Earnings call transcript: Soleno Therapeutics beats Q2 2025 forecasts with strong revenue

Soleno Therapeutics (SLNO) reported its earnings for the second quarter of 2025, exceeding expectations with a significant revenue beat. The company posted an earnings per share (EPS) of -$0.09, surpassing the forecasted -$0.64, marking an impressive surprise of 85.94%. Revenue reached $32.7 million, more than double the anticipated $15.35 million, with a surprise of 113.03%. Despite these positive results, Soleno’s stock experienced a slight decline of 0.54% in after-hours trading, closing at $81.19. According to InvestingPro data, the company maintains a "Fair" financial health score, with the stock delivering an impressive 84.69% return over the past year.

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Key Takeaways

• Soleno Therapeutics reported a substantial revenue beat in Q2 2025.
• The company’s EPS exceeded expectations by a wide margin.
• Despite strong financial performance, the stock dipped slightly post-announcement.
• Soleno’s new product, VICAT XR, has been well-received in the market.
• The company is exploring opportunities for European market expansion.

Company Performance

Soleno Therapeutics demonstrated robust performance in the second quarter, driven by the successful launch of VICAT XR, the first FDA-approved treatment for hyperphagia in Prader-Willi Syndrome (PWS). The company is focusing on expanding its market presence and increasing coverage for its innovative product. With a strong current ratio of 19.64 and moderate debt levels, Soleno’s financial position supports its strategic initiatives aimed at solidifying its position as a leader in the PWS treatment space.

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Financial Highlights

• Revenue: $32.7 million, significantly higher than the forecasted $15.35 million.
• Earnings per share: -$0.09, compared to the expected -$0.64.
• Cash used in operating activities: $12.6 million.
• Pro forma cash balance: Over $500 million, following additional financing.

Earnings vs. Forecast

Soleno’s EPS of -$0.09 was a substantial improvement over the forecast of -$0.64, resulting in an 85.94% positive surprise. The company also reported revenue of $32.7 million, far exceeding the anticipated $15.35 million, marking a 113.03% revenue surprise. This strong performance highlights Soleno’s effective execution and market strategy.

Market Reaction

Following the earnings release, Soleno Therapeutics’ stock saw a minor decline of 0.54% in after-hours trading, closing at $81.19. This movement contrasts with the company’s strong financial results. Notably, InvestingPro data shows the stock’s beta of -2.56, indicating it often moves counter to market trends. Analyst price targets range from $97 to $145, suggesting potential upside, though current analysis indicates the stock may be trading above its Fair Value.

Outlook & Guidance

Looking ahead, Soleno Therapeutics is optimistic about reaching cash flow positivity in the near term. The company projects annual cash operating expenses of $120-130 million, with a potential modest increase to $140 million. Soleno is also exploring opportunities for a European launch of VICAT XR and considering future portfolio diversification.

Executive Commentary

"We believe VICAT XR is on its way to being the standard of care for people living with PWS," stated Anish Bhatnagar, CEO. Jim McInnis, CFO, highlighted the company’s financial strength, noting, "We have $500 million of balance sheet strength. So it allows us the optionality when we’re looking at Europe."

Risks and Challenges

• Market entry barriers in Europe could delay product expansion.
• Potential increase in operating expenses may impact profitability.
• Macroeconomic factors and healthcare policy changes could affect market dynamics.
• Competition from emerging therapies might challenge market share.

Q&A

During the earnings call, analysts inquired about the company’s post-marketing safety data and potential European partnerships. CEO Anish Bhatnagar reassured that no new safety signals have emerged, and the company is actively exploring strategic collaborations for its European market entry.

Full transcript - Soleno Therapeutics Inc (SLNO) Q2 2025:

Conference Operator: Greetings and welcome to the Solano Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Question and answer session will follow the formal presentation. You may press star one at any time to be placed into the question queue. And we ask that you please ask one question and one follow-up, then return to the queue.

