Chelsea Therapeutics (NASDAQ:CHTP) is preparing for the launch of its first product — a drug for Parkinson’s disease patients — and the company plans to arm itself with nearly $20 million to do it.
Chelsea aims to raise up to $19.7 million through a stock offering of more than 65 million shares, according to an updated prospectus the Charlotte, North Carolina company filed with regulators. Net proceeds from the offering would fund the company’s droxidopa program.
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Droxidopa is a drug candidate that Chelsea aims to market under the name Northera. It was studied as a treatment for dizziness and fainting experienced by patients with Parkinson’s disease. Now under priority review by the U.S. Food and Drug Administration, Northera could receive an approval decision by March 28. Droxidopa is also being studied in other indications; the compound is in phase 2 clinical trials as a fibromyalgia treatment. Chelsea recently reported positive results from the study, which evaluated potential therapeutic dosing of droxidopa by itself and in combination with Parkinson’s drug carbidopa.
In addition to supporting the droxidopa program, Chelsea said proceeds from the offering will fund the company’s study of the compound CH-4501, an experimental rheumatoid arthritis treatment currently in phase 2 clinical trials.
Chelsea at the beginning of the year filed a shelf registration to raise up to $60 million, money that would be used to support its drug pipeline. The current offering follows a February stock sale that net Chelsea $37.8 million. Chelsea is conducting the current offering in a different manner. The sale will be an “at-the-market” or ATM offering conducted by Cantor Fitzgerald. In an ATM, a company’s stock is sold over an extended period of time rather than all at once at a fixed price. ATMs give a company more flexibility in how and when they raise money.
