– Conference call and webcast to be hosted today at 4:30pm EDT –
VICTORIA, British Columbia–(BUSINESS WIRE)–Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH / TSX:AUP) (“Aurinia” or the
“Company”) today reported financial results for the first quarter ended
March 31, 2019 and provided an update on recent operational highlights.
Amounts, unless specified otherwise, are expressed in U.S. dollars.
First Quarter 2019 Highlights
-
Fully-enrolled AURORA Phase 3 trial in lupus nephritis (“LN”)
continues on track with results anticipated in late 2019. -
Reported results from a Phase 2a Dry Eye study with voclosporin
ophthalmic solution (“VOS”) that achieved statistically superior
efficacy in secondary objective endpoints compared to cyclosporin
ophthalmic emulsion 0.05% (Restasis®), the current DES market leader.
VOS did not meet the primary endpoint as both drugs were well
tolerated and demonstrated less than anticipated drop discomfort. -
Received a Notice of Allowance from the United States Patent and
Trademark Office (“USPTO”) for claims which have the potential to
cover voclosporin’s method of use and dosing protocol for lupus
nephritis (“LN’) until December 2037. -
Appointed Mr. Peter Greenleaf as Chief Executive Officer and Dr.
George Milne to Chairman of the Board of Directors. -
Cash, cash equivalents, and short-term investments of $144.3
million as of March 31, 2019.
Recent Director and Officer Appointments
On April 29, 2019, Aurinia appointed Peter Greenleaf as Chief Executive
Officer and a Director on the Aurinia Board.
Concurrently, Dr. Richard M. Glickman, who previously announced his
plans to retire on November 6, 2018, stepped down from his role as
Chairman and CEO. Dr. Glickman remains an advisor to the Company for a
period of 12 months.
“It is an honor to join Aurinia at this time and lead the organization
through its next phase of growth to advance voclosporin toward
commercialization based upon the Phase 3 AURORA results in lupus
nephritis anticipated by the end of this year,” commented Mr. Peter
Greenleaf, Chief Executive Officer of Aurinia. “After following the
Aurinia story and after conducting further due diligence, I am truly
impressed with the Aurinia team, their ability to execute and advance
voclosporin in a cost-efficient manner, with the ongoing goal of
bringing voclosporin to help patients suffering with LN.”
In conjunction with Dr. Glickman’s retirement as the Chairman, the Board
elevated George M. Milne, Jr., PhD, to the position of Chairman of the
Board effective April 29, 2019. In addition, the Board appointed Dr.
Daniel Billen to the Board also effective April 29, 2019.
Dr. Milne stated, “With the appointment of Peter and Daniel to the
board, combined with our experienced and committed employees and
management team, Aurinia is strongly positioned to achieve our
milestones and maximize the value of voclosporin for all of our
stakeholders.
VOS for Dry Eye Syndrome (“DES”)
Based upon the exploratory Phase 2a results generated with VOS in a
head-to-head comparison vs. the current market leader for the treatment
of DES, Aurinia plans to initiate a Phase 2/3 study by late 2019. This
study will encompass certain critical regulatory requirements that the
FDA has traditionally required for DES product approval, these
requirements include both dose-optimization requirements along with a
comparison versus vehicle.
“I’m confident that the internal Aurinia team along with our key
ophthalmology clinical advisors have crafted a framework of a plan that
minimizes the clinical and regulatory risk for VOS and maximizes our
probability of launching VOS into the multi-billion dollar DES market in
due course,” said Michael R. Martin, Chief Operating Officer of Aurinia.
Financial Liquidity at March 31, 2019
As at March 31, 2019, Aurinia had cash, cash equivalents and short-term
investments of $144.3 million compared to $125.9 million of cash, cash
equivalents and short-term investments as at December 31, 2018. Net cash
used in operating activities was $13.1 million for the first quarter
ended March 31, 2019 compared to $14.4 million for the first quarter
ended March 31, 2018.
The Company believes, that based on its current plans that Aurinia has
sufficient financial resources to fund the existing LN program,
including the AURORA trial and the AURORA 2 extension trial, complete
the NDA submission to the FDA, conduct the ongoing Phase 2 study for
FSGS, commence additional DES studies and fund operations into mid-2020.
