Chelsea Therapeutics is a biopharmaceutical development company that acquires and develops innovative products for the treatment of a variety of human diseases. Chelsea develops technologies that address important unmet medical needs or offer improved cost-effective alternatives to current methods of treatment. Chelsea concentrates its efforts on acquiring and developing technologies for the treatment of rheumatoid arthritis psoriasis cancer and other immunological disorders. Chelsea Therapeutics International Ltd. has a market cap of $92.28 million; its shares were traded at around $2.76 .
Highlight of Business Operations:Interest income. At September 30, 2009, we had cash and cash equivalents of $30.1 million and short-term investments of $11.475 million. Although the funding received from our July 2009 financing, proceeds from the sale and redemption of ARS and additional funding under the UBS line of credit allowed us to maintain a higher than expected average cash and investments level over the period, the average cash and investment level during 2009 was significantly lower than the level for the same period of 2008. When those lower average levels are combined with the loss of interest income on ARS earned in 2008, the deterioration of overall market interest rates and a shift of our holdings, other than ARS, into non-interest bearing accounts, Treasury funds and similar investments, interest earned decreased by $1.3 million.
As of September 30, 2009, we had working capital of approximately $18.2 million, cash and cash equivalents of approximately $30.1 million and short-term investments of $11.475 million. We have financed our operations primarily through sales of our common stock and, to a much lesser extent, through the issuance of our common stock pursuant to option or warrant exercises. Cash on hand results primarily from previous financing activities and proceeds from our line of credit with UBS, offset by funds utilized for operating and investing activities.
On July 28, 2009, we raised gross proceeds of approximately $13.3 million through the sale of 3,325,000 shares of our common stock at $4.00 per share in a registered direct offering pursuant to our shelf registration statement, as amended effective July 22, 2009 pursuant to Rule 462(b) to increase the dollar amount of securities available for sale, as filed with the Securities and Exchange Commission. There are no more securities available under this shelf registration. In connection with this offering, we received net proceeds, after deducting placement fees and offering expenses, of approximately $12.4 million.
At September 30, 2009, our short-term investments of $11.475 million consisted of the fair value of principal invested in certain ARS and the fair value of the ARS Rights. The ARS held by us are private placement securities with long-term nominal maturities for which the interest rates are reset through a dutch auction on 28 or 35 day cycles. Although the monthly auctions had historically provided a liquid market for these securities, in early 2008, with the liquidity issues in the global credit and capital markets, auctions for these, and similar, securities began to fail and by March 2008, market activity had essentially ceased. Our investments in these securities represent interests in collateralized debt obligations supported by pools of structured credit instruments consisting of student loans. None of the collateral for the ARS held by us includes mortgage, credit card or insurance securitizations. As of September 30, 2009, our ARS holdings had a par value of $11.475 million and all but approximately $4.4 million were AAA/Aaa rated and insured by the Federal Family Education Loan Program (FFELP) and/or over-collateralized by more than 10%. Of the remaining $4.4 million, all were collateralized at 100% and, consistent with our investment policy at the time of purchase, $0.75 million carried an A rating, $1.15 million carried an Aa3/AAA rating and the remainder carried AAA/Aaa ratings.
Per the terms of a settlement agreement executed in May 2009, all of our ARS holdings that were then classified as available-for-sale and had been purchased from BA were redeemed at 100% of par value, or $11.6 million, in June 2009. In addition, BA also refunded to us the $0.4 million realized loss we incurred in January 2009 upon the sale of our $2.5 million par value ARS holding in Mississippi Higher Ed Assistance Corp. As such, we recorded a gain of approximately $4.1 million related to the recovery of the previously recorded other-than-temporary impairment for these ARS holdings.
We have incurred negative cash flows from operations since inception. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned product development efforts, our clinical trials, our commercialization and marketing activities for droxidopa and our efforts to secure opportunities for strategic alliances. Our continued operations will depend on whether we are able to raise additional funds through various potential sources, such as equity and debt financing or strategic alliances. Although differing scenarios might arise based on our planned discussions with the FDA and the results of our second pivotal Phase III study of droxidopa in NOH, management believes that currently available capital resources, under any of the anticipated spending scenarios that might result from those discussions, will be sufficient to meet our operating needs into the third quarter of 2010. We continue to actively pursue additional sources of liquidity, including but not limited to, strategic relationships, out-licensing of our products, public or private sales of equity or debt and other sources. Such strategic relationships or out-licensing arrangements might require us to relinquish rights to certain of our technologies, product candidates or products that we would otherwise seek to develop or commercialize ourselves. Such additional funds might not become available on acceptable terms, or at all, and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs. From inception through September 30, 2009 we had losses of $89.6 million. We had net losses of $19.8 million and $26.1 million for the nine months ended September 30, 2009 and 2008, respectively, and we anticipate losses at least through 2010 unless we should successfully negotiate a strategic agreement earlier that might include out-licensing, co-development or co-promotion of our drug candidates. Actual losses will depend on a number of considerations including:
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