"The chances of approval still seem very strong, and the delay appears to have very little impact on whether this can be eventually approved. This treatment has been approved and used in Japan for many years, where it already generates about $50 million per year in sales. With a track record of safety in another first world country for over 15 years, it adds to the likelihood that this treatment would be suitable and approvable in the United States. Another reason why eventual approval appears likely is because earlier this year an advisory panel voted 7 to 4 in favor of approval. This adds further credence to the theory that the drug has a strong chance for FDA approval once it gets the additional data requested.
Balance sheet risk: This is always an issue I check before investing in any biotech. While some biotech companies are short on cash and even have major levels of debt, this is not the case for Chelsea Therapeutics. It has about $41 million in cash on the balance sheet and no debt. That gives it enough money to operate and make progress for another shot at approval.
Now let's consider the risk of not investing in Chelsea Therapeutics: Investors could be missing out on substantial upside potential. This stock was trading for about $6 earlier this year and based on estimates from the company, it could potentially generate between $300 to $375 million in annual sales within 3 to 5 years of approval. It's possible to make a case for a share price of as much as $28, once those sales levels are achieved" ....from Seeking Alpha...
Sentiment: Strong Buy
Also, a chance of approval is much stronger now because of the recent FDA development (excerpt from Marketwire):
NEW YORK, NY--(Marketwire - Oct 26, 2012) - The Food and Drug Administration Commissioner Margaret Hamburg has told scientific advisers that the FDA is considering a faster pathway for obesity treatments, life-saving antibiotics and other drugs deemed to offer societal benefit....
Under the new pathway the FDA would allow developers of such drugs to conduct smaller, faster clinical trial, and provide a "special medical use" label which would allow doctors to administer drugs to patients with critical need. Hamburg has said that the FDA needs to take into account the needs people with deadly or debilitating diseases that may be willing to take on the risks of unproven drugs.
"A pathway that would allow products to come to market faster but would ensure they were used only in patients where there was an applicable risk-benefit situation would be good," said Pew Health Group's Allan Coukell, deputy director of medical programs. "It would be good for developers, for companies and it would be good for public health."
IMO, the above recent FDA development is the MAIN REASON why CHTP's stock price advance from below $1 to $1.40 - $1.60 range recently. My observation was that CHTP jumped from $0.8x to $1.1 - $1.3, and remained at this level a month or two before the PUBLIC announcement of the recent FDA's action. It is also IMO that the corrupted politicians and their congressional staff did LEGALLY trade on advance knowledge of the FDA decision considering faster pathway for life-saving drug's such as that of Chelsea's Northrea.
And this is purely speculation on my part: Unhappy with the FDA's decision on Northrea, CHTP (and perhaps others drug companies) lobbied congress to pressure the FDA ... and succeed.
FDA already said they will not accept 306b. 306b's only stated purpose is to help define new and ultimate study. What's likely to happen is Chelsea talking to FDA with 306b results in hand, and FDA providing feedback [unless FDA somehow retracts from their earlier written statements and agrees to new NDA with 306b only - unlikely] . Once those talks are complete, you are talking 12-18month "final" study, then NDA resubmission, and another 6-9 months before you will hear from FDA something meaningful. So sometime end of 2014-beginning 2015.