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Aurinia (AUPH) Stock Up on Potential Acquisition Rumors

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  • AUPH
  • BMY
  • NVS

Shares of Aurinia Pharmaceuticals Inc. AUPH gained 13.2% on Dec 2, following fresh rumors of a potential buyout.

Reportedly, Swiss pharma giant Novartis NVS is looking out for small bolt-on acquisitions, as mentioned in its R&D Day 2021 presentation. Shares of Aurinia jumped, with investors expecting the company to be on NVS’ radar.

We note that Novartis recently decided to sell its stake in Roche for $20.7 billion and is looking to use this fund for acquisitions to strengthen its portfolio.

Aurinia’s Lupkynis is the first FDA-approved oral therapy dedicated to treating adult patients with active lupus nephritis (LN). It was approved in January 2021. LN is a serious progression of systemic lupus erythematosus (SLE), a chronic and complex autoimmune disease that can lead to permanent and irreversible tissue damage within the kidney.

Total revenues were $14.7 million in the third quarter and $22.2 million in the first nine months of 2021.

In August 2021, Aurinia added two novel assets to expand its rare autoimmune and kidney-related disease pipeline. The first program, AUR200, was acquired by way of Aurinia purchasing all of the common stock of Thunderbolt Pharma, Inc, a private company. The second program, AUR300, was secured through a global licensing and research agreement with Riptide Bioscience Inc., a private company.

Aurinia has been in the news all through 2021 on speculations of a possible buyout.

Shares of Aurinia have surged 45.6% in the year so far against the industry’s 21% decline.

Earlier, it was rumored that biotech giant Bristol Myers BMY was interested in acquiring Aurinia, and shares surged on the same.

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Bristol Myers too is looking to diversify its revenue base as key drugs will lose patent protection. It earlier boosted its top line with the acquisition of the erstwhile Celgene Corporation.

Mergers & Acquisitions (M&As) are back in focus in the biotech sector as Merck MRK recently acquired Acceleron Pharma for $180 per share in cash for an approximate total equity value of $11.5 billion in a bid to build its rare diseases portfolio.

The acquisition added Accelereon’s promising pipeline candidate — sotatercept — which is being evaluated for the treatment of pulmonary arterial hypertension (PAH), a progressive and life-threatening blood vessel disorder, to MRK’s pipeline.

M&As have always taken center stage in the biotech industry as leading pharma/biotech companies constantly eye lucrative acquisitions to diversify their revenue base in the face of dwindling sales of high-profile drugs. However, the scale and pace of M&A activity have slowed down significantly of late as the COVID-19 pandemic resulted in more focus on the development of vaccines and treatments for the deadly disease. Nevertheless, as the economic situation improves, the pace is picking up, and companies like Bristol Myers are on the lookout for the same to bolster their portfolios.

Aurinia currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Novartis AG (NVS) : Free Stock Analysis Report

Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report

Merck & Co., Inc. (MRK) : Free Stock Analysis Report

Aurinia Pharmaceuticals Inc (AUPH) : Free Stock Analysis Report

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