Stock Alert for Somaxon Pharmaceuticals Inc. ($SOMX)
Somaxon Pharmaceuticals Inc. (NASDAQ: $SOMX)
Somaxon Pharmaceuticals Inc. (SOMX) is a specialty pharmaceutical company focused on the in-licensing and development of product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area. On March 18, 2010, the food and drug administration (FDA) notified the Company that it approved its New Drug Application (NDA) for Silenor (doxepin) 3 milligram and 6 milligram tablets for the treatment of insomnia characterized by difficulty with sleep maintenance. Silenor is an oral tablet formulation of doxepin at strengths of three milligram and six milligram. Doxepin has been marketed from 75 milligram to 300 milligram per day and is indicated for the treatment of depression and anxiety. The Company’s clinical development program for Silenor included four phase III clinical trials, and the primary efficacy endpoint achieved statistical significance in each trial.
Somaxon Pharmaceuticals Inc. was founded in 2003 and is headquartered in San Diego, California.
| Share Statistics (28-Apr-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | SOMX | Revenue, $Mn | 0.0M | 0.0M | 0.0% | 0.0M | 0.0M | 0.0% |
| Current price | $7.19 | Gross marg. | n/a | N/a | n/a | n/a | n/a | n/a |
| 52wk Range: | $10.60-0.33 | Oper. margin | -n/m | -n/m | n/a | -n/m | -n/m | n/a |
| Avg Vol (3m): | 4,646,340 | Net margin | -n/m | -n/m | n/a | -n/m | -n/m | n/a |
| Market Cap. | 186.16M | |||||||
| Dil. Shares Outst. | 31.9M | EPS, $ | -1.45 | Nil | n/a | -0.52 | -0.08 | 84.6% |
Source: Reuters.com, SEC Filings.
Financial Summary
For the 2009 fiscal year, net loss was $14.4 million, or $0.69 per share, compared with $37.2 million, or $2.04 per share, for the 2008 fiscal year. For the fourth quarter of 2009, net loss was $1.9 million, or $0.08 per share, compared with $9.5 million, or $0.52 per share, for the fourth quarter of 2008.
SOMX is a development stage pharmaceutical company, SOMX had no revenues during 2009.
Research and development expenses for 2009 were $4.3 million, compared with $16.5 million for 2008. The decrease was primarily due to a decrease in drug development activities for Silenor as a result of the completion during 2008 of the Company’s cardiac study for Silenor and the delay in the FDA approval process for Silenor. Personnel and other costs and share-based compensation expense allocated to research and development personnel also decreased in connection with the Company’s reduction in headcount.
Marketing, general and administrative expenses were $10.9 million for 2009, compared with $18.8 million for 2008. The decrease was primarily caused by a reduction in market preparation activities as a result of the delay in the FDA approval process for Silenor. Personnel and related costs also decreased as a result of the company’s cost reduction measures, including the reduction in headcount. Share-based compensation expense allocated to marketing, general and administrative personnel increased due to the Company’s one-time stock option exchange program completed in June 2009 and due to arrangements entered into in connection with the reduction in headcount.
For 2009 the company recognized $6.2 million of share-based compensation expense, which is a non-cash expense, compared with $6.3 million for 2008.
At December 31, 2009, the Company had cash, cash equivalents and marketable securities totaling $5.2 million and no debt. As result of the NDA approval for Silenor, SOMX will be required to make a $1.0 million milestone payment to its licensor for Silenor pursuant to its existing license agreement. The Company believes, based on its current operating plan, that its cash, cash equivalents and marketable securities as of December 31, 2009, will be sufficient to fund its operations through the second quarter of 2010.