As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Brian Ritchie of LifeSci Advisors. Please go ahead, Brian.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors: Thank you. Good afternoon, everyone, and thank you for joining us to discuss Solano Therapeutics’ second quarter twenty twenty five financial and operating results. Please note, we’ll be making certain forward looking statements today. We refer you to Solano’s SEC filings for a discussion of the risks that may cause actual results to differ from the forward looking statements. On the call with me today for Solano are Anish Bhatnagar, Solano’s Chairman and Chief Executive Officer Meredith Manning, Solano’s Chief Commercial Officer and Jim McInnis, Solano’s Chief Financial Officer.

With that, I will now turn the call over to Anish.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Thank you, Brian, and thank you, everyone, for joining us for our second quarter financial results call. For those who follow us closely, you will know that we announced results for the second quarter ending 06/30/2025 on July 10. Therefore, many of you will be familiar with certain key metrics we will be discussing today. With that said, I am very pleased to share our significant progress during the second quarter, highlighted by the commercial launch of VICAT XR and commencement of treating people living with Prader Willi syndrome, or PWS. Meredith will review the company’s commercialization progress to date, and Jim will cover the company’s financial statements for the second quarter.

We will then open the call for questions. We achieved a major milestone for the PWS community and for Seleno in March when we launched VICAT XR, the first FDA approved medicine for the treatment of hyperphagia in adults and children four years of age and older with PWS. The approval of VICAT XR was based on our comprehensive clinical development program in which participants received double blind and or open label VICAT XR for a mean duration of three point three years. Primary evidence of efficacy came from a 16 randomized withdrawal Phase III multicenter double blind placebo controlled trial. Following FDA approval on March 26, VICAT XR was available on April 14, ahead of plan.

We’ve been extremely pleased with the initial reception and demand from the PWS community, which we believe speaks to the urgent need for an FDA approved therapy to treat the hallmark feature of PWS, which is hyperphagia. As we announced at that time, concurrent with product availability, prescriptions of VICAT XR had been delivered to the first individuals living with PWS. Since that time, we have seen steady growth in both patient starts and unique prescribers. Total net revenue was $32,700,000 in the second quarter, which in part reflects underlying demand for the drug, but also the significant efforts of our experienced commercial team, whose launch outreach efforts to patients, physicians, and payers set the stage for a strong and successful launch. As Meredith will describe in a moment, we have made steady progress with both commercial and government payers.

We continue to engage with payers to ensure that they understand the severe complications and high unmet need associated with PWS and the inherent value proposition that VICAT XR offers. Establishing broad payer reimbursement is among our highest priorities going forward, and the compelling efficacy and safety data from our clinical trial program is clearly resonating. I would like to once again recognize the substantial contributions of the entire PWS community, including study participants and their families, the study investigators, and study site team members, as well as the two major PWS advocacy organizations, the Foundation for Prader Willi Research and the Prader Willi Syndrome Association USA. I would also like to thank the Solenor team members who worked so tirelessly to get us to this point. I would now like to provide a brief update on our activities in support of potential approval of DCCR in Europe.

As you know, we market DCCR in The U. S. As VICAT XR. PWS is a global disease that impacts hundreds of thousands of patients all over the world. In an effort to make DCCR available to as many of these patients as possible, in parallel with our US commercial launch, we have continued to make progress along regulatory pathways in other geographies, the most important of which is the EU.

As we have stated previously, Europe also has a high unmet need among patients with PWS. Based on widely cited prevalence data, it is estimated that approximately nine thousand patients living with PWS in The EU4 and The UK. We have conducted market research with many PWS experts, patient advocacy leaders, care home executives, etcetera, where we have confirmed the prevalence numbers. Today, in most major markets in The EU, early diagnosis is common. Our research suggests that there is significant structured care for people living with PWS across Europe, with variations that will impact our go to market strategy by country.

Additionally, as with The US, the PWS community has strong thought leader support, and patient care is often concentrated around centers of excellence, even more so than in The US. In May, we were pleased to announce the submission and EMA validation of our marketing authorization application. Gaining approval to market DCCR in The EU would represent a meaningful expansion of our commercial market and remains a priority for us while we continue to progress our US launch. I will now turn the call over to Meredith to provide an update on the launch. Meredith?

