Aurinia extends losses as analysts cut price targets after Q4 results
The commercial-stage biotech, Aurinia Pharmaceuticals (AUPH -4.7%), is trading lower for the third straight session on Wednesday to reach a seven-month low after several Wall Street analysts trimmed their price targets on the stock citing the company’s lackluster Q4 2021 results.
Despite upbeat remarks from its chief executive ahead of the earnings, Aurinia’s (NASDAQ:AUPH) 2022 sales guidance fell short of expectations as net revenue for the year dropped ~9% YoY to $45.6M while net loss widened ~76% YoY to $181.0M.
Citing COVID-19 headwinds on the topline, Oppenheimer analyst Justin Kim, who has an Outperform rating on the stock, has slashed the price target to $18 from $31 per share to imply a premium of ~50% to the last close.
The analyst wrote that “pandemic headwinds persist, with hints of 4Q21 momentum mired by the omicron variant and new patient start forms totaling 201 PSFs QTD.” The Q4 2021 patient start forms improved by 17% sequentially to reach 477, expanding the 2021 PSF to more than 1,500, the company reported in its earnings release on Monday. “Discordance on ‘aggressive’ 2022 revenue guidance ($115M–$135M) has not helped the tape, as consensus estimates (including our own) perhaps now unrealistically relied upon commercial inflection over steady incremental growth” Kim added.
Meanwhile, Jefferies analyst Maury Raycroft, with a Buy rating on Aurinia (AUPH), has cut the per share target to $29 from $34 to imply a premium of ~142% to the last close. Raycroft attributes the discrepancy between the guidance and Street forecasts to 25% – 30% patient discontinuations estimated for the lupus nephritis therapy, Lupkynis.
However, concerns over intellectual property rights for the treatment appear to have also weighed on company shares recently. In the 10-K report submitted on Monday, Aurinia (AUPH) disclosed a new patent challenge filed by the generic drugmaker Sun Pharmaceuticals on Feb. 24 regarding a key patent for Lupkynis. “We are currently reviewing the petition and considering our response and next steps,” the company said.