CHTP - Chelsea Therapeutics - Page 3

earnings call

Interesting earnings call transcript at seeking alpha. Excerpts pasted in below. I like this company. They dont seem to be BS artists releasing a lot of BS PRs. As seen in the excerpts they have an interesting pipeline. Droxidopa is already well established to be safe, so if they can expand the label to fibromyalgia or ADHD, thats HUGE. The scientists they have conducting the trials are top notch. As for the NOH study, read the transcript and you'll appreciate the complexities of choosing an endpoint and how many equally good endpoints there are. Encouraging that they worked with the FDA for the 302 study to determine the endpoint, so it might be easier to convince the FDA that additional paramaters should be considered.

Excerpts:
"In addition to potentially treating fibromyalgia, there has been significant interest in better understanding the potential benefit of Droxidopa for the treatment of adult attention deficit hyperactivity disorder or ADHD. ...We have been working closely with the investigator for this study, Dr. Adler in New York to facilitate an exploratory Phase II trial. This will be a single-center, 12-week study conducted under physician sponsored I&D, and is intended to evaluate 20 adult ADHD patients. ...the study is expected to be under way in the next few weeks, and should likely yield data in the second quarter of 2010. We are very pleased to be working with Dr. Adler on this study.

As have been the case for most of the year, it was CH-4051 that continues to generate the greatest buzz amongst physicians and potential partners at the conference. We believe the CH-4051 has tremendous promise as a treatment for rheumatoid arthritis supported by a robust body of pre-clinical data suggesting proven inhibition of the enzyme dihydroorotate reductase, and Phase I data demonstrating its impressive safety and tolerability at levels believed to exceed likely therapeutic dosages. We are all excited to see what was CH-4051 can do in the Phase II trail."

The key question is this:

"Did CHTP want to redesign the 301 study results because they know that the results are not good, and are not going to succeed, UNLESS they change the endpoints?"

If they don't know the results of the 301 study exactly, they do at least have some kind of idea, as the 302 study was similar enough that they should have some idea.

So, if they get to change the endpoints, then this will be viewed as a positive, as it allows them to use a 302 study that is now would be considered a success, and a 301 study that will probably end up succeeding too. Then that would make FDA approval that much easier.

If they do not get to change the endpoints, then they are basically at the same stage as they were before asking (this is one of those 'whats the worst that they could say? 'No'' situations). However, the street will probably view that as a negative. Furthermore, as has been pointed out by everyone but Adam Feuerstein, this does not mean that the 301 study will fail. I still believe the 301 study will succeed, with either the current format, or the revised format. But I agree with analyst Moussatos that the odds of the FDA allowing a change in format is probably 50-50.

I guess a third option (and the most purely scientifically conservative one) would be to allow them to change the 301 study, but not the 302 study endpoints, as the data is still blinded, right? It seems nobody is talking about this option.

g

For now, I will stay long 32K shares, possibly adding more later.

g

Good points Gambler. To your key point: the study is still blinded so they cannot know. Might they suspect? Thats trickier, but I tend to think not because they gave a lot of thought to the design of these studies and its not likely they botched the design so badly that they know it failed without even knowing the results. The major problem with the 302 study seemed to be a larger than expected response from the placebo group, for reasons not understood. Flukish. If the 301 study ends up with exactly the same design, will they get this same overstated placebo effect or will it revert to the norm? I think the Street has already hammered the stock enough that bad news is already priced in. You look at the potential market for this drug (and it is absolutely just a matter of time until its approved. Worse case scenario? A delay) plus the other drugs/label expansions in the pipeline, then the current PPS is a steal. That said, this a small biotech, so famous last words. But to me this looks like a superb long play and a chance to buy a promising company cheap. I bought in today. Dont want to overweight on this (or any stock), but if it dips more it will be hard to resist adding more. I'd love to see some insider buying about right now...

Found the following explanation from the CEO after the failure of the 302 study. Key point is that the 301 study is DIFFERENT from the 302 design, and the CEO is speculating over a month ago that the 301 design is better, given what they found out during 302. So even if the FDA does not allow a change in endpoints a promising outcome can occur. I think the herd is blindly following the AF article, which creates an opportunity for those who know better. Sentiment may win short term, but fundamentals will rule sooner or later. Not that I'm saying the drug will be approved after the 301 trial is unblinded. Nobody knows. I am saying the sell-off this week was based on a bogus premise.

