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Somaxon Pharmaceuticals Inc expands sales force and agrees USD15m revolving line of credit.

M2 EQUITYBITES-February 9, 2011-Somaxon Pharmaceuticals Inc expands sales force and agrees USD15m revolving line of credit(C)2011 M2 COMMUNICATIONS

Speciality pharmaceutical company Somaxon Pharmaceuticals Inc (NASDAQ:SOMX) revealed on Tuesday that the company plans to take on 35 more sales representatives that will exclusively promote Silenor (doxepin).

The company has engaged its contract sales force partner Publicis Touchpoint Solutions Inc to recruit and deploy the additional sales reps. They will be employees of Publicis but will be hired to Somaxon's specifications and will be managed by Somaxon's team of sales managers.

Somaxon also revealed that it has secured a two-year, USD15m revolving line of credit with Comerica Bank for working capital needs and general corporate purposes. The company will make interest-only payments on any draws under the facility. Subject to certain conditions all principal drawn during the term of the loan facility is due and payable at the maturity date, which is 7 February 2013.

The line of credit is secured by a first priority security interest in all of Somaxon's assets, excluding intellectual property, and it contains affirmative and negative covenants, including financial covenants requiring Somaxon to maintain certain levels of cash and investments and a minimum liquidity ratio.

Interest on outstanding indebtedness under the credit facility is at Comerica's prime rate plus 0.5% or the LIBOR rate plus 3.0% at Somaxon's option.

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Publication:M2 EquityBites (EQB)
Date:Feb 9, 2011
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