Aurinia Pharmaceuticals (AUPH) reported Q3 earnings this week. Apart from getting a glimpse into the state of overall operations, the results were of little consequence for investors, as the biotech has no product to sell yet.
But “yet” might be the key word here as the company is readying for the potential launch of voclosporin, its treatment for lupus nephritis (LN).
A PDUFA date is set for January 22, 2021, the result of which could be the first FDA approved drug to treat LN.
Leering analyst Joseph Schwartz thinks the treatment has a good chance of getting the regulatory body’s nod of approval.
“Considering the recent FDA focus on COVID-19 treatments and vaccines, we find it encouraging that voclosporin was granted priority review, and in our view, this demonstrates the great unmet need for patients,” the 5-star analyst said.
Scwhartz gives voclosporin a 90% probability of success and estimates the treatment could reach peak revenue of approximately $1.6 billion.
Additionally, since the PDUFA date was already known back in July, Schwartz believes Aurinia has had ample time to prepare for a successful launch. The company has been on a hiring spree and has bolstered the commercial team with the addition of 100 new members. By the end of the year, Aurinia says it will be ready to hit the ground running.
The analyst also puts a positive spin on the recently discontinued program for voclosporin in dry eye syndrome (DES) and believes the company has the required cash to execute its plan.
“While the trial missed the primary endpoint and the program will be discontinued, we viewed this outcome favorably as the company will get back to basics and focus on its core competencies,” Schwartz said. “With prospective commercialization in 2021, a strong balance sheet, and a potential COVID-19 opportunity, we remain optimistic on AUPH.”
As a result, Schwartz reiterated an Outperform (i.e. Buy) rating on AUPH along with a $24 price target. There’s a lot of upside from current levels – 81%, in fact. (To watch Schwartz’ track record, click here)
The rest of the Street sees plenty of upside, too; Going by the $21.08 average price target, the projection is for 59% of upside over the next 12 months. The ratings match the optimistic price target; with 4 Buys, the analyst consensus rates AUPH a Strong Buy. (See AUPH stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
