Aurinia Pharma Merits Speculative Buy On M&A Appeal; Phase 3 Study Remains Paramount

Aurinia Pharmaceuticals Inc AUPH's Voclosporin is about to begin Phase 3 trials for first-line treatment of lupus nephritis. The company could be an “ideal acquisition candidate once Phase 3 kicks off,” Mackie Research Capital’s André Uddin said in a report.

Uddin initiated coverage of Aurinia Pharma with a Speculative Buy rating and a 12-month price target of $8. He commented, “Based on the clinical data, market potential of Voclosporin, lack of late-stage competitors and the historical track record of management – we believe Aurinia has the potential to be acquired.”

Team Has M&A Experience

Aurinia Pharma CEO Charlie Rowland has extensive M&A experience. Prior to being co-CEO and chief financial officer of Endo International plc - Ordinary Shares ENDP, Rowland was the CFO of Shire Viropharma Inc VPHM when it was acquired by Shire PLC SHPG for $4.2 billion in 2013.

Several members of Aurinia Pharma’s management team, including chairman Richard Glickman, were at Aspreva Pharmaceuticals, which was acquired by Galenica for $915 million in 2007.

“While at Aspreva, this team ran the largest and most important lupus nephritis (LN) trial ever conducted, called the Aspreva Lupus Management Study ("ALMS"), which resulted in the emergence of CellCept (mycophenolate mofetil) as a key treatment for lupus nephritis,” Uddin wrote.

Aurinia Pharma witnessed large growth in short interest in October, according to The Cerbat Gem. Earlier in September, the company had announced positive top-line results from the Phase 2b clinical study of Voclosporin.