Greetings, and welcome to the Aurinia Pharmaceuticals Q1 2022 financial and operational results conference call. At this time, all participants are in a listen-only mode, and a question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dana Lynch, Aurinia's Senior Director of Corporate Communications and Corporate Affairs. Thank you. Dana, you may begin.
Thank you, Jim, and thank you all for joining today's call and webcast to discuss Aurinia's Q1 2022 financial results. Joining me this morning are Peter Greenleaf, President and CEO, Joe Miller, Chief Financial Officer, both of whom will be leading the call. Other members of the executive team, specifically Max Colao, Chief Commercial Officer, and Dr. Neil Solomons, Chief Medical Officer, will also be available at the conclusion of our prepared remarks for the Q&A portion of the call. This morning, we issued a press release announcing our financial results and recent operational highlights and filed our quarterly report on Form 10-Q. For more information, please refer to our filings with the U.S. Securities and Exchange Commission, which are also available on our website at www.auriniapharma.com. During this call, we will make forward-looking statements based on our current expectations.
These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. For discussion of factors that could affect our future financial results and business, please refer to the disclosures in our press release and our quarterly report on Form 10-Q, along with our 10-K and all of our recent filings with the U.S. Securities and Exchange Commission and Canadian Securities Administrators. Please note that all statements made during today's call are current as of today, May 10, 2022, unless otherwise noted, and are based upon information currently available to us at this time. Except as required by law, we assume no obligation to update any such statements. Now please let me turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?
Well, thanks, Dana, and thanks to everyone for joining us on the call today. For today's agenda, I'll start with a review of the commercial business, including our performance in the Q1 and the positive trends we're seeing for Lupkynis as we move through the Q2 . After that, I'll provide a brief update on our efforts to gain regulatory approval for Lupkynis in Europe and the additional clinical work ongoing to reinforce Lupkynis benefits for patients. And then finally, I'll provide a quick update on our R&D pipeline and cash position before handing over the call to Joe Miller, who will provide a more detailed update on the Q1 results, our expenses, and overall financial position as a company. Let's get started on our Q1 business performance. In spite of some challenges early on, we're off to a great start in 2022.
In the Q1 , we generated $21.6 million in net sales. As discussed on our year-end call in late February, we experienced a slowdown in patient start forms starting in December, given the impact of COVID-19 on prescribers and patients. Many patients faced delays in refilling prescriptions, and many were unable to attend physician appointments on a normalized schedule. As is typical in our industry, at the start of a new calendar year, changes in employer-covered insurance carriers and policies and patient co-pay resets of the new coverage year often slow down converting patient start forms to patients on treatment and affect the timing it takes for existing patients to get a new year. Exiting the quarter, though, we began to see considerable improvements and encouraging trends within our commercial results. First, prescribing has increased significantly.
In fact, we experienced a monthly record high for patient start forms in March, as well as notable improvements in prescription refill rates. In the quarter ending March 31, 2022, we added 461 new patient start forms as compared to 257 recorded in the Q1 of 2021. With a clear upturn since the start of the year, we now stand at 647 total prescription start forms as of Friday, May 6, since the start of the year. Conversion rates and patient access to drug also remain robust and are at the highest level since launch. Patient start form conversion rates are now at 80% after 90 days. On the access front, we have confirmed patient access to LUPKYNIS through payers and plans representing about 90% of total U.S. lives.
While still early, we're encouraged by persistence trends. Through six months of therapy, approximately 70% of patients are remaining on treatment. Additionally, efforts to increase healthcare provider adoption of LUPKYNIS in regular practice remains consistent and positive. Each month, we're adding new prescribers and growing the number of repeat prescribers. Prescribing rates remain balanced between both rheumatologists and nephrologists. Beyond prescribing, we've seen important increase in awareness of LUPKYNIS and its benefits among healthcare providers. Based on recent surveys, unaided brand awareness is over 70%, and if you add branded awareness to the equation, over 90%. Most significant, intent to use in the next three months is now over 70%, which represents the highest level since launch of the drug.
Given these progressive trends, there were approximately 1,071 patients on the LUPKYNIS therapy at March 31, 2022, compared with 884 patients on therapy at the end of 2021. Net realizable revenue per patient remains above our initial guidance of $65,000 per patient per year. As we've discussed previously, we expect to approach this figure as more patients go on and stay on therapy over time. Finally, we're happy to report that with conditions continuing to normalize, there are more in-person opportunities to interact directly with healthcare providers and with patients. Our commercial activities are ramping up accordingly. Just last month, Aurinia attended the first in-person medical meeting with our first commercial booth since we launched LUPKYNIS, with representatives from across our advocacy, marketing, medical affairs, and sales teams attending the National Kidney Foundation Spring Clinical Meetings in Boston.
