Greetings, and welcome to the Soleno Therapeutics First Quarter 2025 Earnings Conference Call. At this time, note that all participants are in a listen-only mode. Instructions will be given for a question-and-answer session following the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Brian Ritchie of LifeSci Advisors. Please go ahead, Brian.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to discuss Soleno Therapeutics' first quarter 2025 financial and operating results. Please note, we'll be making certain forward-looking statements today. We refer you to Soleno’s SEC filings for a discussion of the risks that may cause actual results to differ from the forward-looking statements. On the call with me today from Soleno are Anish Bhatnagar, Soleno’s Chairman and Chief Executive Officer; Meredith Manning, Soleno’s Chief Commercial Officer; and Jim Mackaness, Soleno's Chief Financial Officer. Anish will begin with a review of the company's progress during the first quarter and subsequent period, including FDA approval of VYKAT XR and commercial launch. Meredith will then review the company's commercial progress to date, and Jim will cover the company's financial statements for the first quarter. We will then open the call for questions. With that, I will now turn the call over to Anish.

Thank you, Brian, and thank you, everyone, for joining us for our very first quarterly results earnings call. It's been a momentous couple of months for our company, highlighted by our announcement on March 26th that the FDA approved VYKAT XR, previously known as diazoxide choline extended-release tablets or DCCR as the first medicine for the treatment of hyperphagia in people four years of age and older with Prader-Willi syndrome or PWS. This approval is the culmination of many years of tireless work by the entire Soleno team, without whom none of this would have been possible. I would also like to recognize the significant contributions of the entire PWS community, including study participants and their families, the study investigators and study site team members, as well as the major PWS advocacy organizations, the Foundation for Prader-Willi Research and PWSA USA and UK. We are very pleased to offer VYKAT XR for individuals and families who have been waiting for a treatment option for the symptoms related to the devastating disease since it was first recognized in 1956. Following approval and reflecting our progress in establishing our commercial readiness, we were able to move very quickly to launch. We announced on April 14th that the first patients had received and are currently being treated with VYKAT XR, and this was about a week ahead of our internal forecast. Meredith will provide some additional detail on the initial launch in a moment. For those who may be new to the story, I would like to briefly remind you of the key characteristics of PWS and discuss the impact that hyperphagia can have on the lives of people with PWS, their caregivers, their families, and the health care professionals who treat them. PWS is a rare genetic disease. It occurs spontaneously in about 15,000 to 125,000 live births due to the deletion or lack of expression of a certain set of genes on chromosome 15. This translates to approximately 300,000 to 400,000 individuals living with PWS around the world. By the age of around seven or eight years, although sometimes as early as four, individuals with PWS typically will begin to exhibit the hallmark characteristic of the disease, hyperphagia, which is an insatiable desire to eat. This is essentially your brain telling you that you're starving despite having eaten. The only thing families and caregivers have been able to do to try to control hyperphagia is restrict access to food, such as locking refrigerators, trash cans, and pantries. Constant food preoccupation contributes to significant behavioral problems that can substantially disrupt daily life for those living with PWS and their families. Caregiver burden increases after the onset of hyperphagia and in fact has been measured to be higher than the burden experienced by caregivers for patients with Alzheimer's. So hyperphagia is a truly terrible condition for which no approved treatments have existed until the approval and launch of VYKAT XR. Recapping our label, the indication is for the treatment of hyperphagia in adults and pediatric patients four years of age and older with PWS. We believe that our label reflects VYKAT XR's favorable safety and tolerability profile; it contains no box warning, no contraindication for diabetes, no exclusion for severity of hyperphagia, and no requirement for a risk evaluation and mitigation strategy or REMS program. VYKAT XR is to be taken orally once daily, and the dosing is weight-based. There is a titration period of about six weeks, after which all individuals taking VYKAT XR should be on or close to their maintenance dose. The label has provided directions on how physicians should modify the dose if needed to address any side effects and minimize any dose interruptions. The commercial opportunity for VYKAT XR as the first-to-market therapy is significant. We have used existing claims data to confidently identify approximately 12,000 individuals diagnosed with PWS in the United States, of which approximately 10,000 should represent our total on-label addressable market. This excludes those individuals with PWS who are younger than four years old, others who may not be experiencing hyperphagia, or who may have comorbidities that make them ineligible for VYKAT XR. As mentioned, as soon as we received FDA approval, we were prepared to begin accepting VYKAT XR start forms immediately, and patient treatments commenced in mid-April. This is a testament to the efforts of Meredith Manning, our CCO, and our world-class commercial team whose prelaunch efforts to patients, physicians, and payers set the stage for a strong and successful launch, and to all our employees who have worked so hard to prepare the company for this day. I will now turn the presentation over to Meredith to discuss the early days of the launch and a few performance indicators that we plan to provide for the next several quarters to assist you in tracking our progress. Meredith?

