$28.4 million in total net revenue for the
fourth quarter 2022, a 21% increase over fourth quarter 2021 and
$134.0 million for full year 2022, a 194% increase over 2021
Cash, cash equivalents, and investments of
$389.4 million as of December 31, 2022
Conference call to be hosted today at 8:30 a.m.
ET
Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the
Company) today issued its financial results for the fourth quarter
and the full year ended December 31, 2022. Amounts are expressed in
U.S. dollars.
Aurinia achieved total net revenue of $28.4 million and $134.0
million for the fourth quarter and full year ended December 31,
2022, respectively. Aurinia achieved net product revenue of $28.3
million and $103.5 million for the fourth quarter and full year
ended December 31, 2022, respectively.
“2022 was a year of significant growth generating $134.0 million
in total net revenue representing a 194% increase over the previous
year. As an organization, we continue to advocate for improved
screening, diagnosis and the treatment of lupus nephritis with
healthcare providers while reinforcing the clinical benefits of
LUPKYNIS over the historic standard of care,” said Peter Greenleaf,
President and Chief Executive Officer of Aurinia. “We are focused
on operational and commercial execution and are poised for
continued growth in and outside the U.S., as we work to change the
course of lupus nephritis and other autoimmune diseases.”
For fiscal year 2023, the Company is reiterating its previous
net product revenue guidance of $120 to $140 million from sales of
LUPKYNIS. This range represents a double-digit percentage increase
in net product revenue from sales of LUPKYNIS compared to fiscal
year 2022.
Fourth Quarter 2022 Highlights & Upcoming
Milestones:
- There were approximately 1,525 patients on LUPKYNIS therapy at
December 31, 2022, compared with 1,354 at September 30, 2022.
- Aurinia added 406 PSFs during the fourth quarter 2022, a 15%
decrease from the fourth quarter 2021 (477), and a 9% increase from
third quarter 2022 (374), exiting the year with a total of 1,648
PSFs during 2022.
- Through February 24, 2023, the Company has secured 274 PSFs for
a total of approximately 3,500 PSFs since launch.
- Conversion rates continue to improve with approximately 85% of
PSFs converted to patients on therapy.
- Time to convert continues to decrease with 30- and 60- day
conversion rates at their best levels since launch.
- Launched new direct to patient / consumer campaign focused on
patient education and activation.
- Terminated inter partes review of U.S. Patent No.
10,286,036.
- Strengthened the LUPKYNIS patent position with the receipt of a
Notice of Allowance from the U.S. Patent Trademark Office for an
additional method of use patent associated with the LUPKYNIS
proprietary dosing regimen (U.S. Patent Application (No.
17/713,140) and notification from the European Patent Office of its
intent to grant the European version of the existing U.S. method of
use patent (U.S. Patent No. 10,286,036) for LUPKYNIS.
Financial Results for the Quarter and Year Ended December 31,
2022
Total net revenue was $28.4 million and $23.4 million for the
quarters ended December 31, 2022 and December 31, 2021,
respectively. Total net revenue was $134.0 million and $45.6
million for the years ended December 31, 2022 and December 31,
2021, respectively. The increase in the quarter and full year
periods is due to an increase in LUPKYNIS product sales, which was
driven predominantly by further penetration in the LN market. The
increase for the year ended December 31, 2022 over December 31,
2021 also includes the recognition of a $30.0 million milestone
payment from Otsuka following the European Commission (EC) granting
marketing authorization of LUPKYNIS in September 2022.
Total cost of sales and operating expenses for the quarters
ended December 31, 2022 and December 31, 2021 were $56.5 million
and $56.1 million, respectively. Total cost of sales and operating
expenses were $245.5 million and $226.3 million for the years ended
December 31, 2022 and December 31, 2021, respectively. Further
breakdown of operating expenses drivers and fluctuations are
highlighted in the following paragraphs.
Cost of sales were $1.4 million and $0.5 million for the
quarters ended December 31, 2022 and December 31, 2021,
respectively. Cost of sales were $5.7 million and $1.1 million for
the years ended December 31, 2022 and December 31, 2021,
respectively. The increase for the quarter and full year periods
was primarily due to an increase in product related revenue,
coupled with an increase in our inventory reserves, which were
primarily related to reserves on process validation batches used
for FDA approval.
