Here's Why Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) Should Continue To Run

Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) gained more than 30% on its market capitalization on Tuesday, on what – at first glance – looks to be some relatively innocuous news. Dig a little deeper, however, and the news is very relevant, and its implications suggest that the run could be just the beginning of a longer term upside revaluation.Here's what happened, and why it's important.So, the latest release addresses the acceptance of the company's presentation at the the National Kidney Foundation 2017 Spring Clinical Meetings. It's a late breaking acceptance, and it's rooted in data that the company released during the middle of last week. The data details the outcome of a phase II study in a condition called lupus nephritis (LN) which is a type of lupus that affects the kidneys. There's no current treatment (non that are completely effective, that is) and the drug in question – Voclosporin – is designed to bolster the efficacy of current standard of care.To understand what just happened, a bit of history is necessary.This drug has been in a phase II for more than a year, and data form the study initially hit press mid 2016. That data read out strong in efficacy, but a number of patients died in the active arm of the study (more than in the placebo arm) and markets kind of wrote the drug off as being too dangerous to warrant approval. Just last week, however, Aurinia put out data from an extension of the initial investigation, and this data maintained the efficacy (at 48 weeks, as opposed to 24 weeks) but – additionally – no more patients died in the active arm, while a few more died in control. This is a severe condition, and death is common among sufferers. The concern was that the initial readout suggested Voclosporin accelerates death, whereas the follow up readout suggests the study deaths are not drug related.So that brings readers up to speed – we’ve now got a drug that seems to work very well in a group of patients that really need it, and that (as it turns out) doesn't kill said group of LN sufferers.Aurinia is rushing into a phase III study (target initiation of the second quarter of this year) and if the to-date numbers are replicated in the upcoming pivotal, the drug is a shoo-in for approval when it goes in front of the FDA.So the data that Aurinia reported last week resulted in a market cap surge, but why did the company run up on the news that it's been accepted for presentation? Even with it being late breaking, it's not a 30% revaluation driver, surely? Well, it might be. As we've said, markets are not really looking at the phase III now, they are looking past it to a commercialization strategy. It's assumed the drug will get approved, and while it's risky to take it for granted that the drug will replicate data in the upcoming phase III, risk on sentiment is the name of the game right now in this stock.So, with one eye on commercialization, markets are asking what the company can do to get off to a running start in it's marketing efforts. One thing it can do is get the drug, and its supporting data, in front of the physicians that are going to be prescribing it to patients once it picks up approval. What's the best way to achieve this? Well, to put a scientist on a stage in a room in which said physicians are collected, and to get this scientist to show them the numbers on a big glowing screen in front of them.So that's why the stock is moving, and we see a continuation of this strength as the company presents, and then attempts to build on, the data it's already collected.One to watch.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.