Meredith Manning, Chief Commercial Officer, Solano Therapeutics: Thank you, Anish, and good afternoon, everyone. As Anish previously mentioned, we are still in our early phase of launch, and the response from both families and providers has been exceptionally encouraging. This tells us that our outreach, whether to caregivers, individuals with PWS, physicians, centers of excellence, payers, or advocacy groups, is truly resonating. Our disciplined execution and strong, clear messaging are helping us to build clinical conviction in the field. Taken together, these factors reinforce our confidence in the significant potential ahead.

At this point, I would like to provide an update on the key performance indicators that we believe are helpful in tracking our progress. The first of these is patient start forms. As we announced in our preliminary results press release on July 10, we received six forty six patient start forms from launch through June 30. A vast majority of people who have started treatment, as expected, are younger, so that’s between four and 26 years of age. However, a majority of these individuals are older than what we saw in the clinical trial C601, which was approximately thirteen point five years.

The second key performance indicator is the number of prescribers. From launch through June 30, that number is two ninety five unique prescribers. More than a third of the top 300 prescribers who are the primary prescribers for approximately 2,000 patients have written prescriptions. And we are very heartened to see a large number of start forms coming from prescribers who we did not expect to see writing start forms this early in our launch. We believe the launch momentum and positive results directly reflects the success of our strategic launch efforts, initiatives that targeted pediatric and adult endocrinologists, geneticists, and psychiatrists who directly treat or influence a substantial portion of our addressable market.

Our field force is prioritizing deep engagement with top tier providers, each of whom treats multiple individuals with PWS, not only to further strengthen their experience and confidence with VICAT XR, but also because these key clinicians play a pivotal role in influencing practice patterns and the broader adoption of new therapies within the PWS community. At the same time, we are increasingly encouraged by the strong response from physicians beyond this core group. This demonstrates not only growing awareness of VICAT XR but also expanding recognition of the therapeutic need to treat hyperphagia. The third performance indicator is payer policies. As Anish mentioned, securing broad coverage for VICAT XR is a core focus for us and is fundamental to the success of our launch.

We have seen rapid and broad coverage surpassing recent rare disease launches, with approximately thirty three percent of all insured lives now covered, representing just over 100,000,000 lives covered in The United States. We are encouraged with the payer coverage policies established for VICAT XR to date, including several from major insurers. And it’s worth highlighting that we are receiving coverage across all channels, commercial, Medicaid, and Medicare. And to see such broad coverage so early in the launch is outstanding. These positive outcomes are a direct result of our proactive engagement, efforts that enabled payers to move quickly in recognizing the value of VICAT XR and the urgency of addressing PWS related hyperphagia.

The coverage decisions we have seen so far demonstrate that payers recognize seriousness of PWS, understand the unique challenges of hyperphagia, and appreciate the meaningful value VICAD XR delivers. I will now turn the call over to Jim for a review of the company’s financial statements for the second quarter.

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Thank you, Meredith. We used $12,600,000 of cash in operating activities during the three months ended 06/30/2025 and had £293,800,000 of cash, cash equivalents and marketable securities at the end of the quarter. Subsequent to the quarter end, we raised an additional £230,000,000 of proceeds through an underwritten offering of our common stock, bringing our total pro form a cash balance following the financing to more than £500,000,000 This balance sheet strength ensures that we are sufficiently well capitalized to execute on an effective U. Launch of VICAT XR and become cash flow positive, while in parallel progressing towards regulatory approvals and commercialization, either on a standalone basis or with partners in The EU and other geographies. Turning now to a few income statement Total net revenue for the second quarter ended 06/30/2025, was £32,700,000 As VICAT XR was approved in March, the company generated no revenue in the second quarter ended 06/30/2024.

Cost of goods sold was $700,000 for the second quarter ended 06/30/2025. Please note that prior to the FDA approval, costs associated with manufacturing VICAT XR were expensed as research and development expenses. As such, a portion of the cost of goods sold during the period included inventory at zero cost. Going forward, as we continue to sell VICAT XR, we will deplete our zero cost inventory and replenish it with at cost inventory and consequently cost of goods sold as a percentage of revenue will increase. Research and development expense for the second quarter ended 06/30/2025 was £9,100,000 which includes £2,400,000 of non cash stock based compensation, compared to £12,300,000 which includes £2,700,000 of non cash stock based compensation for the same period of 2024.

