BV3 Portfolio Company Somaxon Pharma PIPEs $6 Million
Somaxon Pharmaceuticals Inc. (Nasdaq: SOMX), a San Diego-based drug company focused on CNS disorders, has agreed to raise $6 million via a PIPE. Participants include existing shareholders like MPM Capital, Montreux Equity Partners, Scale Venture Partners, Prospect Venture Partners and Domain Associates. Tavistock Life Sciences is also involved.
PRESS RELEASE
Somaxon Pharmaceuticals, Inc. (Nasdaq: SOMX), a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded pharmaceutical products and late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area, today announced it has entered into a purchase agreement to issue and sell in a private placement approximately 5.1 million shares of its common stock and warrants to purchase up to approximately 5.1 million additional shares of its common stock, for aggregate gross proceeds of approximately $6 million. The price to be paid for the common stock, $1.05 per share, is equal to the consolidated closing bid price on the Nasdaq Capital Market on the day of pricing, which was July 2, 2009. The seven-year warrants are exercisable at a price of $1.155 per share. The private placement is expected to close on July 8, 2009. In addition, the company announced that the FDA has accepted for review the resubmission of its New Drug Application for Silenor® (doxepin) for the treatment of insomnia and confirmed that the review cycle will be six months, resulting in a new FDA action date of December 4, 2009.
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 new investors, including Tavistock Life Sciences.
"We are extremely pleased about the strong support shown by our existing investors participating in this financing, and we are equally excited about the participation of a new investor with the life science industry experience of The Tavistock Group," said Richard W. Pascoe, Somaxon's president and chief executive officer. "Based on our current operating plan, 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."
"The acceptance of the Silenor NDA resubmission and this $6 million cash infusion represent the achievement of two significant milestones in our strategic plan," continued Pascoe. "Going forward, we will continue to execute on our strategic plan by focusing on obtaining FDA approval of Silenor and advancing our current discussions relating to a potential commercial partnership for Silenor. We believe that the Silenor resubmission fully addressed all of the issues raised in the Complete Response Letter we received from the FDA, and we look forward to continuing to work closely with the FDA in the review process. With respect to a commercial partnership, our goal is to enter into an agreement that will maximize the potential commercial success of our current lead product."
The shares and warrants offered in the private placement and the shares issuable upon the exercise of the warrants have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States without being registered with the Securities and Exchange Commission (SEC) or through an applicable exemption from SEC registration requirements. The shares of common stock and warrants were offered only to accredited investors. The company has agreed to file a registration statement with the SEC covering the resale of the shares issuable in the offering and upon the exercise of the warrants.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, any of the securities referred to in this news release in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Any offering of the company's common stock under the resale registration statement referred to in this news release will be made only by means of a prospectus.
About Somaxon Pharmaceuticals, Inc.
Headquartered in San Diego, CA, Somaxon Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the in-licensing, development and commercialization of proprietary branded pharmaceutical products and late-stage product candidates for the treatment of diseases and disorders in the central nervous system therapeutic area. Somaxon has submitted a New Drug Application for its product candidate, Silenor® (doxepin), to the U.S. Food and Drug Administration.
For more information, please visit the company's web site at www.somaxon.com.