Soleno's Q3 2025 Earnings Call: Contradictions on Patient Discontinuations, Payer Policies, Revenue Conversion, and Outreach Efforts

Date of Call: None provided

Financials Results

• Revenue: $66.0M for Q3 2025, more than doubled from $32.7M in Q2 2025
• EPS: $0.49 basic / $0.47 diluted for Q3 2025, versus net loss of $1.83 per share in Q3 2024

Business Commentary:

* Revenue Growth and Profitability: - Soleno Therapeutics reported total net revenue of $66 million for Q3 2025, over double the $32.7 million in the previous quarter. - The company achieved positive net income of $26 million, marking its first quarter of profitability. - This growth was attributed to the successful launch of ViCAD XR, with a significant increase in patient starts and prescribers.

• Patient Start Forms and Prescriber Base Expansion:
• Cumulative patient start forms from launch through September 30th totaled 1,043, with 397 in Q3 alone.
• The company added 199 new prescribers in Q3, bringing the total unique prescribers to 494.

• The increase in patient starts and prescribers was driven by effective introduction of ViCAD XR to the prescriber community and strong operational execution.

• Efficacy and Patient Experience:

• Real-world data showed that the efficacy and side effects of ViCAD XR have been in line with expectations from clinical trials, with a decreasing trend in fluid retention-related adverse events post-launch.
• Approximately 10% of patients on the medication have been on it for more than a year, indicating potential for long-term patient benefit.

• Improving patient experiences, as reported by those who have completed titration and found their optimal dose, are reinforcing the impact of ViCAD XR.

• Disruptions and Restart Rates:

• Soleno observed an increased discontinuation rate of 10%, with 8% related to AEs, mainly due to non-serious adverse events reported after a short seller report.
• Early indications suggest that some patients are returning to therapy, although the number is not yet quantifiable.
• The company is actively educating physicians and families to mitigate the impact of the short seller report and ensure continued growth.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management described an "outstanding third quarter," noting total net revenue of $66.0M (more than doubled from Q2) and "achieved profitability with a positive net income of $26.0M." They highlighted growing launch KPIs (start forms, prescribers, lives covered) and continued investments in education and access.

Q&A:

• Question from Paul Choi (Goldman Sachs): Can you comment on the restart rate with regard to the discontinuations you’re seeing? Any color from the field in terms of how many patients are restarting and sort of the time to restart there would be helpful. And then in terms of the number of patients on active drug that you disclosed with the press release, can you maybe comment on just how many of those are still waiting for insurance clearance versus the patient start forms? Any color there helping us connect the dots would be great.
  Response: Restarts are only just emerging (a handful so far); typical time from start form to fill is about 30 days (roughly a one‑month backlog); 764 active patients have reimbursed claims.

• Question from Tyler Van Buren (TD Cowen): Can you elaborate on the impact on discontinuations and lower patient start forms due to the short report during the quarter, and is this impact going away as we enter Q4? What can you tell us about early launch momentum into Q4 and year-end?
  Response: The short‑seller report likely depressed August–September starts and contributed to non‑serious AE‑related discontinuations; October trends look similar to September with no clear rebound yet; the company is intensifying outreach and education to restore momentum.

• Question from Moritz Reiter (Guggenheim): Could you elaborate on the average dose across all patients that are currently on drug? For your existing prescribers, could you estimate what % of their PWS patients are currently on VYKAT—is there room to grow within existing prescribers or must growth come from new prescribers?
  Response: Average dosing is still evolving and patients are somewhat heavier than in trials; there is substantial room to grow—~1,000 start forms represent roughly 10% of TAM and many prescribers will prescribe at routine visit cadence, so uptake should continue within existing accounts and new prescribers.

• Question from Kristen Kluska (Cantor): You mentioned discontinuations being up after some of the non‑serious AEs post short report—can you give us a sense for the profile of the AEs leading to these discontinuations? Strictly the on‑label safety profile or anything else?
  Response: Discontinuations have been driven by on‑label, mostly non‑serious AEs—primarily low‑grade peripheral edema and hyperglycemia—and most of these are manageable; serious events are uncommon.

• Question from Yasmin Rahimi (Piper Sandler): Is the hesitation among patients coming from general endocrinology or other prescriber types? Can you quantify which prescribers/patient profiles need additional outreach, and how will you communicate timing for recovery from the short‑report impact?
  Response: Hesitation is concentrated among community prescribers with only one or two PWS patients who need more disease‑state and dosing education; the company launched speaker programs, expert‑on‑demand and caregiver webinars to target them; no specific timeline for recovery was provided.

• Question from Milan Gershaw (Oppenheimer): Should we think adverse events are more likely among patients treated by less specialized prescribers, and has time to reimbursement changed from prior guidance?
  Response: AEs reported post‑launch are lower than in trials and largely low‑grade, but less‑experienced prescribers may be less comfortable managing them; Soleno provides field teams, MSL support and physician‑to‑physician resources; target turnaround from start form to reimbursement remains ~30 days.

• Question from James Gondulis (Stifel): As patients approach six months on therapy, what early learnings on efficacy are you seeing and how might that affect discontinuation rates over time?
  Response: Early real‑world anecdotes show meaningful functional benefits across ages (e.g., reduced food seeking, improved behavior), and management expects these efficacy experiences to reduce discontinuation rates over time as more patients see benefit.

