#USA #New York #Securities Fraud #VYKAT XR #Soleno Therapeutics

The Soleno Therapeutics Investor Alert: A Shift from Optimism to Disillusionment

In the wake of the FDA approval of VYKAT XR (diazoxide choline extended-release tablets), a therapy approved to treat hyperphagia in individuals suffering from Prader-Willi syndrome (PWS), investor excitement surged around Soleno Therapeutics, Inc. (NASDAQ: SLNO). However, recent developments have indicated a drastic shift in sentiment, prompting a securities class action lawsuit against the company. This article explores the factors that have led to growing investor disillusionment and the implications of potential fraud allegations.

The Initial Enthusiasm

On March 26, 2025, the FDA announced the approval of VYKAT XR, hailed as the first therapy for treating hyperphagia associated with PWS. Soleno Therapeutics reported impressively strong early performance metrics, including nearly 650 patient start forms, 295 prescribers, and a remarkable $32.7 million in quarterly net revenue. This initial success gave many investors the confidence that this product would set a new standard in the treatment of a condition previously devoid of approved therapies.

The positivity was further bolstered when the FDA granted approval without any boxed warnings or requirements for Risk Evaluation and Mitigation Strategies (REMS). Management's optimistic proclamations indicated a successful launch and a favorable response from both families and healthcare providers. The prevailing narrative suggested that VYKAT XR had a solid safety profile, supported by over four years of clinical data, paving the way for a burgeoning market for the product.

Emerging Concerns

However, as investor enthusiasm built, alarming signs began to surface within online PWS support communities. The class action complaint indicates that discussions within these networks turned sharply negative, as parents started sharing troubling experiences indicative of serious health risks associated with VYKAT XR. Reports included:

• - Severe fluid retention making mobility difficult or resulting in the inability to wear shoes,
• - Sharp increases in blood sugar levels leading to pre-diabetic and diabetic conditions,
• - Hospitalizations for symptoms that could indicate heart failure,
• - Decisions made by parents to halt treatment due to emerging health complications.

As parents voiced their concerns, discussions grew increasingly critical rather than supportive, with the most highly engaged posts lamenting the negative experiences influenced by VYKAT XR. This alarming trend posed a stark contrast to the initially positive expectations surrounding the drug's adoption by desperate families seeking relief.

The Breaking Point

The situation escalated dramatically when on August 15, 2025, Scorpion Capital published a comprehensive 415-page investigative report challenging the credibility of Soleno's clinical trials. The report suggested that vital safety risks associated with VYKAT XR were being deliberately underreported, including risks leading to diabetes, congenital heart failure, and other severe complications. Interviews with numerous trial investigators characterized the drug as an inadequate treatment option and raised questions about whether Soleno was misleading investors about its safety profile.

Scorpion Capital's assertions posed significant concerns; it argued that Soleno had misrepresented findings related to alarming fluid retention data by conflating it with increases in lean body mass, consequently downplaying the dangers posed by VYKAT XR. The company's management had, just nine days before the report's release, stated that there were