Soleno Plunging 48% In Pre-Market On Obesity Study Failure

Shares in Soleno Therapeutics, Inc. (SLNO) are plunging over 45% in Tuesday’s pre-market trading after the company announced disappointing top-line results from its Phase III trial evaluating once-daily Diazoxide Choline Controlled Release (DCCR) tablets for patients with Prader-Willi Syndrome (PWS).

The Destiny PWS study did not meet its primary endpoint of change from baseline in hyperphagia. Hyperphagia, the predominant symptom of PWS, is an unrelenting hunger that can cause life-threatening co-morbidities, including obesity, and is a condition for which no treatments are available.

The change was measured by the total score of a Hyperphagia Questionnaire for Clinical Trials (HQ-CT, 0‑36). An improvement in HQ-CT is represented by a decrease in the score. The mean (SE) change from baseline for DCCR was -5.94 (0.879) and for placebo was -4.27 (1.145).

However, significant changes were observed in two of three key secondary endpoints from baseline to week 13 in subjects receiving DCCR as compared to placebo. This was seen in both an improvement in Clinical Global Impression of Improvement (CGI-I) score as assessed by the investigator (p=0.029), and reduction of body fat mass measured by DXA scan (p=0.025).

In patients with more severe hyperphagia, the mean (SE) change from baseline for DCCR was statistically significant at -9.67 (1.429) vs placebo at -4.26 (1.896).

A total of 115 subjects were enrolled into C602, an ongoing open-label, safety extension study of DCCR in PWS patients, and >90% of them continue to be treated at this time.

“While we are disappointed to have not achieved the study’s primary endpoint, we are excited by the results observed in those subjects with severe hyperphagia, as well as the changes in body composition and behavioral endpoints,” said Anish Bhatnagar, CEO of Soleno. “Based on these data, we will continue treatment of patients on C602.”

As for the safety profile of DCCR, treatment emergent adverse events (TEAEs) were reported in 70 (83.3%) DCCR subjects and 31 (73.8%) placebo subjects. TEAEs occurring in at least 5% of DCCR subjects were excessive hair growth, peripheral edema, blood glucose increase, hyperglycemia and high body temperature.

Primary miss not withstanding, Oppenheimer analyst Leland Gershell continues to see a bright future for SLNO. He reiterated his buy rating on June 9, but cut his price target from $11 to $8. This still indicates upside potential of over 145%.

“Shares are likely to open down sharply, a reaction that would belie what we view as a positive fundamental step” he wrote.

“The demonstration of: (1) significant improvement in this analysis for a pre-specified higher severity subgroup; (2) significant improvement in two of three key secondary endpoints; (3) marked improvements vs. placebo on outcomes assessments that were consistent across domains; and, (4) unremarkable safety leaves us convinced that this candidate can play a meaningful role in Prader-Willi syndrome management” Gershell explained.

The analyst is now looking forward to further analyses of the trial dataset, ongoing extension study updates, and regulatory feedback which he expects in 2H. (See Soleno stock analysis on TipRanks)

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