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Somaxon Pharmaceuticals Reports First Quarter 2011 Financial Results

Stocks in this article: SOMX

Somaxon Pharmaceuticals, Inc. (Nasdaq: SOMX), a specialty pharmaceutical company, today announced financial results for the first quarter ended March 31, 2011.

“During the first quarter of 2011, we continued to lay the foundation for Silenor’s® long-term commercial success by growing Silenor net product sales 73% and the number of new Silenor patients by approximately 50% over the previous quarter,” said Richard W. Pascoe, Somaxon’s President and Chief Executive Officer. “In addition, we decreased patient co-pays through managed care contracting so that over 110 million lives are now covered in contracted formularies, expanded our consumer marketing programs so that to date over 1.5 million advertising impressions have been made and over 230,000 insomniacs have been reached, increased our specialty sales force by over 30% and received an additional method of use patent relating to Silenor having an expiration date no earlier than August 2027.”

“For the remainder of 2011, we expect to continue to increase the growth of Silenor through the combined efforts of the Somaxon and Procter & Gamble sales forces, advancing our efforts to make Silenor available and affordable to any patient who may benefit from its unique product profile for sleep maintenance insomnia, and driving greater brand awareness through targeted consumer advertising,” continued Pascoe. “In addition, we intend to leverage our commercial infrastructure to broaden our business, to extend the Silenor franchise and to effectively manage our financial and other corporate resources, with the goal of building a sustainable specialty pharmaceutical business dedicated to delivering long-term stockholder value.”

Recent Highlights

  • Somaxon has continued to make significant progress in expanding access to Silenor at affordable co-pays. Recently, RxSolutions, Inc., Express Scripts, Inc. and Medco Health, national pharmacy benefit managers that manage commercial healthcare plans covering a total of approximately 50 million lives, agreed to add Silenor to their commercial formularies. Silenor will be covered in a Tier 2 unrestricted position at Medco Health, which is a preferred position relative to the other branded insomnia products on this formulary. Silenor will be covered in a Tier 3 unrestricted position at RxSolutions and Express Scripts. Including these agreements, Silenor is currently contracted for reimbursement on commercial plans covering over 110 million lives, most frequently in an unrestricted position, and Silenor is currently reimbursed on other commercial plans representing approximately an additional 90 million lives, with final formulary positioning subject to final negotiation with such plans.
  • Somaxon has come to agreement with Medicare Part D health insurance plans covering a total of over 3 million lives. The company has also reached agreement with the U.S. Department of Veteran’s Affairs to make Silenor eligible for formulary inclusion by the regional Veterans Integrated Services Network plans.
  • Beginning in early April 2011, Somaxon implemented the eVoucher co-pay assistance program under which co-pay amounts of $85 or below for patients having access to commercial health insurance will be automatically reduced to $15 at the time of payment at approximately 33,000 participating pharmacies. This program is intended to support Somaxon’s goal of making Silenor available and affordable to anyone whose physician determines they may benefit from Silenor’s unique safety and efficacy profile. The company’s existing Sleep Saver program will continue to be available to patients that are unable to take advantage of the eVoucher program.
  • On March 29, 2011, Somaxon announced that it had received from the U.S. Patent and Trademark Office U.S. patent no. 7,915,307, entitled “Methods of Improving the Pharmacokinetics of Doxepin.” This patent 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. This patent will expire no earlier than August 2027 and has been listed in the Orange Book.
  • As of early April 2011, Somaxon, through its contract sales force partner Publicis Touchpoint Solutions, Inc., had fully deployed an additional 35 sales representatives that are exclusively promoting Silenor. As a result of this expansion, Silenor is now promoted by 250 sales representatives between Somaxon’s sales force and that of its co-promotion partner Procter & Gamble.
  • As of early April 2011, Somaxon deployed a team of eight contracted Federal Account Managers who will focus specifically on generating Silenor demand at Military Treatment Facilities and other Department of Defense institutions where Silenor is currently contracted.

First Quarter 2011 Financial Results

For the first quarter of 2011, Somaxon recorded shipments of Silenor to its wholesale distributors totaling $2.2 million, and recognized net product sales of $2.3 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 March 31, 2011, deferred revenue totaled $3.0 million and is reported net of $0.6 million of associated discounts and allowances on Somaxon’s balance sheet.

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