Shares of Soleno Therapeutics (NASDAQ: SLNO) were up more than 372% as of 12:30 p.m. on Tuesday. The clinical stage biotech said its lead pipeline candidate fared well in a study to treat a rare genetic disorder. So far this year, the stock is up more than 984%.
Soleno focuses on treating rare metabolic and neurobehavioral disorders. On Tuesday, before the markets opened, it announced that its lead pipeline candidate, diazoxide choline controlled-release (DCCR), an extended-release pill to treat Prader-Willi syndrome (PWS), showed a dramatic improvement in hyperphagia-related behaviors compared to a placebo. The long-term study involved 77 participants over a period of two to four years.
The company said it plans to submit a New Drug Application (NDA) to the Food and Drug Administration (FDA) for DCCR to treat PWS. The FDA has already granted DCCR Orphan Drug and Fast Track designations to treat PWS. Prader-Willi syndrome causes abnormally strong hunger signals and can cause a number of physical, mental, and behavioral problems. It results from an abnormality of the 15th chromosome and occurs in one of every 15,000 to one of every 25,000 live births.
DCCR met its primary and secondary endpoints in the study. As it is the company’s only pipeline candidate, there’s plenty of risk involved with the stock, despite the trial’s positive results. At the minimum, though, the trial data should help Soleno raised more money. As of the second quarter, the company said it had $19.4 million in cash. To bring DCCR to market, it will need more funds, so there’s a good possibility the company will have a stock sale. The news also makes the company a good target for a larger pharmaceutical company.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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