Shepherd, Finkelman, Miller & Shah, LLP, a law firm with offices in California, Connecticut, Florida, New York, New Jersey, Pennsylvania and Wisconsin, announces that it is investigating possible breaches of fiduciary duty and other violations of law by certain officers and directors at Chelsea Therapeutics, Ltd. ("Chelsea Therapeutics" or the "Company").
SFMS's investigation focuses on whether the officers and directors of Chelsea Therapeutics harmed the Company by failing to disclose material information regarding the effectiveness, commercial viability, and market potential for Northera, an experimental drug developed for treating neurogenic orthostatic hypotension.
On February 13, 2012, the Company disclosed that the Federal Drug Administration ("FDA") raised questions regarding the size and duration of the Company's clinical trials for Northera, as well as the possibility that there have been three deaths related to the trial in connection with Northera's new drug application. As a result, the Company's share price declined by $1.88 per share, or approximately 37.68%, from $4.99 per share to $3.11 per share. On February 21, 2012, the FDA released a staff report advising that Northera not be approved because of safety and durability concerns. Chelsea Therapeutics' share price dropped again after the release of the FDA staff report, closing at $2.64 per share. The Company responded by stating that it believed its "clinical program has established robust safety and efficacy data for Northera." But, despite an earlier positive vote from FDA expert advisors, on March 28, 2012, the FDA formally rejected the drug application. Upon this news, shares of Chelsea Therapeutics fell 28.63% the next day, to $2.62 per share. As of April 5, 2012, shares of the Company closed at $2.16, less than 44% of the share price on February 13, 2012.