Trophy Hunting: No Yawns Over Somaxon Insomnia Drug (SOMX)
Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) has soared in after-hours trading as we have noted over and over how micro-cap and low-priced biotech stocks are seeing trophy hunters trying to find the next 1,000% move… That is the quest for the ten-bagger in investor slang. The company provided an update on the status of its New Drug Application for Silenor for the treatment of insomnia. It held a meeting with senior leadership at the FDA on January 20, 2010 to discuss the issues raised in the FDA’s Complete Response Letter Somaxon from December 2009.
According to Somaxon, the FDA acknowledged that this resubmission would be considered a complete response and noted that no additional safety or efficacy data was needed. Furthermore, the company now sees a decision from the FDA due by March 21, 2010. Somaxon has no stock options, so no binary trading event opportunity exists here other than being long or short. The short interest as of December 31 was a mere 522,000 shares.
The company noted that the only remaining efficacy issue was over the robustness of sustained subjective sleep maintenance efficacy in non-elderly adults with primary insomnia. The FDA has instructed Somaxon to resubmit the contents of its pre-meeting briefing package to the FDA and the agency has reportedly acknowledged that the resubmission would be considered a complete response to the Complete Response Letter Somaxon received from the FDA back in December.
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Trouble With Somaxon (SOMX)
Somaxon Pharmaceuticals (SOMX) collapsed today, with shares down over two-thirds. It will be interesting to see if the company can recover from a major blow to its prospects.
The company has received a Complete Response Letter from the U.S. Food and Drug Administration (FDA) for its New Drug Application (NDA) for Silenor (doxepin) for the treatment of insomnia. Based on its review, the FDA has determined that the NDA cannot be approved in its present form. Somaxon previously received a Complete Response Letter for the NDA in February 2009, and it resubmitted the NDA in June 2009.
In the most recent Complete Response Letter, the FDA stated that the Silenor NDA did not meet the approval standard for efficacy due to a lack of robustness of sustained subjective sleep maintenance efficacy in adults with primary insomnia.
For the third quarter of 2009, net loss applicable to common stockholders was $1.8 million, or $0.08 per share, compared with $10.3 million, or $0.56 per share, for the third quarter of 2008. The company had no revenue and had only $5.4 million in revenue at the end of the quarter.
The firm’s share price is down to $1.80 and its market cap down to $31 million.
Douglas A. McIntyre
BioHealth Companies Keep Raising Cash (MNKD, IDIX, ISPH, ARIA, ONTY, NBY, SOMX, ARNA, OXGN)
The appetite for biotech and emerging pharmaceutical companies to raise cash is almost a never ending line of companies. We have some offerings today and have seen many offerings and filings from companies to offer shares. These are just some of the filings and offerings we have seen.
MannKind Corporation (NASDAQ: MNKD) priced a secondary offering this morning of 7,400,000 shares of its common stock, and while the press release did not say what price the deal came at the syndicate group told us this went out at $7.35 per share. Chairman, CEO, and principal stockholder Alfred E. Mann is purchasing 1,000,000 of these shares from the underwriters, which brought in over $54 million before fees and commissions. MannKind shares are down 9.5% at $7.37. Its 52-week trading range is $2.00 to $9.25.
Idenix Pharmaceuticals Inc. (NASDAQ: IDIX) priced a secondary offering this morning of 7,248,936 shares of common stock at $3.14 per share to clear roughly $22 million before fees and commissions. Its shares are down over 14% at $3.15 today and its 52-week range is $1.86 to $10.10.
Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) priced a 22.2 million share secondary offering of common stock this morning at a price of $4.50 per share. This raised close to $100 million. Share are down 6% at $4.66 and the 52-week trading range is $1.68 to $5.80.
Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) on Tuesday priced its public offering of 19,000,000 shares of common stock at $1.75 per share; the company said net proceeds after fees and commissions was roughly $30.9 million.
Oncothyreon Inc. (Nasdaq: ONTY) announced on Tuesday that it had obtained commitments from several investors for $15 million in a direct offering. The agreement was to purchase approximately 2.28 million shares of common stock and warrants to purchase approximately 684,000 shares of common stock for gross proceeds of approximately $15.0 million. The company noted that investors agreed to purchase the shares and warrants for $6.5775 per unit with each unit being one share of common stock and a warrant to purchase 0.30 shares of common stock and an exercise price of $6.5775 per share.
NovaBay Pharmaceuticals, Inc. (NYSE: NBY) filed this week with the SEC to offer up to $20,000,000 of any combination of common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon the exercise of warrants. It market cap is a mere $48 million.
Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) filed this week to cover for the resale of up to 10,212,750 shares of common stock (roughly $23 million) from time to time for existing security holders and certain transferees of the selling security holders. Roughly 5.1 million of these shares were issued in a private placement that closed on July 8, 2009; the additional 5.1 million shares are issuable upon a warrant exercise sold in the private placement which expire on July 8, 2016. If sold, none of the proceeds go back to NovaBay.
Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) filed on Monday to allow the resale from time to time of up to 28,000,000 shares of common stock by the selling stockholders from a July private placement. We will not receive any of the proceeds from the sale of these shares. If sold, none of the proceeds go back to Arena.
OXiGENE, INC. (NASDAQ: OXGN) filed this week for the resale of up to 10,000,000 shares of common stock from time to time by Symphony ViDA Holdings LLC. This was via an amendment dated as of July 2, 2009. If sold, none of the proceeds go back to OXiGENE.
JON C. OGG
AUGGUST 5, 2009
