Stock of the Day

June 30, 2023

MoonLake Immunotherapeutics (MLTX)

$15.05
+$0.06 (+0.4%)
Market Cap: $1.28B

About MoonLake Immunotherapeutics

MoonLake Immunotherapeutics, a clinical-stage biopharmaceutical company, engages in developing therapies. It develops Sonelokimab, a novel investigational Nanobody for the treatment of inflammation diseases; and hidradenitis suppurativa, psoriatic arthritis, axial spondyloarthritis, and psoriasis. MoonLake Immunotherapeutics was incorporated in 2020 and is headquartered in Zug, Switzerland.

Today's Trend

MoonLake Immunotherapeutics (NASDAQ: MLTX) is receiving a mixed set of signals, with encouraging clinical data and improved financial execution competing with ongoing losses and insider selling. The Phase 3 results are the most important near-term catalyst for the stock.

  • Strong Phase 3 psoriatic arthritis results: MoonLake said its IZAR-1 trial of sonelokimab met all primary and secondary clinical endpoints at Week 16 in biologic-naïve patients. The 60 mg dose produced an ACR50 response in 42.1% of patients, while ACR20 reached 66.5%; among patients with skin involvement, 61% achieved PASI90. The results strengthen the drug’s prospects and may improve investor confidence in MoonLake’s pipeline. Reuters Phase 3 trial article
  • Solid liquidity and upcoming milestones: The company ended the second quarter with $537 million in cash, cash equivalents and short-term investments, expects its cash runway to extend into mid-2028, and has up to $400 million available under its debt facility. Investors are also watching a potential hidradenitis suppurativa BLA submission by the end of September and completion of IZAR-2 enrollment in the third quarter. MoonLake Phase 3 and cash article
  • Quarterly loss narrower than expected: MoonLake reported a second-quarter loss of $0.84 per share, better than the analyst consensus loss of $0.92. The earnings beat and increased call-option activity—2,707 calls purchased versus typical daily volume of 1,118—indicate some bullish positioning. Yahoo Finance earnings article
  • Short-interest data is inconclusive: Reported short interest was zero shares with a zero-day days-to-cover ratio, but the stated percentage change was “NaN,” suggesting a data-quality issue rather than a meaningful change in bearish positioning.
  • Continued losses and insider selling remain concerns: MoonLake remains unprofitable, with analysts expecting a full-year loss, while company insiders reportedly made 20 sales and no purchases during the past six months. These factors could limit enthusiasm despite the positive trial results.

MoonLake Immunotherapeutics Makes a Moonshot on Trials

Written By Jea Yu on 6/28/2023

MoonLake Immunotherapeutics investment potential

Clinical stage biotech MoonLake Immunotherapeutics AG (NASDAQ: MLTX) shares spiked 70% on positive phase two clinical trial results. The company specializes in nanobodies, fragments of antibodies that can bind to smaller targets. Due to their smaller size, they can penetrate tissue better, are resistant to temperature changes, are easier to manufacture and have the ability to design multivalent therapeutic molecules with bespoke target combinations.

While similar to antibody drug conjugates (ADCs) like leader ImmunoGen Inc. (NASDAQ: IMGN), they contain different concepts. MoonLake is applying the technology to multiple chronic diseases, including hidradentitis suppurativa (an inflammatory skin disease causing painful lumps under the skin), psoriasis, ulcerative colitis and Crohn's disease. Read on for more information about MoonLake stock.

What’s Next?

Phase two results have excited the market, as ADC gets more spotlight followed by strong gains in the underlying stocks as evidenced by IMGN and now MLTX. However, sonelokimab must still complete another clinical trial, which would require a larger-scale study with complete safety and efficacy evaluations before being approved for general use by the FDA. Doing so could take until 2025.

Learn more about MoonLake Immunotherapeutics analyst ratings and price targets at MarketBeat.

Chart of MoonLake stock performance

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Parabolic Island Gap

The weekly candlestick chart for MLTX shows the explosive gap resulting from its positive clinical trials involving its nanobody technology. The positive indications from this clinical trial reverberate the optimism for other skin diseases that can use this treatment solution. MLTX was already uptrending with a weekly 20-period exponential moving average (EMA) at $25.15, followed by the weekly 50-period MA support at $15.36. The $30.31 was a multiple-top resistance that shares gapped on this phase's news. Shares have been able to remain elevated above $39 on heavy volume. The question is how prices hold up when volume dissipates to normal in the coming weeks. Pullback support levels are at $39.06, $30.31 prior to resistance gap fill, $25.13 and $20.35. 

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