Top Pharmaceutical Stock Watch: SOMX to Co-promote Insomnia Drug Silenor with Procter & Gamble

Posted by on Aug 26, 2010 | No comment

Somaxon Pharmaceuticals (NASDAQ: SOMX) is a specialty pharmaceutical company focused on the development, in-licensing and commercialization of proprietary products and late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area. The company is headquartered in San Diego. Somaxo competes with Sanofi-Aventis Inc., King Pharmaceuticals, Dainippon Sumitomo Pharma Co., Ltd., Merck & Co., Inc., Takeda Pharmaceuticals North America Inc., etc.

In March 2010, the US Food and Drug Administration (FDA) approved Somaxon’s lead product, Silenor, for the treatment of insomnia characterized by difficulty with sleep maintenance. Silenor (doxepin) is a first of its Kind Sleep Medicine for people with Insomnia, who have trouble staying asleep. Silenor is the only drug proven to provide patients with a full night’s sleep, including sleep into the 7th and 8th hour. The drug can be used by patients with chronic (long term) or transient (short term) insomnia characteristics. The drug is available in three milligram and six milligram tablets.

On Wednesday, the company announced that Procter & Gamble (NYSE: PG) will be co-promoting the drug, Silenor. The alliance of the company with the market leader in the FMCG sector will enhance the credibility and reach of the drug. Procter & Gamble has a reach of 35,000 high prescribing doctors for insomnia problems. Last year, Procter & Gamble exited its pharmacy business to concentrate on its core business; however, the company retained 15% of the sales force of its pharmacy business. This sales force will now concentrate on selling Silenor.

Both the companies will maintain their own sales force for selling the drug. Somaxon will maintain long term control of the drug. Procter & Gamble will receive royalties and fees on the net sales and these fees will not exceed 15% of total sales.

Insomnia is a wide spreading and growing problem in America. People due to tension, frustration and depression are regularly having sleep maintenance difficulty. The Insomnia market is estimated to be of 70 million American people with only 20% currently being treated with medication. Silenor having a distinctive advantage over other drugs pose a good chance of growing faster.

The Somaxon stock soared on the announcement of the alliance with Procter & Gamble. The small cap stock has a 52-week range of $0.90-$10.60.

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