Soleno jumps as analysts say US nod for rare disease drug transforms treatment options

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By Sneha S K and Bhanvi Satija

(Reuters) -Shares of Soleno Therapeutics jumped 40% in morning trading on Thursday, after the company’s drug for a rare metabolic condition became the first such treatment to receive U.S. regulatory nod.

Soleno’s Vykat XR was approved late on Wednesday by the Food and Drug Administration to treat hyperphagia, or feelings of intense and persistent hunger, in patients with the genetic disorder called Prader-Willi syndrome.

Wall Street analysts said the approval of Soleno’s drug markedly changes treatment options for patients who suffer from hyperphagia that can lead to a range of disruptive food-related behaviors such as aggressively seeking food.

“This is a launch investors want to own and one that should be very strong,” said James Condulis, analyst at Stifel.

The company is on track to add nearly $900 million to its market value of $2.3 billion, if gains hold.

Approval for Soleno’s drug comes with a clean label that does not exclude any patients based on the severity of the disease symptoms and carries no harsh safety warnings from the regulator, Baird analyst Brian Skorney wrote in a note.

Skorney, who hiked his price target on the stock to $102 from $72, said the drug’s mechanism is “an ideal fit” for patients with hyperphagia.

“The field has been searching for a solution to this problem so that patients are better armed not to succumb to hyperphagic obesity and subsequent complications,” Skorney said.

The California-based company said it has identified about 10,000 individuals with PWS in the U.S. as its patient population. It expects sales to pick up in 2026.

Condulis said the drug has “blockbuster opportunity”, as there is very high awareness about the drug among patients and doctors.

Soleno’s price to tangible book value ratio, a common benchmark of valuing stocks, stood at 9.39 as of Thursday, compared with 4.63 for Acadia Pharmaceuticals, which is testing a rival drug, according to data compiled by LSEG.

(Reporting by Bhanvi Satija and Sneha S K in Bengaluru; Editing by Krishna Chandra Eluri)