What happened
MoonLake Immunotherapeutics (NASDAQ: MLTX), a clinical-stage biotechnology company that specializes in therapies for inflammatory skin and joint diseases, saw its shares jump 41.1% on Tuesday.
The stock closed at $6.38 on Friday, then opened at $7.55 on Tuesday after the Memorial Day weekend, before rising to a high of $9 just after the opening bell. The stock has a 52-week high of $15.19 and a low of $4.25, and is down more than 25% this year.
Image source: Getty Images.
So what
Tuesday's run-up is a continuation of a 25.4% jump on Friday. The company recently began a phase 2 trial for sonelokimab to treat patients with moderate to severe hidradenitis, a condition that causes painful lumps under the skin. The drug has also fared well in its phase 2b study as a therapy against psoriasis.
Still, the jump was surprising because the company had no recent news over the weekend. The Swiss pharmaceutical company just went public in April 2022 via a special purpose acquisition company (SPAC) merger. Sonelokimab is the only therapy in the company's pipeline and it is being looked at to treat a variety of inflammatory diseases. It is a nanobody, also known as single-body antibody, which are small antigen-binding fragments. They are useful because their small size and high solubility and stability enhance their ability to penetrate tissue.
Now what
With so little information as to why the biotech stock jumped, investors would be wise to wait to see what happens with the company next in its clinical trials. If sonelokimab can prove to be more effective than the immunosuppressant industry leader, Cosentyx, sold by Novartis, that would be a big opportunity -- Cosentyx produced $4.7 million in revenue last year.
Bear in mind, though, that a real payoff for MoonLake is a long way away. Its lead drug is years away from approval and the company has no revenue yet. In the first quarter, the company reported a loss of $2.7 million. The company said it is debt-free and has enough cash, $116.2 million, to continue operations through the second half of 2024.
The stock is likely to remain volatile as it is a relatively new stock with a small market cap of just $336 million.
