- Conference call and webcast to be hosted
today at 4:30pm EDT –
Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH / TSX:AUP) (“Aurinia”
or the “Company”), a late-stage clinical biopharmaceutical company
focused on advancing voclosporin in multiple indications, today
reported financial results for the three and nine months ended
September 30, 2019 and recent operational highlights. Amounts,
unless specified otherwise, are expressed in U.S. dollars.
“As we look forward to results from the AURORA Phase 3 trial for
LN by the end of this year, the organization has been preparing for
success by continuing to strengthen the Board, making several key
strategic hires into our commercial and medical affair groups, and
advancing the portfolio of potential indications for voclosporin,
including FSGS and dry eye syndrome,” commented Peter Greenleaf,
President and Chief Executive Officer of Aurinia. “Looking ahead to
2020, and assuming positive results, we plan on submitting a NDA to
the FDA in the first half of 2020 and project a commercial launch
of voclosporin in early 2021 as a potentially first-line treatment,
in combination with mycophenolate mofetil, for lupus
nephritis.”
Voclosporin for Lupus Nephritis (“LN”)
On October 16, Aurinia announced that the last patient study
visit had occurred in the AURORA Phase 3 LN trial with efficacy and
safety results anticipated by the end of 2019.
The AURORA clinical trial is a global, double-blind,
placebo-controlled study to evaluate whether voclosporin, when used
in combination with mycophenolate mofetil (“MMF”)/CellCept®, can
increase complete renal response rates at 52 weeks in the presence
of low dose steroids. A total of 358 patients with LN were
randomized into sites across 27 countries.
AURORA 2 is an extension study whereby eligible patients from
AURORA have the option of continuing their therapy for an
additional two years in a blinded fashion. Results of this study
are not required for FDA approval; however, AURORA 2 is expected to
provide valuable insights as to the long-term safety and efficacy
of voclosporin as a potential new treatment for LN.
Voclosporin Ophthalmic Solution (“VOS”) Phase 2/3 AUDREY™
Clinical Trial in Dry Eye Syndrome (“DES”)
On October 31, Aurinia announced the initiation of patient
dosing in the Phase 2/3 AUDREY™ clinical trial evaluating VOS for
the potential treatment of DES. The AUDREY trial is a randomized,
double-masked, vehicle-controlled, dose-ranging study evaluating
the efficacy and safety of VOS in subjects with DES. A total of
approximately 480 subjects are expected to be enrolled. The study
will consist of four arms with a 1:1:1:1 randomization schedule, in
which patients will receive either 0.2% VOS, 0.1% VOS, 0.05% VOS or
vehicle, dosed twice daily for 12 weeks.
The primary outcome measure for the trial is the proportion of
subjects with a 10mm improvement in Schirmer Tear Test (“STT”) at
four weeks. Secondary outcome measures will include STT at other
time points, Fluorescein Corneal Staining (“FCS”) at multiple time
points, change in eye dryness, burning/stinging, itching,
photophobia, eye pain and foreign body sensation at multiple time
points, and additional safety endpoints.
Top-line results from AUDREY are anticipated during the second
half of 2020.
Financial Liquidity at September 30, 2019
As of September 30, 2019, Aurinia had cash and cash equivalents
of $134.5 million compared to $131.5 million at June 30, 2019 and
$118.0 million at December 31, 2018.
The Company received net proceeds of $14.3 million upon the sale
of 2.35 million common shares at a weighted average price of $6.40
per share pursuant to its September 13, 2019 At-the-market (“ATM”)
facility with Jefferies LLC.
Net cash used in operating activities was $11.8 million and
$38.2 million respectively for the three and nine months ended
September 30, 2019 compared to $11.3 million and $38.0 million
respectively for the same periods in 2018.
The Company believes, that based on its current plans, it has
sufficient financial resources to fund the existing LN program,
including the AURORA trial and the AURORA 2 extension study,
complete the New Drug Application (“NDA”) submission to the FDA,
conduct the ongoing Phase 2 study for focal segmental
glomerulosclerosis (“FSGS”), conduct the AUDREY clinical trial, and
fund operations into the fourth quarter of 2020.
