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On Tuesday, Guggenheim maintained a Buy rating on Soleno Therapeutics Inc. (NASDAQ:SLNO) and increased the price target to $81 from the previous $70. The adjustment follows the approval of VYKAT XR, a treatment developed by Soleno Therapeutics. According to InvestingPro data, analyst consensus is strongly bullish with targets ranging from $70 to $123, suggesting significant upside potential.
In his statement, the Guggenheim analyst highlighted the rationale behind the new price target, citing several conservative assumptions that underpin the valuation. These assumptions include a target addressable market (TAM) that encompasses 50% of the estimated 10,000 U.S. patients with Prader-Willi Syndrome (PWS), a compliance-adjusted wholesale acquisition cost (WAC) of $400,000 per patient per year starting in 2025 with a 3% annual increase, and a fully-diluted share count of 54 million. InvestingPro analysis indicates the company currently has a market capitalization of $3.05 billion and maintains strong liquidity with a current ratio of 15.68.
The analyst’s forecast for VYKAT XR’s financial performance is optimistic, projecting that by the year 2030, the drug could generate revenues of $1.6 billion in the United States market alone. This projection is based on the drug’s pricing and the anticipated patient population who will be using the weight-based dosing regimen. InvestingPro Tips reveal that while the company isn’t currently profitable, analysts expect positive net income growth this year, with projected earnings per share of $7.31 for FY2025.
Soleno Therapeutics’ new price target of $81 reflects a significant increase from the prior target of $70. The company’s focus on developing innovative therapies for rare diseases has garnered continued support from Guggenheim, as evidenced by the maintained Buy rating.
The approval of VYKAT XR represents a milestone for Soleno Therapeutics, with the company’s stock price target being raised in anticipation of the drug’s commercial success and its potential impact on the company’s financial growth.
In other recent news, Soleno Therapeutics has received FDA approval for its VYKAT XR (DCCR) tablets, designed to treat hyperphagia in patients with Prader-Willi Syndrome. This approval is accompanied by a favorable label, which only includes minor warnings, and has led to a positive response from analysts. Piper Sandler maintained an Overweight rating with a $93 price target, while Stifel kept a Buy rating with a $74 target, both expressing optimism about the drug’s market potential. Oppenheimer increased its price target to $105, citing the drug’s potential peak sales in the United States reaching $2 billion. Cantor Fitzgerald also raised its target to $123, highlighting the drug’s clean label and supportive pricing strategy. Baird upgraded its target to $102, viewing the FDA approval as a key catalyst for Soleno’s valuation. The drug’s pricing strategy, set at approximately $466,200 annually, is expected to be well-received by the market. Soleno’s strategic approach includes deploying a sales team to focus on specialists who treat a significant portion of the patient population.
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