3 Min Read
* Says to cut costs by reducing compensation pay to officers
* Expects to resubmit Northera by end of Q1 2013
* Shares up 11 pct after market
June 7 (Reuters) - Chelsea Therapeutics International , whose hypotension drug Northera was rejected by U.S. health regulators in March, said it would cut its officers' compensation by a quarter as it tries to contain costs to pitch the drug for approval again.
The biotechnology company will also suspend performance bonuses for all its employees until Northera is approved by the U.S. Food and Drug Administration.
Chelsea said it expects to save up to $6 million in costs over the next twelve months through cost-cutting measures including the pay cuts.
The news sent the company's shares up as much as 11 percent to $1.40 after the bell on Thursday.
FDA had denied approval to Northera late March, seeking another trial to show that the drug was effective for a longer term.
The company said it expects results from this modified trial, dubbed Study 306B, to be available by the first quarter of 2013.
The efforts reflect the importance of the hypotension drug to Chelsea, which hit a developmental roadblock last month after an experimental drug for rheumatoid arthritis failed a mid-stage study.
Northera is designed to treat symptomatic neurogenic orthostatic hypotension -- a chronic drop in blood pressure on standing up that is most often associated with Parkinson's disease -- and has an orphan drug status.
The FDA assigns the status to drugs that treat rare conditions affecting less than 200,000 Americans, guaranteeing a marketing exclusivity of seven years in the United States.
The company expects to resubmit an application for Northera by the end of the first quarter of 2013, and anticipates that the FDA will take a decision late in the third quarter of the next year.
Chelsea said all its corporate officers and members of the board volunteered for the pay cut, effective from July 1 until data from the modified study is available.
Additionally, about 35 percent of Chelsea's non-executive staff will take a cut in salaries and temporarily transition to a part-time status, the company said in a statement.
The Charlotte, North Carolina-based company estimates its 2012 operating expenses to be lower by $1 million, and reiterated that it would have a cash balance of about $18 million to $20 million at the end of the year.