A few months after Chelsea Therapeutics International Ltd. got a rare FDA blessing to modify the endpoints to an ongoing Phase III trial, the Charlotte, N.C.-based firm pulled in $18.2 million in a registered direct offering led by Venrock.
Part of that funding will help finish up Study 301, a pivotal trial testing Northera (droxidopa) in neurogenic orthostatic hypotension (NOH), a condition characterized by unusually low drops in blood pressure as patients go from sitting or lying to standing.
That study had been under way last year when Chelsea reported that a higher-than-expected placebo response spoiled data from its first Phase III trial, Study 302, dropping its shares 61 percent and prompting the firm to rethink its trial design for droxidopa, a synthetic precursor of norepinephrine. (See BioWorld Today, Sept. 25, 2009.)
Chelsea maintained that the drug showed clear clinical benefit, even though it fell short of statistical significance. And, given the fact that droxidopa has been marketed in Japan since 1989, the company believed a reworked trial design might yield a better outcome. But that meant convincing the FDA to allow a change in protocol midway through a pivotal trial.
"We had a couple of things working to our advantage," Chelsea spokeswoman Kathryn McNeil told BioWorld Today. For one, NOH is still a rare disease, so "there's a much narrower body of clinical research" at hand to help design studies, especially when it comes to demonstrating symptomatic improvement in NOH patients.
The only available therapy in NOH is midodrine, which gained approval using blood pressure measurement as the primary endpoint, but the drug's postmarketing requirement was to show in clinical testing an improvement in NOH symptoms and "nobody's been able to do that," McNeil said.
Midodrine, which has since gone generic, also is limited by its side-effect profile and carries a black-box warning.
But data from droxidopa's earlier Phase III study might have been the most persuading factor for Chelsea.
"When we presented data to the FDA, they saw there was such broad evidence of efficacy" and agreed that the original endpoint was not sufficient to capture the symptomatic benefit, McNeil said.
The failed Study 302 had used a single question from the orthostatic hypotension symptom assessment (OHSA) score - dizziness - to measure droxidopa's effect. The amended protocol for Study 301 employs a more comprehensive measurement, defined as the mean change in the Orthostatic Hypotension Questionnaire composite score between the droxidopa and placebo arms.
The FDA also agreed to let Chelsea enroll an additional 24 patients, increasing the power of the trial by greater than 80 percent. Enrollment is expected to be completed in the second quarter, with top-line data coming in the third quarter.
Two successful trials likely will be needed for a new drug application, so Chelsea plans to start a confirmatory study next quarter. That trial, designated Study 306, will be a little different, enrolling specifically Parkinson's patients with NOH and will test droxidopa treatment over a slightly longer duration, McNeil said.
Data from Study 306 are anticipated in the second quarter of 2011.
The company, which reported a net loss of $7.1 million, or 22 cents per share, for the third quarter of 2009, expected to end the year with about $20 million in cash, enough to fund operations into the third quarter of 2010. The latest financing should get Chelsea into 2011.
Terms of the latest financing called for Chelsea to offer 6.7 million shares priced at $2.72 apiece, plus warrants for about 2.3 million shares.
Net proceeds totaled about $16.8 million. In addition to its droxidopa program, the company plans to use funds for a Phase II trial of antifolate compound CH-4501 in rheumatoid arthritis and for general corporate purposes.
Leerink Swann served as lead placement agent, with Needham & Co. LLC acting as co-placement agent.
Shares of Chelsea (NASDAQ:CHTP) closed at $2.94 Monday, up 6 cents.
In other financings news:
? Genta Inc., of Berkeley Heights, N.J., is raising $25 million in gross proceeds in a private placement of convertible notes, expected to close on or about March 10. Funds will be used to ensure adequate follow-up to determine overall survival results from the company's recently completed Phase III trial of Genasense (oblimersen sodium) plus chemotherapy in first-line advanced melanoma patients and to accelerate development of other pipeline products.
? Lexicon Pharmaceuticals Inc., of The Woodlands, Texas, is planning to raise $95 million in a stock sale, though it has not yet announced the number of shares to be offered or share price. Lexicon also intends to grant underwriters a $14.25 million overallotment option. Based on a March 5 closing stock price of $1.78, the company anticipates net proceeds of about $89.4 million - or $153.6 million if shareholder Invus exercises its pro rata right and underwriters exercise overallotment options in full. The money will be used to fund R&D work. Morgan Stanley & Co. Inc. and J.P. Morgan Securities Inc. will be acting as joint bookrunners, with Cowen and Co. LLC and Thomas Weisel Partners LLC acting as co-managers. Shares of Lexicon (NASDAQ:LXRX) closed at $1.59 Monday, down 19 cents.
? MabCure Inc., of Hasselt, Belgium, completed a $1 million private placement, comprising a $500,000 cash investment and the conversion of a $500,000 bridge loan that was made in September 2009. Under the terms, MabCure will issue 2 million units - each consisting of one share of common stock, one two-year nontransferable common stock purchase warrant exercisable at a price of 60 cents per share and one two-year nontransferable common stock purchase warrant exercisable at a price of 70 cents per share. Each unit is priced at 50 cents. MabCure will use the funds to pursue clinical trials in Europe and Asia to test its anti-ovarian MAbs in diagnosing ovarian cancer in the blood and urine of patients suspected of having the disease.
? Omthera Pharmaceuticals Inc., of New York, closed a $6.5 million Series A round led by Sofinnova Partners. Funds will be used to advance Epanova, an omega 3 fatty acid containing a formulation of eicosapentaenoic acid and docosahexaenoic acid, which has shown promising results in lowering triglycerides in early clinical trials. Omthera plans to start comparative bioavailability trials in the middle of this year, with Phase III testing expected to start in patients with severe hypertriglyceridemia in late 2010 or early 2011.
? Response Genetics Inc., of Los Angeles, entered a purchase agreement with new and existing investors and certain funds managed by Lansdowne Partners LP to raise about $4 million in a private placement of about 3 million shares priced at $1.31 each. The firm develops molecular diagnostic tests for cancer. Shares of Response Genetics (NASDAQ:RGDX) closed Monday at $1.22, up 2 cents.
? YM BioSciences Inc., of Mississauga, Ontario, increased its recent registered direct offering from $15 million to about $17.5 million. The company is offering units - each consisting of one common share and one half of one common share - priced at $1.20 per unit. Funds will be used to support drug development activities and for general corporate purposes. Roth Capital Partners LLC served as lead placement agent, with Bloom Burton & Co. Inc., Griffin Securities Inc. and Haywood Securities Inc. acting as co-placement agents. Shares of YM (AMEX:YMI) closed at $1.15, up 1 cent.
