Chelsea Therapeutics Reports Fourth Quarter and Full-Year 2012 Results

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| Source: Chelsea Therapeutics

CHARLOTTE, N.C., March 7, 2013 (GLOBE NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the fourth quarter and full year ended December 31, 2012.

Fourth Quarter and Recent Highlights

  • In February 2013, Chelsea received written guidance from the Director of the Office of New Drugs at the U.S. Food and Drug Administration (FDA) stating that Study 306B has the potential to serve as the basis for a resubmission of a Northera (droxidopa) New Drug Application (NDA) for the treatment of symptomatic neurogenic orthostatic hypotension (NOH). The guidance suggested that "data strongly demonstrating a short-term clinical benefit… of droxidopa in patients with NOH would be adequate for approval, with a possible requirement to verify durable clinical benefit post-approval." It further notes that any decision regarding the outcome of an FDA review, to be performed by the DCRP will be based on the strength of Study 306B and its ability to provide substantial evidence of effectiveness to support approval.

As a result of FDA's guidance, the Company intends to resubmit the Northera NDA in late second quarter 2013. Chelsea also intends to initiate a new clinical trial in the fourth quarter of 2013, given FDA guidance regarding the potential need for Chelsea to verify the durability of effect of Northera in a post-marketing study. This study would also include short-term clinical endpoints should the Agency require an additional clinical trial for the approval of Northera.

  • In December 2012, Chelsea reported that Study 306B demonstrated statistically significant improvements for Northera compared to placebo in dizziness/lightheadedness at week 1 (p=0.018), the primary endpoint, and increase in standing systolic blood pressure at week 1 (p=0.032), an important secondary endpoint. Treatment with Northera also resulted in a reduction in patient falls and fall-related injuries, although the results were not significant. The safety data were consistent with previous studies, and showed that Northera was well tolerated.
     
  • In November 2012, Chelsea announced positive results from a clinical study of Northera in hypotensive individuals with spinal cord injury (SCI) at the 23rd International Symposium on the Autonomic Nervous System. These preliminary data indicated that Northera increases seated blood pressure in a dose dependent manner without worsening supine increases in blood pressure in hypotensive patients with SCI, suggesting a greater normalization of blood pressure across positional changes.

"Chelsea now has a regulatory path forward for Northera in NOH. We look forward to interacting with FDA to provide the necessary analyses for a thorough review of our resubmitted NDA and to collaborate on the design of the next clinical study," said Joseph G. Oliveto, Interim CEO of Chelsea. "As previously announced, we ended 2012 with cash and cash equivalents of approximately $28.4 million. We will continue to diligently manage our existing funds which we expect will fund operations into the third quarter of 2014, well past the currently projected Northera approval determination date."

Financial Results for the Fourth Quarter

For the quarter ended December 31, 2012, Chelsea reported a net loss of $2.2 million or ($0.03) per share versus a net loss of $12.5 million or ($0.20) per share for the same period in 2011.  For the twelve months ended December 31, 2012, Chelsea reported a net loss of $31.7 million or ($0.47) per share compared to a net loss of $50.5 million or ($0.84) per share for the same period in 2011.

Research and development (R&D) expenses for the fourth quarter of 2012 were $0.9 million, compared to $7.7 million for the same period in 2011.  For the twelve months ended December 31, 2012, research and development expenses were $16.7 million, versus $37.3 million for the comparable prior-year period.  The reduction in R&D costs is primarily due to the completion of multiple studies in both the droxidopa and antifolate development programs.

Selling, general and administrative (SG&A) expenses were $1.4 million for the three months ended December 31, 2012, compared to $4.8 million for the same period in 2011.  For the twelve months ended December 31, 2012, SG&A expenses were $12.9 million, compared to $13.3 million for the prior-year period.  The period to period changes in SG&A costs are primarily related to our significant spending on Northera commercialization and launch preparation activities that occurred during the latter half of 2011 and the first half of 2012. By the end of the second quarter of 2012, the majority of these activities had been brought to a close as related vendor contracts were cancelled and projects were finalized subsequent to receipt of the Complete Response Letter from the FDA in March 2012.