Additionally, we've launched an extensive set of new healthcare provider marketing programs to further share and educate on AURORA 2 data and have begun to develop and roll out a number of patient-focused awareness and engagement initiatives, including the initiation of a LUPKYNIS patient ambassador program. With the continued return to normal healthcare practices in the United States and our plans for expanded commercial execution, we remain confident and reaffirm our guidance for net LUPKYNIS sales of $115 million to $135 million for the full year of 2022. As a reminder, our guidance does not include any milestone payments, royalty or manufacturing revenue or anticipated ex-US sales related to our licensing agreement with Otsuka to market voclosporin in the European Union and Japan.
If voclosporin is approved for use in the European Medicines Agency, depending on the favorability of the approved label, we have the potential to receive up to $30 million in the second half of 2022 and potentially low double-digit royalties on sales as well as supply cost recovery through a cost-plus arrangement we have with Otsuka. We continue to work closely with Otsuka to support the European approval process. We have received a Day 157 question document posed by the EMA, and given the ongoing interactions, we believe we remain on track for EMA approval in the second half of 2022. With regard to our R&D work, next week we will present for the first time more complete results from voclosporin's AURORA 2 continuation study at the 59th European Renal Association Congress.
This will be followed up by a presentation at the 2022 European Congress of Rheumatology, European Alliance of Associations for Rheumatology in June. Data from this study, which we reported in December, looked at 216 patients continuing from the 12-month AURORA study for an additional 24 months of treatment. This data reinforces the favorable risk-benefit profile of LUPKYNIS over a three-year period with safety and efficacy comparable to that seen in the original AURORA 1 trial. We still plan to submit a manuscript for peer-reviewed publication in the second half of 2022, as well as abstract submissions for presentations at additional major scientific conferences throughout both 2022 and 2023. On other research fronts, recruitment of patients and initial new sites into the VOCAL pediatric study and the ENLIGHT-LN registry is continuing.
As a reminder, we committed to the VOCAL study as part of our FDA approval, while we initiated the registry to gain further knowledge about patients taking LUPKYNIS, as well as help their clinicians and payers to improve patient care and ensure access to therapy. Finally, we continue to advance IND-enabling work for both AUR200 and AUR300, and we remain on track to submit INDs for both compounds in 2023. These are important next steps in the build-out of our pipeline to build long-term sustainable value and growth for Aurinia. As I said previously, we are well positioned relative to many of our biopharma company peers with a healthy balance sheet and no significant debt or obligations.
With approximately $420 million through the quarter on hand and continued LUPKYNIS revenue contribution, we can fund our business operations for at least the next few years and remain flexible while weathering the current weakness in the biotech market and the overall economy in the U.S. I will now turn the call over to Joe Miller for a more detailed review of our financial results. I'll then return at the end of the call for a recap and to answer any questions you may have. Joe?
Thank you, Peter, and good morning, everyone. As of March 31, 2022, we had cash equivalents and restricted cash and investments of $418.8 million, compared to $466.1 million at December 31st, 2021. The decrease is primarily related to the continued investment in commercialization activities, payments made for our ongoing post-approval obligations and advancement of our pipeline, payments associated with inventory purchases to ensure adequate supply to meet forecasted demand, and a payment for the achievement of a one-time milestone, partially offset by an increase in cash receipts from the sale of LUPKYNIS.
We believe that we have sufficient financial resources to fund our current operations, which include funding commercial activities, including FDA-related post-approval commitments, manufacturing and packaging of commercial drug supply, funding our supporting commercial infrastructure, conducting planned research and development R&D programs, investing in our pipeline and operating activities for at least the next few years. Total revenue was $21.6 million and $914,000 for the quarters ended March 31, 2021 and March 31, 2022 and March 31, 2021 respectively. Our revenues primarily consisted of product revenue, net of adjustments for LUPKYNIS following FDA approval in late January 2021. Quarter-over-quarter revenue growth is attributed to further progress in the launch of LUPKYNIS.
Total cost of sales and operating expenses at March 31, 2022 were $59.5 million, in comparison to $51.5 million as of March 31, 2021. The quarterly fluctuation could be broken down as follows. Cost of sales were $256,000 and $48,000 for the quarter ended March 31, 2022 and March 31, 2021 respectively. The increase is primarily due to the growth of LUPKYNIS sales in comparison to the prior year period. Gross margins for the quarter ended March 31, 2022 and 2021 was approximately 99% and 95% respectively. The fluctuation in gross margin is driven primarily by fixed specialty pharmacy costs in the Q1 of 2021 as a percentage of overall cost of sales.
These costs were a higher percentage of overall cost of sales due to lower sales volumes in the Q1 of the launch. Selling, general and administrative SG&A expenses were $45.2 million and $39.8 million for the quarters ended March 31, 2022 and March 31, 2021, which is consistent with the prior quarter and represents a fully burning quarter as the company did not have approval until late January 2021. The increase is primarily due to an increase in employee-related expenses, professional fees related to various corporate matters, pharmacovigilance costs, and consulting-related expenses tied to the increased investment in our back office infrastructure to support the commercialization of LUPKYNIS. Non-cash SG&A share-based compensation expense for the quarter ended March 31, 2022 and March 31, 2021 was $6 million and $6.6 million respectively.
