Goldman Sachs Downgrades MoonLake to Sell, Citing Trial Setback and Regulatory Hurdles
In a move underscoring the high-stakes volatility of biotech investing, Goldman Sachs has downgraded clinical-stage company MoonLake Immunotherapeutics (NASDAQ: MLTX) from Neutral to Sell. The firm's revised $10 price target, while raised from $8, comes with a stark warning: the recent failure of the VELA-2 trial for the drug sonelokimab significantly clouds its regulatory path.
The investment bank's analysis, reported by TheFly on January 14, points to sonelokimab's advancement into Phase 3 studies for palmoplantar pustulosis as a positive, yet secondary, opportunity. The core concern remains the drug's approvability for hidradenitis suppurativa (HS), a painful inflammatory skin disease. Goldman analysts argued that the VELA-2 trial's miss on its primary endpoint means recent procedural guidance from the U.S. Food and Drug Administration (FDA) does little to reduce the fundamental uncertainty surrounding a future approval.
This pessimistic stance contrasts sharply with another Wall Street voice. Just days earlier, on January 9, H.C. Wainwright reaffirmed its Buy rating on MoonLake and lifted its price target to $32 from $26. That firm cited a clear regulatory pathway following a recent FDA Type B meeting as cause for optimism.
MoonLake is pioneering Nanobody therapies aimed at inflammatory conditions, with sonelokimab designed to inhibit two specific interleukins (IL-17A and IL-17F) involved in diseases like HS and psoriatic arthritis. The divergent analyst views highlight the classic biotech investment dilemma—weighing groundbreaking science against the formidable risks of clinical development and regulatory scrutiny.
Investor Reactions: A Spectrum of Views
Michael R., Portfolio Manager (Boston): "Goldman's call is a necessary reality check. The market had priced in near-certainty for the HS indication. VELA-2's failure resets the timeline and the risk profile. Until we see robust Phase 3 data, caution is warranted."
Dr. Lena Chen, Rheumatologist (San Francisco): "The scientific rationale for targeting IL-17 in HS remains strong. One trial setback isn't a death knell. For patients with limited options, the potential of sonelokimab is too significant to dismiss based on a single data point."
Dave K., Retail Investor (Online Forum): "This is classic Wall Street manipulation. A minor target bump but a downgrade to Sell? They're trying to spook retail holders and shake out weak hands before the next catalyst. The Wainwright note tells the real story—the FDA gave them a roadmap!"
Sarah P., Biotech Analyst (Industry Newsletter): "The split between Goldman and H.C. Wainwright perfectly captures the current crosscurrents. It's a battle between near-term trial execution risk and long-term commercial potential. Investors must decide which timeline they're betting on."