A stock offering of $35 million is the target for Chelsea Therapeutics, which intends to use the money to finance commercialization of its low blood pressure drug and fund work on a compound intended to treat rheumatoid arthritis.
Charlotte, North Carolina-based Chelsea (NASDAQ:CHTP) is offering 8.75 million shares at $4 per share. The price represents a discount to Chelsea’s $4.24 per share closing price on Thursday. After expenses, the company estimates net proceeds to the company will be about $32.8 million. The offering is expected to close on Feb. 24.
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Net proceeds from the offering will be used to fund commercialization and marketing of droxidopa, also called Northera, a compound that Chelsea has been developing to treat neurogenic orthostatic hypotension, a sudden drop in blood pressure when a person stands up. The condition is common in people with Parkinson’s disease. But Chelsea disclosed earlier this month that Northera failed to perform better than a placebo in late-stage clinical trials. Chelsea said it was not abandoning the hypotension indication. Chelsea said patients in the study suffered fewer falls using Northera and the company said it would expand its study to include fall prevention.
Chelsea said proceeds from the stock offering would also fund the study of CH-4501, a compound being developed as a rheumatoid arthritis treatment.
The offering follows a January shelf registration filing where Chelsea started laying the groundwork to raise up to $60 million in a stock offering.