All right. Hey, good afternoon, everyone. Thank you again all for coming to the conference, day one of our Global Healthcare Conference. Great to see everybody here. My name's Olivia Brayer. I'm one of the senior biotech analysts here at Cantor, and we're really excited to have with us the Aurinia team. We've got Peter Greenleaf, who's CEO, and we've got Greg Keenan, who's Chief Medical Officer. Thanks, guys, for being here today.
Thanks for having us.
It's a pleasure.
Well, I guess just to kick it off, I think most people in the room are probably fairly familiar with the Aurinia story, but obviously a lot of progress over the last year since we had you up on this stage this time last year. So maybe just give us a sense for the state of the company today, direction that you guys are heading, and just what you're most enthusiastic about.
Yeah. So I mean, it's been an eventful year for us so far. First off, Olivia, thank you, Cantor , thank you for having us here at the event. We're on track to achieve $210 million-$220 million this year in revenue. I think through at least the two quarters we've reported up to this point, we remain on target with hitting that for the year. For our first quarter, actually ended up cash flow positive, so we're strengthening our balance sheet now, just under four years into the launch. So I think that's a big milestone for us and something we're proud of.
Alongside of that, global approvals continue to move forward, and Europe pricing and reimbursement, country by country, for our partners, Otsuka, have continued to move forward at a good pace, so the globalization of the brand is happening, and we're awaiting the hopeful approval by the PMDA in Japan any day now, almost. So that brings to Aurinia another $10 million milestone, which, again, will help the year, but more importantly, will bring the drug to Japan, where we think there's a big market opportunity for Otsuka there. As a refresher, of course, we get a royalty stream, and we have a cost-plus manufacturing arrangement with Otsuka, so it's good for us on top of just being good for getting the global patient population the drug in lupus nephritis.
In addition, obviously, we've had the label expansion that we most recently reported this year. That has afforded a really strong data set and support out there for continued dosing of the product over the long term, just to name a few. And obviously, we dosed our first patient with AUR-200 in our single-ascending dose study just a few weeks back. So pipeline moving, commercial business good on track, financials look really strong. Still have $330 million through the second quarter in cash on our balance sheet, no debt. So we're proud of where we are, and we're looking forward to taking the rest of the year forward.
Yeah, and I know there's a lot of interest in your pipeline in AUR-200.
200 .
AUR-200 specifically, so we'll definitely spend a lot of the discussion on that, but maybe just to start on LUPKYNIS, obviously your wheelhouse. You know, give us a sense of where the lupus nephritis market is today. I mean, what inning do you feel like we're in in terms of, you know, patient awareness, physician awareness, or really just trying to tap into that market and what it could be?
Yeah, maybe I'll start, and obviously, Greg's a rheumatologist, so it'd be good to get the real-world perspective of how things are not just working out there, but the viewpoint of treating rheumatologists in the space today. Listen, I think we've done a really good job up to this point, building awareness, getting physicians to understand what our data looks like, both in nephrology and rheumatology, and getting solid penetration into the base of patients that are treated today. I think where we need to move to is to try to get treating physicians, both in rheumatology and nephrology, but primarily in rheumatology, to more closely align to historical guidelines for the treatment of lupus nephritis and newly published treatment guidelines that are out there.
There's very low overall diagnosis rates that are out there today. On every visit, for a lupus patient, at least from a guidelines standpoint, they're supposed to be doing urine screens. What we know from claims data and large claims data audits that have been done by some of the large payer groups out there, there's a grossly low diagnosis rate and utilization of 24-hour urine screens by rheumatologists. We get that to improve, we believe there's more patients that are suffering from this disease that actually get diagnosed. Second, when they do diagnoses, the actual treatment rates are really low. We know in talking to most rheumatologists, they know LN when they see it, when there's very high proteinuria. So most identified treatment patients are above 1 g of proteinuria.
