SLNO Plunges 2.08% Amid Legal Scrutiny and Safety Concerns: What’s Brewing in Biotech?

Summary
• Soleno Therapeutics (SLNO) trades at $64.195, down 2.08% from its previous close of $65.56
• Intraday range spans $63.955 to $66.095, reflecting heightened volatility
• Legal investigations and safety allegations dominate headlines, with Pomerantz and Hagens Berman probing VYKAT XR’s commercial claims

Today’s sharp decline in Soleno Therapeutics underscores a perfect storm of regulatory scrutiny, safety controversies, and investor skepticism. The stock’s 2.08% drop follows a critical report by Scorpion Capital and a patient death linked to its flagship drug, VYKAT XR. With multiple law firms launching investigations into potential securities fraud and data integrity, the biotech sector watches closely as SLNO’s fate hangs in the balance.

Legal Probes and Safety Allegations Trigger SLNO's Sharp Decline
Soleno Therapeutics’ 2.08% intraday drop is driven by a confluence of legal and safety-related headwinds. The August 15 Scorpion Capital report accused VYKAT XR of being overpriced, unsafe for children, and reliant on questionable clinical data. This was compounded by a September 10 disclosure of a patient death linked to the drug, which sent shares plunging 12% that day. Legal firms like Pomerantz LLP and Hagens Berman are now investigating whether Soleno misled investors about VYKAT XR’s safety and commercial viability. The company’s core patent for VYKAT XR expires in 2026, adding urgency to these concerns. Meanwhile, rival Acadia Pharmaceuticals’ failed Prader-Willi trial briefly boosted SLNO earlier this month, but recent developments have erased those gains.

Options Playbook: Navigating SLNO's Volatility with Strategic Contracts
• MACD: -0.95 (bearish divergence from signal line -1.93)
• RSI: 64.92 (neutral but trending downward)
• Bollinger Bands: Price at $64.195, below the 200-day MA of $65.25
• Key Levels: 30D support at $56.49, 200D support at $44.38

SLNO’s technicals suggest a bearish bias, with RSI and MACD signaling potential for further downside. The 200-day MA acts as a critical resistance level. For traders, the SLNO20251017C65 and SLNO20251121C65 options stand out. The October 17 call (strike $65) has a 85.5% implied volatility ratio, 21.47% leverage, and a theta of -0.35, making it sensitive to short-term price swings. The November 21 call (strike $65) offers 94.8% IV and a theta of -0.12, ideal for a mid-term bearish play. Both contracts have high turnover (33,700 and 18,747, respectively), ensuring liquidity. A 5% downside scenario (targeting $60.99) would yield a put option payoff of $0.99 for the $65 strike, while the call would expire worthless. Aggressive bears may consider SLNO20251017P65 if the stock breaks below $63.95.

Backtest Soleno Therapeutics Stock Performance
Here is the historical impact of a ≥ 2 % intraday plunge in SLNO since 2022. (Scroll the chart for detailed statistics.)Key takeaway • After a -2 % plunge, SLNO’s median 5-day move was +6.3 % and the 30-day median gain reached ≈27 %, but none of the horizons showed statistical significance at the 95 % level. Feel free to ask if you’d like to explore different thresholds, add a stop-loss layer, or run the same study on another ticker.

SLNO at Crossroads: Legal Risks vs. Analyst Optimism—What’s Next?
Soleno Therapeutics faces a pivotal juncture as legal investigations and safety concerns overshadow its recent EMA approval efforts. While the stock’s 2.08% decline reflects immediate risks, analysts like Piper Sandler and Wells Fargo maintain $145 and $123 price targets, suggesting long-term conviction. However, the sector leader Amgen (AMGN) also fell 1.07%, indicating broader biotech sector fragility. Investors should monitor the $60 support level and regulatory updates on VYKAT XR’s safety profile. For now, the path of least resistance appears bearish, but a rebound above $66.095 could reignite short-term optimism. Watch for $60 breakdown or regulatory reaction.