MoonLake Immunotherapeutics Stock (MLTX) Downgraded on Trial Data

MoonLake Immunotherapeutics stock (MLTX) experienced a dramatic downturn following asom disappointing trial data, and Wolfe Research downgrading the stock to “Underperform,” triggering a significant sell-off and raising concerns about the company's future prospects in the treatment of hidradenitis suppurativa (HS).

The stock price plummeted a staggering 89.93% in yesterday's trading session, which reflects a loss of market confidence following the release of Phase 3 VELA program data and the subsequent downgrade. The downgrade came with a price target cut, from the previously bullish $76, down to a mere $2.

The downgrade by Wolfe Research was prompted by data from the Phase 3 VELA program evaluating sonelokimab for HS. While the trials, VELA-1 and VELA-2, demonstrated statistical significance across all endpoints, the analyst expressed concerns that realizing stock value, even with a potential path to HS treatment, would be too challenging and time-consuming.

The analyst drew parallels to Acelyrin's (SLRN) experience, where a failed HS trial led to a stock sell-off and an inability to rebound, despite data in psoriatic arthritis (PsA) and a restructuring to focus on its thyroid eye disease (TED) program. VELA-1 saw 34.8% of patients receiving sonelokimab achieve a 75% reduction in total abscess and inflammatory nodule count (HiSCR75), compared to 17.5% in the placebo group. In VELA-2, 35.9% of patients achieved HiSCR75, compared to 25.6% in the placebo cohort; the higher than expected placebo response in VELA-2 raised additional concern.

Prior to this downturn, MoonLake had garnered positive attention, including a potential acquisition interest from Merck for over $3 billion in June 2025. While Merck's initial nonbinding offer was rejected, discussions were expected to resume, signaling confidence in MoonLake's potential.

Additionally, several analyst upgrades, including one from Wolfe Research itself, had boosted market sentiment earlier in the year. These optimistic ratings, with price targets ranging from $66 to $100, were based on expectations for sonelokimab's performance in clinical trials. In May 2025, Wolfe Research upgraded the stock from “Peer Perform” to “Outperform,” setting a price target of $61.

The initiation of the Phase 3 VELA program in May 2024 was a key milestone, with the aim of enrolling 800 patients across two trials. The topline primary endpoint readout was anticipated by mid-2025, setting the stage for the recent data release that ultimately triggered the stock's decline.

The future of MoonLake Immunotherapeutics hinges on its ability to navigate the challenges presented by the recent setback. While the Phase 3 data demonstrated statistical significance, concerns about the path to commercialization and the potential for value realization have weighed heavily on market sentiment.

The stock's performance will likely depend on the company's strategic decisions and its ability to restore confidence in its long-term prospects. Today's price movement may have been impacted by the news, and what that could mean for the future sentiment.