FDA Turmoil Spills Over To Aurinia Pharma As Lawsuit Targets Ex-Drug Review Chief — Retail Traders Cry ‘Stock Manipulation’

• The development comes shortly after George Tidmarsh took a potshot against Aurinia Pharma’s kidney inflammation drug in a now-deleted LinkedIn post.
• In announcing his resignation, he reportedly alleged that a new FDA drug approval program “injected politics into the drug review program, superseding decisions based on science.”
• Retail traders on Stocktwits saw Tidmarsh’s Aurinia attack as a “stock manipulation” move.

Aurinia Pharmaceuticals, Inc. (AUPH) was among the top five trending equities on Stocktwits late Sunday as retail traders discussed reports regarding developments following a lawsuit filed by the company against Dr. George Tidmarsh, who served as the director of the FDA’s Center for Drug Evaluation and Research (CDER) and was appointed to the post on an interim basis in late July.

Tidmarsh’s Rapid Exit

A New York Times report stated on Sunday that Tidmarsh said in an interview that he was placed on administrative leave on Friday after he raised concerns over the legality of a new program that was put in place to approve drugs rapidly, reasoning that the new program “injected politics into the drug review program, superseding decisions based on science.”

The Department of Health and Human Services (HHS) placed him on leave, pending the outcome of an investigation. Tidmarsh claimed that the move may have been a preemptive one to his offer to resign in protest against the new program.

In the Times interview, Tidmarsh said he didn’t want to work in a toxic environment, attributing it to Dr. Vinay Prasad, who returned as chief medical and scientific officer at the Center for Biologics Evaluation and Research (CBER) and also oversaw vaccines and gene therapies. 

Tidmarsh took exception to an October FDA announcement that it would approve a slate of drugs in record time. “The effort was going to basically change the entire paradigm of the legal underpinnings of drug approvals that have for decades supported the actions on the safety and effectiveness of drugs,” he said. “There was insufficient legal support for what they wanted to do, and so I didn’t agree.”

The Aurinia Connection

HHS’s move came after Kevin Tang, the chair of Aurinia Pharma, filed a complaint against Tidmarsh on Sunday, alleging that the latter has acted out of his “longstanding personal vendetta against Tang, STAT reported. Tidmarsh previously served as CEO of La Jolla, with Tang serving as the company’s chair at that time.

Tidmarsh claimed in a LinkedIn post, which has since been retracted, that companies working on lupus nephritis therapies haven‘t conducted post-approval studies to “demonstrate a benefit on hard clinical endpoints,” according to Biospace.

Posting on LinkedIn on Sept. 30, Tidmarsh said, “We have approved drugs with significant toxicity like vocolosporin [Lupkynis’ active ingredient] that has not been shown to provide a direct clinical benefit for patients. He also stated that “for some diseases such as lupus nephritis, companies have not run trials to demonstrate a benefit on hard clinical endpoints.”

Lupkynis is Aurinia’s FDA-approved oral medication for treating lupus nephritis, or kidney inflammation caused by an autoimmune disorder. It was approved in January 2021. Responding to the post, Aurinia said it “stands behind the favorable benefit/risk profile” of Lupkynis. For the six months ended June, the drug fetched $126.5 million in revenue for Aurinia, marking a 23% year-over-year increase. It accounted for 96% of the company’s revenue for the period.

In a post on X, STAT’s Adam Feuerstein stated that the lawsuit filed by Aurinia also accused Tidmarsh of extorting money from American Labs, a private company owned by Tang that supplies ingredients for a thyroid medicine. Tidmarsh reportedly directed the FDA to ya nk thyroid drugs off the market to hurt American Labs.

What Retail’s Saying

On Stocktwits, retail sentiment toward Aurinia Pharma stock remained ‘bullish’ as of late Sunday, and the retail chatter also stayed high. The message volume over the seven days, ending late Sunday, climbed about 300%.

 A bullish watcher called Tidmarsh’s action “stock manipulation.” Another user also shared a similar view. “I'm almost certain Tidmarsh wrote this post to drive down the stock price. He bought Aurinia shares at a low price. Now there's an investigation, so he preferred to resign,” they said.

Aurinia Pharma stock is up about 47% this year. Although the stock shed 4% in the two days after Tidmarsh’s post, it rallied 8.66% on Friday.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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