Somaxon Pharmaceuticals (Nasdaq: SOMX) has announced one yawn-fest of a deal. And not just because the drug involved, Silenor, treats insomnia.

The California biotech licensed the rights to Silenor in Canada, South America, and Africa to Canada-based Paladin Labs for the low, low price of $500,000. Paladin is also making a $5 million equity investment in Somaxon, but that isn't much of an endorsement of Silenor either. Shares are priced slightly lower than where Somaxon closed Tuesday.

There's $128 million in potential milestone payments built into the deal, but they're tied to sales of the drug. The levels for the triggers weren't announced, but one has to guess they won't be a cakewalk; otherwise the companies could have tied some of the milestone to gaining approval in Canada and elsewhere.

Somaxon basically gave away the rights to Silenor and said, "See what you can do with it." Somaxon says the Canadian market for sleeping pills exceeded $79 million last year. The company is due tiered double-digit royalties on sales, which could theoretically be lucrative if the market continues growing at its current 10% clip.

If stateside sales are any indication, though, I wouldn't count on it. In the U.S., where the drug is already approved, Somaxon has the help of Procter & Gamble (NYSE: PG) to market Silenor. Unfortunately, it hasn't helped get Silenor off to a quick start. In the first quarter of the year, Somaxon recognized just $2.3 million in Silenor product sales. It's clearly been difficult to compete against Sepracor's Lunesta, Sanofi's (NYSE: SNY) Ambien CR, and Takeda's Rozerem, as well as generics of Pfizer's (NYSE: PFE) Halcion.

Additional sales from Canada, South America, and Africa would be better than nothing, but this deal shouldn't help investors sleep better at night. Only accelerating sales in the U.S. can do that.

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