We've got to bring that down, get it closer to what the actual guideline target goals of therapy are, and it's well below the that 1 g category. So we've got a bit of market development we need to do-
Mm-hmm.
To get the market to where even physicians are recommending treatment guidelines go, and then continue to differentiate and penetrate that market. Greg, what would you add?
Yeah, no, I agree with all those points. One thing that's interesting when we look at our prescriber base today is it's 50% nephrology, 50% rheumatology.
Mm.
The rheumatologists are the clinicians that see these patients early and right at the beginning of their disease, and we think there's definitely an opportunity for improved patient management, where the rheumatologist initiate treatment more often. One of the things that will be new news is the ACR will be talking about their new lupus nephritis management guidelines that will be presented at the November meeting, the November annual ACR meeting. It's likely there'll be more call to action to more rigorous assessments of the presence of the disease, more aggressive initial management, something we're hoping to see, and perhaps more in line with the EULAR and KDIGO guidelines with regard to duration of treatment. Clinicians here, to...
Poor rheumatologists have been sort of approaching things in a cycling way for remitting, relapsing condition, and top opinion leaders know that this condition is chronic, and they think it deserves chronic therapy. So those will be some things to look forward to, and we'll see how those guidelines look, and perhaps rheumatologists will embrace those more. There haven't been guidelines that have been issued in over 10 years in this, so...
Yeah, it's an interesting point. I mean, how involved in those conversations are you all, or just around the guidelines and potential updates?
We're definitely not involved. These are ones that's an independent groups. We're not involved in that. But from the standpoint of speaking about the guidelines, the EULAR and KDIGO guidelines, those, to this point, have been very helpful for us on the medical side of things, to be able to speak to clinicians to help point out what these groups are sort of stating needs to be considered. At least in my opinion, I think it's helped clinicians start to think about how to get more aggressive. But I don't know if you have other comments.
No, I think it's an integral part of what we talk about. Usually, these guidelines are grossly underutilized and looked at. So just by getting higher diagnosis rates and treating to the targets that are in those guidelines is going to grow this market, regardless of our drug. So they're a part of what our MSLs and our sales reps point to on a regular basis as to what physicians should be doing, so they're helpful.
Okay, interesting. Well, definitely looking forward to some of those updates-
Mm-hmm.
and seeing how the guidelines unfold. Peter, you mentioned your guidance targets that you all set out for this year. Maybe just remind us the pushes and pulls around guidance. I know the summer months are extremely important, so any update on, you know, I know we'll obviously have to wait for the third quarter, but any tidbits on how summer months performed from a, you know, prescription standpoint and patient start forms, et cetera?
I mean, I can only speak to it in the rearview mirror a little bit about what we've seen each year. But historically, a good year for us in the summer has been kind of flat to 2Q, right? Because we know that we see less patient office visits, docs aren't in the office as much, office staff's not as frequently there. We see less actual diagnostic tests being run, biopsies, urine screens, and we see less prescriptions outside of LUPKYNIS. So in a good year for us, it's been kind of flat, and we've seen... Since the launch, we've seen, during COVID, even a down year during the summer. To me, the range of our guidance that we've given, because we're asked this question quite frequently, if we see our historical trends, I think you're still in the range of our guidance.
But if you see a summer where we actually continue to grow the product through the summertime in 3 Q and lead into 4 Q, to me, that's where you start to see upper end of potentially a beat. So it all also depends on the fourth quarter, and we've historically seen growth in the fourth quarter. So, yeah, we'll see when we report the third quarter.
Yeah, well, maybe I'll ask it a different way. What's your level of confidence in hitting that guidance range or potentially even beating it after, you know, now that we are in September?
Obviously, I can't say anything that would project us forward, but we haven't changed our guidance range. We tightened it in our last call.
Okay, fair enough. How about an update on patient start forms? Any maybe qualitative feedback around trends that you guys have been seeing so far this year?
