Somaxon Pharmaceuticals Posts 2009 2Q Financial Results

Aug 10, 2009 (Close-Up Media via COMTEX) -- SOMX | Quote | Chart | News | PowerRating -- Somaxon Pharmaceuticals, Inc., a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded pharmaceutical products and late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area, announced financial results for the second quarter ended June 30.

"The past few months have been very positive and productive for Somaxon as we continue to execute on our strategic plan. The resubmission of our NDA for Silenor and our recent $6 million financing transaction represent significant progress relating to our key corporate objectives," said Richard W. Pascoe, Somaxon's president and chief executive officer.

"Going forward, we will continue to work closely with the FDA toward a potential approval for Silenor, responsibly manage our financial resources, and advance our discussions with third parties toward a potential commercial partnership for Silenor," continued Pascoe. "Our goal is to enter into an agreement that will maximize the potential commercial success of our current lead product."

Second Quarter Financial Results

In a release on August 6, the Company noted that for the second quarter of 2009, net loss applicable to common stockholders was $6.1 million, or $0.33 per share, compared with $10.4 million, or $0.57 per share, for the second quarter of 2008.

As a development stage pharmaceutical company, Somaxon had no revenues during the second quarter of 2009.

Research and development expenses for the second quarter of 2009 were $1.5 million, compared with $5.8 million for the second quarter of 2008. The decrease resulted primarily from the company's conduct during 2008 of its clinical trial to evaluate the potential for electrocardiogram (ECG) effects of doxepin, the active ingredient in Silenor. In addition, salaries and related costs decreased in 2009 as a result of the reduction in force undertaken as part of cost reduction measures. This decrease was partially offset by higher share-based compensation expense as a result of the company's one-time stock option exchange program that was completed in June 2009 and vesting arrangements under the company's severance-related agreements.

Marketing, general and administrative expenses were $4.6 million for both the second quarter of 2009 and the second quarter of 2008. Marketing, personnel and general costs decreased approximately $1.0 million due to a reduction in market preparation activities as a result of the delay in the FDA approval process for Silenor, as well as the company's reduction in force and move to a smaller corporate facility. This decrease was offset by expenses incurred under severance arrangements and higher share-based compensation expense resulting from the company's one-time stock option exchange program.

For the second quarter of 2009, the company recognized $3.0 million of share-based compensation expense. Share-based compensation expense for the second quarter of 2008 was $1.5 million.

At June 30, Somaxon had cash, cash equivalents and marketable securities totaling $1.3 million and no debt. This amount does not include $6.0 million in gross proceeds from the company's July 2009 private placement of its common stock and warrants. The company believes, based on its current operating plan, that its cash, cash equivalents and marketable securities as of June 30, together with the proceeds from this private placement, will be sufficient to fund its operations through the expected duration of the FDA's review of its resubmission of the Silenor NDA and through the second quarter of 2010.

At December 31, 2008, the company had cash, cash equivalents and marketable securities totaling $14.3 million and outstanding debt of $15.0 million. The December 31, 2008 cash, cash equivalents and marketable securities did not include $7.5 million of restricted cash that was required to be maintained at Silicon Valley Bank under the company's secured loan agreement with Silicon Valley Bank and Oxford Finance Corp. This restricted cash was released upon the full repayment in March 2009 of the remaining principal balance of $13.7 million under the secured loan facility. An additional $0.6 million of restricted cash was released in the second quarter of 2009 in connection with the termination of the company's facility lease.

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