BioWorld Today Contributing Writer

After wowing investors with strong Phase III results for Northera (droxidopa), Chelsea Therapeutics International Ltd. is giving them a chance to buy into the action with a new public offering worth $32.8 million in net proceeds.

The Charlotte, N.C.-based company priced 7.14 million shares of common stock at $4.90 per share, granting underwriters a 30-day option to purchase approximately 1.07 million additional shares to cover any overallotments.

The company's stock (NASDAQ:CHTP) closed at $5.47 on Friday, a modest jump of 35 cents.

Northera is being developed for neurogenic orthostatic hypotension (NOH), a disorder that affects more than 100,000 people in the U.S. and about 200,000 in Europe. Chelsea "conservatively" projects sales of $300 million to $375 million annually, CEO Simon Pedder told BioWorld Today. "The purpose of the $35 million is to take us out to commercialization of the compound, which is going to be in the first quarter of 2012," Pedder said.

NOH is a condition in which a person experiences dizziness upon standing up – something most have experienced at one time or another.

Patients with Parkinson's disease, multiple systems atrophy, pure autonomic failure or similar conditions may feel that way every time they stand up, due to a sudden drop in blood pressure. According to Pedder, that is due to a lack of norepinephrine. "When we stand up, we get a release of norepinephrine," he explained. "These patients, they don't have enough norepinephrine. When they stand up, there is not enough blood getting to the brain."

Chelsea claims that Northera is metabolized into norepinephrine in the body, which provides relief of the orthostatic hypotension without raising blood pressure overall. In clinical trials, researchers documented improvements in the activities of daily living of patients with NOH that Pedder called "dramatic."

The Phase III trial also demonstrated a statistically significant improvement in symptoms and standing blood pressure. (See BioWorld Today, Sept. 21, 2010.)

The only comparable treatment for NOH is midodrine, a drug with a black-box warning for supine hypertension that according to Pedder has not shown symptomatic benefit. In February, Shire plc announced plans to withdraw its midodrine formulation, ProAmatine, from the market in response to criticism by the FDA of its postmarketing trials. In August the FDA proposed withdrawal of all midodrines from the market by Sept. 30, writing, "To date, neither the original manufacturer nor any generic manufacturer has demonstrated the drug's clinical benefit, for example, by showing that use of the drug improved a patient's ability to perform life activities." (See BioWorld Today, Aug. 18, 2010.)

Both Shire and the FDA have walked back from this position in response to protests from professional organizations, patients and physicians, and midodrine remains on the market and is available pending further studies of the drug's efficacy.

In a research note published Thursday, Wedbush Securities Inc. rated Chelsea Therapeutics stock to outperform, which means they expect the total return of the stock to outperform relative to the median total return of the analyst's coverage universe over six to 12 months, and adjusted its fair value from $10 to $8 due to dilution of the stock.

Wedbush predicts that the new public offering will extend Chelsea's cash runway into the third quarter of 2011, covering the release of topline data from Phase II trials of Northera plus carbidopa for attention deficit hyperactivity disorder, Phase III data from a trial of Northera in Parkinson's patients with NOH due in the second quarter, and possible interim data from a Phase II trial of CH-4051 for rheumatoid arthritis in the third quarter.

Chelsea's recent clinical trial success figures prominently in Wedbush's relatively sunny assessment. In their research note, Wedbush analysts Liana Moussatos and Richard Lau wrote, "We believe Droxidopa treatment of NOH has lower than average clinical risk due to its approval and long-term use in Japan for orthostatic hypotension. Furthermore, with positive results from the '301 Phase III study for Droxidopa, we believe the clinical risk has been significantly reduced."

In other financing news:

• Bionovo Inc., of Emeryville, Calif., is raising about $3 million in gross proceeds through a registered direct offering. The firm agreed to sell about 2.7 million shares priced at $1.10 apiece and will issue about 2 million warrants. Proceeds, expected to total $2.8 million, will be used for general corporate purposes, including clinical trials, R&D, general and administrative and manufacturing expenses. William Blair & Co. LLC is acting as exclusive placement agent. Shares of Bionovo (NASDAQ:BNVI) fell 56 cents, or 35 percent, to close Friday at $1.04.

• A placement of $14 million will help QRxPharma Ltd., of Sydney, Australia, to fund a Phase III labeling claim study for MoxDuo IR, an immediate-release dual-opioid pain therapy. The issue price will be 85 cents per share, which is a 15 percent discount over the closing price of QRxPharma (ASX:QRX) on Sept. 28. QrxPharma closed at A93 cents (US 90 cents), down A7 cents, or 7 percent, on Friday.

• Sunesis Pharmaceuticals Inc. priced a stock offering of 44.1 million units of one share plus a warrant for a half share of common stock at 35 cents each. The deal will gross $15.5 million for the South San Francisco-based company, with net proceeds of $14.3 million to be used to fund a Phase III trial of vosaroxin in combination with cytarabine for relapsed or refractory acute myeloid leukemia. Cowen and Co. LLC was the lead undewriter with ThinkEquity LLC as co-underwriter. Shares in Sunesis (NASDAQ:SNSS) dropped 11 cents, or 26 percent, to close at 31 cents Friday.