Somaxon Pharma (NASDAQ:SOMX): Second Time a Charm with FDA? Print E-mail
Wednesday, 22 July 2009 08:03

StocksHaven Investments profiles one of the most promising biomedical pharmaceutical company involved with a PDUFA with regards to a drug which could quite possibly revolutionize the treatment for insomnia, a condition affecting over 70 million Americans. The company has been making waves the past few months as investors and institutions gain confidence from the highly positive clinical trials, and the recent exclusive meeting with the FDA with regards to their NDA.

Somaxon Pharma (NASDAQ:SOMX) is a specialty pharmaceutical company focused on the in-licensing, development 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 lead product candidate is Silenor (doxepin) for the treatment of insomnia. The FDA decision date on Silenor has been set to 12/4/09 for their NDA resubmission, the importance of this is discussed further in the article. The FDA Calendar entry for SOMX is summarized in the following two paragraphs.

On 6/4/09, SOMX announced that it has resubmitted its New Drug Application (NDA) to the FDA for Silenor (doxepin) for the treatment of insomnia in response to a 2/25/09 Complete Response Letter (CRL) and following a 4/6/09 meeting with the FDA. The resubmission includes additional statistical analyses of the Company's clinical data relating to the durability of subjective sleep maintenance efficacy. It also includes the results of the Company's completed clinical trial of doxepin that evaluated the potential for electrocardiogram (ECG) effects.

The results of that clinical trial demonstrated that Silenor had no effect on QT interval prolongation when administered at 6 mg or under exaggerated exposure conditions of 50 mg. The FDA has indicated that the review cycle for the resubmission will be six months (a Class 2 Review designation) for an estimated decision date of 12/4/09 on the Silenor NDA resubmission. Shares of SOMX have increased by about 239% over the past three months and the Company raised $6 million in a private placement in early July - providing adequate liquidity through 2Q10.

Sleep is essential for human performance, general health and well-being. Insomnia, the most common sleep complaint across all stages of adulthood, is a condition characterized by difficulty falling asleep, waking frequently during the night or too early, or waking up feeling not refreshed. Approximately 70 million Americans have insomnia according to the National Sleep Foundation (NSF).  About 40 million people in the United States suffer from chronic sleep disorders and an additional 20-30 million are affected by intermittent sleep related disorders.  According to the 2007 Sleep in America Poll, 65% of respondents reported experiencing insomnia symptoms a few nights a week.

In fact, insomnia has become a problematic issue as of late, receiving publicity from various worldwide publications and news outlets. Adding to the growing pains of this phenomenon, celebrities have been struggling to deal with it as well. Michael Jackson was so distraught over persistent insomnia in recent months that he pleaded for a powerful sedative despite warnings it could be harmful, says a nutritionist who was working with the singer as he prepared his comeback bid.

The Mechanism of Action - What Makes Silenor Unique

At the doses used in Silenor (doxepin) (3 mg and 6 mg), doxepin's most potent pharmacological response, histamine H1 blockade, appears to define the action of the drug. Doxepin has long been known as a potent H1 antagonist; receptor binding and functional studies conducted by Somaxon confirm that doxepin has high affinity at human H1 receptors and good selectivity against other central nervous system targets.

The receptor binding profile of doxepin suggests that the drug is at least 10-fold more potent as an H1 antagonist than for its other clinically relevant targets. The potency of doxepin at the H1 receptor, coupled with its selectivity versus other central nervous system targets, makes this drug an ideal candidate for use in insomnia when used at low doses. Silenor's low doses avoid much of the pharmacology of doxepin at antidepressant doses, as supported by the very low incidence of adverse events associated with Silenor.

Doxepin has activity at re-uptake sites for norepinephrine and serotonin, although it is essentially inactive at the dopamine transporter or at dopamine receptor subtypes studied to date. Studies conducted by Somaxon suggest little or no relevance for 5-HT or dopamine re-uptake in the pharmacology of Silenor, although some functional role for the norepinephrine transporter cannot be definitively ruled out. The finding that doxepin is a functional antagonist at 5-HT2a sites suggests that this activity could play a role in doxepin's sleep promoting effects, as this receptor has been proposed to contribute to the expression of restorative sleep.

Market Opportunity

Silenor (doxepin) is highly differentiated from currently available insomnia treatments and will have competitive advantages in a large and growing market, if it is approved by the FDA. According to IMS Health, in 2008 the prescription market for the treatment of insomnia grew approximately 6% to more than 63 million prescriptions compared the prior year. In 2008, the insomnia market accounted for more than $2.0 billion in sales despite the introduction in April 2007 of generic versions of Ambien, which was the leading prescription product at the time.

While there are a number of products currently available for the treatment of insomnia, the market remains under-served due in part to the limitations of current therapies. It is estimated that only about 20 percent of those who suffer from insomnia are on prescription therapy. Somaxon-sponsored market research indicates that less than one third of patients being treated for insomnia with prescription medications claimed they were very satisfied with their current treatment, and only 12% of patients claimed that their insomnia was well controlled.

Competitive Advantage

In addition, the insomnia market is driven primarily by the clinical experience of patients. Patient trial is seen as the most useful tool by physicians to determine the clinical utility of any insomnia agent. Importantly, because Silenor will not be designated as a Schedule IV controlled substance (unlike GABA-ergic products), it can be freely sampled in all jurisdictions. This will facilitate critical initial physician and patient trial and usage and provide Silenor with an important competitive advantage.

Based on Somaxon's clinical results and market research, they believe that initial trial will lead to prescription usage. In their market research nine out of 10 physicians indicated a willingness to try Silenor. In fact, when presented with the Silenor product profile as part of our market research, the surveyed physicians indicated that Silenor could become a leading product for treating insomnia in their practice.

Overall Sentiment

This company is truly in a unique situation, having being granted exclusive rights to a meeting with the FDA to discuss their resubmission for their product Silenor. Based on this alone, including the positive efficacy trials and steps taken to ensure a positive result on 12/4/09, Somaxon should continue to see a positive price per share trend both in the long-term and short-term. Evidence of this can be seen from the 6 month chart, where volume has been exponentially increasing as news spreads of the almost certain positive outcome with the upcoming second meeting.

Contributed by: Michael Vlaicu

Disclosure: Long-Term Position

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