Aurinia Pharmaceuticals Inc. (AUPH) Earnings Call Transcript & Summary

Greetings, and welcome to the Aurinia Pharmaceuticals Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Peter Greenleaf, Aurinia's President and CEO. Thank you. You may begin.

Well, thank you, and I want to thank everyone for taking the time during this busy time of the year to join us. Today, we're here to announce the top line results from the conclusion of the AURORA 2 study. To remind you, AURORA 2 is a Phase III continuation study designed to assess the long-term safety and tolerability of voclosporin when added to MMF and low-dose corticosteroids for an additional 24 months following a 52-week treatment period in the original AURORA 1 trial. While there have been interim cuts of the data presented at this year's EULAR and ACR meetings, we now have key data from the completion of the study and are actually quite pleased with the results. Today, we issued a press release with details regarding the AURORA 2 readout which is accessible from our website at www.auriniapharma.com, and the information has been filed on a Form 8-K with the SEC. Dr. Neil Solomons, our Chief Medical Officer, will provide specific data details and explain why it is important, but I'm happy to report that the study itself demonstrated a favorable risk-benefit profile for LUPKYNIS in patients with active lupus nephritis up to 3 years with safety comparable to AURORA 1 and sustained efficacy. With the conclusion of this study, LUPKYNIS in combination with background immunosuppressive therapy is the first and only FDA-approved medicine with 3 years of pivotal trial results in LN. As well, Aurinia's LN clinical program, including a Phase II AURA-LV and both AURORA trials represent the largest successful LN program to date and we're quite proud of this accomplishment. So with that intro, I now want to hand the call over to Dr. Solomons. Neil?

Thank you, Peter. As Peter said, the overall conclusion is that AURORA 2 demonstrates a favorable risk benefit profile over a 3-year period with safety comparable to AURORA 1 and sustained net efficacy. I'm pleased to share the topline results that the clinical team has constructed from a deep and thorough analysis of more than 2,000 pages of data over the last couple of days. Just to recap, AURORA 2 is a safety study designed to demonstrate long-term that is up to 3 years of safety data and those who were on drug at the end of AURORA 1. As you all know, 357 subjects completed a year of therapy in AURORA 1. 216 of AURORA subjects. That's 116 voclosporin and 100 out of control who completed a year on drug or active control entered the continuation study with a further 2 years of treatment using their initial randomized therapy. No further randomization occurred when we moved to AURORA 2. Therefore, any comparison between groups should be performed with caution. Patient demographics were generally well balanced between AURORA 2 arms with some exceptions. There are more black patients and fewer Asian patients in the voclosporin arm versus the active control arm. Now looking at certain clinical characteristics at the AURORA 2 baseline for both groups. The mean eGFR was higher and the UPCR lower compared to the start of Aurora, and this is consistent with an active LN population who have undergone a year of treatment. The active control group had a high UPCR entering AURORA 2. That's 1.5 milligrams per milligram versus 0.9 milligrams per milligram, while corticosteroid doses were low in both arms. When we assessed the estimated glomerular filtration rate, or eGFR, we noted that even with the early benign decline the eGFR, which is due to expected hemodynamic effect of CNIS, I the EGFR after 3 years of treatment with voclosporin remains remarkably stable with no attrition over time. The eGFr assessed 4 weeks after discontinuing treatment is actually slightly greater than baseline, reflecting the release of the hemodynamic effect. To remind you, proteinuria reduction is the most important predictor of long-term meaningful renal outcomes. And here is a graph of new new PCR assessments over time. It remains low throughout the course of the study, with the QTc significant differences observed in nearly all visits. In the voclosporin group, the mean UPCR remarkably remains between 0.5 and 1.0 for the duration of AURORA 2. Along the bottom, you can observe reducing patient numbers between months 18 and 36, and this reduces the statistical power of the analysis to detect differences. We were pleased also to report in the AURORA 2 study a confirmation of the favorable safety profile seen in Aurora. Here, we can see the safety overview of AURORA 2. The serious adverse events or SAEs were essentially the same between arms and all 4 deaths occurred in the active control arm. The guide as a result of COVID and 1 of the pulmonary embolism. In general, the adverse events were well balanced and importantly, very few voclosporin subjects discontinued due to adverse events. To recap here is the risk benefit statement again. We're providing study highlights today, but we will continue to do work in the next few months, and this will result in publications and presentations in medical conferences in 2022. And before we wrap up the call, I just wanted to take this opportunity to provide some additional updates regarding our voclosporin LN clinical program. I'm excited to announce Aurinia's plans to initiate ENLIGHT-LN, a U.S.-based prospective observational registry of adult patients with LN treated LUPKYNIS. The registry is intended to support the interest of patients, clinicians and regulatory bodies, payers and industry obtaining the longitudinal data on LUPKYNIS. We aim to initiate approximately 75 sites across the U.S. and more details to come as we move into 2022. As noted previously, as part of our discussions, with the FDA, we are also committed to conducting a pediatric program for voclosporin lupus nephritis, including our previously announced boost. Given the rarity of B deficient patients with lupus nephritis, we expect the recruitment to begin in 2022. We also have post-marketing commitments with the FDA to share the results from the LAPTATiON study and the drug-drug interaction once completed. Timing is to be determined for a quarter on the results of these studies. And now I'll pass the call back to Peter, who will open up the floor for questions and answers. Peter?