R&D expenses were $12.6 million and $9.8 million for the quarters ended March 31, 2022 and 2021 respectively. The primary driver for the increased quarter-over-quarter was due to an increase in expenses related to AUR200 and AUR300 development, partially offset by a decrease in expenses related to the AURORA 2 continuation study, which was completed during the Q4 of 2021, but had wind down activities ongoing into the quarter ended March 31, 2022. Non-cash R&D share-based compensation expense for the quarter ended March 31, 2022 and March 31, 2021 was $1 million compared to $1.1 million respectively.
For the quarter ended March 31, 2022, Aurinia recorded a net loss of $37.6 million or $0.27 net loss per common share, as compared to a net loss of $50.4 million or $0.40 net loss per common share for the quarter ended March 31, 2021. With that, I'd like to hand the call back over to Peter for closing remarks. Peter?
Hey, thanks, Joe. As you heard throughout the call, we're excited by the trends we've seen in the recent months. The increases in prescribing a number of patients on therapy signals more healthcare provider experience and comfort in treating their lupus nephritis patients with LUPKYNIS, which we are optimistic will result in healthcare providers providing, continuing to address, and therefore improving early urgent diagnosis and treatment of the condition. Beyond the U.S. commercial results, we're quickly moving towards possible approval in Europe, triggering the potential for additional milestones as well as moving closer to IND submission in our two novel assets, AUR200 and AUR300. We continue to operate with a healthy balance sheet, which will enable us to execute on our long-term strategy. That's all we have for today.
Look forward to updating you on these items as the year progresses and look forward to taking your questions. With that, let me turn it to the operator for Q&A.
Thank you. Ladies and gentlemen, joining over the phone today, if you would like to ask a question at this time, simply press star and one on your telephone keypad. If you're joining us today on a speakerphone, we ask that you please return to your handset prior to pressing star and one to be certain that your signal does reach our equipment. Once again, ladies and gentlemen, that is star and one if you would like to ask a question. We'll pause for just a moment to assemble our queue. Our first question today is gonna come from Joseph Schwartz at SVB Securities. Please go ahead.
Hi, all. This is Will on for Joe, and thank you for taking our questions today. Congrats on the recent progress. So one for us. Can you just remind us on the ongoing litigation with Sun Pharmaceuticals, and has the company filed its response to the IPR? And when should we expect an update here, and kinda how does this process unfold? Thank you.
Okay. Thanks. That was Joseph Schwartz's team over at SVB Leerink. Sorry, you're a little choppy coming in, so let me repeat the question for everybody on the call. It related to any updates on the Sun Pharmaceuticals litigation, the IPR process, and have we actually submitted our response to the IPR submitted by Sun to the U.S. Patent and Trademark Office. To start with the Sun Pharma litigation, there's really no news there. The most recent update we'll have for you is probably sometime in 2023 as that litigation is ongoing. Recalling that that is the litigation where we are suing Sun for patent infringement on our ophthalmic solution that we believe their product, CEQUA, infringes upon our patents for voclosporin and ophthalmic solutions.
No new news there, Joe, and wouldn't look for any until 2023. On the IPR process, officially the patent office recognized the application. The date for response, our response back to them, is in late June. Then, the PTAB has, I believe, three months to review the initial filing alongside of our response. I would look for, you know, something in the back half of the year, call it, you know, late 3Q, early 4Q. Nothing new. We have not submitted our response as of yet because we're still formulating it. We have until the latter part of June to get that submission in.
Great. Thank you.
Thank you, Mr. Schwartz. Our next question is gonna come from the line of Olivia Brayer at Cantor Fitzgerald.
Hi, good morning, guys, and thanks for the questions. Joe, can you give us a sense for you know some of the different factors that drove the drag in 1Q? How big of an impact did Omicron have or some of the seasonality impacts you know around things like insurance changes you know that maybe we should think more about as a potential headwind going forward? I recognize it's still early days in the launch, but how are you guys seeing uptake play out between rheumatologists and nephrologists so far? Are you maybe seeing more willingness initially from one group versus the other? Is there anything that you can do to help drive similar adoption between the two going forward? I've got one follow-up on capital allocation.
All right. Let me start, and Max Colao is here with me too, so he can get into deeper detail. As we said on the call, right now, our split in terms of prescribing between nephrologists and rheumatologists is almost right down the middle. I think that therein lies the importance between both specialties. We value them equally, albeit the caveat that, you know, a lupus patient is a rheumatologist patient first. Obviously, as we increase diagnosis and we wanna put emphasis on earlier diagnosis, there's a higher intensity that needs to go against rheumatology. In terms of ongoing seasonality sort of considerations, I'll give my take, and then I'll turn it over to Max Colao.
I think on a go-forward basis, barring COVID, like, being out of the equation, much like any other specialty pharma company, as we enter into January, and you can look at others who have a large, both, rare and specialty products, that, you know, patients, employers change insurance plans, patients have to reset co-pays. I think, you know, as you face January, February of every year, you're gonna see some impact in that time period as things start to reset. As you move into Q2 and beyond, I think our, you know, overall analyst base out there has done a good job of sort of distributing where the year looks. While we don't give quarterly guidance, we give annual guidance, and I think the ramp in PSFs and patient start should be accordingly.
