Group 1: U.S. Stock Market Overview - U.S. stock futures were higher, with Dow futures gaining over 100 points on Monday [1] Group 2: Inventiva ADR Performance - Inventiva reported a loss of $(1.84) per share, significantly worse than the analyst consensus estimate of a loss of 41 cents per share [1] - The company’s quarterly sales were $5.050 million, missing the analyst consensus estimate of $5.310 million [1] - Inventiva shares fell 5.5% to $5.72 in pre-market trading [1] Group 3: Other Stocks in Pre-Market Trading - MoonLake Immunotherapeutics saw a significant decline of 86.3% to $8.50 in pre-market trading [4] - Cellectis SA declined 10.4% to $3.01 in pre-market trading [4] - Quantum-Si Inc fell 10.1% to $1.34 in pre-market trading after filing for a mixed shelf of up to $300 million [4] - Penguin Solutions Inc dropped 8.4% to $24.00 in pre-market trading [4] - Lithium Americas Corp declined 5.4% to $5.99 in pre-market trading after a 14% dip on Monday [4] - Platinum Analytics Cayman Ltd fell 5.3% to $16.20 in pre-market trading after a 44% jump on Monday [4] - Novo Nordisk A/S decreased by 2.9% to $54.01 in pre-market trading [4] - Lexicon Pharmaceuticals Inc declined 2.9% to $1.36 in pre-market trading, with an update on additional data submission to the U.S. FDA regarding Zynquista® in Type 1 Diabetes [4]

VELA Program Results - The combined VELA program demonstrated statistically significant improvement across primary and key secondary endpoints at week 16 (p<0.001)[9] - In VELA-1 and VELA-2, the sonelokimab arm showed HiSCR75 response rates of 35% and 36% respectively[9] - VELA-1 achieved statistical significance for all primary and key secondary endpoints[10] - In VELA-2, using the treatment policy strategy, statistically significant HiSCR75 response rates were demonstrated at week 16[10] - Approximately 30% of patients in VELA-1 and VELA-2 experienced a marked reduction in pain[32] Efficacy and Safety Profile - Sonelokimab continues to show a differentiated profile, including leading Patient Reported Outcomes (PROs) and a favorable safety profile[10] - VELA-1 showed a HiSQOL response with a change from baseline of -9.4 for Sonelokimab vs -3.8 for Placebo[34] - VELA-2 showed a HiSQOL response with a change from baseline of -9.0 for Sonelokimab vs -3.5 for Placebo[34] - VELA-1 showed a DLQI-MCID response of 58% for Sonelokimab vs 39% for Placebo[37] - VELA-2 showed a DLQI-MCID response of 59% for Sonelokimab vs 38% for Placebo[37] Future Plans - MoonLake will seek to confirm the registration path with regulatory authorities and is seeking guidance from the FDA[10, 55]

Market Movements - US stock index futures are all up, with Dow futures rising by 0.42%, S&P 500 futures by 0.45%, and Nasdaq futures by 0.56% [1] - European indices also show positive movement, with Germany's DAX up 0.15%, UK's FTSE 100 up 0.55%, France's CAC 40 up 0.05%, and the Euro Stoxx 50 up 0.06% [2][3] Oil Prices - WTI crude oil has decreased by 1.90%, trading at $64.47 per barrel, while Brent crude oil has fallen by 1.70%, priced at $68.04 per barrel [3][4] Economic Data and Events - Investors are focusing on the upcoming non-farm payroll data, which is crucial for their expectations regarding the Federal Reserve's interest rate decisions in October and December [5] - The potential government shutdown starting October 1 may delay the release of key economic data, including the non-farm payroll report [5] Company News - BMO Capital Markets has raised its year-end target for the S&P 500 index to 7000 points, citing strong market performance and resilience [6] - Cleveland Fed President Loretta Mester expresses concerns about inflation remaining above target levels until 2028, opposing interest rate cuts [6] - Gold prices have surged by 1%, reaching a new high of over $3800, driven by strong demand from central banks and ETF investors [6] - OPEC+ is considering increasing oil production by at least 137,000 barrels per day in November, despite warnings of oversupply [6] Individual Company Updates - MoonLake Immunotherapeutics' stock plummeted over 87% after disappointing clinical trial results for its skin disease drug [7] - GlaxoSmithKline's CEO Emma Walmsley will step down after nine years, with Luke Miels set to take over in January 2026 [8] - Toyota's global sales rose for the eighth consecutive month, with a 2.2% year-over-year increase, driven by strong demand in the US market [9] - Uxin Group reported a significant increase in retail transaction volume, with a 153.9% year-over-year growth in Q2 [9]

Market Movements - US stock index futures are all up ahead of the market opening, with Dow futures rising by 0.42%, S&P 500 futures by 0.45%, and Nasdaq futures by 0.56% [1] - European indices also show positive movements, with Germany's DAX up 0.15%, UK's FTSE 100 up 0.55%, France's CAC 40 up 0.05%, and the Euro Stoxx 50 up 0.06% [2][3] Oil Prices - WTI crude oil has decreased by 1.90%, trading at $64.47 per barrel, while Brent crude oil has fallen by 1.70%, priced at $68.04 per barrel [3][4] Economic News - The US government shutdown risk and non-farm payroll data are major concerns for investors this week, especially after optimistic GDP and consumer spending data were released [5] - The upcoming non-farm payroll data is crucial for market sentiment regarding potential interest rate cuts by the Federal Reserve [5] Company News - BMO Capital Markets has raised its year-end target for the S&P 500 to 7000 points, citing strong market performance and resilience [6] - Cleveland Fed President Loretta Mester expressed concerns about inflation remaining above target levels, opposing interest rate cuts [6] - Gold prices have surged to a new high, exceeding $3800, driven by strong demand from central banks and ETF investors [6] - OPEC+ is considering increasing oil production by at least 137,000 barrels per day in November, despite warnings of oversupply [6] Individual Stocks - MoonLake Immunotherapeutics' stock plummeted over 87% after disappointing trial results for its skin disease drug [7] - GlaxoSmithKline's CEO Emma Walmsley will step down after nine years, with Luke Miels set to take over in January 2026 [8] - Toyota's global sales rose for the eighth consecutive month, driven by strong demand in the US, with an overall increase of 2.2% [9] - Uxin Group reported a significant increase in retail transaction volume, up 153.9% year-over-year for Q2 [9]