Thank you, Anish, and good afternoon, everyone. As Anish indicated, the launch readiness activities that we have been diligently executing for the past several months have ensured that we are well-positioned to deliver this much-needed treatment to patients as quickly as possible. We previously discussed three pillars of activity that we view as crucial to a successful launch: first, to establish VYKAT XR as the standard of care in hyperphagia in PWS; second, to deliver operational excellence; and finally, to communicate the compelling VYKAT XR value proposition. And while it is still very early in the launch cycle of a new therapy, I'm nonetheless very pleased with our launch efforts to date. We are seeing awareness on the part of people living with PWS and their caregivers, a willingness to prescribe on the part of treating physicians, and a recognition of the unmet need on the part of payers. We outlined several performance indicators we plan to provide over the next several quarters to help track our progress. The first of these is patient start forms. As of the end of day yesterday, we have received 268 start forms, and that's in 29 business days since approval. And while it's early, it is very encouraging. We look forward to future quarterly updates when we will have an opportunity to collect more data and identify trends that are emerging. On April 14, we announced the first shipment of VYKAT XR to individuals living with hyperphagia in PWS. Since then, many patients have received their first dose of VYKAT XR and have started treatment. This reflects our dedication to ensuring timely access to treatment. The second performance indicator that we will be providing is the number of prescribers, which is 131 unique prescribers as of yesterday. Our field force is prioritizing engagement with top-tier providers with high patient volumes, which includes pediatric and adult endocrinologists, geneticists, and psychiatrists. We have also been impressed with the adoption of VYKAT XR from a broad base of prescribers, including those practicing in the community. This expanded reach indicates that our efforts to drive awareness of VYKAT XR availability to communicate the efficacy and safety profile, and the need for a therapy across a broad prescribing spectrum is strong. Finally, in the future, we will be covering a detailed update on payer coverage. That will be covered live and some color on payer policies as this is critical to patients initiating and remaining on therapy. We previously talked about our payer outreach, which was mostly focused on emphasizing the complexity of hyperphagia in PWS patients, the consequences of not controlling hyperphagia, and the need for a new therapeutic option. We are very pleased with the feedback we have received from payers as a result of this outreach. And we are confident the VYKAT XR value proposition is resonating with commercial and government payers alike. While formal coverage policies can take anywhere from three to six months and sometimes longer, to develop and implement, we do expect that VYKAT XR will achieve broad payer coverage in the United States. We are fully committed to ensuring that VYKAT XR is available to all eligible patients, and that affordability is not a barrier to treatment. To this end, we have stood up Soleno One, our single point of contact for patient services. Soleno One was operational on day one upon approval and is dedicated to supporting caregivers and healthcare providers in minimizing and overcoming payer access obstacles. I will now turn the call over to Jim for a review of the company's financial statements for the first quarter.

Thanks, Meredith. We used $32.8 million of cash in operating activities during the three months ended March 31, 2025, and ended the period with $290 million of cash, cash equivalents, and marketable securities, compared with $318.6 million as of December 31, 2024. As we have stated previously, based on our current operating plan, we believe our cash, cash equivalents, and marketable securities are sufficient to fund our operations through cash flow breakeven. Furthermore, with the approval of VYKAT XR, we now have an additional $75 million available to us in two tranches over the next 18 months under our loan agreement. Turning now to a few income statement items. The company had not commercialized VYKAT XR in the 3 months ended March 31, 2025, and accordingly generated no revenue for the period. Research and development expenses for the first quarter ended March 31, 2025, was $13.5 million, which includes $4.3 million of noncash stock-based compensation. That compares to $14.6 million which includes $2.4 million of noncash stock-based compensation for the same period in 2024. The cadence of our research and development expenditures fluctuates depending upon the state of our clinical programs, timing of manufacturing, and other projects as we've moved through submission, approval, and now preparation for commercialization. Selling, general and administrative expense for the first quarter ended March 31, 2025, was $29.3 million, which includes $10.4 million of noncash stock-based compensation. That compares to $8.5 million which includes $4.0 million of noncash stock-based compensation for the same period of 2024. The increase reflects our ongoing investment in additional personnel and new programs in preparation for commercial launch and in support of our increased business activity. Total other income net was $2.0 million for the 3 months ended March 31, 2025, compared to total other income net of $2.1 million in the same period of 2024. Our net loss was approximately $43.8 million, or $0.95 per basic and diluted share for the first quarter ended March 31, 2025, and $21.4 million or $0.59 per basic and diluted share for the same period in 2024. This concludes the financial overview, and I'll now turn the call back over to Anish for closing remarks.

