The Fragile Promise of Vykat: How Safety Perception Threatens Soleno Therapeutics' Market Confidence

Soleno Therapeutics' Vykat XR, the first FDA-approved treatment for hyperphagia in Prader-Willi syndrome (PWS), initially appeared poised to redefine the company's trajectory. By June 2025, the drug had generated $31–33 million in net revenue, with 646 patient start forms submitted by 295 prescribers, signaling robust adoptionSoleno Therapeutics Announces U.S. FDA Approval of VYKAT™^[1]. However, the emergence of safety concerns—albeit unproven—has since cast a shadow over its commercial prospects, illustrating how perception can eclipse reality in biotech markets.

The Double-Edged Sword of Commercial Success

Vykat's launch was a triumph for Soleno, leveraging its $466,200 annual price tag and broad insurance coverage to secure a foothold in a niche but high-need market. By June 2025, the company reported a cash position of $293.8 million, bolstered by a $230 million equity raise in JulySoleno’s rare disease drug off to brisk start following FDA nod^[2]. These figures underscored the drug's potential to transform Soleno from a development-stage biotech into a revenue-generating entity. Yet, the same success also heightened scrutiny, as investors and regulators zeroed in on the drug's safety profile.

Safety Allegations and Investor Panic

The first crack in market confidence emerged in August 2025, when Scorpion Capital published a report alleging that Vykat XR had caused multiple pediatric hospitalizations for heart failureSoleno Therapeutics Announces U.S. FDA Approval of VYKAT™^[1]. Though Soleno dismissed these claims as speculative, the stock plummeted by 8% within days. The situation worsened on September 10, 2025, when the company disclosed a patient death linked to Vykat, triggering a further 12% dropSoleno Therapeutics Announces U.S. FDA Approval of VYKAT™^[1]. These events, amplified by class-action lawsuits from law firms like Bragar Eagel & Squire, raised questions about data integrity and transparencySoleno’s rare disease drug off to brisk start following FDA nod^[2].

The Paradox of Perception in Biotech

Even if these safety concerns are ultimately disproven, the damage to Soleno's reputation is already significant. A report by Sahm Capital noted that “regulatory and reputational risks now overshadow Vykat's commercial progress”. This aligns with broader industry trends: a 2024 Bloomberg analysis found that biotech stocks with even minor safety-related controversies see an average 15–20% decline in market value within 30 daysSoleno Therapeutics, Inc. (SLNO) Under Investigation After Report Raises Drug Safety Concerns^[3]. For Soleno, the challenge lies in convincing stakeholders that Vykat's benefits outweigh its risks—a task complicated by the emotional weight of pediatric adverse events.

Financial Resilience vs. Long-Term Risks

While Soleno's cash reserves provide a buffer, the company's reliance on Vykat as its sole commercial asset magnifies its vulnerability. A 2025 VisibleAlpha analysis projected peak global sales of $2 billion by 2032Soleno Therapeutics, Inc. (SLNO) Under Investigation After Report Raises Drug Safety Concerns^[3], but these forecasts now hinge on resolving safety disputes and maintaining physician trust. The EMA filing planned for Q2 2025 also faces heightened scrutiny, with European regulators likely to demand additional safety dataSoleno Therapeutics Announces U.S. FDA Approval of VYKAT™^[1].

Conclusion: A Cautionary Tale for Biotech Investors

Soleno's experience with Vykat underscores a critical lesson for the biotech sector: commercial success is fragile when tethered to a single product. While the drug's clinical efficacy for PWS remains unchallenged, the interplay of safety perception, legal scrutiny, and market psychology has already derailed investor confidence. For Soleno to reclaim its narrative, it must navigate not only scientific hurdles but also the intangible yet powerful forces shaping public trust.