AURORA Phase III Trial in lupus nephritis on
track
Trials in FSGS and Dry Eye to begin in Q2
2018
Cash of $173.5 million as of December 31,
2017
Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH / TSX:AUP) (“Aurinia”
or the “Company”) has released its financial results for the fourth
quarter and year ended December 31, 2017. Amounts, unless specified
otherwise, are expressed in U.S. dollars.
“Aurinia gained remarkable momentum in 2017, as demonstrated by
the achievement of all of our important milestones—strong Phase II
results for voclosporin in LN, initiation of our Phase III AURORA
trial for LN, and the announcement of two exciting new clinical
programs,” said Richard Glickman, Aurinia CEO and Chairman of the
Board. “We are well-capitalized into 2020 and positioned for a
prolific 2018 as the team continues to execute on the plans we’ve
outlined for 2018. We intend to submit the first module of a
rolling NDA later this year for our lead LN program and complete
enrollment of our Phase III AURORA trial. In addition, our team is
working diligently to initiate Phase II trials for FSGS and dry eye
syndrome in Q2.”
2017 and other recent highlights
- We strengthened the breadth and scope
of our Board of Directors with the recent additions of Michael
Hayden and Joseph Hagan in February of 2018 and George Milne in May
of 2017.
On October 20, 2017, we announced our plans
to pursue additional indications for voclosporin, representing an
expansion of the Company’s strategy, pipeline and commercial
opportunities.
- A Phase II proof-of-concept trial in
focal segmental glomerulosclerosis (“FSGS”) will begin in Q2 2018.
A pre-IND meeting was completed in February 2018.
- A Phase IIa tolerability study of
voclosporin ophthalmic solution (“VOS”) versus the standard of care
for the treatment of dry eye syndrome (“DES”) will begin in Q2
2018. Calcineurin inhibitors (“CNIs”) are a mainstay in the
treatment for DES, and the goal of this program is to develop a
best-in-class treatment option.
- In May 2017, we initiated our Phase III
clinical trial (“AURORA”) to evaluate voclosporin for the treatment
of lupus nephritis (“LN”). The AURORA trial is on track to complete
enrollment in Q4 2018. We currently have 201 clinical trial sites
activated and able to enroll patients around the globe.
Additionally, under voclosporin’s fast-track designation, we intend
to utilize a rolling New Drug Application (“NDA”) process, with the
first module being submitted in the second half of 2018.
- On March 20, 2017, we completed a
public offering for net proceeds of $162.3 million, strengthening
the Company’s balance sheet and extending our cash runway into
2020.
- On March 1, 2017, we released positive
48-week results from our Phase II AURA clinical trial for the
treatment of LN. Additional data were released on April 20,
2017.
Financial Liquidity at December 31, 2017
In 2017, we raised net proceeds of $162.3 million from the March
20, 2017 public offering and received $12.8 million from the
exercise of warrants and options. As a result, at December 31,
2017, we had cash, cash equivalents and short term investments of
$173.5 million and working capital of $167.1 million compared to
$39.6 million of cash and $33.5 million of working capital at
December 31, 2016. Net cash used in operating activities was $41.2
million for the year ended December 31, 2017, compared to $18.7
million for the year ended 2016.
We believe, based on our current plans that we have sufficient
financial resources to fund our existing LN program, including the
AURORA trial and the NDA submission to the FDA, conduct the planned
Phase II trials for FSGS and DES and fund operations into 2020.
Financial results for the fourth quarter ended December 31,
2017
We reported a consolidated net loss of $3.3 million or $0.04 per
common share for the fourth quarter ended December 31, 2017, as
compared to a consolidated net loss of $8.3 million or $0.21 per
common share for the fourth quarter ended December 31, 2016.
The loss for the fourth quarter ended December 31, 2017
reflected a $9.0 million reduction in the estimated fair value of
derivative warrant liabilities compared to a reduction of $658,000
in the estimated fair value of derivative warrant liabilities for
the fourth quarter ended December 31, 2016.
The net loss before this non-cash change in estimated fair value
of derivative warrant liabilities was $12.4 million for the fourth
quarter ended December 31, 2017 compared to $9.0 million for the
same period in 2016.
