investigative treatment for Prader-Willi syndrome, called DCCR (diazoxide choline), is expected to be approved, first in the States as early as next year, then later in the European Union, reported Oppenheimer analyst Dr. Leland Gershell in an October 10 research note. Prader-Willi is a rare genetic disorder in which hyperphagia, or the excessive desire to eat, "is the major source of morbidity and mortality."
"Our attendance at the Foundation for Prader-Willi Research's annual Research Symposium and Family Conference late last week reinforced our bullish view on DCCR's U.S. Food and Drug Administration (FDA) approval and commercial prospects for Prader-Willi syndrome," Gershell wrote.
Buying Opportunity, Attractive Return
As such, Oppenheimer reiterated its target price of US$39 per share on California-headquartered Soleno. Its current share price, in comparison, is about US$25.75 per share.
"We believe shares remain undervalued following the recent positive data," wrote Gershell, referring to results of a Phase 3 study and a subsequent withdrawal trial. "We would continue to be buyers."
The difference between the current and target prices implies a compelling return for investors of 51%.
Soleno remains rated as Outperform.
Expected Approval Dates
Oppenheimer expects the FDA to approve DCCR for Prader-Willi syndrome in the U.S. in 2024, with a commercial launch to follow by early 2025, Gershell wrote. Approval in the European Union (EU) is estimated to happen in 2026.
Further, Oppenheimer projects peak sales of DCCR to be US$1 billion or more in each region.
Takeaways From Meeting
Gershell pointed out that the clinicians Oppenheimer talked with at the conference indicated they were excited about the performance of DCCR in the recent randomized withdrawal trial. In it, the drug showed "a strongly significant benefit to hyperphagia," thereby meeting the primary endpoint. Clinicians also indicated they did not have concerns about DCCR or it getting approved.
Some investors have expressed concern, noted Gershell, that study patients with a lower starting weight/BMI who stayed on DCCR may have "favored a drug effect." However, while physicians at the conference acknowledged this was possible, they said it would not impact the hyperphagia endpoint.
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- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
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Disclosures for Oppenheimer, Soleno Therapeutics, October 10, 2023
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