Whether the impact will be exactly the same to January every year is TBD 'cause as you had mentioned, we're early on in the launch. Max, what would you add?
Thanks. Thanks for the question. Yeah. What I would add to that is, you know, as Peter highlighted, in just the beginning of January and the beginning of February, what we saw is there was just a COVID impact above and beyond just your general reset of insurance. That had an impact on refill rates and also on patients being able to continue therapy. But we saw that completely normalize as things opened up in March. In fact, as we highlighted, March was a record month in terms of patient start forms, and we saw refill rates go right back to where they were in Q4. Then what I would add on the physician front is that we've seen just a completely balanced intent to treat between rheumatologists and nephrologists.
That is actually when we look at the three-month intent to treat, it's over 70%. That's reflected in prescribing, where we see balanced prescribing across both specialties.
Olivia, you had another question.
Ms. Brayer, this is the operator. If I could I invite you to re-signal with star and one? We've lost you from the queue presently. Thank you, Ms. Brayer. Your line is open once again.
Hey, can you guys hear me now?
Yes, ma'am.
Okay, great. Thanks, guys. Then on the M&A front, you know, you guys obviously have a nice cash position. Is there much willingness to do a deal near term? Can you give us a sense of, you know, where you'd have more of a strategic interest, whether it's doing a partnership versus adding a wholly owned asset that, you know, is maybe more mid-stage development with some level of de-risking?
I think as we've said historically, we firmly believe in diversification and, you know, continuous innovation. It's part of our mission as a company and part of our strategy. Business development is key to that, as evidenced through both the AUR200 and AUR300 deals that we did in 2021. It's important, but I'll emphasize that, you know, there's no, you know, magic to how these things come together, and we are not going to push a higher sense of urgency just to get deals done. We wanna try to get the right deals done.
The current market, the fact that valuations are where they are, and raising money is as difficult as it is right now, I think represents significant opportunity for everything from partnership programs, i.e., licensing of assets, licensing of indications of assets, and M&A are all becoming more attractive even for our size, which obviously we are not, you know, one of the larger cash position companies out there. We have a healthy balance sheet, but we're not Pfizer. In order of priority, yeah, we'd prefer to license something over acquiring a company.
We would most likely only acquire a company if in fact we couldn't leverage the asset out of the company individually, or the company itself had capabilities that we thought were, you know, critical to the success of the program and towards the intrinsic value of the company. But it is a priority, but making sure everybody's clear, our priority number one is LUPKYNIS, U.S. launch and globalization of LUPKYNIS, and nothing's steering our head away from that. We'll keep you posted on progress on the business development front.
Got it. Thanks very much.
Thank you.
Thank you, Ms. Brayer. Our next question today will come from the line of Maury Raycroft at Jefferies. Dr. Raycroft, your line is open.
Hi, good morning. Congrats on the progress and thanks for taking my questions. Let's see. Just wondering if you can elaborate on patient discontinuations that you mentioned in your 4Q update. Are these transient compliance issues or related to how the doctor is managing the patient? Or are there any other insights or explanations you can provide at this point?
Yeah. I'm gonna ask Max to join me on that conversation. I think, Maury, my answer would be it's across the board, and we're providing six months of data because we have a healthy number of patients who have crossed six months of therapy. Obviously, since we launched at the end of January, the number of patients seeing 12 months of therapy is lighter. As we go forward, we'll start to give longer term views on that. Max, you wanna give any color as to, you know, why patients, you know, the 30% or so might be fall off the product at six months.
Sure. Thanks for the question, Maury. I'll make one more point before commenting that, which is that 30% discontinuation at six months. We've seen that now consistent for a couple of quarters here. In terms of reasons for discontinuations, I would say that it's really the typical reasons that you would expect, patients discontinuing. As a start, there's tolerability issues for some patients that show up early in the treatment, and that's the primary reasons that patients will discontinue. I'll make just one more point, Maury, which was we talked about that there was, above and beyond just the discontinuation, there was just this temporary impact in the beginning of the quarter on refill rates.
That was outside of the kind of the discontinuation. As I noted, that just rebounded, and really what we've seen now is consistent discontinuation with what we saw in the fourth quarter.
Got it. Okay. Presumably outside of the safety or tolerability, some of these patients could actually come back onto therapy. Is that the right way to think about it or?
Yeah. We've seen even just tracking analog products like MMF, and others that patients do. It's not in the guidelines, but patients do cycle on and off of products. I think one way to explain that would be a patient, you know, stops taking therapy, finally sees their doctor. Doctor says, "Your proteinuria is still high. Start taking your therapy again." You know, they can come back. It's not like we see this as once they've seen the product, they're considered a non-responder or something and don't come back. You know, we're not getting reasons coming back to us saying the patient's proteinuria wasn't under control. A lot of these are, you know, patient-driven decisions and, you know, we'll have to continue to.
