What happened

Shares of Aurinia Pharmaceuticals (AUPH -1.83%) were up by 79.6% this week as of late Friday afternoon, according to data provided by S&P Global Market Intelligence. The biopharmaceutical company, which specializes in treating autoimmune disorders, closed last Friday at $4.32, then rose to as high as $7.80 in the early afternoon this Friday. Its stock is up more than 76% over the past year and it has a 52-week high of $4.07 and a 52-week low of $20.48.

So what

The company announced preliminary and unaudited fourth-quarter numbers and investors liked what they saw. Aurinia reported full-year revenue of $134 million, up 112% over 2021. Revenue for the quarter was $28.4 million, up 20.9% year over year. That growth was due to the company's only marketed product, Lupkynis, which is the only Food and Drug Administration approved oral therapy to treat autoimmune disorder lupus nephritis.

The big jump wasn't just because of the company's finances. On Tuesday, Aurinia said it had settled its patent lawsuit with Sun Pharma regarding Lupkynis and patent No. 10,286,036 and Sun's dry-eye treatment, Cequa. The lawsuit had been a negative factor on the stock price for both companies, so the settlement was welcome news.

Aurinia may only have one approved drug in Lupkynis, but it has two other promising therapies in its pipeline. AUR200 is a therapy that reportedly promotes B cell survival to treat certain autoimmune and kidney conditions. AUR300 helps regulate M2 macrophages (a type of white blood cells) and decreases inflammatory cytokines, so it could be used to treat conditions where unregulated macrophages lead to certain fibrosis and against certain autoimmune disorders. 

Both AUR200 and AUR300 are in the preclinical stage, but the company said it plans to submit investigational new drug applications for both this year.

Now what

Even with the two motivating factors, the rise of 76% seemed a bit extreme. There was talk that the company might be the focus of a buyout effort, and just the rumor of that would explain why Aurinia's shares jumped, as there was heavy trading volume for the stock. The company has frequently been mentioned as a buyout candidate. It was unusual that the company would release early fourth-quarter and full-year numbers. Last year, the company's annual report was issued on Feb. 28.

Aurinia has solid long-term potential, but thanks to the recent run-up in price, a buy at this point may be a bit risky.