Thank you, Jim. While we are very pleased with what we are seeing in the early days of our US commercial launch, PWS is a global disease that impacts hundreds of thousands of patients around the world. In an effort to make VYKAT XR available to as many of these patients as possible in parallel with our US commercial launch, we continue to progress around regulatory pathways in other geographies, the most important of which is the EU. We have stated previously that Europe also has a high unmet need among other patients with PWS and as with the US, the PWS community has strong thought leader support, and patients are often concentrated around centers of excellence. Based on widely cited prevalence data, we estimate that there are as many as 9,500 patients with PWS in the EU, four in the UK. As we have stated previously, the submission of a Marketing Authorization Application to the EMA is planned for the first half of this year. Before we open the call for questions, I want to close by reiterating how pleased we are with the early response we are seeing from the PWS community to the availability of VYKAT XR in the US. With that said, however, I remind everyone that start forms are a leading indicator, and there is a lag between receiving a start form and our specialty pharmacy partner purchasing product from us, which is when we record revenue. Therefore, as is typical in these types of launches, we expect revenues to start off modestly. It will take time to execute a full commercial launch, which includes patient scheduling visits with their healthcare providers, peers determining coverage policies, and the sales team being fully oriented to their territories. I look forward to sharing more details on our launch trajectory during our second quarter results call in August. And with that, we will now open the call to your questions.

First question will be from Yasmeen Rahimi at Piper Sandler. Please go ahead.

Good afternoon, team. Congrats on an outstanding quarter. Two questions. The first one is just could you quantify how soon we could start converting the starting forms into revenue? Second question is, what do you project the time to fill to be at this point and how it will change over the course of 2025? And I respect your wishes of two questions, and then I'll jump back into the queue.

Jim, you want to take the first question?

Yes, sure. So, obviously, there are a number of steps that have to go through to get the start form into the hands of the specialty pharmacy and qualify, if you like, for commercial drug because you're talking about the commercial drug. And then they, in turn, have to turn around and obviously place the order. And we anticipate that they will be cautious, if you like, in the inventory build that they want to take. So, that's why we're just being mindful and say we think modest revenues for Q2.

Second one, Meredith?

Sure. Thank you. Thank you for the question. We're very happy with the speed in which we're able to convert the current start forms over to shipped product. It's too soon right now; we're only 29 days in to give specific details on the turnaround time. But we're seeing what is ordinary with other rare disease launches, and we'll look forward to giving more information on the next call.

Thank you, Meredith, and thank you, Jim and Anish.

Thank you. Next question will be from Debjit Chattopadhyay at Guggenheim Securities. Please go ahead.

Good afternoon. Thank you for taking my question and congratulations. I have a couple of inquiries. If I recall correctly, about 127 patients were enrolled in the Phase 3 program. What percentage of those patients is represented in the current start forms?

Meredith, do you want to take that?

Yes, happy to take that. So, as you'll recall in the randomized withdrawal period, we had a total of 77 patients, 60 of those patients are here in the United States. And so the majority of those patients, we've received their start form, and we're looking at converting them over. So, we're very pleased with how fast our clinical operations team is executing on converting those patients.

Awesome. Regarding the free drug that patients are currently receiving, what should our perspective be? How many days of the free drug are necessary before we see reimbursement and the resulting margin?

Yes, I want to remind everyone that we are still in the early stages of the launch, and it usually takes about six months for most payers to establish a full coverage policy, and sometimes it may take longer. However, we are quite satisfied with the reimbursements we are currently receiving. We have a couple of initiatives in place. First, we have our Bridge program for the patients involved in clinical trials. Additionally, if we encounter significant delays in reimbursement or approval for the start form, we have a program called quick start, which allows us to provide a 28-day prescription.

Thank you so much.

Thank you. Next question will be from Kristen Kluska at Cantor. Please go ahead.

Hi. Good afternoon, everybody. Let me also add my congrats on a great start here. My two questions. First, can you help us understand some of the ways we are thinking about coverage decisions on a state-by-state level and how policies may differ? And then my second question is the international PWS organization conference is taking place next month, always a huge conference for these patients. So I was hoping you can give some color about ways that Soleno will be present there now that you have an approved therapy to talk about.

