8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2006

CHELSEA THERAPEUTICS INTERNATIONAL, LTD.

(Exact name of registrant as specified in its charter)

Delaware	000-51462	20-3174202
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer ID Number)

13590 Ballantyne Corporate Place, Unit 325, Charlotte, North Carolina 28277

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (704) 341-1516

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On May 5, 2006, Chelsea Therapeutics International, Ltd. signed a letter of intent to enter into an asset purchase agreement with Synergia Pharma to acquire all intellectual property rights belonging to Synergia for L-Threo DOPS (Droxidopa). The consideration to be paid will consist of 15,000 shares of Chelsea common stock and $25,000 in cash upon execution of a definitive agreement, with an additional total of up to $2,975,000 in cash payable upon achievement of development and sales milestones. If an asset purchase agreement is not negotiated, executed by Synergia and received by Chelsea on or before June 30, 2006, there will be no further obligation on either party to negotiate an agreement. Chelsea also has the right to terminate negotiations on the agreement for any reason at any time, upon payment to Synergia of a termination fee of $25,000. A copy of the press release announcing the letter of intent is attached to this current report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference. The agreement itself will be filed with Chelsea’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2006.

Effective May 5, 2006, Chelsea also entered into a Development and Commercialization Agreement with Active Biotech AB to co-develop and commercialize the I-3D portfolio of orally active, Dihydroorotate dehydrogenase inhibiting compounds for the treatment of autoimmune diseases and transplant rejection. Under the terms of the agreement, a joint development committee with equal representation from both Chelsea and Active Biotech will oversee the clinical development of the I-3D portfolio. Chelsea gets exclusive North and South American rights, with Active Biotech retaining rights for remaining global markets. Chelsea will pay Active Biotech consideration including $1,000,000 in cash within five business days of executing the agreement for initial co-development expenses, and an additional total of up to $15,500,000 if certain development and sales milestones are achieved. Chelsea and Active Biotech will share development costs and also pay each other sublicensing income and royalty payments on sales in their respective markets. The term of the Development and Commercialization Agreement begins on May 5, 2006 and will continue on a country-by-country basis until the later of (a) the last to expire of Active Biotech patent rights, Chelsea patent rights and joint patents rights of Chelsea and Active Biotech in a country, and (b) 15 years from the first commercial sale of a product in such country. Either Chelsea or Active Biotech can terminate the agreement prior to the expiration of the royalty term due to a material breach of a material obligation of the agreement by the other with a 60-day cure period. In all other cases, Chelsea or Active Biotech can terminate the agreement upon six months’ notice to the other. A copy of the press release announcing the Development and Commercialization Agreement is attached to this current report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference. The agreement itself will be filed with Chelsea’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2006.

Item 8.01. Other Events.

Chelsea issued a press release on May 8, 2006 announcing the Droxidopa letter of intent. A copy of the press release is attached as Exhibit 99.1. Chelsea also issued two press releases on May 9, 2006. The first press release announces the Active Biotech Development and Commercialization Agreement and is attached hereto as Exhibit 99.2. The second press release updates Chelsea’s product pipeline status and clinical development priorities and is attached hereto as Exhibit 99.3.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit No.	Description
99.1	Press release dated May 8, 2006 announcing the Droxidopa letter of intent.
99.2	Press release dated May 9, 2006 announcing Active Biotech Development and Commercialization Agreement.
99.3	Press release dated May 9, 2006 updating Chelsea’s product pipeline status and clinical development priorities.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CHELSEA THERAPEUTICS INTERNATIONAL, LTD.
Date: May 9, 2006	/s/ J. Nick Riehle
	J. Nick Riehle, Chief Financial Officer

EX-99.1

Exhibit 99.1

Press Release

CHELSEA THERAPEUTICS TO SEEK ORPHAN DRUG STATUS AND BEGIN DEVELOPMENT OF DROXIDOPA FOR NEUROGENIC ORTHOSTATIC HYPOTENSION

Company Signs Letter of Intent to Acquire Intellectual Property for Controlled Release Formulation

Management to Host Conference Call to Discuss New Product and Update Investors on Clinical Development of Expanded Pipeline

Charlotte, NC, May 8, 2006 – Chelsea Therapeutics International, Ltd. (NASDAQ: CHTP) has initiated a development program and signed a letter of intent to acquire all intellectual property rights previously belonging to Synergia Pharma for L-Threo DOPS (L-DOPS or Droxidopa), a synthetic amino acid currently approved and marketed in Japan for the treatment of neurogenic orthostatic hypotension.

