Aurinia Pharmaceuticals Inc.AUPHNASDAQ
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Operator: Good morning. Welcome to the Aurinia Pharmaceuticals Third Quarter 2025 Conference Call. [Operator Instructions] I will now turn the call over to Peter Greenleaf, President and Chief Executive Officer of Aurinia.
Peter Greenleaf: Thank you all for joining us to discuss Aurinia's third quarter 2025 update. Joining me on the call today are Joe Miller, our Chief Financial Officer; and Dr. Greg Keenan, our Chief Medical Officer. Before we begin our discussion, I'd like to direct your attention to Slide 2, which contains important information regarding forward-looking statements. Additionally, we note that on November 2, Aurinia filed a complaint against Dr. George Tidmarsh arising from his statements about voclosporin. The complaint is pending in the United States District Court for the District of Maryland and is available online. If you have questions regarding the complaint, we refer you to the complaint itself as we will not be commenting further on this matter. On today's call, we will report third quarter 2025 financial results and provide an update on recent business progress. We're pleased to report that third quarter 2025 LUPKYNIS sales experienced continued momentum following last year's inclusion in the American College of Rheumatology lupus nephritis treatment guidelines, growing at a rate of 27% for the quarter year-over-year. As a result, we're raising LUPKYNIS sales guidance for 2025 for the second time this year to $265 million to $270 million. Further, we have conducted new LUPKYNIS data analyses, which we will share shortly that reinforce LUPKYNIS' robust clinical profile in the treatment of patients with lupus nephritis. And lastly, following the positive Phase I results that were announced in June, we're excited to be advancing aritinercept toward clinical studies in 2 autoimmune diseases. I'd like to turn the call over now to Joe to review our financial results. Joe?
Joseph Miller: Thank you, Peter. For the third quarter of 2025, total revenue was $73.5 million, up 8% from $67.8 million in the same period of 2024. As a reminder, the 2024 period included a milestone payment of $10 million associated with LUPKYNIS regulatory approval in Japan. Excluding the onetime milestone, total revenue increased by 27% over the same period in 2024. Net product sales of LUPKYNIS were $70.6 million, up 27% from $55.5 million in 2024. Net income was $31.6 million, up 119% from $14.4 million in 2024. Diluted earnings per share was $0.23, up 130% from $0.10 in 2024. Lastly, cash flows from operating activities were $44.5 million, up 162% from $17 million in 2024. For the 9 months ended September 30, 2025, total revenue was $205.9 million, up 17% from $175.3 million in the same period of 2024. Again, the 2024 period included a $10 million milestone payment associated with LUPKYNIS approval in Japan. Excluding the onetime milestone, total revenue increased by 25% over the same period in 2024. Net product sales of LUPKYNIS were $197.2 million, up 24% from $158.6 million in 2024. Net income was $76.4 million, up 1,677% from $4.3 million in 2024. Diluted earnings per share was $0.55, up 1,733% from $0.03 in 2024. Lastly, cash flows from operating activities were $90 million, up 529% from $14.3 million in 2024. As of September 30, 2025, we have cash, cash equivalents, restricted cash and investments of $351.8 million compared to $315.1 million at June 30, 2025, and $358.5 million at December 31, 2024. As previously mentioned, for the 3 and 9 months ended September 30, 2025, cash flows from operating activities were $44.5 million and $90 million, respectively. For the 9 months ended September 30, 2025, the company repurchased 12.2 million shares for $98.2 million and diluted shares outstanding were reduced from 149.8 million to 138.2 million. As a result of LUPKYNIS continued momentum, we are pleased to increase our 2025 guidance for the second time this year. For total revenue, we are increasing guidance from a range of $260 million to $270 million to a range of $275 million to $280 million. For net product sales, we are increasing guidance from a range of $250 million to $260 million to a range of $265 million to $270 million. Now I'd like to turn the call over to Greg for some scientific updates. Greg?
Greg Keenan: Thank you, Joe. We are pleased to share some new analyses of the results of the clinical studies that form the basis of the FDA's approval of LUPKYNIS. These analyses were recently shared with the FDA in response to an information request. As a reminder, LUPKYNIS was granted full FDA approval based on a statistically significant and clinically meaningful improvement in complete renal response at week 52 and was bolstered with the supplemental NDA with 2 additional years of evidence. New analyses, which show that LUPKYNIS also was associated with a statistically significant and clinically meaningful reduction in the risk of renal-related events or death, reinforce the robust efficacy and favorable safety profile of LUPKYNIS. As you can see from the Kaplan-Meier curve on this slide, LUPKYNIS was associated with a statistically significant and clinically meaningful 53% reduction in the risk of renal-related events or death. This analysis used the AURORA 1 Phase III population. We have included the complete tables contained in our information request response in the appendix of this presentation, which is available on our website. Turning to aritinercept. We are very excited about the potential of this novel biologic in the treatment of a wide range of autoimmune diseases. Aritinercept is a dual BAFF/APRIL inhibitor that contains a BCMA-engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL and an IgG4 Fc domain with no appreciable effector function. As a reminder, BAFF and APRIL are cytokines that regulate B cell survival and differentiation with BAFF more targeted at differentiating and mature B cells and APRIL more targeted plasma cells. By targeting both BAFF and APRIL, aritinercept depletes a broader set of B cells, including plasma cells compared to antibodies such as Benlysta that target only BAFF. In our Phase I study, we enrolled 61 healthy subjects in a standard single ascending dose study design. The study investigated aritinercept doses of 5, 25, 75, 150, 225 and 300 milligrams and placebo, administered by subcutaneous injection. The study included an expanded cohort of 150 milligrams, which will be our starting dose in our next studies. You can see our safety results on this slide. Aritinercept was well tolerated at all dose levels tested. There were 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. Adverse events that occurred in more than 1 subject were injection site reactions, headaches, upper respiratory tract infections and back pain. All injection site reactions were grade 1. While antidrug antibodies, or ADAs, were detected in the majority of subjects at dose levels of 25 milligrams and higher, the presence of ADAs was not associated with any changes in safety, pharmacokinetic or pharmacodynamic parameters. 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 that these long-lasting pharmacodynamic effects support once-monthly dosing. With that, I will turn the call over to Peter.
