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