Chelsea intends to seek Orphan Drug Status for Droxidopa from the FDA and European Health Agencies for the treatment of neurogenic orthostatic hypotension. Orphan Drug Status, granted for rare diseases afflicting less than 200,000 patients per year in the United States and similar population in Europe, should provide Chelsea with considerable strategic advantages for accelerating the development of Droxidopa by reducing clinical development costs, facilitating global regulatory filings and providing 7 years of marketing exclusivity in the United States and 10 years in the European Union.

“Development of Droxidopa provides a unique opportunity to accelerate Chelsea’s drug development activities, expand our product pipeline and help finance the establishment of a sales and marketing infrastructure prior to commercialization of our lead compound, CH-1504,” commented Dr. Simon Pedder, Chelsea’s President and Chief Executive Officer. “Given the accumulated evidence of its clinical efficacy and safety, its potential for rapid development and the significant unmet need in its therapeutic indications, we believe Droxidopa represents an attractive commercialization opportunity in the global markets.”

Droxidopa initially received Japanese approval in 1989 for the treatment of frozen gait or dizziness associated with Parkinson’s Disease and for the treatment of orthostatic hypotension, syncope or dizziness associated with Shy-Drager syndrome and Familial Amyloidotic Polyneuropathy. In 2000, Droxidopa received expanded marketing approval to include treatment of vertigo, dizziness and weakness associated with orthostatic hypotension in hemodialysis patients. Droxidopa currently generates annual revenue of approximately $50 million in Japan.

Chronic, symptomatic orthostatic hypotension is a neurogenic disorder resulting from a deficient release of norepinephrine, the neurotransmitter used by autonomic nerves to send signals to the blood vessels and the heart. This deficiency results in sudden,

decreased blood pressure when a person assumes a standing position and is characterized by lightheadedness, dizziness, blurred vision and syncope. Droxidopa, an orally active synthetic precursor of norepinephrine, increases the supply of norepinephrine available for delivery to its receptors to improve orthostatic blood pressure and alleviate symptoms of orthostatic hypotension.

An estimated 100,000 U.S. patients suffer from chronic, symptomatic orthostatic hypotension which is commonly associated with Parkinson’s Disease, Pure Autonomic Failure (PAF) and Multiple System Atrophy (MSA), which encompasses disorders previously known as striatonigral degeneration, olivoponto-cerebellar atrophy and the Shy-Drager syndrome.

Conference Call Tuesday, May 9 at 10:00 AM ET

Chelsea will provide an update on each of its clinical development programs, including Droxidopa, in a conference call tomorrow, May 9th at 10:00 A.M. Eastern Time. Those interested in hearing management’s discussion can access the call directly by dialing 1- 877-407-0782. International participants may access the call by dialing 201-689-8567. A replay will be available for one week following the call by dialing 1-877-660-6853 for domestic participants or 201-612-7415 for international participants and entering account number 286 and Conference ID number 201946 when prompted. Participants may also access both the live and archived web cast of the conference call through the investor relations section of Chelsea’s web site, www.chelseatherapeutics.com.

About Chelsea Therapeutics

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. Early clinical data suggests that Chelsea’s lead product candidate, CH-1504, may support a safe and effective treatment for rheumatoid arthritis and may have further applications for psoriasis, certain cancers and other immunological disorders. Chelsea Therapeutics is traded on the NASDAQ Capital Market under the ticker CHTP.

This press release contains forward-looking statements regarding future events. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include the risk that we will not be able to negotiate a definitive agreement with Synergia, intellectual property risks including specifically the allowance, value and enforceability of Synergia’s Droxidopa patents, risks and costs of drug development, our history of losses and need to raise more money, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder, management of rapid growth, and the need to acquire or develop additional products.

***

Chelsea Therapeutics:
Nick Riehle	Kathryn McNeil
Chief Financial Officer	Investor/Media Relations
704-341-1516 x101	718-788-2856

EX-99.2

Exhibit 99.2

CHELSEA THERAPEUTICS AND ACTIVE BIOTECH TO CO-DEVELOP PORTFOLIO OF THERAPEUTICS TARGETING AUTOIMMUNE DISEASE AND TRANSPLANT REJECTION

Agreement Creates Synergistic Alliance Focused on Immune-Mediated Inflammatory Disorders

Chelsea to Host Conference Call to Discuss New Products and Update Investors on Clinical Development of Expanded Pipeline

Charlotte, NC, USA and Lund Sweden, May 9, 2006 – Chelsea Therapeutics International, Ltd. (NASDAQ: CHTP) and Active Biotech AB (Stockholm: ACTI.ST), have signed an agreement to co-develop and commercialize the I-3D portfolio of orally active, Dihydroorotate dehydrogenase (DHODH) inhibiting compounds for the treatment of autoimmune diseases and transplant rejection.

