Soleno Therapeutics (SLNO) | News Based Sentiment Analysis

• On October 1, 2025, Soleno Therapeutics experienced a significant stock drop, falling between 9% and 13% to approximately $61.53 from a previous close of $67.60, triggered by short-seller attacks from Scorpion Capital alleging inflated commercial prospects and safety concerns regarding VYKAT XR. Trading volume was lower than average, with approximately 362,810 shares traded, though some reports indicated 1.73 million shares.
• Despite the negative stock reaction on October 1, 2025, Soleno reported surprisingly strong Q2 2025 earnings, with EPS of ($0.09), exceeding expectations of ($0.53) by $0.44, and revenue reaching $32.66 million – significantly surpassing the anticipated $3.91 million. This positive financial performance was somewhat overshadowed by the external criticisms.
• Several analysts reaffirmed positive ratings following the Vykat XR launch and competitor setbacks. TD Cowen reaffirmed a Buy rating with a $120 price target on October 1, 2025, citing the successful launch, while Baird maintained an Outperform rating with a $121 target, viewing Acadia Pharmaceuticals' trial failure as a positive for Soleno.
• Stifel adjusted its price target to $115.00 from $118.00 on October 1, 2025, while maintaining a Buy rating, projecting a 50% penetration rate within the Prader-Willi Syndrome (PWS) patient population and noting a worldwide opportunity exceeding $2 billion. They also highlighted a potential EU expansion opportunity for next year.
• Piper Sandler reiterated an Overweight rating and a $145.00 price target on October 3, 2025, addressing safety concerns related to VYKAT XR, stating the stock was oversold and their analysis of FDA Adverse Event Reporting System (FAERS) data revealed no concerning signals. The stock had declined 10.75% in the past week.
• Institutional investor activity was mixed, with Raymond James Financial Inc. purchasing a new stake worth $25,000 on October 1, 2025, and Nisa Investment Advisors LLC increasing its position, while insider selling occurred with Patricia C Hirano selling 4,096 shares, estimated at $339,381.
• Simply Wall St News highlighted Soleno's strong shareholder returns, with a 26.8% year-to-date return and over 32% three-year total shareholder return as of October 3, 2025, and noted the stock trades at an 87.7% discount to estimated fair value based on a DCF model.
• Pomerantz LLP initiated an investigation into potential securities fraud claims against Soleno Therapeutics on October 3, 2025, following the August 15, 2025 report by Scorpion Capital, which alleged Vykat XR was overpriced and unsafe, causing a $5.73 stock price decline to $71.63 on that date.

The Investment Story: October was a turbulent month for Soleno Therapeutics, marked by a sharp stock decline following short-seller allegations, but also supported by strong Q2 earnings, positive analyst sentiment, and promising data on Vykat XR. The conflicting signals create a complex investment picture.

What It Means for Investors: The stock's volatility and ongoing investigations present significant risks, but the potential of Vykat XR and positive analyst coverage offer potential rewards. Investors should carefully weigh these factors and monitor key developments closely.

Looking Ahead: Investors should watch for updates on the class-action investigation, further developments regarding the short-seller allegations, and continued data on Vykat XR's adoption and safety profile. The potential for EU expansion will also be a key area to monitor.

The Bottom Line: Soleno Therapeutics remains a high-risk, high-reward investment. While the company's strong Q2 performance and promising drug launch are encouraging, the ongoing legal and regulatory challenges demand caution and close monitoring.