How MoonLake Turned Merck's Shelved Asset Into a $15B Breakthrough
Merck shelved it. Moonlake licensed it. Now it’s a $15B nanobody on the brink of reshaping inflammatory disease.
Ready for a biotech thriller? Today I’m diving into one exciting story that grabbed me—a tale of a pharma giant fumbling a game-changing asset. Why? Bureaucracy, misplaced priorities, and a failure to nurture bold ideas.
Let’s zoom in on the saga of Merck KGaA and MoonLake Immunotherapeutics, a scrappy biotech that spun a dusty Merck asset into a $15 billion blockbuster-in-waiting. This is a wild ride worth taking.
This piece draws on public statements and an in-depth interview with Moonlake CEO Jorge Santos da Silva on the BioBoss podcast, published in April 2024.
You might’ve caught wind of Moonlake Therapeutics, or maybe it’s fresh. This Swiss outfit just secured $500 million to fuel its pipeline for sonelokimab, a nanobody set to reshape chronic disease treatment.
How did a Merck reject become a biotech star?
Let’s unpack the story and hand every pharma CEO a blueprint to spark their own moonshot.
A Nanobody Spark Ignites
Jorge Santos da Silva, Moonlake’s CEO, a blend of science and strategy. After 12 years in academia and nearly 15 at McKinsey guiding pharma giants, he stumbled across sonelokimab in 2011.
Merck KGaA had acquired immunology assets from Ablynx, a pioneer in nanobodies—an agile alternative to bulky monoclonal antibodies. At 10 kilodaltons, nanobodies are 15 times smaller than 150-kilodalton antibodies, penetrating hard-to-reach tissues to tackle hidradenitis suppurativa (HS) and psoriatic arthritis.
Santos da Silva was captivated. Sonelokimab, targeting IL-17A and IL-17F (inflammation’s key drivers), showed blockbuster potential. But at Merck, it was caught in a strategic bind.
“Money doesn’t cover all corners. You have to make choices,” he says.
Sonelokimab languished, overshadowed by oncology bets. In 2016, Merck tested it in psoriasis, enlisting Dr. Kristian Reich, a leading dermatologist and Santos da Silva’s future co-founder, as a principal investigator. Dr. Reich saw the same promise. Yet, by late 2019, after a decade of indecision, Merck shelved it. (Why let a $15B asset gather dust? Talk about a missed opportunity.)
To be fair, Merck’s decision wasn’t without (corporate/innovator’s dilemma) rationale. At the time, its immunology portfolio was competing for internal attention against an aggressive oncology expansion strategy. Resources were finite, and the immunology unit faced portfolio congestion, with psoriasis already being a highly contested indication. With larger pipeline bets in oncology commanding internal momentum and revenue projections, sonelokimab didn’t make the cut. In hindsight, that cautious reallocation now reads like a costly oversight.
Seizing the Opportunity
Merck’s indecision was Moonlake’s opening. “If you’re going to put it out, then I want it,” Santos da Silva recalls. With a grin and what he calls “infinite arrogance,” Santos da Silva recalls their bold move: “We said no—we’re the ones who know this space,” as they chose not to shop sonelokimab to another pharma giant.
In 2021, they launched MoonLake Immunotherapeutics, licensed sonelokimab, and built a lean, Skunk Works-style team—fast, focused, and ferocious.
Their edge? Ruthless execution.
“We just beat everybody, not because we're necessarily better or smarter, but because the industry is so ineffective.” Santos da Silva notes. Unlike Merck’s sluggish trial management, MoonLake runs a tight operation, overseeing CROs and sites to cut costs and timelines.
Strategically, MoonLake didn’t just inherit sonelokimab—they redefined its purpose. Where Merck saw a psoriasis follower, MoonLake saw a breakthrough opportunity in high-unmet-need diseases like HS, where nanobodies’ deep-tissue penetration could shine.
A Lifeline for Patients
Moonlake’s strategic shift delivered remarkable results. In HS, a debilitating disease of abscesses and draining tunnels, sonelokimab eliminated all symptoms in 25% of Phase II patients, far surpassing the standard 50% improvement in 50%. “That is a fundamental change. That's 100% improvement, not some percentage in a percentage of a percentage,” Santos da Silva says.