"Dr. Simon Pedder, Chelsea's President and CEO. "Further, we anticipate a more comprehensive review of the data will help determine the relative impact of a higher than anticipated placebo response and what, if any, additional factors may have contributed to these unexpected results. Key features to the design of this study included an initial 7-day open-label drug treatment period following dose titration and prior to a 14-day randomized withdrawal treatment period. While we intended to stabilize patients immediately prior to withdrawal, the observed decline in BP during this period appears to have had a negative effect on the study's ability to discern treatment effect. In addition, the benefits of Droxidopa, as measured by both BP and item 1 of the OHSA scale, appeared to persist to some extent despite absence of therapy, raising potential questions regarding the suitability of this type of trial design for an NOH study. We remain hopeful that the results of Study 301, which is a standard induction design study in which patients are washed out between titration and the blinded study, may provide a better opportunity to clearly demonstrate the efficacy of Droxidopa in this indication."

doubled down

Have been reading more about CHTP. Doubled my position this morning at 2.24. Quote from the company made after the failed 302 trial below. Goes against my philosophy to be overweight in a stock but there are equally good reasons to be into CHTP. This recent selling created a hell of an opportuntiy.

"In looking ahead, we believe these results will be evident in the results of Study 301 expected this quarter. Further, we believe the outcome of Study 301 may be enhanced by the washout period included in that study. This belief is supported by open-label data from Study 301 that demonstrate a marked return of symptoms prior to randomization. The increase in average dizziness score from 1.0 following dose titration to 5.4 after a 7-day washout period in Study 301 suggests a reduction in the carry-over effect that appeared to follow sustained drug treatment prior to randomized withdrawal in Study 302."

Pipeline

I'm into CHTP primarily because of droxidopa, which I see as having a high probability of success. But adding to the appeal of the company are other products in its pipeline and expanded labelling efforts. Below is info on their potential 800 pound gorilla. Note that the RA market is over 13 billion.


Chelsea Therapeutics International, Ltd. (Nasdaq:CHTP) announced that a preliminary analysis from its recently completed 12-week Phase II clinical trial in rheumatoid arthritis (RA) demonstrated that patients treated with once daily oral doses of CH-1504 at 0.25mg, 0.50mg and 1.0mg showed comparable ACR20/50/70 response rates to patients treated with a standard 20mg oral dose of methotrexate (MTX) administered once weekly. In addition, the efficacy of CH-1504 was associated with improved tolerability and reduced hepatotoxicty compared to the MTX.

"That CH-1504, even across this low dose range, can achieve comparable ACR response rates to a standard dose of methotrexate, validates the scientific rational that the known metabolites of methotrexate are not required for efficacy," commented Dr. Edward Keystone, M.D., FRCP(C), Professor of Medicine, Rheumatology Division at The University of Toronto, Canada, and principle investigator for the study. "Further, that all doses of CH-1504 show a clinically relevant decrease in ALT elevations compared to methotrexate is in keeping with the principle that methotrexate metabolites likely contribute to the liver toxicities and tolerability issues associated with methotrexate treatment and is suggestive of the potential for a non-metabolized antifolate, such as CH-1504, to provide a better, safer treatment option for RA patients

Reasons to be bullish

In the failed 302 trial, 5 of the 6 endpoints were successful. There was a marked reduction in the number of falls of subjects taking drox. Only the primary endpoint failed. Why did it fail? Because the drug was too effective! It persisted longer than expected after they stopped administering it. So when they broke off the placebo group (who didnt get anymore drox), they didnt wait long enough for drox to clear the system and the control group continued to benefit from droxidopa, screwing up the study. Note that the completed, but still blinded, 301 study has a 1 week washout period. Strong insider buying since the 302 study. Big hedge fund purchase on Nov 6gh. Below is quote from another analyst a few weeks ago, after the failed 302 trial, also with a target price above 9 dollars.




Dr. Moussatos: Right now I've put one of my companies on the Wedbush Best Ideas List, and it's called Chelsea Therapeutics, the ticker is CHTP. I have an outperform rating and $9 fair value, and it's trading between $2 and $3. The reason I have it outperform is they have guided to releasing the data from their first Phase III trial on a drug that treats a certain kind of low blood pressure condition called neurogenic orthostatic hypotension, or NOH. And that data is due at the end of this quarter, and so it's a near-term major catalyst for this company. The way the trial was designed, they enriched for patients who had the highest response to the drug. And also the drug has already been approved in Japan for over 10 years for the same condition. So we know the drug works. I'm pretty comfortable that this Phase III trial is going to be positive. My fair value is $9. I think the stock is going to go to $9-10 by the end of the quarter. So it's pretty big uptick. I'm pretty comfortable that this drug is going to work in this trial. That's my top pick. As I said before, Phase III is a major catalyst for a company

Biding time

Slideshow of todays presentation on the CHTP website. The NOH prospects look excellent. Insider buying is accelerating. Absolutely amazing how CHTP has stayed below the radar. Buying at current price is almost like stealing. To me the evidence is overwhelming that droxidopa will make lots of money, sooner or later, for shareholders. If this stock does what I think and goes through the roof soon, I'll be wondering what the hell all the new people screaming "buy buy buy" were doing when the stock was at 2.25.

