Soleno Therapeutics, Inc. Class Action Lawsuit – SLNO
Introduction to Soleno Therapeutics, Inc. (SLNO) Securities Class Action Lawsuit
A securities class action lawsuit under the Securities Exchange Act of 1934 has been filed against Soleno Therapeutics, Inc. (NASDAQ: SLNO) and certain of its executives for the period between March 26, 2025 and November 4, 2025. Investors allege that the company and its officers made materially false and misleading statements regarding the safety profile and commercial viability of VYKAT XR (DCCR), the company’s only commercial product used to treat hyperphagia in patients with Prader-Willi syndrome.
According to the complaint, while executives touted a favorable safety profile with no new safety signals and strong commercial adoption, the company had allegedly concealed significant safety concerns including risks of excess fluid retention, pre-diabetes, diabetes, pulmonary edema, and congestive heart failure. As these safety issues emerged publicly through an investigative report, a patient death, and management admissions of commercial disruption, Soleno Therapeutics, Inc.’s stock price moved from over $90 per share to lows of less than $45 per share, reflecting a pattern of material stock price declines.
“Most SLNO shareholders never file or join the class action, which means they miss out on potential recovery funds,” said Attorney Joseph Levi.
Soleno Therapeutics, Inc. (SLNO) Securities Lawsuit Case Details
Case Name: City of Pontiac Police and Fire Retirement System v. Soleno Therapeutics, Inc., et al.
Case No.: 3:26-cv-01979
Jurisdiction: U.S. District Court, Northern District of California, San Francisco Division
Filed on: March 6, 2026
Soleno Therapeutics, Inc. (SLNO) Company Profile
Soleno Therapeutics (NASDAQ: SLNO), a rare disease focused biopharmaceutical company, is a pharmaceutical company focused on developing therapies for rare diseases and is headquartered in Redwood City, California. At the time of the complaint filing, the company’s only commercial product, reflecting its single-product company dependency, was diazoxide choline extended-release tablets (DCCR), marketed as VYKAT XR, for the treatment of hyperphagia in individuals with Prader-Willi syndrome, including hyperphagia in PWS.
Soleno Therapeutics, Inc. (SLNO) Securities Lawsuit Class Period
March 26, 2025 – November 4, 2025, inclusive.
All persons who purchased Soleno Therapeutics, Inc. common stock during the Class Period may be eligible to join the Soleno Therapeutics, Inc. (SLNO) class action lawsuit, including investors who purchased common stock on the NASDAQ (NASDAQ: SLNO).
Allegations in the Soleno Therapeutics, Inc. (SLNO) Securities Class Action Lawsuit
The complaint targets Soleno Therapeutics, Inc. and three of its executives: Anish Bhatnagar, Chief Executive Officer and Chairman of the Board; James Mackaness, Chief Financial Officer; and Meredith Manning, Chief Commercial Officer, alleging violations of the Securities Exchange Act of 1934. Investors allege that these defendants made materially false and misleading statements about the safety profile and commercial prospects of VYKAT XR throughout the class period and downplayed or concealed material safety concerns and related commercial risks.
On March 26, 2025, as the product received approval, by the Food and Drug Administration, CEO Bhatnagar emphasized on a conference call that the label “reflects VYKAT’s favorable safety and tolerability profile, contains no [box] warnings, no contraindications for diabetes, no exclusions for severity of hyperphagia, and no requirement for a risk evaluation and mitigation strategy or REMS program.”
Just weeks later on May 7, 2025, Bhatnagar highlighted in a press release that “the high level of interest that we are experiencing, as reflected in both patient start forms and unique prescribers, reflects the significant unmet need that VYKAT XR can address as a first-to-market treatment for this debilitating condition.” During the second quarter, Soleno Therapeutics, Inc. reported $32.7 million in revenue from DCCR sales, and by August 6, 2025, Bhatnagar told investors on a conference call that “discontinuation rates are substantially lower than what we saw even in clinical trials” and assured them that “we have not seen anything in the postmarketing setting that is different from the clinical trial setting. So there are no new safety signals,” while investors allege the company downplayed adverse events.
