Soleno Therapeutics Provides Corporate Update and Reports Fourth Quarter and Full-Year 2023 Financial Results
- Positive top-line data from Study C602 for DCCR in PWS
- Planned NDA submission for DCCR in mid-2024
- Successful public offering raising $129 million
- Strengthened leadership team appointments
- Cash and cash equivalents of $169.7 million as of December 31, 2023
- Increasing research and development expenses
- Higher general and administrative expenses
- Obligation to make cash payments for commercial milestones
- Net loss increased compared to the previous year
Insights
The financial results reported by Soleno Therapeutics indicate a significant increase in both research and development (R&D) and general and administrative (G&A) expenses year-over-year. The increased R&D expenditure, from $15.3 million in 2022 to $25.2 million in 2023, reflects the company's investment in late-stage clinical development of DCCR for Prader-Willi syndrome (PWS). This investment aligns with the typical lifecycle of biopharmaceutical companies, where spending escalates as a product candidate approaches the regulatory submission phase.
The successful public offering and concurrent private placement, resulting in gross proceeds of approximately $129 million, alongside the $43.1 million from warrant exercises, have bolstered Soleno's cash position to $169.7 million. This strong cash reserve is crucial as it provides the financial runway needed to support the NDA submission and potential commercialization of DCCR. However, investors should be aware of the contingent consideration payable upon achieving certain commercial milestones, which stands at a fair value of $11.5 million, reflecting the company's expectations of DCCR's market performance.
Despite the strengthened balance sheet, Soleno reported a net loss increase to $39.0 million in 2023 from $24.1 million in 2022. The reported net loss per share also increased, although the comparison is somewhat skewed by the difference in the number of shares outstanding due to the recent financing activities. These losses are typical for clinical-stage biopharmaceutical companies prior to product commercialization. Stakeholders should weigh the potential future revenues against the increased operational costs and the inherent risks of the biopharmaceutical development process.
The announcement of positive top-line data from the randomized withdrawal period of Study C602 is a significant milestone for Soleno Therapeutics, as it supports the safety and efficacy profile of DCCR for the treatment of PWS. The primary endpoint being met with high statistical significance (p=0.0022) is a strong indicator of DCCR's potential therapeutic benefit. Furthermore, the secondary endpoints, while not meeting the conventional threshold for statistical significance (p<0.05), show trends towards efficacy that may be clinically relevant.
Prader-Willi syndrome is a complex genetic disorder and the development of effective treatments is challenging. DCCR's mechanism of action, which involves the modulation of ATP-sensitive potassium channels, represents a novel approach in the PWS therapeutic landscape. The implications of a new treatment option are substantial for patients and caregivers, given the limited therapies currently available. If DCCR is approved, it could address a significant unmet medical need and potentially improve the quality of life for individuals with PWS.
However, the path to regulatory approval is not guaranteed. The planned NDA submission in mid-2024 is a critical step and the FDA's review will be a decisive factor in DCCR's future. The company's focused preparation for the NDA submission, leveraging the extensive clinical data, is essential to optimize the likelihood of approval. The medical community and potential investors will be closely monitoring the FDA's feedback post-submission, as it will impact Soleno's strategic direction and the commercial potential of DCCR.
The biopharmaceutical sector is highly competitive, especially in the rare disease space where companies like Soleno Therapeutics operate. The successful completion of a public offering and private placement indicates investor confidence in Soleno's potential, particularly in its lead product candidate, DCCR. The strengthened leadership team, with strategic appointments in commercial operations and human resources, suggests that Soleno is gearing up for the potential market entry of DCCR.
Market dynamics for rare disease treatments often involve high pricing strategies due to the small patient populations and significant R&D investments. If DCCR is approved, Soleno may leverage orphan drug exclusivity and other incentives to maximize its commercial success. However, the company must navigate complex reimbursement landscapes and ensure access to treatment for patients. The potential for DCCR to meet a critical unmet need in PWS could drive market adoption, but Soleno will need to effectively communicate the value proposition to payers and clinicians.
Furthermore, the financial health of the company, as indicated by the cash reserves post-financing, provides a lens into its ability to sustain operations through the commercial launch phase. Investors and analysts should monitor the burn rate and anticipate future capital needs, as well as the execution of the commercial strategy upon potential approval. The contingent milestone payments to former Essentialis stockholders also underscore the importance of DCCR's commercial performance post-launch.
REDWOOD CITY, Calif., March 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 fourth quarter and full-year ended December 31, 2023.
Full Year 2023 and Recent Corporate Highlights
- Announced positive statistically significant top-line data from the randomized withdrawal period of Study C602, a long-term treatment study of DCCR (Diazoxide Choline) Extended-Release tablets for the treatment of Prader-Willi syndrome (PWS) in September 2023.
- The study met its primary endpoint, demonstrating a highly statistically significant difference in change from baseline in HQ-CT total score for DCCR compared to placebo (p=0.0022).
- Secondary endpoints of Clinical Global Impression of Severity (CGI-S) and Clinical Global Impression of Improvement (CGI-I) both showed strong trends towards worsening in the placebo group compared to DCCR (p=0.08 and 0.09), respectively.
- DCCR continued to be generally well-tolerated in the randomized withdrawal period with no new or unexpected safety signals.
- The study met its primary endpoint, demonstrating a highly statistically significant difference in change from baseline in HQ-CT total score for DCCR compared to placebo (p=0.0022).
- Planned submission of a New Drug Application (NDA) for DCCR in PWS remains on track for mid-2024, after receipt of pre-NDA meeting minutes from the U.S. Food and Drug Administration. The FDA stated that the potential for data from the DCCR clinical program to provide substantial evidence of effectiveness will be a matter of review following the submission of an NDA.
