Pharma

CHTP submits $100M shelf filing ahead of FDA decision on Northera

Drug developer Chelsea Therapeutics (NASDAQ:CHTP) is expanding its financial cushion to the tune of $100 million in advance of a regulatory decision on what could be the company’s first approved drug. A recently filed shelf registration shows the company laying groundwork to raise the money if needed. Pharmaceutical companies often make shelf filings to give […]

Drug developer Chelsea Therapeutics (NASDAQ:CHTP) is expanding its financial cushion to the tune of $100 million in advance of a regulatory decision on what could be the company’s first approved drug.

A recently filed shelf registration shows the company laying groundwork to raise the money if needed. Pharmaceutical companies often make shelf filings to give themselves financial leeway to raise cash in a pinch. But the filing doesn’t necessarily mean they’ll pull money from the shelf; doing so dilutes existing shareholders.

Even so, Charlotte, North Carolina-based Chelsea needs to give itself a bit more financial wiggle room. Chelsea last year set submitted a $60 million shelf filing. Since then, Chelsea has twice turned to that shelf to raise capital. Last February, Chelsea raised $40.25 million in a stock offering. Last month, Chelsea completed a $19.2 million offering. Proceeds from the latest offering were intended for drug pipeline development as well as preparation for the commercial launch of Northera, Chelsea’s first drug.

Chelsea could find itself in a position where it needs more money. Drug candidate Northera is under review by the U.S. Food and Drug Administration. An approval decision has been targeted for late March. Chelsea is scheduled to meet with an FDA advisory committee to discuss Northera later this month. The company is preparing for a second quarter launch of Northera.

Northera was developed to treat neurogenic orthostatic hypotension, or NOH. The condition, common in Parkinson’s disease patients,  is characterized by a sudden drop in blood pressure that causes light-headedness and fainting. The FDA granted the drug candidate orphan drug status in 2007. Last November, the FDA granted priority review for the drug candidate.

Chelsea has invested more than $98 million into Northera R&D through the third quarter, according to the company’s quarterly report. The company expects to spend another $13.5 million through Northera’s expected approval date at the end of March. Chelsea’s filing notes several risk factors, including the possibility that the company never reaches profitability — even if Northera becomes successfully commercialized. From Chelsea’s 2002 start through the third quarter of 2011, the company has lost $170.9 million.

Northera, also called droxidopa, does bring Chelsea the opportunity to finally draw revenue from years of drug research. And Northera’s use to treat NOH could be just one of several indications for the drug. Chelsea has conducted phase 2 studies of droxidopa in combination with Parkinson’s disease drug carbidopa as a treatment for attention-deficit/hyperactivity disorder as well as fibromyalgia. The company’s pipeline also includes CH-4501, an experimental rheumatoid arthritis treatment currently in phase 2 clinical trials. But first Chelsea must secure FDA approval on Northera. The meeting with the FDA advisory committee is scheduled for Feb. 23.