|Chelsea Therapeutics taps into shelf, raising $35 million|
|Wednesday, 29 September 2010 07:43|
Chelsea Therapeutics International Ltd (NASDAQ:CHTP) announced after the market close on Tuesday its intention to offer $35 million in shares of its common stock in a registered public offering pursuant to its existing shelf registration statement. How far will the stock go before a bounce?
Just last week, CHTP said a late-stage study of its hypotension drug met the main goal of improving the symptoms related to low blood pressure compared to a dummy drug, sending its shares up as much as 38 percent.The study, which was conducted under a special protocol assessment granted by U.S. health regulators, also showed that the drug Northera, also called droxidopa, was both safe and well tolerated at all dose levels.
Days later, the company initiated enrollment in a multinational, 12-week, double-blind Phase II trial designed to compare the efficacy and tolerability of CH-4051 against methotrexate (MTX) in 250 patients with rheumatoid arthritis (RA) who are experiencing an inadequate response to the MTX treatment. CH-4051 is an orally available, non-metabolized antifolate with potent anti-inflammatory properties engineered to provide enhanced clinical benefits to patients without associated liver toxicities or other side effects that often limit the use of chronic MTX therapy. Based on the available data, the company believes that oral treatment with CH-4051 has the potential to significantly reduce joint pain and swelling as well as have disease-modifying effects in patients who have not responded well or have difficulty tolerating methotrexate and who might otherwise be moved onto more costly, biological injectable monoclonal therapies.
The Company also intends to grant to the underwriters of the offering an option to purchase additional shares of common stock to cover over-allotments, if any. Deutsche Bank Securities Inc. is acting as sole book-running manager for the offering. Needham & Company, LLC is acting as a co-manager.
A glance through various message boards showed that reaction to the offeing among investors appeared mixed after the market closed, but the market's true feelings will be reflected during today's trading action. Shares closed yesterday at $5.54, but pre-market trading had shares down -$0.29 (-5.23%) to $5.25.
After the market digests the news and the price settles, you could see a nice bounce back up given the positive technical and fundamental sentiment about the company.
Disclosure: No Positions