What happened
Shares of the autoimmune disease specialist Aurinia Pharmaceuticals (NASDAQ: AUPH) are up by a noteworthy 15.5% as of 1:10 p.m. ET Thursday afternoon. The drugmaker's stock is perking up today in response to renewed buyout speculation.
Rumors began to swirl about a possible buyout this morning after Novartis (NYSE: NVS) reportedly said during its research and development day that it will focus on smaller bolt-on acquisitions, instead of megadeals. Earlier this year, Novartis banked a $21 billion windfall by selling its stake in Roche.
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So what
Aurinia has repeatedly been the topic of the buyout rumor mill in 2021. The company has been linked to possible offers from Amgen, Bristol Myers Squibb, GlaxoSmithKline, and now Novartis. Although the Bristol Myers Squibb rumor appeared to have something behind it for a host of reasons, Aurinia has yet to fetch a tender offer from anyone so far. Investors, in turn, probably shouldn't put much stock in this latest rumor -- even though Novartis is flush with cash and Aurinia would fit the bill as a bolt-on acquisition.
Now what
Instead, shareholders should arguably remain focused on Aurinia's organic growth prospects for the time being. Sales of the biotech's Food and Drug Administration-approved lupus nephritis medication Lupkynis are forecast to jump by a healthy 357% next year. That's a solid fundamental reason to own this stock.
So while a buyout would be nice from a share appreciation standpoint, it isn't the only reason to own this biotech right now -- or even the most compelling one. Aurinia, in short, will be a winner for investors, regardless of whether or not it gets bought out.
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George Budwell has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bristol Myers Squibb. The Motley Fool recommends Amgen and GlaxoSmithKline. The Motley Fool has a disclosure policy.
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