Group 1 - MoonLake Immunotherapeutics' experimental drug for skin diseases showed disappointing late-stage clinical trial data, leading to a pre-market stock drop of over 86% [1] - UCB SA's stock rose by 20% following the news, with Financiere de Tubize SA, an investment tool of UCB's founder, also seeing a significant increase of 17% [1] - The key efficacy measure for MoonLake's sonelokimab in treating moderate to severe hidradenitis suppurativa was only 14% after placebo adjustment, compared to UCB's Bimzelx, which showed an 18% efficacy [1] Group 2 - Since Bimzelx's approval for psoriasis treatment at the end of 2023, UCB's stock has surged approximately 190% [4] - Hidradenitis suppurativa is a critical growth area for UCB, with 21% of Bimzelx's global net sales expected to come from this treatment by mid-2025 [4] - The market for hidradenitis suppurativa treatments is projected to grow from $2 billion currently to $15 billion by 2035, indicating a significant unmet need among patients [4]

Core Insights - MoonLake Immunotherapeutics announced week 16 results from Phase 3 VELA-1 and VELA-2 trials for sonelokimab in treating moderate-to-severe hidradenitis suppurativa (HS) [1][4][29] - The trials demonstrated statistically significant improvements in primary and key secondary endpoints, indicating the efficacy of sonelokimab [4][6][7] - The company plans to discuss these results with regulatory authorities to confirm the path to registration for HS [14][32] Group 1: Trial Design and Results - The VELA program utilized HiSCR 75 as the primary endpoint, requiring a 75% reduction in abscess and inflammatory nodule count [2][29] - A total of 838 patients were enrolled in the trials, which compared a single 120mg dose of sonelokimab to placebo [2][4] - In VELA-1, sonelokimab achieved a HiSCR75 response rate of 34.8% compared to 17.5% for placebo, while VELA-2 showed 35.9% versus 25.6% [6][8] Group 2: Efficacy and Safety - Sonelokimab demonstrated statistically significant improvements across all primary and key secondary endpoints with p-values below 0.001 [4][7] - The treatment policy strategy indicated a clinically meaningful benefit, with nearly 60% of patients achieving a DLQI improvement of at least 4 points [7][8] - The safety profile of sonelokimab remained favorable, with no new safety signals detected [10][12] Group 3: Future Developments - The company is advancing other clinical studies for sonelokimab, including trials for adolescent HS and psoriatic arthritis [4][14][21] - The VELA program is expected to progress to a week 52 readout, with further data anticipated to support regulatory submissions [4][14] - MoonLake aims to address the significant unmet need for effective treatments in HS, a condition affecting approximately 2% of the population [32][33]

Group 1 - MoonLake Immunotherapeutics (NASDAQ:MLTX) is considered one of the best stocks to buy for the next three months according to hedge funds, with a Buy rating and a price target of $73 set by Leerink Partners analyst Thomas Smith [1][2] - The company's drug Sonelokimab is highlighted for its potential in treating moderate-to-severe hidradenitis suppurativa, with the upcoming Phase 3 VELA trial results expected to be a key catalyst for the stock [2][3] - Recent completion of patient enrollment in the VELA trial, along with favorable baseline characteristics resembling the successful Phase 2 MIRA study, supports the analyst's optimism [3] Group 2 - Key dermatology experts have expressed favor for Sonelokimab, citing its better efficacy, safety, and dosing convenience compared to competitors, which is expected to drive strong sales growth for the drug by 2035 [3] - MoonLake Immunotherapeutics is a clinical-stage biopharmaceutical company focused on developing therapies for inflammatory skin and joint diseases [4]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for MoonLake Immunotherapeutics, detailing financial position and operational results [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------------ | | **Assets** | | | | Cash and cash equivalents | $306,681 | $180,426 | | Short-term marketable debt securities | $118,402 | $267,601 | | Total current assets | $455,481 | $474,289 | | Total assets | $460,096 | $477,933 | | **Liabilities and Equity** | | | | Total current liabilities | $27,361 | $22,463 | | Long-term debt | $73,381 | $— | | Total liabilities | $102,152 | $24,542 | | Total equity | $357,944 | $453,391 | - Total assets decreased from **$477.9 million** at **December 31, 2024**, to **$460.1 million** at **June 30, 2025**. Total liabilities significantly increased from **$24.5 million** to **$102.2 million**, primarily due to the new long-term debt of **$73.4 million**. Total equity decreased from **$453.4 million** to **$357.9 million**[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's financial performance, including revenues, expenses, and net loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $(49,762) | $(23,662) | $(86,221) | $(36,676) | | General and administrative | $(10,936) | $(6,916) | $(21,962) | $(13,723) | | Total operating expenses | $(60,698) | $(30,578) | $(108,183) | $(50,399) | | Operating loss | $(60,698) | $(30,578) | $(108,183) | $(50,399) | | Interest expense | $(2,037) | $— | $(2,056) | $— | | Other income, net | $6,779 | $5,898 | $13,876 | $11,814 | | Net loss | $(56,051) | $(24,759) | $(96,611) | $(38,734) | | Basic and diluted net loss per share attributable to controlling interests shareholders | $(0.87) | $(0.39) | $(1.50) | $(0.60) | - Net loss significantly increased for both the three and six months ended **June 30, 2025**, compared to the same periods in **2024**, primarily driven by higher research and development expenses and the introduction of interest expense from new debt[11](index=11&type=chunk) [Condensed Consolidated Statements of Changes In Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20In%20Equity) This section details the changes in the company's equity components, reflecting transactions and comprehensive loss over time Condensed Consolidated Statements of Changes In Equity (in thousands except share data) | (in thousands except share data) | Balance at January 1, 2025 | Share-based compensation | Conversion of Class C to Class A | Options exercised | Issuance of Restricted Stock Awards | Net loss for Q1 2025 | Other comprehensive loss | Balance at March 31, 2025 | Share-based compensation | Net loss for Q2 2025 | Other comprehensive loss | Balance at June 30, 2025 | | :------------------------------- | :------------------------- | :----------------------- | :----------------------------- | :---------------- | :-------------------------------- | :------------------- | :----------------------- | :------------------------ | :----------------------- | :------------------- | :----------------------- | :----------------------- | | Total Shareholders' Equity | $446,825 | $2,279 | $851 | $129 | $— | $(39,944) | $(2,620) | $407,520 | $3,298 | $(55,220) | $(1,867) | $353,731 | | Noncontrolling Interests | $6,566 | $11 | $(851) | $(9) | $— | $(615) | $(41) | $5,061 | $11 | $(831) | $(28) | $4,213 | | Total Equity | $453,391 | $2,290 | $— | $120 | $— | $(40,559) | $(2,661) | $412,581 | $3,309 | $(56,051) | $(1,895) | $357,944 | - Total equity decreased from **$453.4 million** at **January 1, 2025**, to **$357.9 million** at **June 30, 2025**, primarily due to net losses and other comprehensive losses, partially offset by share-based compensation and equity conversions/exercises[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash flow used in operating activities | $(92,670) | $(42,838) | | Net cash flow provided by (used in) investing activities | $144,500 | $(116,547) | | Net cash flow provided by financing activities | $73,122 | $50,978 | | Net change in cash and cash equivalents | $126,255 | $(108,378) | | Cash and cash equivalents, end of period | $306,681 | $342,791 | - For the six months ended **June 30, 2025**, the company experienced a significant increase in cash from investing activities (**$144.5 million** vs. **$(116.5) million** in **2024**) and financing activities (**$73.1 million** vs. **$51.0 million** in **2024**), leading to a net increase in cash and cash equivalents of **$126.3 million**, despite increased cash used in operating activities[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 — Overview of the Company](index=9&type=section&id=Note%201%20%E2%80%94%20Overview%20of%20the%20Company) This note provides an introduction to MoonLake Immunotherapeutics, its business, and strategic focus - **MoonLake Immunotherapeutics** is a clinical-stage biotechnology company focused on developing therapies for inflammatory skin and joint diseases. The company is currently a single-asset company, developing **Sonelokimab (SLK)**, a novel tri-specific **IL-17A and IL-17F inhibiting Nanobody**[20](index=20&type=chunk) [Note 2 — Basis of Presentation and Significant Accounting Policies](index=9&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note describes the accounting principles and policies used in preparing the financial statements - The financial statements are prepared in conformity with **U.S. GAAP** and include the Company and its subsidiaries. The Company operates as a single operating segment. Significant accounting policies cover areas such as cash and cash equivalents, marketable securities, fair value measurements, long-term debt, leases, property and equipment, R&D costs, share-based compensation, foreign currency, income taxes, acquisitions, and pension plans[22](index=22&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk)[44](index=44&type=chunk)[47](index=47&type=chunk)[49](index=49&type=chunk)[54](index=54&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk)[66](index=66&type=chunk)[71](index=71&type=chunk) - The Company has changed its presentation from ones to thousands in the current year, with rounding adjustments made to prior years' disclosed amounts[24](index=24&type=chunk) - New accounting pronouncements include **ASU 2023-09** (Income taxes - Improvements to Income Taxes Disclosures, effective after **Dec 15, 2024**) and **ASU 2024-03** (Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure, effective after **Dec 15, 2026**), both of which the Company is currently evaluating for impact[73](index=73&type=chunk)[74](index=74&type=chunk) [Note 3 – Risks and Liquidity](index=17&type=section&id=Note%203%20%E2%80%93%20Risks%20and%20Liquidity) This note discusses the company's operational risks and its ability to meet short-term and long-term financial obligations - **MoonLake** is a biopharmaceutical company facing risks common to the industry, including reliance on third-party manufacturers and the need for future financing. The company expects significant expenses and operating losses for **at least the next two years** as it develops **SLK** and prepares for commercial launches[76](index=76&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - As of **June 30, 2025**, the Company had **$306.7 million** in cash and cash equivalents and believes it has sufficient capital to fund operations and capital expenditures **into 2028**, based on its current operating plan and the **Loan and Security Agreement**[80](index=80&type=chunk) [Note 4 – Debt](index=18&type=section&id=Note%204%20%E2%80%93%20Debt) This note details the company's debt instruments, terms, and carrying values - On **March 31, 2025**, **MoonLake** entered into a **Loan and Security Agreement** for a non-dilutive senior secured term loan facility of up to **$500.0 million**, maturing on **April 1, 2030**. An initial **Tranche 1 Loan** of **$75.0 million** was fully funded on the closing date[81](index=81&type=chunk)[82](index=82&type=chunk) - The **Credit Facility** includes additional tranches of up to **$450.0 million**, contingent on achieving specific clinical milestones (**VELA-1/2 Phase 3**, **IZAR-1/2 Phase 3**, **BLA acceptance**) and Lenders' approval for the fifth tranche[82](index=82&type=chunk) - The loan