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On Tuesday, Guggenheim Securities reiterated their Buy rating and $80.00 price target for Moonlake Immunotherapeutics (NASDAQ:MLTX) stock. Currently trading at $38.67, the stock sits near its 52-week low, with analyst targets ranging from $65 to $104, according to InvestingPro data. The company, valued at $2.45 billion, maintains a FAIR financial health score despite being pre-revenue. The reaffirmation follows recent clinical trial results announced by Incyte (NASDAQ:INCY) Corporation concerning their Phase III STOP-HS 1&2 trials of povorcitinib, an oral JAK1 inhibitor aimed at treating moderate-to-severe hidradenitis suppurativa (HS) in adults. The trials met the primary endpoints at week 12 with both doses tested, showing a placebo-adjusted HiSCR-50 (Hidradenitis Suppurativa Clinical Response) score of 10.6% and 10.9% in STOP-HS1 and 13.8% at both 45 mg and 75 mg doses in STOP-HS2.
In a subgroup of patients who had previously undergone biological treatment, povorcitinib demonstrated higher efficacy, with a placebo-adjusted pooled HiSCR-50 score of 19.1% and 18.3% at 45 mg and 75 mg doses, respectively. However, the treatment’s performance on the more stringent HiSCR-75 endpoint showed placebo-adjusted scores of only 4.8% and 8.5% in STOP-HS1, which were not statistically significant, and improved scores of 12.3% and 15.1% in STOP-HS2.
Guggenheim analysts pointed out that no new adverse effects were reported and both doses were well-tolerated. Despite these results, the analysts expressed skepticism about povorcitinib’s competitive profile in comparison to IL-17 A/F targeting drugs, which they anticipate will become the preferred standard of care for HS. They highlighted Moonlake Immunotherapeutics’ sonelokimab, an IL-17A/F dual-targeting nanobody, which achieved a 29% placebo-adjusted HiSCR-75 and a 38% placebo-adjusted HiSCR-50 in its Phase IIb MIRA study. According to Guggenheim, these results set a benchmark efficacy of approximately 20% placebo-adjusted HiSCR-75, positioning sonelokimab to potentially become the leading drug for HS treatment.
The next significant event for Moonlake Immunotherapeutics will be the topline readout from their pivotal Phase III VELA study, expected in mid-2025, with a more precise estimate pointing to July or August. InvestingPro data shows the company maintains a strong financial position with a current ratio of 21.11, holding more cash than debt on its balance sheet. This robust liquidity position should support operations through key clinical milestones. For deeper insights into MLTX’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. Additionally, the company plans to host an in-person and virtual Capital Markets Update in the second quarter of 2025 to discuss further details on the Phase III VELA program, including additional clinical data and financial updates. With the next earnings report expected on May 8, 2025, InvestingPro subscribers can access 11 additional ProTips and extensive financial metrics to better evaluate the investment opportunity. Guggenheim has selected Moonlake Immunotherapeutics as their Best Idea, maintaining a positive outlook on the company’s stock.
In other recent news, MoonLake Immunotherapeutics has been the focus of several significant developments. Cowen analysts have reiterated their Buy rating on the company, expressing confidence in its lead drug candidate, sonelokimab, which is undergoing pivotal trials. The analysts project that this drug, aimed at treating inflammatory diseases, could achieve peak revenues exceeding $4 billion, reflecting a strong commercial outlook. Furthermore, MoonLake announced the upcoming resignation of Dr. Kara Lassen from its board of directors, effective December 31, 2024, due to her increased responsibilities at Roche Pharma Research & Early Development. The company clarified that her departure was amicable and expressed gratitude for her contributions. Additionally, MoonLake introduced a new long-term incentive program, including annual equity grants for certain employees, with top executives set to receive equity grants valued at $4 million each, vesting over four years. These strategic moves are part of MoonLake’s ongoing management and compensation planning efforts, as indicated in a recent SEC filing.
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