Soleno Therapeutics, Inc. (NASDAQ: SLNO) reported that it has signed a securities purchase agreement for up to $60 million with Nantahala Capital Management, LLC, Abingworth LLP, and Vivo Capital, LLC.
Chief Executive Officer of Soleno Therapeutics, Anish Bhatnagar stated that prior to anticipated findings from the randomized withdrawal period of Study C602 in mid-2023, this pledge from top-tier investors is a major expression of trust. It improves their financial sheet both now and in the future, supports ongoing work on their upcoming New Drug Application application, and speeds up commercial ready preparations. Additionally, they are happy to inform that the rate of study enrollment at their U.S. sites is proceeding according to plan. The timeliness of regional regulatory and ethical processes will determine when they launch their U.K. sites.
Under the terms of the agreement, the investors have committed to pay $10 million in exchange for warrants to purchase common stock upon the Company’s announcement of enrollment completion in the randomized withdrawal period of Study C602, anticipated in Q1 2023. The warrants consist of two tranches.
Within 30 days after the release of good top-line data from the randomized withdrawal period of Study C602, Tranche A warrants to acquire up to 8,598,870 shares of common stock at $1.75 for a total of roughly $15 million must be exercised. The $35 million Tranche B warrants to acquire up to 14,000,000 shares of common stock at $2.50 expire 3.5 years after the date of issuance or 30 days after receiving U.S. Food and Drug Administration clearance of DCCR for the treatment of PWS, whichever comes first.
Approximately 80 patients with PWS were included in the randomized withdrawal phase of Investigation C602, a multi-center, randomized, double-blind, placebo-controlled study of DCCR at 17 locations in the United States and 5 sites in the United Kingdom. Participants who are presently participating in Study C602 are the only patients who can withdraw randomly from the study. For a four-month period, patients are randomized to receive either DCCR or a placebo.