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

Good morning, and welcome to Aurinia's Aritinercept Phase I Study Results Conference Call. [Operator Instructions] I will now turn the call over to Peter Greenleaf, Chief Executive Officer of Aurinia. Please go ahead, sir.

Good morning. Thank you all for joining us to discuss the results from our Aritinercept Phase I single ascending dose study. Aritinercept has been previously referred to as AUR200. Joining me on the call are Dr. Greg Keenan, our Chief Medical Officer; and Joe Miller, our Chief Financial Officer. Before beginning our discussion, I'd like to direct your attention to Slide 2, which contains important information regarding forward-looking statements. With that introduction, let me now turn the call over to Dr. Greg Keenan to walk you through the aritinercept Phase I study results. Greg?

Thank you, Peter. It's a pleasure speaking with you today about aritinercept and the results of our Phase I single ascending dose study. Aritinercept is a dual BAFF/APRIL inhibitor. It contains a BCMA engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL. Other dual BAFF and APRIL inhibitors use TACI-engineered extracellular binding domains. BCMA has a stronger natural affinity for APRIL and TACI. Aritinercept also contains an IgG4 Fc domain with no appreciable effector function. Other dual BAFF/APRIL inhibitors use IgG1 Fc domains. IgG4 is considered the least inflammatory across the IgG subclasses, in part because it poorly activates the complement system. Before we talk about our aritinercept results, just a few words on the important roles of BAFF and APRIL in the immune system and why modulating these cytokines may be a good treatment approach for a wide range of autoimmune diseases. Both of these cytokines regulate B cell survival and differentiation, with BAFF more targeted at differentiating and mature B cells and APRIL more targeted at plasma cells. Thus, targeting both BAFF and APRIL depletes a broader set of B cells, including plasma cells than targeting a single cytokine. Aritinercept may prevent the activation of autoreactive B cells and reduce their numbers in associated immune globulins in the body, thereby reducing important drivers of B cell-mediated autoimmune diseases. Aritinercept has high binding affinity for both BAFF and APRIL. As you can see in this slide, when compared in vitro studies to atacicept and telitacicept to BAFF/APRIL inhibitors from other sponsors, aritinercept has 3- to 8-fold higher binding affinity. Additionally, as you can see in this slide, aritinercept potently inhibits both BAFF and APRIL mediated B-cell proliferation as compared to the competitor dual BAFF/APRIL inhibitors. Compared to atacicept and telitacicept, aritinercept is 6- to 53-fold more potent at inhibiting BAFF and APRIL mediated B-cell proliferation. On this side, you can see our results in nonhuman primates. Aritinercept reduced the immunoglobulins IgA, IgM and IgG by up to 76%, 67% and 43%, respectively. Aritinercept was well tolerated with no adverse findings in any of the doses tested. Moving to our Phase I results, we enrolled 61 healthy subjects in the standard single ascending dose study design. Subjects were treated with placebo or 1 of 6 subcutaneous doses aritinercept, 5, 25, 75, 150, 225 and 300 milligrams. You can see our safety results on this slide. Aritinercept was well tolerated at all dose levels tested. There are no treatment-related Grade 3 or higher adverse events. There were no treatment-related serious adverse events, and there were no discontinuations due to treatment-related adverse events. There was one SAE, a concussion, due to motor vehicle accident reported as not treatment-related. Adverse events that occurred in more than one subject were injection site reactions, which occurred in 24% of subjects who received aritinercept versus 13% of subjects who received placebo. All injection site reactions were Grade 1. Headaches, which occurred in 11% of subjects who received aritinercept versus 7% of subjects who received placebo; upper respiratory tract infection, which occurred in 7% of subjects who received aritinercept versus 0% of subjects who received placebo; and back pain, which occurred in 4% of subjects who received aritinercept versus 0% of subjects who received placebo. This slide depicts the pharmacokinetic curves of subcutaneous aritinercept, a half-life of 6 to 8 days after a single dose in the target dose range was observed. On this slide, you can see the pharmacodynamic effects of aritinercept treatment. Single doses of aritinercept led to robust and long-lasting reductions in immunoglobulins. Specifically, mean reductions from baseline to day 28 of up to 48%, 55% and 20% were observed for IgA, IgM and IgG, respectively. Importantly, we believe these long-lasting pharmacodynamic effects support once-monthly dosing. On the next 3 slides, we provide some comparative results to provide context. Please note that these are cross-trial comparisons and therefore, should be interpreted with caution. On this slide, you can see that aritinercept's effect on IGA compares favorably to BAFF and APRIL inhibitors from Vertex, Vera and RemiGen as well as Otsuka's anti-APRIL. On this slide, you can see the same comparison for IgM. Again, aritinercept compares favorably. And finally, on this slide, you can see the same comparison for IgG with aritinercept again comparing favorably. With this, I will turn the presentation back over to Peter.

