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Columbia Wanger Chucks Chelsea, Despite FDA Progress

By: GuruFocus
Posted: 4/9/2013 7:06:00 PM
Referenced Stocks: CHTP

The U.S. Food and Drug Administration (FDA) approved only 35 new drugs in 2011. The discouraging snail's pace of new drug evaluation and approval is enough to turn many pharmaceutical investors from buyers to sellers.

As of March 31, 2013, Columbia Wanger Asset Management reduced its position with the biotech drug maker Chelsea Therapeutics International Ltd. ( CHTP ) by 46.4%, with current shares at 4,302,458. The current price of CHTP is $1.87, with a change of average down 8%.

Founded in 2004, Chelsea Therapeutics is a specialty pharmaceutical company, specializing in the acquisition and development of innovative products and technologies that address unmet medical needs or offer alternatives to current methods of treating disease. Chelsea's compounds target a variety of prevalent medical conditions; particularly rheumatoid arthritis, psoriasis, cancer, other immunological disorders, neurogenic orthostatic hypotension and other autonomic disorders.

Up 131% since January, CHTP is one stock in the Columbia Wanger Asset Management portfolio of 321 stocks valued at $21.7 billion, with 23 new stocks listed as of April 8, 2013. Columbia Wanger has a quarter-over-quarter turnover of 7%.

Columbia Wanger holding history:



The Columbia Wanger trading history of CHTP over nine quarters since third quarter of 2010 shows an average cost of $4 per share with a 53% loss.

The development pipeline of Chelsea Therapeutics International shows seven product candidates in the second or third phase of evaluation towards eventual drug commercialization. Chelsea's investigational candidates include "droxidopa" (drug name: Northera), a synthetic precursor of norepinephrine, for the treatment of neurogenic orthostatic hypotension. The FDA granted the company a priority review of Northera in 2011. As of February 2013, based on FDA guidance, Chelsea plans to file a resubmission of the Northera new drug application (NDA) in the late second quarter of 2013, for another six-month review.

Chelsea's Interim CEO, Joseph G. Oliveto, stated, "We appreciate and are encouraged by FDA's willingness to consider data from Study 306B in evaluating Northera for the treatment of NOH, and look forward to submitting the totality of our clinical experience to date to the Agency for review... We now have a regulatory path forward, including the potential for an approval of Northera later this year."

Other Chelsea product candidates under evaluation are for the possible application in treating rheumatoid arthritis, autoimmune diseases and transplant rejection.

According to the GuruFocus insider trading feature, Chelsea Therapeutics International Ltd. ( CHTP ) shows no insider trading activity in 2013 so far.

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