Piper Sandler reiterated its overweight rating on shares of Soleno Therapeutics Inc. (NASDAQ: ) with a price target of $93.00. The company’s positive outlook is based on the anticipation of good results for the company’s drug candidate, DCCR, which is being developed for the treatment of Prader-Willi syndrome (PWS).
The company’s confidence in the drug is based on what it sees as a de-risking path for DCCR, until the PDUFA date is set for December 27, 2024. Analysts at Piper Sandler have conducted a comprehensive review of investor inquiries regarding the Advisory Committee. (AdCom), including timing, logistics, and the main topics expected to be addressed.
Analysis by Piper Sandler suggests that DCCR has a positive benefit/risk profile, supported by comprehensive data. The company also noted that there is minimal regulatory risk due to the alignment between Soleno Therapeutics and regulatory authorities regarding the development plan for DCCR. This alignment has been further strengthened by the precedents of other drugs that have been approved based on withdrawal data.
The upcoming AdCom meeting is seen as an important event for Soleno Therapeutics stock, as it is expected to influence the drug’s approval process. Piper Sandler believes that the outcome of the AdCom meeting will have a bearing on the final approval decision.
If approved, DCCR is expected to be indicated for the treatment of PWS, specifically to address hyperphagia in patients four years of age and older. The company expects that the drug’s clear safety profile and unmet medical needs in this patient population will lead to strong market adoption.
In other recent news, Soleno Therapeutics has been in the spotlight with some significant developments. The company has submitted a New Drug Application (NDA) for its DCCR product, a potential treatment for Prader-Willi Syndrome, to the US Food and Drug Administration (FDA). The FDA has granted Priority Review status to the application, with a Prescription Drug User Fee Act (PDUFA) target action date of December 27, 2024.
Analysts from companies such as HC Wainwright, Stifel, and Oppenheimer have expressed optimism about the company’s prospects. HC Wainwright initiated coverage with a Buy rating, while Stifel maintained a Buy rating, and Oppenheimer stated an Outperform rating. The companies are hoping for a favorable outcome from the FDA review process, which shows the drug’s potential market impact.
Soleno Therapeutics has undergone significant changes to its Board of Directors, with Matthew Pauls becoming the new Lead Independent Director and biotech veteran Dawn Carter Beer joining the board. The company has also entered into an agreement with Jefferies LLC to potentially sell up to $150 million of common stock, further strengthening its financial position.
Soleno Therapeutics has granted performance-based restricted stock units to employees, aligning their interests with company performance.
InvestingPro Insights
Soleno Therapeutics Inc. (NASDAQ:SLNO) presents a compelling investment case, especially in light of recent Piper Sandler analysis. According to InvestingPro data, the company’s market capitalization is about $1.9 billion, reflecting investors’ optimism about its potential. This optimism is further supported by the stock’s impressive performance, with a total return of 135.95% over the past year.
InvestingPro Tips highlights that Soleno’s net income will grow this year, and analysts predict that the company will be profitable. These projections are in line with Piper Sandler’s positive outlook on DCCR approval prospects and potential market adoption. In addition, the company has more cash than debt on its balance sheet, which can give it financial flexibility as it navigates the regulatory process and prepares for potential commercialization.
However, investors should note that Soleno is currently unprofitable, with adjusted operating income of $68.5 million over the past twelve months. The stock’s high Price/Book ratio of 6.75 indicates that the market expectations are quite high, which can be justified if DCCR receives approval and performs well in the market.
For those interested in a more in-depth analysis, InvestingPro offers 8 additional tips for Soleno Therapeutics, providing a more complete view of the company’s financial health and market position.
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