Somaxon, The Ten-Bagger Chase (SOMX, SNY)
There is a new weapon in the war on insomnia, and one which does not appear to have the drug dependence and the nasty side-effects associated with many other sleep aids. Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) announced this morning that the FDA has approved the New Drug Application for Silenor as a treatment of insomnia characterized by difficulty with sleep maintenance. Somaxon calls this the “First and Only Prescription Sleep Aid to Provide a Full Night’s Sleep Without Abuse Potential.”
The company said it will focus on seeking a U.S. commercial partnership and will then build a U.S. commercial presence and will prepare to launch Silenor in the second half of 2010.
Silenor binds with high affinity to histamine (H1) receptors, which is believed to be the mechanism to promote the maintenance of sleep. The company noted that this mechanism of action is different from any other prescription medication currently approved for the treatment of insomnia.
- Sanofi Aventis (NYSE: SNY) makes Ambien. Drugs.com noted that Ambien CR was the #43 drug with sales of $865 million. Sepracor Inc. makes LUNESTA, but this company has been acquired. Drugs.com notes that in 2008 Lunesta was the #47 drug with $771 million in sales.
- Sleep maintenance difficulty is defined as waking frequently during the night and/or waking too early and being unable to return to sleep. The company noted that this is the most commonly reported nighttime symptom of insomnia.
Silenor is approved for the treatment of both transient (short term) and chronic (long term) insomnia characterized by difficulty with sleep maintenance in both adults and elderly patients.
In clinical trials, Silenor demonstrated maintenance of sleep into the 7th and 8th hours of the night, with no meaningful evidence of next day residual effects.
What is important here compared to other “sleep aid” pills on the market now is that Silenor has not been designated as a controlled substance by the U.S. Drug Enforcement Administration because of a lack of abuse potential. And in that theme, the Silenor clinical development program showed no withdrawal effects or other adverse events were observed that were indicative of physical dependence.
Somaxon further said that its own market research shows the abuse potential or risk of dependence was one of the most common safety concerns cited by patients as a reason for not seeking prescription treatment for insomnia, switching medications or discontinuing treatment. It also demonstrated a favorable safety and tolerability profile, with the overall incidence of adverse events comparable to placebo, a low discontinuation rate and no evidence of tolerance, amnesia or complex sleep behaviors. Those complex sleep behaviors are the most critical of all because of reports of excessive sleep walking, sleep driving, sleep eating and more. I have even heard a funnier “sleep action” that is not appropriate for pronting.
Somaxon said this approval will require Somaxon to make a $1.0 million milestone payment to its licensor.
If you want to know just how well this is going to be, take a look at the stock. At 1:30 PM EST shares are up 60% at $6.33. It even hit as high as $7.98 today, a 52-week high. The market capitalization rate here is only $150 million. The new adjusted 52-week trading range is $0.22 to $7.98. Somaxon came public at the end of 2005 ad the stock initially traded with a range of $10 to $20. This may have already been a ten-bagger for anyone who got in on the lows of 2009, but there is still a lot of room for this to run before it is not classified as a busted IPO b traders and investors.
JON C. OGG
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One Response to “Somaxon, The Ten-Bagger Chase (SOMX, SNY)”
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Thanks Jon.
How quickly and how high can revenue run rate be developed .. in your opinion?
Thanks again..