Soleno is a biopharmaceutical company focused on developing novel therapeutics for the treatment of rare diseases. At the time of the Soleno class action lawsuit’s filing, Soleno’s only commercial product is diazoxide choline extended-release tablets (“DCCR”) for the treatment of hyperphagia in individuals afflicted with Prader-Willi syndrome (“PWS”).
The Soleno class action lawsuit alleges defendants throughout the Class Period failed to disclose that: (i) the Soleno Phase 3 clinical trial program for DCCR had systematically downplayed, misrepresented, and/or concealed significant evidence of safety concerns potentially related to the administration of DCCR, including issues related to excess fluid retention in clinical trial participants; (ii) as a result, the administration of DCCR to treat hyperphagia in individuals with PWS posed materially greater safety risks than disclosed by Soleno or its executives; and (iii) consequently, DCCR had materially lower commercial viability and undisclosed risks related to the likelihood of significant and widespread adverse events after its commercial launch, including risks related to patient discontinuation rates, lower patient adoption, prescriber reluctance, adverse regulatory action, and potential reputational and legal fallout.
On August 15, 2025, the Soleno investor class action alleges that Scorpion Capital LLC published a critical report regarding Soleno, DCCR, and Soleno’s Phase 3 clinical trial program, titled “Russian Roulette With Prader-Willi Children: How The Latest Rare Disease Price-Gouging Scheme Fleeced the FDA, Parents, And Its Own Study Investigators With A Worthless, Toxic Drug; Suspect Data; And Sham Clinical Trials To Push A $500K/Year Knockoff Of A 50-Year-Old Generic Compound – Triggering One Of The Worst Launch Failures And Safety Catastrophes In Post-Approval History.” On this news, the price of Soleno common stock declined nearly 12% over two trading days, the complaint alleges.
Then, on September 10, 2025, Soleno filed with the U.S. Securities and Exchange Commission a current event report on Form 8-K disclosing that a patient had died after taking DCCR, the Soleno shareholder lawsuit alleges. On this news, the price of Soleno common stock declined approximately 19% over two trading days, the complaint alleges.
Finally, on November 4, 2025, Soleno reported its financial results for its third fiscal quarter ended September 30, 2025, revealing that the Scorpion Capital Report had caused a “disruption” in DCCR’s launch trajectory and concerns within the PWS community, with a lower number of patient start forms and increased discontinuations beginning after the report’s publication, the Soleno class action alleges. On this news, the price of Soleno common stock declined approximately 27%, the complaint alleges.