Let me take the second part of it. Meredith, you can take the first one then. So we definitely will have a significant presence at this United and HOPE conference. It's the first time the international organization as well as the two US-based organizations are having a combined conference. It's a large conference, and it's going to be very well attended. Our commercial teams, medical affairs teams, as well as the clinical development teams will be there. We have several presentations and abstracts, so we would like to see you all there. I know many of you are planning to be there as well. So we're happy to engage and tell you more about what we're doing when we are there. Meredith, do you want to take the first?

Sure. Regarding the state-by-state situation, Soleno is participating in the MDRP program, which allows states to start uploading VYKAT XR into their system as of May 1. However, states have different timelines; some may adopt their policies within a month, while others may take until July, August, or later in the year. We're pleased to report that several states have already uploaded VYKAT XR and we are seeing coverage in various states.

Thank you.

Next question will be from Leland Gershell at Oppenheimer. Please go ahead.

Perfect. Thanks for taking the questions and great to see the early launch numbers. Maybe a question for Meredith, just teeing off your comments about the fact that you're seeing prescriptions coming from doctors who may not have been in the initial targeted group of prescribers. Could you share a bit more color on what you're seeing with respect to the community-type interest? And then I also want to ask with respect to Europe, if you could share a bit of color on the dispersion of patients and how they're treated. Does it look similar to the States in terms of having a smaller group of specialists who treat those patients? Or is it a bit different?

Why don't you take the first one? I'll take the second.

Sure, happy to. So thanks for the question, Leland. We are very encouraged and very pleased by the broad spectrum of writing that we've seen and we definitely anticipated a lot of excitement from the community, whether it be thought leaders, also community treating physicians who see PWS. I think what we can attribute that to is the fact that we had a lot of strong pre-launch awareness efforts and an opportunity to partner very closely with many thought leaders as well as advocacy in the community to hold various different types of webinars upon launch. We have a lot of promotional materials and digital assets up and running. So we believe that not only our sales force but also our omnichannel efforts have enabled us to reach a broad spectrum of those physicians, including those in the community.

Regarding Europe, in general, I would say that the care for PWS in Europe is similar. But I would say that in some cases, it's probably more organized than in the US. For example, when you think about a place like France, our understanding based on conversations and visiting some of the centers there is that virtually every individual with PWS there is seen at one of the few centers of excellence, and virtually all of them are tracked by a centralized system. We believe something similar exists in Germany. And we think that the care of those patients is quite similar to here, with growth hormone being administered to those who qualify for it and really no other treatments being available. So the environment for the use of a drug like VYKAT is quite similar to what you would expect here.

That's very helpful. Thanks very much.

Thank you. Next question will be from Brian Skorney at Baird. Please go ahead.

Hey, good afternoon, everyone. Thanks for taking the question. And congrats on the initial launch metrics. I hate to put you guys on the spot and make a direct comparison to another drug launch, but since DolenBear is on your Board, I can't imagine that this conversation hasn't come up. But at 268 start forms over a little more than a month, you seem to be pacing SKYCLARYS almost exactly. They had 500 start forms a little over two months. Their first-quarter sales were almost half of what your full year consensus estimates are right now. So I'm just wondering why shouldn't VYKAT, given the start forms and the reimbursement dynamics, why would it track lower than SKYCLARYS? Because that's a much better launch curve than where consensus is currently modeling you at.

Brian, thanks for putting us on the spot. Jim wants to take the question.

Well, the one thing I'd comment, Brian, is obviously, each company has its own dynamics. I would suggest with our weight-based pricing, one has to be sensitive to the weight profile of the patients. And if you remember, we sort of anticipated that we might have a younger set of patients coming through. So that's one variable that we have to consider.

Yeah. If I may, I would also just mention that I think SKYCLARYS had a lot of their commercial team in place for many years prior to launch, and their field team was out a couple of months prior. Remember that we had half of our sales team come on at the end of January. And then we most recently brought on the rest of our field team fully trained and they're out as of April 27. So I think if you could give us some time to get our team out there to sell, I'm confident that we'll produce similar results as well. Additionally, I would also bring your attention to the fact that we had drug in channel by April 14. SKYCLARYS didn’t. So we are also operationalizing and converting start forms into paid patients.

So better than SKYCLARYS position.

Yeah, Brian, I think it's also important to note that our prescription base, as Meredith has mentioned, is 131 physicians already. So we think it's a broad-based build, which will sustain us over time. We're not as in the detail with SKYCLARYS as maybe you are, but no direct comparisons to be made, but we certainly feel pretty enthusiastic about what we've seen so far.

Great. Thank you.

Thank you. Next question will be from James Condulis at Stifel. Please go ahead.