Third Quarter 2019 Financial Results
For the three months ended September 30, 2019 Aurinia reported a
consolidated net loss of $19.0 million or $0.21 per common share
compared to a consolidated net loss of $18.3 million or $0.21 per
common share for the same period in 2018.
Research and development expenses (R&D) increased to $17.8
million for the three months ended September 30, 2019, compared to
$11.2 million for the three months ended September 30, 2018. The
increase in these expenses were primarily related to the
manufacturing of voclosporin for commercial and investigational
use. In addition, higher costs were incurred for the AURORA 2
extension study, completion of the drug-drug interaction (“DDI”)
study, preparation costs associated with the planned NDA submission
for LN, and initiation of the Phase 2/3 DES clinical trial,
partially offset by lower AURORA clinical trial costs.
Corporate, administration and business development expenses
increased to $6.1 million for the three months ended September 30,
2019, compared to $2.9 million for the same period in 2018. The
increase reflected overall higher activity levels as the Company
scales the organization ahead of AURORA Phase 3 results in LN. The
Company incurred higher costs for professional and consulting
services, insurance, personnel and information technology and for
pre-commercial activities, including market research.
Non-cash stock compensation expense was $2.0 million for the
third quarter ended September 30, 2019 as compared with $1.5
million for the same period in 2018 and was included in both
R&D and corporate, general and business development
expenses.
Aurinia also recorded a non-cash reduction of $4.5 million in
the estimated fair value of derivative warrant liabilities which
reduced the loss for the third quarter ended September 30, 2019
compared to an increase of $4.8 million in the estimated fair value
of derivative warrant liabilities which increased the loss for the
third quarter ended September 30, 2018. 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.
Financial Results for Nine Months Ended September 30,
2019
For the nine months ended September 30, 2019, Aurinia reported a
consolidated net loss of $47.4 million or $0.52 per common share
compared to a consolidated net loss of $49.5 million or $0.59 per
common share for the comparable period in 2018.
R&D expenses were $39.6 million for the nine months ended
September 30, 2019 compared to $30.5 million for the same period in
2018. The increase in these expenses were primarily related to the
manufacturing of voclosporin for commercial and investigational
use. In addition, higher costs were incurred for the AURORA 2
extension study, completion of the drug-drug interaction study,
preparation costs associated with the planned NDA submission for
LN, and initiation of the Phase 2/3 DES clinical trial, partially
offset by lower AURORA clinical trial costs.
Corporate, administration and business development expenses were
$14.9 million for the nine months ended September 30, 2019 compared
to $10.2 million for the same period in 2018. The increase
reflected overall higher activity levels as the Company scales the
organization ahead of AURORA Phase 3 results in LN. The Company
incurred higher costs for professional and consulting services,
insurance, personnel and information technology and for
pre-commercial activities, including market research.
Non-cash stock compensation expense was consistent at $5.6
million for both the nine months ended September 30, 2019 and the
nine months ended September 30, 2018 and was included in both
R&D and corporate, general and business development
expenses.
For the nine months ended September 30, 2019 Aurinia recorded a
decrease of $6.9 million in the estimated fair value of derivative
warrant liabilities compared to an increase of $9.4 million for the
comparable period in 2018.
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 third quarter
ended September 30, 2019 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
third quarter ended September 30, 2019 financial results today,
Thursday , November 14, 2019 at 4:30 p.m. ET. This event can be
accessed on the investor section of the Aurinia website at
www.auriniapharma.com.
About Aurinia
Aurinia Pharmaceuticals is a late clinical-stage
biopharmaceutical company focused on developing and commercializing
therapies to treat targeted patient populations that are impacted
by serious diseases with a high unmet medical need. The Company is
currently developing an investigational drug, for the treatment of
Lupus Nephritis, Focal Segmental Glomerulosclerosis and Dry Eye
Syndrome. The Company’s head office is in Victoria, British
Columbia and focuses its development efforts globally. For further
information, see our website at www.auriniapharma.com.
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. It has been shown to have a more predictable
pharmacokinetic and pharmacodynamic relationship (potentially
requires no therapeutic drug monitoring), an increase in potency
(vs cyclosporin), 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 laws in other countries and until April 2028 with
anticipated pediatric extension. Further, the new Notice of
Allowance is expected to result in the issuance of a U.S. patent
with a term extending to December 2037. If the FDA approves the use
of voclosporin for LN and the label for such use follows the dosing
protocol under the Notice of Allowance, the issuance of this patent
will expand the scope of intellectual property protection for
voclosporin to December 2037.