Thanks, Greg. We're obviously very excited about these results. In summary, our aritinercept was well tolerated at all dose levels that we tested, and single doses of aritinercept led to robust and long-lasting reductions in immunoglobulins supportive of once monthly dosing. Aurinia plans to initiate further clinical studies of aritinercept in at least 2 autoimmune diseases in the second half of this year. We're very excited about the wide range of therapeutic possibilities for aritinercept, but for competitive reasons, we'll not be disclosing further detail about our future plans at this time. We want to thank you all for joining us on today's call, and we look forward to taking your questions. So with that, let me ask the operator to now open up the line for Q&A. Operator?

[Operator Instructions] Our first question is coming from Stacy Ku from TD Cowen.

Congratulations on the progress. So understanding you're not able to maybe talk about the clinical study specifically that you're planning to do next, maybe can you comment on your current deliberations? Would you be wanting to stay within your current commercial infrastructure, or maybe a Lupus or something in renal diseases? Or are you even thinking kind of more widely to think about maybe neuromuscular or even dermatology? So that's the first question. Just any kind of thoughts on what a potential clinical trial design would look like. And just to confirm, would this be Phase Ia kind of proof concept? And then the second question, if we could sneak one in, is if you've disclose kind of doses you're planning to move forward? Could you even, looking at the safety, what are -- how are you thinking about that?

Stacy, thanks for the question. So as you know, there's a lot of excitement about BAFF/APRIL inhibitor space at this stage. And I think a large part of that is because of the wide range of B cell-mediated autoimmune diseases that are out there, which these potential compounds could be effective. So as we said on the call, we plan to initiate clinical studies in at least 2 of these autoimmune diseases in the second half of the year. But for competitive reasons, we've made a decision not to disclose any more at this time. Obviously, there's alignment to our therapeutic area that's interesting, but also as the space continues to widen, I think it's going to become more competitive even on dose selection. So we're trying to leave it at that. In terms of the doses, we're intending to take forward. Obviously, Greg, I can kind of ask you maybe just to elaborate a little bit on that. Do you want to go, Greg?

Sure. Thanks, and thanks, Stacy, for the question. At this point, we're not prepared to indicate the specific dose level that -- our dose levels will take forward into the multiple setting dose study. But I think it's fair to say when you see the evidence specifically, the kinetics of the drug, higher doses performing well with regard to half-life on the one hand and with regard to the impact on pharmacodynamics and the other -- it's definitely fair to say that in our single ascending dose study, we captured in a bracketed way, doses that are very viable, and we're going to use the information from the SAD study to inform which dose or doses we take forward from that, but we're very encouraged with the SAD results and the information it provides to inform the multiple setting dose study.

Next question today is coming from Maury Raycroft from Jefferies.

Congrats on the update. Maybe just to -- I think the data speak for itself for the most part. Wondering if you can just remind me what the IP life is for the drug. And also wondering strategically from a BD standpoint, would you consider running the studies on your own or potentially consider partnering these out.

