How Investors May Respond To Soleno Therapeutics (SLNO) Legal Scrutiny After Accelerated Buyback

• Earlier this month, Soleno Therapeutics announced a US$100 million accelerated share repurchase agreement with Jefferies LLC after reporting a net income of US$26.01 million for the third quarter of 2025, reversing a significant loss from the prior year.
• This announcement came amid increasing scrutiny from law firms investigating Soleno’s disclosures about its VYKAT XR drug following concerns around trial outcomes and adverse events.
• We'll explore how the emergence of legal investigations into VYKAT XR’s safety disclosures may influence Soleno Therapeutics' investment narrative.

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What Is Soleno Therapeutics' Investment Narrative?

For those considering Soleno Therapeutics, the big picture now hinges on whether confidence in VYKAT XR can recover amid ongoing legal scrutiny. The recent US$100 million share repurchase program signals management’s belief in the company's long-term trajectory and may help support the share price after a steep drop following concerns over VYKAT XR’s safety disclosures. However, these legal investigations and the revelations about heightened treatment discontinuations present a shift in both immediate catalysts and risks. While previous analysis highlighted regulatory milestones and commercial launches as the main short-term catalysts, attention has shifted sharply to the outcomes of internal investigations and external law firm probes. The buyback, though sizable, may not offset the market’s uncertainty if questions around VYKAT XR persist, and volatility is likely to remain heightened until regulatory and legal clarity emerges.

But there’s a twist: ongoing legal investigations create fresh uncertainty investors should not ignore. Soleno Therapeutics' shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.

Exploring Other Perspectives

Three Simply Wall St Community members valued Soleno between US$46.28 and US$462.79 per share, showing very broad views on fair value. While the share buyback signals conviction from management, the ongoing safety concerns and legal reviews add an extra layer of risk investors cannot overlook. Explore more community insights to see how different views might impact your assessment.

Explore 3 other fair value estimates on Soleno Therapeutics - why the stock might be worth over 9x more than the current price!

Build Your Own Soleno Therapeutics Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Soleno Therapeutics research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Soleno Therapeutics research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Soleno Therapeutics' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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