Shawshank, VA 5/31/12 (StreetBeat) -- Chelsea Therapeutics International (Nasdaq: CHTP) said it will stop developing its experimental drug for rheumatoid arthritis after the treatment failed a mid-stage study, sending its shares down 27 percent before the bell.
The drugmaker said methotrexate, the standard treatment for rheumatoid arthritis, showed better results than its drug CH-4051 in the trial.
"The outcome of the trial was confounded by the unexpectedly robust response reported by patients treated with methotrexate," Chelsea Therapeutics CEO Simon Pedder said.
The Charlotte, North Carolina-based company will now focus on the development of its hypotension drug Northera.
The company is facing shareholder lawsuits after the U.S. health regulators declined to give marketing approval to Northera in its current form.
Chelsea Therapeutics shares, which have lost about 47 percent of their value since the Northera application was turned down, closed at $1.95 on Wednesday on Nasdaq. They fell to $1.42 in trading before the bell on Thursday.
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