- U.S. Food & Drug Administration grants
Priority Review for voclosporin and sets PDUFA date of January 22,
2021 -
- Cash, cash equivalents and investments
totaled approximately $421 million at September 30, 2020 -
- Conference call and webcast to be hosted
today at 4:30pm EDT -
Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH / TSX:AUP) (“Aurinia”
or the “Company”) today reported financial results for the third
quarter ended September 30, 2020 and provided an update on recent
operational highlights. Amounts, unless specified otherwise, are
expressed in U.S. dollars.
“Throughout the course of 2020, Aurinia has evolved
significantly as an organization as we ready the organization for
our next potential phase of growth. With the voclosporin NDA
undergoing Priority Review for LN, we are focused as an
organization to being fully prepared for a potential launch by
year-end as the January 22, 2021 PDUFA date approaches,” commented
Peter Greenleaf, President and Chief Executive Officer of Aurinia.
“In addition to preparing for commercialization, we continue to
evaluate opportunities to strengthen the development pipeline and
look forward to providing updates on our efforts in the coming
months.”
Max Colao, Chief Commercial Officer of Aurinia commented, “Over
the past few months, we have onboarded and deployed an amazingly
talented commercial team that shares our passion for making a
difference for patients. As our potential PDUFA date approaches,
the team is focused on launch readiness by year-end in order to
maximize the potential launch of voclosporin.”
Recent Highlights
New Drug Application (NDA) for voclosporin granted Priority
Review and January 22, 2021 PDUFA date
In July 2020, the Company announced that the U.S. Food and Drug
Administration (FDA) has accepted the NDA filing for voclosporin,
as a potential treatment for lupus nephritis (LN). The FDA has
granted Priority Review for the NDA, which provides an expedited
six-month review, and has assigned a PDUFA target action date of
January 22, 2021. The FDA has also informed the Company that they
are not currently planning to hold an advisory committee meeting to
discuss the application. The FDA has the option to change this
decision based on review of the pending NDA. There are currently no
FDA-approved treatments for LN.
Appointment of Stephen Robertson as Executive Vice President,
General Counsel, Corporate Secretary & Chief Compliance
Officer
On November 2, Aurinia appointed Mr. Robertson as Executive Vice
President, General Counsel, Corporate Secretary & Chief
Compliance Officer, following the departure of Dr. Erik Eglite, who
served as General Counsel since 2017. Mr. Robertson brings more
than 13 years of corporate law experience across various roles with
the law firm Borden Ladner Gervais LLP, where he has been a Partner
since 2014. He has focused on advising clients on securities,
corporate and commercial legal matters, including extensive
experience with mergers and acquisitions and commercial agreements.
Mr. Robertson has served as Corporate Secretary for Aurinia since
2014.
July 27, 2020 Public Offering
On July 27, 2020 the Company completed an underwritten public
offering of 13.33 million Common Shares (the “July 2020
Offering”).
The Common Shares were sold at a public offering price of $15.00
per share. The gross proceeds from the July 2020 Offering were $200
million before deducting the 6% underwriting commission and other
offering expenses which totaled an estimated aggregate $12.3
million. Jefferies and SVB Leerink acted as joint book-running
managers for the July 2020 Offering. Cantor acted as lead manager
and Oppenheimer & Co and H.C. Wainwright & Co. acted as
co-managers for the July 2020 Offering. We intend to use the net
proceeds of the July 2020 Offering for pre-commercialization and
launch activities, research and development (R&D), as well as
working capital and general corporate purposes.
Financial Liquidity at September 30, 2020
As of September 30, 2020, Aurinia had cash, cash equivalents and
investments of $421 million compared to $306 million at December
31, 2019. Net cash used in operating activities was $30.3 million
for the third quarter ended September 30, 2020 compared to $11.8
million for the third quarter ended September 30, 2019.
The Company believes that it has sufficient financial resources
to fund its current plans, which include conducting its ongoing
R&D programs, obtaining approval of voclosporin for the
potential treatment of LN, 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 the end of 2022.
