Aurinia Pharmaceuticals gets price target raise at M Partners

A fast track designation increases Aurinia Pharmaceuticals (Aurinia Pharmaceuticals Stock Quote, Chart, News: TSX:AUP) likelihood of success, says M Partners analyst Daniel Pearlstein.

Yesterday, Aurinia announced it had been granted fast-track designation for its lupus nephritis treatment, voclosporin, by the U.S. Food and Drug Administration.

“It is encouraging that fast-track designation has been granted for voclosporin and we look forward to working closely with FDA as we complete the Aura trial,” said Aurinia’s vice-president of regulatory affairs and quality, Lawrence Mandt. “This designation demonstrates the substantial unmet medical need for patients with LN and potentially helps move a promising therapy through the FDA more rapidly.”

Pearlstein says yesterday’s development is a real positive for the company.

“Upon further review of recent academic studies [BMJ, Aug 2015], we’ve determined a Fast Track designation increases a drug’s prospects of receiving FDA approval, which we have reflected in our model as an increase in the probability of success to 35% from 30%,” said Pearlstein. “A company that receives Fast Track designation for a drug may be eligible for more frequent meetings and communication with the FDA, eligibility for Accelerated Approval and Priority Review pending relevant criteria, and a rolling review for completed sections of its New Drug Application (NDA). Fast Track designation must be requested at the discretion of the company and can be initiated at any time during the drug development process. The FDA reviews the request and decides whether the drug fills an unmet medical need in a serious condition. There is still no FDA approved drug for LN, and only one drug approved for SLE (systemic lupus erythematosus), the parent disease. We believe the unique mechanism of action of voclosporin distinctively positions the company in the lupus market.”

In a research update to clients today, Pearlstein maintained his “Buy” rating on Aurinia Pharmaceuticals, but raised his one-year price target on the stock from (U.S.) $7.50 to (U.S.) $8.25, implying a return of 217 per cent at the time of publication.