The I-3D portfolio developed by Active Biotech consists of an extensive library of therapeutic compounds that have demonstrated, during preclinical testing, potent inhibition of DHODH activity while maintaining PK and safety properties superior to the marketed DHODH inhibitor. Inhibition of DHODH is the rate-limiting step in de novo pyrimidine biosynthesis, which is required for the proliferation of T-cells during clonal expansion. Potential indications for drug candidates in this library include transplant rejection, rheumatoid arthritis, psoriasis and systemic lupus erythematosus (SLE). Of the compounds in this portfolio, more than 15 compounds have been isolated and undergone extensive preclinical modeling, including two lead compounds with the potential to be in clinical trials in early 2007.

The strategic alliance created through this agreement leverages the strength of Chelsea’s clinical development expertise with the impressive breadth of intellectual property and depth of preclinical data Active Biotech has already established around the I-3D compounds. The I-3D library significantly broadens Chelsea’s autoimmune pipeline, which also includes its lead drug candidate, CH-1504, an orally available, metabolically inert, anti-inflammatory and anti-tumor agent for the treatment of rheumatoid arthritis, psoriasis, inflammatory bowel disease and certain cancers.

Under the terms of the license and co-development agreement, Chelsea and Active Biotech will jointly conduct and fund the clinical development of the I-3D portfolio via a Joint Development Committee with equal representation from both parties. The agreement also provides Chelsea with the exclusive North and South American commercial rights to all drugs within this portfolio, while Active Biotech will retain rights for the remaining global markets. In addition to sharing development costs, both Chelsea and Active Biotech will pay the other royalty payments on sales in their respective markets. Active Biotech will also receive certain defined milestone payments related to clinical development and commercialization.

“This alliance strengthens our product pipeline and augments our ongoing work in autoimmune diseases by providing us with a robust library of DHODH-inhibiting drug candidates with substantial therapeutic and revenue potential,” commented Dr. Simon Pedder, Chelsea’s President and CEO. “We believe this alliance brings tremendous synergies to the table, making the deal very attractive and beneficial to our respective shareholders. We look forward to working with Active Biotech in advancing the I-3D product portfolio through the clinic in both Europe and the U.S.”

“We are very pleased seeing that the I-3D portfolio of compounds that we have advanced through discovery, screening and preclinical evaluation, is rapidly advancing towards clinical trials. We believe having Chelsea as a co-development and commercial partner will bring substantial strength and clinical development expertise to the project and a strong international network,” commented Sven Andréasson, President and CEO of Active Biotech.

Chelsea Conference Call, May 9 at 10:00 AM ET (4:00 pm CEST)

Chelsea will discuss the transaction and provide an update on the clinical development programs of its newly expanded pipeline in a conference call on Tuesday, May 9, 2006, 10:00 A.M. Eastern Time. Those interested in hearing management’s discussion can access the call directly by dialing 1-877-407-0782. International participants may access the call by dialing 201-689-8567. A replay will be available for one week following the call by dialing 1-877-660-6853 for domestic participants or 201-612-7415 for international participants and entering account number 286 and Conference ID number 201946 when prompted. Participants may also access both the live and archived web cast of the conference call through the investor relations section of Chelsea’s web site, www.chelseatherapeutics.com.

About Chelsea Therapeutics

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. Early clinical data suggests that Chelsea’s lead product candidate, CH-1504, may support a safe and effective treatment for rheumatoid arthritis and may have further applications for psoriasis, certain cancers and other immunological disorders. Chelsea Therapeutics is traded on the NASDAQ Capital Market under the ticker CHTP.

About Active Biotech AB

Active Biotech AB is a biotechnology company focusing on research and development of pharmaceuticals. Active Biotech has a strong R&D portfolio with pipeline products focused on autoimmune/inflammatory diseases and cancer. Most advanced projects are laquinimod, an orally administered small molecule with unique immunomodulatory properties for the treatment of multiple sclerosis, as well as ANYARA for use in cancer immunotherapy with the primary indication non-small cell lung cancer. Further key projects in clinical development comprise the three orally administered compounds TASQ for prostate cancer 57-57 for SLE and RhuDex^® for RA.