Research and development (“R&D”) expenses increased to $8.7
million in the fourth quarter of 2017, compared to $5.5 million in
the fourth quarter of 2016 primarily due to increased AURORA trial
costs related to patient enrollment and treatment costs.
Corporate, administration and business development expense also
increased to $3.1 million for the fourth quarter of 2017, compared
to $2.2 million for the fourth quarter of 2016, reflecting
increased personnel and level of activities. In addition, these
expenses reflected an increase in non-cash stock compensation
expense to $653,000 for the fourth quarter ended December 31,2017
compared to $314,000 for the same period in 2016.
Financial Results for the year ended December 31,
2017
For the year ended December 31, 2017, the Company recorded a
consolidated net loss of $70.9 million or $0.92 per common share,
which included a non-cash increase of $23.9 million related to the
estimated fair value annual adjustment of derivative warrant
liabilities at December 31, 2017. After adjusting for this non-cash
impact, the net loss before this change in estimated fair value of
derivative warrant liabilities was $47.0 million.
This compared to a consolidated net loss of $23.3 million or
$0.66 per common share in 2016 which included a non-cash reduction
of $1.7 million in the estimated fair value of derivative warrant
liabilities for the year ended December 31, 2016. After adjusting
for the non-cash impact for 2016, the net loss before this change
in estimated fair value of derivative warrant liabilities was $25.0
million.
The change in the revaluation of the derivative warrant
liabilities is primarily driven by the change in our share price.
Our share price of $4.53 was significantly higher at December 31,
2017 compared to our share price of $2.10 at December 31, 2016.
This increase in price resulted in large increases in the estimated
fair value of derivative warrant liabilities. 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.
We incurred net R&D expenses of $33.9 million for the year
ended December 31, 2017, as compared to $14.5 million for the year
ended December 31, 2016. The increase in these expenses resulted
primarily from the clinical and drug supply expenses associated
with our AURORA trial which commenced active patient enrollment and
treatment in May of 2017. R&D expenses for 2016 included costs
related to the AURORA planning phase and completion costs for the
Phase II AURA trial.
We incurred corporate, administration and business development
expenses of $12.1 million for the year ended December 31, 2017, as
compared with $7.0 million for the same period in fiscal 2016. The
increase in these expenses reflected overall higher activity
levels, higher consulting fees, sponsorships and tradeshows
expenses related to greater investor and public affairs activities
and higher personnel compensation costs which included non-cash
stock compensation expense of $3.2 million for the year ended
December 31, 2017 compared to $1.0 million for the year ended
December 31 ,2016.
The audited financial statements and the Management's Discussion
and Analysis for the year ended December 31, 2017, are accessible
on Aurinia's website at www.auriniapharma.com, on SEDAR at
www.sedar.com or on EDGAR at www.sec.gov/edgar.
About AuriniaAurinia is a clinical stage
biopharmaceutical company focused on developing and commercializing
therapies to treat targeted patient populations that are suffering
from serious diseases with a high unmet medical need. The Company
is currently developing voclosporin, an investigational drug, for
the treatment of LN, FSGS and DES. The Company is headquartered in
Victoria, BC and focuses its development efforts globally.
About LNLN 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 & 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 FSGSFSGS is a lesion characterized by persistent
scarring identified by biopsy and proteinuria. FSGS is a cause of
Nephrotic Syndrome (“NS”) and is characterized by high morbidity.
NS is a collection of symptoms that indicate kidney damage,
including: large amounts of protein in urine; low levels of albumin
and higher than normal fat and cholesterol levels in the blood, and
edema. Similar to LN, early clinical response and reduction of
proteinuria is thought to be critical to long-term kidney health.
Currently, there are no approved therapies for FSGS in the United
States and the European Union.
About DESDES, or keratoconjunctivitis sicca, is a
chronic, multifactorial, heterogeneous disease in which a lack of
moisture and lubrication on the eye’s surface results in irritation
and inflammation of the eye.
About VoclosporinVoclosporin, an investigational drug, is
a novel and potentially best-in-class CNI with clinical data in
over 2,400 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, an increase in
potency, an altered metabolic profile and potential for flat dosing
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.
