Aurinia Pharmaceuticals Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2024

There are 10 speakers on the call.

Operator

As a reminder, this conference is being recorded. It's now my pleasure to turn the conference over to Andrea Christopher, Head of Corporate Communications and Investor Relations for Aurinia Pharmaceuticals.

Operator

Please go ahead, Andrea.

Speaker 1

Thank you, operator, and thank you to everyone for joining today's call and webcast. Joining me on the call this morning are Peter Greenleaf, Aurinia's Chief Executive Officer Joe Miller, our Chief Financial Officer and Doctor. Greg Keenan, our Chief Medical Officer. Today, we will review and discuss Aurinia's 2024 Q1 financial and operational results as communicated in the company's press release issued this morning. The company also filed its quarterly financial statements on Form 10 Q this morning.

Speaker 1

For more information, please refer to Aurinia's filings with the U. S. Securities and Exchange Commission and applicable Canadian securities authorities, which are also available on Aurinia's website atauriniapharma.com. During today's call, Aurinia may make forward looking statements based on current expectations. These forward looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially.

Speaker 1

For a discussion of factors that could affect Aurinia's future financial results and business, please refer to the disclosures in Aurinia's press release, its quarterly report on Form 10 Q and its annual report on Form 10 ks and all of its recent filings with the U. S. Securities and Exchange Commission and Canadian Securities Authorities. Please note that all statements made during today's call are current as of today, Thursday, May 2, 2024, unless otherwise noted and are based upon information currently available to us. Except as required by law, Aurinia assumes no obligation to update any such statement.

Speaker 1

Now let me turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?

Speaker 2

Thanks, Andrea, and good morning, everyone. I want to thank everybody for joining us on today's call. On this morning's call, we will focus on the Q1 performance. I'll then turn the call over to Joe Miller, our CFO, to provide additional details on our financial results. We saw continued strong momentum in the Q1, reflecting the initiatives that the company is focused on, including demonstrating solid commercial execution, rapidly restructuring the company and reducing our headcount by approximately 25% and accelerating the company's timeline towards cash flow positivity.

Speaker 2

So now let me dive into the Q1 business performance and how we're executing on these overall initiatives. For the Q1 of 2024, Aurinia achieved $50,300,000 in total net revenue, representing growth of approximately 46% year over year. We achieved $48,100,000 in net product revenue, representing significant growth of approximately 40%. With this momentum, we remain on track to achieve our net product revenue guidance range of approximately $200,000,000 to $220,000,000 In terms of our restructuring efforts, we executed with speed and precision following the announcement on February 15, while maintaining our focus on loop kindness and growth. While we've ceased development on AUR-three hundred, we are currently exploring alternative approaches for AUR-two hundred.

Speaker 2

Taken as a whole, we expect the restructuring will drive the organization to a cash flow positive position, excluding share repurchases and over time will provide meaningful accumulation of cash, increasing tangible value and allowing more flexibility for the company for the future. As part of our corporate restructuring, we reduced employee headcount by approximately 25% in the Q1. With this effort, we expect to reduce operating expenses by $50,000,000 to $55,000,000 over the next 12 months, and approximately 75 percent of that will be recognized in this year. The company expects total annualized operating expenses on a go forward basis to be in the range of $185,000,000 to $195,000,000 with cash based operating expenses $95,000,000 with cash based operating expenses of approximately $155,000,000 to $165,000,000 With these achievements in mind, I'm very pleased to confirm that we expect to be cash flow positive excluding share repurchases in the Q2 of 2024 ahead of our prior projections. On the commercial front, we are laser focused on driving Loop Kinus revenues and have several key commercial metrics driving the brand's trajectory.

Speaker 2

In the Q1, we added 4 48 patient start forms and approximately 148 new patients who were either restarting loop kindness or receiving it through the hospital pharmacy. Together, these total approximately 5.96 PSFs in combination with restarts and hospital fills versus 4.66 PSFs in the prior year Q1, representing substantial year over year growth. There were approximately 2,178 patients on loop kinase therapy as of March 31, 2024, in comparison to approximately 1731 patients as of March 31, 2023, an increase of approximately 26%. And this was driven by overall improvements in all key commercial metrics. Net realizable revenue per patient for LUPCONUS remains higher than our initial guidance of 65,000 per patient on an annualized basis.