This press release contains forward-looking statements regarding future events. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include reliance on collaborative partners, risks and costs of drug development, our history of losses and need to raise more money, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder, management of rapid growth, and the need to acquire or develop additional products.

***

Chelsea Therapeutics International Ltd

Nick Riehle

Chief Financial Officer

704-341-1516 x 101

Kathryn McNeil

Investor/Media Relations

718-788-2856

Active Biotech AB

Sven Andréasson President and CEO Tomas Leanderson Chief Scientific Officer

Tel +46 (0) 46-19 20 00

Fax +46 (0) 46-19 20 50

U.S. Investors

Kathy Price / Emmanuelle Ferrer

The Global Consulting Group

Tel: +1-(646) 284-9430 / +1-(646) 284-9421

Email: kprice@hfgcg.com / eferrer@hfgcg.com

EX-99.3

Exhibit 99.3

Press Release

CHELSEA THERAPEUTICS UPDATES PRODUCT PIPELINE STATUS AND CLINICAL DEVELOPMENT PRIORITIES

Management to Host Conference Call for Investors at 10:00 AM ET

Charlotte, NC, May 9, 2006 – In conjunction with the Company’s recent strategic alliance and licensing agreements, Chelsea Therapeutics International, Ltd. (NASDAQ: CHTP) has realigned its clinical development priorities to maximize future growth. Priorities for product development were established based on several factors, including time to market, potential-partner needs, size of target markets, cost of development and expected regulatory challenges for respective opportunities.

Management will host a conference call today at 10:00 A.M. ET to discuss updates to its product pipeline and clinical development expectations, including:

• Pursuing orphan drug strategy for Droxidopa to secure marketing exclusivity and expedite development prior to commercialization of CH-1504;

• Accelerating formulation improvements for CH-1504 to strengthen results of planned Phase II trials in 2007, expedite the start of Phase III and increase the potential value of the compound for future licensing opportunities; and

• Selecting lead compound from newly licensed I-3D portfolio for advancement into clinical trials in early 2007.

“We are thrilled to have expanded our therapeutic pipeline with a series of drug candidates, including both Droxidopa and the I-3D portfolio, that we believe to be of similar caliber as CH-1504 and should substantially increase the combined peak revenue potential for the company,” commented Dr. Simon Pedder, Chelsea’s President and CEO. “The current pipeline should allow us to establish and leverage complementary clinical and commercialization infrastructures to drive a strong entrance into multiple therapeutic markets for Chelsea.”

Pursuing Orphan Drug Strategy for Droxidopa

On Monday, Chelsea announced its execution of a letter of intent for the acquisition of intellectual property pertaining to Droxidopa, a synthetic amino acid currently approved and marketed in Japan, and its intent to seek orphan drug status for the treatment of neurogenic orthostatic hypotension in the United States and European Union.

Chelsea anticipates filing its application for Orphan Drug Status with the U.S. FDA and European Health Agencies in the third quarter of 2006 and initiating the clinical program in 2007. The compound’s impressive efficacy and safety established in Japan, combined with Orphan Drug Status, should minimize the development program required for both U.S. and European approval.

Development of Droxidopa under an orphan drug strategy offers Chelsea an attractive, commercial opportunity by addressing a distinct group of underserved patients suffering from orthostatic hypotension associated with abnormal sympathetic neurological function. These patients have well described symptoms of vertigo, dizziness, weakness and fatigue. Furthermore, Chelsea expects this strategy to facilitate the Company’s eventual transition to a commercial organization.

“Our first priority for Droxidopa is to move expeditiously in securing Orphan Drug Status,” continued Dr. Pedder. “We believe that the rapid commercialization path this offers will generate a meaningful revenue stream that will offset the acquisition and limited development costs of the drug, while contributing to the development of an internal sales team focused on marketing drugs for niche applications, including potential indications for our lead compound, CH-1504. During the course of our due diligence and in anticipation of our agreement with Synergia, we have already made substantial progress toward this goal and are confident we can obtain orphan status in 2006 and move swiftly into our planned clinical development in 2007.”

