On Monday, Piper Sandler initiated coverage on Soleno Therapeutics Inc. (NASDAQ:SLNO), assigning an Overweight rating to the company’s stock with a price target of $93.00. The biopharmaceutical company has seen its shares surge over 1500% in the past year, a rise attributed to positive Phase 3 data for its drug candidate, DCCR, in treating Prader-Willi Syndrome (PWS).
The firm expressed confidence in the potential of DCCR, which is anticipated to be submitted for a New Drug Application (NDA) by mid-2024. The optimism is based on the significant unmet medical needs of PWS, a rare genetic disorder affecting approximately 9,000 individuals in the United States. Analysts at Piper Sandler believe that DCCR has a high probability of success for approval due to the strong data presented.
The report by Piper Sandler compared the market opportunity for DCCR to that of Reata Pharmaceuticals (NASDAQ:RETA)' omaveloxolone, a treatment for Friedreich's ataxia (FA), which is another orphan disease. Omaveloxolone's approval led to a $7.3B acquisition, illustrating the potential financial rewards for successful treatments in niche markets with critical needs.
Piper Sandler's bullish stance on Soleno Therapeutics is rooted in the belief that DCCR will significantly penetrate the PWS market. The firm's analysis suggests that the current valuation of Soleno Therapeutics does not fully reflect the growth prospects, especially if the drug gains approval, making the company's stock a compelling investment opportunity.
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