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
Company Website:
http://www.auriniapharma.com
VICTORIA, British Columbia -- (Business Wire)
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 Aurinia
Aurinia 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 LN
LN in an inflammation of the kidney caused by
Systemic Lupus Erythematosus (“SLE”) and represents a serious
progression of SLE. SLE is a chronic, complex and often disabling
disorder. The disease is highly heterogeneous, affecting a wide range of
organs & tissue systems. Unlike SLE, LN has straightforward disease
outcomes (measuring proteinuria) where an early response correlates with
long-term outcomes. In patients with LN, renal damage results in
proteinuria and/or hematuria and a decrease in renal function as
evidenced by reduced estimated glomerular filtration rate (“eGFR”), and
increased serum creatinine levels. LN is debilitating and costly and if
poorly controlled, LN can lead to permanent and irreversible tissue
damage within the kidney, resulting in end-stage renal disease (“ESRD”),
thus making LN a serious and potentially life-threatening condition.
About FSGS
FSGS 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 DES
DES, 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 Voclosporin
Voclosporin, 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 VOS
VOS 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
singlePhase 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 and other
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 of derivative 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 term investments
| |
11
| |
-
| |
(78)
| |
-
|
| | | | | | | |
|
Net comprehensive loss for the period | |
(3,321)
| |
(8,333)
| |
(70,870)
| |
(23,295)
|
| | | | | | | |
|
Net loss per common share (expressed in $ per share) | | | | | | | | |
Basic and diluted loss per common share
| |
(0.04)
| |
(0.21)
| |
(0.92)
| |
(0.66)
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180315006132/en/
Contacts:
Aurinia Pharmaceuticals Inc.
Investor & Media Contacts:
Celia
Economides
VP, Public Affairs
ceconomides@auriniapharma.com
or
Dennis
Bourgeault
Chief Financial Officer
dbourgeault@auriniapharma.com
Source: Aurinia Pharmaceuticals Inc.
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