MoonLake Stock Plummets 90% on Mixed Trial Results
Psoriasis drug sonelokimab fails to meet key endpoint in one of its two Phase 3 trials, raising regulatory doubts.
Shares of MoonLake Immunotherapeutics (NASDAQ: MLTX) plummeted more than 90% in premarket trading after the company announced mixed top-line results from its pivotal Phase 3 VELA trials for the psoriasis treatment sonelokimab. The dramatic sell-off erased billions in market capitalization, reflecting investor fears over the drug's regulatory and commercial future.
The VELA program, which evaluated the efficacy of sonelokimab in treating moderate-to-severe hidradenitis suppurativa, consisted of two identical trials. While VELA-1 successfully met its primary endpoint, showing a statistically significant improvement compared to a placebo, the . The company attributed the VELA-2 miss to a higher-than-anticipated placebo response rate of 25.6%.
Despite the setback, MoonLake's management highlighted that both trials achieved statistical significance on all key secondary endpoints, including pain reduction and quality of life improvements. In a press release, the company stated that sonelokimab demonstrated a consistent and favorable safety profile. However, the failure to meet a primary endpoint in one of the two key trials has cast significant doubt on the drug's path to approval.
Wall Street's reaction was swift and severe. and slashed their price targets. Jefferies cut its rating from 'Buy' to 'Hold' and reduced its price target from $65 to just $8. Stifel followed suit, downgrading to 'Hold' and cutting its target to $13 from $77, calling the results 'significantly worse than expected.' Analysts expressed concern that the data makes sonelokimab's profile appear uncompetitive compared to existing treatments like UCB's Bimzelx.
MoonLake now faces a challenging road ahead. The and a potential regulatory path forward with authorities. For investors, the stock has become a highly speculative play, with its future heavily dependent on the outcome of these regulatory discussions and the company's ability to convince authorities of sonelokimab's viability despite the mixed Phase 3 results.