Yeah, I mean, I can give you qual and some level of quant, and the quant is through 2 Q. Obviously, you know we report PSFs almost real time. These are our patient start forms, which are like our prescription because we utilize specialty distribution, and that initiates product getting shipped to the patient. Trends through July looked relatively similar to what we've seen historically and stable. And which one might say, "Okay, well, you don't want stable, you want growing," and that indeed is true. So all I can say about start forms is all these initiatives we have are continuing to try to break the trend of having stable PSFs-
Mm-hmm.
- and get it back to a growth trend. What's been driving on top of those PSFs we produce, the continued revenue growth in the company has been other factors, like, Some of these equate to a PSF, a hospital start. Well, a hospital doesn't fill out a patient start form, but they order product. So we know what hospitals are ordering, and historically, like in the COVID time period, we didn't have any hospitals ordering. So there's been a fairly significant increase, all relative, in new patient starts coming out of the hospital side. The second is a dynamic that the guidelines don't point at or say a physician should do, but in the reality of practice, they do, which is restart the drug.
They'll take a holiday, take them off drug, and if proteinuria jumps back up on a screen, they'll put them back on the drug. So we've been seeing a pretty dramatic increase year over year in restarts. Then lastly, there's persistency. Now, we've had three-year data that looks at eGFR, that looks at UPCR, and we've had a biopsy study, sub-study of our original pivotal done that looked at biopsies, serial biopsies, these patients out to 18 months. That data has been instrumental in helping us to have a conversation with a physician about how long they keep them on therapy. And while these numbers are not, like, off the charts dramatic, obviously, just looking at twelve-month persistency, it's moved from about 50% in the first year or so of the launch to today, almost 56%.
So if we're carrying more patients stable along on the drug and growing that, all those impact revenue. PSFs are important, but these other factors are equally so.
Mm-hmm. And then how do you weigh, you know, maybe from a growth perspective, right? You have new patient starts, you have patient re-engagement, and then obviously, you have patients just taking therapy for a longer time and not going off of it. I mean, how do you think about those three as different drivers, right? I don't know if there's a rank order or if there's maybe an area of prioritization for growing revenues longer term.
Yeah, I mean, I think we can continue to work on and grow all of those elements, right? And I would look at the hospital business very similar to PSFs because those are outside of patients that have existed, that are restarting therapy, are grossly important. Like, they're the top end of the funnel, right? So hospital's important, PSF's important. We have to, you know, get PSFs continuing to grow. Hard stop, that's an important one for us. But we can continue to grow revenue in the company pretty consistently just by working on the elements that right now we're seeing. Continued restarts, we can reach back out to those patients who have opted into our program and make sure that they're actively seeing their physician. Persistency, we've got great data for it, guidelines sort of play to it. We can continue to grow there.
Mm-hmm.
But it doesn't, it doesn't negate the importance of new patients at the top end of the funnel, and obviously, all our initiatives continue to work on that.
... Sure. Urine screening is something that you guys have talked about quite a bit, urine screening.
Mm-hmm.
Just the importance of more regular screenings for patients. I mean, maybe just talk to some of the initiatives that you've done there and the work that you've done to try to make that a more regular thing in practice. You know, if you've started to see any, you know, shift in how rheumatologists are thinking about treating this disease.
Yeah, I think, you know, nirvana for lupus nephritis, not just for our drug in the future, looks like, you know-
Mm-hmm
... rheumatologists being 90% of your prescriptions, right? Like, they're catching it early screening for it, catching it early, treating it aggressively to avoid it becoming a combination treatment between the nephrologist and the rheumatologist. It's not where the market is today. The market today is, patient's got 1 g of proteinuria, we better call a nephrologist get this patient managed quickly. It shouldn't be two steps away from chronic kidney disease and dialysis before this becomes a patient management opportunity. Today, that's a 50/50 split, right? We're seeing prescriptions come from rheumatologists and nephrologists almost even down the middle, and some of those prescriptions travel.