bears interest at an annual rate equal to the greater of (i) prime rate plus **1.45%** and (ii) **8.45%**, with a **0.25%** reduction upon **FDA approval of SLK BLA**. The effective interest rate as of **June 30, 2025**, is **10.41%**[81](index=81&type=chunk)[84](index=84&type=chunk) Debt (in thousands) | (in thousands) | June 30, 2025 | | :-------------------------------- | :-------------- | | Principal amount | $75,000 | | Accreted present value of End of Term Charge | $3,431 | | Unamortized End of Term Charge | $(3,171) | | Unamortized debt issuance cost | $(1,071) | | Unamortized debt discount | $(808) | | Carrying value | $73,381 | [Note 5 – Fair Value Measurements](index=20&type=section&id=Note%205%20%E2%80%93%20Fair%20Value%20Measurements) This note explains the valuation methods and inputs used for financial instruments measured at fair value Fair Value Measurements (in thousands) | (in thousands) | June 30, 2025 (Level 2) | December 31, 2024 (Level 2) | | :--------------------- | :---------------------- | :-------------------------- | | Eurocommercial Papers | $59,075 | $207,701 | | Certificates of Deposit | $59,327 | $119,583 | | Total | $118,402 | $327,284 | - The Company's short-term marketable debt securities are measured at fair value using Level 2 inputs. The fair value of outstanding long-term debt (**$73.4 million**) approximates its amortized cost[90](index=90&type=chunk) [Note 6 – Investments](index=20&type=section&id=Note%206%20%E2%80%93%20Investments) This note provides information on the company's marketable debt securities and investment strategies Investments (in thousands) | (in thousands) | Amortized cost (June 30, 2025) | Fair value (June 30, 2025) | Amortized cost (Dec 31, 2024) | Fair value (Dec 31, 2024) | | :--------------------- | :----------------------------- | :------------------------- | :---------------------------- | :-------------------------- | | Eurocommercial Papers | $58,731 | $59,075 | $204,572 | $207,701 | | Certificates of Deposit | $58,928 | $59,327 | $117,305 | $119,583 | | Total | $117,659 | $118,402 | $321,877 | $327,284 | - All marketable debt securities held by the Company as of **June 30, 2025**, mature **within one year**. The total fair value of these investments decreased from **$327.3 million** at **December 31, 2024**, to **$118.4 million** at **June 30, 2025**[91](index=91&type=chunk)[93](index=93&type=chunk) [Note 7 — Prepaid Expenses](index=21&type=section&id=Note%207%20%E2%80%94%20Prepaid%20Expenses) This note details the nature and amounts of the company's prepaid expenses Prepaid Expenses (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :------------------ | | Non-clinical research and clinical development services | $17,302 | $14,136 | | Supply and manufacturing services | $7,015 | $7,716 | | Insurances | $1,337 | $1,113 | | Other prepayments | $1,335 | $453 | | Total | $26,989 | $23,418 | - Total prepaid expenses increased from **$23.4 million** at **December 31, 2024**, to **$27.0 million** at **June 30, 2025**, primarily driven by an increase in non-clinical research and clinical development services prepayments[94](index=94&type=chunk) [Note 8 — Trade and Other Payables](index=21&type=section&id=Note%208%20%E2%80%94%20Trade%20and%20Other%20Payables) This note outlines the company's short-term obligations to suppliers and other entities Trade and Other Payables (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :-------------- | :------------------ | | Research and development services | $10,004 | $5,081 | | Supply and manufacturing fees payable | $4,886 | $3,597 | | Consulting and advisory services | $1,183 | $39 | | Legal advisory services | $404 | $93 | | Other payables | $602 | $182 | | Total | $17,079 | $8,992 | - Total trade and other payables significantly increased from **$9.0 million** at **December 31, 2024**, to **$17.1 million** at **June 30, 2025**, mainly due to higher payables for research and development services and consulting/advisory services[95](index=95&type=chunk) [Note 9 — Accrued Expenses and Other Current Liabilities](index=22&type=section&id=Note%209%20%E2%80%94%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note presents the company's accrued liabilities and other short-term financial obligations Accrued Expenses and Other Current Liabilities (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :------------------ | | Bonuses and related employee compensation expenses | $3,234 | $4,237 | | Research and development services and license fees | $2,818 | $2,022 | | Supply and manufacturing services | $917 | $4,474 | | Tax liabilities | $836 | $642 | | Accrued debt interest | $541 | $— | | Consultant and other fees | $386 | $586 | | Legal fees | $— | $138 | | Total | $8,732 | $12,099 | - Total accrued expenses and other current liabilities decreased from **$12.1 million** at **December 31, 2024**, to **$8.7 million** at **June 30, 2025**. This was primarily due to decreases in bonuses and supply/manufacturing services, partially offset by an increase in accrued debt interest[97](index=97&type=chunk) [Note 10 — Leases](index=22&type=section&id=Note%2010%20%E2%80%94%20Leases) This note describes the company's lease arrangements, related assets, and liabilities - The Company has five operating leases for office spaces in Switzerland, the United Kingdom, and Portugal, with terms ranging from **2 to 3 years** and options for extension. The weighted average remaining lease term is **25 months** with a weighted average discount rate of **4.7%** as of **June 30, 2025**[45](index=45&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) Lease Expense (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Operating lease expense | $730 | $702 | | Variable lease expense | $23 | $— | | Total lease expense | $753 | $702 | [Note 11 — Employee Benefit Plans](index=24&type=section&id=Note%2011%20%E2%80%94%20Employee%20Benefit%20Plans) This note provides details on the company's pension and other employee benefit plans - The Company operates a defined benefit pension plan in Switzerland and a defined contribution plan in the UK. The net periodic benefit cost for the Swiss plan was **$137 