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Somaxon Reports Financial Results For Full Year And Fourth Quarter Ended December 31, 2010

Stocks in this article: SOMX

Somaxon Pharmaceuticals, Inc. (Nasdaq: SOMX), a specialty pharmaceutical company, today announced financial results for the full year and fourth quarter ended December 31, 2010.

“During 2010, we achieved our key corporate objectives that allowed us to successfully transition from a development stage organization to a commercial specialty pharmaceutical company, including the FDA approval of Silenor®, the commercial launch of Silenor alongside our primary care co-promotion partner, Procter & Gamble, and strengthening our balance sheet,” said Richard W. Pascoe, Somaxon’s President and Chief Executive Officer. “In 2011, we intend to build upon our progress as we anticipate growing Silenor revenue, leveraging our commercial infrastructure to broaden our business, extending the Silenor franchise and effectively managing our financial and other corporate resources, with the goal of building a sustainable specialty pharmaceutical business dedicated to delivering long-term shareholder value.”

Recent Highlights

  • On February 22, 2011, Somaxon announced that it had received from the U.S. Patent and Trademark Office a Notice of Allowance for claims in U.S. patent application no. 11/781,165, which significantly strengthened the Silenor intellectual property portfolio. This patent application generally relates to dosing Silenor at least three hours after a meal to promote faster onset of action and reduce the potential for next-day residual sedation. Because this food effect is described in the Silenor prescribing information, Somaxon will list the patent in the Orange Book once it is issued.
  • On February 8, 2011, Somaxon announced that based upon positive commercial trends in the fourth quarter of 2010, it had engaged its contract sales force partner Publicis Touchpoint Solutions, Inc. to recruit and deploy for Somaxon an additional 35 sales representatives that will exclusively promote Silenor. Somaxon expects the majority of these additional sales representatives to be deployed in the field by the end of the first quarter of 2011.
  • Somaxon has come to agreement with CVS/Caremark PCS Health, Blue Shield of California and Prime Therapeutics for unrestricted Tier 3 formulary placement of Silenor, and with the U.S. Department of Defense/TRICARE for Tier 2 formulary placement of Silenor. The CVS/Caremark entities and Prime Therapeutics are pharmacy benefit managers that manage commercial healthcare plans covering approximately 50 million lives and 2 million lives, respectively, Blue Shield of California covers approximately 3 million lives and TRICARE covers approximately 10 million lives. Silenor is currently reimbursed on other commercial plans representing approximately an additional 145 million lives, with final formulary positioning subject to final negotiation with such plans.
  • On February 8, 2011, Somaxon announced that it had obtained from Comerica Bank a two-year, revolving line of credit for up to $15 million for working capital needs and general corporate purposes. To date no amount of the revolving line of credit has been drawn down.
  • On February 3, 2011, Somaxon announced that it strengthened its senior management team through the hiring of Robert Cutler as Vice President of Business Development, responsible for driving Somaxon’s corporate growth strategy.

Full Year and Fourth Quarter of 2010 Financial Results

For the full year of 2010, Somaxon recorded shipments of Silenor to its wholesale distributors totaling $6.0 million, of which $1.4 million was recognized as net product sales. For the fourth quarter of 2010, shipments of Silenor to wholesale distributors totaled $0.4 million and Somaxon recognized net product sales of $1.3 million. In accordance with U.S. generally accepted accounting principles, Somaxon defers revenue recognition of the amounts of Silenor shipments to wholesale distributors that are not yet estimated to be dispensed through patient prescriptions. As of December 31, 2010, deferred revenue totaled $3.5 million and is reported net of $0.8 million of associated discounts and allowances on Somaxon’s balance sheet.

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