Somaxon to axe HQ staffers as adviser explores possible sale

Posted under Blog, Companies, Diagnostics, Funding, layoffs, Medical Devices, Medical Supply, Pharmaceuticals, Silenor, Somaxon, Startups, Universities, Videos by John Carroll

Plagued by weak sales of the sleep drug Silenor, San Diego-based Somaxon ($SOMX) laid out plans to lay off a majority of its headquarters staff as a financial adviser reviews its options, including a potential sale of the company. Stifel Nicolaus Weisel has been hired as a strategic advisor.

"This process will focus on strategic alternatives, which may include one or more of a sale of the company or assets relating to Silenor, or partnering or other collaboration transactions relating to U.S. or ex-U.S. prescription or over-the-counter rights to Silenor," said CEO Richard Pascoe. "While we are conducting this process, we will continue to market Silenor in the U.S. to existing prescribers through our 30-person sales force and non-personal promotion, and to protect the intellectual property position of the product," continued Pascoe. "We will also undertake measures to minimize our cash burn rate, including through a reduction in force involving approximately 60% of our current non-field-based employees."

Somaxon said in its release that it will terminate 60% of its non-field workforce, underscoring lingering doubts about the biotech's future. Silenor has helped illustrate how an FDA approval is no panacea for a biotech company. Its third quarter 2011 sales amounted to only $3.7 million in a crowded market of competing therapeutics. Somaxon's stock was trading at 52 cents a share this morning, down 12%.

- here is the Somaxon release

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