Development-stage biotech company Somaxon Pharmaceuticals Inc. said Thursday the Food and Drug Administration approved its delayed insomnia drug Silenor, sending shares skyrocketing.

The stock rose $2.34, or 59.4 percent, to $6.28 in afternoon trading. The stock earlier set a new year high of $7.98, dwarfing a prior peak of $4.88 set March 3.

The FDA approved the drug to treat short term and long term insomnia. FDA decisions on the drug were delayed in 2008 and again in February of 2009. The latter delay came as the FDA asked for more information on the drug.

Silenor is a low-dose oral tablet form of doxepin for use in insomnia. Doxepin has been long prescribed as a treatment for depression and anxiety at dosages typically ranging from 75 mg to 300 mg per day. The FDA did not schedule Silenor as a controlled substance, as expected. The company has described the drug as abuse resistant.

The company expects to launch the drug in the second half of 2010.

Separately, Somaxon reported a fourth-quarter loss of $1.9 million, or 8 cents per share, compared with a loss of $9.5 million, or 52 cents per share, during the same period a year prior. The company had no revenue in either period.

The narrower loss was due to a plunge in costs as the company completed development of Silenor.

For the full year, the company lost $14.4 million, or 69 cents per share, compared with a loss of $37.2 million, or $2.04 per share, in 2008.

The company had $5.2 million in cash, cash equivalents and marketable securities as of Dec. 31 and said it has sufficient funds to operate through the second quarter.