The cadence of our research and development expenditures fluctuate depending upon the state of our clinical programmes, timing of manufacturing and other projects as we have moved through submission, approval and now preparation for commercialisation. Selling, general and administrative expense for the second quarter ended 06/30/2025 was £28,200,000 which includes £7,300,000 of non cash stock based compensation, compared to £10,900,000 which includes £4,500,000 of non cash stock based compensation for the same period of 2024. The increase reflects our ongoing investment in additional personnel and new programs to support the VICAT XR commercial launch and in support of our increased business activities. Total other income net was CAD1.8 million for the three months ended 06/30/2025, compared to total other net income of CAD3.0 million in the same period of 2024. Net loss was approximately CAD4.7 million or CAD0.09 per basic and diluted shares for the second quarter ended 06/30/2025 and $21,900,000 or $0.57 per basic and diluted share for the same period in 2024.

This concludes the financial overview and I will now turn the call back over to Anish for closing remarks. Anish?

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Thank you, Jim. In closing, while we are still early in the launch of iCAD XR, we are pleased with the trajectory we’re on. In the second quarter, we saw extraordinary momentum in the number of start forms, patients on active drug, number of patients on paid drug, and lives covered. While we’re not able to share details at this time since we are far from steady state, we continue to be encouraged that VICAT XR is a groundbreaking therapy, and we believe it will soon be the standard of care for people living with PWS related hyperphagia. And with that, we’ll now open the call to questions.

Operator?

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch tone phone. Your first question comes from Yasmeen Rahimi with Piper Sandler. Your line is now open.

Yasmeen Rahimi, Analyst, Piper Sandler: Good afternoon, team. Thank you so much for the updates. I guess many of our clients were wondering if you could comment on how do you see sort of the monthly scripts in July compared to the earlier months, and how do you think it will change going into the remainder of August and September? Appreciate any color around that. And then also, one second one to squeeze in is like, what is sort of the time to fill currently, and how do you think it would change over time?

And I’ll jump back in the queue.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Okay, thanks Yasmeen. I’ll take the July question. And as you know, we’re not addressing data after the end of the quarter on this call. But what I can tell you is that we have confidence that VICAT XR is on its way to being the standard of care for people living with PWS. It is going to be a therapy that’s going to be meaningful, and it’s going to be something that PWS patients are going to be on for a long time to come.

But, Meredith, I’ll let you address the time to fill question.

Meredith Manning, Chief Commercial Officer, Solano Therapeutics: Yeah, thank you. Thanks, Yasmin, for the question. I think with regard to time to fill, and something that we’ve mentioned in the past, is it takes a while for the payer policies to come in and have a steady state. And while we’re very pleased and super encouraged with the 33% coverage live, we still expect policies to come in and for that to grow. So, we’ve seen pretty rapid turnaround time based on the fact that we do have very strong policies, favorable policies coming in, and we have that 33% coverage.

As more policies come in, the turnaround time could potentially slow. And then hopefully, as we move into the later months, after a full year, we’re looking at reaching a steady state. And something that we’re shooting for that we’ve seen in other rare disease or other therapeutic areas, around approximately thirty days of turnaround time is pretty standard.

Yasmeen Rahimi, Analyst, Piper Sandler: Thank you so much.

Conference Operator: Your next question comes from Rye Forseth with Guggenheim. Your line is now open.

Rye Forseth, Analyst, Guggenheim: Hi, this is Rye from Debjit’s team. Thanks for taking our questions. Are there any emerging pain points during the patient start form process that you see as addressable in the next couple of quarters? And our second question is, how are early compliance trends tracking?

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: So, the pain points front, as you know, this is a very strong start. Mean, six forty six patient starts in the first quarter is a very large number. You know, we try to track things like seasonality, you know, holidays, you know, summer holidays, things like that. And this is the first drug launch for hyperphagia. So, we don’t know how it’s gonna be.

It’s hard for us to predict the pain points with the start forms. But again, the next couple quarters will be pretty educational, so we’ll keep you posted on that. And your second question was? Compliance. Compliance.

