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Chelsea Therapeutics International, Ltd. (NASDAQ: CHTP) Showing Strong Gains as NDA Draws Near

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Chelsea Therapeutics International, Ltd. (NASDAQ: CHTP) has seen a significant spike in their share price on Monday as the biopharmaceutical development company that acquires and develops innovative products for the treatment of a variety of human diseases, including central nervous system disorders jumped from a 1.93 close on Friday to a 52-week high of 2.49 today while trading volume has already topped the 4.5 million mark.

If anything can be attributed to the climb in CHTP’s share price, it was trading as low as 1.78 last week, the company’s presentation at the 38th Annual Deutsche Bank Health Care Conference on May 29, 2013 may be it. At the conference CHTP provided a corporate update and an overview of their Northera(TM) (droxidopa) development program.

Northera is CHTP’s lead investigational agent in their pipeline and the orally-active therapeutic agent 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).

Up to this point the company’s pursuit of FDA approval for Northera has been going well and as Nick Riehle, Chief Financial Officer of CHPT pointed out in the company’s conference call on May 29, 2013 “market research and analysis indicates Northera should provide a significant commercial opportunity.”

That opportunity is based on what is currently approved for treatment of orthostatic hypotension or neurogenic OH, called mitogen, a vasoconstrictor available from several generic manufacturers. Riehle noted in that conference call, and a transcript of that call is available on Seeking Alpha, that orthostatic hypotension is a drop in blood pressure associated with moving from a lying or sitting position to a standing position. Riehle went on to say “Neurogenic OH has this drop in blood pressure. However, it is specifically associated with the underlying neurological disorders and a diminishing synthesis and/or release of norepinephrine.”

The benefits that CHTP has been able to display thus far concerning Northera has the company looking to hit a few milestones during the upcoming months as Riehle stated “Based on the FDA, the updated FDA guidance Chelsea plans to resubmit the NDA late in the second quarter or very early in the third quarter. So, that’s about a month from now. The submission will include data from Study 306B, additional open-label data from our extension program Study 304 and new bioequivalence data to support our 300 milligram dose. As a Class 2 submission, the expectation is that a review can be completed by the FDA within six months of the submission.”

While it is estimated that there are fewer than 200,000 patients in the U.S. with primary autonomic failure afflicted by neurogenic OH, CHTP has indicated that peak U.S. sales of Northera to be in the range of $300 million to $375 million. This is based on the assumption of a limited sales force addressing the estimated 4,000 physicians that are responsible for approximately 50% of the mitogen sales.

Those sales figures could be significantly higher if mitogen, which entered the market in 1996 via an accelerated approval pathway, fails to prove beneficial on the symptoms of OH in trials recently requested by the FDA.

Of course CHTP has had their own problems gaining FDA approval and putting their first product on the market as evidenced by the complete response letter they received from the agency back in 2012 regarding Northera. Since that time CHTP has taken careful steps to ease the concerns of the FDA and investors will have a good idea how successful they were when the NDA is resubmitted and they review is completed, all of this hopefully taking place within the next 7-8 months.

In the meantime CHTP believes that the $25 million in cash on hand is enough to cover  their operating expenses into the third quarter of 2014, money that will be used to complete the re-filing of their NDA and to begin dosing for an additional study related to the durability of effect in the fourth quarter of this year.

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