Gross margin for the quarters ended December 31, 2022 and
December 31, 2021 was approximately 95% and 98% respectively. Gross
margin for the years ended December 31, 2022 and December 31, 2021
was approximately 96% and 98%, respectively.
Selling, general and administrative (SG&A) expenses,
inclusive of share-based compensation, were $47.5 million and $44.8
million for the quarters ended December 31, 2022 and December 31,
2021, respectively. SG&A expenses, inclusive of share-based
compensation, were $196.4 million and $173.5 million for the years
ended December 31, 2022 and December 31, 2021, respectively. The
primary drivers for the increase for the quarter and full year
periods ended December 31, 2022 as compared to December 31, 2021
were an increase of professional fees and services mainly related
to corporate legal matters and pharmacovigilance; and travel, trade
shows and sponsorships to support the commercialization of
LUPKYNIS. Additionally, salaries, incentive pay and employee
benefits increased due to inflationary increases and routine year
over year merit and promotion increases.
Non-cash SG&A share-based compensation expense were $7.0
million and $7.2 million for the quarters ended December 31, 2022
and December 31, 2021, respectively. Non-cash SG&A share-based
compensation expense were $28.4 million and $26.4 million for the
years ended December 31, 2022 and December 31, 2021,
respectively.
Research and Development (R&D) expenses, inclusive of
share-based compensation, were $9.9 million and $11.1 million for
the quarters ended December 31, 2022 and December 31, 2021,
respectively. R&D expenses, inclusive of share-based
compensation expense, were $45.0 million and $51.1 million for the
years ended December 31, 2022 and December 31, 2021, respectively.
The primary drivers for the decrease were due to the $10.0 million
upfront license and accrued milestone expense for AUR300 in the
prior year, offset partially by additional developmental expenses
related to AUR200 and AUR300 for the year ended December 31, 2022.
In accordance with U.S. GAAP, AUR200 and AUR300 were recorded as
asset acquisitions and expensed as R&D expense at the
acquisition dates.
Non-cash R&D share-based compensation income and expense
were $0.3 million and $1.2 million for quarters ended December 31,
2022 and December 31, 2021, respectively. Non-cash R&D
share-based compensation expense were $3.3 million and $4.4 million
for the years ended December 31, 2022 and December 31, 2021,
respectively.
Interest income was $2.9 million and $0.1 million for the
quarters ended December 31, 2022 and December 31, 2021,
respectively. Interest income was $5.1 million and $0.5 million for
the years ended December 31, 2022 and December 31, 2021,
respectively. The increase for the quarter and full year was mainly
due to higher yields on our investments as a result of increasing
interest rates.
For the quarter ended December 31, 2022, Aurinia recorded a net
loss of $26.0 million or $0.18 net loss per common share, as
compared to a net loss of $33.3 million or $0.25 net loss per
common share for the quarter ended December 31, 2021. For the year
ended December 31, 2022, Aurinia recorded a net loss of $108.2
million or $0.76 net loss per common share as compared to a net
loss of $181.0 million or $1.40 net loss per common share for the
previous period.
Financial Liquidity at December 31, 2022
As of December 31, 2022, Aurinia had cash, cash equivalents and
restricted cash and investments of $389.4 million, compared to
$466.1 million at December 31, 2021. The decrease in cash, cash
equivalents and restricted cash and investments is primarily
related to the continued investment in commercialization
activities, advancement of our pipeline and a payment for the
achievement of a one-time milestone, partially offset by an
increase in cash receipts from the sale of LUPKYNIS and the
achievement of a $30.0 million one-time milestone upon the EC
granting marketing authorization of LUPKYNIS in September 2022.
Aurinia believes that it has sufficient financial resources to
fund its operations, which include funding commercial activities,
including FDA related post approval commitments, manufacturing and
packaging commercial drug supply, funding its commercial
infrastructure, advancing its R&D programs and funding its
working capital obligations for at least the next few years.
