Soleno Therapeutics Provides Corporate Update and Reports Third Quarter 2024 Financial Results

SLNO 11.06.2024

SERA-AI Powered Highlights
Drug:DCCR-unknown DCCR
Diseases:Prader-Willi syndrome
Full Press ReleaseSEC FilingsOur SLNO Tweets

About Gravity Analytica

Recent News

  • 12.17.2024 - Soleno Therapeutics Enters Into $200 Million Debt Financing with Oxford Finance LLC
  • 12.05.2024 - Piper Sandler 36th Annual Healthcare Conference
  • 11.27.2024 - Soleno Therapeutics to Participate in Piper Sandler 36th Annual Healthcare Conference

Recent Filings

  • 01.06.2025 - 4 Statement of changes in beneficial ownership of securities
  • 12.17.2024 - 8-K Current report
  • 12.17.2024 - EX-99.1 EX-99.1

REDWOOD CITY, Calif.,Nov. 06, 2024(GLOBE NEWSWIRE) --Soleno Therapeutics, Inc.(Soleno) (NASDAQ: SLNO), a clinical-stage biopharmaceutical company developing novel therapeutics for the treatment of rare diseases, today provided a corporate update, and reported financial results for the third quarter endedSeptember 30, 2024.

Third Quarter 2024 and Recent Corporate Highlights

  • New Drug Application (NDA) for DCCR (diazoxide choline) extended-release tablets for the treatment of Prader-Willi syndrome (PWS) accepted by theU.S. Food and Drug Administration(FDA) and granted Priority Review, with a Prescription Drug User Fee Act (PDUFA) target action date ofDecember 27, 2024.
    • The FDA Review Division determined that there does not appear to be a need for an advisory committee meeting at this time. However, the Division’s review team will continue to consider the potential need for an advisory committee meeting during their ongoing review.
  • Announced updates to its Board of Directors:
    • AppointedDawn Carter Bir, a seasoned biotechnology executive with over 30 years of industry executive leadership and strategic experience, to Soleno’s Board of Directors.
    • Current Board memberMatthew Pauls, J.D., M.B.A assumed the role of Lead Independent Director.
  • Soleno mourned the passing of former Chairman of the BoardErnest Mario, Ph.D.Dr. Marioserved as Soleno’s (formerly Capnia’s) Chairman from 2007 throughAugust 2024.

“In the third quarter of 2024, we achieved a major milestone with FDA acceptance of our NDA seeking approval of DCCR for the treatment of PWS,” saidAnish Bhatnagar, M.D., Chief Executive Officer ofSoleno Therapeutics. “Our dialogue with the FDA has been productive to date, and we look forward to continued collaboration as the review process advances. As we look towards potential approval of DCCR, our commercial team continues to prepare for our planned U.S. market launch. Our strong balance sheet supports successful execution of a launch and the delivery of a transformative therapy to people living with PWS, if approved.”

Financial Results

Soleno’s current research and development efforts are primarily focused on advancing its lead product candidate, DCCR, for the treatment of PWS, through late-stage clinical development.

Third Quarter EndedSeptember 30, 2024Financial Results

Soleno used$14.9 millionof cash in its operating activities during the three months endedSeptember 30, 2024, and had$284.7 millionof cash, cash equivalents and marketable securities.

Research and development expense was$30.1 million, which includes$18.5 millionof non-cash stock-based compensation, for the three months endedSeptember 30, 2024, compared to$6.0 million, which includes$0.9 millionof non-cash stock-based compensation in the same period of 2023. Personnel and associated costs increased$2.4 millionas we hired additional employees in support of our research and development activities. Consulting costs in support of our NDA submission and preparation for a submission to theEuropean Medicines Agencyincreased$2.7 million, and we invested$1.3 millionin supply chain activities in preparation for commercial launch. The cadence of our research and development expenditures will fluctuate depending upon the state of our clinical programs, the timing of manufacturing and other projects necessary to support the submission of our NDA and prepare for commercial launch. The$17.6 millionof additional non-cash stock-based compensation being recognized in the period is predominantly due to performance-based RSU grants which partially vested upon the acceptance by the FDA of the NDA submission and fully vest upon the approval by the FDA (see table below).

