What happened

Shares of small-cap autoimmune disease specialist Aurinia Pharmaceuticals (AUPH 1.43%) were down by a hefty 13.5% as of 10:50 a.m. ET Friday morning. This double-digit move southward was also accompanied by a healthy surge in the stock's daily volume.

What's sparking this sudden sell-off? Yesterday, Aurinia announced the hiring of three new executives. Specifically, the company said that Volker Knappertz, M.D., will become its executive vice president of research and development, Scott Habig will take over as chief commercial officer, and DeDe Sheel will become vice president of investor relations. 

So what

Why are investors giving the biotech's hiring spree a thumbs-down? Aurinia has long been the subject of the buyout rumor mill. As a result, there's no doubt that some investors bought this stock looking for a quick buck via a premium tender offer.

However, these various rumors have all turned out to be a big nothing burger. And now with the company hiring several new executives to shore up the launch of its oral lupus nephritis medication, Lupkynis, a buyout now seems like a long shot. Armed with this insight, it's not surprising that some shareholders are throwing in the towel today. 

Now what

Is Aurinia's stock worth buying on this latest dip? Launching a novel medication as a smaller biopharma is a tough road. There's a very good reason why most small-cap drugmakers with important new products either get bought out or end up signing licensing deals with larger partners. The fact of the matter is that it takes a seasoned sales force, along with a well-oiled infrastructure, to turn a recently approved medication into a commercial success. With this in mind, investors may want to wait on more sales data before buying Aurinia's stock.