You heard that we have an increase in our focus on the patient, educating the patient, and all of that pertains to education on disease itself, importance to stay on your medication and keep on your medication over time.
Got it. That's really helpful perspective. Just wondering if you can talk more about what you're seeing with pricing metrics and what your latest assumptions are.
Well, as we said, you know, we're giving an average net in the first year of launch at, you know, at around $65,000 net per year per patient. As we indicated in the quarter, it's been above that. We haven't given specifics 'cause the last thing that we really want you to do is plug in a number that's had variability and then, you know, carry that forward and then it changes. The one thing we do know is that we believe it will continue to migrate towards that average net, and that's why we're sticking pretty consistent to that. Adherence, once a patient goes on drug, Maury, has been at around 80%.
If they're on the prescription, they're staying on it, and that's a good thing in terms of looking at your average monthly number of doses, etc. You know, as we've said, average net has been higher than $65, but we think it's a safe bet to land on $65 at this stage until we just have more data. 'Cause mix of patients, depending on insurance carrier, public versus private pay, how much eGFR dosing is utilized and adherence are all going to vary over time.
Got it. Okay. Makes sense. Thanks for taking my questions.
Thanks, Maury.
Coming up next, the question to follow is Stacy Ku at Cowen and Company. Your line is open. Please go ahead.
Hi. Good morning. Congrats on the quarter, and thanks for taking our questions. First, a really specific one on the patient start form additions. From our math and your comments from last quarter, we're seeing roughly 260 patient start forms that we added in March. Just wanted to confirm that. What are you seeing in terms of the cadence of kind of quarter-over-quarter patient start forms? What are you seeing in Q2 so far? How should we be thinking about the March additions? Is that a run rate or are you seeing more growth from that number? That's the first question. The second question is if you could talk about repeat prescribers.
Once they've kind of figured out how to use LUPKYNIS, benefit from LUPKYNIS, they're getting good, they're happy with kind of the efficacy, maybe the tolerability profile, what kind of metrics would you be willing to provide around those that kind of have adopted versus those that are still kind of waiting and seeing? Those are our two questions. Thank you.
Let me start with PSFs and have Joe Miller just make sure if I'm right with the math. What we said was we didn't give the exact number for March, but just told you that in March we had our highest yet. I don't know, Joe, did you calc what she said 260.
Yeah, that's a little bit high. We gave kind of an average number coming into year-end earnings. It wasn't the full, you know, February through the end of the month when we did that number. You're a little bit high on March. Overall, as you kind of look at monthly run rates, March was our highest month to date.
Yeah. Then what I would say about quarter, we report and we've consistently done this. We'll give you the year-end or the end of quarter number, but then we'll always give you the, depending on when we do the earnings call, we'll give you the most up-to-date PSF number, and that's what we gave you as of Friday of last week. That was. What was the number we reported? It's year to date.
6:47.
$647. What I can tell you about that number, Stacy, is it is on track with or growing ahead of where we were in Q4, which is what I think you wanna see. You wanna see consistent quarter-on-quarter growth, and as we noted, we saw a slight dip, you know, from Q4 to Q1, and then we're seeing growth that's representative growth over Q4 so far into Q2, and that's right on track with where we wanna be. In terms of your question on prescriber habits and repeat prescribers, let me share just a couple things here and just for being expedient here, you know, kinda cover off on this for Max. One, yes, prescribers are more apt to use the product once they've used it.
We do see strong secondary prescribing and so from after initial prescription, repeat prescribing is quite high and consistent. Second, obviously we decile our docs, and in our top decile docs, our penetration increase and continues to grow. To put that into perspective, the top-tier docs have, in some cases, 10-12 times the number of patients, and we're talking a small number of patients per doc, but more than the average lower decile. Our penetration there has continued to grow. As we get, you know, over the next couple quarters, you know, we'll continue to share more as to what our, both our depth and breadth of prescribers look like.
We've been quite happy based upon our deployment with our sales force as to what our penetration's been in the highest deciles, the breadth of our prescribing, and then more importantly, the depth. Physicians are reusing the drug after start, more apt to once they do.
That's very helpful. Thanks. Thank you, guys.
Our next question today will come from Ed Arce at H.C. Wainwright. Please go ahead.
Hi, everyone. Thanks for taking my questions. Can you hear me okay?
Sure can.
Great. A few questions for me. First, wanted to ask, well you mentioned in the release the PSF conversion rates at about 80% after 90 days. My question is, if you could describe for us, for that conversion, the average period from the PSF to treatment on average, what does that look like? Wondering now that you've had over a year now of experience with patients, any lessons learned so far as you work on keeping patients on therapy, the consistency, the persistence, compliance, obviously towards not just refill rates, but staying consistent? Any lessons learned there and perspectives you could share?
Lastly, regarding the $30 million, up to $30 million in potential milestones from Otsuka, potentially later this year from the EU approval, is there any details you could provide onto the split and what would be required in terms of labeling and so forth? I have a follow-up.
Yeah.
Thank you.
