arthritis, psoriasis and certain cancers."
An independent six-month pilot clinical study using CH-1504 in 20 patients was conducted for the possible treatment of rheumatoid arthritis (RA) compared to methotrexate (MTX). Although the pilot study will not be used as a part of the U.S. regulatory approval process, the results indicate that CH-1504 has lower toxicity and improved tolerability, as well as increased effectiveness versus MTX, even among patients who had previously failed to demonstrate improvement with MTX treatment. Pre-clinical animal models have also indicated that CH-1504 may have superior efficacy, less toxicity and increased tolerability compared to MTX, which currently accounts for almost half of the prescriptions written for the RA market.
The proceeds from the private placement will be used primarily to fund clinical and non-clinical research and development of its patented CH-1504 drug, preclinical development of additional antifolates in the pipeline, licensing additional clinical drug candidates, working capital and general corporate purposes. The securities were sold to accredited investors pursuant to exemptions under the Securities Act of 1933, as amended. The securities have not been registered under the Securities Act and may not be sold or offered in the United States absent registration under the Securities Act or an exemption from the registration requirements.
About Chelsea Therapeutics, Inc.
Chelsea Therapeutics is a privately held, development-stage biopharmaceutical company that acquires and develops innovative products for the treatment of a variety of human diseases. Chelsea develops technologies that address important unmet medical needs or offer improved, cost-effective alternatives to current methods of treatment. Early clinical data suggests that Chelsea's lead product candidate, CH-1504, may support a safe and effective treatment for rheumatoid arthritis and may have further applications for psoriasis, certain cancers and other immunological disorders.
This press release contains forward-looking statements regarding future events. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks and costs associated with drug development, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder, management of rapid growth, and the need to acquire additional products.