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Somaxon raises USD6m private equity financing

Somaxon Pharmaceuticals, a pharmaceutical company focused on the treatment of diseases and disorders in the central nervous system, has entered into a purchase agreement to issue and se

Somaxon Pharmaceuticals, a pharmaceutical company focused on the treatment of diseases and disorders in the central nervous system, has entered into a purchase agreement to issue and sell 5.1 million shares of its common stock for aggregate gross proceeds of approximately USD6m.

The price to be paid for the common stock, USD1.05 per share, is equal to the consolidated closing bid price on the Nasdaq Capital Market on the day of pricing, which was 2 July 2009.

The seven-year warrants are exercisable at a price of USD1.155 per share.

The private placement is expected to close on 8 July 2009.

In addition, the FDA has accepted for review the resubmission of Somaxon’s new drug application for Silenor (doxepin) for the treatment of insomnia. The review cycle will be six months, resulting in a new FDA action date of 4 December 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,’ says 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.’

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