The 91.74% gain in Chelsea Therapeutics International Ltd (Nasdaq: CHTP) stock yesterday (Wednesday) is the latest biotech to see a massive one-day surge. More development-stage biotechs are nearing approval for new treatments - and doubling or tripling their share prices.
Shares of 10-year-old Charlotte, N.C.-based Chelsea Therapeutics surged as much as 120% Wednesday after an independent panel found CHTP's drug to treat a rare form of low blood pressure effective enough to warrant regulatory approval.CHELSEA THERAPEUTIC NASDAQ: CHTP Jan 16 10:56 AM loading chart... Price: 4.47 | Ch: 0.06 (1.3%)
Tuesday's decision from the group, an advisory panel to the U.S. Food and Drug Administration, was nearly unanimous. Sixteen cast votes in favor of the drug; just one voted against it.
While the FDA isn't bound by the advisory group's advice, the government agency does take its guidance into consideration and frequently follows it.
The FDA is scheduled to make a decision on Chelsea's drug, Northera, on Feb. 14.Chelsea's (CHTP) Northera Drug
Northera is used to treat patients with neurogenic orthostatic hypotension (nOH), a rare, lingering type of low blood pressure. nOH typically occurs upon standing and is commonly experienced by those with certain neurological disorders, including Parkinson's disease. Nearly 300,000 patients presently suffer from nOH in the U.S. and EU combined.
Also known as droxidopa, Northera works like a chemical messenger. It sends signals to blood vessels and the heart to regulate blood pressure and prevent things such as light-headedness, dizziness, blurred vision, fatigue, poor concentration, and fainting upon standing.
"Chelsea is committed to improving the lives of patients with nOH, a debilitating disorder which often severely limits a person's ability to perform routine daily activities," Joseph G. Oliveto, Interim Chelsea chief executive officer, said in a statement.
One cardiologist who voted in Northera's favor told Reuters he did so "based on the compelling evidence of suffering and the absence of viable alternatives." But, the doctor added FDA approval should be contingent on additional studies.
Meanwhile, patient and patient advocates who testified before the panel made compelling statements about the positive impact Northera has had on their lives.Strong Support for Chelsea (CHPT)
This is a second time Northera faces the FDA...
Chelsea first filed for approval of Northera in 2011. In March 2012, the FDA rejected Northera's application, requesting more efficacy data about the medicine.
Following additional studies that addressed the FDA's concerns, and more than a year of delays in efforts to bring its first and lead candidate to market, Chelsea resubmitted its application in September.
In a research note Wednesday, Wedbush analysts said they think the "overwhelming positive vote this time may pressure the FDA to approve Northera." The investment firm gives Northera a 65% chance of getting the FDA nod next month.
In a note of caution, an advisory panel also recommended approval in February 2012. That endorsement was prior to the FDA's first rejection. Shares sorely suffered following the rejection, slumping more than 36%.
This time around, Chelsea has a more solid, albeit independent, backing.
In addition to Northera, Chelsea's pipeline of potential therapies include treatments for rheumatoid arthritis that may also prove appropriate in the treatment of a number of other autoimmune disorders.
CHTP stock traded as high as $5.78 Wednesday before closing at $4.41. CHTP is up 3% to $4.55 in Thursday morning trading.
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