Soleno Therapeutics Inc. (NASDAQ:SLNO) shares fell on Friday following a short report from Scorpion Capital, which criticized the company's only product, Vykat XR, as overpriced and potentially unsafe for children with Prader-Willi syndrome (PWS).
Vykat XR, a modified tablet version of a 50-year-old generic suspension, carries an annual cost of $500,000, the report claims.
In March, the U.S. Food and Drug Administration (FDA) approved Soleno’s Vykat XR (diazoxide choline) extended-release tablets for hyperphagia in adults and children with PWS.
PWS is a genetic condition characterized by hyperphagia (insatiable hunger) that affects a child’s metabolism, body, and behavior.
Benzinga reached out for comments but has not received a response.
Soleno Situation Similar To Zafgen
In recent weeks, multiple children were reportedly hospitalized for possible heart failure shortly after starting treatment. Scorpion Capital suggests the medication could face market withdrawal or see new prescriptions plummet.
The report compares Soleno’s situation to Zafgen Inc, another PWS drug developer that collapsed in 2015 after two patient deaths during trials.
It warns that Soleno’s stock could follow the same trajectory and plummet to the penny-stock range.
Critics argue Soleno Therapeutics is a “one-trick pony” with no other significant drugs in development. Its only patent expires in 2026, which could threaten its survival if Vykat XR fails commercially.
According to the report, the launch heavily relies on one physician in Gainesville, Florida — the lead investigator for several Soleno Therapeutic studies. This doctor has previously been linked to Zafgen’s drug, and a halted psychedelic trial promoted by an Australian microcap.
Scorpion Capital also points to irregularities in this investigator’s research, raising concerns about data integrity and the validity of Soleno’s clinical trial results.
From approval on March 26 through June 30, Soleno reports that 646 patient start forms were received. It also identified 295 unique prescribers of Vykat XR.
Announced submission and validation of Marketing Authorization Application (MAA) submission to the European Medicines Agency (EMA) seeking marketing approval of DCCR (marketed in the U.S. as VYKAT XR) to patients with PWS in the E.U.
Product revenue was $32.7 million.
Price Action: SLNO stock is down 9.68% at $69.87 at the last check on Friday.
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