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Chelsea Therapeutics Posts Wider Q4 Loss

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Chelsea Therapeutics International Ltd. reported fourth quarter 2013 loss of 7 cents per share, in line with the Zacks Consensus Estimate, but wider than the year-ago loss of 3 cents per share.

In 2013, Chelsea Therapeutics reported a loss of 24 cents per share, narrower than the year-ago loss of 44 cents per share but a penny wider than the Zacks Consensus Estimate of a loss of 23 cents per share.

In 2013, Chelsea Therapeutics did not have any approved product in its portfolio and hence did not generate any revenues in the reported quarter as well as in 2013. The company’s first drug to gain U.S. Food and Drug Administration (FDA) approval is Northera, which was approved in Feb 2014.

In the fourth quarter of 2013, Chelsea Therapeutics’ R&D expenses shot up by 353.5% year over year to $3.9 million. General and administrative (G&A) expenses edged down 1.8% year over year to $1.1 million.

Northera, is currently the only therapy approved by the FDA for the treatment of orthostatic dizziness, lightheadedness, or the “feeling that you are about to black out” in adults with symptomatic neurogenic orthostatic hypotension (NOH) caused by primary autonomic failure, DBH deficiency, and non-diabetic autonomic neuropathy. Chelsea Therapeutics intends to begin commercialization of Northera in the second half of 2014.

We note that Northera has orphan drug designation in the U.S. and the EU with seven years and ten years of marketing exclusivity, respectively.

Meanwhile, Chelsea Therapeutics plans to pursue label expansion of Northera. The company said that it intends to study Northera for other norepinephrine-related conditions and diseases.

We are positive on the FDA approval for Northera. Chelsea Therapeutics currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector include Alexion Pharmaceuticals, Inc. (ALXN - Free Report) , Amgen Inc. (AMGN - Free Report) and Gilead Sciences Inc. (GILD - Free Report) . All these stocks carry a Zacks Rank #1 (Strong Buy).

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