It's D-Day for Chelsea Therapeutics and its rare disease drug Northera. The FDA is due to deliver its official verdict on a therapy that's been in use for years in Japan. But this therapy caused more than one case of heartburn for Chelsea ($CHTP) with split results in two Phase III studies, dour safety warnings from FDA staffers and only a majority 7-to-4 vote in its favor by an FDA expert panel.
The last cliffhanger for the Charlotte, NC-based biotech occurred about a month ago when a majority of the agency's panel concluded, rather reluctantly, that Northera--or droxidopa--offered perhaps the best hope for patients with symptomatic neurogenic orthostatic hypotension, the sudden drop in blood pressure that can trigger fits of dizziness for some 180,000 patients. Advocates concluded that the risks could be managed and the potential benefits were significant. But the agency had earlier recommended against an approval, noting that the treatment is linked to lethal cases of neuroleptic malignant syndrome while there's no data to support a case for long-term efficacy.
The mixed signals are giving investors a bad case of heartburn of their own today. As Brian Orelli at Motley Fool remarks, the company's share price has been trading down a bit following the spike that occurred on the panel vote in its favor, indicating that there's a lot of bets being made for a rejection in the form of a complete response letter. So if it is approved, the thumbs-up is likely to trigger a neck-breaking ride straight up.
For Chelsea, an approval would give the biotech its first marketed drug, giving it a green light to set up its own marketing effort in the U.S. while finding partners to handle international markets.
But it could go either way. We'll keep you posted when the news breaks.