thousand** for the six months ended **June 30, 2025**, up from **$126 thousand** in the prior year[107](index=107&type=chunk)[109](index=109&type=chunk) - Employer contributions to the Swiss plan for the six months ended **June 30, 2025**, were **$146 thousand**, with an additional **$146 thousand** anticipated for the remainder of **2025**[110](index=110&type=chunk) [Note 12 — Shareholders' Equity](index=25&type=section&id=Note%2012%20%E2%80%94%20Shareholders%27%20Equity) This note details the components of shareholders' equity, including share classes and equity offerings Share Classes | Share Class | Authorized Shares | Issued and Outstanding (June 30, 2025) | | :-------------------- | :---------------- | :------------------------------------- | | Class A Ordinary Shares | 500,000,000 | 63,474,253 | | Class C Ordinary Shares | 100,000,000 | 729,320 | - **Class A Ordinary Shares** trade on **Nasdaq under 'MLTX'**. **Class C Ordinary Shares** carry voting rights but no economic rights and are convertible into **Class A shares** under specific agreements[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The Company has an active **August 2023 At-the-Market (ATM) Sales Agreement** for up to **$350.0 million** of **Class A Ordinary Shares**, with **$265.0 million** remaining for future sales as of **June 30, 2025**. No sales occurred under this agreement in **Q2 2025**[118](index=118&type=chunk)[119](index=119&type=chunk) - In **June 2023**, a public offering of **Class A Ordinary Shares** generated **$436.7 million** in net proceeds. A substantial portion of these proceeds was directed to **MoonLake AG** through share acquisitions and capital contributions[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Note 13 — Net Loss per Share](index=27&type=section&id=Note%2013%20%E2%80%94%20Net%20Loss%20per%20Share) This note explains the calculation of basic and diluted net loss per share Net Loss per Share (in thousands, except share and per share data) | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to controlling interests shareholders | $(55,220) | $(24,267) | $(95,165) | $(37,940) | | Total weighted average number of outstanding shares | 63,282,728 | 62,874,637 | 63,258,393 | 62,755,925 | | Net loss per share – basic and diluted | $(0.87) | $(0.39) | $(1.50) | $(0.60) | - Diluted net loss per share is the same as basic net loss per share due to the net loss attributable to **Class A Ordinary Shares**, making potential dilutive shares anti-dilutive. **Class C Ordinary Shares** are excluded as they carry no economic rights[127](index=127&type=chunk) [Note 14 — Share-Based Compensation](index=28&type=section&id=Note%2014%20%E2%80%94%20Share-Based%20Compensation) This note describes the company's share-based compensation plans and related expenses - The Company's active share-based compensation plans as of **June 30, 2025**, are the **Employee Share Participation Plan (ESPP)** and the **MoonLake Immunotherapeutics 2022 Equity Incentive Plan**. Restricted Founder Shares and ESOP are fully vested[131](index=131&type=chunk)[134](index=134&type=chunk) Share-Based Compensation Expense (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total share-based compensation expense | $3,309 | $1,828 | $5,599 | $3,505 | | Of which: included in research and development expense | $905 | $520 | $1,532 | $937 | | Of which: included in general and administrative expense | $2,404 | $1,308 | $4,067 | $2,568 | - As of **June 30, 2025**, the Company had **$1.6 million** of unrecognized compensation expense for **ESPP** (**0.55 years** weighted average period) and **$19.2 million** for **Equity Incentive Plan** options (**2.84 years** weighted average period), plus **$7.3 million** for restricted stock awards (**3.67 years** weighted average period)[139](index=139&type=chunk)[146](index=146&type=chunk)[150](index=150&type=chunk) [Note 15 — Income Taxes](index=32&type=section&id=Note%2015%20%E2%80%94%20Income%20Taxes) This note provides information on the company's income tax position and effective tax rates Effective Tax Rate | Period | Effective Tax Rate | | :-------------------------------- | :----------------- | | Three months ended June 30, 2025 | (0.2)% | | Six months ended June 30, 2025 | (0.3)% | | Three months ended June 30, 2024 | (0.3)% | | Six months ended June 30, 2024 | (0.4)% | - The Company's effective tax rate is negative due to losses in entities domiciled in the Cayman Islands and Switzerland, with a full valuation allowance recorded against deferred tax assets[151](index=151&type=chunk) [Note 16 — Commitments and Contingencies](index=33&type=section&id=Note%2016%20%E2%80%94%20Commitments%20and%20Contingencies) This note discloses the company's contractual obligations and potential future liabilities - As of **June 30, 2025**, total committed expenses under agreements with CROs and CMOs for **SLK** development amounted to **$223.9 million**[153](index=153&type=chunk) - The In-License Agreement with MHKDG includes potential additional milestone payments of up to **€299.6 million ($351.4 million)** upon achieving specific regulatory and commercialization milestones. Royalties ranging from **low to mid-teen percent** of net sales are also payable[154](index=154&type=chunk)[155](index=155&type=chunk) [Note 17 - Segment Information](index=33&type=section&id=Note%2017%20-%20Segment%20Information) This note presents financial information by operating segment and geographical area - The Company operates as a single operating segment, focusing exclusively on the research, development, and commercialization of its product, **SLK**. No revenue has been generated from programs or services as of **June 30, 2025**[156](index=156&type=chunk)[158](index=158&type=chunk) Long-Lived Assets by Geographical Area (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :-------------- | :------------------ | | Switzerland | $468 | $610 | | United Kingdom | $1,295 | $1,777 | | Portugal | $1,155 | $1,257 | | Total | $2,918 | $3,644 | - Long-lived assets, consisting of property and equipment, net, and operating lease right-of-use assets, decreased across all geographical areas from **December 