MoonLake Lost 90% of Its Value. Then It Started Winning Again.
MoonLake's stock crashed 90% after a catastrophic Phase 3 miss in 2025. Five months later, the company just posted an 81% response rate in spinal arthritis, with PET scans showing it might actually slow irreversible bone damage.
Five months ago, MoonLake Immunotherapeutics was left for dead. Its stock had cratered 90% in a single day, one of the most brutal collapses biotech has seen in years. Investors fled. Lawsuits piled up. Analysts slashed their targets to single digits.
Now the company just posted its fifth consecutive positive clinical result. And this one might actually matter more than the disaster that nearly killed it.
The Day Everything Fell Apart
To understand why last week's data matters, you need to understand how bad things got.
On September 29, 2025, MoonLake reported results from its Phase 3 trials (VELA-1 and VELA-2) testing sonelokimab in hidradenitis suppurativa, a painful skin condition that causes abscesses and scarring. HS was supposed to be the company's flagship indication. The one that proved sonelokimab belonged.
It didn't go well. VELA-2 flat-out missed its primary endpoint. VELA-1 technically passed, but the improvements over placebo were modest at best, and substantially worse than UCB's competing drug BIMZELX. Analysts called it "disastrous" and "near worst-case."
The market's response was immediate and merciless. MLTX shares plunged from $62 to $6.24, erasing roughly $3.5 billion in market value in a single trading session. Think of it like building a house for three years, then watching it burn down overnight.
Stifel cut its rating from Buy to Hold and slashed its price target from $77 to $13. Goldman Sachs went to Sell. Multiple securities class-action lawsuits were filed. MoonLake had to scramble for a $75 million equity offering at $10.50 just to keep the lights on.
One Drug, Multiple Shots on Goal
Sonelokimab isn't a typical antibody. It's a nanobody, a much smaller molecule, roughly a quarter the size of a standard antibody. Think of regular antibodies as SUVs: big, powerful, but sometimes too bulky to squeeze into tight parking spots. Nanobodies are more like motorcycles. They can weave into deeper, harder-to-reach tissues.
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That size advantage matters because sonelokimab targets both IL-17A and IL-17F, two inflammatory proteins that drive a range of autoimmune diseases. Most competitors only block one of them. Blocking both is like cutting off two supply routes to an enemy instead of one.
MoonLake has been testing this approach across multiple diseases: hidradenitis suppurativa, psoriatic arthritis, axial spondyloarthritis (a type of inflammatory back disease), and palmoplantar pustulosis. The HS miss was devastating, but it was just one battlefield. The war wasn't over.
The Comeback: 81% Response in Spinal Arthritis
On February 22, MoonLake reported topline results from its Phase 2 S-OLARIS trial in axial spondyloarthritis. This is a disease where inflammation attacks the spine and sacroiliac joints, the junctions connecting your spine to your pelvis. Over time, it can fuse vertebrae together, locking patients in permanent stiffness and pain.
The headline number: 81% of patients hit the ASAS40 benchmark at 12 weeks. That means four out of five patients saw at least a 40% improvement across key measures of pain, function, inflammation, and overall disease activity. Over 80% also showed clinically meaningful improvement on a separate disease activity score called ASDAS-CRP.
For context, the approved IL-17 drugs in this space (Novartis's secukinumab and Lilly's ixekizumab) typically show ASAS40 rates in the 60–75% range in their pivotal trials, and those numbers come at week 16, not week 12. Even UCB's bimekizumab, which also blocks both IL-17A and IL-17F, landed around 60–70%.
Now, a major caveat: S-OLARIS only enrolled 26 patients, and it was an open-label trial, meaning everyone knew they were getting the drug. Small open-label trials can look spectacular and then deflate in larger, placebo-controlled studies. MoonLake learned that lesson the hard way with HS. So take the 81% number as promising, not proven.
The PET Scan Plot Twist
But the most interesting part of the data wasn't the patient-reported outcomes. It was what the imaging showed.
MoonLake used PET/MRI scans with a special tracer (called 18F-NaF) to look directly at what was happening inside patients' sacroiliac joints. This tracer lights up wherever osteoblasts, the cells that build new bone, are active.
In axial spondyloarthritis, the real danger isn't just inflammation. It's what inflammation leaves behind. Overactive osteoblasts start laying down new bone in the wrong places, gradually fusing joints together. That's the irreversible damage that drives long-term disability. It's like inflammation starts a fire, and then the repair crew accidentally walls off the exits.
By week 12, the PET scans showed significant reductions in both inflammation and osteoblast activity in the sacroiliac joints. That's a potential signal of disease modification: not just symptom relief, but actually slowing the structural damage that makes this disease so devastating.
No approved IL-17 drug has demonstrated this kind of deep-tissue imaging evidence in such a short timeframe. If it holds up in larger trials, sonelokimab's nanobody format — that motorcycle-in-traffic advantage — could be a genuine differentiator.
Where MoonLake Goes From Here
The company isn't out of the woods. Not even close.
MoonLake has roughly $455 million in cash, enough to fund operations into the second half of 2027. Its Phase 3 IZAR program in psoriatic arthritis is enrolling about 1,500 patients, with the primary readout expected by the end of 2026. And after its FDA Type B meeting, the agency confirmed that MoonLake can pursue a biologics license application for HS using existing VELA and MIRA trial data, no new trials needed.
Analyst sentiment is fractured. H.C. Wainwright maintains a Buy rating with a $32 target. BTIG recently upgraded to Buy at $24 after the FDA clarity on HS. But Goldman Sachs sits at Sell with a $10 target, and Citigroup went to Sell back in October. The consensus across roughly a dozen analysts lands somewhere around Hold, with average price targets in the $20–$26 range.
The stock recently traded around $15–$17, which means the market is pricing in some recovery but far from full confidence. Shares are still down more than 70% from their pre-crash highs.
The Bigger Picture
MoonLake's story is a reminder of something biotech investors already know but keep relearning: one-drug companies live and die by their data, and one bad readout can erase years of optimism overnight.
But it's also a reminder of something else. Sonelokimab didn't stop working because it missed in HS. Biology is messy. A drug can fail spectacularly in one disease and still be transformative in another. The 81% ASAS40 response, the PET imaging data showing reduced bone damage, the consistent safety profile across trials: these are real signals, even if they come from a small study.
MoonLake went from a $3.9 billion company to a $377 million company in 24 hours. Now it's clawing its way back, one positive readout at a time. The question isn't whether sonelokimab works in axial spondyloarthritis. Based on 26 patients, it probably does. The question is whether it still works when 260 patients are in the trial, and whether Wall Street will stick around long enough to find out.
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