- Achieved $50.3 million in total net revenue and $48.1 million
in net product revenue for the first quarter of 2024, representing
year over year growth of approximately 46% and 40% respectively,
and extending the trend of consistent growth in LUPKYNIS®
(voclosporin) sales
- Rapidly completed restructuring while maintaining focus on
commercial execution
- Ahead of prior projections, Company expects to be cash flow
positive, excluding share repurchases, in second quarter 2024, with
estimated cost savings of $50 to $55 million annually
- Company reiterates 2024 net product revenue guidance of $200 to
$220 million
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 first quarter
ended March 31, 2024. Amounts are expressed in U.S. dollars.
Total net revenue was $50.3 million for the three months ended
March 31, 2024 and $34.4 million for the same period in 2023.
representing growth of approximately 46%. Net product revenue was
$48.1 million for the three months ended March 31, 2024 and $34.3
million for the same period in 2023, representing growth of
approximately 40%.
Aurinia rapidly completed its corporate restructuring in the
first quarter, reducing employee headcount by approximately 25%.
The Company discontinued its AUR300 research and development
program and is exploring alternative approaches for AUR200 to
maintain its development momentum. As previously reported, the
Company expects to recognize $50 to $55 million in annual cost
savings, with 75% of those savings recognized in 2024, excluding a
one-time restructuring charge of approximately $7 million incurred
in the first quarter. Following the restructuring, the Company
expects total annualized operating expenses on a go-forward basis
to be in the range of $185 to $195 million, with cash-based
operating expenses of approximately $155 to $165 million.
“We are pleased to be on track to reach positive free cash
flows, excluding share repurchases, in the second quarter of 2024,
ahead of prior projections, further strengthening our financial
position, and with further balance sheet growth, allowing more
strategic flexibility for the Company,” said Peter Greenleaf,
President and Chief Executive Officer of Aurinia. “We recently
achieved several key milestones, including FDA approval of a label
update for LUPKYNIS which now includes long-term efficacy data from
our AURORA Clinical Program. We have also launched an innovative
new marketing campaign to further educate rheumatologists on the
seriousness of lupus nephritis and the urgent need for appropriate
treatment. This momentum demonstrates our full commitment to solid
execution and driving growth, as we continue in our work of
delivering LUPKYNIS to patients in need.”
Earlier this week, Aurinia announced that the FDA has approved a
label update for LUPKYNIS that provides physicians with important
information to treat and manage their lupus nephritis (LN)
patients. Notably, the updated label no longer includes language
indicating that the safety and efficacy of LUPKYNIS has not been
established beyond one year. The label now includes long-term data
from a post-hoc analysis of the AURORA 2 extension study showing
that patients receiving LUPKYNIS achieved sustained complete renal
response at every time point assessed through three years, compared
to mycophenolate mofetil (MMF) and low-dose glucocorticoids alone.
Additionally, the updated label now requires quarterly, rather than
monthly kidney function assessment after the first year of
treatment. The safety profile of LUPKYNIS in the updated label
remains unchanged and is aligned with the safety findings in the
AURORA Clinical Program.
Aurinia recently launched “Know the Signs,” a disease state
education campaign designed to increase awareness among
rheumatologists around the severity of LN, the critical need to
prioritize kidney health for people with systemic lupus
erythematosus (SLE), and to increase screening for LN among people
with SLE.
In addition to the Company’s operational execution, Aurinia has
also released its 2023 ESG report, which details the holistic
approach the Company takes to address environmental, social and
governance priorities, including energy and emissions, addressing
barriers to care among LN patients, (Diversity, Equity and
Inclusion) DE&I practices, employee engagement, and risk
management. The full report is available here.
For the fiscal year 2024, the Company maintains its established
net product revenue guidance for a range of $200 to $220 million.
The guidance range is based on assumptions regarding historical
patient start form (PSF) run rates, consistent conversion rates,
time to convert, persistency, and pricing.
First Quarter 2024 and Recent Highlights
- There were approximately 2,178 patients on LUPKYNIS therapy as
of March 31, 2024, compared to 1,731 as of March 31, 2023.
- In the first quarter, the Company added 448 patient start forms
and approximately 148 new patients who were either restarting
LUPKYNIS or receiving it through a hospital pharmacy, compared to
466 PSFs in the prior year first quarter, representing significant
year-over-year growth.
- From January 1, 2024, through April 28, 2024, the Company added
approximately 582 PSFs and approximately 170 new patients from
restarts and the hospital channel.
- Conversion rates were sustained, with approximately 85% of PSFs
converted to patients on therapy.
- Time to convert was sustained with approximately 60% of
patients on therapy by 20 days.