31, 2024**, to **June 30, 2025**[161](index=161&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key business developments and an outlook on liquidity and capital resources [Overview](index=37&type=section&id=Overview) This section provides a high-level summary of the company's business, strategy, and key developments - **MoonLake** is a clinical-stage biotechnology company focused on developing **Sonelokimab (SLK)** for inflammatory skin and joint diseases. **SLK** is a novel tri-specific **IL-17A and IL-17F inhibiting Nanobody**[168](index=168&type=chunk) - **SLK** is currently in Phase 3 clinical trials for **Hidradenitis Suppurativa (VELA program)** (enrollment completed, primary endpoint data expected **around September 2025**) and **Psoriatic Arthritis (IZAR program)** (screening initiated). Additional Phase 2/3 trials are planned or initiated for **adolescent HS**, **Palmoplantar Pustulosis** (enrollment completed), and **axial Spondyloarthritis**[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - The company expects to submit its first **Biologics License Application (BLA)** for **SLK** **in 2026** and anticipates a first commercial launch in the U.S. **in 2027**, subject to **FDA approval**[176](index=176&type=chunk) - As of **June 30, 2025**, the company had **$306.7 million** in cash and cash equivalents, and **$425.1 million** including short-term marketable securities, which is believed to be sufficient to fund operations **into 2028**[178](index=178&type=chunk) [Equity Offerings](index=38&type=section&id=Equity%20Offerings) This section details the company's equity financing activities, including ATM sales and public offerings - The Company has an active **August 2023 At-the-Market (ATM) Sales Agreement** for up to **$350.0 million** of **Class A Ordinary Shares**, with **$265.0 million** remaining for future sales as of **June 30, 2025**. No sales occurred under this agreement in **Q2 2025**[181](index=181&type=chunk)[182](index=182&type=chunk) - A public offering in **June 2023** generated **$436.7 million** in net proceeds, which were largely directed to **MoonLake AG** for capital reserves and share acquisitions[184](index=184&type=chunk)[185](index=185&type=chunk) [Financial Operations Overview](index=39&type=section&id=Financial%20Operations%20Overview) This section outlines the company's revenue recognition, expense categories, and financial management approach - The Company has not generated any revenue from product sales to date and expects to incur significant operating losses for **at least the next three years** due to ongoing **SLK** development and commercialization preparations[187](index=187&type=chunk)[177](index=177&type=chunk) - Research and development expenses are expensed as incurred and include costs for clinical trials, manufacturing, consulting, and personnel. These costs are expected to remain significant as **SLK** development continues and the pipeline potentially expands[188](index=188&type=chunk)[192](index=192&type=chunk) - General and administrative expenses primarily cover employee-related costs, professional services (legal, accounting), and facility costs, and are expected to increase with organizational growth[194](index=194&type=chunk)[198](index=198&type=chunk) - Foreign currency transaction gains were **$378 thousand** for **Q2 2025** and **$343 thousand** for **YTD 2025**, compared to losses in the prior year periods[205](index=205&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, highlighting key drivers of changes in income and expenses [Comparison of the three months ended June 30, 2025 and 2024](index=43&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the three-month periods ended June 30, 2025 and 2024 Results of Operations - Three Months Ended June 30 (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | Change % | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----- | :------- | | Research and development | $(49,762) | $(23,662) | $(26,100) | 110.3 % | | General and administrative | $(10,936) | $(6,916) | $(4,020) | 58.1 % | | Total operating expenses | $(60,698) | $(30,578) | $(30,120) | 98.5 % | | Operating loss | $(60,698) | $(30,578) | $(30,120) | 98.5 % | | Interest expense | $(2,037) | $— | $(2,037) | 100.0 % | | Other income, net | $6,779 | $5,898 | $881 | 14.9 % | | Net loss | $(56,051) | $(24,759) | $(31,292) | 126.4 % | | Other comprehensive income (loss) | $(1,895) | $576 | $(2,471) | (429.0)% | | Comprehensive loss | $(57,946) | $(24,183) | $(33,763) | 139.6 % | - Research and development expenses increased by **110.3%** to **$49.8 million**, driven by clinical trial costs for the VELA and IZAR programs, manufacturing, and non-clinical R&D. General and administrative expenses rose by **58.1%** to **$10.9 million** due to personnel and advisory/legal costs[207](index=207&type=chunk)[208](index=208&type=chunk) - Net loss increased by **126.4%** to **$56.1 million**, and comprehensive loss increased by **139.6%** to **$57.9 million**, primarily due to increased operating expenses, new interest expense from the **Loan and Security Agreement**, and a decrease in net unrealized gain on marketable securities[206](index=206&type=chunk)[209](index=209&type=chunk)[212](index=212&type=chunk) [Comparison of the six months ended June 30, 2025 and 2024](index=45&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the six-month periods ended June 30, 2025 and 2024 Results of Operations - Six Months Ended June 30 (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change % | | :------------------------------------------------ | :----------------------------- | :----------------------------- | :----- | :------- | | Research and development | $(86,221) | $(36,676) | $(49,545) | 135.1 % | | General and administrative | $(21,962) | $(13,723) | $(8,239) | 60.0 % | | Total operating expenses | $(108,183) | $(50,399) | $(57,784) | 114.7 % | | Operating loss | $(108,183) | $(50,399) | $(57,784) | 114.7 % | | Interest expense | $(2,056) | $— | $(2,056) | 100.0 % | | Other income, net | $13,876 | $11,814 | $2,062 | 17.5 % | | Net loss | $(96,611) | $(38,734) | $(57,877) | 149.4 % | | Other