On May 14, 2020 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH / TSX:AUP) ("Aurinia" or the "Company") reported financial results for the first quarter ended March 31, 2020 and provided an update on recent operational highlights (Press release, Aurinia Pharmaceuticals, MAY 14, 2020, View Source [SID1234558169]). Amounts, unless specified otherwise, are expressed in U.S. dollars.
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"We are fortunate that the global COVID-19 pandemic has had minimal impact on Aurinia’s operations, and we have maintained our timelines to ensure the filing of the voclosporin NDA by the end of the second quarter and hopefully obtain approval in early 2021," commented Peter Greenleaf, President and Chief Executive Officer of Aurinia. "Following the positive AURORA data reported last December we have strengthened the balance sheet, added world-class commercial expertise including the appointments of Timothy, Max, and Joe, and on-boarded a group of extraordinarily talented commercial leaders and additional staff."
Mr. Greenleaf further stated, "With the establishment of our commercial hub in Maryland, we’re building and preparing for the U.S. launch of voclosporin as the first FDA-approved treatment for lupus nephritis. In addition, the VOS development program remains on target, and we anticipate reporting out top-line results from the Phase 2/3 AUDREY dose-ranging trial of VOS during the fourth quarter of this year."
Dr. Neil Solomons, Chief Medical Officer of Aurinia commented, "With respect to FSGS, our exploratory study has been open for an extended period and due to the continued difficulty identifying and enrolling primary FSGS patients, we’ve decided to adjust our approach. We are preparing to evaluate voclosporin in other proteinuric kidney diseases, while continuing to support patients who have participated in the FSGS exploratory study. As we work to incorporate these broader populations further updates will be available later this year."
First Quarter 2020 Highlights
Pre-NDA Meeting with the U.S. Food & Drug Administration ("FDA") and Rolling New Drug Application ("NDA") Submission
Aurinia held a positive and successful Pre-NDA meeting with the FDA on February 25, 2020. The Company presented information about the safety and efficacy data to be included in the filing, reviewed the format and content of the planned application, and gained agreement on the rolling review plans for filing modules of the NDA. No obstacles were raised by FDA that would prevent submission of the complete NDA by the end of the second quarter as planned.
In March 2020, Aurinia filed the non-clinical module to the FDA followed by the chemistry, manufacturing and controls module in April 2020.
Aurinia remains on track to file the complete NDA to the FDA by the end of the second quarter of 2020.
Recent Director and Officer Appointments
Appointment of Timothy P. Walbert to the Board
On April 20, Aurinia announced the appointment of Mr. Walbert to the Board of Directors. Mr. Walbert has nearly 30 years of experience commercializing pharmaceutical products. Mr. Walbert is currently chairman, president and chief executive officer of Horizon Therapeutics plc. He also served as president, chief executive officer and director of IDM Pharma, Inc., a public biopharmaceutical company which was acquired by Takeda.
Appointment of Joe Miller as Chief Financial Officer
On April 27, Aurinia appointed Mr. Miller as Chief Financial Officer following the retirement of Mr. Dennis Bourgeault, who served in that role since 1998. Mr. Miller will be responsible for developing and leading the Company’s financial operations to effectively support the Company’s rapid growth. Mr. Bourgeault will remain an advisor to the Company to assist with the transition.
Appointment of Max Colao as Chief Commercial Officer and build out of world-class commercial team
On February 25, 2020, Aurinia announced the appointment of Max Colao to the newly created position of Chief Commercial Officer. In addition, Aurinia has recruited an experienced team of leaders responsible for key commercial functions including sales, marketing, market access, and commercial operations.
Financial Liquidity at March 31, 2020
As of March 31, 2020, Aurinia had cash, cash equivalents and short-term investments of $286.1 million compared to $306 million as at December 31, 2019. Net cash used in operating activities was $22.7 million for the first quarter ended March 31, 2020 compared to $13.1 million for the first quarter ended March 31, 2019.