- The overall adherence rate remained high at approximately 87%
through the first quarter of 2024.
- Persistency continues to improve, with approximately 56% of
patients remaining on therapy at 12 months, 50% at 15 months, and
46% at 18 months.
Financial Results for the Three Months Ended March 31,
2024
Total net revenue was $50.3 million and $34.4 million for the
three months ended March 31, 2024 and March 31, 2023, respectively.
Net product revenue was $48.1 million and $34.3 million for the
three months ended March 31, 2024 and March 31, 2023, respectively.
The Company currently sells to two main specialty pharmacies for
U.S. commercial sales of LUPKYNIS and pursuant to a collaboration
partnership with Otsuka for sales of semi-finished product and
license, collaboration and royalty revenue in Otsuka Territories.
The increase is primarily due to an increase in product sales to
our two specialty pharmacies for LUPKYNIS, driven predominantly by
further penetration of the LN market.
This penetration can be demonstrated by a total of 2,178
patients on therapy as of March 31, 2024, compared to 1,731
patients on therapy as of March 31, 2023. The increase in patients
was driven by 448 additional patients start forms and 148 new
patients who were either restarting LUPKYNIS or receiving it
through a hospital pharmacy during the three months ended March 31,
2024, compared to 466 PSFs received during the three months ended
March 31, 2023. Additionally, our 12-month persistency rate has
increased to 56% at March 31, 2024 from approximately 51% at March
31, 2023.
License, collaboration and royalty revenue was $2.2 million and
$0.1 million for the three months ended March 31, 2024 and March
31, 2023, respectively. The increase is due to manufacturing
services revenue from Otsuka related to shared capacity services
that commenced in the third quarter of 2023.
Total cost of sales and operating expenses, inclusive of a
one-time restructuring charge in Q1 2024, were $63.6 million and
$64.0 million for the three months ended March 31, 2024 and March
31, 2023, respectively. Further breakdown of cost of sales and
operating expense drivers and fluctuations are highlighted in the
following paragraphs.
Cost of sales were $7.8 million and $0.4 million for the three
months ended March 31, 2024 and March 31, 2023, respectively. The
increase is primarily due to increased sales of LUPKYNIS
(voclosporin), coupled with the amortization of the monoplant
finance right of use asset, which was placed into service in late
June 2023.
Gross margin was approximately 85% and 99% for the three months
ended March 31, 2024 and March 31, 2023, respectively.
SG&A expenses, inclusive of share-based compensation, were
$47.7 million and $50.1 million for the three months ended March
31, 2024 and March 31, 2023, respectively. The decrease is
primarily due to lower employee costs due to a reduction in general
and administrative headcount, which occurred late in the first
quarter of 2024, lower corporate costs related to insurance and
information technology and lower spend for travel and business
meetings.
Non-cash SG&A share-based compensation expense included
within SG&A expenses was $7.5 million and $7.6 million for the
three months ended March 31, 2024 and March 31, 2023,
respectively.
R&D expenses, inclusive of share-based compensation expense,
were $5.6 million and $13.2 million for the three months ended
March 31, 2024 and March 31, 2023, respectively. The primary
drivers for the decrease were lower employee costs due to a
reduction in headcount, which occurred late in the first quarter of
2024 and a decrease of clinical supply and distribution costs
related to ceasing development of our AUR200 and AUR300
programs.
Non-cash R&D share-based compensation expense included
within R&D expense was $(2.2) million and $1.6 million for the
three months ended March 31, 2024 and March 31, 2023, respectively.
The non-cash R&D share-based compensation credit in the three
months ended March 31, 2024 is due to the reversals of expense for
forfeitures related to a reduction in headcount.
Restructuring expenses were approximately $6.7 million and nil
for the three months ended March 31, 2024 and March 31, 2023,
respectively. Restructuring expenses included employee severance,
one-time benefit payments and contract termination expenses. The
company recognized the majority of the planned restructuring costs
in the first quarter of 2024.
Other (income) expense, net was $(4.1) million and $0.3 million
for the three months ended March 31, 2024 and March 31, 2023,
respectively. The increase was primarily due the foreign exchange
remeasurement of the monoplant lease liability, which commenced in
June 2023 and is denominated in CHF.
Interest income was $4.5 million and $3.8 million for the three
months ended March 31, 2024 and March 31, 2023, respectively. The
increase is due to higher yields on our investments as a result of
increased interest rates.
For the three months ended March 31, 2024, Aurinia recorded a
net loss of $10.7 million or $(0.07) net loss per common share, as
compared to a net loss of $26.2 million or $(0.18) net loss per
common share for the three months ended March 31, 2023.
