Chelsea Therapeutics (CHTP) Announces Large Headcount Reduction; Resignations of CEO Pedder, Chairman Clemens
Tweet Send to a Friend
Up)
Chelsea Therapeutics International, Ltd. (Nasdaq: CHTP) reports that its Board of Directors plans to promptly implement a corporate reorganization that includes a reduction in force, executive changes and changes to the Company's Board of Directors, and has authorized a plan to explore and evaluate strategic options for the Company, all with the goal of optimizing long-term stockholder value.
As part of the reorganization, Chelsea's Board of Directors expects to significantly reduce the company's 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. As part of this effort, the Company plans 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.
At the executive level, Simon Pedder, Ph.D. Founder, President and CEO, has resigned as a director, officer and employee of the company, effective immediately. Dr. Pedder will continue to serve the Company in an advisory capacity, as needed to assist in a smooth transition of his duties. The Board will begin evaluating candidates to succeed him as Chief Executive Officer. Joseph G. Oliveto, who has been the Company's Vice President, Operations since June 2008, has been appointed interim President and Chief Executive Officer until a permanent CEO is appointed. Keith Schmidt, Vice President, Marketing and Sales, will also be leaving the Company, but will remain available in an advisory capacity.
At the Board level, Kevan Clemens, Ph.D. has stepped down as Chairman and remains a director, with director Michael Weiser, M.D., Ph.D. assuming the role of Chairman. In addition, Norman Hardman, Ph.D., C.Chem., F.R.S.C., F.I. Biol., and Johnson Y.N. Lau, M.B., B.S., M.D., F.R.C.P., have stepped down from the Board. The continuing directors plan to begin carefully evaluating candidates to join the Board, including the evaluation of any candidates put forth by the Company's stockholders, as promptly as practicable.
"Chelsea Therapeutics has faced tremendous challenges in moving Northera forward through the regulatory process, making these difficult decisions necessary to ensure stockholder value is preserved in the short term and can be built over the long-term," said Dr. Weiser. "We believe that this reorganization should allow the Company's resources and capital to be laser-focused on efficient conclusion of the 306B study and the evaluation of next steps in the regulatory process. In tandem, the Board plans to explore and evaluate all available strategic options to determine the best path forward in the long-term strategic interests of the Company and its stockholders."
Dr. Weiser added: "We remain committed to Northera, a treatment which meets an important unmet need in patients and has a significant record of efficacy and safety in the clinic and in ex-US markets. We would like to thank those employees leaving the Company for their service. We would also like to recognize Dr. Pedder's years of dedication to Chelsea and his work in helping to advance the Company's innovative therapies."
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
As part of the reorganization, Chelsea's Board of Directors expects to significantly reduce the company's 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. As part of this effort, the Company plans 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.
At the executive level, Simon Pedder, Ph.D. Founder, President and CEO, has resigned as a director, officer and employee of the company, effective immediately. Dr. Pedder will continue to serve the Company in an advisory capacity, as needed to assist in a smooth transition of his duties. The Board will begin evaluating candidates to succeed him as Chief Executive Officer. Joseph G. Oliveto, who has been the Company's Vice President, Operations since June 2008, has been appointed interim President and Chief Executive Officer until a permanent CEO is appointed. Keith Schmidt, Vice President, Marketing and Sales, will also be leaving the Company, but will remain available in an advisory capacity.
At the Board level, Kevan Clemens, Ph.D. has stepped down as Chairman and remains a director, with director Michael Weiser, M.D., Ph.D. assuming the role of Chairman. In addition, Norman Hardman, Ph.D., C.Chem., F.R.S.C., F.I. Biol., and Johnson Y.N. Lau, M.B., B.S., M.D., F.R.C.P., have stepped down from the Board. The continuing directors plan to begin carefully evaluating candidates to join the Board, including the evaluation of any candidates put forth by the Company's stockholders, as promptly as practicable.
"Chelsea Therapeutics has faced tremendous challenges in moving Northera forward through the regulatory process, making these difficult decisions necessary to ensure stockholder value is preserved in the short term and can be built over the long-term," said Dr. Weiser. "We believe that this reorganization should allow the Company's resources and capital to be laser-focused on efficient conclusion of the 306B study and the evaluation of next steps in the regulatory process. In tandem, the Board plans to explore and evaluate all available strategic options to determine the best path forward in the long-term strategic interests of the Company and its stockholders."
Dr. Weiser added: "We remain committed to Northera, a treatment which meets an important unmet need in patients and has a significant record of efficacy and safety in the clinic and in ex-US markets. We would like to thank those employees leaving the Company for their service. We would also like to recognize Dr. Pedder's years of dedication to Chelsea and his work in helping to advance the Company's innovative therapies."
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- OSI Systems (OSIS) Unit Issued Notice of Proposed Debarment from U.S. DHS
- Rosetta Genomics (ROSG) Higher After Credentialing Agreement w/Prime Health
- IMAX Corp (IMAX) Grosses $13.6M in North America from 'Star Trek' Opening Weekend
Create E-mail Alert Related Categories
Corporate News, Hot Corp. News
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
