MoonLake Plunges 90% on Disappointing Trial Results
The biotech company's lead drug candidate, sonelokimab, failed to meet its primary endpoint in a key Phase 3 trial, leading to a massive sell-off.
Shares of MoonLake Immunotherapeutics (MLTX) cratered this week, wiping out nearly 90% of the company's market value after it announced disappointing results from a pivotal Phase 3 trial for its lead drug candidate, sonelokimab. The drug, a potential treatment for the chronic skin condition hidradenitis suppurativa, failed to meet its primary endpoint in the VELA-2 study, triggering a massive sell-off and raising questions about the drug's future.
The news sent shockwaves through the investment community, with MoonLake's stock plummeting in after-hours trading. The sell-off continued into the next day, fueled by a flurry of analyst downgrades and price target cuts. , slashing its price target to $5 from $72, while Jefferies lowered its rating to Hold from Buy.
The VELA-2 trial's failure to achieve statistical significance on its primary endpoint was a major blow to MoonLake, which had been banking on sonelokimab to be a game-changer in the hidradenitis suppurativa market. While the company has pointed to some positive secondary endpoint data, the primary endpoint miss has cast a long shadow over the drug's prospects. and its ability to compete with existing treatments from larger pharmaceutical companies.
Despite the devastating trial results, MoonLake's management has tried to strike a hopeful tone. The company has highlighted what it calls a "" for sonelokimab and has pointed to the drug's potential in other inflammatory conditions. However, with the VELA-2 trial miss, the company faces an uphill battle to regain investor confidence and bring its lead drug candidate to market. The coming months will be critical for MoonLake as it navigates the fallout from the trial results and tries to salvage its future.