Okay. Ed, I'll go backwards on this because as you go through those lists, usually the last one's the first one on my mind. On the $30 million from Otsuka, here's what we've said historically. The closer we come to a match of the U.S. label, the closer we'll be assured to a $30 million payment. The range of up to $30 million it all comes down to how the label comes together and duration of utilization. Meaning if the product were approved by the EMA, you know, said to be a therapy that can only be used for three-six months, the payment would be lower. That's all the color I can give you on up to $30 million.
The closer it comes to match the US, the closer you can be assured that 30 million is the number we would see. So far in our conversations, both at 120 and 157 days in conversations with the Rapporteur and co-Rapporteur, we don't see any showstoppers here. We feel good about it. You know, the PSF conversion rate, and then let me go to lessons learned because I want Max's input there. I have plenty, but you know, you asked specifically about patients, and I think we should give you our color there. PSF conversion rate on average, we are above at 30 days, more than 50% of patients are converting onto drug.
We give you a 90% number, which was, you know, 80%, a 90-day number. At 30 days, more than 50, almost up to over 60 are on drug. They get on pretty quick. We're improving, as I've said historically, we're looking at 30. We're looking at even pre-30, but the important ones are 30, 60, and 90 days. We wanna have as many converted within that 90-day period as possible. I think we're getting to a point of almost like, I mean, 100% is perfection, and we're at 80%. We wanna get them on faster. Now to be up over 60% at 30 days is we're on track with where we wanna be.
Lastly, on lessons learned with patients, I'll just emphasize that it's critical and that because this disease presents with no physical signs and symptoms, there is no natural patient quality of life indicator that forces a patient to stay on drug. If your joints hurt, you're more apt to stay on a biologic therapy for rheumatoid arthritis because it's helping your joints. Lupus nephritis is a quiet disease until it's not. We need the healthcare providers, we need the patients to be educated on the overall impact of the disease, and we need the patients themselves to be overly educated to stay on therapy because their kidneys and potentially, you know, because of what the data shows, if the disease progresses, their lives may be at risk. Patient education, patient support programs are continuing to be paramount.
As we mentioned in the call script, we're increasing our investment there. Max.
Yeah. I mean, what I would add, and I think Peter hit the nail on the head. What I would add is that we have improved our processing speed every quarter. We are. You know, having more than 80% adherence rate is significant for this patient population. Really the key, as Peter highlighted, is education. We put significant resources in Aurinia Alliance, our case management team that connects with patients on a regular basis. We put significant resources in support of physician offices and academic centers to ensure that patient start forms are converted fast. Those investments are bearing fruit in speeding up conversion and also helping patients stay on treatment.
That's great. Thank you. That's helpful. Just one more follow-up for me. You mentioned the VOCAL pediatric study underway and enrolling patients. Just wondering if you could delineate for us any other post-approval commitments, so just we could be aware of what's coming up down the line. Thanks so much.
Yeah. As previously mentioned here, Ed, and just a reminder for everyone on the call, our post-marketing commitments were, one, the AURORA-2 extension data, which has been shared with the agency and the EMA, and is part of our application in the EMA. The VOCAL Ped study, which is a pediatric study, obviously, which is ongoing. Then lastly, there was a lactation study and I think a drug-drug interaction study. The one has been completed. The lactation study is ongoing. The Ped study is ongoing, and we'll report out on those, over time. As I said, the drug-drug interaction study has, I believe, been completed and submitted at this stage. The AURORA-2 has been submitted, and then, the VOCAL Ped study will take some time. Obviously, this is primarily a disease that affects middle-aged females.
You know, getting down into a younger audience will take time, but we have all the belief that we can do that. Those are our commitments, Ed, and we continue to, through the ENLIGHT-LN study, invest in further research both on, you know, the higher level, like a global registry, and secondarily with individual investigator-initiated studies and things of that nature to support understanding the therapy in the real-world environment.
Great. Thanks so much, Peter.
Thanks, Ed.
Next, we'll hear from the line of Sahil Dhingra at RBC.
Morning.
Hi, this is Sahil. Hi, good morning. This is Sahil for Douglas Miehm. Thank you for taking my questions. My first question is, can you please elaborate on the quarter-over-quarter decline in revenues? When I look at the total number of patients on therapy, they have increased from 884 at the end of the year to 1,071 by end of Q1 2022. Is it a function of refills, or is it a function like you have more patients on eGFR that is driving the revenues lower quarter-over-quarter? Can you please comment on that? Then I have a follow-up.
I'm not sure I understand the question. You're asking about the net price per patient, or you're asking. The patients have accumulated patients have grown. What are you pointing at that I just need to understand and to have you clarify a little more. I'm not sure I get it.
In the press release, it was mentioned that there were 884 patients at the end of Q4, at the end of 2021.
Oh.
1,071 at the end of March 2022. There are net additions to patients, but the revenues have declined. I just wanted to understand, is it a function of lower refills during Q1, or is it like there are more patients on the dose reduction program, or is it anything else?
