- Cash and cash equivalents totaled
approximately $306 million at December 31, 2019 -
- Positive AURORA Phase 3 results with
voclosporin enabling an NDA submission for the treatment of lupus
nephritis (“LN”) by the end of the second quarter 2020 -
- Continued build out of a top-tier commercial
team, highlighted by the appointment of Max Colao, Chief Commercial
Officer, focused on launch activities -
- AUDREY Phase2/3 Dry Eye Study remains
on-track with results anticipated during the second half of 2020
-
Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH / TSX: AUP) (“Aurinia”
or the “Company”) today issued its financial results for the fourth
quarter and year ended December 31, 2019. Amounts, unless specified
otherwise, are expressed in U.S. dollars.
“2019 was a truly transformational year for Aurinia, highlighted
by the positive results achieved with voclosporin in the Phase 3
AURORA clinical trial for the treatment of LN. As the team works
diligently to prepare and file a New Drug Application to the U.S.
FDA next quarter, we continue to build out an incredibly talented
and experienced commercial team that will be led by Max Colao,
Aurinia’s newly appointed Chief Commercial Officer,” commented
Peter Greenleaf, President and Chief Executive Officer of
Aurinia.
“Beyond the impact voclosporin could bring to those living with
LN, we continue to evaluate voclosporin in additional indications,
including the rare kidney disease, FSGS, as well as for the
potential management of dry eye syndrome. During the second half of
2020, we anticipate reporting new data from both of these
development programs, consisting of interim data from the
exploratory Phase 2 FSGS study and results from the Phase 2/3
AUDREY DES trial evaluating 3 concentrations of VOS compared to
vehicle alone,” said Neil Solomons, Chief Medical Officer of
Aurinia.
Recent Operational Highlights
Pre-NDA Meeting with the U.S. Food & Drug Administration
(“FDA”)
Aurinia held a positive and successful Pre-NDA meeting with the
FDA Division of Pulmonary, Allergy and Rheumatology Products 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.
Appointment of Max Colao as Chief Commercial Officer and
build out of 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
across key commercial functions including sales, marketing, market
access, and commercial operations.
AURORA Phase 3 LN Trial
On December 4, 2019, Aurinia announced positive efficacy and
safety results from its pivotal AURORA Phase 3 trial of
voclosporin, in combination with mycophenolate (“MMF”) and low-dose
corticosteroids, in the treatment of LN. The global study in which
357 patients with active LN were enrolled, met its primary endpoint
of Renal Response rates of 40.8% for voclosporin vs. 22.5% for the
control (OR 2.65; p < 0.001). Additionally, all pre-specified
hierarchical secondary endpoints achieved statistical significance
in favor of voclosporin, which included Renal Response at 24 weeks,
Partial Renal Response at 24 and 52 weeks, time to achieve urinary
protein-to-creatinine ratio (“UPCR”) ≤ 0.5, and time to 50%
reduction in UPCR. The robustness of the data was also supported by
all pre-specified subgroup analyses (age, sex, race, biopsy class,
region, and prior MMF use) favoring voclosporin.
Voclosporin was well tolerated with no unexpected safety
signals. Serious adverse events (“SAEs”) were reported in 20.8% of
voclosporin patients vs. 21.3% in the control arm. Infection was
the most commonly reported SAE with 10.1% of voclosporin patients
versus 11.2% of patients in the control arm. Overall mortality in
the trial was low, with six deaths observed; one in the voclosporin
arm and five in the control group. Additionally, the voclosporin
arm showed no significant decrease at week 52 in estimated
glomerular filtration rate (“eGFR”) or increase in blood pressure,
lipids or glucose, which are common adverse events associated with
legacy calcineurin inhibitors (“CNIs”).
The AURORA Phase 3 clinical trial was initiated in May of 2017
and completed enrollment in September 2018.
AURORA 2 Extension Trial
Eligible patients completing the AURORA trial had the option to
roll over into a 104-week blinded extension study (the "AURORA 2
extension study"). A total of 216 patients enrolled into the AURORA
2 extension study. The data from the AURORA 2 extension study will
allow the Company to assess the long-term benefit/risk of
voclosporin in LN patients, however, this study is not a
requirement for potential regulatory approval for voclosporin. Data
from the AURORA 2 extension study assessing long-term outcomes in
LN patients should be valuable in a post-marketing setting and for
future interactions with regulatory authorities.
