Chelsea Therapeutics International Ltd. (NASDAQ: CHTP) looks dead. In all actually, there is still some hope here. Ultimately, the drug under question could be approved even if the FDA panel follows the recommendation that its hypotension drug Northera should not be approved in the United States.
The review at the FDA said the treatment has not shown to have a durable effectiveness in clinical trials. There are also some safety concerns in the test results and also in post-marketing cases in Japan where annual sales of the drug are about $50 million.
FDA physician Melanie Blank said that her regulatory recommendation is that the FDA not approve droxidopa at this time. The formal panel decision is on Thursday after the FDA gave this application priority status in November. The formal decision is not due until March 28, 2012.
It is important to know that this drug is approved in Japan and has been used for years. The second issue to consider is that this is a treatment for a condition that is often without any real treatment.
Even if the panel shoots it down, this is one story that might not be totally dead yet. Shares are down 21.5% at $2.63 on 12 million shares. The prior 52-week range was $2.95 to $6.06 and the adjusted market capitalization rate is $162 million after today’s drop.
Chelsea also has more than $57.6 million in cash and liquidity and here is the company’s existing drug pipeline.
If Droxidopa is not approved, it obviously will not be good news for existing shareholders. Just don’t think that the company has to fold up shop and die.
JON C. OGG