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On Wednesday, Stifel analysts resumed coverage of Soleno Therapeutics Inc. (NASDAQ:SLNO), a biopharmaceutical company with a market capitalization of $2 billion, issuing a Buy rating and setting a price target of $74.00. According to InvestingPro data, analysts maintain a strong bullish consensus with price targets ranging from $67 to $93. The firm expressed optimism about the biopharmaceutical company’s prospects, particularly regarding its product DCCR, which is under review by the FDA for the treatment of Prader-Willi Syndrome.
The analysts highlighted that the Prescription Drug User Fee Act (PDUFA) goal date for DCCR is scheduled for March 27th. Despite acknowledging some debate around the approval, they estimated an 80% probability of success. InvestingPro analysis reveals the company maintains a strong financial position with a current ratio of 15.68, indicating robust liquidity to support its development programs. The data supporting DCCR, according to the analysts, are not flawless but are believed to be strong enough to demonstrate a credible clinical effect. They noted that the drug’s risk/benefit profile should be considered favorably due to the significant unmet need in this rare disease, which may warrant regulatory flexibility.
The Stifel team also addressed concerns regarding the study design and the interpretation of the FDA’s actions, such as the cancellation of an advisory committee meeting and the extension of the PDUFA date. They argued that the bear case scenarios do not hold up against their analysis.
Feedback from healthcare professionals on DCCR has been positive, and Stifel’s projections suggest that DCCR has the potential to become a blockbuster drug. This, in turn, indicates a considerable upside to Soleno Therapeutics’ stock value. Additionally, the analysts speculated that the company could be an attractive target for mergers and acquisitions, which would further enhance shareholder value.
The report concluded with a reaffirmation of the Buy rating and a $74 price target, reflecting confidence in the company’s future performance and the anticipated FDA decision on DCCR. Based on InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels, though analysts expect the company to become profitable this year. InvestingPro subscribers have access to 8 additional key insights about SLNO, including detailed financial health metrics and exclusive research reports that could help inform investment decisions.
In other recent news, Soleno Therapeutics has been spotlighted for several significant developments. Analysts at Cantor Fitzgerald have maintained their Overweight rating and a $67 price target for Soleno Therapeutics, reflecting confidence in the company’s future prospects despite adopting a more conservative revenue estimate for 2025. This adjustment comes as the company prepares for the potential launch of a new drug, prompting revisions to operating expenses and market expectations. Additionally, Stifel has included Soleno Therapeutics among its top biotech picks for 2025, citing significant upcoming catalysts, including a regulatory decision expected in the first half of the year. This decision, scheduled for March 27, 2025, could lead to revenue growth and profitability, potentially attracting strategic investors.
In another development, Soleno Therapeutics announced changes to its executive compensation program. The company has increased the base salaries and granted cash bonuses and equity awards to its executives, aligning compensation with performance and market standards. CEO Anish Bhatnagar will receive a base salary of $739,000 and a cash bonus of $403,200 for fiscal year 2024, along with stock options and restricted stock units. These changes reflect the company’s ongoing efforts to retain and motivate its leadership team amid anticipated growth.
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