Aurinia Pharmaceuticals Inc (AUPH) Is an Attractive Opportunity with 75% Upside

Aurinia potentially has the 1st treatment for lupus nephritis, says RBC Capital's Douglas Miehm.


In a very upbeat and promising report, RBC Capital analyst Douglas Miehm explains why he is initiating coverage on shares of Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) with a Speculative Risk rating and a $9.00 price target (75% from current levels).

The analyst believes that Aurinia’s lead candidate – voclosporin (VCS) – can become a staple of a new multi-targeted treatment approach for lupus nephritis (LN), and has significant benefits versus current methods. This approach would be based on the combined effects from two immune suppressants – usually CellCept (the current standard of care in LN) and drugs like VCS. Importantly, Miehm projects the lupus market to grow to $3.0-$4.0B over the next decade.

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“We believe Aurinia Pharmaceuticals is well positioned for future growth based on its lead drug candidate, voclosporin. This small molecule is currently undergoing a Ph. III trial for lupus nephritis that is studying the added benefit of voclosporin when layered on top of the current standard of care (CellCept) in disease remission. We believe the lupus nephritis market is underpenetrated, partly because there is currently no FDA or EMA approved therapy for the condition. Additionally, the current treatment paradigm is comprised of off-label medication and has significant room for improvement with complete remission rates only in the midteens. Ph. II trials for voclosporin demonstrated a statistically significant improvement in patient outcomes when added to the current standard of care with complete remission rates of ~50%. Based on our outlook, we believe the Ph. III trial will also be a success and provide the clinical data necessary for voclosporin approval. Following a 2021 launch in the US, EU and Japan, we believe voclosporin can achieve peak global sales of $930MM,” Miehm wrote.  (To watch Miehm’s track record, click here)

If we turn to the Street in general, we can see that the stock also has a Strong Buy analyst consensus rating, with 5 back-to-back Buy ratings. These analysts have an average price target on the stock of $11.10, which suggests an upside from the current share price of close to 115%.