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Biotech Surges Again As Novartis Potentially Joins Buyout Ring

Novartis (NVS) said Thursday it’s interested in “bolt-on” deals and investors zeroed in on Aurinia Pharmaceuticals (AUPH), sending AUPH stock flying.




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Aurinia has spent months entertaining takeover speculation. An investor presentation from Novartis outlined the company’s focus on “opportunistic bolt-on acquisitions.” That could put Aurinia in the crosshairs. AUPH stock’s market cap is north of $2.6 billion. The market cap for Novartis is $180.9 billion.

In afternoon trading on the stock market today, AUPH stock soared 14.7% near 20.40. That put the biotech stock at its highest point in two weeks. Novartis stock inched up a fraction near 80.30.

Aurinia sells a lupus treatment called Lupkynis. In the third quarter, Lupkynis sales were nearly $15 million. Aurinia is also working on other treatments for autoimmune and nephrology conditions.

But AUPH stock has boomeranged on takeover rumors. In late November, the company filed a mixed-shelf offering with the Securities and Exchange Commission. This led investors to question whether a buyout might actually be imminent.

AUPH Stock Offering To Fund Operation

Proceeds from the offering will be used to fund operations, Aurinia said in the filing. Still, AUPH stock tumbled on the filing.

On Thursday, Aurinia spokeswoman Dana Lynch said in an email the company “will not comment on rumors or speculation about (mergers and acquisitions).”

Representatives of Novartis didn’t immediately return a request for comment.

AUPH stock has a strong Relative Strength Rating of 87 out of a best-possible 99, according to IBD Digital. This puts shares among leading stocks with RS Ratings of at least 80. The RS Rating tracks a stock’s 12-month performance, pitting it against all other stocks.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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