Soleno shares jump following competitor Acadia’s trial miss

Shares of Acadia Pharmaceuticals (ACAD) are sliding on Wednesday after the company’s Phase 3 failure in Prader-Willi syndrome. The news sent Soleno Therapeutics’ (SLNO) stock higher, with Wells Fargo saying that the news removes a near-term competitor to the company’s VYKAT XR.

COMPASS PWS TRIAL: Acadia Pharmaceuticals announced top-line results from the Phase 3 COMPASS PWS trial evaluating the efficacy and safety of intranasal carbetocin in patients with hyperphagia in Prader-Willi syndrome. Intranasal carbetocin did not demonstrate a statistically significant improvement over placebo on the study’s primary endpoint, change from baseline to Week 12 on the Hyperphagia Questionnaire for Clinical Trials, nor was there separation from placebo on any secondary endpoint. The safety and tolerability profile of intranasal carbetocin was consistent with previous clinical trials, showing a low rate of adverse events.

“We are disappointed by these findings, especially for Prader-Willi syndrome patients, their families and the entire community,” said Elizabeth H.Z. Thompson, Ph.D., Acadia’s Head of Research and Development. “I want to thank the many patients, families, study site personnel, and physicians who participated in the COMPASS PWS study as well as the intranasal carbetocin clinical development program, for their dedication and contributions in this important study. We are committed to sharing a summary of the data in the future to ensure learning for the PWS community; however, given these results, we do not intend to investigate intranasal carbetocin any further.” COMPASS PWS was a 12-week, double-blind, randomized, placebo-controlled global Phase 3 trial evaluating the efficacy and safety of intranasal carbetocin 3.2 mg three times daily in 175 enrolled children and adults aged five to 30 years with PWS.

TRADING UP ON THE NEWS: Wells Fargo believes Acadia Pharmaceuticals’ Phase 3 failure removes a near-term competitor to Soleno Therapeutics’ VYKAT XR. Wells thinks Soleno’s shares should trade up at least 20% on Acadia Pharmaceuticals’ failure in PWS, Prader-Willi syndrome. The firm remains bullish on VYKAT’s launch and would be a buyer at these levels into Q3 print. Wells has an Overweight rating on Soleno with a price target of $123 on the shares.

PRICE ACTION: Shares of Acadia Pharmaceuticals have dropped almost 11% to $21.02 in morning trading, while Soleno Therapeutics’ stock has jumped more than 14% to $64.86.