So thank you, Neil. And again, thank you all for joining us today. Obviously, the completion of the AURORA 2 study is a great achievement for us as a company. But more importantly, I want to express our gratitude to the participants, their families, and the health care providers involved in our lupus nephritis development studies over the last many years. Now I want to take this opportunity to turn the call over to the operator and initiate the Q&A session. Operator?

[Operator Instructions] Our first question today is coming from Alethia Young from Cantor Fitzgerald.

Congrats on the . I guess maybe 1 obviously can you discuss kind of what the [indiscernible] label itself. And then from a physician perspective, by both 3 physician types. I mean, do you find this to be 1 of the key questions that people have asked about while you're kind of detailing your marketing [indiscernible] base?

Yes. Why don't I start and Neil can build on. First, on the submission of the data, it was a commitment once we submitted the original AURORA data, the 52-week data and then the on the approval to submit the data to the agency. So we have a commitment to do that. And within the first quarter of 2022. It's not a supplemental package though, Alethia. So we'll have a conversation with the agency. We'll see where they see the importance, et cetera, and how it impacts the label is TBD, but I just do want to underscore that -- It was a commitment but was not a supplemental NDA. The second part of your question is the importance. I think we tried to underscore that in the call itself. We're the only approved medicine out there today for lupus nephritis with data out to 3 years. Obviously, the results are quite positive, we think, and are going to be clinically meaningful. And as you look at physicians prescribing today, I think, is a little more of the -- having more data is a good thing, having more data over time is a very good thing, and we think this is going to be really influential to the marketing of the product. Last point, our clinical or our commercial and marketing team has done quite a bit of work with this. And while we're hopeful that there will be good conversations with the agency about how it potentially is added or how it's looked upon in the label, just having the data, getting it out there in the public domain and providing it to physicians is going to be sufficient and obviously important. Neil, What did I miss?

No, I think we covered pretty much everything, Peter.

Our next question today is coming from Maurice Raycroft from Jefferies.

Congrats on The update. This is Farzin on for Maury. You have collected the 4-week follow-up data. Can you add some more color on the purpose of that for collecting those data? And what is the conclusion based on that?

Okay. So I'll answer that. I think, Farzin wants to know a bit more about the follow-up data. So at the end of the study, what we did was what physicians are instructed to do was obviously stopped the drug because the study was finished at 3 years and then do another assessment, which included UPCR and eGFR 4 weeks later. Obviously, 1 of the feats of the CNI I is a hemodynamic change on the kidney where the eGFR is reduced due to that. And what we found was when you removed the drug, even after 3 years of therapy, the eGFR popped up but there's no penalty from the respective of UPCR. So there was no increase in UPCR which and what that means to me, and we're still analyzing the data, and we still need to discuss it with our physician colleagues, but our initial look at that suggests that the reduction in UPCR really is a result a of disease-modifying effect and that the -- any initial reductions in eGFR that you see with this this particular CNI is completely reversible. So I think this is a very encouraging data.

Our next question today is coming from Kenneth Cacciatore from Cowen & Company.

Peter, congratulations on this data. I'm going to go in a different direction of my colleagues. That's very smart questions on this current topic. I was going to ask about just any views as far this late into the quarter on how the launch is going. Just kind of any perspective you give us? And then secondly, it would be remiss if we didn't ask you, obviously, a lot of volatility in the stock around speculation in the press about potential takeout. Peter, can you just give us any thoughts or comments from your perspective? It's difficult, obviously, for institutional investors to be able to kind of gain a foothold here with this much volatility. So is there anything you can give any perspective you can provide us on kind of the dynamics here and what might be going on behind the scenes?

