Why Soleno Therapeutics Stock Rocketed Higher on Monday
Key Points
The deal isn't cheap; the biotech is changing hands at a 34% premium.
It gives the buyer a unique product that was FDA-approved barley over a year ago.
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On news that Soleno Therapeutics (NASDAQ: SLNO) has agreed to be acquired, investors piled into the company's shares on Monday. This left the commercial-stage biotech with a juicy 32% gain on the day's trading session.
Biotech buyout
That morning, Soleno and its peer biotech, Neurocrine Biosciences (NASDAQ: NBIX), announced that they had signed a definitive agreement under which Neurocrine would acquire Soleno. The deal, valued at $2.9 billion, will see Neurocrine pay $53 per share in an all-cash transaction to own Soleno.
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Soleno is a rare-disease specialist who earned its first approval from the Food and Drug Administration (FDA) in March 2025. This nod was for Vykat XR, a medicine that treats hyperphagia (excessive hunger) arising from the genetic disorder Prader-Willi Syndrome.
In their joint press release on the acquisition, the two companies quoted Neurocrine CEO Kyle Gano as saying that it "will advance Neurocrine's mission to deliver life-changing treatments while accelerating our revenue growth and portfolio diversification strategy."
The deal is subject to the tender of at least a majority of Soleno's outstanding shares -- which shouldn't be an issue, given that the offering price is 34% higher than the stock's level last Thursday. It has been approved by the boards of directors of both companies. The two expect the acquisition to close within 90 days.
That's one unique asset
The hefty double-digit premium shows how eager Neurocrine was to get its hands on Soleno, particularly following last year's FDA green light for Vykat XR (the only treatment in this country approved for hyperphagia associated with Prader-Willi).
As often happens in these situations, Soleno's price zoomed to nearly the buyout price (it currently sits at $52.25). There's some room for arbitrage, then, but for the most part, Soleno's days as a stand-alone stock are ticking down fast. Anyone who hasn't sold out yet should do so and book their profits.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Neurocrine Biosciences. The Motley Fool has a disclosure policy.
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