Somaxon Pharmaceuticals Shares Slide After Analyst Lowers Target on New FDA Data Requirement

NEW YORK -- Shares of Somaxon Pharmaceuticals Inc. declined Wednesday after one analyst lowered her price target for the drug developer after management disclosed the Food and Drug Administration's new request for preclinical data on a sleep-aid in development.

Somaxon shares shed $1.40, or 8.6 percent, to $14.87 in afternoon trading on the Nasdaq. Since going public in December, shares have traded between $9.69 and $21.24.

Piper Jaffray analyst Deborah A. Knobelman lowered her price target to $22 from $23 to represent the added risk in the company's regulatory profile for the sleep-aid Silenor.

Originally, the company had intended to make a 505(b)2 filing for Silenor, meaning the drug is based upon a widely used and documented compound making preclinical studies unnecessary. However, the company noted the FDA recently requested preclinical studies on Silenor, which uses the generically named doxepin as an active ingredient. Doxepin has been on the market since 1969 and is mostly used as an antidepressant.

Somaxon is currently in late-stage clinical trials for Silenor. Knobelman, who rates the company an "Outperform," speculates that any new preclinical data could be submitted after the marketing application is filed, or after the drug is approved.