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The FDA will complete its review and provide an action letter to Somaxon Pharmaceuticals (NASDAQ:SOMX) relating to the Silenor NDA by December 4, 2009.

Insomnia has become an issue of great concern in the United States, since according to the National Sleep Foundation almost 70 million Americans have insomnia. Market research indicates that the clinical profile most desired by patients and doctors is that of a product that will provide 7-8 hours of sleep in adults without causing next day sedation and without the risk of other troubling side effects such as amnesia, hallucinations and other complex behaviors. Importantly, they want to feel confident that their medication can be taken safely over time with no tolerance to the drug’s effects and no risk of dependency.

The leading approved insomnia medications, Ambien®, Ambien CR®, Sonata® and Lunesta®, work by binding to and activating a set of brain receptors known as GABA receptors. These products induce sleep by suppressing the CNS arousal mechanism.

Doxepin is a potent H1 antagonist and has a high affinity for human H1 receptors. Doxepin is approved in the United States and Europe for the treatment of depression and anxiety at doses of 75mg-300mg daily. Doxepin at higher doses has been associated with a range of pharmacologic side effects that include anticholenerigic effects (dry mouth, constipation, etc.) and weight gain.

Silenor® (doxepin) is a sleep-specific, low-dose, oral tablet formulation of doxepin for use in insomnia. In contrast to higher-dose doxepin, Silenor is a potent antagonist that appears to selectively affect histamine at the H1 receptor without a clinically relevant impact on other neurotransmitter systems. Histamine is an important waking neurotransmitter, and the blockade of histamine is believed to play an important role in the promotion of sleep. It is expected that Silenor will be indicated for the treatment of insomnia characterized by difficulties maintaining sleep after sleep onset.

Somaxon submitted its first NDA on January 31, 2008. However, it had to resubmit its NDA on June 4, 2009 after receiving a Complete Response Letter from the FDA. In the letter, the FDA denied approval for the insomnia drug Silenor in its present form since it lengthened the cardiac QT interval, which in turn caused irregularities in the heart’s electrical system. Also silenor has some other potential risks: even with prescription, people with insomina tend to abuse drugs. If they see no immediate relief, most likely they will over-dose themselves. In the resubmitted NDA, Somaxon presented statistical results of clinical trials, in which the company said it was shown that Silenor did not affect QT interval prolongation if administered at 6 mg.

At September 30, 2009, Somaxon had cash, cash equivalents and marketable securities totaling $5.4 million. The company believes, based on its current operating plan, that its cash, cash equivalents and marketable securities as of September 30, 2009 will be sufficient to fund its operations through the expected duration of the FDA’s review of its resubmission of the Silenor NDA and through the second quarter of 2010. The FDA decision on Silenor will be a make or break event for Somaxon.

Monday, SOMX had its pre-FDA run to reach a new 52 weeks high of $4.8/share, which translates into a double of share price from merely three trading days ago. In my opinion, the FDA likely will not approve the insomnia drug Silenor from Somaxon Pharmaceuticals, just like what it did to Intermezzo from Transcept Pharmaceuticals, Inc.(TSPT) last month. The FDA decision date coming close makes it a very high risk investment to long SOMX stock at this price level.

Disclosure: No positions in SOMX, TSPT.