Yes, I can just reinforce 2 things. One, the second part of your question, we're going sort of sit in the same position. We really can't comment on any of the market speculation on how people are seeing us and what the potential strategic things that could be happening with the company on. So we're still standing with no comment on that. In terms of the business, and I'll give a very sort of simple to that since we're end of December, and we've not reported the full quarter. I think, listen, we continue to drive to year-end. We rein forward. We're not making any changes to what we've guided to for the year, and we feel really strong about how we're finishing up the year as we move into the holiday season. As a matter of fact, we've sort of turned our eye towards closing out the year strong and thinking about how we enter into January. And really set the trajectory the right way for January through the end of 2022. More to come on that as we finish up the year and as we report the quarter and give a little more steer as to how we see 2022.

Congrats again on the results.

Your next question is coming from Justin Kim from Oppenheimer.

Let me add my congratulations on the results today. Maybe just 2 for me. The first question I had was just on any observations between the, I guess, year 1 extension to year 2 extension or year 2 year 3? So overall, that was observed suggesting that you're sort of seeing a difference in slopes between the 2 arms just because it seems like things are sort of relatively equivalent at the other time points or follow-ups? And maybe if -- correct me if I'm wrong, if that was the case. I have just a follow-up after that.

So I didn't catch the very end, but I think you're analyzing the slope since in the zone difference and what happened. And I think the main thing that happened, I kind of pointed out in the call is we have a reduction in the number of patients as we get along. For example, the number of patients that always happens in these continuation studies, will leave for a variety of reasons, not often not informative withdrawals. So for example, related to pregnancy or patients being off to follow up. It happens over time. And you will see an attrition in the number of patients as we go between the years 2 and 3 of the study. And of course, what that does is that broaden the confidence into AURORA, and it makes us, therefore, less confident about what we see. And therefore, that's why we kind of report the fact that we, in general, we see the sustained reduction in protenuria, because that's true from a statistical perspective, it doesn't really change. The means may change a bit, but we're not -- I wouldn't read too much into that. I think the very fact that the patient is behaving well and net broken eras, the mean propanes the are sitting between 0.51 long. So for meaning, everything including those that are dropping out is really quite remarkable. The other thing that we do see over time and of course, we'll report this in future congresses is a reduction in the number of adverse events over time, which we kind of expected and hoped for, but we definitely have seen that. And I think that's encouraging to a prescribing physician.

Understood. Just maybe a clarification on my part. Just on eGFR, it looks to me like there is some deterioration of eGFR in the control arm and sort of that last year to get to maybe some of the implied like sort of overall results. Is that right? Or am I just maybe looking at it wrong?

Yes. I mean I think, again, you can read into these slopes. The caution, which I have is that it should not re-randomize. So I first look at what's happening in the voclosporin and the eGFR really does tend to start to improve over time, which I think, at least, all of our experts believe may be the beginning of a true disease-modifying effect. But I take your point, you do see that in the slopes. I don't look at the supine too much detail, but I agree that that's what it looks like.

Understood. And be just a final question. In terms of thinking about potential guideline changes and recommendations, how much do you think Aurora 2 plays a role in that? And how much is ENLIGHT may be going to sort of influence those changes as well? Just any thoughts as you think ahead in terms of changes in the treatment practices and recommendations?

That's a very important point. And that's something that we had in mind when we actually decided to do the full 3 years because we were aware from discussions with key players at the [indiscernible] and other guidelines that really that the community is looking at you want to look at 3-year data, and that's why we did the study. is our anticipation -- no -- sorry, excuse me, there's our hope that these data will help them be incorporated into guidelines. But of course, they're going to need to see the full published data. We're going to need to fully analyze the data before that happens, but I think it's a very important point. And in terms of the ENLIGHT-LN, absolutely as well, that's going to be looking at a real-world application of lupins in the community. So that will also be important.

Your next question today is coming from David Martin from Bloomberg.

Congratulations. I'm wondering, were there differences in the number of patients have progressed to end-stage renal disease or dialysis? And would you have caught those events for patients who dropped out or once they're out, you no longer follow them?

