Biotech stock MoonLake Immunotherapeutics skyrocketed Monday after the company says it set a new bar in treating a painful skin condition.
The company hopes to treat hidradenitis suppurativa, a condition that causes painful lumps to form under the skin. If successful, it will go up against AbbVie blockbuster Humira.
After 12 weeks, a statistically significant portion of patients who received MoonLake's drug, known as sonelokimab, showed at least a 75% reduction in under-the-skin abscesses. There were no new safety issues in the Phase 2 study, MoonLake said in a news release.
"We believe the totality of the (sonelokimab) data suggest a competitive, best-in-class profile," SVB Securities analyst Thomas Smith said in a note to clients. He boosted his price target on the biotech stock to 56 from 28 and kept his outperform rating.
On today's stock market, MoonLake shares rocketed 77.6% and closed at 45.95.
Biotech Stock Hits Record High
MoonLake tested two doses of sonelokimab. After roughly three months, the low dose outperformed the placebo by 29 percentage points. On a scale that measures a 50% reduction in abscesses, the same dose outperformed the placebo by 38 percentage points, MoonLake said.
"The results suggest that, as early as week 12, the (drug) sonelokimab, relative to placebo, reaches the highest clinical activity among all other therapies tested in similarly stringent pivotal-like (studies)," MoonLake said in a news release.
Further, sonelokimab showed promise on other secondary measures.
The news sent biotech stock MoonLake to a record high.
The biotech stock has a perfect Relative Strength Rating of 99, meaning shares have outperformed 99% of the market when it comes to 12-month performance, according to IBD Digital.
Mutual funds have snapped up most of MoonLake stock, owning 97% of its shares. Institutional support is a bullish sign. Further, the number of funds that own the biotech stock has increased for the past four quarters.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
