Biotech small cap Soleno gets FDA approval for hunger treatment, shares soar

Shares of biotech small cap Soleno Therapeutics jumped almost 38% yesterday, March 27, after the U.S. FDA approved its drug for a genetic disorder that causes insatiable hunger. It is the first approved medication designed for this.

Yesterday, California-based Soleno saw its stock soar 37.6% to $67.40 per share, the largest single-day gain since September 2023 and the highest close in eight years, as reported by Bloomberg.

The FDA has approved Soleno's drug to treat hyperphagia — where individuals constantly feel hungry and never full — in adults and children aged four and older. This condition is often a symptom of Prader-Willi syndrome, a genetic disorder that has no cure and affects 1 in every 10,000-30,000 children, according to the U.S. National Institutes of Health.

Soleno expects the drug to be available in the U.S. starting in April. It is the company’s first treatment approved for commercialization since it went public in 2014.

Soleno states that the drug, Vykat XR, is the first treatment approved by regulators for extreme hunger associated with Prader-Willi syndrome. RBC Capital Markets analyst Brian Abrahams described the development of Vykat XR as “somewhat of a journey.”

Soleno spent years in talks with the FDA and submitted multiple clinical studies. Not all of them were successful — one 2021 trial, for example, failed to show a statistically significant improvement in hyperphagia versus placebo.

To prove the drug’s efficacy, Soleno had to take patients off the treatment, after which their extreme hunger returned.

In August, the FDA granted the drug a special status that allowed for fast-track review and approval. Still, health regulators delayed a final decision, as they had classified the company’s latest communications as a “major amendment” to its new drug application, meaning additional review time.

Soleno is not the only company developing such treatments. Its main competitor, Aardvark Therapeutics, is testing a drug called ARD-101, which may offer a better benefit/risk profile, Abrahams of RBC says. In one of Soleno's trials, more Vykat XR patients experienced hyperglycemia (high blood sugar) than placebo patients. Additionally, Vykat XR has a side effect of excessive hair growth, which could deter some female patients, he points out.

Yesterday, Aardvark Therapeutics stock tumbled 5.5% in response to the news about Vykat XR.

Soleno had been steadily rising over the last two years in anticipation of FDA approval. Since the beginning of 2025, it is up 50%. According to MarketWatch, all nine analysts who cover Soleno recommend buying the stock (including “buy” and “overweight” ratings).

For context, Aardvark is covered by four analysts, who also unanimously rate it a “buy.”