Somaxon Renews its Insomnia Drug Application, Raises $6M
San Diego’s Somaxon Pharmaceuticals (Nasdaq: SOMX) says it has submitted a revised new drug application for its insomnia drug doxepin (Silenor), and the biotech raised about $6 million in a private stock placement to see it through the NDA process.
As I noted in February, the U.S. Food and Drug Administration turned down Somaxon’s initial application, asking the drug developer to address concerns about prolonging the heart’s QT interval—a key measure of the heart’s electrical rhythm. Somaxon said it intended to regroup and try again, and it met with FDA officials in April to gain a better understanding of the regulators’ concerns.
The company also spent some time on a financial makeover. Somaxon said in May it had erased $15 million in debt, although the company also had depleted its available cash from $14.3 million at the end of December to $3.8 million at the end of March. The company also reduced its operating costs. Somaxon reported a loss of $4.5 million for the first quarter that ended March 31, down from a loss of $7.1 million during the same quarter in 2008. As a development stage pharma, the company had no revenues.
The company also said in May it’s continuing to look for a Big Pharma partner to help further development of doxepin, and it signaled its intent to raise cash for another go at FDA approval. Several of the company’s existing investors are participating in the financing, including MPM Capital, Montreux Equity Partners, Scale Venture Partners, Prospect Venture Partners and Domain Associates, as well as Tavistock Life Sciences and other new investors.
In a statement today, Somaxon CEO Richard W. Pasco says, “We expect that the cash raised in this financing, together with our existing resources, will allow us to operate our business through the FDA review cycle of the NDA resubmission and extend our cash runway through the second quarter of 2010.”