The Company believes that it has sufficient financial resources to fund its current plans, which include conducting its ongoing research and development ("R&D") programs, completing the NDA submission to the FDA, conducting pre-commercial and launch activities, manufacturing and packaging commercial drug supply required for launch, and fund its supporting corporate and working capital needs through 2021.
Financial Results for the First Quarter Ended March 31, 2020
The Company reported a consolidated net loss of $16.5 million or $0.15 per common share for the first quarter ended March 31, 2020, as compared to a consolidated net loss of $12.4 million or $0.14 per common share for the first quarter ended March 31, 2019.
The loss for the first quarter ended March 31, 2020 reflected a reduction of $9.8 million in the estimated fair value of derivative warrant liabilities compared to a reduction of $1.7 million in the estimated fair value of derivative warrant liabilities for the first quarter ended March 31, 2019. The derivative warrant liabilities will ultimately be eliminated on the exercise or forfeiture of the warrants and will not result in any cash outlay by the Company. The outstanding warrants expire on December 28, 2021.
The loss before the change in estimated fair value of derivative warrant liabilities and income taxes was $26.6 million for the first quarter ended March 31, 2020 compared to $14.1 million for the same period in 2019.
R&D expenses increased to $13.8 million for the first quarter ended March 31, 2020 compared to $10.6 million for the first quarter ended March 31, 2019. The increase in these expenses primarily reflected higher costs related to the preparation of the NDA submission and related supporting activities, the ongoing VOS Phase 2/3 AUDREY trial, the AURORA 2 extension trial and the expansion of the medical affairs team to support the launch of voclosporin. Non-cash stock compensation expense charged to R&D also increased to $1.2 million for the first quarter ended March 31, 2020 compared to $862,000 for the comparable period in 2019 reflecting the hiring of a significant number of personnel in 2020 and an increase in the fair value of the stock options granted due to the increase in the Company’s share price.
Corporate, administration and business development expenses increased to $11.1 million for the first quarter of 2020 compared to $3.9 million for the first quarter of 2019. These expenses included the expansion of the commercial team, higher consulting and professional fees, insurance costs, and personnel compensation costs as the corporate organization buildout continued in the first quarter of 2020. Non-cash stock compensation expense charged to corporate, administration and business development also increased to $2.3 million for the first quarter ended March 31, 2020 compared to $742,000 for the comparable period in 2019 reflecting the hiring of a significant number of personnel in 2020 and an increase in the fair value of the stock options granted due to the increase in the Company’s share price.
This press release should be read in conjunction with our unaudited interim condensed consolidated financial statements and the Management’s Discussion and Analysis for the first quarter ended March 31, 2020 which are accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.
Aurinia will host a conference call and webcast to discuss the first quarter ended March 31, 2020 financial results today, Thursday, May 14, 2020 at 4:30 p.m. ET. The webcast can be accessed on the investor section of the Aurinia website at www.auriniapharma.com. To participate in the teleconference please dial +1-877-407-9170 (Toll-free U.S. & Canada).
About Voclosporin
Voclosporin, an investigational drug, is a novel and potentially best-in-class calcineurin inhibitor ("CNI") with clinical data in over 2,600 patients across indications. Voclosporin is an immunosuppressant, with a synergistic and dual mechanism of action. By inhibiting calcineurin, voclosporin blocks IL-2 expression and T-cell mediated immune responses and stabilizes the podocyte in the kidney. Voclosporin may result in a more predictable pharmacokinetic and pharmacodynamic relationship (potentially requires no therapeutic drug monitoring), an increase in potency (versus cyclosporine A), and an improved metabolic profile compared to legacy CNIs. Aurinia anticipates that upon regulatory approval, patent protection for voclosporin will be extended in the United States and certain other major markets, including Europe and Japan, until at least October 2027 under the Hatch-Waxman Act and comparable patent extension laws in other countries with anticipated pediatric extension. Further, a U.S. patent has also been issued covering the voclosporin dosing protocol with a term extending to December 2037, if the FDA incorporates the dosing protocol used in both the AURA and AURORA trials into the product label.