(By Balaseshan) Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) said it expects to significantly reduce its headcount and explore strategic options after the U.S. Food and Drug Administration (FDA) asked for additional Northera hypotension drug trial.
In addition, the company said its President and Chief Executive Simon Pedder has resigned as a director, officer and employee of Chelsea, effective immediately. Pedder will continue to serve in an advisory capacity, as needed to assist in a smooth transition of his duties.
The board will begin evaluating candidates to succeed Pedder as Chief Executive. Joseph Oliveto, who has been the company's Vice President, Operations since June 2008, has been appointed interim President and Chief Executive until a permanent CEO is appointed.
As part of the reorganization, Chelsea's board expects to significantly reduce its headcount, retaining only those employees necessary to gain marketing authorization of Northera (droxidopa) in the U.S. for the treatment of symptomatic neurogenic orthostatic hypotension in patients with primary autonomic failure.
The company intends to stop patient enrollment in its ongoing 306B study in July, which should result in data by year-end, and will evaluate additional study designs required to support marketing authorization.
The reduction in force is expected to be completed in the third quarter of 2012 and result in salary reductions of at least $3.5 million on an annualized basis, excluding any one-time restructuring charges.
Additionally, Keith Schmidt, Vice President, Marketing and Sales, would be leaving the company, but will remain available in an advisory capacity. At the Board level, Kevan Clemens has stepped down as Chairman and remains a director, with director Michael Weise assuming the role of Chairman.
CHTP closed Monday's regular session down 3.12% at $1.24. The stock has been trading between $0.70 and $6.06 for the past 52 weeks.