comprehensive income (loss) | $(4,556) | $839 | $(5,395) | (643.0)% | | Comprehensive loss | $(101,167) | $(37,895) | $(63,272) | 167.0 % | - Research and development expenses increased by **135.1%** to **$86.2 million**, primarily due to increased clinical trial expenses for the VELA and IZAR programs, manufacturing, and non-clinical R&D. General and administrative expenses increased by **60.0%** to **$22.0 million**, driven by personnel, advisory, and legal costs[215](index=215&type=chunk)[216](index=216&type=chunk) - Net loss increased by **149.4%** to **$96.6 million**, and comprehensive loss increased by **167.0%** to **$101.2 million**, mainly due to higher operating expenses, new interest expense, and a significant decrease in net unrealized gain on marketable securities[214](index=214&type=chunk)[217](index=217&type=chunk)[220](index=220&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding needs, and strategies for managing capital - The Company has no product revenue and expects significant expenses and operating losses for **at least the next two years**. As of **June 30, 2025**, cash, cash equivalents, and short-term marketable securities totaled **$425.1 million**, projected to fund operations **into 2028**[221](index=221&type=chunk)[222](index=222&type=chunk) - Future funding needs are expected to be met through equity sales, debt financings, or collaborations. The company entered into a **$500.0 million** term loan facility in **March 2025**, with an initial **$75.0 million** funded[224](index=224&type=chunk)[225](index=225&type=chunk) Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(92,670) | $(42,838) | | Net cash provided by (used in) investing activities | $144,500 | $(116,547) | | Net cash provided by financing activities | $73,122 | $50,978 | | Net increase (decrease) in cash and cash equivalents | $126,255 | $(108,378) | - Net cash used in operating activities increased by **$49.9 million** to **$92.7 million** for the six months ended **June 30, 2025**, primarily due to increased net loss. Investing activities provided **$144.5 million**, a significant shift from a **$116.5 million** outflow in the prior year, mainly from marketable debt securities maturities. Financing activities provided **$73.1 million**, primarily from the new term loan[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) [Contractual Obligations and Commitments](index=49&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details the company's future payment obligations under various agreements Contractual Obligations and Commitments (in thousands) | (in thousands) | Total | Less than 1 year | 1 to 5 Years | More than 5 years | | :-------------------------- | :------ | :--------------- | :----------- | :---------------- | | Purchase obligations | $223,884 | $160,545 | $63,339 | $— | | Lease commitments | $2,490 | $1,621 | $869 | $— | | Long-term debt obligations | $113,122 | $6,806 | $106,316 | $— | | Total contractual obligations | $339,496 | $168,972 | $170,524 | $— | - Total contractual obligations as of **June 30, 2025**, amounted to **$339.5 million**, with **$169.0 million** due **within one year**. This includes significant purchase obligations for R&D and manufacturing, lease commitments, and long-term debt obligations[238](index=238&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section describes the accounting policies requiring significant judgment and estimation - There were no material changes to the Company's critical accounting estimates during the six months ended **June 30, 2025**, as detailed in the Annual Report[241](index=241&type=chunk) [Recently Issued Accounting Pronouncements](index=49&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section provides updates on new accounting standards and their potential impact on the company - Information on recently issued accounting pronouncements, their adoption timing, and potential impact is provided in Note 2 to the condensed consolidated financial statements[242](index=242&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk and foreign currency risk, and how these risks are managed through investment policies and financial instruments - As of **June 30, 2025**, the Company held **$425.1 million** in cash, cash equivalents, and short-term marketable securities, primarily bank deposits, commercial papers, and certificates of deposits. These investments are managed to preserve principal and maximize income without significantly increasing risk, maintaining a diverse and highly liquid portfolio[244](index=244&type=chunk)[245](index=245&type=chunk) - The fair value of cash, cash equivalents, and short-term investments would not be significantly affected by interest rate changes due to their short-term maturities. A hypothetical **10%** change in interest rates would not materially impact financial results[245](index=245&type=chunk) - The Company had **$73.4 million** in variable rate debt outstanding as of **June 30, 2025**, with the **Tranche 1 Loan** bearing a floating interest rate of **8.95%**. A hypothetical **100 basis point** change in interest rates would not have a material impact on the financial statements[246](index=246&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and stating no material changes to internal control over financial reporting during the quarter - Management, with **CEO** and **CFO** participation, evaluated the effectiveness of disclosure controls and procedures as of **June 30, 2025**, concluding they were effective at a reasonable assurance level[248](index=248&type=chunk)[249](index=249&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended **June 30, 2025**[250](index=250&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently involved in any material legal proceedings - The Company is not currently subject to any material legal proceedings[253](index=253&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors, emphasizing the potential adverse effects of geopolitical events, global economic conditions, and legislative/regulatory tax changes on the company's operations and financial condition - Geopolitical events and global economic conditions (e.g., conflicts, tariffs, inflation) could seriously and adversely affect preclinical studies, clinical trials, business, financial condition, and results of operations[255](index=255&type=chunk) - The company may be subject to adverse legislative or regulatory tax changes, such as the recent **One Big Beautiful Bill Act** restoring immediate deductibility of domestic R&D expenditures, which could impact its financial condition[258](index=258&type=chunk)[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report - There were no unregistered sales of equity securities or use of proceeds to report[260](index=260&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities - There were no defaults upon senior securities[261](index=261&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the Company[262](index=262&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section discloses the adoption of Rule 10b5-1(c) trading plans by the Chief Executive Officer, Chief Financial Officer, and Chief Scientific Officer for the sale of Class A Ordinary Shares - **Dr. Jorge Santos da Silva** (**CEO**), **Mr. Matthias Bodenstedt** (**CFO**), and **Dr. Kristian Reich** (**CSO**) adopted **Rule 10b5-1(c)** trading plans on **June 17, 2025**, and **June 26, 2025**, respectively, for the sale of **Class A Ordinary Shares**[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - The plans provide for the sale of up to **200,000 shares** for the **CEO** (through **Nov 24, 2025**) and up to **300,000 shares** each for the **CFO** and **CSO** (through **March 31, 2026**)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including organizational documents, certifications, and XBRL documents - The exhibits include the Memorandum and Articles of Association, certifications from the **Principal Executive and Financial Officers** (**31.1***, **31.2***, **32.1***, **32.2***), and Inline XBRL documents (**101.INS***, **101.SCH***, **101.CAL***, **101.DEF***, **101.LAB***, **101.PRE***, **104***)[268](index=268&type=chunk) [SIGNATURES](index=56&type=section&id=SIGNATURES) - The report is signed by **Dr. Jorge Santos da Silva**, **Chief Executive Officer**, and **Matthias Bodenstedt**, **Chief Financial Officer**, on **August 5, 2025**[273](index=273&type=chunk)

Core Insights - MoonLake Immunotherapeutics reported strong performance in Q2 2025, with significant advancements in clinical trials and financial stability [2][5]. Financial Performance - As of June 30, 2025, the company held cash, cash equivalents, and short-term marketable debt securities totaling $425.1 million [4]. - Research and development expenses for Q2 2025 were $49.8 million, an increase from $36.5 million in the previous quarter, attributed to higher costs in clinical trials and preparations for a Biologic License Application (BLA) submission [4]. - General and administrative expenses remained stable at $10.9 million compared to $11.0 million in the previous quarter [4]. - The company ended Q2 with a robust financial position, having access to an additional $425 million in non-dilutive funds through a previously announced debt facility [5][6]. Clinical Developments - The pivotal Phase 3 VELA program for hidradenitis suppurativa (HS) is on track for a primary endpoint readout around September 2025, with a BLA submission expected in mid-2026 [5][6]. - An earlier-than-expected interim readout from the Phase 2 LEDA trial in palmoplantar pustulosis (PPP) has provided further validation for sonelokimab, which is seen as reducing overall development risk [2][5]. - The company shared data from the Phase 2 ARGO trial in psoriatic arthritis (PsA) at the European Congress of Rheumatology, indicating positive outcomes [4]. Upcoming Milestones - Key upcoming milestones include the primary endpoint readout for the Phase 3 VELA program in HS expected in September 2025, and several other critical trial results anticipated in 2026 [5][25]. - The company is actively preparing for multiple investor and medical conferences to present findings and updates on ongoing trials [8]. Product Pipeline - Sonelokimab, a novel investigational Nanobody, is being evaluated for multiple inflammatory diseases, including HS, PsA, and PPP, with promising results reported in various trials [10][14][31]. - The VELA program aims to enroll 800 patients and is designed to assess the efficacy and safety of sonelokimab in adult patients with active moderate-to-severe HS [22]. Market Opportunity - The market for hidradenitis suppurativa is projected to reach $15 billion by 2035, highlighting a significant unmet need and potential for sonelokimab [25].

Core Insights - Shares of MoonLake Immunotherapeutics (MLTX) increased by 18% following reports of Merck's interest in acquiring the company [1][8] - Merck had previously made a non-binding offer for MoonLake valued at over $3 billion, which was rejected, but discussions may resume [2][8] - MoonLake is focused on developing sonelokimab, a novel nanobody therapy for inflammatory diseases, with key data expected in September 2025 [3][4] Company Overview - MoonLake Immunotherapeutics is a clinical-stage biotech company based in Switzerland, developing sonelokimab for conditions such as hidradenitis suppurativa and psoriatic arthritis [3] - The company is also exploring sonelokimab for additional dermatological and rheumatological indications [4] Market Context - Merck's interest in MoonLake is part of a strategy to diversify its revenue sources, which are heavily reliant on Keytruda, accounting for nearly 46% of its total revenues in 2024 [7] - Concerns over Keytruda's potential loss of exclusivity after 2028 have prompted Merck to seek new drug candidates [7][8] - Recent M&A activity in the pharmaceutical sector indicates a trend towards acquiring small biotechs with promising assets, aligning with Merck's rumored pursuit of MoonLake [13] Recent Transactions - Sanofi announced a $9.5 billion acquisition of Blueprint Medicines to enhance its immunology pipeline [11] - Bristol Myers Squibb entered a co-development agreement with BioNTech for an investigational bispecific antibody, reflecting ongoing interest in oncology candidates [12]