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Chelsea Therapeutics International, Ltd. (NASDAQ:CHTP)

Q2 2008 Earnings Call Transcript

August 6, 2008 11:00 am ET

Executives

Kate McNeill – IR

Simon Pedder – President and CEO

Arthur Hewitt – VP, Drug Development

Nick Riehle – VP, Administration and CFO

Analysts

Brian Abrahams – Oppenheimer & Company

Daniel Mallin – WBB Securities

Andrew Vainos – Roth Capital

Jonathan Gertler – Leerink Swann

Operator

Good day and welcome everyone to the Chelsea Therapeutics International second quarter 2008 financial results conference call. Today’s call is being recorded and at this time I’d like to turn the program over to Kate McNeill. Please go ahead ma’am.

Kate McNeill

Thank you. Good morning and welcome to Chelsea Therapeutics second quarter conference call. Joining me from Chelsea Therapeutics is Dr. Simon Pedder, President and Chief Executive Officer; Nick Riehle, Chief Financial Officer and Dr. Arthur Hewitt Vice President of Drug Development.

Before we begin, I’d like to take a moment to remind everyone that during the conference call members of Chelsea management team will make certain forward-looking statements regarding the company’s future plans and anticipated outcome that involve risks and uncertainties that made cause the actual result or outcomes to be materially different from those anticipated and discussed on this conference call.

Forward-looking statements on this call are made pursuant to the Safe Harbor Provisions of the Federal Securities Laws. Information contained in the forward-looking statements is based on our current expectation is subject to change and actual results may differ materially from these forward-looking statements. Chelsea does not undertake to update such statements to reflect any changes, events or circumstances that may materially effect the company’s expectations after the date of this conference call.

Factors that could affect actual events or results to differ include risks associated with the company’s ability to attract and retain partners for technologies, protect its intellectual property, raise additional capital, conduct successful clinical trials, obtain regulatory approvals and gain acceptance from the marketplace for its products; as well as reliance on collaborative partners, a limited number of drug candidates and management, including Dr. Pedder.

These and additional risks are discussed in Chelsea’s filings with the SEC and are available on company’s website. We encourage you to review them carefully. With that said, I’d now like to turn the call over the Dr. Simon Pedder. Go ahead Simon.

Simon Pedder

Thanks Kate. Good morning and thank all of you for participating on today’s call. As usual I’ll ask Nick to get us started this morning with a brief discussion on our quarterly financials. Then following his review I’ll go into some detail on our operating activities during the second quarter and provide you with an update on our ongoing plans. Following our prepared remarks we will open the call for Q-&-A, Nick.

Nick Riehle

Thanks Simon and good morning everyone. For the second quarter 2008 we had a net loss of $7.3 million or $0.24 per share, compared to a net loss of $3.2 million or $0.14 per share for the comparable period in 2007. Our net loss for the six months ended June 30, 2008 was $16 million or $0.53 per share, compared to a net loss of $7 million or $0.33 per share for the prior year period.

The net loss for the first six months of 2008 includes the recognition of an impairment charge at approximately $1.6 million that we reported in the first quarter, you will recall that this charge was related to student loan backed auction rate securities with a par value of $26.3 million. Excluding this impairment Chelsea’s net loss on a non-GAAP basis for the six months ended June 30, 2008 was $14.4 million or $0.48 per share.

Research and development expenses for the second quarter 2008 were $6.4 million, compared to $2.2 million for the same period in 2007. For the six months ended June 30, 2008 research and development expenses were $12.9 million versus $5.3 million for the comparable prior-year period. As this indicates, over the last several quarter our higher net loss reflect increases in R&D associate with our expanded portfolio product candidates in particular the impact of our droxidopa development programs and the overall heightened level of clinical activity.

