AUPH - Why Is Aurinia Pharmaceuticals (AUPH) Stock Down 30%?
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Shares of Aurinia Pharmaceuticals (NASDAQ:AUPH) stock are down 30% today after the company reported its latest financial results and lowered its forward guidance.
AUPH stock is one of the top trending tickers on Stocktwits today following decent financial results not only for the third quarter but also through the first nine months of the year. However, the company, which is based in Canada, cut its guidance for the remainder of the year. This raised concerns among investors and prompted today’s sharp selloff.
Prior to today, AUPH stock had declined 66% this year and was trading at $7.61 a share.
What Happened With AUPH Stock?
The Canadian biotech firm reported better-than-expected Q3 earnings but lowered its full-year guidance due to weak demand for its lupus nephritis therapy called Lupkynis. Aurinia said it now expects Lupkynis sales of $100 million to $105 million for all of this year, down from a previous forecast of $115 million to $135 million.
The lowered sales guidance has investors hitting the sell button on AUPH stock. However, investors might be overreacting given that the company announced that its Q3 revenue more than tripled from a year ago to $55.8 million due, in large part, to European approval of Lupkynis this past September. Revenue from Lupkynis sales rose 74% year-over-year in the quarter to $25.5 million.
Why It Matters
Investors were quick to react to the earnings and guidance of Aurinia Pharmaceuticals, a small biotechnology company focused on treatments for autoimmune diseases such as lupus. AUPH has been under pressure all year, and the steep decline in the share price is worsening today on the company’s lowered guidance.
However, the cut to its sales outlook overshadows the fact that Aurinia posted solid results for the third quarter and first nine months of the year, with sales of its main Lupkynis treatment growing following European approval. Also noteworthy is that the company’s net loss in the third quarter declined 82% to $9 million. The company currently has $376 million of cash on hand and forecasts revenue of $135 million to $229 million for 2022 and 2023.
What’s Next
Investors are clearly focusing on Aurinia Pharmaceuticals’ lowered guidance and ignoring what was a strong earnings print. While unfortunate, it looks like AUPH stock is set for a big downturn today, which will only hurt the company’s share price further. As such, investors may want to remain on the sidelines with this stock until the dust settles from its latest earnings announcement.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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