Net revenue increased to $41.5 million for
second quarter of 2023; 47% over the prior year second quarter
Increases 2023 revenue guidance range to $150 -
$160 million from net product sales of LUPKYNIS® (voclosporin)
Conference call to be hosted today at 8:30 a.m.
ET
Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the
Company) today issued its financial results for the three and six
months ended June 30, 2023. Amounts are expressed in U.S.
dollars.
Total net revenue was $41.5 million for the three months ended
June 30, 2023, compared to $28.2 million in the prior year three
months ended June 30, 2022, representing growth of approximately
47% year over year. Year to date net revenue increased to $75.9
million for the six months ended June 30, 2023 compared to $49.8
million for the same time period for 2022, representing growth of
approximately 52% period over period.
“We are extremely pleased with our results in the second quarter
of 2023. Building on three successful quarters in a row, this
represents our most successful quarter to date from a net revenue
perspective,” said Peter Greenleaf, President, and Chief Executive
Officer of Aurinia. “Strong commercial execution continues as we
see further utilization of LUPKYNIS® (voclosporin) across the lupus
nephritis marketplace. Moreover, we are excited by the depth of
usage in nephrology and the continued expansion into rheumatology.
Our marketing and selling efforts continue to produce patient start
forms (PSFs), patients on therapy (POT), wallets shipped, and net
product revenue at or near all-time highs.”
For the fiscal year 2023, the Company is increasing its net
product revenue guidance to a range of $150 - $160 million for net
product sales of LUPKYNIS. The guidance range is based on
assumptions regarding PSF run rates, consistent conversion rates,
time to convert, persistency, and pricing.
Second Quarter 2023 and Recent Highlights
- Arthritis & Rheumatology published full results of AURORA
2, a Phase 3, double-blind, placebo-controlled extension study out
to 3 years, demonstrating that kidney preservation, sustained renal
response, and reductions in steroid use were achieved with LUPKYNIS
with mycophenolate mofetil (MMF) and low-dose steroids, compared to
MMF and low-dose steroids alone.
- A post-hoc, pooled analysis of the Phase 2 AURA-LV and Phase 3
AURORA 1 studies presented at the annual meetings of the European
League Against Rheumatism (EULAR) and the European Renal
Association (ERA) found that LUPKYNIS with MMF and low-dose
steroids resulted in significantly higher renal response rates and
earlier and greater reductions in proteinuria in LN patients with
high proteinuria, compared to MMF and low-dose steroids alone.
- Refined method of use patent (‘991) was issued by the U.S.
Patent and Trademark Office and Orange Book listed.
- Received reimbursement recommendation from National Institute
for Health and Care Excellence (NICE) in the United Kingdom,
Swissmedic marketing authorization in Switzerland and most recently
reimbursement approval in Italy.
- Initiated strategic review of the company in association with
J.P. Morgan Securities LLC as our financial advisor.
LUPKYNIS Product Performance Highlights
- There were approximately 1,911 patients on LUPKYNIS therapy at
June 30, 2023, compared with 1,274 at June 30, 2022, representing
an increase of approximately 50% year over year.
- Aurinia added 451 patient start forms (PSFs) during the three
months ended June 30, 2023, compared to 409 during the three months
ended June 30, 2022, representing an increase of approximately 10%
over the previous period last year.
- As of July 31, 2023, the Company recorded approximately 1,017
PSFs since January 1, 2023.
- Conversion rates remain consistent with more than 89% of PSFs
converted to patients on therapy.
- Time to convert has improved to an all-time high with the large
majority (65%) of patients on therapy by 20 days.
- As of June 30, 2023, 12 month persistency improved to 54% from
51% at March 31, 2023.
Financial Results for the Three and Six Months Ended June 30,
2023
Total net revenue was $41.5 million and $28.2 million for the
three months ended June 30, 2023 and June 30, 2022, respectively.
Total net revenue was $75.9 million and $49.8 million for the six
months ended June 30, 2023 and June 30, 2022, respectively. The
increase is primarily due to an increase in net product revenue
from our two main customers for LUPKYNIS driven predominantly by
further penetration in the LN market.
Total cost of sales and operating expenses for the three months
ended June 30, 2023 and June 30, 2022 were $57.7 million and $64.2
million, respectively. Total cost of sales and operating expenses
for the six months ended June 30, 2023 and June 30, 2022 were
$121.7 million and $123.7 million, respectively. Further breakdown
of operating expense drivers and fluctuations are highlighted in
the following paragraphs.