Selling, general and administrative expenses were $1.4 million for the three months ended June 30, 2008 compared to $1.3 million in the same period in 2007. For the six months ended June 30, selling, general and administrative expenses increased to $2.7 million from $2.2 million for the comparable period in 2007. We ended the quarter with $50.3 million in cash in short-term investments which consist of $25.6 million in cash and cash equivalents and $24.7 million in short-term investments which is net of the auction rate impairment.

This compares to $62.7 million in cash in short-term investments consisting of $34.1 million in cash and cash equivalents and $28.6 million in short-term investments as of December 31. While we have not seen emergence of a fully liquid, public secondary market for auction rate securities we have seen a significant number of refinancing.

Although to this point the student loan backed securities have lagged other auction rate securities in this respect, there has been a number of such redemptions and as the enormous backlog of auction rate security, refinancing are steadily addressed there is some anticipation that this will improve in the coming month.

Finally there have been a number of highly publicized discussions coming from the federal government about the need to resolve this issue and these coupled with the high profile legal actions initiated by federal of the states are creating further pressured to restore liquidity to this market.

Not withstanding our belief that these securities will regain liquidity as per near face value within the next several quarters. We continue to investigate alternatives for selling or leveraging our auction rate securities in order to ensure that this issue does not disrupt our clinical programs. We remain confident that we have the capital resources to fund our planned clinical activities through significant inflection points in our droxidopa programs including phase II in IDH and our pivotal phase III program in neurogenic orthostatic hypotension, as well as in our phase II for concept trial for CH-1504 in rheumatoid arthritis.

Based on current development plans and the anticipated timing of clinical activity, we continue to anticipate full year spending between $30 million and $35 million in 2008. As a result we anticipate ending the year with at least $30 million in cash in short-term investment. These projections reflect in the current impairment against the company’s investment in auction rate securities, Simon.

Simon Pedder

Thank you, Nick. Before I get into the details related towards our clinical activities, I would like to take a minute to welcome some new additions to the Chelsea team. Some of you have already had the opportunity to meet with Joe Oliveto a former colleague from the Texas development team at Rosh who recently joined Chelsea in the newly created position of Vice President of Operations.

In addition to Joe, we have added some additional depth to our regulatory and clinical teams with some key appointments in those areas, as well as bring the total number of employees to 16. Those of you who have followed us from the early days know that we have been judicious in the expansion of our management team and will appreciate that this growth reflects the momentum that have been building here at Chelsea as the rate of our ongoing clinical activity continues to increase and we get further and further along in each of our development programs.

Our droxidopa development program of course has been our support front of this activity. As we initiated trials in two of the approved Japanese indications neurogenic orthostatic hypotension and intradialytic hypotension as well as begin to move ahead with some of the new and larger potential indications such as fibromyalgia. As you know our pivotal program in neurogenic orthostatic hypotension is a complex and sophisticated global pivotal program consisting of two individual phase III trials each involving approximately 50 centers for the recruitment of a 118 patients.

The first of these trials study 302 got underway earlier this year and getting this trial fully up and actively enrolling patients have been our primary focus over the past several months.

On our last call I reviewed with you the full scope and complexity of this study and indicated that we have undertaken several strategic initiatives designed to expedite the process by which the study centers are brought online. At that time we anticipated that these efforts would results in the completion of center activation by mid-July.

While we have not yet met that objective, I’m pleased to report that we have seen a solid return on these efforts. During the second quarter we were able to double the number of sites in study 302 and now anticipate that the remaining sites including those in the United Kingdom, Australia, New Zealand and Poland are well position to be fully activated in the current quarter.

As the process of initiating sites have progressed we have intern begun to look more closely at additional measures including patient enrollment initiatives, site administration and protocol adjustments that could favorably impact the efficiency in which the trials conducted.

Those are large number of centers involved in each of our pivotal studies will be a critical success factor in achieving full patient enrollment. There are numerous additional measures that we believe will further support our enrollment goals. Among these initiatives will be an extensive and proactive outreach campaign targeting both physicians and patient support groups to broaden awareness of the trial and facilitate referrals within the medical community. Some of these efforts are just beginning to get underway in earnest and we look forward to the impact of their contribution in the coming months.

