Moonlake's Sonelokimab Falls Short in Hidradenitis Suppurativa Trials, Shares Plummet

Moonlake Immunotherapeutics faced a significant setback as its experimental immune disease drug, sonelokimab, failed to meet investor expectations in two pivotal late-stage clinical trials for hidradenitis suppurativa (HS). The disappointing results led to a dramatic 80% drop in the company's share price, erasing more than four-fifths of its market value.

Mixed Results in Phase 3 Trials

The Swiss biotechnology company reported mixed outcomes from its twin Phase 3 studies, known as the VELA trials. In one study, sonelokimab demonstrated a statistically significant improvement over placebo, with 35% of treated patients experiencing a substantial reduction in disease symptoms after four months, compared to 18% in the placebo group. However, the efficacy margin fell short of analysts' and investors' expectations.

The second study failed to meet its primary endpoint, a result Moonlake attributed to an unexpectedly high placebo response. This outcome has cast doubt on the drug's potential for rapid approval and its competitive edge in the HS market.

Market Implications and Analyst Reactions

Wall Street analysts expressed skepticism about sonelokimab's path to approval and its commercial prospects following the trial results. RBC Capital Markets analyst Brian Abrahams described the efficacy as "uncompetitive" compared to UCB's Bimzelx, suggesting sonelokimab may be relegated to a "much narrower role" in HS treatment.

Leerink Partners analyst Thomas Smith noted that the data have "introduced uncertainty" around Moonlake's regulatory strategy and market outlook. Stifel analyst Alex Thompson went further, stating that a "clear path to approval" is likely "off-the-table in the near term."

Moonlake's Response and Future Plans

Despite the setback, Moonlake emphasized that pooled results from both studies showed "clinically meaningful and statistically significant improvement" across all trial objectives. The company plans to discuss the approval pathway with regulators, including strategies to address the high placebo response observed in one of the trials.

Moonlake had previously positioned sonelokimab as a potential advancement in HS treatment, citing its unique binding profile to two inflammatory cytokines and albumin, as well as its small molecular size. These characteristics were thought to potentially offer superior potency and duration compared to existing biologics like AbbVie's Humira, UCB's Bimzelx, and Novartis' Cosentyx.

As the pharmaceutical industry continues to seek effective treatments for hidradenitis suppurativa, Moonlake's journey with sonelokimab underscores the challenges and uncertainties inherent in drug development, particularly in competitive therapeutic areas.