Neurocrine pays $2.9bn for Soleno and extreme hunger drug

Neurocrine Biosciences has agreed a $2.9 billion deal to buy Soleno Therapeutics and its treatment for a rare, genetic form of severe obesity.

The prize for Neurocrine is Soleno's Vykat XR (diazoxide choline) medicine for Prader-Willi syndrome (PWS), which was approved by the FDA last year to treat hyperphagia, an intense and incessant urge to eat, which is the most prominent characteristic of the disorder and can lead to dangerous weight gain.

The disorder can also cause other issues, including learning difficulties, behavioural problems, restricted growth, and a shorter life expectancy.

Vykat XR remains the only approved treatment for PWS in the US, and made $190 million in sales last year following its FDA approval in March, with around 1,250 patients taking the drug, and $92 million of the total coming in the fourth quarter.

The PWS population in the US eligible for treatment with Soleno's drug is estimated at around 10,000 out of a total of 50,000 cases, and Soleno has started looking at regulatory filings in other markets, including Europe.

Neurocrine's $53-per-share offer was a premium of around 31% over its closing value on 2nd April, although Soleno's stock rocketed after the announcement to reach the offer price.

The takeover bid is the first large-scale M&A play for Neurocrine, though it has bought other smaller companies, such as UK biotech Diurnal, which it bought for $57 million in 2022.

The company's purchasing power has been transformed by the strong sales growth for Ingrezza (valbenazine) for tardive dyskinesia and chorea associated with Huntington's disease, which made $2.83 billion in sales last year, but is facing competitive pressure from rivals, particularly Teva's Austedo (deutetrabenazine).

Buying Soleno would give Neurocrine another fast-growing candidate, with patent protection into the 2040s, to go alongside other newer products such as Crenessity (crinercerfont) for congenital adrenal hyperplasia, which was approved in 2024 and made $301 million last year.

The deal continues a steady stream of M&A deals in the biopharma sector since the start of the year. The last couple of weeks alone have seen a $5.6 billion bid for kidney and eye disorder player Apellis by Biogen, Eli Lilly's $7.8 billion offer for Centessa and its narcolepsy therapy, a $1.225 billion offer from Otsuka for neuroplastogen company Transcend, and two acquisitions by Novartis, namely food allergy specialist Excellergy for $2 billion and breast cancer drug developer Pikavation for up to $3 billion.