In addition to our outreach program, we have been closely monitoring the open label titration phase and enrollment for those centers which are actively bringing patients into the program. In doing so, two clear observations emerged, the first thing that we see today; the results from the open label titration phase have been very encouraging and the number of patients classified as responders i.e. those patients showing both the symptomatic as well as the blood pressure improvement have been strong and in keeping with our expectation regarding the drugs activity.

The second thing that we have seen is that the blood pressure criteria that must be met at the randomization visit, appears to be impacting the total number of patients progressing to full enrollment. Just to be clear, the blood pressure criteria in question is unrelated to the blood pressure improvement requires during the titration phase to be consider a responder and eligible for trail.

Rather in addition to the improvement in blood pressure demonstrated in tandem two symptomatic improvements during the titration phase, the current protocol requires another qualifying blood pressure to be taken after randomization visit. So, following the titration period and following the one week period of active treatment, but prior to the randomization in the blinded study, each patient’s blood pressure is measured and compared to their respective phase line blood pressure measurements established at the beginning of the titration phase.

What we have seen is that despite reports of continued significant symptomatic response. Some patients have been disqualified from the study for failing these final entry criteria. In reviewing the data with our scientific advisory board, there has been broad consensus that given the highly variable nature of blood pressure measurement overtime, which can be impacted by diet, physical activity, temperature, time of the day etc. It is difficult to establish or maintain a correlation over a possible three week period.

Further, our advisory board in accessing the field agreement that this specific comparison of blood pressure at randomization to the blood pressure at the initial dose titration should not impact inclusion and exclusion in the blinded study, as a result we are amending the protocol for study 302 to remove this criteria as we believe it will substantial increase a number of patients that are successfully enrolled.

So far to-date, we find the open label data to be highly compelling and are currently working with our investigators to prepare a presentation of data from this open label phase of the study at this year’s American Autonomic Society meeting in October.

We are not however, prepared to discuss specifics at this juncture and will caution anyone to be weary of extrapolating from this relatively small population. Given that we have not yet completed site activation, it is still difficult to say with any degree of certainty the precise impact, the initial delay in site activation will have on our target to our completion date.

Further, at this stage it is too early to predict with accuracy any potential favorable impact that may result from our protocol changes and outreach programs. However, we feel it is prudent at this juncture to adjust our guidance to reflect the circumstances. With these considerations in mind, we are now planning to complete study 302 in parallel with our second pivotal trial study 301 and believe data will be available for both studies in the second quarter of 2009.

Before moving onto our other programs, I would also like to touch briefly on the status of Study 301. We currently have four U.S. sites actively lining our potential patients in anticipation of coming online in the next few weeks and EU sites will be coming onboard by the end of the year. Compared to study 302, study 301 it’s a bit more straightforward as it does not require a second blood pressure measurement at randomization nor an extensive collection of pharmacokinetic data that can differ patients from enrolling into the study.

Further with the exception of the protocol amendment, which is not applicable for the design of study 301, each of the initiatives we are implementing for the study 302 are expected to benefit study 301, allowing for the completions of both trials in the first half of 2009. I am very proud of their hard work and meticulous oversight and close attention to detail that everybody at Chelsea has put into this program, and I believe we are taking all the necessary steps to effectively manage both pivotal programs and that we will ultimately be rewarded by a favorable outcome in both of these studies.

As stated to you before, we are willing to change the program milestones, but we’re not willing to change the risks profile for this pivotal Phase III program. Now, looking next at our ongoing Phase II trial of droxidopa in and intradialytic hypotension, I’m happy to report this trial is on track and continues to progress smoothly. Working with the leader on the study has proven to be a great asset during the startup phase with this trial and we are working with each of our investigator, site administrators and our CRO to reach our target enrolment to our 75 patients.