The increase in our cash position at March 31, 2019 was primarily the
result of the following:
At-The-Market (“ATM”) Facility
On November 30, 2018, Aurinia had entered into an open market sale
agreement with Jefferies LLC pursuant to which the Company could from
time to time sell, through ATM offerings, common shares that would have
an aggregate offering amount of up to $30 million. The ATM was fully
utilized in the first quarter. Aurinia received gross proceeds of $30
million and issued 4.6 million common shares. The Company incurred share
issue costs of $1.2 million including a 3% commission and professional
and filing fees related to the ATM offerings.
February 14, 2014 Warrant Exercises
The remaining derivative warrants outstanding from the February 14, 2014
private placement were exercised in the first quarter ended March 31,
2019. Certain holders of these warrants elected the cashless exercise
option and the Company issued 687,000 common shares on the cashless
exercise of 1.3 million warrants. Three holders of 464,000 warrants
exercised these warrants for cash, at a price of $3.2204 per common
share. The Company received cash proceeds of $1.5 million and issued
464,000 common shares.
Financial Results for the First Quarter Ended March 31, 2019
The Company reported a consolidated net loss of $12.4 million or $0.14
per common share for the first quarter ended March 31, 2019, as compared
to a consolidated net loss of $15.5 million or $0.18 per common share
for the first quarter ended March 31, 2018.
The loss for the first quarter ended March 31, 2019 reflected a
reduction of $1.7 million in the estimated fair value of derivative
warrant liabilities compared to an increase of $2.6 million in the
estimated fair value of derivative warrant liabilities for the first
quarter ended March 31, 2018. The derivative warrant liabilities will
ultimately be eliminated on the exercise or forfeiture of the warrants
and will not result in any cash outlay by the Company.
The loss before the change in estimated fair value of derivative warrant
liabilities and income tax was $14.1 million for the first quarter ended
March 31, 2019 compared to $12.9 million for the same period in 2018.
Research and development (“R&D”) expenses increased to $10.6 million for
the first quarter ended March 31, 2019 2019, compared to $8.9 million
for the first quarter ended March 31, 2018. The increase in these
expenses primarily reflected completion costs for the DES study and
higher costs incurred for the AURORA 2 extension trial, the DDI study
and the FSGS Phase 2a study as these studies had more activity in the
first quarter ended March 31, 2019 compared to the same period in 2018.
Corporate, administration and business development expenses increased
slightly to $3.9 million for the first quarter of 2019, compared to $3.8
million for the first quarter of 2018.
This press release should be read in conjunction with our unaudited
interim condensed consolidated financial statements and the Management’s
Discussion and Analysis for the first quarter ended March 31, 2019 which
are accessible on Aurinia’s website at www.auriniapharma.com,
on SEDAR at www.sedar.com
or on EDGAR at www.sec.gov/edgar.
Aurinia will host a conference call and webcast to discuss the first
quarter ended March 31, 2019 financial results today, Monday, May 13,
2019 at 4:30 p.m. ET. This event can be accessed on the investor section
of the Aurinia website at www.auriniapharma.com.
About Aurinia
Aurinia Pharmaceuticals is a late clinical-stage biopharmaceutical
company focused on developing and commercializing therapies to treat
targeted patient populations that are impacted by serious diseases with
a high unmet medical need. The Company is currently developing an
investigational drug, for the treatment of Lupus Nephritis, Focal
Segmental Glomerulosclerosis and Dry Eye Syndrome. The Company’s head
office is in Victoria, British Columbia and focuses its development
efforts globally. For further information, see our website at www.auriniapharma.com.
About Voclosporin
Voclosporin, an investigational drug, is a novel and potentially
best-in-class calcineurin inhibitor (“CNI”) with clinical data in over
2,600 patients across indications. Voclosporin is an immunosuppressant,
with a synergistic and dual mechanism of action. By inhibiting
calcineurin, voclosporin blocks IL-2 expression and T-cell mediated
immune responses and stabilizes the podocyte in the kidney. It has been
shown to have a more predictable pharmacokinetic and pharmacodynamic
relationship (potentially requires no therapeutic drug monitoring), an
increase in potency (vs cyclosporin), and an improved metabolic profile
compared to legacy CNIs. Aurinia anticipates that upon regulatory
approval, patent protection for voclosporin will be extended in the
United States and certain other major markets, including Europe and
Japan, until at least October 2027 under the Hatch-Waxman Act and
comparable laws in other countries and until April 2028 with anticipated
pediatric extension. Further, the new Notice of Allowance is
expected to result in the issuance of a U.S. patent with a term
extending to December 2037. If the FDA approves the use of voclosporin
for LN and the label for such use follows the dosing protocol under the
Notice of Allowance, the issuance of this patent will expand the scope
of intellectual property protection for voclosporin to December 2037.
