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Somaxon Reports Financial Results For Full Year And Fourth Quarter Ended December 31, 2011

Stocks in this article: SOMX

Somaxon Pharmaceuticals, Inc. (Nasdaq: SOMX), a specialty pharmaceutical company, today reported financial results for the full year and fourth quarter ended December 31, 2011.

“While Silenor revenue did not achieve its full potential in 2011, we were able to grow both prescriptions and wholesaler orders in each quarter of the year,” said Richard W. Pascoe, Somaxon’s President and Chief Executive Officer. “In the fourth quarter, we changed our commercial strategy in order to significantly reduce our operating expenses while continuing to focus on high-value Silenor prescribers. In January of this year, we re-trained and re-deployed a more focused and streamlined sales force resulting in the retention of over 85 percent of our existing total prescriptions. Going forward, we intend to leverage the promotional sensitivity of Silenor to continue to generate prescriptions while managing our operating expenses in an effort to drive towards positive cash flow and profitability.”

“We will also continue to work with our strategic advisor, Stifel Nicolaus Weisel, to evaluate strategic alternatives with the goal of fully leveraging Silenor for the benefit of our stockholders,” continued Mr. Pascoe. “In addition, we will continue to defend our intellectual property position for the product in an effort to protect Silenor’s market exclusivity.”

Recent Highlights

  • On February 22, 2012, Somaxon announced that its licensee Paladin Labs Inc. has filed a New Drug Submission (NDS) that has been accepted for review by Health Canada for Silenor for the treatment of insomnia. If approved, Silenor is expected to be the first and only prescription product approved for the treatment of insomnia in Canada that is not a controlled substance. Once Silenor is commercialized in Canada and/or the other territories under the licenses to Paladin, Somaxon will be eligible to receive sales-based milestone payments of up to US$128.5 million as well as a tiered double-digit percentage of net sales. To date, the Canadian prescription sleep aid market has consisted mainly of zopiclone, an older medication that despite its limitations, has driven the market to exceed $87 million in 2011, an increase of 10% vs. 2010.
  • In October 2011, Somaxon announced that in a meeting it and Procter & Gamble (P&G) had with the U.S. Food & Drug Administration (FDA) relating to the over-the-counter (OTC) development program for Silenor, the FDA provided clinical and regulatory guidance that the company believes provides a clear path forward toward an OTC version of Silenor. Through the period ending on March 31, 2012, Somaxon and P&G are working together to evaluate the potential to develop and commercialize an OTC version of Silenor, including conducting market research on a desired product profile at P&G’s expense. If P&G notifies Somaxon of its interest in negotiating for rights to an OTC version of Silenor at any time prior to March 31, 2012, P&G will have the exclusive right to negotiate with Somaxon relating to such rights for 120 days from Somaxon’s receipt of the notice, or such longer period as may be mutually agreed by Somaxon and P&G.

Full Year and Fourth Quarter of 2011 Financial Results

For the full year of 2011, net product sales for Silenor was $16.2 million, compared to net product sales of $1.4 million for the full year of 2010. For the fourth quarter of 2011, net product sales of Silenor was $3.9 million, compared to net product sales for the fourth quarter of 2010 of $1.3 million.

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