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Sleep is one of the most
attractive markets in all pharmaceuticals, and Somaxon Pharmaceuticals offers a new drug,
SILENOR, currently in Phase III trials for insomnia, that addresses the needs of
insomniacs without the risk of dependency
Healthcare
Specialty Pharmaceuticals
(SOMX-NASDAQ)
Somaxon Pharmaceuticals, Inc.
3721 Valley Centre Drive, Suite 500
San Diego, CA 92130
Phone: 858-480-0400
Kenneth M. Cohen
Co-Founder, President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
October 26, 2006
BIO:
Mr. Kenneth M. Cohen
Co-Founder, Chief Exec. Officer, Pres.
Kenneth M. Cohen is a Somaxon co-founder and has served as the company’s
President and Chief Executive Officer and as a member of the board of directors since the
company’s inception in August 2003. Previously, he was an independent advisor to
various biotechnology and pharmaceutical companies, entrepreneurs and investors, including
Synbiotics Corporation, Applied NeuroSolutions, Inc. and Highbridge Capital Management.
From 1996 to 2001, he was President and Chief Executive Officer of Synbiotics Corporation,
a diagnostics company. From 1995 to 1996, Mr. Cohen was Executive Vice President and Chief
Operating Officer for Canji Incorporated, a human gene-therapy company, until its
acquisition by Schering-Plough Corporation in February 1996. Prior to joining Canji, he
was Vice President of Business Affairs at Argus Pharmaceuticals, Inc. and Vice President
of Marketing and Business Development for LifeCell Corporation. Mr. Cohen began his career
at Eli Lilly and Company in 1978, where among many different responsibilities over ten
years, he directed business planning for the Medical Instrument Systems Division (now
known as Guidant Corporation) and managed the launch of Prozac. He received an A.B. in
biology and chemistry from Dartmouth College and an M.B.A. from the Wharton School of The
University of Pennsylvania.
Company Profile:
Somaxon is a specialty pharmaceutical company focused on the in-licensing and development
of proprietary product candidates for the treatment of diseases and disorders in the
fields of psychiatry and neurology.
To date, the company has in-licensed three products.
Its lead product, SILENOR™ (doxepin HCl), is in Phase III clinical trials for the
treatment of insomnia. Nalmefene HCl is in a Phase II/III clinical trial for the treatment
of pathological gambling and a Phase II clinical trial for smoking cessation. Somaxon also
is developing a new formulation of acamprosate Ca for the treatment of certain movement
disorders.
Somaxon intends to continue to build a portfolio of
product candidates that target psychiatric and neurological diseases and disorders,
focusing on products that are currently commercialized outside the United States, approved
in the United States but with significant commercial potential for proprietary new uses,
new dosages or alternative delivery systems, or in late stages of clinical development.
CEOCFO: Mr. Cohen, what
was your vision when you founded Somaxon and where are you today?
Mr. Cohen: “We started Somaxon three-and-a-half years
ago with a goal of building a specialty pharmaceutical company focused on products where
there is already a significant base of human experience behind them, but through some way,
whether it is a dosage or a different use, we have a chance to take these older
established drugs and turn them into new products. In effect, this allows us to start the
drug development race somewhat closer to the finish line.
We thought that would be a better way to manage the risk/reward potential of a drug
development company. We were able to bring three product candidates into the company that
fit that description. So far, we think the strategy is working, because we are here three
years later well along into Phase III studies on our most advanced program, which is a
potential new drug for insomnia. We have managed to get the company well-financed, take it
public, and right now we are approaching an advanced stage in our product development. We
expect more Phase III data this year and we are aiming to file our first new drug
application in the third quarter of 2007 on our insomnia product SILENOR.”
CEOCFO: Will you tell us
about the company’s lead product?
Mr. Cohen: “Our product in Phase III trials for insomnia
is based on a drug that was approved 40 years ago. The generic name is doxepin; it was
originally marketed as Sinequan, an antidepressant drug. It has always been known that
this particular antidepressant drug has sleepiness as a side effect, but unlike some other
antidepressants, it has never been very popular for use in insomnia. This was mostly
because at the high dose prescribed, patients do not tolerate it well. They are too sleepy
during the day, and they have too many anticholinergic side effects, like dry mouth or
blurred vision. It was discovered by a physician in practice that at very low dosages than
had ever previously been studied or manufactured or approved or marketed, that
unexpectedly this drug would maintain its beneficial effects on sleep, but it would not
have all of the side-effects that would discourage people from taking it. That was Dr.
Kavy at Columbia Presbyterian in New York. He secured a couple of patents on this, and we
in-licensed those patents and moved the drug into development. Insomnia is one of the most
exciting market opportunities because there are close to 70 million people that suffer
from insomnia and only a small portion who take prescription drugs. People are concerned
about the currently available drugs, most of which are schedule IV controlled substances,
which means they are potentially addictive. Many of these help people fall asleep faster,
but do not help people to sleep all through the night or into early hours of the morning,
and most have a lot of side-effects. We have a drug called SILENOR with data from the
first Phase III study that suggests it can be useful in helping people fall asleep and
sleep all through the night. The safety profile that we have seen so far in clinical
trials looks quite encouraging; the drug is not addictive, and it never has been a
controlled substance, or regulated as such. We think this could be for a lot of people, a
very interesting choice to get them the benefits they want without a lot of side effects
and without the risk of dependency.”
CEOCFO: In general, are
consumers receptive to drugs that were originally developed for something else and now are
being offered in a new version for a new problem?
