Chelsea Therapeutics: There Are Safer Rebound Plays

A comment from Noah regarding Chelsea Therapeutics International Ltd (CHTP).:

Hi VFC,

I was wondering if your thoughts have changed on CHTP since they were @ $7+.

Thanks,

Noah

VFC's Take: CHTP was trading for over six dollars when I first commented on the stock, and at that price I wasn't much of a fan.

Since that time, the company's lead drug Droxidopa failed to meet the endpoint of a Phase III trial designed to measure the drug's effectiveness in treating symptomatic neurogenic orthostatic hypotension (NOH). However, with an additional Droxidopa trial still ongoing and with the stock now trading for about $2.25, CHTP is being considered by some as a potential rebound play.

In my opinion, I still think that there are better - and safer - rebound plays out there than this one, although the possibilities are there for CHTP to eventually recover.

Chelsea has pending talks with the FDA where they may attempt to alter the trial design of the second ongoing trial, since it has been claimed that it was a poorly designed endpoint that caused Droxipa to fail the recently announced trial. That being said, the short to mid term success of this company depends on the FDA 'playing nice' with a company after a failed trial. That's something that doesn't happen too often and I'm not willing to risk my money on that proposition.

At the current time I'd enter into an investment in CHTP with the assumption that the ongoing trial will continue on unchanged, meaning that I'd be worried - as an investor - that the results of this trial could be met with the same results of the failed one. That's a little bit more risk than I'd like to take on, even while the stock is trading for just over $2.

By comparison, I like the prospects of TTNP.PK (although Titan has started to rise pretty significantly lately) and BDSI more than CHTP because both stocks are set to start raking in revenues on already approved drugs and are still trading at levels that I believe do not believe justify their market potential over the next few quarters.

So, I do see a possible upside for CHTP if things go right with the ongoing trial and/or the FDA allows the company some flexibility with the still ongoing trial, but realistically I think that a recovery to previously traded levels may be a couple of years off at this point.

Of course, this is just my opinion and keep in mind that I'm not a long time follower of this stock.

Disclosure: VFC has no position in CHTP and is long BDSI and TTNP.

Comments

[jimmy Turano:]

VFC-While your writing articles, and still haven't replied to my posts
regarding 'MRNA', I thought you would like to see my posting of opinion, that was selected and published today, by "MEDICAL NEWS ADMINISTRATION". SOMEONE THINKS IT IS NEWS WORTHY TO POST ON THEIR FRONT PAGE.
www.medicalnewstoday.c...
THOUGHT SOMEONE LIKE YOU WITH YOUR STATURE WOULD TACKLE A CHALLENGE WITH EASE, INSTEAD OF THE SAME OLD WEEKLY EASY ARTICLES YOU WRITE ABOUT.
VFC-GIVES AN IN DEPTH STUDY & OPINION ON 'MRNA'

Nov 11 07:22 AM