According to the complaint, these statements were materially false and misleading because the company’s Phase 3 clinical trial program had allegedly systematically downplayed, misrepresented, or concealed significant evidence of safety concerns potentially related to DCCR administration, including issues related to excess fluid retention in clinical trial participants, and other adverse events. The complaint alleges that DCCR posed materially greater safety risks than disclosed and had materially lower commercial viability due to undisclosed risks of significant and widespread adverse events, including risks related to patient discontinuation rates, lower patient adoption, prescriber reluctance, adverse regulatory action, and potential reputational and legal fallout.
The Truth Emerges
The truth began to surface on August 15, 2025, when Scorpion Capital LLC published an extensively researched exposé, a 415-page report titled “Russian Roulette With Prader-Willi Children: How The Latest Rare Disease Price-Gouging Scheme Fleeced the FDA, Parents, And Its Own Study Investigators With A Worthless, Toxic Drug.” The report detailed problems with Soleno Therapeutics, Inc.’s clinical trial conduct, safety and efficacy concerns with DCCR, and patient reports of serious adverse reactions, with key trial investigators broadly rebuking VYKAT XR as a failure and looming safety disaster, including high risks of pre-diabetes, diabetes, pulmonary edema, and congestive heart failure, which plaintiffs allege helped reveal previously undisclosed safety concerns.
On September 10, 2025, Soleno Therapeutics, Inc. filed a Form 8-K with the U.S. Securities and Exchange Commission disclosing that a patient had died after taking DCCR, though the company stated that the treating physician and Soleno Therapeutics, Inc.’s own assessment concluded the death was not related to treatment with VYKAT XR.
Finally, on November 4, 2025, during an earnings call, CEO Bhatnagar admitted that the Scorpion Capital Report had caused a “disruption” in DCCR’s launch trajectory, signaling commercial launch disruption and concerns within the Prader-Willi syndrome community, with a lower number of patient start forms and increased discontinuations beginning after the report’s publication. These revelations directly contradicted the company’s prior assurances about VYKAT XR’s favorable safety profile, absence of new safety signals, strong commercial adoption, and low discontinuation rates. What executives had portrayed as a successful first-to-market treatment with robust demand was now revealed to face significant safety concerns and commercial headwinds.
Market Reaction
Following the August 15, 2025 Scorpion Capital Report, which alleged safety and clinical-trial concerns related to DCCR, Soleno Therapeutics, Inc.’s stock price (NASDAQ: SLNO) declined from more than $77 per share on August 14, 2025 to close at approximately $68 per share on August 18, 2025, nearly a 12% drop over two trading days on above-average trading volume.
After the September 10, 2025 disclosure of the patient death, the stock fell from more than $70 per share on September 9, 2025 to close at approximately $57 per share on September 11, 2025, approximately a 19% drop over two trading days on above-average trading volume, continuing a pattern of stock price declines following the disclosures described in the complaint. On November 5, 2025, following the company’s third quarter results and CEO Bhatnagar’s admission of commercial disruption along with a social media post about congestive heart failure, amplifying safety concerns, the stock plummeted from nearly $64 per share on November 4, 2025 to close at approximately $47 per share, a one-day drop of approximately 27% on above-average trading volume.
Next Steps
● The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.
● The Court will then consider motion for class certification.
● The Court will later consider a Motion to Dismiss.
Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.
Frequently Asked Questions
What is the Soleno Therapeutics securities class action lawsuit about?
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that Soleno Therapeutics, Inc. (NASDAQ: SLNO) and certain executives violated federal securities laws by making materially false and misleading statements about the safety profile of VYKAT XR (diazoxide choline extended-release tablets). According to the complaint, defendants allegedly concealed significant safety concerns identified during the Phase 3 clinical trial program for the company’s only commercial product, which is approved to treat hyperphagia in individuals with Prader-Willi syndrome.