Mr. Cohen: “As with any marketing plan for something
new, there is a mix. There is always a segment of the market that is going to think they
know what it is because it is old, it has been around. On the other hand, what our data
show is that at this low dosage, it is not the drug people think it is. It has a very
different profile, and it is intended for a different purpose. It is a challenge to get
people to realize this is not what they assume it to be, but it is something new. At the
same time, there are a lot of people that are going to like this better. From a lot of
cases in our industry, it is evident that even after a new drug gets approved, there are
some risks as to whether the safety in a large population will be consistent with what the
limited number of patients in clinical trials predicted. In our case, we have a drug on
the market that has been used by millions of people over the last almost 40 years at
significantly higher dosages. For many patients and physicians, the idea that this drug
has a long safety history and is being offered at a much lower dose, is a big
advantage.”
CEOCFO: Tell me about
the other drugs you are developing.
Mr. Cohen: “We are currently in Phase II clinical trials
with a drug called nalmefene hydrochloride as a potential treatment for impulse control
disorders and addictions. For a long time now, the diagnostic guidelines for psychiatry
have included a category of disorders called impulse control, which are easily thought of
as behavioral addictions such as pathological gambling, pyromania, kleptomania, and
intermittent explosive disorder, which are things like road rage. With our drug, the one
that we know the most about so far is pathological gambling. These are behaviors
characterized by urges and cravings much like substance addictions. It is believed that if
you can block certain receptors in the brain called opioid receptors, you can reduce urges
and cravings and help people to reduce or quit the behavior. Prior to our in-licensing it,
nalmefene has been through one large Phase II trial with about 200 patients, which was
published a few months ago in the American Journal of Psychiatry. It shows that based on a
validated evaluation scale that physicians use for these pathological gambling patients,
the drug was more effective than placebo at reducing cravings and urges and helping people
to overcome some of the functional problems that they get into as a result of the gambling
habit. We are interested in the same drug as a potential aid to smoking cessation. We have
taken it through an early pilot trial where we did see evidence that patients taking the
drug seemed to be able to abstain from smoking at a higher rate than patients on the
placebo. Therefore, we have two interesting early efficacy signals here that we hope to
follow up on with further studies. We have a large pathological gambling trial going on
now, and we will have data from that early next year.”
CEOCFO: You are focusing
in the area of psychiatry and neurology; why have you chosen those areas?
Mr. Cohen: “We started the company around an insomnia
opportunity and about two-thirds of the market for insomnia drugs is actually in primary
care physicians, such as your family doctor. To reach that market we think the most
logical thing will be through collaboration with a larger pharmaceutical company who can
already access that market. After primary care, the next largest specialty for insomnia is
psychiatry and neurology. That amounts to about 15 percent of the market, and there are
not nearly as many psychiatrists and neurologists as there are primary care doctors.
Therefore, we would like to partner on the primary care side of the business, but over
time, to build our own sales and marketing capability, targeting that smaller, more
focused market of psychiatry and neurology. We have in-licensed a couple of other product
candidates to target that market. Over time, we would hope to acquire or in-license more
products for that market. When you start your company from scratch, it is reasonable to
plan a sales and marketing effort around a modest number of specialists, but to get so big
that you can reach all of the family doctors in the country, that is a longer term, much
more expensive proposition, and probably not any place we are going to go in the near
term.”
CEOCFO: What is the
financial picture of the company?
Mr. Cohen: “Since we started the company, we raised $90
million in three rounds of private venture capital. Then in December 2005, we raised about
$55 million in an initial public offering. Therefore, we are financially strong. As of the
end of June, we had about $78 million in the bank, which is enough for us to get all the
way through the filing of a new drug application on SILENOR, our insomnia product, in the
third quarter of 2007, and have something left over. For a development stage company to do
all the things it wants to do, we need to plan to raise a lot of money over time. For the
moment, we are comfortable with our financial situation to carry out what we need to get
done over the next year.”
CEOCFO: Why should
potential investors be interested and what sets you apart in the development process that
we should know about?
Mr. Cohen: “First, insomnia is one of the most exciting
and attractive markets in all of the pharmaceutical business. It is growing rapidly, yet
there is a lot of dissatisfaction with currently available treatments. Secondly, from a
risk point of view, we believe we have addressed many of the inherent development risks of
an emerging specialty pharmaceutical company. We already have Phase III data on our
product, and our product is based on a drug that has been on the market at higher dosages
for nearly 40 years. We are looking at a large market; we already have evidence from Phase
III that our drug seems to do what we want it to do; and from a safety perspective, this
drug already has been in millions of patients at higher dosages. You never know until you
finish your trials what you have and what is going to happen, but simply from a
probability and risk perspective, we already know a great deal about this drug. It is in
the advanced stage of development for a market that is pretty attractive.”
CEOCFO: Is the
investment community paying attention?
Mr. Cohen: “There are six Wall Street analysts writing
research on the company. We have a significant base of institutional shareholders. We
became public last December, and the stock has moved considerably both up and down, but it
is still considerably higher than when we first went public, so yes, people are beginning
to pay attention.”
CEOCFO: Finally, what
should readers remember about the company?
Mr. Cohen: “Sleep is one of the most attractive markets
in all of pharmaceuticals, and we are among a handful of companies or maybe the only
company that has Phase III data on a drug that could potentially address all the things
people are looking for in a new drug for insomnia without the risk of dependency. We think
we have a potentially best-in-class product opportunity here if additional data, which
will be available by year-end, supports the data that we already have.”
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