Accelerating Formulation Improvements to CH-1504

Chelsea’s lead compound CH-1504, has shown promising safety and efficacy results in a pilot clinical study, and the company successfully completed Phase I clinical trials for all oral indications in 2005. Continued evaluation of these results and existing preclinical data suggest that dramatic improvements in the bioavailability of CH-1504 could be achieved through standard alterations to the existing formulation. Consequently, reformulation of CH-1504 using salts of the free acid has been initiated and is already demonstrating significant improvements with regard to bioavailability. Enhanced bioavailability is expected to improve the safety and consistency of future clinical results and increase the value of the drug to potential partners.

Based on management’s assessment of these findings, consultation with outside experts and on-going discussions with potential partners, Chelsea is accelerating its planned formulation improvements for CH-1504 prior to commencing Phase II trials in RA. Management expects that planned reformulation work, including anticipated bioequivalence and toxicology studies, will take approximately one year to complete. Consequently, Chelsea now anticipates bioequivalency trials of the improved formulation will commence in the first half of 2007, with Phase II trials in RA to follow in the second half of 2007. The company anticipates recapturing much of the delay associated with reformulation prior to Phase II through the expedited transition of CH-1504 directly into Phase III clinical trials. Use of a combined Phase II/III trial design, which adds Phase III sites to those involved in Phase II after seeing Proof-of-Concept, should eliminate the delays for reformulation and regulatory approval typically seen between Phase II and III.

“While our first priority remains validating the proof-of-concept identified in the pilot clinical study of CH-1504, we are acutely aware of the potential licensing opportunity in our lead indication, RA, and are committed to executing a clinical development program

designed to maximize potential indications and realize the highest possible value for our shareholders and potential partners” commented Dr. Pedder. “We believe that taking advantage of the available formulation improvements now further increases the likelihood and speed of success for this valuable asset by facilitating seamless transition into Phase III RA trials and rapid expansion into additional indications.”

Evaluating Molecules from I-3D Portfolio for Clinical Advancement

Earlier today, Chelsea also announced the formation of a strategic partnership with Active Biotech AB for the joint development of a portfolio of therapeutics targeting immune-mediated inflammatory disorders and transplantation.

Of the compounds in this portfolio, greater than 15 have been isolated and undergone extensive preclinical modeling, including 2 lead compounds for the treatment of transplant rejection and RA. The first priority of the Joint Development Committee will be to select the lead compound from this portfolio and initiate the required toxicology studies enabling the filing of an IND with the U.S. FDA and European Union health agencies. Based on partner discussions and preclinical work to date, Chelsea currently expects initial clinical trials to commence early in 2007.

“Active Biotech has a demonstrated history and strong reputation for drug discovery, thorough preclinical development of therapeutic compounds and successful joint development programs,” continued Dr. Pedder. “ We are confident that together we will be able to rapidly advance this strong platform of compounds through the clinic, ultimately developing multiple, complementary drug candidates that together with CH-1504 should establish a strong franchise in autoimmune and inflammatory indications.”

Conference Call Today at 10:00 AM ET

Chelsea will discuss recent transactions and provide an update on its clinical development programs in a conference call today at 10:00 A.M. Eastern Time. Those interested in hearing management’s discussion can access the call directly by dialing 1- 877-407-0782. International participants may access the call by dialing 201-689-8567. A replay will be available for one week following the call by dialing 1-877-660-6853 for domestic participants or 201-612-7415 for international participants and entering account number 286 and Conference ID number 201946 when prompted. Participants may also access both the live and archived web cast of the conference call through the investor relations section of Chelsea’s web site, www.chelseatherapeutics.com.

About Chelsea Therapeutics

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. Early clinical data suggests that Chelsea’s lead product candidate, CH-1504, may support a safe and effective treatment for rheumatoid arthritis and may have further applications for psoriasis, certain cancers and other immunological disorders.

This press release contains forward-looking statements regarding future events, some of which can be identified by use of words like ‘expects’ or ‘believes’ or expressions of Company confidence regarding future events. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks and costs of drug development, reliance on collaborative partners, our history of losses and need to raise more money, regulatory approvals, intellectual property risks, our reliance on our lead drug candidate CH-1504, competition, market acceptance for our products if any are approved for marketing, reliance on key personnel including specifically Dr. Pedder, management of rapid growth, and the need to acquire or develop additional products.

***

Chelsea Therapeutics:
Nick Riehle	Kathryn McNeil
Chief Financial Officer	Investor/Media Relations
704-341-1516 x101	718-788-2856