Soleno Therapeutics, Inc. (SLNO): A Bull Case Theory

Core Thesis - Soleno Therapeutics, Inc. (SLNO) is positioned for significant growth due to its FDA-approved therapy VYKAT XR for hyperphagia in Prader-Willi Syndrome (PWS) patients, with a strong early commercial performance and substantial market potential [2][3][4] Company Overview - Soleno Therapeutics is a single-asset company focused on VYKAT XR, the first and only FDA-approved treatment for hyperphagia in PWS patients aged four and older, a rare genetic disorder affecting approximately 8,000–12,500 individuals in the U.S. and about 20,000 in Europe [2] - VYKAT XR is an extended-release formulation of diazoxide choline that acts as a potassium channel activator to reduce hyperphagia by modulating neuronal activity [2] Financial Performance - The drug is priced at around $500,000 annually for adults, with Q2 revenue reaching $32.7 million, surpassing expectations [3] - By the end of Q2, there were 295 unique prescribers and 646 patient start forms, with an additional ~500 in Q3, totaling around 1,000 treatments [3] - SLNO estimates peak sales potential between $1.8 billion and $2.6 billion, indicating significant valuation upside [3] Market Position and Competition - The company faces limited competition, with peers like ACADIA having failed, and Aardvark's upcoming readout being the only near-term competitive threat [3] - Safety concerns raised by Scorpion Capital appear overstated, with no major new safety updates since September and positive real-world patient feedback [4] Future Outlook - Expectations for Q3 2025 revenue are projected to exceed $60–65 million, compared to consensus estimates of $46 million, indicating a strong launch trajectory [4] - The manageable safety profile and limited competition position SLNO for a potential rerating toward $100+ within 12–18 months [4]