CHARLOTTE, N.C., Nov. 5, 2008 (GLOBE NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the third quarter 2008. Chelsea's management team will host a conference call this morning to discuss these results and present a quarterly update on the Company's development programs at 11:00 AM EST.
Recent Corporate Highlights
* Granted MHRA approval to begin Phase II trial of Droxidopa in
fibromyalgia
* Awarded Fast Track designation for Droxidopa in neurogenic
orthostatic hypotension
* Initiated second pivotal Phase III trial of Droxidopa in
neurogenic orthostatic hypotension
* Received positive DSMB recommendation to continue all arms of
CH-1504 Phase II trial in rheumatoid arthritis as planned
* Completed enrollment in CH-1504 Phase II trial in rheumatoid
arthritis
* Reported positive data from open-label titration phase of
pivotal Phase III trial of Droxidopa in neurogenic orthostatic
hypotension showing significant reduction in severity of
symptoms and improvement in standing systolic blood pressure
"The third quarter was a highly productive one for Chelsea, as we continued to make steady progress in our Droxidopa pivotal program for neurogenic orthostatic hypotension, increasing the number of centers activated in the study, initiating the second trial in this program and securing Fast Track designation from the FDA," commented Dr. Simon Pedder, President and CEO of Chelsea. "The substantial efforts and achievements in this program were complemented by significant advances in the remainder of our clinical programs. We have now completed enrollment in our CH-1504 Phase II trial in rheumatoid arthritis, are nearing completion of enrollment in our Droxidopa Phase II trial in intradialytic hypotension and are in the process of initiating our Droxidopa Phase II trial in fibromyalgia. Looking ahead, the next few quarters promise not only to be busy, but potentially rewarding as we eagerly anticipate the read out of data from several key trials."
Financial Results for the Third Quarter
As a result of recent proposed settlements related to Chelsea's current holdings in student loan backed auction rate securities (ARS) and developments in the market for those securities, Chelsea has established a plan to gain liquidity in these holdings over the next 6 months and has recognized an impairment charge of $2.1 million, or ($0.07) per share, for the three months ended September 30, 2008. This impairment charge is in addition to a similar charge of $1.6 million recorded in the first quarter of 2008, bringing the total impairment charges related to Chelsea's ARS to $3.7 million for the nine months ended September 30, 2008.
Excluding this impairment, Chelsea's net loss on a non-GAAP basis for the third quarter 2008 was $8.0 million or ($0.27) per share versus a net loss of $3.2 million or ($0.14) per share for the comparable period in 2007. Net loss on a non-GAAP basis for the nine months ended September 30, 2008 was $22.4 million or ($0.75) per share compared to a net loss of $10.2 million or ($0.47) per share for the prior-year period.
Research and development expenses for the third quarter 2008 were $7.0 million, compared to $2.7 million for the same period in 2007. For the nine months ended September 30, 2008, research and development expenses were $19.9 million versus $8.0 million for the comparable prior-year period. Total research and development expenses increased primarily as a result of increased clinical activity compared to the prior year including the Droxidopa pivotal registration program in neurogenic orthostatic hypotension, the Phase II trial of Droxidopa in intradialytic hypotension as well as the ongoing Phase II evaluation of CH-1504 versus methotrexate in rheumatoid arthritis.
Selling, general and administrative expenses were $1.2 million for the three months ended September 30, 2008 compared to $0.9 million for the same period in 2007. For the nine months ended September 30, 2008, selling, general and administrative expenses increased to $4.0 million from $3.1 million for the comparable period in 2007.
Chelsea ended the quarter with $42.1 million in cash and short-term investments reflecting $19.7 million in cash and cash equivalents and $22.4 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, anticipated timing of clinical activity, and including the additional $2.1 million impairment on auction rate securities taken in the third quarter, Chelsea anticipates a net loss for full year 2008 in the range of $34 million to $36 million. We currently expect to end the year with at least $36 million in cash and short-term investments.
Conference Call Today at 11:00 AM EST
Chelsea will discuss its second 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 877-879-6174 (domestic) or 719-325-4771 (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 8536142 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 our history of losses and need to raise more money, 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, 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 For the nine months ended
September 30, September 30,
------------------------- --------------------------
2008 2007 2008 2007
------------ ----------- ------------ ------------
Operating
expenses:
Research
and
development $ 7,041,343 $ 2,652,206 $ 19,915,204 $ 7,975,042
Sales and
marketing 294,686 235,775 1,176,898 1,055,195
General
and admini-
strative 940,652 662,325 2,797,908 2,034,431
------------ ----------- ------------ ------------
Total
operating
expenses 8,276,681 3,550,306 23,890,010 11,064,668
------------ ----------- ------------ ------------
Operating loss (8,276,681) (3,550,306) (23,890,010) (11,064,668)
Interest
income 306,214 307,490 1,493,260 822,545
Interest
expense -- -- -- --
Other expense (2,109,927) -- (3,676,173) --
------------ ----------- ------------ -----------
Net loss $(10,080,394) $(3,242,816) $(26,072,923) $(10,242,123)
============ =========== ============ ============
Net loss per
basic and
diluted share
of common
stock $ (0.34) $ (0.14) $ (0.87) $ (0.47)
============ =========== ============ ============
Weighted
average
number of
basic and
diluted
common shares
outstanding 30,048,839 22,512,364 29,998,676 21,639,903
============ =========== ============ ===========
See accompanying notes to condensed consolidated financial
statements.
Chelsea Pharmaceuticals International, Ltd.
Condensed Consolidated Balance Sheet Data
(unaudited)
As of
-----------------------
Sept. 30, Dec. 31,
2008 2007
-------- --------
(in thousands)
Cash and cash equivalents $ 19,688 $ 34,076
Short-term investments 22,399 28,638
Total assets 42,709 63,163
Total liabilities 9,525 5,197
Deficit accumulated during the
development stage (60,758) (34,685)
Stockholders' equity 33,184 57,967
A reconciliation of GAAP to non-GAAP loss per share is as follows:
For the three months For the nine months
ended September 30, ended September 30,
------------------- -------------------
2008 2007 2008 2007
------- ------- ------- -------
GAAP loss per share $ (0.34) $ (0.14) $ (0.87) $ (0.47)
Impairment charge
related to short-
term investments in
auction rate
securities 0.07 -- 0.12 --
------- ------- ------- -------
Non-GAAP loss per
share $ (0.27) $ (0.14) $ (0.75) $ (0.47)
======= ======= ======= =======
To view the Notes to the Company's Financial Statements and Management's Discussion and Analysis, please see the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 available on Chelsea's website at www.chelseatherapeutics.com