GlobeNewswire Inc | May 5, 2021 04:01PM EDT

May 05, 2021

REDWOOD CITY, Calif., May 05, 2021 (GLOBE NEWSWIRE) -- Soleno Therapeutics, Inc. (Soleno) (NASDAQ: SLNO), a clinical-stage biopharmaceutical company developing novel therapeutics for the treatment of rare diseases, today provided a corporate update, and reported financial results for the three months ended March 31, 2021.

We are continuing our dialogue with the U.S. Food and Drug Administration (FDA) to evaluate the appropriate next steps in our DCCR program for the treatment of Prader-Willi Syndrome (PWS) and work towards obtaining regulatory approval as expeditiously as possible, saidAnish Bhatnagar, M.D., Chief Executive Officer ofSoleno Therapeutics. The Soleno team remains committed to the development of DCCR and building an appropriate data set to support its development. To this end, we were excited to recently present behavioral outcomes data from caregiver interviews that summarized individual patient experiences during treatment with DCCR. We were also pleased to speak to the PWS community directly during the recent PWS DCCR Town Hall meeting where we reiterated our continued focus on DCCR and outlined the proposed necessary steps for submitting a marketing application to the FDA in the U.S. More importantly, we were able to listen to the stories about the individual study participants experiences during our completed Phase III clinical trial of DCCR, DESTINY PWS, and the ongoing long-term safety extension study.

Dr. Bhatnagar continued, We are grateful for the work completed by the Foundation for Prader-Willi Research and Prader-Willi Syndrome Association | USA in collecting the experiences of PWS patients and caregivers treated with DCCR. This petition, which was submitted to the FDA, was signed by more than 26,000 individuals in support of DCCR.

First Quarter 2021 and Recent Corporate Highlights

-- Continued discussions with FDA and currently evaluating appropriate next steps for DCCR program in PWS -- Presented behavioral outcomes data from the Companys ongoing open-label extension study (C602) of DCCR in PWS at the Pediatric Academic Societies (PAS) 2021 Virtual Annual Meeting (poster available here) A majority of patients (83%) reported positive changes in multiple behavioral outcome domains, including food-seeking behaviors, mealtime behaviors and daily life behaviors in a preliminary analysis of data from interviews of caregivers of participants in C602 -- Presented assessment of baseline renal function in PWS patients enrolled in clinical study C601 at the Endocrinology Society (ENDO) 2021 Virtual Annual Meeting (poster available here) -- With researchers from the U.S. National Institutes of Health, presented resting energy expenditure data for a limited number of subjects enrolled in clinical studies C601 and C602 at the Pediatric Academic Societies (PAS) 2021 Virtual Annual Meeting (poster available here) DCCR treated subjects showed progressive increases in resting energy expenditure -- Presented a post-hoc analysis of C601 taking into account data prior to the COVID impact (defined as 1 March 2020) at the PES 2021 Virtual Annual Meeting (poster available here) The primary endpoint, change in hyperphagia using HQ-CT, and all key secondary endpoints showed significant improvements in DCCR treated subjects compared with placeboThere were significant improvements in a number of behavioral and cardiometabolic endpoints in DCCR treated subjects compared with placebo -- Participated in PWS DCCR Town Hall Highlighted the proposed necessary steps to submit a marketing application for DCCR in the U.S. and reaffirmed the Companys commitment to this processListened to individual patient and caregiver experiences with DCCR -- Participated in a fireside chat at the 31st Annual Oppenheimer Healthcare Conference

Financial ResultsSolenos current research and development efforts are primarily focused on advancing its lead product candidate, DCCR, for the treatment of PWS, through late-stage clinical development.

First Quarter Ended March 31, 2021 Financial Results

Research and development expenses were$7.2 millionfor the quarter endedMarch 31, 2021, compared to$6.7 millionin the same period of 2020. The increase was primarily due to increased activities related to the DCCR development program. General and administrative expense was$3.0 millionfor the quarter endedMarch 31, 2021, compared to $2.0 million in the same period of 2020.

The change in the fair value of contingent consideration results from Solenos obligation to make cash payments toEssentialisstockholders upon the achievement of certain future commercial milestones associated with the sale of DCCR in accordance with the terms of theEssentialismerger agreement. The fair value was estimated to be approximately$9.3 millionatMarch 31, 2021, resulting in a decrease in expense of approximately$1.0 million from the estimate atDecember 31, 2020.

Total other income was $0.2 million for the quarter ended March 31, 2021, compared to $3.4 million in the same period of 2020, and consisted primarily of the change in the fair value of our outstanding warrants.

