Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Investors Faint From FDA Rejection

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Investors' blood pressure might be on the rise today, but it isn't because they're taking Chelsea Therapeutics' (Nasdaq: CHTP  ) Northera. Yesterday, the Food and Drug Administration rejected the drug for treating neurogenic orthostatic hypotension, a disease characterized by lightheadedness and even fainting when standing because of a sudden decrease in blood pressure.

Wonder how many investors fainted when they woke up to find their shares are down 27%?

As I said in my preview of the FDA decision, the roadmap to the Northera FDA decision paralleled InterMune's (Nasdaq: ITMN  ) Esbriet; the FDA panel seemed to shrug off issues with the clinical trials because they were orphan drugs, giving both a positive recommendation. But the agency ignored the advice and turned down the drugs.

Where the roadmaps diverge is the post-rejection requirements. InterMune had to run another long trial with a one-year efficacy endpoint. And the trial took a while to get started as InterMune waited for a decision in Europe. If the drug had been denied there, the trial needed to be designed to satisfy regulatory authorities on both sides of the pond.

For Northera, on the other hand, the FDA just wants data on the durability of Northera's efficacy over two to three months. Chelsea is currently running a trial with a 10-week efficacy endpoint, which falls into that two- to three-month requirement. The company isn't sure whether that trial will satisfy the FDA, though; a new trial could be required.

In addition to the efficacy requirement, the FDA said a black-box warning would probably be required if Northera is approved. Considering the limited options for patients with NOH -- Shire Pharmaceuticals' (Nasdaq: SHPGY  ) ProAmatine doesn't appear to work that well -- I don't see this as a major stumbling block. And the FDA said it might be able to get the warning removed with data that showed a lack of severe hypertension in patients taking Northera.

Today's knockdown certainly seems like a buying opportunity for Chlesea. There's some risk that a new trial won't work -- especially given the complexity with finding the right clinical endpoint -- but based on data from the previous trial and its use in Japan, it seems pretty clear Northera works. Just keep in mind that, like MAP Pharmaceuticals (Nasdaq: MAPP  ) , which saw its drug get rejected earlier this week, there's still plenty of time to get in before the next FDA decision.

While you're waiting, take a look at what Fool analysts believe is the next rule-breaking multibagger. Get the free report.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (4)

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.

Compare Brokers

Fool Disclosure

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: 1850948, ~/Articles/ArticleHandler.aspx, 10/23/2016 4:23:05 PM

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...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
CHTP.DL $0.00 Down +0.00 +0.00%
Chelsea Therapeuti… CAPS Rating: **
ITMN.DL $0.00 Down +0.00 +0.00%
InterMune CAPS Rating: **
MAPP.DL $0.00 Down +0.00 +0.00%
MAP Pharmaceutical… CAPS Rating: *
SHPG $184.40 Down -3.89 -2.07%
Shire CAPS Rating: ***