Voclosporin Drug-Drug Interaction (“DDI”) Study
On November 7, 2019, Aurinia announced the completion of a
FDA-requested clinical DDI study in patients with lupus that
investigated the potential effect of voclosporin on blood levels of
mycophenolate acid (“MPA”), the active metabolite of MMF. MMF, also
known as CellCept®, is considered by treating physicians to be part
of the current standard of care for lupus nephritis (“LN”) in the
United States.
This FDA-requested clinical DDI study aimed to measure, and
potentially quantify, the impact voclosporin may have on MPA blood
levels when given concomitantly with MMF in patients with lupus.
The study results indicate that the coadministration of voclosporin
with MMF had no clinically significant impact on MPA blood
concentrations. In past studies, it was reported that the legacy
calcineurin inhibitors (“CNIs”) inhibit the
multidrug-resistance-associated protein 2 (MRP-2) transporter in
the biliary tract thereby preventing the excretion of mycophenolic
acid glucuronide (MPAG) into the bile leading to the enterohepatic
recirculation of MPA1. This adverse impact of cyclosporine on MPA
pharmacokinetics has resulted in a 30 – 50% reduction in MPA
exposure when used in combination.1
Voclosporin ‘036 Method-of-Use Patent for Proteinuric Kidney
Diseases
On May 14, 2019, Aurinia was granted U.S. Patent 10,286,036
entitled ‘PROTOCOL FOR TREATMENT OF LUPUS NEPHRITIS”) with a term
potentially extending to December 2037, for claims directed at our
novel voclosporin dosing protocol for LN. The allowed claims
broadly cover the novel voclosporin individualized flat-dosed
pharmacodynamic treatment protocol adhered to and required in both
the previously reported Phase 2 AURA-LV study and our Phase 3
confirmatory AURORA trial. Notably, the allowed claims cover a
method of modifying the dose of voclosporin in patients with LN
based on patient specific pharmacodynamic parameters.
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 until December
2037, supplementing an already robust manufacturing, formulation,
synthesis and composition of matter patents.
AUDREY™ Phase 2/3 Trial for Dry Eye Syndrome (“DES”)
In October 2019, Aurinia announced the initiation of patient
dosing in the Phase 2/3 AUDREY™ clinical trial evaluating
voclosporin ophthalmic solution (“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 the AUDREY clinical study are anticipated
during the second half of 2020.
In January of 2019, Aurinia reported Phase 2 results
demonstrating that VOS (voclosporin 0.2%) administered twice daily
was superior to cyclosporin A 0.05% (Restasis®) administered twice
daily across all objective endpoints including FCS and STT. This
statistical superiority was observed after two weeks of dosing. The
exploratory study also showed no statistically significant nor
clinically meaningful difference in drop discomfort, as measured by
drop discomfort scores at one and five minutes after first
application, between VOS 0.2% and cyclosporin A 0.05%.
Financial Liquidity at December 31, 2019
At December 31, 2019, Aurinia had cash and cash equivalents of
$306 million at December 31, 2019, compared to $125.9 million of
cash and short-term investments at December 31, 2018. Net cash used
in operating activities was $63.5 million for the year ended
December 31, 2019, compared to $51.6 million for the year ended
December 31, 2018.
The Company received net proceeds of $179.9 million pursuant to
its December 12, 2019, public offering.
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 Year Ended December 31,
2019
For the year ended December 31, 2019, Aurinia recorded a
consolidated net loss of $123.8 million or $1.33 per common share,
which included a non-cash increase of $41.1 million related to the
estimated fair value adjustment of derivative warrant liabilities
during 2019 and at December 31, 2019.
The net loss before the change in estimated fair value of
derivative warrant liabilities and income taxes was $82.6 million
or $0.89 per common share for the year ended December 31, 2019.