General and administrative expense was$49.2 million, which includes$38.1 millionof non-cash stock-based compensation, for the three months endedSeptember 30, 2024, compared to$3.3 million, which includes$1.3 millionof non-cash stock-based compensation, in the same period of 2023. Personnel and associated costs increased$3.0 millionas we hired additional employees in preparation for commercial launch and in support of our increased business activities. Professional services expenses and other program costs associated with preparation for commercial launch, including medical affairs activities, increased by$5.9 million. The$36.8 millionof additional non-cash stock-based compensation being recognized in the period is predominantly due to performance-based RSU grants which partially vested upon acceptance by the FDA of the NDA submission and fully vest upon approval by the FDA (see table below).

We are obligated to make cash payments of up to a maximum of$21.2 millionto the former Essentialis stockholders upon the achievement of certain commercial milestones associated with the sales of DCCR in accordance with the terms of our merger agreement with Essentialis. The fair value of the liability for the contingent consideration payable by us achieving two commercial sales milestones of$100 millionand$200 millionin cumulative revenue in future years was estimated to be$14.5 millionas ofSeptember 30, 2024, a$0.9 millionincrease from the estimate as ofJune 30, 2024.

Total other income, net, was$3.6 millionfor the three months endedSeptember 30, 2024, compared to total other expense, net, of$0.5 millionin the same period of 2023. The increase was primarily due to an increase in interest income driven by higher cash and cash equivalents, marketable securities and long-term marketable securities during the three months endedSeptember 30, 2024, compared to the three months endedSeptember 30, 2023.

Net loss was approximately$76.6 million, or$1.83per basic and diluted share, for the three months endedSeptember 30, 2024, and$10.9 million, or$0.95per basic and diluted share, in the same period of 2023.

About PWSThe Prader-Willi Syndrome Association USAestimates that PWS occurs in one in every 15,000 live births. The hallmark symptom of this disorder is hyperphagia, a chronic and life-threatening feeling of intense, persistent hunger, food pre-occupation, extreme drive to food seek and consume food that severely diminish the quality of life for patients with PWS and their families. Additional characteristics of PWS include behavioral problems, cognitive disabilities, low muscle tone, short stature (when not treated with growth hormone), the accumulation of excess body fat, developmental delays, and incomplete sexual development. Hyperphagia can lead to significant morbidities (e.g., obesity, diabetes, cardiovascular disease) and mortality (e.g., stomach rupture, choking, accidental death due to food seeking behavior). In a global survey conducted by theFoundation for Prader-Willi Research, 96.5% of respondents (parent and caregivers) rated hyperphagia and 92.9% rated body composition as either the most important or a very important symptom to be relieved by a new medicine. There are currently no approved therapies to treat the hyperphagia/appetite, metabolic, cognitive function, or behavioral aspects of the disorder.

About DCCR (Diazoxide Choline) Extended-Release TabletsDCCR is a novel, proprietary extended-release dosage form containing the crystalline salt of diazoxide and is administered once-daily. The parent molecule, diazoxide, has been used for decades in thousands of patients in a few rare diseases in neonates, infants, children and adults, but has not been approved for use in PWS. Soleno conceived of and established extensive patent protection for the therapeutic use of diazoxide, diazoxide choline and DCCR in patients with PWS. The DCCR development program is supported by data from five completed Phase 1 clinical studies in healthy volunteers and three completed Phase 2 clinical studies, one of which was in patients with PWS. In the PWS Phase 3 clinical development program, DCCR showed promise in addressing hyperphagia, the hallmark symptom of PWS, as well as several other symptoms such as aggressive/destructive behaviors, fat mass and other metabolic parameters. Diazoxide choline has received Orphan Drug Designation for the treatment of PWS in theU.S.and E.U., and Fast Track and Breakthrough Designations in theU.S.

About Soleno Therapeutics, Inc.Soleno is focused on the development and commercialization of novel therapeutics for the treatment of rare diseases. An NDA for its lead candidate, DCCR (diazoxide choline) extended-release tablets, a once-daily oral tablet for the treatment of Prader-Willi syndrome (PWS) is currently under review by the FDA and was granted Priority Review. For more information, please visitwww.soleno.life.

Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward-looking statements, including statements regarding the timing of any regulatory process or ultimate approvals and determining a path forward for DCCR for the treatment of PWS. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including the risks and uncertainties associated with the FDA’s review of our NDA, market conditions, as well as risks and uncertainties inherent in Soleno’s business, including those described in the company's prior press releases and in the periodic reports it files with theSEC. The events and circumstances reflected in the company's forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, the company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Corporate Contact:Brian RitchieLifeSci Advisors, LLC212-915-2578

Soleno Therapeutics, Inc.Condensed Consolidated Balance Sheets(In thousands except share and per share data)
September 30,2024December 31,2023
Assets(unaudited)
Current assets
Cash and cash equivalents$48,413$169,681
Marketable securities208,363—
Prepaid expenses and other current assets1,4231,677
Total current assets258,199171,358
Long-term assets
Property and equipment, net19612
Operating lease right-of-use assets2,992407
Intangible assets, net7,2918,749
Long-term marketable securities27,945-
Other long-term assets83165
Total assets$296,706$180,691
Liabilities and stockholders’ equity
Current liabilities
Accounts payable$6,243$3,149
Accrued compensation3,4083,135
Accrued clinical trial site costs1,7623,393
Operating lease liabilities448273
Other current liabilities3,1011,555
Total current liabilities14,96211,505
Long-term liabilities
Contingent liability for Essentialis purchase price14,46411,549
Long-term lease liabilities2,581130
Total liabilities32,00723,184
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock,$0.001par value; 10,000,000 shares authorized, no shares issued and outstanding——
Common stock,$0.001par value, 100,000,000 shares authorized, 41,041,216 and 31,678,159 shares issued and outstanding atSeptember 30, 2024andDecember 31, 2023, respectively4132
Additional paid-in-capital660,041433,885
Accumulated other comprehensive gain895-
Accumulated deficit(396,278)(276,410)
Total stockholders’ equity264,699157,507
Total liabilities and stockholders’ equity$296,706$180,691

Soleno Therapeutics, Inc.Condensed Consolidated Statements of Operations and Comprehensive Loss(unaudited)(In thousands except share and per share data)
Three Months EndedSeptember 30,Nine Months EndedSeptember 30,
2024202320242023
Operating expenses
Research and development$30,138$6,043$57,082$16,500
General and administrative49,1973,31868,5589,341
Change in fair value of contingent consideration8771,0212,9151,633
Total operating expenses80,21210,382128,55527,474
Operating loss(80,212)(10,382)(128,555)(27,474)
Other income (expense), net
Change in fair value of warrants liabilities—(653)—(652)
Interest income, net3,5961748,687434
Total other income (expense), net3,596(479)8,687(218)
Net loss$(76,616)$(10,861)$(119,868)$(27,692)
Other comprehensive income (loss)
Net unrealized gain on marketable securities1,049—898—
Foreign currency translation adjustment(1)(1)(3)(1)
Total comprehensive loss$(75,568)$(10,862)$(118,973)$(27,693)
Net loss per common share, basic and diluted$(1.83)$(0.95)$(3.08)$(2.65)
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share41,879,02511,436,74838,917,16910,443,186

Soleno Therapeutics, Inc.Stock-based Compensation Expense(In thousands)
Three Months EndedSeptember 30,Nine Months EndedSeptember 30,
2024202320242023
Research and development$18,516$935$23,682$1,587
General and administrative38,0821,26646,5212,449
Total$56,598$2,201$70,203$4,036

Primary Logo

Source: Soleno Therapeutics

Please be aware that the following content has been generated by an AI system and may contain errors, inconsistencies, or outdated information. It is provided as-is without any warranties or guarantees of accuracy. We strongly recommend using this content as a starting point for further research and consultation with relevant experts or authorities. We disclaim any liability for damages or losses resulting from the use or reliance on this content.Please note that this is a beta version of the Gravity Analytica LLC’s AI Service which isstill undergoing final testing before its official release. Theplatform, its software and all content found on it are provided on an“as is” and “as available” basis. Gravity Analytica LLC does not give any warranties,whether express or implied, as to the suitability or usability of thisservice, webpage, or its software or any of its content.Should you encounter any bugs, glitches, lack of functionality orother problems on the website, please let us know immediately so wecan rectify these accordingly. Your help in this regard is greatlyappreciated! You can write to us at this addressteam@gravityanalytica.com