On May 7, 2021 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH / TSX: AUP) ("Aurinia" or the "Company") reported its financial results for the first quarter ended March 31, 2021. Amounts, unless specified otherwise, are expressed in U.S. dollars (Press release, Aurinia Pharmaceuticals, MAY 7, 2021, View Source [SID1234579477]).
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"2021 started with the FDA approval of LUPKYNIS, the first FDA-approved oral treatment for active lupus nephritis – a devastating complication of lupus," commented Peter Greenleaf, President and Chief Executive Officer of Aurinia. "Our pivotal decision and work to build a world-class commercial infrastructure prior to approval ultimately led to Aurinia being able to make LUPKYNIS immediately available to patients and physicians following approval. Since that time, the Aurinia team has been encouraged by the feedback we are receiving from physicians and patients and our confidence has only grown as we continue to understand the tremendous need and value of LUPKYNIS, and work to accelerate broader adoption across the underserved LN population."
Recent Highlights
FDA Approval and Commercial Launch of LUPKYNIS
On January 22, 2021, the FDA approved LUPKYNIS in combination with a background immunosuppressive therapy regimen to treat adult patients with active LN.
Commercial Activities
Engaged with over 6,000 rheumatologists and nephrologists;
Received over 250 patient start forms during the first quarter (covering 48 business days post-FDA approval);
Converted nearly 40% of patient start forms to patients on therapy by the end of the first quarter; and
Launched LUPKYNIS Patient Marketing Campaign, Focus on the Fight, in April 2021.
"Since launch, the commercial team has focused on educating their customers on the urgency needed in reducing proteinuria for patients with active LN. With more than 250 patient start forms and 40% of those patients on therapy after the first two months on the market, more than 6,000 clinical interactions, continued gradual expansion of payor coverage, and our Aurinia Alliance patient support program fully operational, the LUPKYNIS trajectory is on track against our internal projections. Furthermore, we anticipate that our market access will continue to improve as the rate of COVID vaccinations in the United States continues to climb and healthcare centers re-open their doors to patients," commented Max Colao, Chief Commercial Officer at Aurinia.
Upcoming Milestones
Anticipate filing a marketing authorization application (MAA) with the European Medicines Agency (EMA) during the first half of 2021 with partner, Otsuka;
Abstracts discussing voclosporin accepted for presentation at the Annual European Congress of Rheumatology (EULAR 2021 Congress), June 2 – 5, 2021, and at the Nephrology Virtual Congress (ERA-EDTA 2021), June 5 – 8, 2021;
Expect to initiate a study of voclosporin in adolescent patients (VOCAL study) during the second half of 2021; and
Anticipate reporting top-line results from the ongoing AURORA-2 continuation study during the first quarter of 2022.
Financial Liquidity at March 31, 2021
As of March 31, 2021, Aurinia had cash and cash equivalents and investments of $360.9 million compared to $422.7 million at December 31, 2020. The decrease is primarily related to the commercial infrastructure spend to support the launch of LUPKYNIS in addition to an upfront payment made as part of a collaborative agreement with Lonza to build a dedicated manufacturing facility (also referred to as "monoplant") and one-time payment to a related party upon achievement of specific milestones.
Net cash used in operating activities was $53.5 million for the quarter ended March 31, 2021 compared to $22.6 million for the quarter ended March 31, 2020. The increase is primarily due to the commercial infrastructure spend to support the launch of LUPKYNIS in addition to a one-time payment to a related party upon achievement of specific milestones. In the prior year, the Company was still in the development phase of LUPKYNIS and as a result, did not incur any material related selling expenses.
The Company believes that it has sufficient financial resources to fund its current plans, which include funding commercial activities, including our FDA related post approval commitments, manufacturing and packaging of commercial drug supply, conducting our planned research and development (R&D) programs, and operating activities into at least 2023.
Financial Results for the Quarter Ended March 31, 2021
For the quarter ended March 31, 2021, Aurinia recorded a net loss of $50.4 million or $0.40 net loss per common share, as compared to a net loss of $25.9 million or $0.23 net loss per common share for the quarter ended March 31, 2020.
Revenues were $0.9 million and $30 thousand for the quarters ended March 31, 2021 and March 31, 2020, respectively. The increase was the result of the commercial sales of LUPKYNIS, which began in January 2021.
Cost of sales were $48 thousand and nil for the quarters ended March 31, 2021 and March 31, 2020, respectively. The increase was the result of commercial sales of LUPKYNIS and drug substance. Gross margin for the quarter ended March 31, 2021 was approximately 95%.
Selling, general and administrative (SG&A) expenses were $39.3 million and $11.1 million for the quarters ended March 31, 2021 and March 31, 2020, respectively. The increase was primarily due to the expansion of the commercial infrastructure, administrative functions and patient assistance programs to support the launch of LUPKYNIS. SG&A share-based compensation expense for the quarter ended March 31, 2021 was $6.6 million.
R&D expenses were $9.8 million and $13.8 million for the quarters ended March 31, 2021 and March 31, 2020, respectively. The decrease was primarily due to lower Contract Research Organization (CRO) expenses and other third-party clinical trial expenses following the approval of LUPKYNIS, including a reduction in NDA preparation costs, capitalization of supply costs following approval, and termination of the dry eye trial during the fourth quarter of 2020. R&D share-based compensation expense for the quarter ended March 31, 2021 was $1.1 million.
This press release is intended to be read in conjunction with the Company’s unaudited condensed consolidated financial statements and Management’s Discussion and Analysis for the quarter ended March 31, 2021 in the Company’s Quarterly Report on Form 10-Q, which is accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.
Conference Call Details
Aurinia will host a conference call and webcast to discuss the quarter ended March 31, 2021 financial results today, Thursday, May 6, 2021 at 5:00 p.m. ET. The audio webcast can be accessed under "News/Events" through the "Investors" section of the Aurinia corporate website at www.auriniapharma.com. In order to participate in the conference call, please dial +1-888-506-0062 (toll-free U.S.) or +1-973-528-0011 (international); entry code: 662377. A replay of the conference call will also be available on Aurinia’s website approximately two hours after the live call is completed.
About Lupus Nephritis
LN is a serious progression of systemic lupus erythematosus (SLE), a chronic and complex autoimmune disease. About 200,000-300,000 people live with SLE in the U.S. and approximately one out of three of these individuals have already developed LN at the time of SLE diagnosis. If poorly controlled, LN can lead to permanent and irreversible tissue damage within the kidney, resulting in kidney failure. Black and Asian individuals with SLE are four times more likely to develop LN and individuals with Hispanic ancestry are approximately twice as likely to develop the disease when compared with Caucasian individuals. Black and Hispanic individuals with SLE also tend to develop LN earlier and have poorer outcomes when compared to Caucasian individuals.