CHARLOTTE, N.C., May 13, 2008 (PRIME NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the first quarter 2008 and presented a quarterly update on the Company's development progress. Chelsea's management team will host a conference call this morning to discuss these results at 11:00 AM EDT.
First Quarter Highlights:
* Initiated Head-to-Head Phase II Clinical Trial to Compare
Efficacy and Tolerability of CH-1504 Versus Methotrexate in
Rheumatoid Arthritis (RA)
* Initiated Pivotal Phase III Trial of Droxidopa in Neurogenic
Orthostatic Hypotension (NOH)
* Received Special Protocol Assessment for Pivotal Phase III
Study of Droxidopa in NOH
* Reported Significant Efficacy of CH-4051 in Reduction of
Collagen-Induced Arthritis in Animal Model
* Appointed Two New Independent Directors
"The first quarter of 2008 marked the beginning of a significant level of clinical activity for Chelsea," commented Dr. Simon Pedder, President and CEO of Chelsea. "During the quarter, we initiated both our Pivotal Phase III program for Droxidopa in NOH and our Phase II proof-of-concept trial of CH-1504 in RA as we continued our ongoing Phase II study of Droxidopa in intradialytic hypotension. Our cash position remains strong and we believe our financial resources are sufficient to finance the company's clinical programs beyond the anticipated data points in each of these three trials. As these studies progress, we continue to move forward with our plans to leverage our existing portfolio through the initiation of additional trials in new indications such as fibromyalgia while continuing preclinical development that will enable additional compounds to advance toward clinical stage trials."
Financial Results for the First Quarter
Chelsea reported a net loss for the quarter ended March 31, 2008 of $8.7 million or ($0.29) per share versus a net loss of $3.8 million or ($0.19) per share for the comparable period in 2007. The loss for the first quarter of 2008 includes the recognition of an impairment charge of approximately $1.6 million related to student loan backed auction rate securities with a par value of $26.4 million. Net loss attributed to this impairment was ($0.05) per share. Excluding this impairment, Chelsea's net loss on a non-GAAP basis for the first quarter of 2008 was $7.1 million, or ($0.24) per share.
Research and development expenses for the three months ended March 31, 2008 were $6.5 million, compared to $3.2 million for the same period in 2007. Total research and development expense increased $3.3 million during the quarter compared to the same period a year ago due primarily to increased clinical trial expenses and costs associated with the advancement of the two major product candidates.
Selling, general and administrative expenses were $1.3 million for the three months ended March 31, 2008 compared to $0.9 million for the same period in 2007. The increase resulted primarily from costs associated with pre-launch activities for Droxidopa.
Chelsea ended the quarter with $55.7 million in cash and short-term investments reflecting $30.9 million in cash and cash equivalents and $24.8 million in short-term investments. This compares to $62.7 million in cash and short-term investments consisting of $34.1 million in cash and cash equivalents and $28.6 million in short-term investments at December 31, 2007.
2008 Financial Guidance
Based on current development plans and anticipated timing of clinical activity, Chelsea anticipates a net loss for full year 2008 in the range of $30 million to $35 million with cash usage at approximately the same level. We expect to end the year with at least $30 million in cash and short-term investments, which would be net of the impairment against current investments in auction rate securities.
Conference Call Today at 11:00 AM EDT
Chelsea will discuss its first quarter results and provide an update on its clinical development programs in a conference call today at 11:00 AM Eastern Time. Interested investors may participate in the conference call by dialing 877-419-6603 (domestic) or 719-325-4873 (international). A replay will be available for one week following the call by dialing 888-203-1112 for domestic participants or 719-457-0820 for international participants and entering passcode 7539634 when prompted. Participants may also access both the live and archived webcast of the conference call on Chelsea's web site at www.chelseatherapeutics.com. The webcast will remain available on the company's website until the next quarterly conference call.
About Chelsea Therapeutics
Chelsea Therapeutics is a biopharmaceutical development company that acquires and develops innovative products for the treatment of a variety of human diseases. The Company is currently developing a library of metabolically inert antifolate compounds engineered to have potent anti-inflammatory and anti-tumor activity to treat a range of immunological disorders. Early clinical data suggests that Chelsea's lead antifolate compound, CH-1504, is a safe and effective treatment alternative to methotrexate for RA and may have further applications for psoriasis, IBD and certain cancers. Chelsea's antifolate program is complemented by the development of the I-3D portfolio of therapeutics targeting immune-mediated inflammatory disorders and transplantation. In addition to its autoimmune pipeline, Chelsea is developing Droxidopa, an orally active synthetic precursor of norepinephrine, for the treatment of neurogenic orthostatic hypotension. Currently approved and marketed in Japan, Droxidopa has accumulated over 15 years of proven safety and efficacy, historically generating annual revenues of approximately $50 million in Japan.
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 reliance on collaborations and licenses, risks and costs of drug development, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, our history of losses and need to raise more money, 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 or develop additional products.
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
March 31,
-----------------------------
2008 2007
------------ ------------
Operating expenses:
Research and development $ 6,504,832 $ 3,167,289
Sales and marketing 477,564 216,615
General and administrative 856,332 649,412
------------ ------------
Total operating expenses 7,838,728 4,033,316
------------ ------------
Operating loss (7,838,728) (4,033,316)
Interest income 729,448 197,436
Interest expense -- --
Other expense (1,566,246) --
------------ ------------
Net loss $ (8,675,526) $ (3,835,880)
============ ============
Net loss per basic and
diluted share of common stock $ (0.29) $ (0.19)
============ ============
Weighted average number
of basic and diluted
common shares outstanding 29,957,695 19,975,135
============ ============
Chelsea Pharmaceuticals International, Ltd.
Condensed Consolidated Balance Sheet Data
(unaudited)
As of
---------------------
March 31, Dec. 31,
2008 2007
-------- --------
(in thousands)
Cash and cash equivalents $ 30,868 $ 34,076
Short-term investments 24,848 28,638
Total assets 56,201 63,163
Total liabilities 6,616 5,197
Deficit accumulated during the
development stage (43,361) (34,685)
Stockholders' equity 49,585 57,967
A reconciliation of GAAP to non-GAAP loss per share is as follows:
For the three months
ended March 31,
----------------------
2008 2007
--------- --------
GAAP loss per share $ (0.29) $ (0.19)
Impairment charge related to short-
term investments in auction rate
securities 0.05 --
-------- -------
Non-GAAP loss per share $ (0.24) $ (0.19)
-------- -------
To view the Notes to the Company's Financial Statements and Management's Discussion and Analysis, please see the Company's 2007 Annual Filings available on Chelsea's website at www.chelseatherapeutics.com