Tuesday, February 27, 2007

To sleep, perchance to dream....

Well, I finally bought some Somaxon (SOMX). They've got as much going for them as a biotech which has never marketed a product can have:

  • They have gotten good results in Phase III trials on a drug which they are suggesting for a problem which is serious and common in the rich Western countries. (I'm talking about Silenor, of course. My crystal ball tells me that just as some of their previous results with nalmefene were "disappointing", nothing much is ever going to come of it for "impulse control disorders".)
  • Silenor isn't a new drug. It's a much lower dose of a well-known medication, which improves its chance of approval.
  • Although Somaxon might not have a platform in technological sense, they have one in the conceptual sense: They are trying to license old drugs for new indications. This might make them an attractive buyout candidate in these days when several big drug companies are desperate to fill out their pipelines quickly somehow. In fact, in the medium term, every time another biotech is bought out, this should help boost Somaxon's price.
  • Somaxon is probably very close to an NDA; the submission itself should boost their price in the medium term, and perhaps also their attractiveness as a buyout candidate. Remember Vicuron?
  • Somaxon's upsides and downsides are very much company-specific; even if the whole world economy nosedives, as everybody seems to be expecting today, SOMX could still go up. In other words, it's pretty much unlinked to macroeconomic factors.


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