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Investing.com - Soleno Therapeutics (NASDAQ:SLNO) stock jumped 14% in pre-market trading Wednesday following news that a potential competitor has exited the Prader-Willi syndrome (PWS) treatment space.
Acadia Pharmaceuticals announced that its Phase 3 trial of intranasal carbetocin for PWS failed to meet its primary endpoint, prompting the company to discontinue development of the treatment. Despite this setback, Acadia maintains strong financial health with a market capitalization of nearly $4 billion and robust revenue growth of 14.4% over the last twelve months.
The discontinued development removes a competitive threat to Soleno’s Vykat XR, which is being developed to treat hyperphagia and other symptoms associated with Prader-Willi syndrome.
Oppenheimer analysts noted that the market reaction to Acadia’s announcement indicates investors had maintained some optimism for a positive outcome from Acadia’s clinical trial.
Prader-Willi syndrome is a rare genetic disorder that causes chronic hunger, obesity, and intellectual disability, with limited treatment options currently available to patients.
In other recent news, Soleno Therapeutics has received positive attention following the failure of a competitor’s drug in clinical trials. Acadia Pharmaceuticals announced that its Phase 3 trial for the Prader-Willi syndrome treatment, intranasal carbetocin (ACP-101), did not meet its primary endpoint, leading the company to discontinue its development for this indication. Following this development, Wells Fargo reiterated an Overweight rating for Soleno Therapeutics with a price target of $123, and Stifel reiterated a Buy rating with a target of $118. Both firms noted the removal of a significant competitive overhang for Soleno’s Vykat drug. Meanwhile, Stifel maintained a Hold rating on Acadia Pharmaceuticals, citing the drug’s failure but also acknowledging the company’s stabilizing core business and future prospects with other treatments. These developments have shifted the competitive landscape for Prader-Willi syndrome treatments, with Soleno Therapeutics now in a more favorable position.
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