H.C. Wainwright Gets More Confident On Aurinia Pharmaceuticals Inc (AUPH); Here’s Why

Ed Arce lifts his price target on AUPH after recent R&D day widened doors to voclosporin's opportunity.


Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) revealed in its recent R&D Day a fresh intent to take development of its voclosporin drug further, now targeting focal segmental glomerulosclerosis (FSGS) and minimal change disease (MCD). H.C. Wainwright analyst Ed Arce for one believes the wide array of renal orphan disease is a good match for voclosporin’s dual mechanism of action (MoA), translating these new indications to an ideally “expanded opportunity at hand.”

As such, the analyst maintains a Buy rating on AUPH stock while hiking the price target from $10 to $12, which represents a 104% increase from where the stock is currently trading. (To watch Arce’s track record, click here)

Investors caught wind of Arce’s step forward in confidence on the biotech player’s more robust opportunity and in reaction, shares are on a solid 3% upturn today. Worthy of note, between the indications of FSGS and MCD, roughly 60,000 patients are afflicted on a domestic front alone, with approximately 150,000 patients suffering across the globe. This marks close to 50% of patients who endure the impact of Nephrotic Syndrome (NS), which strings together a range of symptoms signaling kidney damage, from proteinuria to hyperlipidemia to edema to hypoalbuminemia.

When evaluating the voclosporin renal franchise, the analyst commends FSGS and MCD as indication picks for Aurinia, finding that four key criteria are fulfilled here:

Arce highlights, “1) Strategic— high unmet medical need (significant morbidity/mortality with limited treatment options); 2) Clinical—validated and highly objective endpoint (proteinuria), compelling biologic rationale and only small patient enrollment required; 3) Regulatory—potential for straightforward pathway with expedited development and review; and 4) Commercial —Clearly defined patient population, no approved therapies, specialty pricing and potential to strengthen IP and data exclusivity.”

The drug maker has its plans set on initiating a Phase II proof of concept clinical study evaluating voclosporin in the indications of FSGS as well as MCD by the first half of next year, testing around 20 biopsy-proven patients with proteinuria at a minimum of 3mg/mg and corticosteroid-free. Meanwhile, the AUPH team looks to issue two interim data results by the back half of next year, issuing a primary endpoint by the first quarter of 20129. Should voclosporin be approved in FSGS and MCD, the AUPH team forecasts a commercial launch within five years’ time.

Overall, “Given our view that this development expansion is both highly complementary to LN and substantially de-risked, we add the FSGS/MCD indication to our valuation model,” Arce surmises, likewise content that the pivotal Phase III Aurora trial is “on track” for enrollment in LN.

TipRanks analytics exhibit AUPH as a Strong Buy. Out of 4 analysts polled by TipRanks in the last 3 months, all 4 are bullish on Aurinia stock. With a return potential of 99%, the stock’s consensus target price stands at $11.63.