Yeah. As we said, because I got it now. You're just doing the straight line math. You're saying the question is, if you had 884 and you grew a net 200 patients, why would the quarter be down? What you're not taking into account there is, one is a patient growth number. You also have to look at refill rates, right? As we mentioned, with patient insurance plan changes, with the COVID impact and patients, you know, not picking up prescriptions due to that, as we mentioned in the call, that your refill rates were lower. Even though we increased the number, the net revenue per patient in the quarter went down. I think, you know, the. Then we'll see that hopefully in the next quarter, but we up.
Partially why we, you know, try to keep consistent on this net revenue number because in a quarter like this, obviously we saw a dip primarily due to refills. The simple answer for you there is, it's based on refill rate per patient.
The patients on dose reduction that are consistent with the prior quarter, is that correct?
Yeah, we haven't seen any dramatic changes there. Yeah, I would not look to Q1 as anything significant happened with dose adjusting on patients. We've seen pretty consistent at or around what we saw in our clinical trials so far in practice in the market.
Okay. I have one more question. Earlier you have mentioned that the discontinuation rate, which happens within three months, the patient is on the drug, that is, that was around 25%-30%. Today you have commented on for six months, compliance rate, which is around 70%. When we're looking at net patients, should we deduct both of them?
No.
Individually or is it combined? Like
No. What we've done is we originally, when we did not give data for six months or 12 months, was we gave you the best grouping of data we had, which was what happens at 90 days. On a go-forward basis, you should look at our persistency numbers that we give. Like at six months, 70% of patients that get on drug remain on drug as being one number inclusive of those who have actually discontinued drug in the first 90 days. It's not a double hit.
Great. Thank you so much for clarifying my questions. That is all from my end.
Thank you.
Moving forward, our next question comes from David Martin at Bloom Burton.
Yes. Good morning.
Morning, David.
Most of my question's been asked, but I'll go back to a couple I've had in previous quarters. The doctors that are using or prescribing LUPKYNIS, are they also prescribing generally Benlysta? Or do they tend to pick one or the other? If they're prescribing both drugs, any insight yet as to which patients they decide to give LUPKYNIS and which they decide to give Benlysta?
Yeah. Thanks for the question. You know, the answer to that question is pretty consistent with what we've said in the past, which is, you know, really when we talk with rheumatologists, they think about Benlysta and LUPKYNIS for different types of patients. Really, there's almost a different positioning as they think about what the patient's manifestations are, their level of proteinuria, you know, their lupus health state and how they position, how they think about whether to use LUPKYNIS or Benlysta. What we've seen in nephrology is a stronger preference
For LUPKYNIS than Benlysta. That comes from just their general experience also with prior generation CNIs.
I think, you know, for me on this one. It's tough in the data to really break through. I mean, rheumatologists have the ability to use Benlysta for the treatment of lupus. Sometimes they keep a lupus patient on as they get lupus nephritis. Sometimes they initiate Benlysta when the patient has lupus nephritis. It seems to us that even the rheumatologist is selecting the patients when they get lupus nephritis for Benlysta or when they use our drug. The good thing is in nephrology, we're getting preferential right now. We'll keep you posted on how those numbers move moving forward.
Okay. Are patients with newly diagnosed lupus nephritis, are the doctors waiting until they fail MMF and steroids before they put them on LUPKYNIS? Is it first line combination?
Well, I think our greatest tracking towards success, and what we've said is our goal is to change the treatment paradigm, is to track over time the amount of patients who start receiving LUPKYNIS in combination with MMF and steroids as first line therapy. But as you can appreciate, David, these patients are coming in, the majority of these patients that are in the diagnosed and treated population are gonna be on MMF and steroids first. We are seeing growth in newly diagnosed patients, but it's a smaller percentage of the N, and we're gonna track it over time. The majority of our patients have seen a course or are currently on MMF and steroids, and our drug is added to the equation, which is as predicted.
Okay. Last question, are doctors keeping the patients on LUPKYNIS only if they achieve a complete remission? Or is just a lowering of proteinuria, a partial remission, good enough to keep them on?
Yeah, I don't know that we sort of longitudinally track, you know, proteinuria rates on a monthly. We can only give you what we hear anecdotally, and I'll pitch it to Max to give you what we're hearing from the docs.
Yeah. What we're hearing from the docs is that they're looking for a proteinuria decrease overall. They're happy with a 50% decrease in proteinuria, and clearly their goal is to get a complete response. They don't stop treatment. The goal is to get proteinuria down.
Okay.
Recall they're in most cases, David, they're adding our drug to the mix. You're getting an incremental benefit over the current standard of care for the majority of patients.
Okay, great. I do have one other question. When you say adding it to the mix, these patients with lupus that are already on Benlysta, are you seeing LUPKYNIS being layered on top if
We have not seen that yet, although our thought leader base talks about whether a strategy in combination with CNI and B-cell inhibition could be an approach. But that's one that's talked about hypothetically as a treatment strategy. We do not see that in practice right now, at least in our data.
Okay, got it. Thank you. That's it.
Thanks, David.
Now we'll hear from Justin Kim at Oppenheimer.