Financial Results for Three Months Ended September 30,
2020
The Company reported a consolidated net loss of $34.1 million or
$0.28 per Common Share for the third quarter ended September 30,
2020, as compared to a consolidated net loss of $19.0 million or
$0.21 per Common Share for the third quarter ended September 30,
2019.
The net loss for the third quarter ended September 30, 2020
reflected a non-cash decrease of $2.6 million in the estimated fair
value of derivative warrant liabilities compared to a non-cash
decrease of $4.5 million in the estimated fair value of derivative
warrant liabilities for the same period in 2019. 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. The outstanding warrants expire on December
28, 2021.
The loss before the change in estimated fair value of derivative
warrant liabilities and income taxes was $36.7 million for the
third quarter ended September 30, 2020 compared to $23.5 million
for the same period in 2019.
R&D expenses decreased to $4.8 million for the third quarter
ended September 30, 2020 compared to $17.8 million for the same
period in 2019. The decrease is due to a decrease in activities
related to clinical trials and exploratory development work and the
capitalization of inventory and internal development costs as
management believes that approval by the FDA of voclosporin as a
treatment for LN was reasonably assured.
Non-cash stock compensation expense charged to R&D increased
to $814,000 for the third quarter ended September 30, 2020 compared
to $596,000 for the same period in 2019. The increase in stock
option compensation expense for the three months ended September
30, 2020 reflected higher stock option grants resulting from the
hiring of new employees and an increase in the fair value of the
stock options granted due to the significant increase in our share
price.
Corporate, administration and business development expenses
increased to $31.1 million for the third quarter of 2020 compared
to $6.1 million for the same period in 2019. The increase reflects
the investment incurred to build out our organization to support
the launch of voclosporin as a treatment for LN which is planned
for early 2021, subject to FDA regulatory approval being granted.
Since the release of the positive results of our AURORA trial in
December of 2019 we have moved quickly to develop our commercial
capabilities across the organization including the expansion of the
commercial team headed by our new Chief Commercial Officer.
Non-cash stock compensation expense charged to corporate,
administration and business development increased to $3.8 million
for the third quarter ended September 30, 2020 compared to $1.4
million for the same period in 2019. The increase in stock option
compensation expense for the three months ended September 30, 2020
reflected higher stock option grants resulting from the hiring of
new employees and an increase in the fair value of the stock
options granted due to the significant increase in our share
price.
Financial Results for Nine Months Ended September 30,
2020
For the nine months ended September 30, 2020, Aurinia reported a
consolidated net loss of $80.1 million or $0.69 per Common Share
compared to a consolidated net loss of $47.4 million or $0.52 per
common share for the same period in 2019.
R&D expenses were $29.7 million for the nine months ended
September 30, 2020 compared to $39.6 million for the same period in
2019. The decrease in these expenses is due to a decrease in
activities related to clinical trials and exploratory development
work and the capitalization of inventory and internal development
costs as management believes that approval by the FDA of
voclosporin as a treatment for LN was reasonably assured.
Corporate, administration and business development expenses were
$57.7 million for the nine months ended September 30, 2020 compared
to $14.9 million for the same period in 2019. The increase reflects
the investment incurred to build out our organization to support
the launch of voclosporin as a treatment for LN which is planned
for early 2021, subject to FDA regulatory approval being granted.
Since the release of the positive results of our AURORA trial in
December of 2019 we have moved quickly to develop our commercial
capabilities across the organization including the expansion of the
commercial team headed by our new Chief Commercial Officer.
Non-cash stock compensation expense totaled $12.3 million for
the nine months ended September 30, 2020 compared with $5.6 million
for the same period in 2019 and is included in both R&D and
corporate, general and business development expenses.
For the nine months ended September 30, 2020 Aurinia recorded a
non-cash decrease of $9.5 million in the estimated fair value of
derivative warrant liabilities compared to a non-cash decrease of
$6.9 million for the comparable period in 2019.
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, 2020 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, 2020 financial results today,
Tuesday, November 10, 2020 at 4:30 p.m. ET. The webcast can be
accessed on the investor section of the Aurinia website at
www.auriniapharma.com. To participate in the teleconference please
dial +1-877-407-9170 (Toll-free U.S. & Canada).
