Biotech stock MoonLake Immunotherapeutics rose Monday after the company said its experimental psoriatic arthritis treatment beat out AbbVie's Humira in a 24-week study.
MoonLake measured the effectiveness of its drug, dubbed sonelokimab, across multiple parameters. On all of them, sonelokimab topped the responses seen in Humira recipients. Notably, patients' response to sonelokimab also appeared to beat out UCB's bimekizumab, which is also being tested for this use.
The company also outlined its expectations for the hidradenitis suppurativa, or HS, market. Also called acne inversus, this condition causes skin lesions, abscesses, draining tracts and fibrotic scars. MoonLake is also testing sonelokimab in patients with HS.
"HS, currently a roughly $2 billion annual market opportunity, is expected to grow to $10 billion to $15 billion by 2031 based on improving diagnosis and treatment rates, and the arrival of new effective treatments," Needham analyst Serge Belanger said in a report.
On today's stock market, MoonLake stock rose 3.2% to 47.05, falling back from strong gains in earlier action. The biotech stock is under its 200-day moving average, MarketSurge.com shows.
Biotech Stock Under Pressure
MoonLake stock has been under pressure since announcing 12-week results from its psoriatic arthritis treatment study in November, analysts said. Higher-than-expected placebo rates muted the effect of sonelokimab. The biotech stock plummeted more than 29% on Nov. 6.
"The 24-week Argo trial results should assuage these concerns and provide additional support for sonelokimab's best-in-class potential," Belanger said.
He has a buy rating and 66 price target on the biotech stock.
At the end of the study, 58% to 61% of patients showed at least a 50% improvement in the number of swollen joints. In comparison, just 55% of Humira recipients hit the same bar. In another study, UCB said 45% of bimekizumab recipients reached a 50% improvement in joint swelling after 24 weeks.
Promisingly, 39% to 42% of patients who received MoonLake's sonelokimab had a 70% improvement in joint swelling. That compared well to the 29% UCB reported for bimekizumab in a separate study.
Psoriasis Improvement
On another scale measuring the severity of psoriasis, 75% to 83% of sonelokimab recipients improved, Belanger said. This is a "25% to 27% delta over Humira" and "numerically higher than those achieved by bimekizumab" at 56% to 73%.
Next, MoonLake plans to meet with the Food and Drug Administration in the second quarter before starting Phase 3 studies in the second half of the year. The results of those studies won't be available until late 2025 or early 2026, however.
"The psoriatic arthritis market, currently estimated to be a roughly $6.5 billion market, is expected to grow to $10 billion to $15 billion by 2031, with the IL-17 drug class playing a major treatment role (30% to 40% of biologics usage)," Belanger said.
Both sonelokimab and bimekizumab belong to the IL-17 drug class. These drugs block an inflammatory cytokine tied to numerous conditions.
Growing Market For Sonelokimab
MoonLake also has high expectations for the HS market. There are currently 2 million patients in the U.S. and about 240,000 new diagnoses each year. About 40,000 to 60,000 people are treated with the standard of care, Humira.
But Belanger notes about 35% of HS patients take Humira for less than six months. About 55% are on Humira for less than a year. Novartis' Cosentyx is also approved for HS treatment, but has shown to be less effective than the AbbVie drug.
Leerink Partners analyst Thomas Smith noted MoonLake is also pushing sonelokimab into new testing areas. The company plans to begin studying the drug's impact in patients with another skin condition called palmoplanter pustulosis and in a form of arthritis known as axial spondyloarthritis. The firm also wants to study its drug in children with HS.
"Management believes early treatment intervention can potentially control progressive disease before reaching irreversible damage often observed among adult HS patients," he said in a report.
He has an outperform rating on the biotech stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
