Chelsea Therapeutics International, Ltd. (CHTP) said Thursday that all corporate officers and directors of the company will take a voluntary 25% reduction in salary and fees, respectively, effective July 1, until the results of the company's ongoing Phase III trial of Northera are available, currently estimated to be during the first quarter of 2013.
In addition to the officers and directors, at least 35% of Chelsea's non-executive staff across select functional areas that do not critically support a timely NDA filing and approval for Northera are expected to temporarily transition to part-time status with a corresponding decrease in salary, the company said.
Chelsea said it plans to further reduce compensation expense by suspending performance bonuses for all employees, including officers, for 2012 and until Northera is granted marketing approval in the U.S.
The savings, combined with broader cost containment initiatives, including the planned transition of patients from safety study 304 to an alternate access program, are expected to generate savings of over $6 million in the next twelve months.
Chelsea said the savings would allow it to implement additional 306B enrollment initiatives while still achieving a net reduction of $4 million in expenses that would extend the company's cash runway into the third quarter of 2013.
"Everyone at Chelsea shares in the disappointment that Northera was not approved by the FDA earlier this year," commented Dr. Simon Pedder, president and CEO of Chelsea Therapeutics. "We continue to anticipate results of a modified Study 306B to be available during the first quarter of 2013 allowing for a planned resubmission of our Northera NDA by the end of that quarter and potential FDA action date late in the third quarter of next year."
The company received a complete response letter from FDA in March 2012 indicating that its NDA for Northera was not ready for approval in its current form. The FDA has requested that the company submit data from an additional positive study to support efficacy, and demonstrate durability of effect over a 2- to 3-month period.
The company has been seeking approval of Northera for the treatment of symptomatic neurogenic orthostatic hypotension in patients with primary autonomic failure, dopamine beta hydroxylase deficiency and non-diabetic autonomic neuropathy.
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