Mr. Richard Glickman reports

AURINIA REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS, AND PROVIDES OPERATIONAL HIGHLIGHTS

Aurinia Pharmaceuticals Inc. has released its financial results for the second quarter ended June 30, 2017. Amounts, unless specified otherwise, are expressed in U.S. dollars.

"Our phase 3 clinical trial (Aurora) evaluating voclosporin for the treatment of lupus nephritis is under way, and we are enrolling patients," said Richard Glickman, Aurinia's chief executive officer and chairman of the board. "The clinical team continues to initiate sites around the globe, implementing an aggressive patient recruitment program. We are on track to complete enrolment in 18 months."

Operational highlights:

• On May 17, 2017, the company announced that the first patient was dosed in Aurora, the company's phase 3 confirmatory clinical trial evaluating voclosporin for the treatment of lupus nephritis (LN).
• On June 5, 2017, and June 16, 2017, the company presented additional data from its global phase IIB AURA-LV (AURA) study in LN during the 54th European Renal Association-European Dialysis and Transplant Association Congress (ERA-EDTA) and the European Annual Congress of Rheumatology (EULAR 2017).
• As previously reported, treatment with low-dose voclosporin showed statistically improved efficacy over the control arm at 24 and 48 weeks. The data presented at ERA-EDTA demonstrated this improved efficacy was attained while maintaining stable serum magnesium, potassium and blood pressure levels. Known side effects with other calcineurin inhibitors at the effective dose include hypomagnesemia and hyperkalemia, which are associated with renal impairment and require monitoring or intervention.
• The data presented at EULAR 2017 demonstrated that over the course of the 48-week trial, patients on voclosporin stayed in remission approximately twice the amount of time as those in the control group.

Financial results for the second quarter ended June 30, 2017

Cash, cash equivalents and short-term investments were $189.8-million as at June 30, 2017, compared with $202.1-million as of March 31, 2017, and $39.6-million as at Dec. 31, 2016. The company believes, based on its current plans, that it has the financial resources to complete the Aurora trial and the regulatory submission process.

For the three months ended June 30, 2017, it reported a consolidated net loss of $2.4-million or three cents per common share. This loss included a non-cash revaluation adjustment (gain) of $7.5-million related to the estimated fair value quarterly adjustment of derivative warrant liabilities at June 30, 2017. After adjusting for this non-cash impact, the net loss before change in estimated fair value of derivative warrant liabilities was $9.9-million.

This compared with a consolidated net loss of $3.3-million or 10 cents per common share, which included a non-cash revaluation adjustment (gain) on revaluation of derivative warrant liability of $1.4-million at June 30, 2016. After adjustment for the non-cash impact of the revaluation, the net loss before change in estimated fair value of derivative warrant liabilities for the three months ended June 30, 2016, was $4.6-million.

The change in the revaluation of the derivative warrant liabilities is primarily driven by the change in the company's share price. The company's share price decreased at June 30, 2017, compared with March 31, 2017, which resulted in a revaluation gain. These derivative warrant liabilities will ultimately be transferred to equity upon the exercise or expiry of these warrants and therefore are non-cash adjustments.

The company incurred net research and development costs of $7.1-million for the three months ended June 30, 2017, as compared with $2.4-million for the same period in 2016. The increase in research and development costs for the three months ended June 30, 2017, reflected Aurora trial commencement costs, including activities, such as clinical site initiations, regulatory submissions, drug manufacturing and drug distribution.

The company incurred corporate, administration and business development costs of $2.9-million for the three months ended June 30, 2017, as compared with $1.8-million for the same period in 2016. These costs included a non-cash stock compensation expense of $718,000 for the three months ended June 30, 2017, compared with $9,000 for the three months ended June 30, 2016.

This press release should be read in conjunction with the company's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the second quarter ended June 30, 2017, which are accessible on Aurinia's website, on SEDAR or on EDGAR.

About Aurinia Pharmaceuticals Inc.

Aurinia is a clinical-stage biopharmaceutical company focused on developing and commercializing therapies to treat targeted patient populations who 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. The company is headquartered in Victoria, B.C., and focuses its development efforts globally.

         INTERIM CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
           (expressed in thousands of U.S. dollars, except per-share data)
  
                                                                    Three months ended
                                                                 June 30       June 30
                                                                    2017          2016
Revenue
Licensing revenue                                                   $329           $29
Research and development revenue                                       -            25
Contract services                                                      -             1
                                                                     329            55
Expenses
Research and development                                           7,107         2,406
Corporate, administration and business development                 2,901         1,835
Amortization of acquired intellectual property and other
intangible assets                                                    364           360
Amortization of property and equipment                                 6             5
Contract services                                                      -             1
Other expense (income)                                              (152)           85
                                                                  10,226         4,692
Net (loss) before change in estimated fair value of
derivative warrant liabilities                                    (9,897)       (4,637)
Change in estimated fair value of derivative warrant
liabilities                                                        7,498         1,361
Net (loss) and comprehensive (loss) for the period                (2,399)       (3,276)
Net (loss) per common share
Basic and diluted (loss) per common share                          (0.03)        (0.10)

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