• Question from Derek Archila (Wells Fargo): Is the initial bolus over or will uptake resume as education improves? And on the EU front, can you characterize the EMA 120‑day questions and whether they increase confidence in approval?
  Response: Management expects a steady build rather than a return of a discrete bolus; EMA queries mirror prior FDA discussions about efficacy/study design and sequential studies—responses are being prepared and will inform path forward.

• Question from Yale Jen (Laidlaw): With over 100 patients >1 year on treatment, will you analyze long‑term outcomes? Also, do you need additional patient‑finding efforts or do you already know where patients are?
  Response: Soleno has long‑term open‑label and extension data showing varied but meaningful improvements in many patients and will continue to track outcomes; the company has claims data identifying ~12,000 individuals (TAM ≈10,000) and is using analytics/ML to better target outreach.

• Question from Catherine Villaroso (LifeSci): What proportion of patients reach or are maintained on on‑label dose versus dose reduction, and for those who discontinue, how long are they typically on therapy before stopping?
  Response: Dose reductions are uncommon—most patients reach on‑label dosing (therapeutic window ~3–5 mg/kg); discontinuations tend to occur early (during titration or within ~first 3 months); ~two‑thirds of active patients are now beyond three months.

• Question from Ramsay Varat (H.C. Wainwright): When might you provide annualized revenue guidance? And how do you view Rhythm’s setmelanotide effort in PWS—as competitor or potential complement?
  Response: It's too early to provide annualized revenue guidance while launch components mature; Rhythm’s setmelanotide had a prior negative randomized study in PWS—any future relationship would depend on data, and mechanisms could be competitive or potentially synergistic.

Contradiction Point 1

Patient Discontinuation Trends

It reflects differing perspectives on the timing and causes of patient discontinuations, which are crucial for understanding market dynamics and product performance.

What was the impact of short reports on patient discontinuations and start forms during the quarter? Will this impact subside in Q4? What early Q4 launch momentum is expected heading into year-end? - Tyler Van Buren (TD Cowen)

2025Q3: There was a decrease in August and September, possibly due to summer activities and the short report. - Anish Bhatnagar(CEO)

How do July's monthly scripts compare to previous months? What is the current time to fill, and how do you expect it to evolve? - Yasmeen Rahimi (Piper Sandler)

2025Q2: In terms of seeing any pattern with the cessation of therapy, we don't know that there is any pattern that we can see yet because it's still very early. - Meredith Manning(CMO)

Contradiction Point 2

Payer Policies and Time to Fill

It involves differing statements about payer policies and time to fill, which are critical for understanding the reimbursement and accessibility of the product.

What is the restart rate for discontinued patients, including the average time to restart and the percentage still awaiting insurance clearance versus patient start forms? - Paul Choi (Goldman Sachs)

2025Q3: All 764 active patients have claims that are being reimbursed. The lag time between start forms and insurance coverage is roughly one month. - Meredith Manning(CMO)

Are there emerging issues in the patient start form process that can be addressed in the next few quarters; and how are early compliance trends tracking? - Ry Roger Forseth (Guggenheim Securities)

2025Q2: Time to fill is dependent on payer policies. Policies continue to come in, possibly affecting turnaround time. As steady state is reached, a turnaround time of 30 days is expected. - Meredith Manning(CMO)

Contradiction Point 3

Conversion of Patient Start Forms to Revenue

It involves predictions on the timeline and process for converting patient start forms into revenue, which is crucial for financial forecasting.

Can you clarify the impact of discontinuations and lower patient start forms from the short report this quarter? Will this impact persist into Q4? - Tyler Van Buren (TD Cowen)

2025Q3: There was a decrease in August and September, possibly due to summer activities and the short report. - Anish Bhatnagar(CEO)

Can you quantify how soon we can start converting initial forms into revenue? - Yasmeen Rahimi (Piper Sandler)

2025Q1: We anticipate that they will be cautious in the inventory build that they want to take. So, modest revenues for Q2. - Jim Mackaness(CFO)

Contradiction Point 4

Education and Outreach Efforts

It involves the strategies and timelines for educating healthcare providers and patients, which affect product adoption and market penetration.

How did the short report impact discontinuations and patient start forms in Q3? Will this impact subside in Q4? - Tyler Van Buren (TD Cowen)

2025Q3: The effect is still being seen in October, but efforts are being made to reach out to patients and educate with webinars and patient testimonials. - Anish Bhatnagar(CEO)

What can you share about community interest in VYKAT XR? - Leland Gershell (Oppenheimer)

2025Q1: We're very encouraged by the broad spectrum of prescriptions coming from outside our targeted group, including community treating physicians. - Meredith Manning(CCO)

Contradiction Point 5

Patient Discontinuations and Restarts

It involves the reported reasons for patient discontinuations and how the company plans to address them, which impacts expectations of future patient retention and growth.

What is the impact of the short report this quarter on discontinuations and lower patient start forms? Will this impact subside in Q4? - Tyler Van Buren (TD Cowen)

2025Q3: There was a decrease in August and September, possibly due to summer activities and the short report. - Anish Bhatnagar(CEO)

What is the community interest in VYKAT XR? - Leland Gershell (Oppenheimer)

2025Q1: We're very encouraged by the broad spectrum of prescriptions coming from outside our targeted group, including community treating physicians. - Meredith Manning(CCO)