Shares of Swiss biotech MoonLake Immunotherapeutics tumbled 88% to $7.45 in premarket trading on Monday after the company reported mixed outcomes from two late-stage trials of its experimental skin drug, sonelokimab.
The treatment is being developed for hidradenitis suppurativa, a painful and chronic inflammatory skin disease.
In one of the Phase 3 trials, sonelokimab achieved all of its goals at week 16, but in the second study a higher-than-expected placebo response clouded the results.
The company said the data made it harder to demonstrate statistical significance under one analysis method, though an alternative measure showed the drug working in both studies.
Analysts question competitive edge against rivals
The results prompted a sharp reassessment from analysts.
RBC Capital Markets downgraded MoonLake stock to “Sector Perform” from “Outperform” and cut its price target to $10 from $67.
The bank said the placebo-adjusted results were “well into our worst case scenario” and failed to demonstrate a clear efficacy advantage over rival treatment Bimzelx, developed by Belgium’s UCB.
RBC warned that the drug’s effect size looked uncompetitive.
Wedbush struck a different note, maintaining its “Outperform” rating and an $80 price target.
But it acknowledged that the outcome of the VELA trial came as “a big surprise to many if not all investors” and predicted significant pressure on the stock.
The firm said attention had shifted from how sonelokimab could stand apart from competing therapies to whether it can even secure regulatory approval for hidradenitis suppurativa.
Broader implications for pipeline and takeover prospects
Wedbush cautioned that the mixed results could also weigh on MoonLake’s ongoing studies in psoriatic arthritis, with top-line data expected in the first half of 2026.
The firm added that acquisition interest in the company may cool, noting that the VELA data “appear to suggest inferiority” compared to competing drugs.
The setback comes just months after the Financial Times reported that US pharmaceutical group Merck had made a non-binding takeover approach for MoonLake in a deal valued at more than $3 billion.
While the offer was rejected, the report suggested talks could be revived and that other bidders might emerge.
Both companies declined to comment at the time.
Financial results add to pressure
Alongside the trial disappointment, MoonLake recently reported a quarterly loss of $55.22 million, or 87 cents per share, wider than Wall Street’s expectations.
Analysts had projected a loss of 72 cents a share, with forecasts ranging from 83 cents to 49 cents. The company posted no revenue in the period.
MoonLake shares have risen by more than 15% this year however, Monday’s collapse in premarket trading threatens to erase much of the company’s recent gains and casts doubt over the future trajectory of its most advanced therapy candidate.
The post MoonLake shares crash 88% after mixed trial results raise doubts over skin drug appeared first on Invezz