So IP life on the product, we continue to file IP in and around the compound. So we haven't disclosed the full life on it, but know that we continue to add to the patent portfolio as early as the results that we're seeing from this STAT/SAD study. And then second, the other question was about -- can you repeat the second question, Maury?

BD and whether you run the studies on your own or potentially partner out?

Yes. No, our thought is we're going to take this study forward on our own. We don't need funding. Obviously, we've got good cash flows coming from operations. So our intention right now is to take this forward on our own.

Next question today is coming from Joe Schwartz from Leerink Partners.

Congrats on the nice data. I was wondering if you could just give us some insight into your thought process around what indications you're most likely to pursue. Is there anything which could give you a sustainable competitive advantage in any of them relative to other APRIL/BAFFs, which there are many and they're all further ahead and a lot of different indications. Is there -- are there any indications that might be particularly well suited where Aurinia might be able to control their destiny in those indications in particular? And then what is the time line to generate Phase II data in these studies? And then we noticed that the 150-milligram dose group had almost 3x as many patients. I was just wondering why that was.

Well, on the indications, as we've already said, we've done a pretty extensive internal review on all the potential B-cell mediated diseases, autoimmune diseases that we could potentially look at here, and I think in our initial assessment, we had upwards of 20 different potential targets you could go after. Obviously, the focus primarily has been centered as of late on IgAN and some emerging new areas. So we think -- part of this is going to be a competitive process moving forward and why we're not disclosing more details on the 2 that we intend to move forward with. But obviously, this is going to be important for everyone developing in this space moving forward. And if everyone's hypothesis around the potential breadth and depth of indications works out, this could be a very large area. So we're excited about that. Greg, do you want to talk maybe just a little bit about the 150 milligram?

Sure. Yes, and thanks for the question. Going into the study, the development of the single ascended dose study, our allometric scaling relative to the nonhuman primate based work we had done indicator suggested that 150 milligrams or thereabouts is going to be an important dose to thoroughly explore to be able to understand the magnitude of impact on pharmacodynamic changes. So that's why we "enriched" that particular dose level. As we build it out, you can see for yourself the impact of that dose with fine precision relative to the other doses. And we think when we look at it now that it really helped inform our thinking of the firmness of the effect that we see both with regard to PD and really clarified and firmed up the kinetics of the drug in general. So it's basically a dose to explore very specific aspects of the pharmacodynamics and pharmacokinetics of the drug.

Your next question today is coming from Arthur He from H.C. Wainwright.

Congratulations on the data. It's very impressive, a single dose immunoglobulin reduction. So I had one question on the safety and one on the injection side. So for safety, Greg, could you give us more color on the upper respiratory infection and also the back pain. Is this more -- has any dose dependent lean towards the higher dose or it's more across the board?

Sure. Thank you, Peter. So just specifically, obviously, this is a small study. So we didn't observe any dose-dependent effects on upper respiratory tract infections, for example, where it was a very modest number of events, and these were relatively mild and very self-limited, did not require any intervention. So we were very encouraged by those. So no dose effect there. With regard to back pain, the same thing goes for that. These were very transient events that resolved with essentially no intervention. So transient, mild, benign.

That's great. And my second question is regarding injection volume. Could you give us more color on that? And the reason I ask is -- do you think your drug also could be suitable for the self-administration at home?

Well, thanks for the question. Our formulation for early clinical studies is less concentrated than what will be our commercial formulation. Right now, our formulation development is ongoing, and we're confident that given the physiochemical properties of aritinercept, our target dose range, our commercial formulation, and the formulation we'll use in later-stage clinical studies will enable a single monthly injection from either a prefilled syringe or an auto-injector and the standard gauge needle. And the hope would be that that could be administered at home as well.

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

We want to thank everybody for joining us on the call today, and we look forward to giving further updates moving forward. Thank you very much, and have a great day.

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