What is the class period for the Soleno (SLNO) lawsuit?
The class period extends from March 26, 2025, through November 4, 2025. Investors who purchased Soleno common stock during this timeframe may be eligible to participate in the class action. The class period begins on the date the FDA approved VYKAT XR and ends when the company disclosed that a critical research report had caused disruption to the drug’s commercial launch trajectory.
What specific allegations does the complaint make against Soleno?
The complaint alleges that Soleno’s Phase 3 clinical trial program systematically:
- Downplayed and concealed evidence of safety concerns related to DCCR administration
- Failed to adequately disclose risks of excess fluid retention in clinical trial participants
- Misrepresented the drug’s commercial viability given undisclosed adverse event risks
Plaintiffs allege these omissions caused the stock price to be artificially inflated during the class period.
Who are the defendants named in the Soleno securities lawsuit?
The complaint names Soleno Therapeutics, Inc. as a corporate defendant along with three individual defendants: Anish Bhatnagar (CEO and Chairman), James Mackaness (CFO), and Meredith Manning (Chief Commercial Officer). According to the complaint, these executives were directly involved in drafting, reviewing, and disseminating the allegedly false and misleading statements about VYKAT XR’s safety profile and commercial prospects.
What events allegedly revealed the truth about Soleno’s disclosures?
According to the complaint, the stock declined after several disclosures:
- On August 15, 2025, Scorpion Capital published a detailed report alleging safety issues with VYKAT XR and problems with clinical trial conduct
- On September 10, 2025, Soleno disclosed a patient death following DCCR treatment
- On November 4, 2025, Soleno acknowledged the research report had disrupted the drug’s launch, with increased patient discontinuations
The complaint alleges Soleno stock fell approximately 50% from its class period high.
What safety concerns does the lawsuit allege were concealed?
The complaint alleges defendants failed to disclose risks including excess fluid retention, potential cardiac issues, and hyperglycemia associated with DCCR. According to the Scorpion Capital report cited in the complaint, trial investigators reportedly expressed concerns about edema, diabetes risk, and alleged pressure to downplay adverse effects during the clinical program. The complaint also references social media posts from parents reporting severe adverse reactions in their children following the drug’s commercial launch.
Did Soleno executives sell stock during the class period?
According to the complaint, significant insider sales occurred during the class period. The lawsuit alleges that on March 27, 2025, the day after FDA approval, CEO Bhatnagar sold over $47 million in Soleno stock, CFO Mackaness sold over $6 million, and CCO Manning sold over $3 million, all at prices around $72 per share. The complaint characterizes these sales as suspicious in timing and amount, executed at prices far exceeding where the stock traded at the end of the class period.
What is the Soleno Therapeutics class action about?
The lawsuit alleges Soleno (NASDAQ: SLNO) and certain executives made false statements about the safety of VYKAT XR, concealing risks identified during clinical trials. The complaint claims these omissions artificially inflated the stock price during the class period from March 26, 2025, to November 4, 2025.
Who can participate in the Soleno securities lawsuit?
Investors who purchased Soleno common stock between March 26, 2025, and November 4, 2025, may be eligible class members. The complaint was filed in the U.S. District Court for the Northern District of California on behalf of all such purchasers.
What allegedly caused Soleno’s stock to decline?
According to the complaint, the stock fell after an August 2025 research report alleged safety problems with VYKAT XR, a September 2025 patient death disclosure, and November 2025 acknowledgment that launch disruptions caused increased patient discontinuations.
What safety issues does the lawsuit allege?
The complaint alleges defendants concealed evidence of fluid retention, cardiac risks, and hyperglycemia associated with DCCR. Plaintiffs claim trial investigators reportedly expressed concerns about these issues and alleged pressure to downplay adverse effects.
Did Soleno insiders sell stock during the class period?
According to the complaint, company executives sold tens of millions of dollars in stock the day after FDA approval. The lawsuit alleges CEO Bhatnagar alone sold over $47 million at approximately $72 per share.
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