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. Voclosporin may result in 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 patent extension laws in other countries 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-stage clinical
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 the investigational drug voclosporin for the
treatment of lupus nephritis (“LN”). The Company’s head office is
in Victoria, British Columbia and focuses its development efforts
globally. The Company’s US commercial office is located in
Rockville, Maryland.
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: the
anticipated NDA filing by the end of the third quarter of 2020 and
potential approval in early 2021; the Company’s continued evolution
into a commercial-stage organization; the anticipated U.S. launch
of Voclosporin as the first FDA-approved treatment for LN; the
Company’s belief that it has sufficient cash resources to
adequately fund its plans which include conducting its ongoing
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 the end of
2022; 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 with anticipated pediatric extension; and 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. 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 programs; that
another company will not create a substantial competitive product
for Aurinia’s LN 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;
that Aurinia will successfully complete its clinical programs on a
timely basis; the planned studies achieving positive results;
Aurinia being able to extend and protect its patents on terms
acceptable to Aurinia; the size of the LN market; 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 including
approval of marketing authorization applications and new drug
approvals, as well as favourable product labeling; 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 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; unknown
impact and difficulties imposed by the COVID-19 pandemic on our
business operations including nonclinical, clinical, regulatory and
commercial activities; and our assets or business activities may be
subject to disputes that may result in litigation or other legal
claims. 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.
Interim Condensed Consolidated
Statements of Financial Position
(unaudited – amounts in thousands of
U.S. dollars)
September 30,
2020
$
December 31,
2019
$
Assets
Cash, cash equivalents and short term
investments
392,042
306,019
Accrued interest and other receivables
1,127
368
Inventories
6,757
-
Prepaid expenses and deposits
11,714
8,750
411,640
315,137
Long term investments
28,797
-
Clinical
trial contract deposits
209
209
Property
and equipment
9,663
93
Acquired
intellectual property and other intangible assets
11,441
11,244
461,750
326,683
Liabilities and Shareholders’
Equity
Accounts payable and accrued
liabilities
20,189
11,177
Other current liabilities
3,700
118
23,889
11,295
Derivative warrant liabilities
19,852
29,353
Other
non-current liabilities
19,166
12,519
62,907
53,167
Shareholders’ equity
398,843
273,516
Total liabilities and shareholders’
equity
461,750
326,683
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, 2020
Sept. 30, 2019
Sept. 30, 2020
Sept. 30, 2019
$
$
$
$
Revenue
Licensing revenue
29
230
88
289
Expenses
Research and development
4,800
17,791
29,711
39,574
Corporate, administration and business
development
31,068
6,061
57,670
14,908
Amortization of acquired intellectual
property and other intangible assets
348
348
1,044
1,041
Amortization of property and equipment
154
41
354
116
Other expenses
426
140
2,351
1,028
36,796
24,381
91,130
56,667
Loss before interest income, finance
costs, change in estimated fair value of derivative warrant
liabilities and income taxes
(36,767)
(24,151)
(91,042)
(56,378)
Interest income
170
636
1,381
2,234
Finance costs
(101)
(9)
(204)
(30)
Loss before change in estimated fair
value of derivative warrant liabilities and income taxes
(36,698)
(23,524)
(89,865)
(54,174)
Change in estimated fair value of
derivative warrant liabilities
2,599
4,512
9,492
6,862
Loss before income taxes
(34,099)
(19,012)
(80,373)
(47,312)
Income tax (recovery) expense
(35)
25
(249)
54
Net loss and comprehensive loss for the
period
(34,064)
(19,037)
(80,124)
(47,366)
Net loss per Common Share (expressed in
$ per share)
Basic and diluted loss per Common
Share
(0.28)
(0.21)
(0.69)
(0.52)
Weighted average number of Common Shares
outstanding
122,357
92,169
115,738
91,368
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201110006074/en/
Investor & Media Contacts: Glenn Schulman, PharmD,
MPH Corporate Communications gschulman@auriniapharma.com
Joseph Miller Chief Financial Officer
jmiller@auriniapharma.com
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