Chelsea also has rights in Europe and is agressively pursuing additonal targets for droxidopa. The antifolate research is at an earlier stage, but probability of success also seems high. This would be a huge market encompassing several autoimmune diseases.

Long 30K again

So you account for 10% of the reported volume for today and contributed to moving it higher. 6% including AH on no news that I've fond yet. Got a feeling that I'll be kicking myself down the road for not buying more, but already overweight. Keeping an eye on SQNM and looking into a few other biotechs. Havent found anything I like as much as CHTP.

Yeah, I hit the "BUY BUY BUY" button before I bought

Then the "APPLAUSE" button after

http://www.cnbc.com/id/23278941/

g

The thing with CHTP is that they could certainly go down more if the FDA refuses their 301 protocol change... but I still feel that it should be 9$ if they get approval.

g

I also added some links in my thread in the watchlist forum

http://www.hotstockmarket.com/forums...ad.php?t=74672

g

Everyone sell please, this may be dead money for a while

g

I sold 50contracts of the 2.50 March 2010 Puts yesterday for 1.00. So I take in $6k premium best case, worst case I get an adjusted buy price of 1.50 on 5k shares....which if they do get bad news from the FDA I think will be the low give or take .10 - .15. And I have no problem buying those shares given they have other drugs in the pipeline for early/mid next year

risk/reward by my calculation in my favor 4/1

Down's syndrome

News broke today that droxidopa has the potential to treat Down's syndrome in humans, following spectacular results in a mouse study. Still a long way to go before we know whether it works in humans, but what an exciting finding.

The publicity resulting from this finding should be HUGE for CHTP and I would think could bring an enormous influx of buyers turned on to the company after seeing the news on TV, papers, radio etc.

Already called a WONDER PILL in the LA Times today.

http://latimesblogs.latimes.com/boos...treatment.html

This finding also raises the possibility the droxidopa may be effective against Alzheimers.

http://www.technologyreview.com/biomedicine/23979/

Already picked up by the BBC. CHTP has rights in Europe.

http://news.bbc.co.uk/2/hi/health/8364286.stm

and by US News.

http://health.usnews.com/articles/he...y-of-hope.html

Note the researcher actually says "WOW." Believe me, you dont see that reaction much from a scientist, especially in press.

May take a few days for people and media to do their homework and trace this back to CHTP.


Holy crap.

This is news that has powerful implications both for fundamentals and market sentiment.

CHTP,INCY,HL,IMGG.ob

just my 2 cents....

am in CHTP,will hold if need be.My 2 cents,sooner or a lil later they`ll get drox.app`d. Notice J Austin insider buys and Adam F is a corrupt fool imo.

many analysts except one said HGSI would NEVER get Benylsta app`d,yeah right.Went from pennies to $13-15 in late July,now around $27.I stayed in `till Lupus news,bought at .65 sold most between 13-14.

same with JAZZ,nobody wanted it...was .50-.60,bought `n held,then news and broke out.Now around $6-7.

most remember DNDN,many more analysts WRONG!

ok, am in CHTP as stated. Another you might want to look into is INCY,
Incyte Corporation.Google recent Cowen & Co upgrade and recent Leerink Swann upgrade,says $15-17 sh...it`s now around $7.50.
also read last CC transcripts,you can google 'seekingalpha' for it or company website,page 9 of transcript Lucy Lu/Citigroup questions and check out CEO P Friedmans answer.Then see Friedmans last comments,same page about PARTNERSHIP. Check out/google Cowen & Co 'Blood Cancer Meeting Abstracts Released'....INCY`s INCB018424 called "exceptional".

you can also read a fairly recent 'smallcapnetwork' article on INCY and their take.

Hecla/HL, money maker.Was below $3 not long ago,now just over $6,see last CC and what next earnings will very likely bring.

IMGG.ob,in and out of this one recently. Careful on yer entry point,try and wait for another pullback,it was .50-.70 recently,then popped to 1.95 ish,then fell back to just below $1....lol, now around 1.35.Supposedly-likely has FDA app`l coming,some say-think maybe this week,some say maybe several more weeks

Back to CHTP for second,Ladenburg/Thalmann set $5 target Oct 09.
L Moussatos/Wedbush says 50:50 they get Dec/Jan FDA approval and REITERATED $9 fair value on stock.Droxidopa has been approved and marketed in Japan,don`t hear/read about over a million patients having problems w/droxidopa so if anyone is messed up,seems to me the FDA is if they don`t ok it or possibly delay it.Whatever,risk=possible bigger reward(just like HGSI,JAZZ,DNDN etc),if some don`t like risk then hop on stuff like GOOG,APPL etc.Even those could tank some if there`s downward pressure on overall market.

Up at 15% now.....most during the last hour of trading. Whats up?

En Fuego.

Sign of things to come.