Speaker 2

As persistency, adherence in pricing has evolved over time, we now believe that net realizable revenue per patient will be in the range of $70,000 to $75,000 on an annualized basis. From the start of the year through April 28, 2024, the company has added approximately 5.82 PSFs and approximately 170 new patients from restarts in the hospital channel. We continue to sustain high conversion rates with approximately 85 percent of PSFs converting to patients on therapy. We also sustained a rapid conversion time with approximately 60% of patients starting therapy within 20 days. Our overall adherence rates remained high at 87% through the Q1 and persistency grew year over year from approximately 51% of patients remaining on therapy at 12 months to approximately 56% remaining on therapy at 12 months.

Speaker 2

Additionally, in the Q1, 50% and 46% of patients remained on therapy at 15 18 months, driving the upward trajectory of Luke Heinus. We are heading towards cash flow positivity and increasing the company's financial strength and flexibility for the future. Along with this strong financial performance, we also recently achieved several key milestones reflecting the importance of LoopConus as a best in class drug with a strong clinical portfolio that aligns with the most current treatment guidelines. As announced earlier this week, the FDA has approved a label update for loop kindness. The label no longer includes language indicating that the safety and efficacy of loop kindness has not been established beyond 1 year.

Speaker 2

The label now includes long term data from a post hoc analysis of the AURORA 2 extension study. The data showed that patients receiving lupkinase achieved sustained complete renal response at every time point assessed throughout the 3 years when compared to MMF and low dose glucocorticosteroids alone. Shifting to our marketing efforts, we recently launched the Know the Signs campaign and innovated a new campaign designed to increase awareness among rheumatologists about the severity of lupus nephritis and the urgent need to prioritize kidney health for people with lupus as well as encouraging them to increase screening for lupus nephritis among lupus patients. With an under diagnosed and underserved population, we continue to believe there is still significant untapped potential in the LN market. Current screening and treatment guidelines are not actually being followed.

Speaker 2

We know that a high percentage of lupus and lupus nephritis patients are not being given regular urine screens at every visit and may still only receive steroids when proteinuria levels indicate additional treatment is necessary. Yet, our clinical trials have shown that lupkinase reduced proteinuria roughly 3 times faster than MMF in steroids alone. This is why we're heavily focused on improving physicians' understanding of the seriousness of lupus nephritis. We want rheumatologists to understand the necessity of more aggressively treating and diagnosing LN patients by treating to target protein levels and keeping them on therapy for a minimum of 3 to 5 years, all of which closely aligns with current treatment guidelines. Regarding commercial activities outside the U.

Speaker 2

S, we're seeing continued revenue from Otsuka's launch activities in Europe and we're also working diligently to expand access to lupkinase to another market with our pending regulatory approval in Japan. As previously noted, we expect to receive a response from the Japanese regulatory authorities in the second half of this year regarding the JNDA that Otsuka filed in November of 2023 for the approval of lupkinase to treat adults with active lupus nephritis. Upon approval, we expect to receive a milestone of $10,000,000 and from there low double digit royalties on net sales once launched. So in summary, we believe our first quarter accomplishments reflect solid execution against our previously announced business priorities. I also want to recognize that May is Lupus Awareness Month.

Speaker 2

At Aurinia, we take great pride in the work we do every day to improve the lives of people living with lupus nephritis. We are committed to making a difference for this patient community and we never lose sight of that. I'd now like to turn the call over to Joe for a more detailed review of the financial results, but I'll return at the end of the call for a quick recap and to then open the line to any questions that you might have. Joe?

Speaker 3

Thank you, Peter, and good morning, everyone. Let's take a few minutes and go into detail regarding our financial results for the Q1 of 2024. Total net revenue was $50,300,000 $34,400,000 for the 3 months ended March 31, 2024 and March 31, 2023, respectively. Net product revenue over the same periods was $48,100,000 $34,300,000 representing growth of approximately 46% 40%, respectively. The increase is primarily due to an increase in Loop Kindness sales from our 2 main specialty pharmacies, driven predominantly by further penetration of the LN market.