This compared to a consolidated net loss of $64.1 million or $0.76
per common share in 2018, which included a non-cash increase of $10
million in the estimated fair value of derivative warrant
liabilities for the year ended December 31, 2018. The net loss
before the change in estimated fair value of derivative warrant
liabilities income taxes was $54.1 million or $0.63 per common
share for the year ended December 31, 2018.
The change in the revaluation of the derivative warrant
liabilities is primarily driven by the change in Aurinia’s share
price. The Company’s share price was significantly higher in
December 2019 when 1.83 million derivative warrants were exercised
and at December 31, 2019, when the closing share price was $20.26,
compared to the Company’s share price of $6.82 at December 31,
2018. This increase in share price resulted in a large increase in
the estimated fair value of the derivative warrants for 2019. The
derivative warrant liabilities will ultimately be eliminated on the
exercise of the warrants and will not result in any cash outlay by
Aurinia. In fiscal year 2019, 3.6 million derivative warrants were
exercised with 1.7 million derivative warrants outstanding as of
December 31, 2019.
Aurinia incurred R&D expenses of $52.9 million for the year
ended December 31, 2019, as compared to $41.4 million for the year
ended December 31, 2018. The increase in R&D expenses in 2019
included $6.6 million to manufacture voclosporin for potential
future commercial use and higher costs related to the AURORA 2
extension trial, the DDI study and ongoing dry eye studies,
partially offset by a decrease in AURORA trial costs.
Aurinia incurred corporate, administration and business
development expenses of $22.2 million for the year ended December
31, 2019, as compared with $13.7 million for the same period in
fiscal 2018. The increase in these expenses reflected higher
corporate activity levels including pre-commercial and launch
readiness activities, higher professional and recruiting fees,
insurance costs and personnel compensation costs.
Non-cash stock compensation expense was $7.4 million for the
year ended December 31, 2019, compared to $6.9 million for the year
ended December 31, 2018, and was included in both R&D and
corporate, general and business development expenses.
Financial Results for the Fourth Quarter Ended December 31,
2019
Aurinia reported a consolidated net loss of $76.5 million or
$0.78 per common share for the fourth quarter ended December 31,
2019, as compared to a consolidated net loss of $14.6 million, or
$0.17 per common share, for the fourth quarter ended December 31,
2018.
The increase in the loss for the fourth quarter ended December
31, 2019, primarily reflected an increase of $48.0 million in the
estimated fair value of derivative warrant liabilities compared to
an increase of $593,000 in the estimated fair value of derivative
warrant liabilities for the fourth quarter ended December 31,
2018.This change in the estimated fair value reflected the
significant increase in the Company’s share price in December 2019
when 1.83 million derivative warrants were exercised and at
December 31, 2019, when the closing share price was $20.26,
compared to the Company’s share price of $6.82 at December 31,
2018.
The net loss before the non-cash change in estimated fair value
of derivative warrant liabilities and income taxes was $28.9
million or $0.29 per common share for the fourth quarter ended
December 31, 2019, compared to $13.9 million or $0.17 per common
share for the same period in 2018.
R&D expenses increased to $13.3 million in the fourth
quarter of 2019, compared to $10.8 million in the fourth quarter of
2018. The increase in these expenses reflected costs related to NDA
submission preparation costs, higher personnel costs, higher costs
incurred for the AURORA 2 extension trial, and the AUDREY DES phase
2/3 study partially offset by lower AURORA trial costs.
Corporate, administration and business development expenses
increased to $7.2 million for the fourth quarter of 2019, compared
to $3.5 million for the fourth quarter of 2018, reflecting higher
pre-commercial and launch readiness activities, higher consulting
and professional fees, insurance costs, and personnel compensation
costs as the corporate organization build continued to ramp up
during the fourth quarter of 2019.
The audited financial statements and the Management's Discussion
and Analysis for the year ended December 31, 2019, 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
fourth quarter and year ended December 31, 2019, financial results
today, Thursday, March 5, 2020, at 4:30 p.m. ET. This event can be
accessed on the investor section of the Aurinia 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
(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 laws in other countries and until April 2028 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.
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.