Compliance. Yeah, so it’s too early to tell, Rai, because we haven’t seen that much data, but what I can tell you is that discontinuation rates are substantially lower than what we saw even in clinical trials. So, as you may remember, in our trials we’ve seen very high compliance rates in part because some of these, some of the people living with PWS can also have obsessive compulsive tendencies, and they tend to want to stay on drug as well. So, we don’t expect that to change significantly. And certainly, early to tell from the data.

Rye Forseth, Analyst, Guggenheim: Thank you very much.

Conference Operator: Your next question comes from Kristen Kluska with Cantor. Your line is now open.

Kristen Kluska, Analyst, Cantor: Hi, everyone. Congrats on a very strong quarter. My first question, I just wanted to get a sense of what you’re seeing on safety. You’ve obviously collected a lot of real world evidence now. And then second, I know you’re not commenting on specific revenue trends, but clearly, I think the 2Q numbers were a lot higher than a lot of us modeled and what the investment community was looking for.

So can you just give us any broad sense of how we should be thinking about the rest of the year, so people perhaps don’t go over their skis either? Thank you.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Sure. Thanks, Kristen. Thanks for the question. So, on the safety side, as many of you I’m sure know, monitoring for safety data in a post marketing setting is quite different from clinical trial settings. So, one typically relies on reports from caregivers or healthcare providers, and the patients that you’re treating are also often not as controlled and may have more comorbidities, etcetera.

So, we are pretty early in the launch, but that said, I can tell you that we have not seen anything in the post marketing setting that is different from the clinical trial setting. So, there are no new safety signals. And once again, just to reiterate what we have seen with the discontinuation rates at this time are substantially lower than what we have seen in the clinical trials. And Jim, I’ll let you take the revenue question.

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Sure, yes. Hi, Kristen. Yes, well as you know, there are quite a number of moving parts between the start form and ultimately the revenue. So I think what we saw was the fact that everything seemed to be clicking very, very well out of the gate. So that’s excellent.

We’re obviously sort of mindful of maybe things normalizing over the next couple of quarters. But at the moment, it just seems to be a very strong start with everything all coming together. So good momentum out of Q2.

Yasmeen Rahimi, Analyst, Piper Sandler: Thank you.

Conference Operator: Your next question comes from Tyler Van Buren with TD Cowen. Your line is now open.

Tyler Van Buren, Analyst, TD Cowen: Hey guys, thanks very much and congratulations on the tremendous progress made during the quarter. So regarding the $33,000,000 of VICAT sales for the quarter, can you help us understand to what extent there was an initial patient bolus or stocking in this number? And maybe just a follow-up. I think you mentioned that commercially you’re seeing older patients in the thirteen point five years in the trial. So does that mean on average that these commercial patients are heavier in weight above that sixty one kilograms and higher than the average price of $466,000 estimated based on that?

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Thanks Tyler. Jim, you want to take the bolus stocking question?

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Yes. So, specifically to the stocking Tyler, yes, as you know, have one distribution partner, Panther. They have been managing their business, I’d say very astutely. They order weekly from us. They obviously do carry a little bit of inventory, probably seven to ten days, but we’ve not really seen anything that was out of the norm.

So they’ve just been a very repetitive once a week stocking proposition from us and that’s continued. So I said, don’t think there’s any anomalies there. I think on the bonus question, yes, we do think it was a fantastic set of start forms coming in, in Q2. I think we’ve commented before, hard to imagine that that will continue linearly going forward if you like. So there’ll be some moderation there.

But everything at the moment seems to indicate a very strong launch going forward.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: And Tyler, to your question about patient weights, as you correctly pointed out, the patients that we’re seeing, majority of them are above the average age in 06/2001, which is more than thirteen point five years. So I think it’s a reasonable assumption that they are heavier as well.

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Thank you.

Conference Operator: Your next question comes from James Condulis with Stifel. Your line is now open.

James Condulis, Analyst, Stifel: Hey, thanks so much for taking my question and congrats on the quarter. Just one from us. Just curious, these patients and start forms you’re seeing obviously a great start. Is this all kind of coming are these patients on sort of like their normal cadence of visiting doctors? Or are these kind of patients calling in and trying to get in kind of off cycle?