Speaker 3

Total cost of sales and operating expenses, inclusive of one time restructuring charge in Q1, twenty twenty four were $63,600,000 for the quarter ended March 31, 2024, and $64,000,000 for the quarter ended March 31, 2023. It is important to note that the Q1 was fully burdened from an operating expense standpoint as the restructuring charge was not fully implemented until late in the Q1 of 2024. Let me now give you a further breakdown of operating expenses, drivers and fluctuations. Cost of sales was $7,800,000 for the quarter ended March 31, 2024 $421,000 for the quarter ended March 31, 2023. The increase is primarily due to increased sales of Loop Kindness coupled with the amortization of the Monoplan Finance right of use asset, which was placed into service in late June 2023.

Speaker 3

Gross margins for the quarter ended March 31, 2024 and March 31, 2023 was approximately 85% 99%. Selling, general and administrative expenses inclusive of share based compensation were 47,700,000 dollars 50,100,000 for the 3 months ended March 31, 2024 and March 31, 2023, respectively. The primary drivers for the decrease were lower corporate costs, employee related costs due to the reduction in headcount, which occurred late in the Q1 of 2024 and lower spend for travel. The decrease in SG and A operating expenses reflects the early impact of our restructuring efforts, though this balance does not include The one time restructuring charge is reflected as a standalone line item in the profit and loss statement and will be discussed separately in a moment. Non cash SG and A share based compensation expense was $7,500,000 for the Q1 of 2024 $7,600,000 for the prior year period.

Speaker 3

Research and development expenses inclusive of share based compensation expense was $5,600,000 for the quarter ended March 31, 2024 and $13,200,000 for the quarter ended March 31, 2023. The decrease is primarily related to exiting our pipeline programs as previously announced, but does not include the impacts of the one time restructuring charge. As previously mentioned, the one time restructuring charge is reflected as a standalone line item. Non cash share based compensation expense included within R and D expense was a credit of $2,200,000 and an expense of 1.6 $1,000,000 for the quarters ended March 31, 2024 and March 31, 2023. The primary driver for the decrease compensation is related to the reduction in headcount, which occurred late in the Q1 of 2024.

Speaker 3

Restructuring expenses for the quarter amounted to 6,700,000 dollars and in the prior year period to 0. The balance was primarily made up of employee severance and one time benefit payments and contract termination costs. The company has recognized most of its planned restructuring costs in the Q1. Other income was $4,100,000 and interest expense was 1,300,000

Operator

for the quarter ended

Speaker 3

March 31, 2024 compared to other expense of $290,000 and no interest expense for the prior year period. The changes for both other income and interest expense related to our mono plant finance right of use asset, which is denominated in Swiss francs and was placed in the service in late June 20 23. Interest income was $4,500,000 for the quarter ended March 31, 2024 and $3,800,000 for the prior year period. The increase is due to higher yields in our investments as a result of increased interest rates. Aurinia recorded a net loss of $10,700,000 or $0.07 net loss per common share for the quarter ended March 31, 2024 as compared to a net loss of $26,200,000 or $0.18 net loss per common share for the quarter ended March 31, 2023.

Speaker 3

As of March 31, 2024, Aurinia had cash, cash equivalents and restricted cash and investments of $320,100,000 compared to $350,700,000 at December 31, 2023. The decrease is primarily related to continued investment in commercialization activities and post approval commitments of our approved drug, Loop Kindness, mono plant payments, share repurchases and restructuring related payments, partially offset by an increase in cash receipts from sales of Loop Kindness. The company remains debt free at March 31, 2024. With that, I would like to hand the call back over to Peter for some closing remarks. Peter?

Speaker 2

Thanks, Joe. Obviously, we're looking forward to continued strong performance in 2024 and beyond. I want to thank you all for your time today. We will now open up the lines for any questions you might have. Operator?

Operator

Thank you. We'll now be conducting a question and answer session. Our first question today is coming from Maury Raycroft from Jefferies. Your line is now live.

Speaker 4

Hi, good morning. Thank you for taking my questions. This is Farzin on for Maury. I wanted to ask on the implications of the updated label. Your conversion rate for the PSF has been in the mid-80s.

Speaker 4

Do you expect that to further or do you expect primarily to influence prescribers perception of the drug?

