After the markets closed on Wednesday, Chelsea Therapeutics ($CHTP) put out the word that the FDA had rejected Northera, a troubled program that drew regulatory frowns for an absence of long-term efficacy data and troubling safety signals. In handing Chelsea a complete response letter, the agency opted to overlook the majority vote in favor of Northera by a panel of outside experts, where Northera earned some grudging respect.
The FDA concluded that Chelsea needed to file positive data from an additional two- to three-month study, and Chelsea immediately raised the prospect that an ongoing 10-week trial could provide the data it needs. That didn't sit well with investors, though. Chelsea's shares plunged more than 30% in a matter of minutes.
"We believe there continues to be an important unmet medical need in addressing the symptoms associated with Neurogenic OH and remain committed to working with the FDA to determine the appropriate next steps required to bring a much-needed new therapy to the market as quickly as possible," said CEO Simon Pedder in a statement.
Analysts had been kept guessing on the outcome throughout the day, balancing the official stance of the FDA with the 7-4 panel vote and the simple fact that this drug has been available for years in Japan. For Chelsea, that track record had initially allowed the biotech to claim that their program had been significantly de-risked. Advocates maintained 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.
For some analysts, the first of two Phase III studies was considered something of a cakewalk. But Northera flunked that study. A subsequent Phase III produced positive data, adding to the biotech's reputation for treating investors to a roller coaster ride on its share price.
Even if it is approved at a later date, the FDA is already considering a black box warning on safety concerns. FDA reviewers have raised concerns about links to a neurological condition.