The potential suitors of Aurinia Pharmacueticals

It's in the air, buyout season. Here's a graph of the cash on hand for each Big Pharma company that has been rumored or has expressed some interest in acquiring another company. We think one of these will buy Aurinia Pharmaceuticals (AUPH) out in the coming months to year. We think they could be bought out from 6-9 billion USD which would price the stock at 45-75 a share respectively. Points on these potential acquirers below:

Points taken from the graph:

1. GSK and Astrazeneca seem to be tight in a race and holding enough cash so they could put a down payment for Aurinia and take out debt to acquire them. It is worthy to take note that 2 credible sources (UK Times newsletter and the other Bloomberg) wrote on these two companies "sniffing" around Aurinia. GSK, as mentioned by @Fugitive447 (a user on stocktwits) sold some assets to boost cash on hand. In my opinion GSK will acquire AUPH because GSK wants the monopoly on Lupus Nephritis. Astrazeneca, seems to have more cash built up currently which is another interesting aspect, they may be bidding and trying to give better offers potentially. GSK owns Benlysta which is the only competing drug that has been approved by the FDA a month before Lupkynis (Aurinia's brand name drug).

2. I found that this shows that these companies are positioned to buy and each set shows a slightly different story. For example if you take a look at BIIB, they are desperately needing a pipeline and the Federal Trade Comission would likely agree with a merger for them. BIIB also has in the past disclosed that they are looking into finding a drug to treat Lupus related sickness.

3. Merck & Co is going to be infused with 9 billion in the coming future, I think they could potentially submit a bid. They receive this infusion in June 1st.

4. Roche has a large market cap, I could not find all of the cash and cash equivs but I did see that they try to hold around 5-6 billion.

5. Takeda, Otsuka & Sanofi have progressively increased their cash from when Aurinia announced their Topline Phase 3 results which really derisked the company from the data that they presented. Potentially 1 of them may be saving for an acquisition.

Points to consider outside of this information:

1. These indicators may not be very accurate in prediction of an acquisition due to many factors left out, but this simplified view may help a bit in the sense of understanding a company's direction.

2. I did not look at debt per quarter, but it may be something I tag on in the future.

3. Acquisitions could possibly be all cash offers, share swaps, pulling out loans in the low interest environment to pay for Aurinia and a mixture of all three.

I hope this helps!

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Brad Mitchell

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