Just curious if you have any color on that dynamic. And kind of on that more broadly, all of the kind of cylinders seem to be firing here. So curious what is the rate limiter here kind of going forward, if there’s any that’s obvious to you? Thanks so much.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Meredith, go ahead.

Meredith Manning, Chief Commercial Officer, Solano Therapeutics: Yeah, happy to take that. It’s been really nice to get out in the field and be with our field team and also meet with many of the clinicians. We’re seeing both, to answer your question, both patients who were very proactive as they were anticipating the launch of VICAT XR, getting some of their appointments set up within an early timeframe. But we’re also seeing that some of the PWS experts are very busy with the launch, and therefore it is taking time to get some of the other patients coming in. I think something that we’re very excited to see is many of these clinics did not have a set PWS clinic day prior to And so, as we’re seeing the groundwork being laid across these various different clinics, they are setting up their PWF clinic days.

And we feel like that that will allow for a little bit more steady patient visits and patient cycle to come in. So, we’re still seeing good significant opportunity ahead with the way that the landscape is really, you know, measuring out their process and their logistics.

Conference Operator: Your next question comes from Leland Gershell with Oppenheimer. Your line is now open.

James Condulis, Analyst, Stifel: Hi, good afternoon guys and thanks for the update and tremendous progress. I wanted to ask maybe a little bit in connection with the last question. Patients with PWS come at different levels of severity like in all diseases. Wondering if you’re seeing any pattern where perhaps the more severe patients are the ones who are getting VICAT XR earlier as in Q2 and currently and if we should maybe think about a broader uptake as physicians become more familiar with the drug. Also want to ask with respect to Europe, I know that’s probably going to be in next year, but you’re sort of touching profitability here on The U.

S. Business. Wondering if you could just comment on what could be maybe a more efficient launch in Europe with respect to OpEx and how that may affect your thoughts on profitability and cash flow going forward. Thanks.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Sure. Thanks, Leland. So, in terms of severity, we don’t actually collect that information actively. What we see is a diagnosis of PWS and presence of hyperphagia as sort of on label and the age of four years, and that patient would be on label. So, we don’t get that level of detail, but I suspect there’s probably a combination of things happening.

One is the idea that if there are severe patients, there’s probably physicians who are calling them in earlier and getting them on drug, but there’s definitely an element of more motivated families, likely with younger kids, who are also pushing their way to getting therapy earlier. And we think this phenomenon of a lot of the non KOL prescribers may well be the idea that the KOL practices are so full that some of these more motivated families are going to peripheral providers, their local endos, etcetera, and getting prescriptions from there. In terms of the EU business and OpEx, Jim, you want to take that?

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Yes, sure. So I think Leland, you said, I mean, that goes back to the fact that we have the $500,000,000 of balance sheet strength. So it allows us the optionality When we’re looking at Europe, we’ve mentioned partners along the way, but we now also have the ability if we wish to continue to do it on our own. We do think it’s a concentrated market. Some of the ways rare diseases are addressed within the European countries do present sort of smaller call points and even in The U.

S. So we still got to work out the details on exactly the size of the sort of the sales force, the commercial team that would be needed if we do go on our own. But we think it’s manageable. And as I said, we just point back to the $500,000,000 because it gives us that option to do it if we choose.

James Condulis, Analyst, Stifel: All right. Thank you.

Conference Operator: Your next question comes from Brian Skorney with Baird. Your line is now open.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors0: Hey, good afternoon, and thanks for taking my question. And congrats on in my entire career being the first company to have a sequentially down operating expenditures into the first quarter of launch. Very impressive. So to that point, Jim, I’m just wondering, looking at the OpEx, if this is a fair go forward number to model for The U. S.

Business. And you only it says that operationally spent $12,500,000 in cash. I’m just wondering if I look at just the income statement, you did $32,700,000 in sales, it was about $40,000,000 in OpEx. But if I back out stock based comp, that’s $10,000,000 less. So I would have thought that it would actually be operationally cash flow positive.

So what’s in the cash flow from operations here that’s not kind of summing up with the income statement?

