Long categorized as a takeover target, autoimmune disease specialist Aurinia Pharmaceuticals has remained independent, to the frustration of some investors who believe the Canadian company has not maximized its opportunity with lupus nephritis drug Lupkynis since its approval from the FDA in January 2021.
Thursday, Aurinia tamped down some of the unrest, naming its founder and former CEO Robert Foster to its board of directors.
The appointment comes as part of a deal with major stockholder MKT Capital, which holds a 4.2% stake in the company. Aurinia has come to a “cooperation agreement” with the investment management firm, the company said in a release.
“He has a wealth of institutional knowledge, deep biotech leadership experience, and has led successful mergers, acquisitions, and commercialization deals,” Aurinia’s chairman Daniel Billen, Ph.D., said of Foster. “These skills all will be helpful as we conduct our strategic review and continue the successful commercialization of Lupkynis.”
The agreement comes four months after Aurinia Chairman George Milne and member Joseph Hagan resigned from the board under pressure from MKT at the company’s annual meeting. Then in June, the company revealed that it was considering a “sale, merger or other strategic transaction.” With both of the announcements, Aurinia saw its share price increase.
“We are confident that meaningful value creation is on the horizon for Aurinia shareholders now that the board has initiated a strategic review and made significant governance enhancements,” MKT founder Antoine Khalife said in Thursday’s release. “We look forward to supporting Dr. Foster and the rest of the board as it oversees a comprehensive review of alternatives.”
Foster, currently the CEO of Hepion Pharmaceuticals, knows the art of the deal. He discovered Lupkynis, aka voclosporin, in the 1990s when he was CEO of Isotechnika Pharma. In 2002, Foster structured a $215 million licensing agreement with Roche for voclosporin for kidney transplant immunosuppression.
In August, Aurinia bumped up its 2023 sales projection for Lupkynis from between $120 million and $140 million to a range of $150 million to $160 million, which is a long way from the blockbuster trajectory forecast by Wall Street for the drug.
In 2021, soon after Lupkynis’ approval, Aurinia entertained buyout overtures from Bristol Myers Squibb. Other companies reported to have interest included GSK, Roche and Otsuka.