Soleno Therapeutics SLNO
Scorpion shorts Soleno (SLNO), arguing VYKAT XR — a $500K/year repackaged 50-year-old generic — is causing pediatric heart-failure hospitalizations and was approved on sham trial data; the launch will collapse.
Thesis
Scorpion Capital is short Soleno Therapeutics, alleging that VYKAT XR — a $500K/year extended-release tablet of diazoxide, a 50-year-old generic — is a worthless and dangerous knockoff that fleeced the FDA via sham clinical trials. The 13-week Phase 3 failed; approval rested on an unpublished, single-site-skewed 16-week withdrawal study whose data inconsistencies, per the report, suggest scientific misconduct. Eight of nine trial investigators interviewed allegedly disavow the drug; ex-employees describe pressure to downplay adverse events. Within months of launch, parents in Facebook groups are reporting pediatric hospitalizations for pulmonary edema, fluid overload, and potential heart failure — Scorpion sees the makings of a Zafgen-style debacle. Commercial prospects are torched by GLP-1 substitution, a 10-15% TAM, and dependence on a single physician (Jennifer Miller). Scorpion intends to file an emergency FDA Citizen Petition demanding a voluntary recall.
SCQA
Soleno Therapeutics is a one-product biotech selling VYKAT XR — an extended-release tablet of diazoxide, a generic compound used in hospitals for 50 years — at $500,000 per year for hyperphagia in Prader-Willi Syndrome.
VYKAT XR's Phase 3 failed; FDA approval rested on an unpublished, irregular withdrawal study, and within weeks of launch parents are reporting children hospitalized for fluid overload, pulmonary edema, and potential heart failure.
Scorpion will submit an emergency FDA Citizen Petition requesting a voluntary recall of VYKAT XR, and is soliciting parents and physicians for additional adverse-event evidence to bolster the filing.
If the drug is recalled or new prescriptions plunge, SLNO — a zombie biotech with no pipeline trading near cash — round-trips back toward ~$9, near the penny-stock levels it traded at 2.5 years ago.
The three reasons
- 1
VYKAT XR is a $500K/year repackaged 50-year-old generic (diazoxide) with no real PK advantage
- 2
Children are being hospitalized for fluid overload and potential heart failure within weeks of launch
- 3
8 of 9 trial investigators disavow the drug; data discrepancies suggest scientific misconduct
Primary demands
- FDA should request Soleno to conduct a voluntary recall of VYKAT XR
- Parents and physicians should report serious adverse events to Scorpion / FDA
- Investors and physicians should treat VYKAT XR as a launch failure and safety hazard
KPIs cited
Pattern membership
Precedents cited
- Zafgen (ZFGN) Prader-Willi debacle — high-flier extinct after two trial fatalities
- Sarepta (DKA / heart failure analogue cited by an interviewed investigator)
Composition what's on the 415 slides
Slide gallery ·
Notes
Scorpion Capital's first short report on Soleno Therapeutics (SLNO1) targeting VYKAT XR (extended-release diazoxide choline) for Prader-Willi Syndrome. Signature Scorpion format: 415-page slide-style report with text-heavy black body, red call-out headlines and section dividers, abundant Facebook screenshots and AE-table screenshots, no original data visualization. Argument is built from >30 interviews (trial PIs, KOLs, ex-employees) and parent posts in two PWS Facebook groups suggesting pediatric hospitalizations for pulmonary edema / heart failure within weeks of launch. Headline rhetorical move is 'Russian Roulette With Prader-Willi Children' — unusually emotive even for a short report. Author is the firm; no individual signatory. Closing ask is operational (FDA Citizen Petition + crowdsourced AE evidence at contact@scorpioncapital.com), not a price target per se, though cover argues round-trip to ~$9 cash floor. Notable rhetorical features: explicit Zafgen analogue, naming Jennifer Miller as the 'invisible hand' fueling start forms ("the drug may as well be called MILLER XR"), and a side-by-side label-vs-publication AE table comparison framed as evidence of data fabrication. No sum-of-parts, no peer-gap chart in the conventional sense — this is an investigative-fraud report, not a valuation deck.