Chelsea Therapeutics Reports Second Quarter 2008 Results
Company to Host Conference Call At 11:00 AM EDT
CHARLOTTE, N.C., Aug. 6, 2008 -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today reported financial results for the second quarter 2008. Chelsea's management team will host a conference call this morning to discuss these results and present a quarterly update on the Company's development progress at 11:00 AM EDT.
"Following the initiation of three clinical trials earlier in the year, our efforts during the second quarter of 2008 were solidly focused on the execution and advancement of each of these studies," commented Dr. Simon Pedder, President and CEO of Chelsea. "In support of this focus, we implemented a number of initiatives designed to facilitate site activation and patient enrollment into study 302, our pivotal Phase III trial of Droxidopa in neurogenic orthostatic hypotension. As a result, we more than doubled the sites activated in our pivotal Phase III trial of Droxidopa in neurogenic orthostatic hypotension during the quarter and are now in the final stages of activating the remaining sites. Additionally, patient recruitment for our Phase II study of Droxidopa in intradialytic hypotension continued to progress and remains on track for completion in the fourth quarter while our Phase II trial of CH-1504 continues to exceed expectations, having now exceeded 75% enrollment."
Financial Results for the Second Quarter
Chelsea reported a net loss for the second quarter 2008 of $7.3 million or ($0.24) per share versus a net loss of $3.2 million or ($0.14) per share for the comparable period in 2007.
Net loss for the six months ended June 30, 2008 was $16.0 million or ($0.53) per share compared to a net loss of $7.0 million or ($0.33) per share for the prior-year period. The net loss for the six months ended June 30, 2008 includes the recognition of an impairment charge reported in the first quarter of 2008 of approximately $1.6 million or ($0.05) per share related to student loan backed auction rate securities with a par value of $26.3 million. Excluding this impairment, Chelsea's net loss on a non-GAAP basis for the six months ended June 30, 2008 of was $14.4 million, or ($0.48) per share.
Research and development expenses for the second quarter 2008 were $6.4 million, compared to $2.2 million for the same period in 2007. For the six months ended June 30, 2008 research and development expenses were $12.9 million versus $5.3 million for the comparable prior-year period. Total research and development expenses increased primarily as a result of increased clinical activity compared to the prior year including the Droxidopa pivotal registration program in neurogenic orthostatic hypotension, the Phase II trial of Droxidopa in intradialytic hypotension as well as the ongoing Phase II evaluation of CH-1504 vs. methotrexate in rheumatoid arthritis.
Selling, general and administrative expenses were $1.4 million for the three months ended June 30, 2008 compared to $1.3 million for the same period in 2007. For the six months ended June 30, 2008, selling, general and administrative expenses increased to $2.7 million from $2.2 million for the comparable period in 2007.
Chelsea ended the quarter with $50.3 million in cash and short-term investments reflecting $25.6 million in cash and cash equivalents and $24.7 million in short-term investments. This compares to $62.7 million in cash and short-term investments consisting of $34.1 million in cash and cash equivalents and $28.6 million in short-term investments at December 31, 2007.
2008 Financial Guidance
Based on current development plans and anticipated timing of clinical activity, Chelsea anticipates a net loss for full year 2008 in the range of $30 million to $35 million with cash usage within the same range. We expect to end the year with at least $30 million in cash and short-term investments, which would be net of the impairment against current investments in auction rate securities.
Conference Call Today at 11:00 AM EDT
Chelsea will discuss its second 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 877-419-6600 (domestic) or 719-325-4882 (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 8541487 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. The Company is currently developing a library of metabolically inert antifolate compounds engineered to have potent anti-inflammatory and anti-tumor activity to treat a range of immunological disorders. Early clinical data suggests that Chelsea's lead antifolate compound, CH-1504, is a safe and effective treatment alternative to methotrexate for RA and may have further applications for psoriasis, IBD and certain cancers. Chelsea's antifolate program is complemented by the development of the I-3D portfolio of therapeutics targeting immune-mediated inflammatory disorders and transplantation. In addition to its autoimmune pipeline, Chelsea is developing Droxidopa, an orally active synthetic precursor of norepinephrine, for the treatment of neurogenic orthostatic hypotension. Currently approved and marketed in Japan, Droxidopa has accumulated over 15 years of proven safety and efficacy, historically generating annual revenues of approximately $50 million in Japan.
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 reliance on collaborations and licenses, risks and costs of drug development, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, our history of losses and need to raise more money, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder, management of rapid growth, and the need to acquire or develop additional products.
CHELSEA THERAPEUTICS INTERNATIONAL, LTD. AND SUBSIDIARY
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended For the six months ended
June 30, June 30,
-------------------------- ---------------------------
2008 2007 2008 2007
---- ---- ---- ----
Operating
expenses:
Research
and
develop-
ment $ 6,369,029 $ 2,155,547 $ 12,873,861 $ 5,322,836
Sales and
marketing 404,648 602,805 882,212 819,420
General and
admini-
strative 1,000,924 722,694 1,857,256 1,372,106
------------ ------------ ------------- ------------
Total
operating
expenses 7,774,601 3,481,046 15,613,329 7,514,362
------------ ------------ ------------- ------------
Operating
loss (7,774,601) (3,481,046) (15,613,329) (7,514,362)
Interest
income 457,598 317,619 1,187,046 515,055
Interest
expense -- -- -- --
Other
expense -- -- (1,566,246) --
------------ ------------ ------------- ------------
Net loss $ (7,317,003) $ (3,163,427) $ (15,992,529) $ (6,999,307)
============ ============ ============= ============
Net loss
per basic
and diluted
share of
common
stock $ (0.24) $ (0.14) $ (0.53) $ (0.33)
============ ============ ============= ============
Weighted
average
number of
basic and
diluted
common
shares
outstand-
ing 29,988,944 22,404,328 29,973,319 21,196,442
------------ ------------ ------------- ------------
Chelsea Pharmaceuticals International, Ltd.
Condensed Consolidated Balance Sheet Data
(unaudited)
As of
------------------------------
June 30, December 31,
2008 2007
---- ----
(in thousands)
Cash and cash equivalents $ 25,551 $ 34,076
Short-term investments 24,713 28,638
Total assets 51,288 63,163
Total liabilities 8,500 5,197
Deficit accumulated during
the development stage (50,678) (34,685)
Stockholders' equity 42,788 57,967
A reconciliation of GAAP to non-GAAP loss per share is as follows:
For the three months For the six months
ended June 30, ended June 30,
------------------ ------------------
2008 2007 2008 2007
---- ---- ---- ----
GAAP loss per share $ (0.24) $ (0.14) $ (0.53) $ (0.33)
Impairment charge
related to short-
term investments
in auction rate
securities -- -- 0.05 --
------- ------- ------- -------
Non-GAAP loss
per share $ (0.24) $ (0.14) $ (0.48) $ (0.33)
======= ======= ======= =======
To view the Notes to the Company's Financial Statements and Management's Discussion and Analysis, please see the Company's 2007 Annual Filings available on Chelsea's website at www.chelseatherapeutics.com
CONTACT: Chelsea Therapeutics:
Nick Riehle, Chief Financial Officer
704-341-1516 x101
Investor/Media Relations
Kathryn McNeil
718-788-2856