This press release is intended to be read in conjunction with
the Company’s consolidated financial statements and Management's
Discussion and Analysis for the year ended December 31, 2022 in the
Company’s Annual Report on Form 10-K, which will be accessible on
Aurinia's website at www.auriniapharma.com, on SEDAR at
www.sedar.com or on EDGAR at www.sec.gov/edgar.
Conference Call Details
Aurinia will host a conference call and webcast to discuss the
quarter and year ended December 31, 2022 financial results today,
Tuesday, February 28, 2023 at 8:30 a.m. ET. The audio webcast can
be accessed under "News/Events” through the “Investors” section of
the Aurinia corporate website at www.auriniapharma.com. In order to
participate in the conference call, please dial +1-877-407-9170
(Toll-free U.S. & Canada).
About Lupus Nephritis
Lupus nephritis is a serious manifestation of systemic lupus
erythematosus (SLE), a chronic and complex autoimmune disease.
About 200,000-300,000 people live with SLE in the U.S. and about
one-third of these people are diagnosed with lupus nephritis at the
time of their SLE diagnosis. About 50 percent of all people with
SLE may develop lupus nephritis. If poorly controlled, lupus
nephritis can lead to permanent and irreversible tissue damage
within the kidney. Black and Asian people with SLE are four times
more likely to develop lupus nephritis and Hispanic people are
approximately twice as likely to develop the disease compared to
White people with SLE. Black and Hispanic people with SLE also tend
to develop lupus nephritis earlier and have poorer outcomes,
compared to White people with SLE.
About Aurinia
Aurinia Pharmaceuticals is a fully integrated biopharmaceutical
company focused on delivering therapies to treat targeted patient
populations that are impacted by autoimmune, kidney and rare
diseases with a high unmet medical need. In January 2021, the
Company introduced LUPKYNIS® (voclosporin), the first FDA-approved
oral therapy dedicated to the treatment of adult patients with
active lupus nephritis. The Company’s head office is in Victoria,
British Columbia, its U.S. commercial office is in Rockville,
Maryland. The Company focuses its development efforts globally.
Forward-Looking Statements
Certain statements made in this press release may constitute
forward-looking information within the meaning of applicable
Canadian securities law and forward-looking statements within the
meaning of applicable United States securities law. These
forward-looking statements or information include but are not
limited to statements or information with respect to: Aurinia’s
estimates as to annual net product revenue from sales of LUPKYNIS
in the range of $120-$140 million in 2023; Aurinia’s estimates as
to the number of patients with SLE in the U.S. and the proportion
of those persons who will develop LN; Aurinia being confident that
it is poised for growth and product expansion; and Aurinia’s belief
that it has sufficient financial resources to fund its current
plans for at least the next few years. It is possible that such
results or conclusions may change. Words such as “anticipate”,
“will”, “believe”, “estimate”, “expect”, “intend”, “target”,
“plan”, “goals”, “objectives”, “may” and other similar words and
expressions, identify forward-looking statements. We have made
numerous assumptions about the forward-looking statements and
information contained herein, including among other things,
assumptions about: the accuracy of reported data from third party
studies and reports; the number, and timing of receipt, of PSFs and
their rate of conversion into patients on therapy; that Aurinia’s
intellectual property rights are valid and do not infringe the
intellectual property rights of third parties; Aurinia’s
assumptions relating to the capital required to fund operations;
the assumption that Aurinia’s current good relationships with its
suppliers, service providers and other third parties will be
maintained; assumptions relating to the burn rate of Aurinia’s cash
for operations; assumptions related to timing of interactions with
regulatory bodies; and that Aurinia’s third party service providers
will comply with their contractual obligations. Even though the
management of Aurinia believes that the assumptions made, and the
expectations represented by such statements or information are
reasonable, there can be no assurance that the forward-looking
information will prove to be accurate.
