CHARLOTTE, N.C., May 6, 2009 -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the first quarter 2009 and presented a quarterly update on the Company's development progress. Chelsea's management team will host a conference call this morning to discuss these results at 11:00 AM EDT.
* Initiated Phase II trial of Droxidopa, alone and in combination with carbidopa, for the treatment of fibromyalgia * Reported significant symptomatic improvement in Phase II trial of Droxidopa in intradialytic hypotension with statistical significant reductions in dialysis interventions. * Demonstrated the comparable efficacy of multiple doses of CH-1504 to methotrexate in head-to-head Phase II trial in rheumatoid arthritis while demonstrating enhanced safety profile. * Confirmed significant reduction in severity of symptoms and improvement in standing blood pressure in second analysis of open-label titration data from pivotal study of Droxidopa in neurogenic orthostatic hypotension * Reported positive findings from its Phase I trial testing both single and multiple doses of CH-4051, the second drug candidate from Chelsea's portfolio of orally bioavailable, non-metabolized antifolates * Regained full liquidity on all of the Company's original $26.4 million in auction rate securities
"During the first quarter, we successfully advanced each of our drug candidates, delivering an impressive succession of data that validated the development rationale of each of our clinical programs," commented Dr. Simon Pedder, President and CEO of Chelsea. "Strengthening our balance sheet by regaining full liquidity on our auction rate securities leaves us well positioned to achieve our most significant milestone in 2009, the completion of our pivotal Phase III program in neurogenic orthostatic hypotension, and drive significant value creation for our shareholders."
Financial Results for the First Quarter
Chelsea reported a net loss for the quarter ended March 31, 2009 of $7.4 million or ($0.25) per share versus a net loss of $8.7 million or ($0.29) per share for the comparable period in 2008. As previously reported, the loss for the first quarter of 2008 included the recognition of an impairment charge of approximately $1.6 million related to Chelsea's holdings in auction rate securities. Excluding this impairment, Chelsea's net loss for the first quarter of 2008 was $7.1 million, or ($0.24) per share.
Research and development expenses for the three months ended March 31, 2009 remained flat at $6.5 million, compared to the same period in 2008.
Chelsea's selling, general and administrative expenses of $1.4 million for the three months ended March 31, 2009 were also relatively flat compared to $1.3 million for the first quarter of 2008.
Chelsea ended the quarter with $27.6 million in cash and short-term investments. This compares to $31.8 million in cash and short-term investments at December 31, 2008.
In May 2009, the Company entered into a settlement agreement whereby it will sell, at par value, all of the Company's investments in ARS that were held as short-term investments on the date of the agreement. Per the terms of the agreement, the settlement of such purchase will occur no later than June 5, 2009. In addition, the Company will be reimbursed for the $0.4 million loss it incurred in January 2009 upon disposition of its $2.5 million par value ARS in Mississippi Higher Ed Assistance Corp. Such loss had been previously recorded as an other-than-temporary impairment as of December 31, 2008. Upon receipt of the settlement funds, the Company anticipates recording a gain on the recovery of previously recorded other-than-temporary impairment losses of approximately $4.1 million. This settlement agreement, totaling $12.1 million, combined with the previously disclosed settlement and loan agreements with UBS for $11.6 million, the January sale and various partial redemptions over the past year, provide Chelsea with full liquidity on all of its original $26.4 million in auction rate securities.
2009 Financial Guidance
Based on current development plans, anticipated timing of clinical activity, and recent auction rate security settlements, Chelsea is confident that it has the necessary capital to fund its core clinical activities into the second quarter of 2010. This is an adjustment from the Company's prior guidance of fourth quarter 2009, reflecting the auction rate security settlements.
Conference Call Today at 11:00 AM EDT
Chelsea will discuss its first quarter results and provide an update on its clinical development programs in a conference call today at 11:00 AM Eastern Time. Interested investors may participate in the conference call by dialing 877-857-6144 (domestic) or 719-325-4788 (international). A replay will be available for one week following the call by dialing 888-203-1112 for domestic participants or 719-457-0820 for international participants and entering passcode 8702491 when prompted. Participants may also access both the live and archived webcast of the conference call on Chelsea's web site at www.chelseatherapeutics.com. The webcast will remain available on the company's website until the next quarterly conference call.
About Chelsea Therapeutics
Chelsea Therapeutics is a biopharmaceutical development company that acquires and develops innovative products for the treatment of a variety of human diseases. Chelsea's most advanced drug candidate, Droxidopa, is an orally active synthetic precursor of norepinephrine initially being developed for the treatment of neurogenic orthostatic hypotension. Currently approved and marketed in Japan for the treatment of symptomatic orthostatic hypotension, freezing gait in Parkinson's disease and intradialytic hypotension, Droxidopa has accumulated over 15 years of proven safety and efficacy, historically generating annual revenues of approximately $50 million in Japan. In addition to Droxidopa, Chelsea is also developing a portfolio of metabolically inert oral antifolate molecules engineered to have potent anti-inflammatory and anti-tumor activity to treat a range of immunological disorders, including two clinical stage product candidates: CH-1504 and CH-4051. Preclinical and clinical data suggests superior safety and tolerability, as well as increased potency versus methotrexate (MTX), currently the leading antifolate treatment and standard of care for a broad range of abnormal cell proliferation diseases including RA.
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY (A Development Stage Company) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three months ended March 31, -------------------------- 2009 2008 ---- ---- (unaudited) (unaudited) Operating expenses: Research and development $ 6,506,906 $ 6,504,832 Sales and marketing 305,300 477,564 General and administrative 1,042,473 856,332 ------------ ------------ Total operating expenses 7,854,679 7,838,728 ------------ ------------ Operating loss (7,854,679) (7,838,728) Interest income 115,674 729,448 Interest expense (26,754) -- Other income (expense) 337,492 (1,566,246) ------------ ------------ Net loss $ (7,428,267) $ (8,675,526) ============ ============ Net loss per basic and diluted share of common stock $ (0.25) $ (0.29) ============ ============ Weighted average number of basic and diluted common shares outstanding 30,111,479 29,957,695 ============ ============ Chelsea Pharmaceuticals International, Ltd. Condensed Consolidated Balance Sheet Data (unaudited) March 31, December 31, 2009 2008 ---- ---- (in thousands) Cash and cash equivalents $ 19,567 $ 21,533 Short-term investments 8,022 10,306 Long-term investments 11,575 11,329 Total assets 39,984 44,130 Line of credit payable 11,559 7,277 Total liabilities 22,458 19,583 Deficit accumulated during the development stage (77,200) (69,771) Stockholders' equity 17,526 24,548 A reconciliation of GAAP to non-GAAP loss per share is as follows: For the three months ended March 31, -------------------- 2009 2008 ---- ---- GAAP loss per share $ (0.25) $ (0.29) Net other (income) expense related to investments in auction rate securities (0.01) 0.05 --------- --------- Non-GAAP loss per share $ (0.26) $ (0.24) ========= =========
To view the Notes to the Company's Financial Statements and Management's Discussion and Analysis, please see the Company's Annual Report on Form 10-K for the year ended December 31, 2008 available on Chelsea's website at www.chelseatherapeutics.com
This press release contains forward-looking statements regarding future events. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include our need to raise operating capital, our history of losses, risks and costs of drug development, risk of regulatory approvals, our reliance on our lead drug candidates droxidopa and CH-1504, reliance on collaborations and licenses, intellectual property risks, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder.
CONTACT: Chelsea Therapeutics Nick Riehle, Chief Financial Officer 704-973-4201 Investor/Media Relations Kathryn McNeil 718-788-2856