Cost of sales were $1.6 million for the three months ended June
30, 2023 and June 30, 2022. Cost of sales were $2.0 million and
$1.9 million for the six months ended June 30, 2023 and June 30,
2022, respectively. Cost of sales for both periods ended June 30,
2023 and June 30, 2022 remained consistent due to an increase of
revenues, offset by a write down of FDA process validation batches
that occurred during the second quarter of 2022.
Gross margin for the three months ended June 30, 2023 and June
30, 2022 was approximately 96% and 94%, respectively. Gross margin
for the six months ended June 30, 2023 and June 30, 2022 was
approximately 97% and 96% respectively.
Selling, general and administrative (SG&A) expenses,
inclusive of share-based compensation, were $47.1 million and $51.5
million for the three months ended June 30, 2023 and June 30, 2022,
respectively. SG&A expenses, inclusive of share-based
compensation, were $97.2 million and $96.7 million for the six
months ended June 30, 2023 and June 30, 2022, respectively. The
primary drivers for the decrease in SG&A expense for the three
months ended June 30, 2023 compared to the same period ended June
30, 2022 was a decrease in professional fees and services,
including legal fees incurred during the respective quarters, with
respect to litigation matters that were taking place in the three
months ended June 30, 2022. For the six months ended June 30, 2023
compared to the same period ended June 30, 2022, the increase was
due to an increase in share-based compensation expense and
marketing expenses offset by a decrease in professional fees and
services which includes legal fees.
Non-cash SG&A share-based compensation expense included
within SG&A expenses was $9.8 million and $8.9 million for the
three months ended June 30, 2023 and June 30, 2022, respectively.
Non-cash SG&A share-based compensation expense included within
SG&A expenses, was $17.4 million and $14.9 million for the six
months ended June 30, 2023 and June 30, 2022, respectively.
Research and development (R&D) expenses, inclusive of
share-based compensation, were $12.7 million and $11.5 million for
the three months ended June 30, 2023 and June 30, 2022,
respectively. R&D expenses, inclusive of share-based
compensation expense, were $25.8 million and $24.1 million for the
six months ended June 30, 2023 and June 30, 2022, respectively. The
primary drivers for the increase for the three and six months ended
June 30, 2023 as compared to the same periods ended June 30, 2022,
were an increase in salaries and related employee benefit costs,
share-based compensation expense and clinical supply and
distribution as the Company advances its AUR200 and AUR300 programs
and fulfills the post approval FDA commitments related to LUPKYNIS.
The increase was partially offset by a decrease in contract
research organization costs related to the completion of the AURORA
2 continuation study and drug interaction study, which were
substantially completed in 2022.
Non-cash R&D share-based compensation expense included with
R&D expense was $2.1 million and $1.1 million for the three
months ended June 30, 2023 and June 30, 2022, respectively.
Non-cash R&D share-based compensation expense included with
R&D expenses was $3.7 million and $2.0 million for the six
months ended June 30, 2023 and June 30, 2022, respectively.
Other (income) expense, net was $(3.6) million and $(0.5)
million for the three months ended June 30, 2023 and June 30, 2022,
respectively. Other (income) expense, net was $(3.3) million and
$1.0 million for the six months ended June 30, 2023 and June 30,
2022, respectively. The increase in other income is primarily
related to change in fair value assumptions driven predominantly by
rising interest rates related to our deferred compensation
liability coupled with the foreign exchange gain related to our
monoplant finance liability.
Interest expense was $0.1 million for the three and six months
ended June 30, 2023 due to the commencement of the monoplant
finance lease during the second quarter of 2023. We did not incur
interest expense during 2022.
Interest income was $4.1 million and $0.5 million for the three
months ended June 30, 2023 and June 30, 2022, respectively.
Interest income was $7.9 million and $0.7 million for the six
months ended June 30, 2023 and June 30, 2022, respectively. The
increase between periods is due to higher yields on our investments
as a result of increased interest rates.
For the three months ended June 30, 2023, Aurinia recorded a net
loss of $11.5 million or $0.08 net loss per common share, as
compared to a net loss of $35.5 million or $0.25 net loss per
common share for the three months ended June 30, 2022. For the six
months ended June 30, 2023, Aurinia recorded a net loss of $37.7
million or $0.26 net loss per common share, as compared to a net
loss of $73.1 million or $0.52 net loss per common share for the
six months ended June 30, 2022.
Financial Liquidity at June 30, 2023
As of June 30, 2023, Aurinia had cash, cash equivalents and
restricted cash and short-term investments of $350.7 million
compared to $389.4 million at December 31, 2022. The decrease is
primarily related to the continued investment in commercialization
activities and post approval commitments of our approved drug,
LUPKYNIS, inventory purchases, advancement of our pipeline and the
second capital expenditure payment for the monoplant, partially
offset by an increase in cash receipts from sales of LUPKYNIS.