Forward-looking information by their nature are based on
assumptions and involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance, or
achievements of Aurinia to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking information. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in forward-looking statements or information. Such risks,
uncertainties and other factors include, among others, the
following: Aurinia’s actual future financial and operational
results may differ from its expectations; difficulties Aurinia may
experience in completing the commercialization of voclosporin; the
market for the LN business may not be as estimated; Aurinia may
have to pay unanticipated expenses; Aurinia may not be able to
obtain sufficient supply to meet commercial demand for voclosporin
in a timely fashion; unknown impact and difficulties imposed by the
COVID-19 pandemic on Aurinia’s business operations including
nonclinical, clinical, regulatory and commercial activities; the
results from Aurinia’s clinical studies and from third party
studies and reports may not be accurate; Aurinia’s third party
service providers may not, or may not be able to, comply with their
obligations under their agreements with Aurinia; regulatory bodies
may not grant approvals on conditions acceptable to Aurinia and its
business partners, or at all; and Aurinia’s assets or business
activities may be subject to disputes that may result in litigation
or other legal claims. Although Aurinia has attempted to identify
factors that would cause actual actions, events, or results to
differ materially from those described in forward-looking
statements and information, there may be other factors that cause
actual results, performances, achievements, or events to not be as
anticipated, estimated or intended. Also, many of the factors are
beyond Aurinia’s control. There can be no assurance that
forward-looking statements or information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
you should not place undue reliance on forward-looking statements
or information.
All forward-looking information contained in this press release
is qualified by this cautionary statement. Additional information
related to Aurinia, including a detailed list of the risks and
uncertainties affecting Aurinia and its business, can be found in
Aurinia’s most recent Annual Report on Form 10-K 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, and on Aurinia’s website at
www.auriniapharma.com.
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands)
December 31, 2022
December 31, 2021
Assets
Current assets:
Cash, cash equivalents and restricted
cash
$
94,172
$
231,900
Short-term investments
295,218
234,178
Accounts receivable, net
13,483
15,414
Inventories, net
24,752
19,326
Prepaid expenses
13,580
11,710
Other current assets
1,334
796
Total current assets
442,539
513,324
Non-current assets:
Other non-current assets
13,339
11,838
Property and equipment, net
3,650
4,418
Acquired intellectual property and other
intangible assets, net
6,425
8,404
Right-of-use assets, net
4,907
5,383
Total assets
$
470,860
$
543,367
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
39,990
34,947
Deferred revenue
3,148
190
Other current liabilities
2,033
4,450
Operating lease liabilities
936
1,059
Total current liabilities
46,107
40,646
Non-current liabilities:
Deferred compensation and other
non-current liabilities
12,166
15,950
Operating lease liabilities
7,152
7,680
Total liabilities
65,425
64,276
Shareholders’ Equity:
Common shares - no par value, unlimited
shares authorized, 142,268 and 141,600 shares issued and
outstanding at December 31, 2022 and 2021, respectively
1,185,309
1,177,051
Additional paid-in capital
85,489
59,014
Accumulated other comprehensive loss
(1,061
)
(852
)
Accumulated deficit
(864,302
)
(756,122
)
Total shareholders' equity
405,435
479,091
Total liabilities and shareholders’
equity
$
470,860
$
543,367
AURINIA PHARMACEUTICALS INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
Three months ended
Years ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
(unaudited)
Revenue:
Product revenue, net
$
28,326
$
23,375
$
103,468
$
45,488
License and collaboration revenue
109
29
30,562
117
Total revenue, net
28,435
23,404
134,030
45,605
Operating expenses:
Cost of sales
1,362
481
5,664
1,091
Selling, general and administrative
47,473
44,764
196,371
173,536
Research and development
9,870
11,149
44,988
51,139
Other (income) expense, net
(2,170
)
(285
)
(1,523
)
574
Total cost of sales and operating
expenses
56,535
56,109
245,500
226,340
Loss from operations
(28,100
)
(32,705
)
(111,470
)
(180,735
)
Interest income
2,909
109
5,118
529
Net loss before income taxes
(25,191
)
(32,596
)
(106,352
)
(180,206
)
Income tax expense
855
726
1,828
760
Net loss
$
(26,046
)
$
(33,322
)
$
(108,180
)
$
(180,966
)
Basic and diluted loss per common
share
$
(0.18
)
$
(0.25
)
$
(0.76
)
$
(1.40
)
Weighted-average common shares outstanding
used in computation of basic and diluted loss per share
141,909
132,054
141,915
129,369
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Investors/Media: Aurinia@westwicke.com
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