Speaker 2

So thank you for the question. Listen, I think the label update is a recognition of by the agency of the data that we provided in addition to the original AURORA pivotal study. I think it's going to be helpful to not be concluded in the indication language that anything beyond 1 year has not been studied. To have that taken out and to have the 3 year data incorporated into labels is going to help us I think on multiple fronts. Probably not on the conversion side of the equation, but we'll see.

Speaker 2

We're looking at it more on the probably the persistency side and ensuring that the drug gets utilized as both the EULAR and the Codigo guidelines outline, 3 to 5 years of therapy approximately. So we see it more as persistency and length of therapy and additive to the already published data that's out there.

Speaker 4

Okay, makes sense. And then last month you had like 156 that accounted, the total PSS and restarts. So this is trending a bit lower than the average 1Q monthly numbers. Is that general lumpiness or were there any factors driving the slowness in April?

Speaker 2

Well, the exact number I think in combination PSFs plus the restarts and hospitals was closer to 170. So probably just you were quick doing the math. I think it was 170. If you look at that on a per week basis versus where we were in the 1st 13 weeks of the year, it's pretty consistent, maybe slightly lower, but pretty consistent with what we did in the Q1 of the year. If you look at it April 2023, it's almost directly on target with where we were in April of 'twenty three, but that was just a PSF number last year.

Speaker 2

So if you look at PSFs sort of on April 'twenty three versus PSFs alone in April 24, the numbers were very consistent. The big driver of the change in about 25% improvement year over year in the month of April was driven by both restarts and

Speaker 4

Next

Operator

you. Next question today is coming from Stacy Ku from TD Cowen. Your line is now live.

Speaker 5

Hey there. And sorry if I repeat a question because I got kicked off momentarily. So thanks so much for taking our questions. We did have a few. First is a follow-up to what I believe was the first question.

Speaker 5

Just can you talk about big picture, what's your evolving thoughts around patient start forms and the current candidate additions as we look forward? And then how important is formulary purchases in the hospital channel for your long term growth? That's the first kind of question. I have a few follow ups.

Speaker 2

Thank you. I think it's a great question. Obviously PSFs we see as important. But I think as you've seen, because I think it's the best indicator of new patient volume and since 85% of those convert, new patient starts and kind of our equivalent of an NRX, right? But this emergence over the last, let's call it 6 to 12 months of the importance of restarts and albeit smaller, but emerging hospital business showed new lines of growth.

Speaker 2

So the way we talk about it, Stacy, internally is more how does our new patient on therapy numbers look within the quarter. And I think that's an important one. And that's a combination of all the 3. I'm not trying in any way to discount the importance of PSFs. We think all our marketing and selling initiatives that we have out there, the primary driver is identifying new patients and getting new patients on drug.

Speaker 2

But for the last, let's call it 6 months plus, a lot of our growth has come from both these restarts, which I think points to the importance of the AURORA 2 extension study, this label change and the work we've been doing over the last 12 months. But it doesn't in any way, in my mind, discount the need to focus on new patient growth. And while the hospital patients are indeed new patients, the PSFs are still a major indicator for that.

Speaker 5

Okay, understood. And then around your 2024 revenue guidance, you want to just walk through, remind us about the seasonality, quarterly cadence expectations and how you feel about kind of your revenue guidance for the high and low end this year?

Speaker 2

Well, as you know, we don't give any numeric or sort of pillars to the high and the low, but sort of qualitatively speaking, I think the low end of the guidance with the quarter we just produced would have to see a significant decline or some challenge in the summertime and then back to growth in the Q4 and the high end of the range. This is very generally how we think of it and getting above that range is going to be driven by how well we perform in the summer since for 3 seasons now we've had a little bit of a dip during the summertime or a flattening in the summertime. If we can power through that, we think we have the ability to be in the upper end of that range. Lastly, I think 2Q performance will be a key driver to look at guidance in general and see where we are for the year. And with that outperforms, then we'll come back to the table and talk about where we see the year coming out.

Speaker 2

But the biggest swing on 200 to that 220 range is going to be the summer months of the year.

Speaker 5

Okay, understood. And then last question is just a follow-up on your comments around exploring alternative approaches for your pipeline product 200. But just help us understand what does that mean? Can you go into a little bit more detail for us? Thank you so much.

