Update: Piper Jaffray Lowering Price Target On Somaxon Pharmaceuticals (SOMX)

Piper Jaffray is lowering its price target on shares of Somaxon Pharmaceuticals SOMX to $5 from $7, but is keeping its Overweight rating.

In a note to clients, Piper Jaffray writes, "Somaxon reported a 4Q10 net loss per share of ($0.42), slightly wider than the
Street estimate of ($0.40). Management is guiding to 2011 operating expenses of $74M-$79M, and expects that its current cash position will be sufficient to fund operations through at least 1Q12. This implies a 2011 Silenor sales trajectory of $27M to $33M. Though not as fast of a ramp as we had expected, we nonetheless believe prescription trends look strong, and further believe that the patent estate supports long-term exclusivity (particularly with the newly allowed food effect patent). We reiterate our Overweight rating and slightly lower our price target to $5 from $7 on tempered estimates for Silenor through 2014. That said, with long-term exclusivity, we believe peak sales in excess of $200M-$300M are achievable."

Shares of SOMX gained 6 cents yesterday to close at $3.08, a gain of 2%.