Net loss for the quarter endedMarch 31, 2021, was approximately$9.0 million, ora net loss of$0.11per basic and diluted share, compared to a net loss of approximately$5.9 million, or$0.13per basic and diluted share, for the quarter endedMarch 31, 2020.

As ofMarch 31, 2021, Soleno had cash and cash equivalents of approximately$41.6 million, compared to$49.2 millionatDecember 31, 2020.

About PWSThe Prader-Willi Syndrome Association USA estimates that PWS occurs in one in every 15,000 live births in the U.S. The hallmark symptom of this disorder is hyperphagia, a chronic feeling of insatiable hunger that severely diminishes the quality of life for PWS patients and their families. Additional characteristics of PWS include behavioral problems, cognitive disabilities, low muscle tone, short stature (when not treated with growth hormone), the accumulation of excess body fat, developmental delays, and incomplete sexual development. Hyperphagia can lead to significant morbidities (e.g., obesity, diabetes, cardiovascular disease) and mortality (e.g., stomach rupture, choking, accidental death due to food seeking behavior). In a global survey conducted by the Foundation for Prader-Willi Research, 96.5% of respondents (parent and caregivers) rated hyperphagia as the most important or a very important symptom to be relieved by a new medicine. There are currently no approved therapies to treat the hyperphagia/appetite, metabolic, cognitive function, or behavioral aspects of the disorder. Diazoxide choline has received Orphan Drug Designation for the treatment of PWS in the U.S. and EU, and Fast Track Designation in the U.S.

AboutSoleno Therapeutics, Inc.Soleno is focused on the development and commercialization of novel therapeutics for the treatment of rare diseases. The companys lead candidate, DCCR extended-release tablets, a once-daily oral tablet for the treatment of Prader-Willi Syndrome (PWS), is currently being evaluated in a Phase 3 clinical development program. For more information, please visit www.soleno.life.

Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward-looking statements, including statements regarding timing of any regulatory process or ultimate approvals and determining a path forward for DCCR for the treatment of PWS. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including the risks and uncertainties associated with market conditions, as well as risks and uncertainties inherent in Solenos business, including those described in the company's prior press releases and in the periodic reports it files with theSEC. The events and circumstances reflected in the company's forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, the company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Corporate Contact:Brian RitchieLifeSci Advisors, LLC212-915-2578

Soleno Therapeutics, Inc.Condensed Consolidated Balance Sheets(In thousands except share and per share data)

March 31, December 2021 31, 2020Assets (Unaudited) Current assets Cash and cash equivalents $ 41,607 $ 49,224 Prepaid expenses and other current assets 921 1,019 Total current assets 42,528 50,243 Long-term assets Property and equipment, net 20 19 Operating lease right-of-use assets 50 124 Finance lease right-of-use assets 13 15 Intangible assets, net 14,095 14,581 Total assets $ 56,706 $ 64,982 Liabilities and stockholders? equity Current liabilities Accounts payable $ 4,669 $ 3,489 Accrued compensation 411 1,005 Accrued clinical trial site costs 4,140 3,789 Operating lease liabilities 57 139 Other current liabilities 232 196 Total current liabilities 9,509 8,618 Long-term liabilities 2018 PIPE Warrant liability 338 539 Contingent liability for Essentialis purchase 9,291 10,278 priceTotal liabilities 19,138 19,435 Commitments and contingencies (Note 6) Stockholders? equity Common stock, $0.001 par value, 250,000,000shares authorized,79,723,680 and 79,615,692 80 80 shares issued and outstanding atMarch 31, 2021and December 31, 2020, respectively.Additional paid-in-capital 228,887 227,912 Accumulated deficit (191,399 ) (182,445 )Total stockholders? equity 37,568 45,547 Total liabilities and stockholders? equity $ 56,706 $ 64,982

Soleno Therapeutics, Inc.Condensed Consolidated Statements of Operations(unaudited)(In thousands except share and per share data)

Three Months Ended March 31, 2021 2020 Operating expenses Research and development $ 7,164 $ 6,695 General and administrative 2,979 2,003 Change in fair value of contingent (987 ) 584 considerationTotal operating expenses 9,156 9,282 Operating loss (9,156 ) (9,282 )Other income Change in fair value of warrants 201 3,413 liabilitiesInterest income 1 11 Total other income 202 3,424 Net loss $ (8,954 ) $ (5,858 )Net loss per common share, basic and $ (0.11 ) $ (0.13 )dilutedWeighted-average common sharesoutstanding used to calculate basic and 79,694,781 44,679,858 diluted net loss per common share