Based on the progress we have seen to-date, we continue to expect complete treatment in this study and report our findings in the fourth quarter of this year. Given the history of the success with studies conducted by Dainippon Sumitomo in this indication, we are optimistic that the upcoming results in this trial will be very favorable and provide us with the second low risk market opportunity for droxidopa. Of course in addition to pursuing the indications for droxidopa has already been approved for in Japan, it has been long since our plan to expand the potential applications for the compound into new indications for which norepinephrine deficiency is believed to play a role.

Just a few weeks ago, we took our first major step in this direction by securing approval from the British Health Authority to begin a Phase II trial of droxidopa in fibromyalgia. Not only this is significant that it allows us to begin work in this exciting new indication, but it is particularly significant and that the MHRA rate gave its blessings for us to proceed in both the mono and combination program for the droxidopa.

So, over to carbidopa, carbidopa as the dopa decarboxylase inhibitor that does not cross the blood-brain barrier, carbidopa is expected to limit the peripheral metabolism of droxidopa into norepinephrine prior to a crossing in the blood-brain barrier, thus promoting a greater central effect in those patients receiving the combination therapy. In addition to promoting the central effects of droxidopa the addition of carbidopa may allow longer dosages of droxidopa to be used thus further reducing the risk of any potential side effects.

In this study, we will be evaluating multiple dosages of droxidopa alone and in combination with carbidopa in a placebo-controlled study. Patients in this study will be treated over nine week period and the primary endpoint will be the average reduction and pain as measured by the Short Form McGill Pain Questionnaire. We are very excited to begin exploring the potential benefits with droxidopa in combination and are particularly excited to be doing so in this indication with Dr. Ernest Choy of King's College in London truly one in the pre-eminent thought leaders in the field.

Following the completion of the central IRV review, we look forward to initiating the trial with Dr. Choy in the next month or so. Given the competition for patients in this high profile indication and comparatively limited number of sites, to which we plan to initiate study. We expect this 120 patient trial to continue well into 2010. Though, this trial marked a major milestone for Chelsea as we venture beyond droxidopa’s existing Japanese label, we believe it will be just the first of several new potential indications of which droxidopa could provide significant therapeutic benefit, and it is clear we are not alone in our belief as they continues to be a high level of interest from investigators interested in conducting investigator sponsor trial is a broad range of indications.

A number of these appear quite compelling and we look forward to continuing our discussion to determine how best to facilitate and extra moral development program for the droxidopa going forward. Finally, after having recently provided an update in our Phase II trial of CH-1504 in Rheumatoid Arthritis I would just quickly touch on the progress made in our antifolate program prior to opening your calls for questions.

As we announced for last month we have reached and at this point now exceeded 75% enrollment in this trial. The rate of recruitment and enrollment in this study has continued to exceed our expectations and I’m very happy to say we expect the trail to be fully enrolled with half the patients in this study have been completed drug treatment by late September. This will allow to the safety, data safety monitoring boards complete their plan review early in the fourth quarter and should lead to fall study results early in the first quarter of 2009.

In addition to the progress in our Phase II trial for CH-1504, we have continued our preclinical developments of CH-4051, our fast forward to CH-1504 in our antifolate library. We have now successfully completed our IND-enabling tox work for CH-4051 and gearing up to begin a Phase I study of this compound in the fourth quarter of this year. We have previously reported to you some of the early preclinical findings. This work has continued to yield compelling results and we look forward to sharing with you some of this additional data and our enthusiasm related to CH-4051 at this year’s ACR concepts.

Those of you that have supported us since beginning of the tremendous amount of work that is gone into this program over the past several years and I hope that you will share with us our eager anticipation of the results of our Phase II trial. CH-1504 and our entire library of metabolically inert antifolate represents unique and potential transformative treatment option not only for Rheumatoid Arthritis but for a broad spectrum of anti-inflammatory and autoimmune diseases.

