Buy The Dip On Aurinia Pharmaceuticals Inc (NASDAQ:AUPH)

It's not every day that we agree with out competitors over at The Street, and especially with the pack's supposed biotech guru Adam Feuerstein. However, in the wake of a just announced financing from biotech company Aurinia Pharmaceuticals Inc (NASDAQ:AUPH), and given the market's response to said financing, we've finally found some common ground.Regular readers will know this is one we have covered in the past.In our most recent coverage, back on March 8, we concluded that the company had plenty of run room left near term, and that – as a longer-term biotech play – it could be a real winner. At the time, Aurinia had just been accepted for a late breaking presentation at the National Kidney Foundation 2017 Spring Clinical Meetings, and had jumped close to 10% on its reporting of the acceptance. The driver behind this jump was the focus of our coverage, but for those not wanting to click away, we basically painted it as a chance to get a head start on the commercialization phase of the drug in question – Voclosporin.There's a phase 3 study for the drug about to kick off, so there's hurdles left to be cleared. However, strong prior data suggests that the phase 3 should be no problem, and while markets seem to be expressing concern over an endpoint change, we don't see this as being a problem either. Getting phase 2 data in front of the doctors that are going to be prescribing this drug, which the conference gives Aurinia a chance to do, is a smart (and potentially future rewarding) opportunity.Fast forward a week, and Aurinia takes a 20% hit on the news that it is pricing an offering at a 30% discount to its then-current PPS.Sure, this sort of discount isn't ideal, but longer-term, it's essentially irrelevant. We say irrelevant, it is more accurate to say it is strongly indicative of long-term strength. The aim was to bring in a fresh round of capital that will fund the phase 3 mentioned above, and – and here is an equally important point – bring in a roster of institutional interest that is going to support the company long term.This isn't about generating a quick one or two dollar return on a small short term position. It is about the smart money getting in on the back of the phase 2 data, holding through the phase 3 in anticipation of equally positive results, and benefiting longer-term from the revenue potential of Voclosporin as and when it hits the shelves in its target lupus nephritis indication.The shorter-term operators aren't happy with the pricing, and this is understandable – to a degree. Given our previous thesis, however, that there is plenty of long-term run room for this company available on an exposure at current prices, the recent decline only really means one thing – an opportunity to pick up an entry at a discount. A discount, and in line with (or not far above, at least) the price at which institutional investors have just secured their long-term positions.This is something we see all the time in the biotech space – the market's interpretation of a recent event creating a price/value discrepancy. These raises are not carried out to fund general and admin expense, they are here to fund the company through to its next major catalyst, and to allow it to start generating revenues on its lead asset. As such, the dilutive impact of a discount issue simply doesn't have the same implications as it would if this was an issue designed to raise capital to meet salary, for example.Our bias here, then, remains exactly the same. This is a very strong drug in a potentially highly rewarding indication, with a flurry of near-term catalysts and – now – a raft of institutional support behind it.Readers that took heed of our initial coverage could have gotten in for basically the same price of the offering, but who's counting?We will be updating our subscribers as soon as we know more. For the latest updates on AUPH, sign up below!Disclosure: We have no position in AUPH and have not been compensated for this article.