About VOSVOS is an aqueous, preservative free
nanomicellar solution containing 0.2% voclosporin intended for use
in the treatment of DES. Studies have been completed in rabbit and
dog models, and a single Phase I has also been completed in healthy
volunteers and patients with DES. VOS has IP protection until
2031.
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 being
on track to complete enrollment in the second half of 2018, the
timing voclosporin being potentially a best-in-class CNI with
robust intellectual property exclusivity; the timing for Aurinia
initiating a Phase II clinical trial for voclosporin in FSGS
patients; the timing for interim data readouts for the Phase II
clinical trial for FSGS patients; the timing for commencement of a
Phase IIa tolerability study of VOS; the timing for data
availability for the Phase IIa tolerability study; the anticipated
commercial potential of voclosporin for the treatment of LN, FSGS,
DES and other autoimmune diseases; that the expansion of the renal
franchise could create significant value for shareholders and that
Aurinia has sufficient financial resources to fund the existing LN
program, including the AURORA trial, conduct work on the new
indications and fund operations into 2020. It is possible that such
results or conclusions may change based on further analyses of
these data Words such as “anticipate”, “will”, “believe”,
“estimate”, “expect”, “intend”, “target”, “plan”, “goals”,
“objectives”, “may” and other similar words and expressions,
identify forward-looking statements. We have made numerous
assumptions about the forward-looking statements and information
contained herein, including among other things, assumptions about:
the market value for the LN program; 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; the planned studies
achieving positive results; Aurinia being able to extend its
patents on terms acceptable to Aurinia; and the size of the LN
market. 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 planned 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 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.Condensed Consolidated
Statements of Financial Position(unaudited – amounts in
thousands of U.S. dollars)
December 31,2017
$
December 31,2016
$
Assets Cash and cash equivalents 165,629 39,649 Short term
investments 7,833 - Other current assets 1,790 1,769 Total current
assets 175,252 41,418 Acquired intellectual property and
other intangible assets 14,116 15,550 Other non-current assets 479
29 Total assets 189,847 56,997
Liabilities and
Shareholders’ Equity Accounts payable and accrued liabilities
7,959 5,791 Other current liabilities 191 2,139 Total current
liabilities 8,150 7,930 Derivative warrant liabilities
11,793 9,138 Other non-current liabilities 4,161 3,979 Total
liabilities 24,104 21,047 Shareholders’ equity
165,743 35,950 Total liabilities and shareholders’ equity 189,847
56,997
Aurinia Pharmaceuticals Inc.Condensed Consolidated
Statements of Operations(unaudited – amounts in thousands of
U.S. dollars, except per share data)
Three Months Ended
December 31
Year Ended
December 31
2017 2016 2017 2016
$ $ $ $ Revenue Licensing
revenue 30 30 418 118 Research and development revenue - - - 50
Contract services 1 - 2 5 31 30 420 173
Expenses Research and development 8,691 5,462 33,930 14,534
Corporate, administration and business development 3,118 2,227
12,096 6,970
Amortization of acquired intellectual
property andother intangible assets
361 365 1,434 1,457 Amortization of property and equipment - - 22
22 Contract services - 1 1 4 Other expense (income) 197 966 (195)
2,213 12,367 9,021 47,288 25,200
Net loss before
change in estimated fair value of derivative warrant
liabilities (12,336) (8,991) (46,868) (25,027)
Change in estimated fair value
ofderivative warrant liabilities
9,004
658
(23,924) 1,732
Net loss for the period (3,332)
(8,333) (70,792) (23,295)
Other comprehensive income
(loss)
Item that may be reclassified subsequently
to income(loss)
Net change in fair value of short
terminvestments
11
- (78) -
Net comprehensive loss for the period
(3,321) (8,333) (70,870) (23,295)
Net loss per common share (expressed in
$ pershare)
Basic and diluted loss per common share (0.04) (0.21) (0.92) (0.66)
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version on businesswire.com: http://www.businesswire.com/news/home/20180315006132/en/
Aurinia Pharmaceuticals Inc.Investor & Media
Contacts:Celia EconomidesVP, Public
Affairsceconomides@auriniapharma.comorDennis BourgeaultChief
Financial Officerdbourgeault@auriniapharma.com
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