Chelsea ended the year with $28.4 million in cash and cash equivalents compared to $45.6 million, including short-term investments, as of December 31, 2011.  Chelsea anticipates that its cash and cash equivalents on hand should fund the Company's operations into the third quarter of 2014.  While details for a future clinical trial for Northera are yet to be determined, this projection assumes a new trial would commence dosing in the fourth quarter of 2013. In addition to the initial costs of a new trial, assumptions underlying this guidance cover costs related to the NDA re-submission. This current forecast does not include material activities related to an NDA approval or the commercialization of Northera.

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.

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, risks of distraction of the Board and management at this critical time; 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 we will not be able to resubmit the NDA for Northera and that the FDA will not approve a 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 of 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; 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
         
         
    Period from
      April 3, 2002
  For the years ended December 31,  (inception) through
  2012 2011 2010 December 31, 2012
       
Operating expenses:        
Research and development  $ 16,744,423  $ 37,270,138  $ 30,871,125  $ 162,504,846
Sales and marketing  7,221,800  8,067,709  2,476,494  24,246,376
General and administrative  5,679,485  5,276,146  4,154,944  30,903,158
Restructuring  2,157,795  --   --   2,157,795
Total operating expenses  31,803,503  50,613,993  37,502,563  219,812,175
         
Operating loss  (31,803,503)  (50,613,993)  (37,502,563)  (219,812,175)
Interest income  67,594  161,828  242,883  5,009,113
Interest expense  --   --   (70,389)  (258,348)
         
Net loss  $ (31,735,909)  $ (50,452,165)  $ (37,330,069)  $ (215,061,410)
         
Net loss per basic and diluted share of common stock  $ (0.47)  $ (0.84)  $ (0.91)  
         
Weighted average number of basic and diluted common shares outstanding  66,892,982  60,136,326  41,184,623  
 
 
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
         
        Period from
  For the three months ended    For the twelve months ended April 3, 2002
  December 31,  December 31,  (inception) to
  2012 2011 2012 2011 December 31, 2012
           
Operating expenses:          
Research and development  $ 870,287  $ 7,712,687  $ 16,744,423  $ 37,270,138  $ 162,504,846
Sales and marketing  278,472  3,428,463  7,221,800  8,067,709  24,246,376
General and administrative  1,149,050  1,347,891  5,679,485  5,276,146  30,903,158
Restructuring  (60,552)  --   2,157,795  --   2,157,795
Total operating expenses  2,237,257  12,489,041  31,803,503  50,613,993  219,812,175
           
Operating loss  (2,237,257)  (12,489,041)  (31,803,503)  (50,613,993)  (219,812,175)
Interest income  9,150  30,708  67,594  161,828  5,009,113
Interest expense  --   --   --   --   (258,348)
           
Net loss  $ (2,228,107)  $ (12,458,333)  $ (31,735,909)  $ (50,452,165)  $ (215,061,410)
           
Net loss per basic and diluted share of common stock  $ (0.03)  $ (0.20)  $ (0.47)  $ (0.84)  
           
Weighted average number of basic and diluted common shares outstanding  67,058,174  61,893,905  66,892,982  60,136,326  
   
See accompanying notes to condensed consolidated financial statements.  
 
 
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
Condensed Consolidated Balance Sheet Data
(unaudited)
     
  December 31, December 31, 
  2012 2011
  (in thousands)
     
Cash and cash equivalents  $ 28,425  $ 41,106
Short-term investments  --   4,500
Total assets  28,928  46,903
Total liabilities  3,011  13,238
Deficit accumulated during the development stage  (215,061)  (183,326)
Stockholders' equity  25,916  33,665
Investors:
Fara Berkowitz / Susan Kim
Argot Partners
212-600-1902



Media:
David Pitts
Argot Partners
212-600-1902