Somaxon Pharmaceuticals Inc.'s proposed drug for treatment of insomnia in adults, Silenor, has been rejected by the US Food and Drug Administration, on the grounds that it "has not shown sufficient effectiveness" and cannot be approved in its current form.

On the news, shares of the company, which had grown by nearly two times since October, slipped as much as 69%.

As per the rejection letter that was sent across, the FDA felt that the application for the medicine failed to meet its "efficacy-approval standard" because of a definite "lack" of effectiveness in adults with primary insomnia. In February as well, the company had received a rejection from the FDA on the same grounds.

"We are disappointed in the decision because we believed that our June NDA resubmission adequately addressed the concerns raised by the FDA in its February complete response letter", said President and Chief Executive Richard W. Pascoe.

Although no safety or other issues were raised by the FDA letter, it did ask the pharma company to submit an "amended risk evaluation and mitigation strategy", as well as a guide which would be distributed with the drug.