Jim McInnis, Chief Financial Officer, Solano Therapeutics: Go ahead, Jim. Yes, I’m not sure I understand the tail end of that question, but Brian, let me provide color that we’ve I think we’ve provided in the past. So our cash OpEx, think we’ve mentioned in the past, we think about 120,000,000 to $130,000,000 for this year. We may find that there’s a reason to sort of increase that a little bit, but there wouldn’t be much more than 140,000,000 And that would just be doing things like I said, putting some early sort of initiatives in Europe as we’ve mentioned. There’s also some life cycle management stuff we might fire up as well.

So still very well managed for 2025. And then if we go into 2026, that’ll increment. And I think again, we’ve mentioned sort of probably go north of $150,000,000 but it certainly will be managed, not too much aggressively above that. A lot depends on the size of the Europe commercial footprint and if we decide to go along alone. And then I think to your point, then you just got to layer the revenues from the launch.

And we sort of said, that’s why we’ve commented in the past, if we think what we’d refer to as a modestly successful, I would suggest Q2 is exceeding that. But if we have a modestly successful launch, that’s how we see ourselves getting to cash flow positive in somewhere in the near term. Hopefully, that provides you the guidance you’re looking for.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors0: Yes, that’s perfect. Thanks, Jim.

Conference Operator: Your next question comes from Yale Jen with Laidlaw. Your line is now open.

Rye Forseth, Analyst, Guggenheim: Good afternoon, and thanks for taking the questions. I add my congrats as well. Just a little bit in terms of the revenue breakdowns. In terms of the patients that the titrating phase cells versus the maintenance cells, the number is quite different. So I’m just curious whether most of the patients in this quarter are already the patients in the trial, so they are actually immediately moved to the maintenance, or there are many more newer patients that are actually in earlier titration stage?

Thanks.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Yep, thanks Yale. So, you may remember, only about sixty patients were on the long term study in The US. The rest were in The UK. So, if you look at six forty six start forms, that’s a pretty small fraction of it. And as we’ve said in the past, virtually all of them will be on, are on commercial drug at this time.

So, it’s fair to say that in this quarter, a number of patients are still in the titration phase, or at least part of the quarter they were in the titration phase.

Rye Forseth, Analyst, Guggenheim: Okay, great. And maybe just one more question. In terms of any breakdown in terms of payers between government and commercial? And thanks.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Too early to tell, Yale. I think we’re not quite a steady state yet, but we’ll just remind you of the actual split in the population. It’s about a third commercial, a third Medicare, and a third Medicaid. So, we don’t have numbers to provide for this quarter because of all the moving parts.

Rye Forseth, Analyst, Guggenheim: Okay, great. Thanks a lot. And again, congrats on a great quarter.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Thanks, Yale.

Conference Operator: Your next question comes from Ram Selvaraju with H. C. Wainwright. Your line is now open.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors1: Hi, this is Jade on for Ram. Congrats on that first commercial quarter. I think you guys are doing great. So, first, have you seen any reluctance on the part of your prescribers to deploy in patients who have PWS and are also diagnosed with diabetes?

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: You know, we don’t get sort of real time information on these things, but I think it would be reasonable for a payer to be, for a provider to be hesitant if someone has uncontrolled diabetes. If it’s diabetes that is controlled, then there’s no reason to be reluctant to use GCCR. Of course, you need to be careful and do all the appropriate monitoring per the label, but the drug can certainly be used in patients who have type two diabetes.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors1: Okay, great. And just as a follow-up, so looking to the future, are you thinking about expanding your portfolio beyond Vika XR? And if so, would this potentially include opportunistic in licensing and in what areas?

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Yeah, I think it’s fair to say that as of today, we are laser focused on the launch of VICAT XR and we don’t want to deviate from that. But I think in the long term, it’s fair to say that we would, as a company, need to diversify from just VICAT. And, you know, we will look for opportunities that are likely adjacent to where we are today. But that is certainly not something we would do in the very short term.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors1: Okay, great. Makes sense. Alright, thank you.

Brian Ritchie, LifeSci Advisors, LifeSci Advisors: Thank you. There

Conference Operator: are no further questions at this time. I will now turn the call over to Anish for closing remarks.

Anish Bhatnagar, Chairman and Chief Executive Officer, Solano Therapeutics: Well, thank you all again for calling in, and we look forward to talking to you at the end of the next quarter.

Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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