Now with that all said, I think there maybe a few questions regarding the update that I have just provided. So, now I would like to open up the call for your questions.

Question-and-Answer Session

Operator

(Operator instructions). Our first question this morning comes from Brian Abrahams – Oppenheimer & Company.

Brian Abrahams – Oppenheimer & Company

Thanks for taking my question and congratulations on the continued progress of the antifolate program. Actually I had question on some of the protocol adjustments they discuss for 3302. How do those adjustments affect the patients who have already been in well than the study, are those patients still going through the study as planned?

Simon Pedder

Well, the protocol changes. We’re putting in as a protocol and then subsequently patients that are going through the trial presently have to abide by the protocol as it is. Subsequently, after we get the protocol amendments through IRB’s, then patients would not have to have the requirement of the final blood pressure measurement, but only rely on the blood pressure measurement when they’re seen everyday during the titration period and meeting the criteria.

Brian Abrahams – Oppenheimer & Company

And is there going to be sort of a lag time between when the protocol amendment gets through the IRB and when it’s able to be implemented by the site that are enrolling patients and I’m just wondering if there is going to be any kind of window period in which they won’t be able to enroll patients until the protocol goes through; is that something that happens in real time.

Simon Pedder

No, I mean patients are still obviously going through the process and entering the study, they going through the screening. What we’ve seen is a number of patients who go through the titration got a very positive response and for whatever reason, after they’ve been titrated, they’ve been seen everyday.

There is a one week period whereby they continue on drug and then don’t need our blood pressure requirement. Remember the blood pressure requirement we have is a 10 millimeter of mercury improvement upon standing compared to when they entered into the trial. So, we see it right up there.

What’s unfortunate is that, a patient who may have a symptomatic score of six and lets say they go down to the titration to a score of one and have a 15 millimeter improvement during that titration period, classified a responder go through the additional one week period on active drug, still reporting a symptomatic improvement of five units from a six to one, but they stand up at the last visit and they only a nine millimeter of mercury improvement. They under the present protocol would not be entered into the randomization. So, what we simply want to do is, get rid of that limitation, which by all the conversations that we’ve had with our Scientific Advisory is just an additional trial that’s not really going to change the outcome of the trial.

And let me part to you that our VP of clinical is here, so let me address these couple of questions to him.

Arthur Hewitt

I’d just like to add to that that any patient that currently continues to be a symptomatic responder at randomization, but that we do lose for that blood pressure issues are re-enrollable in the trial. So, we’re not losing them should they choose to re-enroll in the trial and go through the procedures again.

Simon Pedder

And the sites will be well aware of that, so as on first, the patient didn’t get in, they certainly can be reentered in the trial once the amendment has gone through. So, we don’t think that there is going to be any lag time at all really, any effect on the overall enrollment.

Brian Abrahams – Oppenheimer & Company

Great and then just one more follow-up question on that. Obviously, 301 is the study that you have the SPA for and that didn’t have these similar types of requirements, but is there any dialog that you may need to have with the FDA on these protocol amendments for 302 just given that it is part of the clinical program and I guess what’s the potential timing for that?

Simon Pedder

Yes, well 301 is really not changing because 301 did not have the requirement of the second blood pressure and subsequently they are not going to change at all; if anything 302 has an additional (inaudible) just eliminating.

Brian Abrahams – Oppenheimer & Company

But is there any dialog that you need to have with the FDA on study 302 just to make sure that I guess all the (inaudible) are cross sensitive, a pivotal program and make sure they are on board with the protocol change or is that something that because it wasn’t reclassified by them or wasn’t agreed upon the FDA for 301 anyway that’s not something that they would really…

Simon Pedder

Your second comment is basically correct.

Brian Abrahams – Oppenheimer & Company

Okay, thanks for taking my questions. I’ll hop back in the queue.

Simon Pedder

Thank you.

Operator

(Operator instructions). Our next question will come from Daniel Mallin with WBB Securities.

