Chelsea Therapeutics jumps on Northera update

NEW YORK (AP) -- Shares of Chelsea Therapeutics International Ltd. More thandoubled in value Wednesday after the company said the Food and Drug Administration took a more favorable view of a recent study of its drug Northera.

THE SPARK: Chelsea said that after an appeal, the FDA has decided the company can use the study as the basis for a new request for marketing approval of Northera. The company said it plans to file for approval during the second quarter and it expects a decision from the FDA before the end of 2013.

The FDA previously said the study was unlikely to provide enough evidence to convince it to approve Northera, which is intended to help prevent dizziness and falling in patients with Parkinson's disease. Chelsea Therapeutics had appealed that decision.

THE BIG PICTURE: The Charlotte, N.C., company says the FDA might be willing to approve Northera based on a short-term improvement in patients. If Northera is approved, the company might have to do another study to show a longer-term benefit for patients.

In December, Chelsea Therapeutics said Northera was more effective than a placebo at reducing dizziness and lightheadedness after a week of treatment. However it said the results after more than a week were less clear, as the difference between Northera and placebo was not statistically significant.

The company also said the Northera patients fell less frequently and were injured in falls less often, but that difference between Northera patients and the placebo group also wasn't statistically significant.

In March 2012, the FDA asked Chelsea Therapeutics to run a new study to demonstrate Northera's effectiveness.

Northera, or droxidopa, is designed to treat neurogenic orthostatic hypotension, or a drop in blood pressure upon standing. The condition is common in patients with Parkinson's disease, which is the second-most common neurodegenerative disorder in the U.S.

Northera is Chelsea's most advanced drug candidate. The company has no drugs approved for sale.

THE ANALYSIS: Wedbush analyst Liana Moussatos said the announcement suggests Northera will probably be approved. She said she now expects Chelsea Therapeutics to launch the drug in July 2014, a year earlier than her previous estimate. Moussatos rates the shares "Outperform" and raised her price target to $7 per share from $5.

SHARE ACTION: Shares of Chelsea Therapeutics rose 98 cents to $1.75 after closing at 77 cents on Tuesday. Back in December, the stock closed at $1.79 before the company reported the trial results.