$SOMX: “Still is Still Moving”
May 6th, 2010 at 1:52 pm Posted by
As many students are aware, $SOMX from back the back row, $2.91 in late January, to the head of the class, hitting a high of $10.60 in mid-March. This represents a gain of more than 260%.
If you need to jog your memory, Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) focuses on the licensing, development and commercialization of proprietary branded products and late-stage product candidates for the treatment of diseases and disorders associated with the central nervous system.
As of May 1st, $SOMX‘s Corporate Governance Quotient, or CGQ, is better than 52.8% of CGQ Universe companies and 28.6% of pharmaceutical, biotechnology and life science companies.
The CGQ is a corporate governance system provided by Institutional Shareholder Services (NYSE: RMG) on more than 8,000 companies around the globe, which evaluates the strengths, deficiencies, and risks of a company’s corporate governance practices and board of directors.
How does that compare with big pharma?
Listed as 68.8% of S&P 500 companies and 98.7% of pharma, biotechs and life science companies, Pfizer (NYSE: PFE) is a much, much bigger fish in a “smaller” pond.
Apples and oranges? Does Willie Nelson play country music?
It doesn’t take a genius to know that these two companies are miles away from one another, especially when you look at their market capitalizations ($PFE, $138 billion vs. $SOMX, $172 million).
Certainly, there are large differences between $PFE and $SOMX that go way beyond their market caps. For example, $PFE was established in 1849, whereas $SOMX has only been around for seven years.
Perhaps even more obvious than that is the fact that $PFE has a huge product portfolio. Go ahead. Think of a pharmaceutical drug you’ve seen advertised on television or in magazines.
Viagra, Lipitor, Enbrel, Chantix, Spiriva, let’s not forget Celebrex—and the list goes on.
$SOMX, on the other hand, has one main product, Silenor (doxepin), which was recently approved by the FDA for the treatment of insomnia.
What’s The Dean getting at?
Since its FDA approval rally, and subsequent new 52-week high, $SOMX has fallen more than 35%. At the same time, $SOMX has seen fairly consistent trading volume, and has appeared on Fool.com a number of times in the past couple of weeks.
$SOMX recently announced it will release its first quarter 2010 financial results next Tuesday after market close, and The Dean thinks this stock could be moving back up.
Now, everyone knows that past performance is not an indication of future results but The Dean did hit the nail on the head back in January.
