What happened

Shares of Aurinia Pharmaceuticals (AUPH 3.74%), a clinical-stage biopharmaceutical company, are on the move after the U.S. Patent and Trademark Office (USPTO) issued an important notice. Investors looking forward to long-term market exclusivity pushed the biotech stock 14.9% higher as of 3:47 p.m. EST on Monday.

So what 

Doctors have been using ciclosporin to treat autoimmune disorders since the 1980s, and Aurinia's voclosporin is a slightly modified version of the old standby that isn't much younger. Since most composition-of-matter patents last just 20 years, Aurinia had to find another way to protect voclosporin's market exclusivity.

Happy guy wearing a vest and tie.

Image source: Getty Images.

The stock jumped today because it looks like the USPTO will soon issue a patent for Aurinia's only new drug candidate that protects the dosing protocol used in the pivotal Aurora study with lupus nephritis. Dosage protocols are a popular tool for extending the life of decades-old drugs, which means Aurinia probably won't have to worry about generic competition until December 2037 at the earliest.

Check out the latest Aurinia earnings call transcript.

Now what

Aurinia finished enrolling lupus nephritis patients in the Aurora study last September, and top-line results should be ready in the fourth quarter. If Aurora repeats results we saw in a smaller study, a new drug application for voclosporin as a lupus treatment could be ready to submit in the first half of 2020.

There are enough advanced-stage lupus patients in need of a new treatment option to make voclosporin a blockbuster drug, and an expansion to treat dry eye syndrome with an ophthalmic solution of the drug could make Aurinia a top stock in the years ahead. In a head-to-head trial with a standard treatment for dry eye, voclosporin wiped the floor with its potential competitor, Restasis.