That's a very good question. The last bit first. If they remained in the study, we will capture those. So for example, if someone just continued throughout, and then -- but we continue -- we try to continue to follow him up. Some patients, however, will have withdrawn consent and as there's nothing we can do. We're still analyzing that data. All I can tell you is that very few patients have ended up in the SLT and dialysis. But obviously, we have some other important events which I obviously touched on the adverse events leading to death. And we will be reporting a more composite analysis in the coming weeks, David.

Okay. And second question is over the 3 years, how many patients dropped out of either arm because of the EGFR changes? And if you did a full ITT analysis with the last observation for those patients? What would you see on that?

Well, so the eGFR is obviously on -- it is on the patients treated. I'm not -- and again, you have to fully online rates, but I'm not sure there's any patients, but I can't be on the -- yes. So what we do have is -- I'm just looking at some data here. we have a proportion of patients that had a 30% drop when we reported that in the AURORA 1, we see a very, very similar pattern in the AURORA 2. So it's basically the same between arms David. But the details on actual numbers, we've not disclosed yet.

Your next question is coming from An Arce from H.c. Wainwright.

This is Thomas Yip asking a couple of questions for Ed. Congratulations on the positive long-term data First question regarding eGFR over the 3-year period. Can you discuss -- we see a placebo arm has a higher eFGR over the most of the 3-year period than the end tr group? And was the difference ever statistical significance?

Again, eGFRs fluctuates over time. We know that in the early days and months of administration of voclosporin that we have a hemodynamic effect drugs. So what we did see in Aurora, I mean this report and published is a small decrease in eGFR. So that, in general, we believe, accounts for the difference in eGFR between the groups. I agree that we see this increase in the control arm as well. Again, I try not to read too much into it. It's not a run that sample. These observations in terms of statistical significance. Again, we're not on formal statistics for reasons like I said before, this is not a randomized sample. This is patients who went on into the roots safety study. So I think that's probably all got to report at the moment.

Understood. And perhaps a question from us. Can you discuss any correlation between the eGFR level between patients and the rate of [indiscernible] and also withdrawal that were both higher in the active control group?

I'm sorry, I didn't -- I'm not sure I quite got that. Can you just repeat that?

Sure. Yes. Sorry, I was cutting out a little bit. Can you discuss the eGFR increase over this period? And any correlation there between the higher rates of death and also withdrawal in the active control group between the [indiscernible] group?

Yes. Well, we've not done those formal analysis yet. And you see in long-term continuation studies, as I stated before, withdrawals is coming for a number of reasons. -- actually often not due to the numbers, the lab values that you're seeing, there's also many, many other reasons to so for example, like I said, subject to follow up and move house news gets pregnant and stuff. So we've not done that for as this year. I don't expect to see correlation any.

Next question is coming from Doug Miehm from RBC Capital Markets.

Thank you. Congratulations on the results. I'm thinking about this from more of a practical standpoint, when your sales force is out talking to treating physicians right now of those that are using your product currently and those that aren't. Do you have an idea of how many of those physicians are not were -- had said, we're not going to use this until we have the 3-year data on hand and if those data were positive, that we would consider or start using the product?

I don't have, Doug, a quantitative number of docs to give you. But what I can tell you is we know from the market research that we've done that for physicians that are already prescribing that this will be reinforcing and a strong positive and that for physicians who have not yet initiated that this data, 1 put in front of them in terms of if we had 3-year data plays very positively. And our intent to treat numbers across both nephrologists and rheumatologists are -- still remain very, very strong, north of 50% to 70%, depending on the sample time period we've taken have told us we have intent to use the drug and use it more aggressively. So we're encouraged by that. And as I said before, I think obviously, 1-year data is great. 3-year data is better. and we intend commercially and medically to make hay with the data that we have and to as Neil said, continue to work on more cuts of it, published it in major journals, and of course, at the major medical meeting. So we intend to use it to the full extent that we can.

And then just a roll-up question, I guess, to speak to you, Peter. Have you used the ATM yet?

We'd rather kind of stay on the quarterly reporting on the ATM. So once we have audited financials, et cetera. So as we said, when we put it up, it was more of an opportunistic vehicle. And if the stock trades right, we have the ability to utilize it, but we haven't made any public comments on it yet, Doug.

Thank you. We reach the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

I just want to again reinforce and thank everybody for joining us on the call today. and again, thank all the participants of the trial and the physicians who participated in our in this trial has been several years' effort. Last, I want to thank our internal team at Aurinia for all the hard work that's gone into producing these great results. Thank you very much for joining us on the call today. We look forward to talking to you again soon in the next couple of weeks and months.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.