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On Thursday, Piper Sandler reaffirmed its optimistic stance on Soleno Therapeutics Inc. (NASDAQ:SLNO), maintaining an Overweight stock rating with a $93.00 price target. Currently trading at $48.97, the stock has significant upside potential according to analysts, with targets ranging from $70 to $123. The endorsement follows the Food and Drug Administration’s approval of VYKAT XR (DCCR) for the treatment of hyperphagia in patients with Prader-Willi Syndrome (PWS) aged 4 years and older. The approved label comes with minimal warnings, which Piper Sandler considers to be the best-case scenario for the company. InvestingPro analysis indicates the company’s strong potential, with analysts predicting profitability this year.
The FDA’s approval of VYKAT XR is particularly significant due to the drug’s clean label, which only includes minor warnings regarding hyperglycemia and fluid overload risk. This clean label is expected to facilitate the drug’s adoption in the market. With a current market capitalization of $2.25 billion and strong financial health metrics, Soleno Therapeutics has adopted a weight-based pricing strategy for VYKAT XR, with the annual Wholesale Acquisition Cost (WAC) for the average weight of a patient from the C601 study being approximately $466,200. This figure exceeds the previously modeled annual WAC of $300,000 to $350,000 by industry analysts.
The therapeutic’s pricing strategy is expected to be well-received, especially as it is geared towards the average weight of patients, which in the case of the C601 study, corresponds to the 40-64 kg weight band. The pricing is positioned to cater to the needs of the patient population, which includes children and young adults who are likely to have a lower average weight.
With an estimated 10,000 patients in the United States who could benefit from VYKAT XR, Piper Sandler expresses confidence in Soleno Therapeutics’ commercial strategy. The company plans to deploy a sales team of 30 representatives who will focus on approximately 300 specialists. These specialists have influence over or directly treat around 40% of the addressable patient population, providing a solid foundation for the drug’s market entry and growth. Notably, InvestingPro data shows the stock’s beta of -1.69, indicating it often moves opposite to the market, which could provide portfolio diversification benefits.
The approval of VYKAT XR with its favorable pricing and minimal warnings presents a positive development for Soleno Therapeutics. The company’s strategic approach to commercialization, aimed at a well-defined specialist network, is anticipated to drive the successful uptake of this new treatment for hyperphagia in PWS patients. For deeper insights into Soleno Therapeutics’ valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and a detailed Pro Research Report that transforms complex financial data into actionable intelligence.
In other recent news, Soleno Therapeutics has received FDA approval for its VYKAT XR, a treatment for Prader-Willi Syndrome, marking a significant milestone for the company. Analysts from Stifel maintained a Buy rating on Soleno’s shares, with a price target of $74, highlighting the drug’s favorable market conditions and pricing at approximately $466,000. Oppenheimer also adjusted its price target for Soleno, raising it to $105, citing the potential for peak sales in the U.S. to reach $2 billion, up from a previous estimate of $1.5 billion. Cantor Fitzgerald expressed confidence by nearly doubling its price target to $123, emphasizing the drug’s clean label and strong market demand. Additionally, Baird upgraded its price target to $102, viewing the FDA approval as a catalyst for Soleno’s valuation. The approval is expected to enhance Soleno’s market position, as analysts anticipate strong demand and robust support from healthcare payors. Soleno’s strategic preparations for the commercial launch, including expanding its sales force, are underway to ensure prompt product availability.
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