About VOS
Voclosporin ophthalmic solution (“VOS”) is an aqueous, preservative free
nanomicellar solution intended for use in the treatment of DES. A Phase
2a study was recently completed with results released in January of
2019. Previously, a Phase 1 study with healthy volunteers and patients
with DES was also completed as were studies in rabbit and dog models.
VOS has IP protection until 2031.
About LN
Lupus Nephritis (“LN”) in an inflammation of the kidney caused by
Systemic Lupus Erythematosus (“SLE”) and represents a serious
progression of SLE. SLE is a chronic, complex and often disabling
disorder. The disease is highly heterogeneous, affecting a wide range of
organs and tissue systems. Unlike SLE, LN has straightforward disease
outcomes (measuring proteinuria) where an early response correlates with
long-term outcomes. In patients with LN, renal damage results in
proteinuria and/or hematuria and a decrease in renal function as
evidenced by reduced estimated glomerular filtration rate (“eGFR”), and
increased serum creatinine levels. LN is debilitating and costly and if
poorly controlled, LN can lead to permanent and irreversible tissue
damage within the kidney, resulting in end-stage renal disease (“ESRD”),
thus making LN a serious and potentially life-threatening condition.
About FSGS
Focal segmental glomerulosclerosis (“FSGS”) is a rare disease that
attacks the kidney’s filtering units (glomeruli) causing serious
scarring which leads to permanent kidney damage and even renal failure.
FSGS is one of the leading causes of Nephrotic Syndrome (“NS”) and is
identified by biopsy and proteinuria. NS is a collection of signs and
symptoms that indicate kidney damage, including large amounts of protein
in the urine; low levels of albumin and higher than normal fat and
cholesterol levels in the blood, and edema. Similar to LN, early
clinical response (measured by reduction of proteinuria) is thought to
be critical to long-term kidney health in patients with FSGS. Currently,
there are no approved therapies for FSGS in the United States and the
European Union.
About DES
Dry eye syndrome (“DES”) is characterized by irritation and inflammation
that occurs when the eye’s tear film is compromised by reduced tear
production, imbalanced tear composition, or excessive tear evaporation.
The impact of DES ranges from subtle, yet constant eye irritation to
significant inflammation and scarring of the eye’s surface. Discomfort
and pain resulting from DES can reduce quality of life and cause
difficulty reading, driving, using computers and performing daily
activities. DES is a chronic disease. There are currently three FDA
approved therapies for the treatment of dry eye; however, there is
opportunity for potential improvement in the effectiveness by enhancing
tolerability, onset of action and alleviating the need for repetitive
dosing.
Forward-Looking Statements
Certain statements made in this press release may constitute
forward-looking information within the meaning of applicable Canadian
securities law and forward-looking statements within the meaning of
applicable United States securities law. These forward-looking
statements or information include but are not limited to statements or
information with respect to: AURORA having data around the end of this
year, completing NDA submissions in a successful and timely manner,
voclosporin being potentially a best-in-class CNI with robust
intellectual property exclusivity; and that Aurinia has sufficient
financial resources to fund the existing LN program, including the
AURORA trial, and the NDA submission to the FDA, conduct the current
Phase 2a study for FSGS, commence additional studies for DES and fund
operations into mid-2020 and that the efficacy endpoint clearly signals
that VOS has the potential to have a more rapid onset than Restasis®
as measured by signs of the disease. 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 programs; that another company
will not create a substantial competitive product for Aurinia’s LN and
DES 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 or DES markets.
Even though the management of Aurinia believes that the assumptions
made, and the expectations represented by such statements or information
are reasonable, there can be no assurance that the forward-looking
information will prove to be accurate.