About VOS
Voclosporin ophthalmic solution (“VOS”) is an aqueous,
preservative free nanomicellar solution intended for use in the
treatment of DES. A Phase 2a study was recently completed with
results released in January of 2019. Previously, a Phase 1 study
with healthy volunteers and patients with DES was also completed as
were studies in rabbit and dog models. VOS has IP protection until
2031.
About LN
Lupus Nephritis (“LN”) in an inflammation of the kidney caused
by Systemic Lupus Erythematosus (“SLE”) and represents a serious
progression of SLE. SLE is a chronic, complex and often disabling
disorder. The disease is highly heterogeneous, affecting a wide
range of organs and tissue systems. Unlike SLE, LN has
straightforward disease outcomes (measuring proteinuria) where an
early response correlates with long-term outcomes. In patients with
LN, renal damage results in proteinuria and/or hematuria and a
decrease in renal function as evidenced by reduced estimated
glomerular filtration rate (“eGFR”), and increased serum creatinine
levels. LN is debilitating and costly and if poorly controlled, LN
can lead to permanent and irreversible tissue damage within the
kidney, resulting in end-stage renal disease (“ESRD”), thus making
LN a serious and potentially life-threatening condition.
About FSGS
Focal segmental glomerulosclerosis (“FSGS”) is a rare disease
that attacks the kidney’s filtering units (glomeruli) causing
serious scarring which leads to permanent kidney damage and even
renal failure. FSGS is one of the leading causes of Nephrotic
Syndrome (“NS”) and is identified by biopsy and proteinuria. NS is
a collection of signs and symptoms that indicate kidney damage,
including large amounts of protein in the urine; low levels of
albumin and higher than normal fat and cholesterol levels in the
blood, and edema. Similar to LN, early clinical response (measured
by reduction of proteinuria) is thought to be critical to long-term
kidney health in patients with FSGS. Currently, there are no
approved therapies for FSGS in the United States and the European
Union.
About DES
Dry eye syndrome (“DES”) is characterized by irritation and
inflammation that occurs when the eye’s tear film is compromised by
reduced tear production, imbalanced tear composition, or excessive
tear evaporation. The impact of DES ranges from subtle, yet
constant eye irritation to significant inflammation and scarring of
the eye’s surface. Discomfort and pain resulting from DES can
reduce quality of life and cause difficulty reading, driving, using
computers and performing daily activities. DES is a chronic
disease. There are currently three FDA approved therapies for the
treatment of dry eye; however, there is opportunity for potential
improvement in the effectiveness by enhancing tolerability, onset
of action and alleviating the need for repetitive dosing.
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: AURORA Phase
3 LN trial efficacy and safety results anticipated by the end of
2019, completing NDA submission in a successful and timely manner
including the anticipated NDA filing during the first half of next
year and subsequent commercial launch in 2021, voclosporin being
potentially a best-in-class CNI with robust intellectual property
exclusivity; results from the AUDREY trial in DES during the second
half of 2020; the expected timing of FSGS results and patient
enrollment; and that Aurinia has sufficient financial resources to
fund the existing LN program, including the AURORA trial and the
AURORA 2 extension study, complete the NDA submission to the FDA,
conduct the ongoing Phase 2 study for FSGS, conduct the AUDREY
clinical trial, and fund operations into the fourth quarter of
2020. Aurinia’s anticipation 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
laws in other countries and until April 2028 with anticipated
pediatric extension; that the new Notice of Allowance is expected
to result in the issuance of a U.S. patent with a term extending to
December 2037; that if the FDA approves the use of voclosporin for
LN and the label for such use follows the dosing protocol under the
Notice of Allowance, the issuance of this patent will expand the
scope of intellectual property protection for voclosporin to
December 2037. It is possible that such results or conclusions may
change based on further analyses of these data. 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 market value for the LN, DES and FSGS
programs; that another company will not create a substantial
competitive product for Aurinia’s LN, DES and FSGS business without
violating Aurinia’s intellectual property rights; the burn rate of
Aurinia’s cash for operations; the costs and expenses associated
with Aurinia’s clinical trials; the planned studies achieving
positive results; Aurinia being able to extend and protect its
patents on terms acceptable to Aurinia; and the size of the LN, DES
or FSGS markets. 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: difficulties, delays, or failures we may experience in
the conduct of our clinical trial; difficulties we may experience
in completing the development and commercialization of voclosporin;
the market for the LN, DES and FSGS business may not be as
estimated; Aurinia may have to pay unanticipated expenses;
estimated costs for clinical trials may be underestimated,
resulting in Aurinia having to make additional expenditures to
achieve its current goals; Aurinia not being able to extend or
fully protect its patent portfolio for voclosporin; and competitors
may arise with similar products. Although we have 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 our 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.
