CHARLOTTE, N.C., Aug. 7, 2012 (GLOBE NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the quarter and six months ended June 30, 2012.
For the quarter ended June 30, 2012, Chelsea reported a net loss of $7.9 million or ($0.12) per share versus a net loss of $13.3 million or ($0.21) per share for the same period in 2011. For the first six months of 2012, Chelsea reported a net loss of $23.4 million or ($0.35) per share compared to a net loss of $27.1 million or ($0.46) per share for the first half of 2011.
Research and development (R&D) expenses for the second quarter of 2012 were $4.7 million, compared to $10.7 million for the same period in 2011. For the six months ended June 30, 2012, research and development expenses were $13.4 million versus $22.1 million for the comparable prior-year period.
Selling, general and administrative (SG&A) expenses of $3.2 million for the three months ended June 30, 2012 increased from $2.6 million for the same period in 2011. For the six months ended June 30, 2012, SG&A expenses of $10.1 million reflect an increase from $5.1 million for the prior-year period, primarily reflecting increased spending during the first quarter of 2012 related to commercialization activity for Northera.
Chelsea ended the quarter with $40.8 million in cash, cash equivalents and short-term investments compared to $45.6 million at December 31, 2011. Chelsea anticipates that it will end 2012 with over $25 million in cash and cash equivalents which should fund the company's operations into the fourth quarter of 2013.
Recent Developments
In July, Chelsea Therapeutics' Board of Directors announced the implementation of a corporate restructuring pursuant to which certain management and Board changes were effected, and the Company has significantly reduced headcount, retaining only those employees necessary to gain U.S. marketing authorization of Northera™ (droxidopa) as a treatment for symptomatic neurogenic orthostatic hypotension in patients with primary autonomic failure. As announced, the reduction in force is expected to result in salary reductions of at least $3.5 million on an annualized basis, excluding any one-time restructuring charges. Concurrent with the restructuring, the Board of Directors authorized a plan to explore and evaluate strategic options for the Company, with the goal of optimizing long-term stockholder value.
Chelsea Therapeutics also announced that it would stop enrolling patients in its Northera™ Study 306B, following a written response from the U.S. Food and Drug Administration suggesting that the study is unlikely to provide sufficient confirmatory evidence to support a Northera™ Capsules New Drug Application (NDA). The last steps of final enrollment will occur this week with an expected total enrollment of at least 173 patients, which represents the single largest placebo-controlled study ever conducted for neurogenic orthostatic hypotension (NOH). Despite stopping patient recruitment prior to reaching the revised target enrollment for the study, the study's current enrollment nonetheless supports a greater than 80% powering in a number of efficacy endpoints, based on comparators from prior studies. Although the FDA believes that Study 306B is unlikely to provide sufficient confirmatory evidence to support an NDA, the Company anticipates that results of the 306B study will provide valuable efficacy and safety data, including a reduction in patient reported falls, the revised secondary endpoint, as well as longer-term treatment with Northera™, out to 10 weeks. In order to maximize the clinical relevance of the study, the Company plans to revise its statistical analysis plan to change the primary endpoint from patient reported falls to one more specific to NOH. Data from the 306B study are expected by year-end, at which point the Company will finalize additional study designs to support our planned resubmission of an NDA for Northera™.
"As a result of the Board's decision to effect a restructuring of the company and modify the clinical direction of Northera, Chelsea Therapeutics is in a position to conserve its resources and assess a clinical path forward as data becomes available from the 306B study," said Michael Weiser, M.D., Ph.D., Chairman of Chelsea Therapeutics. "We believe the 306B study remains well powered, and will provide important clinical insight into Northera™'s safety and efficacy as a treatment for NOH. While this study moves forward, the Board will evaluate all strategic options available to the Company, with the goal of maximizing stockholder value."
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.
| CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY | ||||
| (A Development Stage Company) | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (unaudited) | ||||
| For the three months ended June 30, | For the six months ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Operating expenses: | ||||
| Research and development | $4,695,546 | $10,681,032 | $13,394,664 | $22,139,974 |
| Sales and marketing | 1,753,166 | 1,324,217 | 6,721,928 | 2,435,347 |
| General and administrative | 1,441,167 | 1,317,454 | 3,361,278 | 2,650,170 |
| Total operating expenses | 7,889,879 | 13,322,703 | 23,477,870 | 27,225,491 |
| Operating loss | (7,889,879) | (13,322,703) | (23,477,870) | (27,225,491) |
| Interest income | 17,594 | 51,316 | 46,368 | 85,898 |
| Interest expense | -- | -- | -- | -- |
| Net loss | $(7,872,285) | $(13,271,387) | $(23,431,502) | $(27,139,593) |
| Net loss per basic and diluted share of common stock | $(0.12) | $(0.21) | $(0.35) | $(0.46) |
| Weighted average number of basic and diluted common shares outstanding | 67,040,569 | 61,847,065 | 66,734,874 | 58,373,101 |
See accompanying notes to condensed consolidated financial statements.
| CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY | |||
| Condensed Consolidated Balance Sheet Data | |||
| (unaudited) | |||
| June 30, | December 31, | ||
| 2012 | 2011 | ||
| (in thousands) | |||
| Cash and cash equivalents | $40,824 | $41,106 | |
| Short-term investments | -- | 4,500 | |
| Total assets | 42,391 | 46,903 | |
| Total liabilities | 8,724 | 13,238 | |
| Deficit accumulated during the development stage | (206,757) | (183,326) | |
| Stockholders' equity | 33,667 | 33,665 | |
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 the risk that the FDA will not accept any proposal regarding any trial or other data to support Study 301 or any other study, including the primary endpoint; 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 develop 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 risk that we do not achieve the anticipated cost savings; reliance on key personnel including specifically in this time of uncertainty following the resignation of Dr. Pedder; risks of distraction of the Board and management at this critical time; 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; and market acceptance for our products if any are approved for marketing.