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It’s not too late for investors to ride along with MoonLake Immunotherapeutics despite the Swiss biotech having more than quadrupled in price this year, according to Stifel. The investment firm initiated research coverage of MoonLake with a buy rating, accompanied by a target price of $75, implying upside of 54% from the stock’s Wednesday closing price of $48.56. Shares of MoonLake have soared 354% in 2023, but Stifel believes more gains lay ahead. MLTX YTD mountain MLTX YTD chart Analyst Alex Thompson believes MoonLake’s sonelokimab drug, which targets diseases in dermatology and rheumatology, could eventually achieve $4.2 billion in U.S. revenue. The next trial readout for the drug is in psoriatic arthritis, with data expected in early November. “While we’ve already missed out on the run this year ( > 350% vs. XBI -20%) following data in Hidradenitis suppurativa (HS) supporting a best-in-class IL-17 profile, we think there’s clear room for potential upside via derisking of additional indications and/or M & A,” Thompson wrote. MoonLake is currently “one of the most derisked clinical-stage companies in I & I [inflammation and immunology] with a clear path to a blockbuster drug,” he added. “Looking ahead, we think upcoming PsA data (early November) are downside-biased given the best-in-class thesis for Sonelokimab: we think the stock could move +10-15%/-20-30% based on efficacy differentiation,” the analyst wrote. MoonLake may also benefit from bigger drug companies’ interest in making strategic acquisitions. “We view recent acquisitions in the TYK2 and TL1A space ($4-11B) as supportive of Strategics’ interest/willingness to pay premiums in these markets,” Stifel noted. — CNBC’s Michael Bloom contributed to this report.
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