Speaker 2

Yes. I think the short answer is, the difference between AUR 203100 in our pipeline was we own AUR200. Yes, we have follow on commitments to those that we purchased it from very minimal, but we have we do have commitments. So we will either seek to develop the drug through someone else or value that we would see for the asset and the type of speed we would want for the asset. So, in other words, we don't want to just shelve it and not get the value of this April BAF inhibitor, which obviously more and more data emerges every day on the April BAF space as it pertains to IGAN in particular.

Speaker 2

But we think more broadly there's going to be a place for April BAF inhibitors in the B cell pathway and much more immunology disorders moving forward. So we want to keep this thing moving forward, whether it's in our own hands or someone else's.

Speaker 5

Okay. Understood. Thank you so much.

Speaker 2

Thanks, Stacy.

Operator

Thank you. Our next question is coming from Joseph Schwartz from Leerink Partners. Your line is now live.

Speaker 6

Hi. Thank you and congrats on a strong quarter. I wanted to ask first about your initiatives around screening and diagnosis. Where is the community now on that front? How much screening is being done?

Speaker 6

And how much have you been able to move that needle? And how is progress there contributing to new patient starts relative to the other initiatives you have ongoing?

Speaker 2

Thanks for the question, Joe. I think we have one series of sort of physician reported AAU that's been done. And at least at the rheumatologist level, what we can tell you is that we're seeing some improvement in treatment. We're seeing some improvement in awareness of need to diagnose lupus patients and do urine screens. We haven't seen that Joe pull through yet to actual claims data.

Speaker 2

And there's no direct, it's not one to one and it's kind of even our interpretation of claims data is kind of, you have to take some liberties around what's submitted through the claim to try to get under that. What I can tell you is these numbers have been like grossly low historically, at least as reported by a large patient record audit that was done by Optum a few years back looking at lupus patients, couple of 100,000 lupus patients over several years. And you're looking at numbers like less than 50% of these patients even get a urine screen. This is lupus patients. Guidelines say they should get it every time they come in the office.

Speaker 2

And when they do have a positive proteinuria or proteinuria level that the guidelines would indicate, indeed are is a lupus nephritis diagnosis, only 30% of them even get treated. And you'd say, well, geez, why? I think one is just general awareness. And I think rheumatologists will treat proteinuria and lupus nephritis differently. I think they see lupus nephritis as several grams of proteinuria and or protein urine and they see low proteinuria as not indeed being on nephritis.

Speaker 2

Now it's a little bit of a liberty from some of the research work we've done, but the awareness we need to build is that even low levels are indicative of poor outcomes for the patient moving forward and you're never going to find it unless you're doing a urine screen. So I think we're making impact there more to come as we continue the campaign forward.

Speaker 6

Yes, it seems like a great area for your white space. I was wondering also regarding the updated label, I think that happened fair amount ahead of expectations given we were expecting an update in the second half. So can you talk about why that turned around so fast? How does the updated label fit within your expectations? And is there any potential to limit the REMS in the future with any additional label updates going forward?

Speaker 2

Well, we don't have a REMS in the technical sense. So maybe I'll answer the question and maybe as you're thinking about it, Joe, come back to me with what you mean by the REMS. As we previously communicated, we let the agency know that we were going to do the extension study and that we were also going to do a biopsy substudy as part of the pivotal. The agency said, great, we'd love to see that data, but it wasn't packaged as your classic supplemental NDA, right? So when we fed this data to the U.

Speaker 2

S. FDA, obviously, we were glad they would take it, but understood that it wasn't technical supplemental new drug application process. The agency luckily treated it much like a supplemental and they performed within the 9 to 12 months category of what a normal supplemental is. And we were more conservative probably in our estimate because this technically wasn't in our view a supplemental NDA package. So it came earlier than maybe the way we guided externally, which is a positive.

Speaker 2

And I think in terms of our expectations, this hit pretty much on everything we had expected. We wanted the language removed from the indication statement now that there's more than 1 year data and we wanted the data incorporated. I will say that the biopsy substudy data was not incorporated, but we don't think that's limiting. We think that data can still be made available through publication and through medical drug and information request forms.

