Aurinia Pharma Holder MKT Pushes Company to Explore Sale

An Aurinia Pharmaceuticals Inc. shareholder is calling the company to start a strategic review and explore prospects for a sale of the entire business.

(Bloomberg) — An Aurinia Pharmaceuticals Inc. shareholder is calling the company to start a strategic review and explore prospects for a sale of the entire business. 

MKT Capital Ltd. also is asking shareholders to withhold support for the reelection of three Aurinia Pharma board members, including Chief Executive Officer Peter Greenleaf as well as Chairman George Milne and Compensation Committee Chair Joseph Hagan, according to a letter reviewed by Bloomberg News. 

The investment firm, which said it owns 4.2% of the company’s stock, said the Canadian drugmaker could be worth as much as $28 a share. Aurinia Pharma’s stock closed at $10.71 on Friday in New York, giving it a market value of $1.5 billion. The company’s shares have fallen 6% in the past year.

A representative for Aurinia Pharma didn’t immediately respond to a request for comment outside of regular business hours.

In 2021, Aurinia Pharma introduced a FDA-approved oral treatment for adults with lupus nephritis, a kidney disorder. MKT Capital said the company had failed to “broaden its distribution or grow sales” under the current leadership. It also saw turnover of key executives such as its chief commercial officer. 

“We believe Aurinia represents an attractive asset that a well-capitalized buyer can acquire to begin effectively monetizing the highly valuable Lupkynis drug, which has been mismanaged by current leadership,” MKT Capital said.

The investment firm also criticized Aurinia Pharma for what it said were overly generous executive pay packages with sizeable stock and option awards. The drugmaker gave the CEO about $26 million of compensation between 2019 and 2022, and the board signed off on an “extremely dilutive and problematic” stock option plan in 2020, according to MKT Capital.

Bristol-Myers Squibb Co. approached Aurinia Pharma about a takeover in 2021, Bloomberg News reported at the time. The conversations didn’t lead to a transaction. 

(Update with details on executive departures, compensation from fifth paragraph.)

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