What happened
Actions of Aurinia Pharmaceuticals (NASDAQ: AUPH), a mid-cap biotechnology company, closed negotiations on Monday with a 26% rise. The stock rose in response to FDA approval of the company’s oral drug for lupus nephritis, Lupkynis (also known as voclosporin).
Lupkynis is indicated for patients with active lupus nephritis who are already receiving basic immunosuppressive therapy. Lupus nephritis is an advanced form of systemic lupus erythematosus, an autoimmune disease that can cause irreversible kidney damage, dialysis and even death. Lupkynis is the first approved oral therapy for this condition.
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And
Approximately 100,000 adults in the United States currently suffer from lupus nephritis, according to Aurínia’s own estimates. A similar number are believed to suffer from the disease in Europe. While this is relatively uncommon, Aurinia said it expects to profit about $ 65,000 per patient annually, after accounting for discounts, channel discounts and patients discontinuing therapy earlier. Wall Street analysts, for their part, think that this important new therapy for lupus nephritis could generate sales in excess of $ 1 billion a year at the beginning of the new decade.
What now
Are Aurinia’s shares still bought after Monday’s big move to the north? Although it may take a few years for Lupkynis’ sales to increase, the company appears to be a strong candidate for the acquisition after that approval. After all, Aurinia’s market capitalization is still below $ 2.5 billion at the time of writing. Even at a price of, say, $ 5 billion, it would be a bargain for any of the big pharmaceutical companies that have interests in lupus. In short, this mid-cap biopharmaceutical action may be worth adding to your portfolio soon.