What happened
Shares of MoonLake Immunotherapeutics (MLTX -3.30%) were up more than 67% Monday afternoon as of 2 p.m. ET after jumping as much as 102% three minutes after the opening bell. The company's shares climbed after it reported positive phase 2 trial results at its research and development day on Monday, before the markets opened. The stock is up more than 306% this year.
So what
MoonLake is a clinical-stage biotech company that focuses on treating inflammatory diseases. The company said that its phase 2 trial for nanobody sonelokimab met its primary endpoints for efficacy and safety in a phase 2 trial to treat patients with moderate-to-severe hidradenitis suppurativa (HS), a chronic skin condition. According to MoonLake, the trials show that sonelokimab has the potential to be a best-in-class therapy for HS, as it has shown superior effectiveness, compared to Bimekizumab (bimzelx), a therapy manufactured by Belgian biopharmaceutical UCB SA.
Now what
MoonLake said that the HS market is worth $10 billion, so the therapy, if approved, could be lucrative for MoonLake. The 24-week results of the trial should be ready by the fourth quarter. Sonelokimab is also being tested in a phase 2 trial to treat active psoriatic arthritis (PsA).
It's important to note that the company doesn't have any approved therapies and has a lot riding on sonelokimab. The therapy is a nanobody, which consists of one or more domains based on the small antigen-binding variable regions of heavy-chain-only antibodies (VHH). Nanobodies are known for their small size, giving them an advantage in tissue penetration.
MoonLake, in its first-quarter report, said it had $63.1 million in cash, enough to fund operations into the end of 2024, according to Chief Financial Officer Matthias Bodenstedt. Considering the huge run-up in the stock's price, it wouldn't be surprising to see the price drop soon, as some investors will take profits.