Financial Liquidity at March 31, 2024
As of March 31, 2024, Aurinia had cash, cash equivalents and
restricted cash and investments of $320.1 million compared to
$350.7 million at December 31, 2023. The decrease is primarily
related to the continued investment in commercialization activities
and post approval commitments of our approved drug, LUPKYNIS,
monoplant payments, share repurchases and restructuring related
payments, partially offset by an increase in cash receipts from
sales of LUPKYNIS and payments from Otsuka.
Cash used in operations and non-GAAP free cash flow used were
$18.6 million for the three months ended March 31, 2024 compared to
cash used in operations of $31.7 million and non-GAAP free cash
flow used of $32.0 million for the three months ended March 31,
2023.
Free cash flow is a non-GAAP financial measure calculated by
subtracting purchases of property and equipment from net cash
provided by or used in operating activities. Free cash flow
reflects a view of our liquidity that, when viewed with our GAAP
results, provides a more complete understanding of factors and
trends affecting our cash flows. We believe it is a more
conservative measure of cash flow since capital expenditures are
necessary for ongoing operations. Free cash flow has limitations
due to the fact that it does not represent the residual cash flow
available for discretionary expenditures. For example, free cash
flow does not incorporate the principal portion of payments made or
expected to be made on finance lease obligations. Therefore, we
believe it is important to view free cash flow as a complement to
our entire consolidated statements of cash flows.
A reconciliation of free cash flow to its most directly
comparable GAAP measure, net cash provided by or used in operating
activities, is set out in the Condensed Consolidated Statement of
Cash Flows included at the end of this press release.
Share Repurchase Program
As previously announced, Aurinia’s Board of Directors approved a
share repurchase program of up to $150 million common shares of the
Company. Canadian securities regulators also granted exemptive
relief for the Company’s share repurchase program, authorizing the
Company to purchase up to 15 percent of its issued and outstanding
shares in any 12-month period for up to 36 months. Through April
30th, Aurinia has repurchased 3.4 million shares for approximately
$18.4 million at an average cost of $5.37. The Company expects to
fund its future discretionary share repurchases from cash flows
from operations and cash currently on hand.
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, 2024 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, 2023, 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 March 31, 2024 financial results today, Thursday, May
2, 2024 at 8:30 a.m. ET. The link to the audio webcast is available
here or on Aurinia’s corporate website at www.auriniapharma.com
under “News/Events” through the Investors section. To join the
conference call, please dial +1 (877) 407-9170 / +1 201-493-6756
(Toll-free U.S. & Canada). A replay of the webcast will be
available on Aurinia’s website.
About Lupus Nephritis
Lupus Nephritis (LN) is a serious manifestation of systemic
lupus erythematosus (SLE), a chronic and complex autoimmune
disease. LN affects approximately 120,000 people in the U.S. and
disproportionately affects women and people of color. People living
with LN have high unmet needs and often face significant barriers
to optimal care. If poorly controlled, LN can lead to permanent and
irreversible tissue damage within the kidney. Medical guidelines
recommend that all SLE patients receive routine LN screenings at
every visit. Guidelines also note that delaying LN diagnosis has
profound prognostic repercussions. Yet, research shows that
approximately 50% of SLE patients are not screened for LN and 77%
of people with LN go untreated. Aurinia is committed to improving
health outcomes for people living with LN by educating patients and
providers on the critical need for routine screening and
transformative therapies that can help improve health outcomes.
