MoonLake Immunotherapeutics ‘ experimental treatment for a chronic skin condition could boost its shares to new heights, according to Goldman Sachs. The bank upgraded the biopharma stock to a buy rating from neutral. Analyst Richard Law’s price target of $82, raised from $62, implies shares of MoonLake could surge nearly 98% from their current levels. MoonLake’s stock has tumbled 26% over the past 12 months. MLTX 1Y mountain MLTX 1Y chart However, Law believes success in MoonLake’s nanobody sonelokimab treatment, or SLK, could boost shares this year. SLK is used to treat hidradenitis suppurativa, or HS, a recurring skin condition that causes painful lumps under the skin. “We now see the possibility of a brighter outlook on the premise that SLK can potentially deliver best-in-class results,” Law wrote. More specifically, the analyst believes SLK could succeed in its phase 3 study due to achieving “impressive efficacy” in phase 2. MoonLake also preserved much of its phase 2 design in its newest study, and has meticulously controlled the trial enrollment to replicate the phase 2 patient population, Law added. MoonLake’s usage of Skyrizi, which has become the standard of care for psoriatic arthritis, or PsA, as a reference treatment is useful to measure how SLK performs against the current market leader, Law wrote. “Although including Skyrizi adds some risk, we believe the benefits well exceed drawbacks given the importance to differentiate in a crowded and competitive PsA market and the difficulty to demonstrate it otherwise,” he said. “Although the trial is not a true [head-to-head] study, it is the first Ph. 3 study that directly compares [interleukin]-23 and IL-17 and could impress mainstream prescribers into perceiving SLK as the superior treatment option.” Meanwhile, the analyst sees further upside ahead as the increase of patients treated with biologics rises from 3.5% to 5% in the U.S. and 4.5% in Europe. Biologics classifies all medicines that are derived from biological sources, such as gene therapies or vaccines. “We believe Bimzelx’s recent approval and SLK’s potential approval in 2027 will expand the market size of biologics over time,” he wrote. “The expansion is due to more efficacious products becoming available, patients staying on more potent treatments longer, and more awareness of HS disease and treatment options.” UCB’s Bimzelx was approved to treat moderate-to-severe HS in November.
