Why Chelsea Therapeutics Shares More Than Doubled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of clinical-stage pharmaceutical company Chelsea Therapeutics (NASDAQ: CHTP  ) skyrocketed as much as 151% shortly after the opening bell following a positive recommendation from the Food and Drug Administration's advisory panel on the symptomatic neurogenic orthostatic hypotension drug, Northera.

So what: Chelsea Therapeutics said in a press release after the closing bell yesterday that the FDA panel voted 16-1 in favor of recommending Northera for approval. This news comes in stark contrast to fears last Friday about the panel's decision, based on briefing documents that alluded to a complex decision based on Northera's significant short-term effectiveness and iffy long-term effectiveness. Although the FDA isn't required to follow the panel's advice, it does more often than not, giving Northera a better than 50-50 chance at approval at this point.

Now what: I'd be lying if I said that the overwhelming support for Northera didn't shock the heck out of me, especially after all the questions surrounding the longer-term efficacy of the drug designed to abate dizziness in Parkinson's disease patients. The real test here will be whether the FDA will approve Northera given its checkered past and, if approved, if physicians will opt for the medication considering that it only appears to offer a statistically significant, but short-term benefit. Don't get me wrong; this is clearly a win for Chelsea Therapeutics, but I'd also suggest keeping your optimism in check and considering the shaky history and data behind Northera before bidding shares even higher.

Can this top stock leave Chelsea Therapeutics in its dust in 2014?
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2796648, ~/Articles/ArticleHandler.aspx, 10/31/2014 2:21:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement