By Casey Lynch:

The 23rd Annual JP Morgan Healthcare Conference is underway this week in San Francisco where 230 public and 50 private companies are presenting their latest findings to over 6,000 healthcare executives and investors.

Of the many areas covered, the insomnia market was especially well represented. JP Morgan specialty pharmaceutical analyst Corey Davis provided an excellent overview of the growing insomnia market where Ambien currently holds 67% of the $2.3 billion market.

But Ambien's future doesn't look bright as new treatments with fewer side effects and less chronic treatment risks emerge, including Sepracor's Lunesta and Neurocrine's Indiplon. JP Morgan analysts suggested that Lunesta, which promotes sleep maintenance, in addition to sleep induction, will be able to gain a major share of the insomnia market in only two years. Lunesta's potential for market dominance is further blostered by Neurocrine's recent technical setback with the FDA that will slow down its market entry.