Speaker 6

That makes sense. That answers my question. And then what about your recently announced buyback? Have you made any progress buying any shares back yet?

Speaker 2

Short answer is yes. Within the quarter, we actually up until the I believe this is up until the end of April, we purchased about $18,400,000 worth of stock with an average cost of $5.37 which equates to about 3,400,000 total shares. On just for future, because I'm sure that's kind of the follow on question, we would look to fund any future purchases through discretionary purchase, repurchases through cash flows and not through what's cash on hand and it's at the Board's discretion. So we'll report out more as we go here, but $18,400,000 through the end of April.

Speaker 6

Helpful. Thank you.

Speaker 2

Thanks, Joe.

Operator

Thank you. Next question is coming from Ed Arce from H. C. Wainwright. Your line is now live.

Speaker 7

Hi, good morning. Thanks for taking my questions. Just a couple here. I wanted to follow-up again really on the bigger picture here in particular with the updated label. I gather you've got the main aspects of that you've got into this new label.

Speaker 7

In particular, I wanted to have you speak a little bit further, Peter, if you could, on your view of that, the impact of that label, particularly longer term persistence and doctors eventually treating this as a long term treatment. Along with the Know the Signs campaign, which in particular targets the rheumatologists, which have been the lower prescribing group of the 2. Just broad thoughts on the longer term perspective and impacts of those.

Speaker 2

Well, I'm sure it wasn't missed on anybody, but over the last couple of quarters, we've actually seen improvement in terms of our persistency. And at least from my history of doing this for a little while and multiple drugs, persistency is a really hard thing to move. In the biologics category when we launched anti TNF, I remember those numbers staying fairly consistent for a very long time, no matter how much money we threw at it. And I think here, we were sort of right below 50%. We inched up to 50% at 1 year and now we're at 56%.

Speaker 2

So on a macro level, I think having this data out there that shows that at least this C and I can be used, this next generation C and I can be used for longer periods of time is incredibly helpful. I think alongside of that, the guidelines are now very vocal about aggressive diagnosis, earlier treatment. They've always been fairly consistent about levels and needing treatment, but now they're very clear and you actually have companies and investment going into educating and making sure that people start to actually put these guidelines into play. So for the longer term, the bigger picture question, we need to see more aggressive diagnosis in the rheumatologist office. We need to see target levels of proteinuria treated by rheumatologists, when there are signs.

Speaker 2

And this is not just Aurinia's goal. This is the goal of the treatment guidelines. And then those treatment guidelines estimate the patient should be on an estimated 3 to 5 years. So all of those things have significant level of improvement that can happen. And I think that's what's going to move this whole category, to a much larger opportunity for the industry.

Speaker 2

And I also think it's going to take the burden of disease for the patients we're trying to care for here and take it down dramatically. So that's kind of the big picture view at least as we see it, Ed.

Speaker 7

Great. That's helpful. A couple more if I may. Just one question on AUR200. You mentioned that remains a very interesting target, the April BAF inhibitor.

Speaker 7

Just wondering if you have any particular development timelines or anything you can share in terms of news flow near term with that? And then last question, wanted to ask about the comment about the newer higher expectations for lupkinis pricing, 70 to 75 versus the 65 previously. What is it that you think has persisted and changed your view from prior expectations? Thanks again.

Speaker 2

Yes. I'll take the first one and then I'll have Joe kind of give his $0.02 on the $0.70 to $0.75 average net. Listen, I think just to give the most update information that we have on it, AUR-two hundred, the IND was approved by the U. S. FDA.

Speaker 2

So we are ready to start on SAD MAD studies. And we'll as I said on the call, our goal is to keep this thing moving forward. So when we actually do have a path, whether internally or externally forward, we understand that getting clear about how long those SAD MAD studies will take, when you're going to have your first in human clinical studies and when you should expect to see Phase 2 data, Phase 3 data, etcetera, and in what indications soon. So, I would earmark that one for a future call, but know that the IND has been approved by the U. S.