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: completing
NDA priority review submissions in a successful and timely manner
including the anticipated NDA filing during the first half of 2020;
the potential for commercial launch of voclosporin for use in LN in
2021; voclosporin being potentially a best-in-class CNI with robust
intellectual property exclusivity; Aurinia’s anticipation that upon
regulatory approval, patent protection for voclosporin composition
of matter 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; a US 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 the AURORA studies into the product label; that the results of
the AURORA clinical study are pivotal and potentially
groundbreaking for LN patients; that voclosporin may be positioned
to become the standard of care for people living with LN; that
Aurinia will present AURORA study results at a future scientific
conference during 2020. 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; Aurinia will be able to obtain
all necessary regulatory approvals for commercialization of
voclosporin for use in LN on terms that are acceptable to it and
that are commercially viable; and that Aurinia’s intellectual
property rights are valid and do not infringe the intellectual
property rights of other parties. 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; competitors may
arise with similar products; Aurinia may not be able to obtain
necessary regulatory approvals for commercialization of voclosporin
in a timely fashion, or at all; and Aurinia may not be able to
obtain sufficient supply to meet commercial demand for voclosporin
in a timely fashion. 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 harbour.
Aurinia Pharmaceuticals Inc. Condensed Consolidated
Statements of Financial Position (unaudited – amounts in thousands
of U.S. dollars)
December 31,
2019
$
December 31,
2018
$
Assets
Cash and cash equivalents
306,019
117,967
Short term investments
-
7,889
Accounts receivable and accrued interest
receivable
368
217
Prepaid expenses, deposits and other
8,750
6,775
Total current assets
315,137
132,848
Acquired
intellectual property and other intangible assets
11,244
12,616
Other
non-current assets
302
399
Total assets
326,683
145,863
Liabilities and Shareholders’
Equity
Accounts payable and accrued
liabilities
11,177
7,071
Other current liabilities
118
190
Total current liabilities
11,295
7,261
Derivative warrant liabilities
29,353
21,747
Other
non-current liabilities
12,519
4,280
Total
liabilities
53,167
33,288
Shareholders’ equity
273,516
112,575
Total liabilities and shareholders’
equity
326,683
145,863
Aurinia Pharmaceuticals Inc. Condensed Consolidated
Statements of Operations (unaudited – amounts in thousands of U.S.
dollars, except per share data)
Three Months Ended December
31
Year Ended December 31
2019
2018
2019
2018
$
$
$
$
Revenue
Licensing revenue
29
29
318
118
Contract revenue
-
-
-
345
29
29
318
463
Expenses
Research and development
13,292
10,839
52,866
41,382
Corporate, administration and business
development
7,246
3,498
22,154
13,674
Amortization of acquired intellectual
property and other intangible assets
349
349
1,389
1,545
Amortization of property and equipment
42
6
159
20
Other expenses
7,963
(65)
8,991
169
28,892
14,627
85,559
56,790
Loss before interest income, finance
costs, change in estimated fair value of derivative warrant
liabilities and income tax expense
(28,863)
(14,598)
(85,241)
(56,327)
Interest income
479
671
2,702
2,234
Finance costs
(9)
-
(39)
-
Loss before change in estimated fair
value of derivative warrant liabilities and income tax
expense
(28,393)
(13,927)
(82,578)
(54,093)
Change in estimated fair value of
derivative warrant
liabilities
(47,986)
(593)
(41,124)
(9,954)
Loss before income taxes
(76,379)
(14,520)
(123,702)
(64,047)
Income tax expense
90
73
144
73
Net loss and comprehensive loss for the
period
(76,469)
(14,593)
(123,846)
(64,120)
Net loss per common share (expressed in
$ per share)
Basic and diluted loss per common
share
(0.78)
(0.17)
(1.33)
(0.76)
Weighted average number of common shares
outstanding
97,936
85,384
93,024
84,782
1 CellCept® (mycophenolate mofetil) package insert, Genentech
USA, Inc., A Member of the Roche Group, 1 DNA Way, South San
Francisco
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200305005786/en/
Investor & Media Contacts: Glenn Schulman, PharmD,
MPH Corporate Communications gschulman@auriniapharma.com
Dennis Bourgeault Chief Financial Officer
dbourgeault@auriniapharma.com
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