TSX gains after CPI shows US inflation rose 3%
Investing.com - Guggenheim lowered its price target on Moonlake Immunotherapeutics (NASDAQ:MLTX) to $20.00 from $80.00 on Tuesday, while maintaining a Buy rating following disappointing Phase III trial results for the company’s hidradenitis suppurativa treatment. According to InvestingPro data, the stock has plummeted 88% in the past week to $6.25, now trading near its 52-week low of $5.95.
The price target reduction came after Moonlake’s VELA-2 study for sonelokimab (SLK), a dual IL-17A/F targeting nanobody, failed to achieve statistical significance in its primary endpoint. The drug showed a 35.9% response rate compared to 25.6% for placebo, resulting in a placebo-adjusted difference of 13.8% across both VELA studies, below market expectations of 20-25%. InvestingPro analysis shows the company maintains a strong liquidity position with its current ratio at 16.65, though it’s quickly burning through cash.
Despite the setback, Moonlake management believes there remains a path forward for the drug, noting that absolute response rates align with competitor Bimzelx and that SLK significantly improved patient-reported outcomes across both studies, with data comparable or better than Bimzelx.
The company also highlighted SLK’s favorable safety profile, with no cases of suicidal ideation and well-balanced liver-related risks, oral candidiasis, and dermatitis/eczema, along with its convenient subcutaneous dosing scheme.
Moonlake continues to run multiple clinical studies for SLK across other dermatological and rheumatological indications, including palmoplantar pustulosis, psoriatic arthritis, and axial spondyloarthritis, which Guggenheim notes collectively represent a multibillion-dollar market opportunity. With analyst price targets ranging from $2 to $104, InvestingPro subscribers can access 16 additional key insights and a comprehensive Pro Research Report to better evaluate the company’s potential in these markets.
In other recent news, MoonLake Immunotherapeutics has reported mixed results from its Phase 3 VELA program, which tested sonelokimab in patients with moderate to severe hidradenitis suppurativa. The VELA-1 trial achieved its primary endpoint, with 35% of patients showing a significant reduction in inflammatory lesions, but the VELA-2 trial did not meet statistical significance. Following these results, Jefferies downgraded MoonLake’s stock from Buy to Hold and reduced its price target from $65.00 to $8.00. Clear Street also significantly lowered its price target for the company to $12.00 from $108.00, though it maintained a Buy rating. Despite the setbacks, Wedbush maintained an Outperform rating with an $80.00 price target, noting the trial results were surprising to investors. Guggenheim reiterated its Buy rating and $80.00 price target, emphasizing the upcoming release of further Phase III trial results for sonelokimab. These developments reflect the company’s ongoing challenges and opportunities in its clinical trials.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.