Neurocrine Biosciences is expanding its scope in rare endocrine disorders through the $2.9 billion acquisition of Soleno Therapeutics, a company that commercialized the first approved drug for a rare genetic condition that leads to ravenous hunger.
The Soleno drug, Vykat XR, won its FDA approval in Prader-Willi syndrome a little more than a year ago. Since its launch, the once-daily pill has seen rapid market uptake, giving San Diego-based Neurocrine confidence that the product can complement its portfolio, contributing to growth of a revenue base includes one blockbuster drug and is now adding a product also projected to reach blockbuster status.
“What we’ve seen across thus far across all our diligence is all the profile aspects of a potential blockbuster in the making with Vykat XR,” Neurocrine CEO Kyle Gano said, speaking during a Monday conference call. “Very pleased overall with the data we’ve seen through launch and leading through all the information that we’ve reviewed thus far in 2026.”
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Prader-Willi syndrome, or PWS, develops from the lack of expression of genes that play a role in regulating feelings of hunger and satiety. This rare disease leads to morbid childhood obesity, which in turn raises the risk of a wide range of complications. In an investor presentation, Neurocrine notes that Prader-Willi patients have a shorter life expectancy and about half of the deaths are in those age 18 or younger. While these deaths are often related to respiratory or cardiovascular complications, PWS can also lead to rupture of the digestive tract.
Vykat was developed and approved for treating hyperphagia in PWS. While the exact way this drug works in PWS is not known, the once-daily tablet’s main pharmaceutical ingredient is an extended release formulation of diazoxide choline, an old drug for hypoglycemia caused by hyperinsulinism. In PWS, the drug is thought to activate potassium channels that regulate physiological processes, including feelings of hunger and satiety. For 2025, Soleno reported $190.4 million in Vykat revenue, including $90 million for the drug in the fourth quarter alone. These sales swung Soleno into profitability last year with $20.8 million in net income.
Neurocrine’s portfolio is led by Ingrezza, a blockbuster product first approved in 2017 for tardive dyskinesia and then in 2023 to treating involuntary movements associated with Huntington’s disease. Ingrezza accounted for $2.5 billion in revenue in 2025, a 4.3% increase compared to the prior year. Vykat has more overlap with Crenessity, a Neurocrine drug approved in late 2024 for treating the rare endocrine disorder congenital adrenal hyperplasia. Gano said Vykat can leverage Neurocrine’s experience commercializing a therapy for a rare endocrine disorder.
Samir Siddhanti, Neurocrine’s vice president, business development & strategy, said the company had followed Soleno and the PWS space for some time, adding that Vykat’s position at the intersection of neuroscience and endocrinology is a strategic fit. The field of PWS drug developers includes Bright Minds Biosciences, Harmony Biosciences, and Rhythm Pharmaceuticals. Some efforts have stumbled. Last September, Acadia Pharmaceuticals stopped work on a PWS drug after it failed to meet the main goal of its Phase 3 study. In February, Aardvark Therapeutics voluntarily paused a Phase 3 test of its drug after cardiac observations were reported in a healthy volunteer study.
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“There’s unfortunately been some setbacks in the space in the last 12 months,” Siddhanti said. “We feel good where this asset is positioned to be a best and first-in-class treatment for PWS.”
The setbacks in the PWS space include Soleno, whose stock price took a hit last August after activist short-seller firm Scorpion Capital released a report claiming Vykat can cause safety problems such as pulmonary edema and congestive heart failure. Gano said Neurocrine is confident in the safety and tolerability of diazoxide based on its decades of use. He added that in clinical testing, the risk benefit profile was favorable for PWS patients.
Leerink Partners analyst Marc Goodman said in a research note that pediatric endocrinologists told the bank they were encouraged to have an FDA-approved therapy to prescribe to select PWS patients. Clinicians also told Leerink the Scorpion conclusions were overly negative, noting that diazoxide’s safety has been well understood from the drug’s decades on the market. While experienced endocrinologists are comfortable managing Vykat’s risks, clinicians also emphasized that not all patients are appropriate candidates for the drug due to its known side effects, including hyperglycemia and edema.
“In a population where obesity and diabetes are common comorbidities, incremental hyperglycemia risk is not acceptable for many patients, which in turn limits the addressable population,” Goodman said.
Globally, Soleno has said the total number of PWS patients is estimated to be between 300,000 and 400,000. Based on an analysis of claims data, the company calculates about 10,000 patients in the U.S. have the rare disease. Soleno said in its annual report that it believes this number is growing due to improved diagnosis.
Vykat is currently under European Medicines Agency review, but Gano said Neurocrine has no plans to commercialize Vykat in Europe at this time. The deal value and financial models for the drug are based only on the U.S. market, and Gano said the company plans to focus on the U.S. opportunity. Asked by an analyst whether Neurocrine would look for a partner to commercialize the drug in Europe and the rest of the world, Gano said the company would evaluate its plans for Vykat in other markets at a later time.
The deal terms call for Neurocrine to pay $53 in cash for each Soleno share. While that represents a 34% premium to Soleno’s closing price on April 2, it’s far from the stock’s 52-week peak of $90 last summer before Scorpion posted its report. The acquisition still needs a majority of Soleno stockholders to tender their shares as well as customary regulatory approvals. The Neurocrine and Soleno boards of directors have approved the transaction, which the companies expect to close within the next 90 days.
Photo: Devrimb, Getty Images