| Financial Strength (28-Apr-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 2.57 | 2.78 | 2.60 | 0.75 |
| Current Ratio (MRQ) | 2.57 | 3.25 | 3.12 | 0.90 |
| Long-Term Debt to Equity (MRQ) | 0.00 | 10.84 | 24.39 | 144.49 |
| Total Debt to Equity (MRQ) | 0.00 | 15.78 | 31.37 | 206.92 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst two polled investment analysts. Against the Somaxon Pharmaceuticals Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 2 | 0 | 0 | 0 | 0 | 1 |
| 4 weeks ago | 0 | 0 | 0 | 0 | 0 | 1 |
| 2 months ago | 0 | 0 | 0 | 0 | 0 | 1 |
| 3 months ago | 0 | 0 | 0 | 0 | 0 | 1 |
| Last year | 0 | 0 | 1 | 0 | 0 | 2 |
The two analysts offering 12-month price targets for SOMX have a median target of 12.50, with a high estimate of 13.00 and a low estimate of 12.00. The median estimate represents a 74.83% increase from the last price of 7.15.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Jun-10 | 1 | 0.00 | 0.00 | 0.00 | – |
| Quarter Ending Sep-10 | 1 | 0.00 | 0.00 | 0.00 | – |
| Year Ending Dec-10 | 2 | 2.76 | 5.51 | 0.00 | 0.00 |
| Year Ending Dec-11 | 2 | 23.27 | 46.55 | 0.00 | 10.20 |
| EARNINGS (per share) | |||||
| Quarter Ending Jun-10 | 2 | -0.05 | -0.03 | -0.07 | – |
| Quarter Ending Sep-10 | 2 | -0.22 | -0.08 | -0.37 | – |
| Year Ending Dec-10 | 2 | -0.68 | -0.33 | -1.03 | -0.76 |
| Year Ending Dec-11 | 2 | -0.34 | -0.23 | -0.45 | -0.31 |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=SOMX.W
Investment Highlights
SOMX recently announced the appointment of Tran B. Nguyen as vice president and CFO. The Company also announced other executive management team updates. Nguyen brings to SOMX more than 10 years of finance experience primarily focused in the life science industry. Nguyen was most recently CFO of Metabasis Therapeutics Inc., a publicly traded biopharmaceutical company that was acquired by Ligand Pharmaceuticals Inc. in January 2010. Prior to Metabasis, Nguyen was a vice president in the healthcare investment banking groups at Citi Global Markets Inc. and Lehman Brothers Inc. where he successfully executed numerous capital raising and strategic transactions for life science clients.
Central to the execution of SOMX’s strategy is an executive leadership team capable of driving the Company toward its long-term financial and strategic goals. To that end, SOMX also announced the following management updates, each effective April 1, 2010:
– Jeffrey Raser was promoted to the newly created role of senior vice president and chief commercial officer. In this role, Raser will be responsible for all of SOMX’s sales, marketing, managed care and other commercial operations.
– Brian Dorsey was promoted to senior vice president of Technical Operations. In this role, Dorsey will manage all of SOMX’s activities relating to research and development, regulatory affairs, medical affairs, manufacturing and quality.
– Matthew Onaitis was promoted to senior vice president and general counsel. In this role, Onaitis will manage all of SOMX’s legal, compliance, intellectual property and business development activities.
Source: http://www.somaxon.com/
Technical Analysis
Source: http://stockcharts.com
SOMX is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.
SOMX has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, SOMX is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
SOMX’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| Apr-28-2010 | symbol | Share, $ | $ Mn | 2009 | 2010 | 2009 | 2010 |
| Alexza Pharmaceuticals Inc. | ALXA | 3.28 | 172.42M | n/a | n/a | 17.54 | n/a |
| Vanda Pharmaceuticals Inc. | VNDA | 9.43 | 262.72M | n/a | n/a | 63.90 | n/a |
| Transcept Pharmaceuticals Inc. | TSPT | 10.76 | 144.33M | n/a | n/a | 26.19 | n/a |
| Drug Manufacturers Median | 193.15M | n/a | n/a | 3.03 | n/a | ||
| Somaxon Pharmaceuticals Inc. | SOMX | 7.19 | 186.17M | n/a | n/a | n/a | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | 3,609,740 | 19 |
| Net Shares Purchased (Sold) | (3,609,740) | 19 |
| Total Insider Shares Held | 8.49M | n/a |
| % Net Shares Purchased (Sold) | (29.8%) | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | 589,598 |
| % Change in Institutional Shares Held | 8.5% |
Source: Yahoo Finance
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