Aurinia believes that it has sufficient financial resources to
fund its operations, which include funding commercial activities,
such as FDA related post approval commitments, manufacturing and
packaging of commercial drug supply, funding its supporting
commercial infrastructure, advancing its R&D programs and
funding its working capital obligations for at least the next few
years.
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 June
30, 2023 in the Company’s Quarterly Report on Form 10-Q and the
Company’s Annual Report on Form 10-K for the year ended December
31, 2022, including risk factors disclosed therein, which will be
accessible on Aurinia's website at www.auriniapharma.com, on SEDAR
at www.sedarplus.ca or on EDGAR at www.sec.gov/edgar.
Conference Call Details
Aurinia will host a conference call and webcast to discuss the
quarter ended June 30, 2023 financial results today, Thursday,
August 3, 2023 at 8:30 a.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) 645-4404 (Toll-free
U.S. & Canada). An audio webcast can be accessed under
“News/Events” through the Investors section of the Aurinia
corporate website at www.auriniapharma.com. A replay of the webcast
will be available on Aurinia’s website.
About Lupus Nephritis
Lupus Nephritis is a serious manifestation 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 about
one-third of these people are diagnosed with lupus nephritis at the
time of their SLE diagnosis. About 50 percent of all people with
SLE may develop lupus nephritis. If poorly controlled, lupus
nephritis can lead to permanent and irreversible tissue damage
within the kidney. Black and Asian people with SLE are four times
more likely to develop lupus nephritis and Hispanic people are
approximately twice as likely to develop the disease compared to
White people with SLE. Black and Hispanic people with SLE also tend
to develop lupus nephritis earlier and have poorer outcomes,
compared to White people with SLE.
About Aurinia
Aurinia Pharmaceuticals is a fully integrated biopharmaceutical
company focused on delivering therapies to treat targeted patient
populations with a high unmet medical need that are impacted by
autoimmune, kidney and rare diseases. In January 2021, the Company
introduced LUPKYNIS® (voclosporin), the first FDA-approved oral
therapy for the treatment of adult patients with active lupus
nephritis (LN). The Company’s head office is in Edmonton, Alberta,
its U.S. commercial hub is in Rockville, Maryland, and the Company
focuses its development efforts globally.
Forward-Looking Statements
Certain statements made in this press release may constitute
forward-looking information within the meaning of applicable
Canadian securities law and forward-looking statements within the
meaning of applicable United States securities law. These
forward-looking statements or information include but are not
limited to statements or information with respect to: Aurinia’s
estimates as to annual net product revenue from sales of LUPKYNIS
in the range of $150 - $160 million in 2023; Aurinia’s estimates as
to the number of patients with SLE in the U.S. and the proportion
of those persons who have developed LN at time of SLE diagnosis;
Aurinia’s belief that it has sufficient financial resources to fund
its operations for at least the next few years. It is possible that
such results or conclusions may change. Words such as “anticipate”,
“will”, “believe”, “estimate”, “expect”, “intend”, “target”,
“plan”, “goals”, “objectives”, “may” and other similar words and
expressions, identify forward-looking statements. We have made
numerous assumptions about the forward-looking statements and
information contained herein, including among other things,
assumptions about: the accuracy of reported data from third party
studies and reports; the number, and timing of receipt, of PSFs and
their rate of conversion into patients on therapy; assumptions
relating to pricing for LUPKYNIS and patient persistency on the
product; that Aurinia’s intellectual property rights are valid and
do not infringe the intellectual property rights of third parties;
Aurinia’s assumptions relating to the capital required to fund
operations; the assumption that Aurinia’s current good
relationships with its suppliers, service providers and other third
parties will be maintained; assumptions relating to the burn rate
of Aurinia’s cash for operations; assumptions related to timing of
interactions with regulatory bodies; and that Aurinia’s third party
service providers will comply with their contractual obligations.
Even though the management of Aurinia believes that the assumptions
made, and the expectations represented by such statements or
information are reasonable, there can be no assurance that the
forward-looking information will prove to be accurate.
