NEW YORK, April 5, 2012 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Chelsea Therapeutics International, Ltd. ("Chelsea" or the "Company") (Nasdaq: CHTP).
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) Chelsea's Northera (droxidopa) product, an orally-active synthetic precursor of norepinephrine being developed for the treatment of symptomatic neurogenic orthostatic hypotension, would not receive approval from the U.S. Food and Drug Administration ("FDA"); and (2) the Company's series of statements regarding the safety and efficacy of the product, as well as reportedly positive results from Northera's clinical trials, were materially false and misleading.
On February 13, 2012, Chelsea disclosed that the FDA had raised questions regarding the size and duration of its clinical trials for Northera. In addition, FDA investigators noted three deaths as possibly related to the trial use of Northera. As a result, Chelsea shares declined by $1.88 per share or more than 37.5%, to close at $3.11 per share on February 13, 2012.
On February 21, 2012, the FDA published information ahead of a meeting by the Cardiovascular and Renal Drugs Advisory Committee of the FDA scheduled for February 23, 2012. The FDA staff report recommended that Northera not be approved "[o]n the basis of the safety concerns compounded by absence of evidence of durability of effect." The FDA staff report concluded that Northera was not approvable as the "durability of effect of droxidopa has not been demonstrated" and "the safety data base was small considering the worrisome safety signals that arose during the open-label phase of the trials which included deaths, strokes, myocardial infarction, progression of underlying disease and hypertensive crisis." As a result of this revelation, Chelsea shares fell an additional $0.71 per share or 21%, to close at $2.64 per share on February 21, 2012.
On March 28, 2012, after the market closed, Chelsea disclosed that it had received a complete response letter from the FDA whereby it rejected the Company's New Drug Application for Northera. Furthermore, the FDA requested that the Company "submit data from an additional positive study to support efficacy demonstrated in Study 301 along with the recommendation that such a study be designed to demonstrate durability of effect over a 2- to 3-month period." As a result of this news, Chelsea shares declined by $1.051 per share or more than 28%, to close at $2.62 per share on March 29, 2012.
If you purchased Chelsea securities between November 3, 2008 and March 28, 2012 and would like to discuss your legal rights, visit www.faruqilaw.com/CHTP. You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to [email protected] or [email protected]. Faruqi & Faruqi, LLP also encourages anyone with information regarding Chelsea's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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