What happened
Shares of clinical-stage biotech MoonLake Immunotherapeutics (MLTX 0.57%) were up more than 12% as of 11 a.m. on Tuesday. The company's stock is up more than 466% so far this year.
So what
MoonLake focuses on inflammatory diseases. Its lead asset is sonelokimab, a nanobody therapy that it is testing against several inflammatory conditions. The company appears to be benefiting from a competitor's woes. On Monday, Acelyrin saw its shares plummet after the biotech company said that its therapy izokibep did not meet statistical significance in a phase 2b/3 trial to treat moderate-to-severe hidradenitis suppurative (HS), a condition that causes small, painful lumps to form under the skin. MoonLake has its own HS therapy, sonelokimab, which is in a phase 2 trial. The company gave positive news on the 12-week readout from the trial and said it expects to announce 24-week data in the middle of next month.
Now what
MoonLake has said it sees HS as a potential market of $10 billion a year, and with sonelokimab, it may have a best-in-class asset to treat the disease. Investors will want to see the results of the 24-week readout from its current trial to treat HS. The company is expecting the therapy to be ready to enter three phase 3 trials next year, including one for HS, one for psoriatic arthritis, and one for psoriasis.
The company may be a strong buyout candidate. It doesn't have any revenue yet, but sonelokimab's promise should be enough to interest another company. As of the second quarter, MoonLake said it had $501.8 million in cash, enough to fund operations for several years.