Daniel Mallin – WBB Securities

Yes. Hi guys, thank you for taking my question. I realized that the auction rate security issue has been a bit of a nuisance for you and you are not alone in dealing with the issues here. My question is, I noticed on your 10-Q that the interest income that you’re reporting appears to be quite lower than in previous quarters, the most recent quarter as well.

Could you tell me, if the auction rates that you currently hold are continuing to pay interest and if so is at money market rates because I’m hearing about these things from other companies; some companies they have been hurt by the fact that the student loan notes have actually stopped paying interest in some cases?

Simon Pedder

Well, that is true literally, but it required a little explanation. First of all most of ours do pay interest. As I’m sure you’re aware, these kind of investments if you are looking at money markets or anything else have declined significantly over the last six months just because of the general tightening; however, we have a few of these that are not paying interest and in particularly what you’re saying is a reduction in its interest.

Following the auction failures, several of these auction rate securities paid interest at like 18%. Essentially, it was an effort to attract bidders in the auction rate process, so we had a number of these that paid exceptional interest. Conceptually, this was a prepayment of interest and so they are permitted under the perspectives under which they operate to defray further interest payments until their 12 month average interest is at a level that’s contractually based on the treasuries or LIBOR rate as the case maybe.

So, what we’re seeing is just several of ours at zero as they work off this prepayment of interest, but more specifically you’re seeing a drop of the same ones from an 18% level several months ago.

Daniel Mallin – WBB Securities

And one last follow up. I recall from your last call, you had made some comments in the call that the evaluations that you arrived at differed somewhat from the values as reported by UBS. I’ve heard in some cases that UBS as marked their value down further. I’m curious if your current value has diverged or if you can share some insight us to how the valuation that you have on the books compares to that being reported by UBS?

Simon Pedder

Yes, actually at the end of the third quarter, UBS’s values had dipped slightly below ours and as of July 31, they are slightly higher than ours again. So, basically UBS, their values have moved around a lit bit. Ours at June 30 was a little higher, ours at July 31 is a little bit lower, but they are very similar still.

Daniel Mallin – WBB Securities

Okay, thanks. That’s all I have.

Operator

And we return now to Brian Abrahams with Oppenheimer & Company.

Brian Abrahams – Oppenheimer & Company

Hi, guys thanks for taking the follow-up. I had a couple of questions on 1504. Obviously, that seems to be moving along pretty rapidly. I was wondering if you could remind us what the DSMB is going to be looking for in terms of their efficacy or Fidelity criteria when they do their review this fall and then if you can also give us a sense of now that the program is progressing so well, where you’re thinking in terms of potential partnership strategy for that program? Thanks.

Simon Pedder

I’ll let Arth take the first question and I’ll take the second question.

Arthur Hewitt

Sure, the DSMB is provided with a fairly comprehensive set of tabular data which includes all of the ACR 20, 50, 70 response data by treatment group, as well as all AEs and the subcomponents of both of those. So, things like the ESR, CRP’s will intender for the ACR calculations as well as for the AEs by type and related this.

They’re mandate subsequently is to evaluating all of that data in its totality to make a determination as to whether any of the individual arms are to be stopped for utility or allowed to continue and also as to whether any of the individual treatment groups represent and unacceptable adverse event profile/risk to patients such that it ought to bed stopped for that reason as well.

Simon Pedder

So, Brian, I’ll answer the first, but do you have a follow-up with Arth before I address your second question.

Brian Abrahams – Oppenheimer & Company

No, that clarified that.

Simon Pedder

Okay, well we obviously continue to talk to potential partners, regarding 1504 and that really are library of antifolates. I think one of the things that has changed over the last several months has been the interesting preclinical data that’s come out on 4051 which obviously is backing up the whole kind of library, when we put into a CIA model and that’s formed relatively well and showed in fact that these compounds do work clearly as antifolates and antifolate activity in the standard animal models.