Like, a nephrologist may start it, ends up with a rheumatologist. Anyway, to answer your question directly, we've got a lot of initiatives that are very focused on guideline alignment, treating to target, diagnosing patient, and very targeted towards the rheumatologist's office. More education on utilization of this CNI, not historical CNIs. You have the opportunity to avoid the number one complication in lupus that can be life-threatening, which is when the kidney progresses into CKD, dialysis, transplantation, and then potential for even worse events down the road. It's very predictive. Anyway, we have the initiatives. I can't say today we have a lot of data sources to say we're moving the needle on it, but it is something we're tracking.
Mm-hmm. Well, maybe let's shift gears to your pipeline. AUR-200 has gotten a lot of interest on my end. I imagine on your end, you're seeing a pickup in questions around that as well, although I do still think it is... you know, I think it flies under the radar for a lot of people that haven't necessarily been following the story as closely. So, you know, maybe just give the audience a sense of what is that program, what's the mechanism, you know, where are you in the clinic, and, you know, phase I, healthy volunteers, and just kind of the how you're thinking about that program fitting into the company portfolio overall.
I mean, I'm gonna let Greg answer the majority, but I just wanna bring people back to, we found this asset the second year in the launch, maybe it might even have been the first year in the launch, that it spun out of, like, an Astellas acquisition or a couple, ex-employees who were selling, and we got it for a very reasonable number, less than, at around $5 million, I think, and we own the asset outright. So we've been working to get this IND ready for, you know, a couple years, and it is now. We just got it into the clinic. We dosed our first patients in a SAD study just the last couple of weeks.
And by the way, all that time period, there used to be a Chinook that's now Novartis, just for comparable companies. You know, there have been companies that have been progressing this, but we're really excited about it, and we're glad people are taking interest. I mean, it's an APRIL BAFF inhibitor targeting B cells. Obviously, there's been a lot of interest here, and we think even outside of IgAN, there's a very ripe market for these drugs. Obviously, if we can prove the mechanism is safe and effective in one indication, there's a lot of other indications that nobody's touching. So Greg, I don't know if you want to-
Sure
... talk mechanism or?
Just a little bit more. So, it's distinct and unique in that it's a BCMA-based platform receptor fusion protein. The other BAFF APRIL inhibitors that are existing, think of atacicept and povatacicept and telitacicept, which are TACI-based platform. Ours is an IgG4, so it won't fix complement and cause ADCC, antibody-dependent cell-mediated cytotoxicity. So in how we're profiling or positioning the drug, that would be a positive. And then it binds both BAFF and APRIL, two key cytokines that are important for B-cell maturation, proliferation, differentiation. And it's been engineered, the BAFF receptor to be that much more like a sponge.
So, translating that into science, the KDs, the coefficients of dissociation are very, very low, which is what you want, very low, and the IC50s are equivalently low, meaning the ability to inhibit both of these cytokines. So, it has all the right pieces. It's a small, larger molecule, if you will. It's half the size, molecular weight-wise, relative to a monoclonal antibody. On the other hand, we like the profile. We're taking it from our preclinical work into people. We're advancing it subcutaneous alone. We think that's gonna be a very viable route of administration, and, as Peter mentioned, we finished dosing our first cohort.
Now we're observing those individuals, and we'll be, from there, methodically moving up a dosing level sort of algorithm along a prescribed timeframe, so that we'll be able to determine the kinetics of the drug, safety, tolerability, and we'll get a little bit of a read on pharmacodynamic markers. The thing we look for is, does it start to move in the relevant doses as we get up a little bit higher, quantitative immunoglobulins. We all have those. If IgM, IgG, and IgA move down a little bit in healthy people, then we'll feel like we've got something that is biologically relevant. So we're pretty excited about where we're at. We need to move quickly and on pace.