About Aurinia
Aurinia Pharmaceuticals is a fully integrated biopharmaceutical
company focused on delivering therapies to people living with
autoimmune diseases with high unmet medical needs. In January 2021,
the Company introduced LUPKYNIS® (voclosporin), the first
FDA-approved oral therapy dedicated to the treatment of adult
patients with active lupus nephritis. The Company’s head office is
in Edmonton, Alberta, with its U.S. commercial office in Rockville,
Maryland. 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
expectations to be free cash flow positive (excluding share
repurchases) in the second quarter of 2024; Aurinia’s estimates as
to annual net product revenue from sales of LUPKYNIS in the range
of $200 to $220 million in 2024; Aurinia’s expectations to
recognize $50 to $55 million in annual cost savings, with 75% of
those savings recognized in 2024, excluding a one-time
restructuring charge of approximately $7 million incurred in the
first quarter; Aurinia’s expectations that its total annualized
operating expenses on a go-forward basis will be in the range of
$185 to $195 million, with cash-based operating expenses of
approximately $155 to $165 million; and 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. 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; 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)
March 31, 2024
December 31, 2023
ASSETS
Current assets
Cash, cash equivalents and restricted
cash
$
64,459
$
48,875
Short-term investments
255,453
301,614
Accounts receivable, net
28,909
24,089
Inventories, net
39,761
39,705
Prepaid expenses
7,646
9,486
Other current assets
1,995
1,031
Total current assets
398,223
424,800
Non-current assets
Long-term investments
199
201
Other non-current assets
1,502
1,517
Property and equipment, net
3,198
3,354
Acquired intellectual property and other
intangible assets, net
4,760
4,977
Finance right-of-use asset, net
104,358
108,715
Operating right-of-use assets, net
4,394
4,498
Total assets
$
516,634
$
548,062
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities
50,270
54,389
Deferred revenue
4,909
4,813
Other current liabilities
1,150
2,388
Finance lease liability
13,724
14,609
Operating lease liabilities
999
989
Total current liabilities
71,052
77,188
Non-current liabilities
Finance lease liability
67,475
75,479
Operating lease liabilities
6,339
6,530
Deferred compensation and other
non-current liabilities
12,292
10,911
Total liabilities
157,158
170,108
SHAREHOLDER’S EQUITY
Common shares - no par value, unlimited
shares authorized, 143,690 and 143,833 shares issued and
outstanding at March 31, 2024 and December 31, 2023,
respectively
1,207,982
1,200,218
Additional paid-in capital
105,419
120,788
Accumulated other comprehensive loss
(854
)
(730
)
Accumulated deficit
(953,071
)
(942,322
)
Total shareholders' equity
359,476
377,954
Total liabilities and shareholders'
equity
$
516,634
$
548,062
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three months ended
March 31,
2024
2023
(unaudited)
Revenue
Product revenue, net
$
48,073
$
34,337
License, collaboration and royalty
revenue
2,230
72
Total revenue, net
50,303
34,409
Operating expenses
Cost of sales
7,752
421
Selling, general and administrative
47,695
50,124
Research and development
5,551
13,158
Restructuring expenses
6,683
—
Other (income) expense, net
(4,125
)
290
Total cost of sales and operating
expenses
63,556
63,993
Loss from operations
(13,253
)
(29,584
)
Interest expense
(1,283
)
—
Interest income
4,526
3,814
Net loss before income taxes
(10,010
)
(25,770
)
Income tax expense
739
436
Net loss
$
(10,749
)
$
(26,206
)
Basic and diluted loss per share
$
(0.07
)
$
(0.18
)
Weighted-average common shares outstanding
used in computation of basic and diluted loss per share
144,013
142,641
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended March
31,
2024
2023
(in thousands)
(unaudited)
Cash flows used in operating
activities:
Net loss
$
(10,749
)
$
(26,206
)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization
4,847
717
Net amortization of premiums and discounts
on short-term investments
(3,206
)
(2,611
)
Share-based compensation expense
5,737
9,467
Foreign exchange on finance lease
liability
(6,025
)
—
Other, net
1,559
217
Net changes in operating assets and
liabilities
Accounts receivable, net
(4,820
)
(5,559
)
Inventories, net
(56
)
(6,993
)
Prepaid expenses and other current
assets
873
3,588
Non-current operating assets
17
(17
)
Accounts payable, accrued and other
liabilities
(6,594
)
(4,117
)
Operating lease liabilities
(181
)
(156
)
Net cash used in operating activities
(18,598
)
(31,670
)
Cash flows used in investing
activities:
Purchase of investments
(121,260
)
(142,397
)
Proceeds from investments
170,505
167,766
Purchase of property and equipment
—
(347
)
Capitalized patent costs
(12
)
(162
)
Net cash provided by investing
activities
49,233
24,860
Cash flows from financing activities
Repurchase of common shares, net of
transaction costs
(12,301
)
—
Finance lease payments
(2,778
)
—
Proceeds from exercise of stock
options
28
1,639
Cash (used in) provided by financing
activities
(15,051
)
1,639
Net increase (decrease) in cash, cash
equivalents and restricted cash
15,584
(5,171
)
Cash, cash equivalents and restricted
cash, beginning of period
48,875
94,172
Cash, cash equivalents and restricted
cash, end of period
$
64,459
$
89,001
Reconciliation of free cash flow(1)
Net cash used in operating activities
$
(18,598
)
$
(31,670
)
Purchases of property and equipment
—
(347
)
Free cash flow
$
(18,598
)
$
(32,017
)
(1) Free cash flow is a non-GAAP financial
measure and is calculated as net cash provided by or used in
operating activities reduced by purchases of property and
equipment.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502430931/en/
Media and Investor Inquiries: Andrea Christopher
Corporate Communications and Investor Relations, Aurinia
achristopher@auriniapharma.com ir@auriniapharma.com
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