It was noted on Monday, as The Financial Times first reported, Merck made a non-binding offer of $3 billion to acquire MoonLake Immunotherapeutics back in the early part of this year. The offer itself was rejected by the biotech, but FT notes that it’s possible that such a deal could end up being revived. The whole premise here is that, while Merck has achieved blockbuster status with Keytruda as a PD-1 inhibitor to treat a wide variety of solid tumors, the drug’s patents are set to expire in 2028. With that being said, it needs to find a new growth driver, and MoonLake might be just exactly what it needs.
The reason why has to do with the fact that MoonLake Immunotherapeutics is in the process of developing its IL-17A/IL-17F inhibitor sonelokimab for the treatment of patients with hidradenitis suppurativa (HS) and for psoriatic arthritis (PsA). As a matter of fact, it is in the process of running phase 3 programs for each of these indications, known as VELA and IZAR, respectively. Each of these indications is expected to be multibillion-dollar markets, and the uniqueness of this drug might set it apart from other IL-17 inhibitors. There are many IL-17 inhibitors in development for dermatology and rheumatology disorders, for example, with a huge market leader being Cosentyx from Novartis.
IL-17A/IL-17F dimers are responsible for driving inflammation through activation of IL-17A receptors and RC receptor complexes. What’s so highly ideal about sonelokimab is that it is the only drug of this class to target all three dimers and do so with similar affinity for each one. I believe this is a strong reason why Merck made an offer to acquire MoonLake because of this. Not only is it possible for Merck’s interest to come about again in acquiring it, but other big pharmaceutical companies could also potentially make a bid for it as well.
The three dimers that sonelokimab targets are IL-17A/A, IL-17A/F, and IL-17F/F. To take it one step further, the company has also developed this nanobody drug to also bind to albumin, and this is to target straight to the sites of inflammation (skin and inflammation that occurs for a skin disorder). The ability to use three dimers of the IL-17A/IL-17F was proven in that the company achieved enormous success when it was the first to set a high bar of Hidradenitis Suppurativa Clinical Response (HiSCR) 75 as its primary endpoint for the phase 2 MIRA trial. This primary endpoint was met as early as 12 weeks. It can even expand this drug to target a wide range of other dermatological conditions.
For instance, it is expected to release primary endpoint data from its phase 2 LEDA trial using sonelokimab to treat patients with palmoplantar pustulosis in the 2nd half of 2025. If the primary efficacy endpoint is met here with statistical significance, not only would it cause its share price to trade higher, but it could probably garner a bigger bid from a potential buyer. If anything, if the company continues to deliver on successful studies in adolescent patients with HS and axial spondyloarthritis (axSpA), then its shareholder value should increase considerably.
Again, the premise here is having the potential for a best-in-class IL-17A/IL-17F inhibitor that could set itself apart from all other competitors with a similar drug class. Lastly, the company ended Q1 of 2025 with $480.1 million in cash, along with the closing of a debt facility to bring in up to $500 million in non-dilutive funds. It believes that this is going to be enough cash on hand to fund its operations into 2028, and this is plenty of time to reach several clinical milestones that are rapidly approaching.