UPDATE: Piper Jaffray Downgrades Somaxon Pharmaceuticals to Neutral

Piper Jaffray is out with its report today on Somaxon Pharmaceuticals SOMX, downgrading SOMX from Overweight to Neutral. In a note to clients, Piper Jaffray writes, "We are downgrading Somaxon to a Neutral from an Overweight and lowering our price target to $2.50 from $5. Though we still believe Silenor has key points of differentiation versus older prescription sleep aids, total Rx's for the product are simply not ramping as fast as we had expected. Further, with heavy promotional spend, SOMX will need to access additional capital sometime in 1H12. With annual spending to support Silenor approaching $80M, sales will need to approach $100M for SOMX to reach break-even. Given the current Rx trajectory, we do not have visibility on Silenor getting to those levels." Shares of SOMX closed Friday at $2.20, down 1.79% from Thursday's close.