Forward-looking information by their nature are based on assumptions and
involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of Aurinia to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking information.
Should one or more of these risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking statements or
information. Such risks, uncertainties and other factors include, among
others, the following: difficulties, delays, or failures we may
experience in the conduct of our AURORA 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; and competitors may arise with similar products. Although
we have attempted to identify factors that would cause actual actions,
events or results to differ materially from those described in
forward-looking statements and information, there may be other factors
that cause actual results, performances, achievements or events to not
be as anticipated, estimated or intended. Also, many of the factors are
beyond our control. There can be no assurance that forward-looking
statements or information will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements. Accordingly, you should not place undue reliance on
forward-looking statements or information.
Except as required by law, Aurinia will not update forward-looking
information. All forward-looking information contained in this press
release is qualified by this cautionary statement. Additional
information related to Aurinia, including a detailed list of the risks
and uncertainties affecting Aurinia and its business can be found in
Aurinia’s most recent Annual Information Form available by accessing the
Canadian Securities Administrators’ System for Electronic Document
Analysis and Retrieval (SEDAR) website at www.sedar.com
or the U.S. Securities and Exchange Commission’s Electronic Document
Gathering and Retrieval System (EDGAR) website at www.sec.gov/edgar.
We seek Safe Harbor.
Aurinia Pharmaceuticals Inc.
Interim Condensed
Consolidated Statements of Financial Position
(unaudited –
amounts in thousands of U.S. dollars)
|
March 31,
2019 $ |
December 31,
2018 $ |
|||
| Assets | ||||
| Cash and cash equivalents | 140,359 | 117,967 | ||
| Short term investments | 3,975 | 7,889 | ||
| Accounts receivable and accrued interest receivable | 376 | 217 | ||
| Prepaid expenses and deposits | 6,714 | 6,775 | ||
| Total current assets | 151,424 | 132,848 | ||
| Acquired intellectual property and other intangible assets | 12,278 | 12,616 | ||
| Other non-current assets | 799 | 399 | ||
| Total assets | 164,501 | 145,863 | ||
| Liabilities and Shareholders’ Equity | ||||
| Accounts payable and accrued liabilities | 6,200 | 7,071 | ||
| Other current liabilities | 296 | 190 | ||
| Total current liabilities | 6,496 | 7,261 | ||
| Derivative warrant liabilities | 14,102 | 21,747 | ||
| Other non-current liabilities | 4,558 | 4,280 | ||
| Total liabilities | 25,156 | 33,288 | ||
| Shareholders’ equity | 139,345 | 112,575 | ||
| Total liabilities and shareholders’ equity | 164,501 | 145,863 |
Aurinia Pharmaceuticals Inc.
Interim Condensed
Consolidated Statements of Operations
(unaudited – amounts
in thousands of U.S. dollars, except per share data)
|
Three months ended March 31, 2019 |
Three months ended March 31, 2018 |
|||
| $ | $ | |||
| Revenue | ||||
| Licensing revenue | 30 | 30 | ||
| Expenses | ||||
| Research and development | 10,631 | 8,887 | ||
| Corporate, administration and business development | 3,901 | 3,791 | ||
|
Amortization of acquired intellectual property and other intangible assets |
346 | 396 | ||
| Amortization of property and equipment | 37 | 3 | ||
| Other income | (745) | (200) | ||
| 14,170 | 12,877 | |||
| Loss before change in estimated fair value of | ||||
| derivative warrant liabilities and income tax | (14,140) | (12,847) | ||
| Change in estimated fair value of derivative warrant liabilities |
1,725 |
(2,631) |
||
| Loss before income taxes |
(12,415) |
(15,478) |
||
| Income tax expense | (13) | – | ||
| Net loss and comprehensive loss for the period | (12,428) | (15,478) | ||
| Net loss per common share (expressed in $ per share) | ||||
| Basic and diluted loss per common share | (0.14) | (0.18) | ||
|
Weighted average common share outstanding
(in thousands) |
90,146 |
84,052 |
Contacts
Investor & Media Contacts:
Glenn Schulman, PharmD, MPH
Corporate
Communications
gschulman@auriniapharma.com
Dennis Bourgeault
Chief Financial Officer
dbourgeault@auriniapharma.com