Yeah. Greg, what can you tell us just around the number of patients that have either already been dosed or, you know, when we do ultimately get a data update in those healthy volunteers? I mean, how many patients should we expect an update on?
... Oh, I don't think we've disclosed anything about the particulars of the trial outside of, you know, the kinetics and dynamics we'll pick up from this study, as well as other relevant biomarkers. We hope to have in the first half of next year from the SAD, and then the ongoing MAD will be sometime in the calendar 2025 as well.
Okay, understood. Anything else you guys can tell us just around trial design or dose level that you're testing?
You know what? What I can say is, because we've said it publicly, we don't have an intention to take this down the route of IgAN.
Yep.
You know, Alpine and Chinook, and Vera, and others are all hard-charging towards IgAN. Not that we don't think there's a huge unmet medical need in IgAN, but whether it's APRIL/BAFF or other mechanisms, we think it's a fairly crowded space. So while we haven't said what specific indication, we're not trying to be cute, we wanna actually get some data to better understand the compound before we plant a flag and say we're definitively going here, and we'll look forward to talking more about that over time. But IgAN probably will not be on that list.
Mm-hmm. Well, maybe broadly speaking, right, without committing to any indications, I mean, can you just give us a sense of how you think about unmet medical need in B-cell-mediated diseases and which markets, you know, could be interesting?
I mean, RITUXAN's a big drug, right? If you could have a better RITUXAN, you could go in a lot of different directions, but we're in the autoimmune disease space, so I think autoimmune inflammatory disorders are kind of where our mindset is targeted, and there are plenty where others that are slightly or, you know, ahead of us, have not planted a flag, where we think we could have first-mover advantage, and underlying some of the science that Greg was going through, we believe that this could have best-in-class properties, which would argue you could go at it somewhere where there's a higher likelihood of success, like a proteinuria-based disease, a proteinuria kidney disease like IgAN, and then you could be the best one, the best APRIL/BAFF.
Mm-hmm.
I think we should try to stack the deck in both directions, different indication and potential for best-in-class, but more to come as we develop the product. We're in single ascending dose studies, so we got a little ways to go. But our focus is on doing it, doing it fast, doing it in the right way, and of course, you know, being efficient in how we do it, and trying to operate like a small biotech, so.
Mm-hmm. And I assume IgAN... I mean, I understand the route, wanting to have proof-of-concept data in maybe a little bit more of a distinct indication, right? Where you feel like you can gain a little bit more traction and market share, right off of the-- right out of the gates. But I assume IgAN is not necessarily off the table, right, going forward in the future? Or at this point, is... I guess my question is, right, have you seen something in the molecule, in the PK/PD profile, that would stray you away from IgAN versus just wanting to go after markets that are- a little bit less crowded?
No, absolutely not. Matter of fact, I think there's a lot. There's all. There's-
Greg, I'm gonna make you answer this one after, too.
No, there's all the like, and then I think there's a lot of to like in addition to, potentially, that needs to continue to be proven out of animals and into human beings. There are other rare proteinuria kidney diseases that you could look at for an orphan rare disease approach, too-
Mm-hmm
... that drive to the same endpoints of proteinuria reduction, eGFR, and other things that aren't IgAN. I mean, it's not hard. You do a pretty broad scan of different mechanisms that and molecules that are being looked at in IgAN. My conclusion, it's gonna be a great market opportunity, but there's gonna be a lot of people vying for it. So doesn't say anything about our compound, that'd probably be the path of least resistance. I think it says a lot about us trying to be creative to go after somewhere novel.
Okay. Anything that-
I'll just offer, I'm in charge of getting these studies done on time, or I hear from this guy, and there's so many other competing compounds. It truly is an issue with regard to study execution, patient recruitment. You have to go further and further afield.
That's right.
