Neurocrine Nears $2.5B-Plus Deal to Buy Soleno Therapeutics

Soleno Therapeutics makes first commercialised drug for extreme hunger caused by Prader-Willi syndrome.

Neurocrine Biosciences is nearing a more than $2.5bn acquisition of a biotech behind the treatment for a rare genetic form of obesity, in the latest instance of a midsized drugmaker bulking up by striking deals. 

U.S.-listed shares of Neurocrine Biosciences fell 3% and Soleno Therapeutics rose 20% in overnight trading.

Neurocrine, a $13.2bn drugmaker specialising in neuropsychiatric medicines, is in advanced talks to buy Soleno Therapeutics, a biotech that makes the first commercialised drug to treat extreme hunger sparked by Prader-Willi syndrome.

Prader-Willi is triggered by genetics and emerges in childhood, leaving patients with an unshakeable desire to eat, known as hyperphagia, which can lead to obesity and other severe health complications. 

The potential sale could value Soleno in the low-to-mid $50s per share, or in excess of $2.5bn, according to people familiar with discussions. That price tag represents a premium to Soleno’s market value of around $2bn at Thursday’s close.

Shares in Soleno, which has long been earmarked as a takeover target because of the successful launch of its lead drug, jumped nearly 30 per cent over the past week, as the wider biotech sector was buoyed by a flurry of deals.

Discussions between Neurocrine and Soleno are progressing quickly and a deal could come together as soon as Monday, provided talks do not hit any last-minute snags, the people said.

Neurocrine and Soleno did not immediately respond to requests for comment. 

Midsized drugmakers such as Neurocrine are increasingly competing with large pharmaceutical groups for deals during a frenzied period for biotech dealmaking. US-based biotech deals worth a total of $63.3bn were struck in the first three months of the year, the fifth-best quarter for biotech mergers and acquisitions during the past decade, according to data provider Dealogic. 

Last year, BioMarin, a drugmaker with a $10.3bn market value, struck a $4.8bn deal to buy rare disease-focused biotech Amicus Therapeutics, while Danish midsized drugmaker Genmab sealed an $8bn acquisition of cancer drug developer Merus. 

An acquisition of Soleno would be Neurocrine’s first sizeable deal, adding a lucrative drug that could generate as much as $2.3bn a year in peak sales, according to HC Wainwright analysts.

Between its launch in March last year and the end of 2025, 1,250 patients were started on Soleno’s once-daily hyperphagia pill, known as Vykat, generating $190mn in sales. 

Shares in Soleno reached a decade high last July, giving the biotech a market capitalisation of nearly $4.5bn. The shares have since retreated.

Neurocrine already has several approved medicines, including Ingrezza, a treatment for an involuntary movement disorder caused by long-term use of psychiatric medication, known as tardive dyskinesia. It also has a wide-ranging pipeline of experimental medicines targeted at schizophrenia, epilepsy and obesity. 

Last week capped a busy quarter for biotech dealmaking. Eli Lilly, the world’s biggest drugmaker by market value, struck a deal worth up to $7.8bn to buy sleep medicine drugmaker Centessa Pharmaceuticals, while Biogen bought Apellis Pharmaceuticals for $5.6bn.