Thanks for taking my question. And congrats again on a great quarter. Kind of following up on that last discussion point. Looking at other rare disease launches, is there a general ballpark on sort of the percentage of patient start forms that actually convert to paid drug? Is it typically all patients that actually convert, and it's just a matter of when? Just curious if you can provide any color there and kind of along those lines, as you think about the cadence of adding start forms throughout the next two quarters and beyond, do you expect it to accelerate or hold steady? Just curious for any color you can provide there.

Meredith?

Yes, happy to. So I think it's too early to give a percentage, but we definitely are expecting it to be comparable to other very strong rare disease launches. We have our internal metrics, but I think it's too early to share what we're looking at.

I believe it's important to acknowledge that there is a substantial unmet need in this area, and there are currently no other treatments available. Therefore, we should anticipate that our launch will at least match the success of other rare disease launches.

Great. Thank you.

Thank you. Next question will be from Myriam Belghiti at LifeSci Capital. Please go ahead.

Hello. Congrats on the update and thank you for taking my question. A little bit off-topic here. I was wondering if you have any comments on how or if the evolving tariff policies are affecting your business operations during the launch.

Tariff. Yes, we have looked through our supply chain, and I would suggest that really we don't see any significant impact with the way the tariffs are currently being framed. We do most of our manufacturing in the US. So we feel that it's not something that's going to impact us to any great extent.

So the drug substance and drug product vendors are both US-based. We do source some starting materials from outside the US, but as Jim said, no major impact.

Okay. Thank you for that clarification.

Thank you. Next question will be from Yale Jen of Laidlaw. Please go ahead.

Good afternoon and thanks for taking the question and congrats on the progression. Just two questions here. The first one is, could you give us a little bit of color in terms of for new patients what's the sort of steps of procedures to ultimately get the drug prescribed? Do you need to start with the request of the start form, or do you need to visit the physician to get a prescription and how does that work? And then I have a quick follow-up.

Yes. So the best way to think of it is that either the patient or caregiver will reach out to a physician or the physician will reach out to them. They would need to typically see the physician. The physician would need to fill out a start form. The start form would go to the specialty pharmacy. And the specialty pharmacy will then take it from there to start the process of providing the drug to the patients.

Okay. Great. That's very helpful. Could you provide an update on the European development? I understand you previously discussed whether to launch the product independently or collaborate with others. Is there any decision made on that front yet? Thanks.

So we continue down the path of assessing both options, whether to partner or to do it ourselves, and there is a fair bit of interest in partnering. We are continuing to assess that as well. For us, the key next step has been to get the MAA submission in place with the EMA, and that should be happening in this quarter. The decisions to commercialize and how to do it best will follow that. So we'll certainly keep you posted.

Okay. Great. Congrats, again.

Thank you. Next, we will hear from Ram Selvaraju at H.C. Wainwright. Please go ahead.

Hi. This is Jade on for Ram. Again, congrats on the fantastic launch. So I just wanted to ask a little bit about how you see the competitive landscape right now in treating hyperphagia. Do you really see there is any noteworthy potential rivals in late-stage development? How are you guys thinking about this?

So I would say the late-stage rival, the obvious one is Acadia with carbetocin, which, as you know, has already been studied in a large Phase 2 as well as a large Phase 3 study. It was submitted to the FDA and got an advisory committee where it was voted down, and I received a complete response letter and they're running another study at this time. I would say that is kind of the later-stage competitor. It is, as you know, a three times a day nasal product that requires temperature control. The other one, Arbor is apparently starting a Phase 3 study. The data that is publicly available is short-term early data. So it's hard for us to gauge what that will look like in a controlled study. Those are probably the two late-stage competitors.

Great. And how are you seeing the ex-US opportunity for this drug shaping up? I know you said about submitting the MMA, but how do you see this doing in Europe?

Yes. We think the opportunity is very significant. The genetics of Prader-Willi syndrome are such that the birth incidence is the same regardless of geography or ethnicity. So you will see the same numbers of patients who have PWS based on population. So if you look at the EU four plus UK, you're seeing about the same number as the US. In the EU 27, it's obviously a proportionately larger number. The unmet need is the same everywhere. So nothing really exists to treat hyperphagia. So we think it's a pretty meaningful market. In terms of rare disease pricing, we see that while Europe is a challenging place for pricing, rare diseases are the one place that appears to be an exception. So we are pretty enthusiastic about it in Europe as well as in other geographies.

All right. Thank you so much.

Thank you. And at this time, we have no other questions registered. So I will turn the call back over to Anish.

Well, thank you, everyone, for listening in today, and we look forward to talking again for the second quarter call.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.