Hi, good morning, and thanks for taking the questions. Maybe just to follow up on Stacy's prior question. You know, our math seems to suggest a pretty stable quarterly script number between Q4 through even our estimate of the 2Q run rate. Just trying to understand, you know, what the team expects sort of maybe those numbers to shift or change as you know, it looks to maybe reach the high end of guidance and, you know, whether it's macro factors or sort of micro with like the sort of physician practices and doctor prescription. Just, can you walk us through how you think about those script numbers changing or maybe not changing over the balance of the year?
Well, I think if you look at the total number of prescription start forms that were produced in Q4, and you look at Q1, it was down slightly. When I say slightly, Joe, what are we talking? It's tens of patients. It's not like 200 patients. You know, as we move into Q2, we are back at least in a run rate. Again, we don't give quarterly projections on PSFs, but directionally, we're back in a growth trajectory over Q4. That's where we wanna be.
We haven't given, but you can probably do your own estimated math on if you believe 70% of patients on therapy are at six months and make an assumption on where they are at twelve months. You carry a prescription start form rate into the quarter and figure back what an attrition rate could look like in a quarter, what our growth in PSFs has to be. You also can estimate what the retention rate can be, and maybe there are improvements there. All I can tell you is the way we think about it is the retention rates we're working on. We wanna continue to improve on, but if we held them steady, what would the prescription start form rate have to be in order to achieve growth numbers from Q4 numbers where we were into Q2?
Because from a pure revenue standpoint, the numbers from Q2 have to be bigger, obviously, than where we were in Q4, not based off of where we are in Q1. They have to grow above Q4. You know, seeing that growth continue throughout the year. Multiple assumptions there around continued opening, prescription start form activity, refills throughout our entire model and our execution. It's not one factor.
Okay. Okay, got it. Does the team have any updated observations or thinking around how LUPKYNIS is being administered beyond maybe the 12-month time point? You know, just having onboarded several hundred patients in the commercial setting who could have reached this point.
Yeah, I mean, that's, to me, the magical question is what's it gonna be at 12 months, and then what's it gonna be at 18 and 24 months? You know, we benchmarked this, by the way, against biologics and other indications, other rare diseases, et cetera. In all honesty, just like before, we'd rather report 12-month numbers when we have a significant N of patients that are on the drug. You know, through six months, we actually had several hundred patients who had seen the drug at that point. The number is small at 12 months. I think it's fair to say that our assumption would be that if you're at 70% at six months, you're probably gonna be less than that at 12 months.
That's just the natural way the you know the big business over time will progress, and probably less at 18 and less at 24. It's just a matter of what it is. You know, Justin, we can't comment on it other than to say, you know, we'll report it when we have a sizable enough N, which each quarter it grows, and so that we can give you something that we think is gonna be consistent and projectable. That generally speaking, we believe it will continue to decline. It's just decline at what rate.
Okay. Maybe just a final question, if I can squeeze one in, is, you know, taking a look at the abstract at ERA, you know, was just kinda curious if there was any observations on the duration of therapy and time to renal response observed commercially. Just sort of curious, you know, with some of the data around pure Class V taking longer time to reach renal responses. Is that sort of mix of patients being observed, maybe as you look at sort of those populations at later and later time points that maybe they are, you know, falling into one class or another?
Well, I think you stepped right into the reason we're doing the VOCAL study so that we can track prospectively, you know, some of those numbers, like in real world, what the time to renal response actually looks like. I can't give you what the time to renal response or the ENLIGHT-LN Registry. Sorry, I think I said Vocal. But I can't give you what real world evidence shows in terms of time to renal response, but Dr. Solomons is on the phone. He can probably give a little bit more on the abstract specifically you're talking about. Neil, you wanna give any commentary if you heard the question?
Yeah. I wasn't quite sure exactly what it was you're asking. I think you were saying, did you have any differential information around how quickly Class V's respond compared to proliferative patients. Was that the question?
Just around whether the time to response is or maybe just class in general and severity of disease is sort of observed as different among the various populations at various time points. Are patients at longer-term duration therapy potentially more severe in disease and in the commercial setting, and whether there are any trends observed as to, you know
Yeah.
What the mix of patients.
I mean. Yeah. I think actually what Pete said about in the real world and the registry is gonna give us a wealth of information around that, and I think that's the reason we're doing it. But, you know, there's so many things at play. Of course, when you look at the abstracts and the data that's being presented, you know, only 15% of the patients that went in, for example, to the AURORA trial and also AURA trials were Class V. We're kind of looking at relatively small populations of patients. I think we just don't have enough knowledge at this point, and it'll become more obvious as we do more and more cuts in ENLIGHT-LN Registry.
Yeah, I mean, that's all we have at this point.
Understood. Thanks.
All right. I wanna thank everyone for joining us for the call today. I think with that last question, that concludes our Q1 earnings. Thank you for the time, and have a good day.
Ladies and gentlemen, this does conclude today's Aurinia Pharmaceuticals Q1 2022 financial and operational results conference call. You may now disconnect your lines, and we hope that you enjoy the rest of your day.