SAN DIEGO--(BUSINESS WIRE)-- Somaxon Pharmaceuticals, Inc. (NASDAQ:SOMX - News), a specialty pharmaceutical company, today announced that it has engaged its contract sales force partner Publicis Touchpoint Solutions, Inc. to recruit and deploy for Somaxon an additional 35 sales representatives that will exclusively promote Silenor® (doxepin). Somaxon also announced that it has obtained from Comerica Bank a two-year, $15 million revolving line of credit for working capital needs and general corporate purposes.
“Since the launch of Silenor in September, we have consistently increased the monthly number of physicians who have prescribed Silenor,” said Richard W. Pascoe, Somaxon’s President and Chief Executive Officer. “In addition, of those doctors who have prescribed Silenor, we achieved a 4% share of their insomnia prescriptions within the first two months of launch. We believe the expansion of our sales force in the first quarter will allow us to build upon these positive trends as we continue to actively assess our performance and deploy our resources in the most effective manner.”
“Moreover, the line of credit from Comerica will provide us with the financial flexibility we need to further invest in the commercialization of Silenor by allowing us to leverage accounts receivable from sales of the product,” continued Pascoe.
“This sales force expansion will enable us to target over 5,000 additional high-value prescribers of insomnia drugs,” said Jeffrey Raser, Somaxon’s Chief Commercial Officer. “With the addition of these 35 representatives to our sales force, we along with our co-promotion partner Procter & Gamble will have 250 sales representatives promoting Silenor to over 40,000 physicians who prescribe over 40% of all prescriptions for the treatment of insomnia in the United States.”
The additional sales representatives will be employees of Publicis but will be hired to Somaxon’s specifications and will be managed by Somaxon’s team of experienced sales managers. Publicis will continue to be responsible for the sales force automation, fleet and other ancillary services relating to the entire sales force, and Somaxon will have the option to hire any or all of the 145 Publicis sales representatives as Somaxon employees in the future.
With respect to the Comerica line of credit, Somaxon will make interest-only payments on any draws under the facility, and subject to certain conditions, all principal drawn during the term of the loan facility is due and payable at the maturity date, which is February 7, 2013.
The line of credit is secured by a first priority security interest in all of Somaxon’s assets, excluding intellectual property, and contains affirmative and negative covenants, including financial covenants requiring Somaxon to maintain certain levels of cash and investments and a minimum liquidity ratio. Interest on outstanding indebtedness under the credit facility is at Comerica’s prime rate plus one-half percent (0.5%), or the LIBOR rate plus three percent (3.0%), at Somaxon’s option.
About Somaxon Pharmaceuticals, Inc.
Headquartered in San Diego, CA, Somaxon Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded pharmaceutical products and of late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area. Somaxon’s product Silenor® (doxepin), now available by prescription in the United States, is indicated for the treatment of insomnia characterized by difficulty with sleep maintenance.
For more information, please visit the company’s web site at www.somaxon.com.
Safe Harbor Statement
Somaxon cautions readers that statements included in this press release that are not a description of historical facts are forward-looking statements. For example, statements regarding the hiring of additional sales representatives for the Silenor contract sales force, the timing of completion of such hiring, and the ability of Somaxon to build upon positive trends and further invest in the commercialization of Silenor are forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by Somaxon that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in Somaxon’s business, including, without limitation, Somaxon’s ability to successfully commercialize Silenor; Somaxon’s reliance on its co-promotion partner, Procter & Gamble, and its contract sales force provider, Publicis, for critical aspects of the commercial sales process for Silenor; Somaxon’s and Publicis’ ability to adequately identify, recruit, hire and retain sales representatives; the performance of Procter & Gamble and Publicis and their adherence to the terms of their contracts with Somaxon; the ability of Somaxon’s sales management personnel to effectively manage the sales representatives employed by Publicis; Somaxon’s ability to comply with the covenants under the Comerica secured loan agreement; the potential for an event of default under the secured loan agreement, and the corresponding risk of acceleration of repayment and potential foreclosure on the assets pledged to secure the line of credit; the scope, validity and duration of patent protection and other intellectual property rights for Silenor; whether the approved label for Silenor is sufficiently consistent with such patent protection to provide exclusivity for Silenor; the ability of Somaxon to ensure adequate and continued supply of Silenor to successfully meet anticipated market demand; Somaxon’s ability to successfully enforce its intellectual property rights and defend its patents, including any developments relating to the recent submission of abbreviated new drug applications for generic versions of Silenor 3 mg and 6 mg and related patent litigation; the possible introduction of generic competition of Silenor; Somaxon’s ability to raise sufficient capital to fund its operations, and the impact of any such financing activity on the level of its stock price; the impact of any inability to raise sufficient capital to fund ongoing operations, including any patent infringement litigation; Somaxon’s ability to operate its business without infringing the intellectual property rights of others; the market potential for insomnia treatments, and Somaxon’s ability to compete within that market; inadequate therapeutic efficacy or unexpected adverse side effects relating to Silenor that could adversely affect commercialization, or that could result in recalls or product liability claims; other difficulties or delays in development, testing, manufacturing and marketing of Silenor; the timing and results of post-approval regulatory requirements for Silenor, and the FDA’s agreement with Somaxon’s interpretation of such results; and other risks detailed in Somaxon’s prior press releases as well as in its periodic filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Somaxon undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Contact:
Somaxon Pharmaceuticals, Inc. Tran Nguyen / CFO 858-876-6500 or PondelWilkinson Inc. Rob Whetstone 310-279-5963 Investors@somaxon.com
