Stay hungry: Analyst says Soleno Therapeutics' upside potential far outweighs downside risk

Cantor Fitzgerald launched coverage on Soleno Therapeutics Inc SLNO with an overweight rating and a target price of $19.

Soleno's lead program, diazoxide choline controlled release (DCCR), is currently in Phase 3 development for Prader-Willi Syndrome (PWS), and the analyst is expects 3Q23 results to be positive.

PWS is characterized by insatiable hunger leading to physical, mental and behavioral problems.

Analyst notes that company announced disappointing phase 3 trial data and missed its primary endpoint on binge eating (excessive binge eating) three years ago . It says COVID-19 has affected the trial due to impacts on patient routines.

Statistical significance was reached for the 69% of study subjects who had completed follow-up by March 1, 2020, but early results after the pandemic took hold did not did not reach statistical significance.

Cantor analyst says secondary metrics and longer-term data cement DCCR's potential.

The analyst says he is encouraged to see that the changes correlate well with some behavioral manifestations seen with the condition. The company also reported physical changes over a year, which are critical because being overweight could have a significant impact on health, Cantor writes.

Since the valuation does not reflect the market potential of PWS, in the absence of approved therapies, the Cantor analyst sees the upside potential to be much higher than any downside risk from short-term binary events.

Price Action: SLNO shares are down 0.62% at $4.80 when last checked on Tuesday.

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.