- Closed on gross proceeds of approximately
$129 million from an underwritten public offering of common stock and concurrent private placement of common stock and pre-funded warrants in October 2023, and received$43.1 million from the sale and exercise of warrants issued in connection with the December 2022 Securities Purchase Agreement. - Strengthened leadership team with appointments of Meredith Manning, M.B.A as Chief Commercial Officer, Dairine Dempsey, Ph.D. as Vice President, Europe and Lauren Budesheim, M.S. as Vice President of Human Resources.
“Following recent feedback from the FDA, Soleno remains focused on preparing an NDA submission for DCCR in PWS mid-2024,” said Anish Bhatnagar, M.D., Chief Executive Officer of Soleno Therapeutics. “We believe data from our extensive clinical program, including highly statistically significant top-line results from the randomized withdrawal period of Study C602, supports that DCCR has the potential to be a safe and effective therapy for patients with PWS. With our strengthened leadership team and balance sheet, we are ideally positioned to carry out our corporate strategy and, if approved, deliver a new treatment option for PWS patients.”
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.
Fourth Quarter and Full Year Ended December 31, 2023 Financial Results
As of December 31, 2023, Soleno had cash and cash equivalents of approximately
Research and development expenses were
General and administrative expenses were
Soleno is obligated to make cash payments of up to a maximum of
Total other income (expense), net, was
Net loss was approximately
Net loss for the year ended December 31, 2023, was approximately
About PWS
The Prader-Willi Syndrome Association USA estimates 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 the Foundation for Prader-Willi Research,
About DCCR (Diazoxide Choline) Extended-Release Tablets
DCCR 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 the U.S. and E.U., and Fast Track Designation in the U.S.
About Soleno Therapeutics, Inc.
Soleno is focused on the development and commercialization of novel therapeutics for the treatment of rare diseases. The company’s lead candidate, DCCR extended-release tablets, a once-daily oral tablet for the treatment of PWS, recently completed its Phase 3 development program to support a planned NDA submission. For more information, please visit www.soleno.life.
Forward-Looking Statements
This 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 projected timeline of our NDA submission, whether FDA will agree with our interpretation of the data or the adequacy of data to support an NDA, 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 the SEC. 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 Ritchie
LifeSci Advisors, LLC
212-915-2578
| Soleno Therapeutics, Inc. Condensed Consolidated Balance Sheets (In thousands except share and per share data) | ||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 169,681 | $ | 14,602 | ||||
| Prepaid expenses and other current assets | 1,677 | 1,045 | ||||||
| Total current assets | 171,358 | 15,647 | ||||||
| Long-term assets | ||||||||
| Property and equipment, net | 12 | 26 | ||||||
| Operating lease right-of-use assets | 407 | 131 | ||||||
| Intangible assets, net | 8,749 | 10,693 | ||||||
| Other long-term assets | 165 | — | ||||||
| Total assets | $ | 180,691 | $ | 26,497 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable, net | $ | 3,149 | $ | 1,777 | ||||
| Accrued compensation | 3,135 | 1,675 | ||||||
| Accrued clinical trial site costs | 3,393 | 3,222 | ||||||
| Operating lease liabilities | 273 | 155 | ||||||
| Other current liabilities | 1,555 | 484 | ||||||
| Total current liabilities | 11,505 | 7,313 | ||||||
| Long-term liabilities | ||||||||
| 2018 PIPE Warrant liability | - | 1 | ||||||
| Contingent liability for Essentialis purchase price | 11,549 | 8,835 | ||||||
| Long-term lease liabilities | 130 | — | ||||||
| Total liabilities | 23,184 | 16,149 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, 31,678,159 and 8,159,382 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 32 | 8 | ||||||
| Additional paid-in-capital | 433,885 | 247,762 | ||||||
| Accumulated deficit | (276,410 | ) | (237,422 | ) | ||||
| Total stockholders’ equity | 157,507 | 10,348 | ||||||
| Total liabilities and stockholders’ equity | $ | 180,691 | $ | 26,497 | ||||
| Soleno Therapeutics, Inc. Condensed Consolidated Statements of Operations (In thousands except share and per share data) | ||||||||||||||||||
| Three Months Ended December 31, | For the Years Ended December 31, | |||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Operating expenses | ||||||||||||||||||
| Research and development | $ | 8,689 | $ | 3,810 | $ | 25,189 | $ | 15,265 | ||||||||||
| General and administrative | 4,410 | 2,402 | 13,481 | 9,844 | ||||||||||||||
| Change in fair value of contingent consideration | 1,081 | (602 | ) | 2,714 | (712 | ) | ||||||||||||
| Total operating expenses | 13,910 | 5,610 | 41,384 | 24,397 | ||||||||||||||
| Operating loss | (13,910 | ) | (5,610 | ) | (41,384 | ) | (24,397 | ) | ||||||||||
| Other income (expense), net | ||||||||||||||||||
| Change in fair value of warrant liability | 470 | (1 | ) | (182 | ) | 30 | ||||||||||||
| Interest income | 2,144 | 125 | 2,578 | 300 | ||||||||||||||
| Total other income (expense), net | 2,614 | 124 | 2,396 | 330 | ||||||||||||||
| Net loss | $ | (11,296 | ) | $ | (5,486 | ) | $ | (38,988 | ) | $ | (24,067 | ) | ||||||
| Net loss per common share, basic and diluted | $ | (0.33 | ) | $ | (0.58 | ) | $ | (2.36 | ) | $ | (2.87 | ) | ||||||
| Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 34,441,721 | 9,440,347 | 16,492,132 | 8,397,088 | ||||||||||||||
FAQ
What positive data did Soleno announce from Study C602 for DCCR in PWS?
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