Except as required by law, Aurinia will not update
forward-looking 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
Information Form available by accessing the Canadian Securities
Administrators’ System for Electronic Document Analysis and
Retrieval (SEDAR) website at www.sedar.com or the U.S. Securities
and Exchange Commission’s Electronic Document Gathering and
Retrieval System (EDGAR) website at www.sec.gov/edgar.
We seek Safe Harbor.
Aurinia Pharmaceuticals Inc. Interim Condensed Consolidated
Statements of Financial Position (unaudited – amounts in thousands
of U.S. dollars)
September 30,
2019
$
December 31,
2018
$
Assets
Cash and cash equivalents
134,539
117,967
Short term investments
-
7,889
Accounts receivable and accrued interest
receivable
470
217
Prepaid expenses and deposits
3,629
6,775
Total current assets
138,638
132,848
Acquired
intellectual property and other intangible assets
11,591
12,616
Other
non-current assets
615
399
Total assets
150,844
145,863
Liabilities and Shareholders’
Equity
Accounts payable and accrued
liabilities
13,272
7,071
Other current liabilities
243
190
Total current liabilities
13,515
7,261
Derivative warrant liabilities
8,965
21,747
Other
non-current liabilities
4,623
4,280
Total
liabilities
27,103
33,288
Shareholders’ equity
123,741
112,575
Total liabilities and shareholders’
equity
150,844
145,863
Aurinia Pharmaceuticals Inc. Interim Condensed Consolidated
Statements of Operations (unaudited – amounts in thousands of U.S.
dollars, except per share data)
Three Months Ended
Nine months Ended
Sept 30, 2019
Sept 30, 2018
Sept 30, 2019
Sept 30, 2018
$
$
$
$
Revenue
Licensing revenue
230
30
289
89
Contract revenue
-
345
-
345
230
375
289
434
Expenses
Research and development
17,791
11,152
39,574
30,543
Corporate, administration and business
development
6,061
2,923
14,908
10,176
Amortization of acquired intellectual
property and other intangible assets
348
403
1,041
1,196
Amortization of property and equipment
41
5
116
14
Other expenses
-
-
720
-
24,241
14,483
56,359
41,929
Loss before interest income, finance
costs, change in estimated fair value of derivative warrant
liabilities and income taxes
(24,011)
(14,108)
(56,070)
(41,495)
Interest income
636
691
2,234
1,563
Finance costs
(149)
(128)
(338)
(234)
Loss before change in estimated fair
value of derivative warrant liabilities and income
taxes
(23,524)
(13,545)
(54,174)
(40,166)
Change in estimated fair value of
derivative
warrant
liabilities
4,512
(4,797)
6,862
(9,361)
Loss before income taxes
(19,012)
(18,342)
(47,312)
(49,527)
Income tax expense
25
-
54
-
Net loss and comprehensive loss for the
period
(19,037)
(18,342)
(47,366)
(49,527)
Net loss per common share
(expressed in $ per share)
Basic and diluted loss per common
share
(0.21)
(0.21)
(0.52)
(0.59)
Weighted average number of common
shares outstanding (in thousands)
92,169
85,321
91,368
84,579
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191114005800/en/
Investor & Media Contact:
Glenn Schulman, PharmD, MPH SVP, IR & Corporate
Communications gschulman@auriniapharma.com
Dennis Bourgeault Chief Financial Officer
dbourgeault@auriniapharma.com
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