Speaker 2

FDA we're moving into animal tox and in the SAD MAD studies this year, either through Aurinia or through an external party. So the pricing question, let me kick that to Joe. Hey Ed. Yes, to follow-up

Speaker 3

on your pricing question, I think it's kind of 2 factors. 1 is obviously Peter already touched on it, which was the persistency itself that has evolved kind of considerably over time. I think if you look back Q1 of 2023, it was about 51% at 12 months, it's now moved to 56% at 12 months. So that's probably your largest driver for the evolution of the net revenue per patient estimate. Also coupled into that is some small price increases over time that have kind of inched up that number on average.

Operator

Thank you. Our next question is coming from David Martin from Bloom Burton. Your line is now live.

Speaker 8

Yes. Good morning. Thanks for taking my questions. First off, also going back to the updated lube kinase label, is there any part of that that could give rise to new patent claims, do you think or is everything related to the change already in your existing patents?

Speaker 2

Well, as we've mentioned previously, David, we have patents on file with the U. S. FDA that have not been or the U. S. Patent and Trade Office that have not publicly been disclosed and won't be until we actually get some action, whether it's an acceptance of the patents or not.

Speaker 2

I can tell you that regardless of the U. S. Label change and the U. S. Label can be helpful unearthed the data from the extension study in general.

Speaker 2

And I would just leave you with know that it follows sort of that line of possibility in terms of those patents that are on file with the U. S. FDA. So the short answer is, yes, but we haven't had a readout from the USPTO yet.

Speaker 8

Got it. Second question, with restarts becoming more important and trending up, do you have a read on what percent of patients have the proteinuria rebound after coming off loop kinase and how long does it typically take for that rebound to occur?

Speaker 2

The short answer is, and I would look to Greg if he's got a clinical answer to this. I think the data is emerging on this in terms of what we know internally in terms of seeing the percent of the patients come back. I'm not sure that we have a quantitative read as to how long that takes and what those proteinuria levels are. What we do know is unfortunately the disease and this isn't a loop kinase issue. This is an MMF issue.

Speaker 2

This is a loop kinase issue. It's any drug that comes after us until we get more alignment to treatment guidelines, that it's treated episodically. And that when patients and some of this might be due to the fact that historical drugs had a lot of toxicity alongside of them that they use to treat the disease. So trying to intermittently treat was a pattern that was just derived from trying to manage these potentially toxic drugs that were being put on the patients. But the short answer is, we see this is continuing to be an opportunity as we shift the market more aligned to guidelines.

Speaker 2

Greg, what would you add?

Speaker 9

Excuse me, at the end of our AURORA program, we monitored patients for a subsequent 4 weeks and there was stability with regard to the patient's response in terms of proteinuria for that subsequent 4 weeks. Thereafter, I certainly agree with you, Peter, that different individuals will have recurrence at different points. I'll just emphasize one thing. The opinion leaders in this area indicate like you are implying this is a chronic disease, not an episodic disease irrespective about how clinicians treat it and hence, the recommendations to maintain treatment once they secure response is important.

Operator

Thank you. We've reached the end of our question and answer session. Like to turn the floor back over to management for any further or closing comments.

Speaker 2

I want to thank everybody for their time today. Look forward to updating you as we move into the Q2. Have a great day.

Operator

Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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Key Takeaways

  • Q1 net revenue rose 46% year-over-year to $50.3 M (net product revenue $48.1 M), keeping the company on track for its $200 M–$220 M 2024 guidance range.
  • Restructuring: a ~25% reduction in headcount is expected to save $50 M–$55 M over 12 months and drive cash flow positivity (excluding share repurchases) in Q2 2024.
  • Commercial execution remains strong, with patient start forms up, 2,178 patients on therapy (+26% YoY), an 85% PSF-to-patient conversion rate, 87% adherence, and net revenue per patient now projected at $70 K–$75 K annually.
  • FDA label update removes the “beyond 1 year” caveat and incorporates 3-year AURORA extension data, expected to support longer-term treatment persistence per EULAR and KDIGO guidelines.
  • Pipeline and international expansion: the IND for AUR-200 (a BAF inhibitor) has been approved and is moving into first-in-human studies, and Aurinia awaits a H2 2024 Japanese regulatory decision that would trigger a $10 M milestone and future royalties.
AI Generated. May Contain Errors.
Earnings Conference Call
Aurinia Pharmaceuticals Q1 2024
00:00 / 00:00