Nanobodies’ small size enables fast, painless injections (3–4 seconds monthly), freeing patients from isolation. “You can start falling in love,” he says, sharing stories of patients rediscovering relationships. (No small feat for a disease that locks people away.)
The Road Ahead: A Biotech Surge
Moonlake’s 2025 is thriving. Phase III HS readouts (VELA-1 and VELA-2) are set for July–August, with Guggenheim naming sonelokimab the HS benchmark, projecting $4 billion by 2027.
New trials in adolescent HS, palmoplantar pustulosis, axial spondyloarthritis, and a Phase III psoriatic arthritis program (IZAR) signal bold ambition. A $500 million non-dilutive financing from Hercules Capital, plus $448 million in cash, powers the push through 2027.
“We’re taking this to market on our own,” Santos da Silva told Endpoints News, dismissing Big Pharma partnerships. With 32 hedge funds backing MLTX in Q4 2024, Moonlake is destined to surge.
Targeting a $200 billion market across inflammatory diseases, Moonlake’s single-asset focus is a lesson in efficiency. “Moonlake’s HS data is rewriting the playbook,” says LifeSci Capital’s Rami Katkhuda, highlighting its edge over Humira and Secukinumab.
So What is the Playbook?
The Moonlake Blueprint: A Skunk Works Playbook
Moonlake’s success isn’t a fluke—it’s a model to emulate. Like Skunk Works, which built the SR-71 with small, driven teams, Moonlake proves what bold innovators can do. Here’s the blueprint, drawn from its strategy:
The Facts:
Sonelokimab lingered in Merck’s portfolio for years, showing promise in inflammatory diseases but never prioritized.
Immunology was sidelined for oncology bets. By 2019, it was shelved—not for poor data, but for lack of resources.
In 2021, Santos da Silva and Vestergaard licensed it, launching Moonlake—a lean, execution-driven biotech.
In four years, they advanced from shelf to Phase III, no Big Pharma reliance, no bloated structure, just sharp focus.
What’s Going Wrong:
Portfolio congestion leads executives to favor politically safe programs over high-potential ones.
Incentives prioritize caution over bold intrapreneurship, stifling innovation.
Fragmented ownership leaves assets without champions to revive them.
Process-driven cultures value control over speed, diluting focus across sprawling teams.
The Strategic Lesson:
Build internal Moonlakes or watch your best assets fuel rivals’ success. Your org charts and budget cycles are choking innovation you’ve already paid for. Merck’s cost? Billions in missed opportunity, a lost first-mover advantage, and a competitor outpacing its former owner.
The Playbook:
Scale your trials budget through lean management, not bureaucracy. Oversee CROs closely, control costs, and accelerate timelines.
Target novel biology in underserved markets, instead of competing in established markets (HS, not psoriasis).
Build teams around assets, keeping them lean and focused.
Reject the notion that Big Pharma partnerships are essential for market entry.
This model is achievable but requires cutting bureaucratic drag, rethinking governance, and protecting agile teams from internal politics. “Moonlake shows what’s possible when visionaries have room to move,” Katkhuda says.
To CEOs, your move: spark a Moonlake in your halls.
A Moonshot for the C-Suite
MoonLake and sonelokimab prove that bold intrapreneurship can turn overlooked assets into stars. Did it have to be outside of Merck? No. It had to happen outside of fixed operations, managed creativity, and restricted innovation.
Merck’s misstep—mired in oncology setbacks and red tape—was MoonLake’s springboard. As Santos da Silva and Vestergaard charge toward market, their single-asset focus formation should be studied as a Skunk Works model to be implemented within large companies. But also, a big lesson for emerging biotech companies: empower your innovators to unearth the next blockbuster. Relentless focus on the one thing. For patients, sonelokimab is a lifeline, restoring hope.
For the C-suite, it’s a challenge: Internal structures often breed enough frustration to ignite a MoonLake spark. Yet what happens afterwards is often a MoonLake escape.
Now, how to make sure great ideas, great assets, and great people can build upon the ignited spark of the idea from within?
That’s the challenge. Yendou was that kind of idea too—one that didn’t get enough oxygen inside a large pharmaceutical to take its first breath.
How many more breakthroughs are quietly escaping—not to scale, but simply not to suffocate?