Event – Optimism returns to Chelsea with dizzying speed

The path toward US approval of Chelsea Therapeutics’ Northera seems to have become easier since the last time regulators took a hard look at the project to treat the drop in blood pressure known as neurogenic orthostatic hypotension. The first hurdle is an advisory committee later this month, and given that experts once before backed the candidate for use in Parkinson's disease patients it seems a good bet to pass a second time.

An approval deadline awaits not long after the adcom meeting, and the big question will ultimately be whether regulators are comfortable approving Northera on the basis of short-term efficacy alone (FDA’s short-term view helps Chelsea rise from the ashes, February 21, 2013). The agency clearly wants the North Carolina group to demonstrate that the project improves patient outcomes in the long term; however, it is looking more like an approval based on reduction in dizziness or light-headedness awaits.

Company   Chelsea Therapeutics
Product   Northera (droxidopa)
Market cap   $317m  
Product NPV   $424m  
% of market cap   134%  
Event type   FDA advisory committee January 14, 2014
PDUFA action date February 14, 2014

Reversal of fortune

If approved, Northera would enter a market against generic midodrine, but offers an advantage over the older drug in that it does not elevate blood pressure in patients who are lying down. This midodrine side effect has limited its use in patients with pre-existing heart disease or hypertension.

Midodrine did achieve regulatory approval on the basis of symptomatic control – higher blood pressure one minute after standing up. Chelsea was shooting for a much higher goal – a longer-term benefit in fall prevention.

The pivotal trial called 306B failed to demonstrate a statistical benefit in this endpoint, and a shift in the primary endpoint from fall prevention to dizziness did little to impress the 2012 edition of the FDA (Investors kick Chelsea after it trips on its Northera data again, December 6, 2012). The 2013 version was more about collaboration, however – guidance Chelsea received last year from the FDA suggested that symptomatic control could be sufficient for approval, with the caveat that a durable clinical benefit might need to be proved after launch, if it is approved.

An additional caveat will be a safety signal – while the elevated blood pressure of midodrine is not an issue, Northera’s use in Japan, where it has been marketed for years as Dops, has revealed a risk of neuroleptic malignant syndrome. This was not enough to keep a previous adcom from backing the project, but it is another potential tripping point for Northera.

Cooler heads?

Chelsea had an incredibly good 2013 on the back of the FDA’s change of heart. Shares more than quintupled in value as the group started the year below the Nasdaq’s $1 de-listing threshold. This allowed the company to hit up investors for another $21.4m in the form of a public offering, its seventh share sale since 2007.

The new revenue will come in handy as the group’s cash pile had dwindled to $21m at September 30, a level that would have put it in a weak negotiating position with potential partners. And with quite a bit of hype surrounding Chelsea, those potential partners will need to consider carefully whether sales of the drug will meet expectations – Roth Capital Partners puts revenues at $453m in 2020 and JMP Securities at $369m.

Indeed, as Chelsea transforms from a development company to a commercial entity, it would not be surprising to see that hype die down as partnership candidates cast a careful eye over the market opportunity.

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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