(Reuters) -Shares of Soleno Therapeutics jumped nearly 40% in premarket hours on Thursday, after the company’s drug for a rare metabolic condition became the first such treatment to receive U.S. regulatory nod.
Soleno’s Vykat XR was approved late on Wednesday by the Food and Drug Administration to treat hyperphagia, or feelings of intense and persistent hunger, in patients with the genetic disorder called Prader-Willi syndrome.
Wall Street analysts said the approval of Soleno’s drug markedly changes treatment options for patients who suffer from hyperphagia that can lead to a range of disruptive food-related behaviors such as aggressively seeking food.
The company is on track to add nearly $800 million to its market value of $2.3 billion, if gains hold.
Approval for Soleno’s drug comes with a clean label that does not exclude any patients based on the severity of the disease symptoms and carries no harsh safety warnings from the regulator, Baird analyst Brian Skorney wrote in a note.
Skorney, who hiked his price target on the stock to $102 from $72, said the drug’s mechanism is “an ideal fit” for patients with hyperphagia.
“The field has been searching for a solution to this problem so that patients are better armed not to succumb to hyperphagic obesity and subsequent complications,” Skorney said.
The California-based company said it does not expect to see growth in revenue from the drug until the second half of this year. It expects sales to pick up in 2026.
With a “fairly quick and straightforward” launch, Skorney expects the drug can bring in more than a billion dollars in annual peak sales.
Soleno’s price to tangible book value ratio, a common benchmark of valuing stocks, stood at 9.39 as of Thursday, compared with 4.63 for Acadia Pharmaceuticals, which is testing a rival drug.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Krishna Chandra Eluri)
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