Aurinia Pharma has a 56 per cent upside, Mackie Research says

Mackie Research analyst André Uddin is bullish on Canadian drug development company Aurinia Pharmaceuticals (Aurinia Pharmaceuticals Stock Quote, Chart NASDAQ:AUPH), whose calcineurin inhibitor drug voclosporin could reach global sales of more than $770 million in ten years time.

BC-based Aurinia released its fourth quarter and full year 2018 financials on Tuesday, with the company reporting zero revenues for Q4 and a net loss of $14.6 million or $0.17 per share. (All figures in US dollars.)

“The team at Aurinia has made extraordinary progress throughout 2018 by achieving a number of significant clinical milestones with voclosporin, and we are excited for what lies ahead in 2019,” CEO Richard Glickman said. “In addition to completing enrolment in the Aurora Phase III trial ahead of schedule last September, we also released Phase 2a dry eye study results with VOS that we believe further demonstrate the potential of voclosporin.”

Uddin says at the moment financials are less important for the clinical stage company, while noting that the net loss was greater than his expected loss of $9.6 million, attributed to higher R&D expenses. The analyst notes that Aurinia finished the year with $125.9 million in cash and zero debt, while in Q1 of 2019 the company completed an at-the-market offering of $30 million and received $1.5 million from option exercises.

Uddin says that the Phase III Aurora trial should bring results by Q4 of 2019, with Aurinia following up with an NDA submission in Q2 of 2020 and the FDA’s decision expected by Q4 of 2020.

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“We believe voclosporin is an asset with significant value. In the lupus nephritis market, no treatment has been available – we believe voclosporin would be the first one with potential global peak sales of over $770 million. In the DES market, a drug like voclosporin showing superiority relative to Restasis (a blockbuster drug) should also garner decent market share,” says Uddin in a client update on Wednesday.

Uddin is maintaining his “Speculative Buy” rating for AUPH with a price target of $10.00, representing a projected return of 56 per cent at the time of publication.