Soleno Therapeutics Faces Lawsuit After DCCR Launch Setback and Share Drop

Hagens Berman investigates whether Soleno misled investors about DCCR's commercial prospects

Apr. 3, 2026 at 11:03pm

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A photorealistic studio still-life featuring a shattered glass vial, a cracked tablet, and a scattered pile of pills on a clean, monochromatic background, conceptually representing the failed launch of a pharmaceutical product.The shattered remnants of a failed drug launch expose the hidden risks and financial fallout for a pharmaceutical company.Gainesville Today

A securities class action lawsuit has been filed against Soleno Therapeutics, Inc. (NASDAQ: SLNO) seeking to represent investors who purchased Soleno common stock between March 26, 2025 and November 4, 2025. The lawsuit follows Soleno's November 5, 2025 report of disappointing information about DCCR (trademarked as VYKAT™ XR), a once-daily oral tablet intended to treat hyperphagia, the 'most life-limiting aspect' of Prader-Willi Syndrome (PWS). The report triggered a 26% selloff in Soleno's share price that day.

Why it matters

The lawsuit alleges that Soleno repeatedly made assurances about the safety, efficacy, and commercial prospects of DCCR, while systematically downplaying, misrepresenting, and/or concealing significant evidence of safety concerns related to the administration of DCCR. This raises questions about Soleno's transparency and the viability of DCCR in the market.

The details

The lawsuit focuses on Soleno's statements about DCCR, including claims that the launch was 'going really well' and 'exceeded expectations.' However, the complaint alleges that the Phase 3 clinical program for DCCR had downplayed or concealed evidence of safety concerns, including issues related to excess fluid retention in trial participants. This suggests DCCR posed greater safety risks than disclosed by Soleno, potentially impacting its commercial viability.

  • On August 15, 2025, activist short seller Scorpion Capital raised questions about Soleno's disclosures and observations regarding VYKAT™ XR.
  • Scorpion alleged a 'rapid pile-up of reports of children hospitalized for potential heart failure' shortly after using the drug, and that new prescriptions might 'plunge'.
  • On November 4, 2025, Soleno's management revealed a 'disruption in our launch trajectory' due to the short seller report, including a lower number of start forms and increased discontinuations.

The players

Soleno Therapeutics, Inc.

A biopharmaceutical company developing DCCR (trademarked as VYKAT™ XR), a once-daily oral tablet intended to treat hyperphagia, the 'most life-limiting aspect' of Prader-Willi Syndrome.

Scorpion Capital

An activist short seller that raised questions about Soleno's disclosures and observations regarding VYKAT™ XR, including concerns about safety issues and the validity of Soleno's clinical trials and data.

Hagens Berman

A global plaintiffs' rights complex litigation firm investigating whether Soleno may have misled investors about the commercial prospects of VYKAT™ XR.

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What they’re saying

“We're investigating whether Soleno may have misled investors about the support it has said it has about the commercial prospects of VYKAT ™ XR.”

— Reed Kathrein, Partner, Hagens Berman

What’s next

The judge in the case will decide on whether to allow the lawsuit to proceed as a class action.

The takeaway

This case highlights the importance of pharmaceutical companies being transparent about potential safety issues and accurately representing the commercial prospects of their drug candidates. Investors will be closely watching the outcome of this lawsuit and its implications for Soleno's future.