I'll offer one other point to consider: There's well over many, more than a hundred different B-cell driven diseases. I'll offer one thing that's attractive about this class of molecule, and this one specifically, as we go along. It's flexible, meaning it's reversible, meaning you're not doing something permanent and enduring to an individual immune system. The individuals that typically have these diseases are young to middle-aged women that are fertile, that are thinking about their future. The ability to adjust the dose, reduce or stop the dose, and have things resolve or be withdrawn, is attractive relative to things like B-cell depleters or CAR T agents, which, while likely to be quite effective and definitive, would render individuals more immunosuppressed for longer periods of time.
There's some attractive elements of that relative to perhaps B-cell driven diseases that are important, but are not necessarily life-threatening. So there's many more opportunities here than perhaps for other classes of that.
Yeah
-offer.
Yeah, it's a great point, and obviously, there has been a lot of interest right in the dual BAFF/APRIL mechanism.
Mm-hmm.
To your point earlier, right, I mean, there was some big M&A earlier this year around it. In terms of the preclinical profile, I mean, anything that you can tell us. I know there's a presentation that's in the public domain.
Mm-hmm
... that has some interesting PK/PD data in it. But anything you can tell us around the preclinical profile that maybe, you know, differentiates this molecule or stacks up differently versus some of the other BAFF? You know, APRIL B-cell modulators that are out there.
But it's hard to make a, it's literally not scientifically good work to make cross experiment comparisons. I'll make, and you, as you know that, too. But I guess my point would be more, we like what we see. What you're referencing was an ACR presentation 2022, that showed that there's utility in a murine model of lupus, and a similar model, it's an IgAN-like model. We saw the kind of utility we wanted to see with regard to biologic activity, and then what we've done in non-human primates, monkey studies to understand the pharmacokinetics. The evidence we've generated from that when we do so-called allometric scaling, you make judgments with regard to how it's gonna behave in people before you study people.
We like the curves we see with regard to the dose range that we've studied in monkeys, and what was observed with regard to reductions in quantitative immunoglobulins. It looks like this is gonna be a very relevant molecule, something that could be administered easily and simply, with a decent frequency. Not too much, not too little.
Yeah, it's a really interesting presentation, definitely for those of you who have not seen it. It is worth flipping through. Okay, well, maybe last question is, you know, you obviously have this new pipeline agent that's starting to get attention. You probably have some other programs that maybe you're doing some preclinical work on. What's kind of the next step, right, in terms of diversifying the portfolio further? Is it M&A? Is it, you know, external BD partnerships? Is it maybe a program that, you know, we don't have any public knowledge or insights into yet, but that could actually be, you know, behind closed doors being worked on? I mean, how do you think about next steps for broadening, you know, the overall portfolio at Aurinia?
Well, I mean, I'll just start with our most important priorities are growing LUPKYNIS, accruing balance sheet, and accelerating forward AUR-200. Hard stop. We're inquisitive, we look at a lot of things, but you can't bet on the future of a deal that you don't know. So the intrinsic value of the company really is based on those things that we have. We'll look at things, but we're not, we're not trying to just diversify the pipeline, do bad deals. People shouldn't be nervous about us doing deals. If we decide something is interesting, we could even take it to investors to see if they wanted to fund it, you know? So we're looking at lots of things, but I wouldn't say.
And obviously, continued diversification is always a possibility and interesting to us, but our priorities are driving the LUPKYNIS business, continuing to make it more profitable, grow our balance sheet, because we're more dangerous as that balance sheet goes up. With anything that we wanna do, that could be value-enhancing to both shareholders, the company, or the two when combined, they should be connected. And then AUR-200 moving into, you know, phase II studies is, you know, then we can start looking at that, and that can actually be part of the valuation of the company. Today, it's an early-stage clinical asset that's not getting enough credit. We need to change that. So, those are our priorities. Doesn't mean we're not looking at business development, we always do.
But those first things are what's gonna be the priority and what people should be looking at from us.
Great. Peter, Greg, always a
Yeah.
Great discussion. Thank you so much.
Thank you.
Thank you for having us too.