Soleno Therapeutics (NASDAQ: SLNO) stock is up 504%. The reason for the leap in SLNO stock is that the company has pulled off the feat that every development pharma company is hoping of - developing something that actually works and that when marketed will likely have a market. Most such development attempts fail at one stage or another and this one is right on the cusp of making it all the way through the process and actually getting to market and revenue.
Soleno’s basic background: “Soleno Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. Its lead candidate is Diazoxide Choline Extended-Release tablets, a once-daily oral tablet, which is in Phase III clinical trials for the treatment of Prader-Willi Syndrome.” That lead candidate is what is providing the excitement right now: “Hyperphagia-related behaviors markedly worsened in the placebo group compared to DCCR, represented by a highly statistically significant, clinically meaningful difference in mean change from baseline in the HQ-CT total score of 5.0 at week 16 (p=0.0022).” That might be a bit technical, so another description: “The company tested 77 patients with Prader Willi syndrome, a genetic disease that causes obesity, intellectual disability and short stature. Patients had been taking Soleno's pill, dubbed DCCR, for two to four years. Over four months, roughly half continued taking DCCR while the others were switched to a placebo. Abnormally strong hunger signals, a medical term known as hyperphagia, returned after patients switched to the placebo.”
Or, a proof that the drug works.
Soleno Therapeutics stock price from Google Finance
The next stage is to actually get the FDA to authorise the treatment but this seems to be very likely - they’d already said that this trial would be good evidence.
It’s usual at this point for a pharma company to look for more capital - the stock price rise reduces the cost to the company of issuing more. Soleno already has an arrangement to issue more stock to certain investors against warrants. But given the stock price rise here we’d be surprised if there isn’t a larger and more general one as well. That doesn’t mean there will be but we’d be surprised if there isn’t.
It’s possible to wonder how big this market is going to be. Prader Willi affects perhaps 10 to 15,000 people in the US. So it’s not a huge market - on the other hand it’s a genetic disorder to any treatment has to be for life. That should be enough to support a $300 million market cap. Probably.
