Stifel lowers Soleno Therapeutics stock price target to $115 on PWS market model refresh

Investing.com - Stifel has reduced its price target on Soleno Therapeutics Inc. (NASDAQ:SLNO) to $115.00 from $118.00 while maintaining a Buy rating on the stock. Currently trading at $67.60, the company has demonstrated strong momentum with a 50.39% gain year-to-date, according to InvestingPro data.

The firm’s adjustment follows a refresh of its Prader-Willi Syndrome (PWS) market model, which now projects 50% penetration within the target population, or approximately 30% of all PWS patients.

Despite the slight reduction in price target, Stifel remains confident in the growth trajectory of Soleno’s Vykat treatment, noting that management has received positive feedback from key opinion leaders and patient advocacy groups regarding the drug’s safety and risk/benefit profile.

The firm acknowledges some element of a "bolus" effect in second-quarter numbers that cannot be extrapolated linearly, but still supports a substantial worldwide opportunity valued at over $2 billion.

Stifel also highlighted European Union expansion as a potential meaningful opportunity for Soleno next year, noting similar prevalence numbers to the U.S. market, with possibly more concentration in certain countries.

In other recent news, Soleno Therapeutics has been in the spotlight with several key developments. The company received positive attention after its competitor, Acadia Pharmaceuticals, reported a failure in its Phase 3 COMPASS trial for a Prader-Willi syndrome treatment, ACP-101. This failure has led both H.C. Wainwright and Baird to reiterate their positive outlooks on Soleno Therapeutics, maintaining a Buy rating with a target of $110 and an Outperform rating with a target of $121, respectively. The failed trial is seen as a reduction in competitive pressure for Soleno, potentially allowing for further growth. Additionally, TD Cowen has reaffirmed its Buy rating with a $120 price target on Soleno following the successful launch of Vykat XR, which has surpassed expectations. This launch was discussed at an investor dinner, highlighting its strong commercial performance. Meanwhile, BMO Capital continues to support Acadia Pharmaceuticals with an Outperform rating, despite the trial setback. These developments mark a significant period for Soleno Therapeutics as it navigates the competitive landscape.

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