On Friday, Bloom Burton & Co. adjusted its stance on Aurinia Pharmaceuticals (NASDAQ:AUPH), downgrading the stock to Hold from its previous rating of Buy, while also reducing the price target to $8 from $13. The revision follows a strategic review initiated in June 2023 that failed to secure a formal offer to acquire the company.
The pharmaceutical company, known for its development of novel therapies, has decided to halt the development of two of its pipeline drugs, AUR200 and AUR300. This decision comes as a consequence of the unsuccessful attempt to find a buyer, despite the company's anticipation of becoming EBITDA positive later in the current year.
In response to these developments, Aurinia Pharmaceuticals is set to implement a significant reduction in its workforce. The planned cutbacks will affect 25% of its total staff, as the company restructures its operations amidst the strategic challenges it faces.
The discontinued development of AUR200 and AUR300 represents a setback for Aurinia, which had been progressing in its efforts to expand its treatment offerings. The decision to stop these programs will likely have implications for the company's future product portfolio and revenue potential.
The downgrade and price target adjustment by Bloom Burton reflect a recalibration of expectations for Aurinia's stock performance. Investors and stakeholders are now provided with a revised outlook on the company's valuation, aligning with the latest developments and the strategic path forward for Aurinia Pharmaceuticals.
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