Forward-looking information by their nature are based on
assumptions and involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance, or
achievements of Aurinia to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking information. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in forward-looking statements or information. Such risks,
uncertainties and other factors include, among others, the
following: Aurinia’s actual future financial and operational
results may differ from its expectations; difficulties Aurinia may
experience in completing the commercialization of voclosporin; the
market for the LN business may not be as estimated; Aurinia may
have to pay unanticipated expenses; Aurinia may not be able to
obtain sufficient supply to meet commercial demand for voclosporin
in a timely fashion; unknown impact and difficulties imposed by the
widespread health concerns on Aurinia’s business operations
including nonclinical, clinical, regulatory and commercial
activities; the results from Aurinia’s clinical studies and from
third party studies and reports may not be accurate; Aurinia’s
third party service providers may not, or may not be able to,
comply with their obligations under their agreements with Aurinia;
regulatory bodies may not grant approvals on conditions acceptable
to Aurinia and its business partners, or at all; there can be no
assurance that the initiated strategic review will result in
Aurinia pursuing a particular transaction or other strategic
outcome in a timely manner, or at all; and Aurinia’s assets or
business activities may be subject to disputes that may result in
litigation or other legal claims. Although Aurinia has attempted to
identify factors that would cause actual actions, events, or
results to differ materially from those described in
forward-looking statements and information, there may be other
factors that cause actual results, performances, achievements, or
events to not be as anticipated, estimated or intended. Also, many
of the factors are beyond Aurinia’s control. There can be no
assurance that forward-looking statements or information will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
you should not place undue reliance on forward-looking statements
or information. All forward-looking information contained in this
press release is qualified by this cautionary statement. Additional
information related to Aurinia, including a detailed list of the
risks and uncertainties affecting Aurinia and its business, can be
found in Aurinia’s most recent Annual Report on Form 10-K and its
other public available filings available by accessing the Canadian
Securities Administrators’ System for Electronic Document Analysis
and Retrieval (SEDAR) website at www.sedarplus.ca or the U.S.
Securities and Exchange Commission’s Electronic Document Gathering
and Retrieval System (EDGAR) website at www.sec.gov/edgar, and on
Aurinia’s website at www.auriniapharma.com.
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
June 30, 2023
December 31, 2022
ASSETS
Current assets
Cash, cash equivalents and restricted
cash
$
81,707
$
94,172
Short-term investments
269,006
295,218
Accounts receivable, net
19,499
13,483
Inventories, net
33,155
24,752
Prepaid expenses
11,332
13,580
Other current assets
1,208
1,334
Total current assets
415,907
442,539
Non-current assets
Other non-current assets
1,518
13,339
Property and equipment, net
3,650
3,650
Acquired intellectual property and other
intangible assets, net
5,683
6,425
Finance right-of-use asset, net
117,428
—
Operating right-of-use assets, net
4,714
4,907
Total assets
$
548,900
$
470,860
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities
41,375
39,990
Deferred revenue
3,228
3,148
Other current liabilities
2,088
2,033
Finance lease liability
14,016
—
Operating lease liabilities
954
936
Total current liabilities
61,661
46,107
Non-current liabilities
Finance lease liability
79,422
—
Operating lease liabilities
6,814
7,152
Deferred compensation and other
non-current liabilities
8,711
12,166
Total liabilities
156,608
65,425
SHAREHOLDER’S EQUITY
Common shares - no par value, unlimited
shares authorized, 143,369 and 142,268 shares issued and
outstanding at June 30, 2023 and December 31, 2022,
respectively
1,196,480
1,185,309
Additional paid-in capital
98,832
85,489
Accumulated other comprehensive loss
(1,020
)
(1,061
)
Accumulated deficit
(902,000
)
(864,302
)
Total shareholders' equity
392,292
405,435
Total liabilities and shareholders'
equity
$
548,900
$
470,860
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(unaudited)
Revenue
Product revenue, net
$
41,100
$
28,148
$
75,437
$
49,640
License, royalty and collaboration
revenue
394
43
466
176
Total revenue, net
41,494
28,191
75,903
49,816
Operating expenses
Cost of sales
1,563
1,599
1,984
1,855
Selling, general and administrative
47,081
51,532
97,205
96,729
Research and development
12,650
11,525
25,808
24,145
Other (income) expense, net
(3,630
)
(476
)
(3,340
)
958
Total cost of sales and operating
expenses
57,664
64,180
121,657
123,687
Loss from operations
(16,170
)
(35,989
)
(45,754
)
(73,871
)
Interest expense
(65
)
—
(65
)
—
Interest income
4,101
483
7,915
745
Net loss before income taxes
(12,134
)
(35,506
)
(37,904
)
(73,126
)
Income tax (benefit) expense
(642
)
9
(206
)
19
Net loss
$
(11,492
)
$
(35,515
)
$
(37,698
)
$
(73,145
)
Basic and diluted loss per share
$
(0.08
)
$
(0.25
)
$
(0.26
)
$
(0.52
)
Weighted-average common shares outstanding
used in computation of basic and diluted loss per share
142,777
141,726
142,904
141,734
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803258324/en/
Investors/Media: ir@auriniapharma.com
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