I think what changed things a little bit is the fact that with 4051 as a follow up molecule where you’re always trying to develop a better molecule than your lead molecule; one of the things that occurred with 4051 is that preclinically when we look at in vivo and in vitro data, it clearly is more potent, but when you have more potency you it costs you a little bit in the toxicity profile just because of the mechanistic activity of the drug and I think what surprised us and surprised other people is in fact that we don’t seem to pay any type of toxicity costs.

In fact the toxicity improvement with 4051 certainly makes us feel that we can go up the efficacy curve. So, what we’ve done with the target profile of these compounds has changed them slightly. So, for example on 1504 we always said that 1504 would be a drug as efficacious with methotrexate, but since the fact we don’t produce these toxicity metabolites such as the 7-hydroxy and the profligate to form then the increased final toxicity will have a better safety tolerability profile.

Now, with 4051 we think that’s a significant potential with the potency, but not having advanced toxicity to go up that potency profile and actually have them more efficacious drug. So, our target profile right now 4051, is in fact higher efficacy and better tolerability than methotrexate and so the data we’ve collected with 4051 still has brought renewed and continued interest with the new possible partners or existing people we’re will talking to you.

Brian Abrahams – Oppenheimer & Company

Thanks very much, that’s really helpful.

Operator

And we take our next question from Andrew Vainos with Roth Capital.

Andrew Vainos – Roth Capital

Hi, thanks for taking my call. Just a quick question; in pre-clinically have you guys determined the difference in KI between 4051 and 1504?

Simon Pedder

Yes, that’s the answer and I hate to steal our head of pre-clinical founder Jerry Rholes who will present that at ACR, but we have stated that we believe 4051 is a more appropriate compound than 1504.

Andrew Vainos – Roth Capital

Okay, but I mean (inaudible).

Simon Pedder

Of inhibition of dihydrofolate reductase, so the answer is yes.

Andrew Vainos – Roth Capital

Okay, thanks.

Simon Pedder

Thanks Andy.

Operator

We move now to Howard Liang with Leerink Swann.

Jonathan Gertler – Leerink Swann

Hello, this is Jonathan dialing in for Howard. I just had a quick couple of questions; first is could you remind me of some Japanese data were patients were on droxidopa for relatively a certain period of time and what the effect of blood pressure drop was after just some of the extended dosing periods and then also do you have any updates on the Midodrine Phase IV requirements then what’s going on in that’s phase? Thanks.

Simon Pedder

Well, as you can appreciate neurogenic orthostatic hypotension is a symptom of the disease where the disease is where the Parkinson’s and multiple system atrophy tends to progress overtime. So, what actually happens in some of the trials that were performed by Dainippon Sumitomo is that although there is a significant benefit with the blood pressure for patients on active that does decrease overtime.

That being said of course the patients on placebos tend to decrease two and decreases in the same parallel change in blood pressure. So that overtime although the blood pressure benefit does decrease in those getting active; in correlation with that the placebo patients continue to get worse and worse overtime. So, the difference between the blood pressures is still significant between the two groups.

With regards to the requirements that the ANDA holders and the NDA holders have for Midodrine, our understanding is still that the FDA is requiring them to provide data and a controlled clinical trial show a symptomatic benefit and that if the ANDA holders along with shyer either collectively or individually do not provide that data in due course the FDA will be forced to look over all possible actions including removing the drug from the market, but clearly that’s not something that we have any influence over or plan to get involved with any discussions on.

Jonathan Gertler – Leerink Swann

Okay, thank you very much.

Operator

And at this time we have no further questions on our question roster. I’d like to the turn the program back to our speakers for any additional or closing comments.

Simon Pedder

Well, no long-term additional comments, just to thank all of you for your interest and your continued support and I hope you have a great day.

Operator

Thank you everyone for your participation in today’s conference and you may disconnect at this time.

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Source: Chelsea Therapeutics International, Ltd. Q2 2008 Earnings Call Transcript

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