Chelsea Therapeutics International, Ltd. Q2 2010 Earnings Call Transcript

Chelsea Therapeutics International, Ltd. (CHTP)

Q2 2010 Earnings Call

July 27, 2010 4:30 PM EST

Executives

Kathryn McNeil – Director, IR

Simon Pedder – President and CEO

Nick Riehle – CFO

Art Hewitt – Chief Scientific Officer

Bill Schwieterman – Chief Medical Officer

Analysts

Andrew Vaino – Roth Capital Partners

Alan Carr – Needham & Company

Juan Sanchez – Ladenburg

Liana Moussatos – Wedbush Securities

Anoop Amin [ph] – Oppenheimer

George Danze [ph] – Morgan Stanley

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Chelsea Therapeutic second quarter 2010 earnings call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session with the instructions following at that time. (Operator Instructions). And as a reminder this conference call is being recorded.

And now your host for today’s conference, Kathryn McNeil. Please begin.

Kathryn McNeil

Thanks. Good afternoon and welcome to Chelsea’s second quarter 2010 conference call. We announced our second quarter results this afternoon just after the close of the US financial markets and our press release can be found on our website at www.chelseatherapeutics.com.

Joining me from Chelsea is Dr. Simon Pedder, our President and Chief Executive Officer; Nick Riehle, our Chief Financial Officer; Dr. Art Hewitt, Chief Scientific Officer; and Dr. Bill Schwieterman, Chief Medical Officer.

Before I turn the call over to Dr. Pedder, let me note that some of the remarks you might hear today may contain forward-looking statements about the company’s performance. Actual future results might differ materially from those projected in these forward-looking statements.

Additional information concerning factors that could cause actual results to materially differ from those in these forward-looking statements is contained in our SEC filings and periodic reports under the Securities Exchange Act of 1934 as amended, copies of which are available on our website or maybe requested directly from the company.

With that said, I’ll now turn the call over to Dr. Pedder. Go ahead, Simon?

Simon Pedder

Thanks Kate, and good afternoon, everyone. We appreciate all of you joining today’s discussion. This has been a busy and productive year for Chelsea. And in the last few months, and in fact in the last few weeks, we have really begun to see significant progress across our multiple development programs.

We recently reported exciting news in our fibromyalgia program as the data monitoring committee indicated meaningful efficacy in this Phase II clinical trial and have recommended that multiple Droxidopa/Carbidopa combination arms continue to study completion.

Just this week, we submitted our response to the FDA’s questions on our CH-4051 Phase II trial in rheumatoid arthritis. And we are confident that with minor modifications, we will be able to evaluate CH-4051 as planned and with minimal delay.

Of course, our NORTHERA Phase III registration program and symptomatic neurogenic orthostatic hypotension or NOH continued to take center stage during the quarter as we reported statistically significant long-term efficacy data validating both the symptomatic improvements seeing with chronic NORTHERA treatment and validating the safe and consistent underlying improvements in blood pressure.

Finally, all of us are pretty excited to now be in the final countdown to our NOH Study 301 data. Having now randomized our final patient into Study 301, we were able to begin refining our estimates for the timing of top line data from the study and believe that we’re well positioned to have that data in mid-to-late September of this year.

I will now ask Nick to begin a review of the quarter by providing you with a brief summary of our financial results. And then, I will turn the call over to Art and Bill, who can provide some additional detail on the progress in each of our development programs. Finally, I will have the operator opening the call for any questions.

Nick?

Nick Riehle

Thanks Simon. For the quarter, we had a net loss of $9.9 million or $0.25 per share versus the net loss of $5.3 million or $0.18 per share for the comparable period in 2009. However, you may recall that during the second quarter last year, we recognized a one-time gain of approximately $4.1 million related to the recovery of previously reported impairments associated with our holdings in auction rate securities. Excluding this gain, last year’s second quarter net loss was $9.3 million or $0.31 per share.

For the six months ended June 30 th, 2010 we had a net loss of $16.2 million or $0.43 per share compared to a net loss of $12.7 million or $0.42 per share for the prior year period. Again, excluding the ARS gain, our net loss for the first half of 2009 was $17.1 million or $0.57 per share.

Research and development expenses for the second quarter of 2010 were $8.4 million compared to $8.1 million for the same period in 2009. For the six months ended June 30 th, 2010 R&D expenses were $13.3 million versus $14.6 million for the comparable prior year period.

While R&D expenses for the quarter were approximately flat year-over-year, R&D expenses for the first half of 2009 were somewhat lower, reflecting an overall decrease in the number of active clinical trials and a temporary reduction in the cost related to our NORTHERA registration program during the first quarter of 2010 with Study 302 that hasn’t been completed, changes for Study 301 being implemented, and preparations for Study 306 just beginning.

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