Kidney drug developer Aurinia fails to clinch a sale, sources say

Aurinia Pharmaceuticals

15/02/2024 10:00

By David  Carnevali
       NEW YORK, Feb 15 (Reuters) - Aurinia Pharmaceuticals
 AUPH.O , the kidney therapies developer that was pushed by
activist hedge fund MKT Capital to sell itself, failed to
attract binding offers and will embark on share buybacks and
cost cuts instead, people familiar with the matter said.  
    Aurinia plans to announce later on Thursday it will conclude
the strategic review it launched at the end of June without a
deal, after receiving only one non-binding expression of
interest from more than 60 parties it contacted, the sources
said. That expression of interest did not result in a formal
offer, the sources added.
    The outcome reflects the challenges Aurinia faces in scaling
up its flagship drug Lupkynis. Held back by the drug's
development cost and slow ramp, the company has yet to turn a
profit.
        Its shares have dropped 80% from the peak of takeover
speculation in October 2021, and the company now has a market
value of $1.1 billion.
    Aurinia plans to roll out a $150 million share buyback
program and will stop its research on immunotherapies to focus
on Lupkynis, which hit the market in 2021, according to the
sources. The move will save it as much as $55 million annually,
the sources said. 
    Aurinia declined to comment.
    Lupkynis is used to treat lupus nephritis. The kidney
inflammatory disease is estimated to affect almost 135,000
people in the U.S., mainly of Black, Asian and Hispanic
ethnicity, according to Aurinia. 
    Aurinia generated $130.4 million in revenue in the first
nine months of 2023, up 24% from the first nine months of 2022. 
    The company operates out of Edmonton, Alberta and Rockville,
Maryland. Its CEO Peter Greenleaf has led the company since 2019
after his two predecessors, Charles Rowland and Richard
Glickman, lasted only about one year and two years on the job,
respectively. 
    Glickman, who founded the company, was in charge the first
time Aurinia formally explored a sale without success in 2018,
the sources said. 

 (Reporting by David Carnevali in New York; Editing by Sonali
Paul)
 ((David.Carnevali@thomsonreuters.com))