Chelsea Therapeutics to Implement Corporate Reorganization
CHARLOTTE, N.C., July 10, 2012 (GLOBE NEWSWIRE) -- Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) today announced that its Board of Directors plans to promptly implement a corporate reorganization that includes a reduction in force, executive changes and changes to the Company's Board of Directors, and has authorized a plan to explore and evaluate strategic options for the Company, all with the goal of optimizing long-term stockholder value.
As part of the reorganization, Chelsea's Board of Directors expects
to significantly reduce the company's headcount, retaining only
those employees necessary to gain marketing authorization of
Northera™ (droxidopa) in the U.S. for the treatment of
symptomatic neurogenic orthostatic hypotension in patients with
primary autonomic failure. As part of this effort, the Company
plans to stop patient enrollment in its ongoing 306B study in July,
which should result in data by year-end, and will evaluate
additional study designs required to support marketing
authorization. The reduction in force is expected to be completed
in the third quarter of 2012 and result in salary reductions of at
least $3.5 million on an annualized basis, excluding any one-time
restructuring charges.
At the executive level, Simon Pedder, Ph.D. Founder, President and
CEO, has resigned as a director, officer and employee of the
company, effective immediately. Dr. Pedder will continue to serve
the Company in an advisory capacity, as needed to assist in a
smooth transition of his duties. The Board will begin evaluating
candidates to succeed him as Chief Executive Officer. Joseph G.
Oliveto, who has been the Company's Vice President, Operations
since June 2008, has been appointed interim President and Chief
Executive Officer until a permanent CEO is appointed. Keith
Schmidt, Vice President, Marketing and Sales, will also be leaving
the Company, but will remain available in an advisory capacity.
At the Board level, Kevan Clemens, Ph.D. has stepped down as
Chairman and remains a director, with director Michael Weiser,
M.D., Ph.D. assuming the role of Chairman. In addition, Norman
Hardman, Ph.D., C.Chem., F.R.S.C., F.I. Biol., and Johnson Y.N.
Lau, M.B., B.S., M.D., F.R.C.P., have stepped down from the Board.
The continuing directors plan to begin carefully evaluating
candidates to join the Board, including the evaluation of any
candidates put forth by the Company's stockholders, as promptly as
practicable.
"Chelsea Therapeutics has faced tremendous challenges in moving
Northera forward through the regulatory process, making these
difficult decisions necessary to ensure stockholder value is
preserved in the short term and can be built over the long-term,"
said Dr. Weiser. "We believe that this reorganization should allow
the Company's resources and capital to be laser-focused on
efficient conclusion of the 306B study and the evaluation of next
steps in the regulatory process. In tandem, the Board plans to
explore and evaluate all available strategic options to determine
the best path forward in the long-term strategic interests of the
Company and its stockholders."
Dr. Weiser added: "We remain committed to Northera, a treatment
which meets an important unmet need in patients and has a
significant record of efficacy and safety in the clinic and in
ex-US markets. We would like to thank those employees leaving the
Company for their service. We would also like to recognize Dr.
Pedder's years of dedication to Chelsea and his work in helping to
advance the Company's innovative therapies."
About Chelsea Therapeutics
Chelsea Therapeutics (Nasdaq:CHTP) is a biopharmaceutical
development company that acquires and develops innovative products
for the treatment of a variety of human diseases, including central
nervous system, rheumatoid arthritis, psoriasis and other
inflammatory diseases. Founded in 2004 around its library of unique
anti-inflammatory and autoimmune technology, Chelsea has further
expanded its product development portfolio with early- and
late-stage candidates that seek to leverage the company's
development expertise and accelerate the company's drug
commercialization efforts. For more information about the company,
visit www.chelseatherapeutics.com.
This press release contains forward-looking statements regarding
future events including our intention to pursue the development of
Northera and the anticipated cost savings from the reduction in
force. These statements are subject to risks and uncertainties that
could cause the actual events or results to differ materially.
These include the risk that we do not achieve the anticipated cost
savings; reliance on key personnel including specifically in this
time of uncertainty following the resignation of Dr. Pedder; risks
of distraction of the Board and management at this critical time;
the risk that the FDA will not accept our proposal regarding any
trial or other data to support Study 301 or any other study; the
risk that we will not be able to resubmit the NDA for Northera and
that the FDA will not approve a resubmitted NDA; the risk that our
resources will not be sufficient to develop any study of Northera
that will be acceptable to the FDA; the risk that we cannot
complete any additional study for Northera without the need for
additional capital; the risks and costs of drug development and
that such development may take longer or be more expensive than
anticipated; our need to raise additional operating capital in the
future; our reliance on our lead drug candidate droxidopa; risk of
regulatory approvals of droxidopa or our other drug candidates for
additional indications; risk of volatility in our stock price,
related litigation, and analyst coverage of our stock; reliance on
collaborations and licenses; intellectual property risks; our
history of losses; competition; and market acceptance for our
products if any are approved for marketing.
\CONTACT: Investors:
Kathryn McNeil
Chelsea Therapeutics
704-973-4231
mcneil@chelseatherapeutics.com
Media:
David Pitts
Argot Partners
212-600-1902
david@argotpartners.com
Posted: July 2012
