FDA Panel Backs CHTP's Northera - Analyst Blog

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Chelsea Therapeutics International, Ltd. ( CHTP ) announced that the Cardiovascular and Renal Drug Advisory Committee (CRDAC) of the U.S. Food and Drug Administration (FDA) recommended (16-1) in favor of aprpoving Northera.

The company is looking to get Northera approved for the treatment of symptomatic neurogenic orthostatic hypotension (NOH) in patients with primary autonomic failure (Parkinson's disease, multiple system atrophy and pure autonomic failure), dopamine beta hydroxylase deficiency and non-diabetic autonomic neuropathy.

A final decision from the FDA is expected to be out by Feb14, 2014. We note that although the FDA is not bound to accept the recommendation of the panel, it usually considers the same while deciding on the fate of a drug.

Background

We remind investors that this is not the first time that Northera has received a positive opinion from the CRDAC. In Feb 2012, the CRDAC had voted 7-4 recommending approval of Northera for the above mentioned indication.

However, the FDA issued a complete response letter for the candidate in Mar 2012. The FDA had asked the company to submit positive data from an additional study supporting the efficacy of the candidate. The agency also recommended that the study should be designed to show durability of effect over a time period of 2-3 months

We note that Northera enjoys both orphan drug designation and fast track designation in the U.S.

Our Take

Chelsea Therapeutics shares had nosedived 29.2% last week ahead of the FDA panel as investors anticipated a negative recommendation based on the FDA's briefing document. But, with the panel voting in favor of approval, we expect the price to rise significantly. However, we advise investors to remain cautious given the bumpy history of Northera and mixed comments related to the drug's long-term efficacy in the FDA's briefing document.

Chelsea Therapeutics currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks include Impax Laboratories Inc. ( IPXL ), Actelion Ltd. ( ALIOF ) and Medivation, Inc. ( MDVN ). All three carry a Zacks Rank #1 (Strong Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ALIOF , CHTP , IPXL , MDVN

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