Chelsea Therapeutics International Ltd. (NASDAQ: CHTP) is being beaten hard this morning. News hit that the FDA has now rejected the company’s Northera drug to treat low blood pressure for now in a complete response. Effectively the FDA is asking Chelsea to provide more efficacy data.
Sadly, this could actually create a one or two year delay and the company was worth only $246 million before the news impact. Chelsea has said that it still needs to have discussions with the FDA so that it can satisfy the FDA’s request.
The company believes that an ongoing trial might meet the FDA’s criteria but it is not sure if the FDA will require changes to the primary endpoint of Northera. Unfortunately this is still just unfinished business.
Investors are shooting first and asking questions later. Shares are down 28% at $2.62 in pre-market trading and the 52-week trading range is $2.18 to $6.06. The NASDAQ pre-market trading alert has already gone over 800,000 shares and it is worth noting that the most recent short interest was at a yearly high of 7.26 million shares as of the March 15 settlement date.
The company is pre-revenue and it had about $45 million in liquidity at the end of the 2011 year.
JON C. OGG