Peter Greenleaf: Thanks, Greg. We're obviously very excited about these results. Aurinia is on track to initiate clinical studies of aritinercept in 2 autoimmune diseases by the end of 2025. We're very excited about the wide range of therapeutic possibilities for aritinercept and look forward to disclosing further details about our development plan in early 2026. So in summary, we continue to drive growth in the commercial LUPKYNIS business, while at the same time, advancing the clinical development of aritinercept. We want to thank you all for joining us on today's call, and we look forward to taking your questions. So now let me ask the operator to open up the line for Q&A. Operator?
Operator: [Operator Instructions] Our first question is from Stacy Ku with TD Cowen.
Stacy Ku: Congrats on the quarter. If you could put the LUPKYNIS regulatory questions to the side, just given your positive commentary around ACR guidelines and LUPKYNIS use, just hoping you could provide a few metrics may be around prescriber habits that you're seeing in real time. In addition, obviously, still very early days, but how are clinicians using LUPKYNIS versus Gazyva?
Peter Greenleaf: Thanks, Stacy. So why don't I start with just giving you a little bit of more qualitative feedback on what we're seeing and why we feel good about the LUPKYNIS business. And then maybe, Greg, you can build in a little bit on that. If you look at where -- and as we've said previously, we're not going to give down to patient level metrics at this stage of launch because we're now into the fifth year of being on the market, and we think the consistency of our performance somewhat speaks for itself as you look at now consecutive changes in our guidance for the year and year-over-year growth that's been and quarter-over-quarter growth that's been fairly consistent. But to answer your question more directly, our strategy and where we're probably seeing the majority of growth coming from is, one, we first off, sharpened our commercial focus on high target, high-volume prescribers and primarily in the rheumatologist space, where we have seen each quarter consistent growth in rheumatology new and existing prescribers. Second, we think the ACR guidelines have been truly a wind in our sails. I think this goes for patients. It goes for more new drugs coming into the market. And I think it also applies to both the balance between rheumatologists using the product and nephrologists. But remember, the guidelines themselves are more aggressive on diagnosis criteria. We ask that every patient actually gets a proactive screening, urinalysis on every visit. And then when they do actually hit certain criteria that the treatment with aggressive therapies, triple concomitant immunosuppression be consistent across the board. So whether it's the ACR guidelines, the KDIGO guidelines or recommendations from the nephrology groups, the guideline exercise in terms of what they're at least outlining for the treatment of lupus nephritis has been aggressive. And then lastly, we continue to see our efficacy profile pulling through for the product, and we continue to see hospital sales growing pretty consistently for us. So Greg, do you want to give any commentary on how -- we don't have any early read on Gazyva, but Greg being a rheumatologist could probably give some good perspective coming off of the most recent ACR conference. Greg?
Greg Keenan: Yes. Thank you, Peter. So Stacy, just to close what Peter was saying, at the ACR meeting this year, I think my takeaway was that the clinicians are that much more familiar with the lupus nephritis portion of the SLE management guidelines, and they do very much believe getting aggressive quickly with triple therapy is a key thing. They also, at least in my impression, perceive Gazyva to be something that will replace rituximab in their treatment armamentarium. I'd point out relative to B-cell-mediated treatments such as Benlysta and Gazyva, LUPKYNIS is a T cell-mediated agent as well as helps protect podocytes. So there is a complementarity there going with one doesn't exclude the other. And then finally, I think in discussions I've had with individual rheumatologists, they are increasingly impressed with the speed with which you can achieve goals with LUPKYNIS relative to B cell modulators, which take longer and also the ability to aggressively taper steroids. So there's a lot of attributes of our drug that are increasingly being thought of as important for the management of lupus nephritis as clinicians increasingly gain familiarity with LUPKYNIS.
Operator: Our next question is from Olivia Brayer with Cantor.
Olivia Brayer: Can you talk through some of the trends that you're seeing into 4Q so far and just overall level of confidence in continued growth from here, especially thinking through 2026 dynamics? Asking in light, obviously, of Roche's recent approval. And then what can you tell us at this point about your APRIL/BAFF program? Have you internally selected which indications you'll be moving forward with and trial design? And if you can't disclose that today, can you tell us how and when you plan to announce your strategy and time lines? And just any feedback from the agency that you've gotten so far from that program?
Peter Greenleaf: Thanks, Olivia. So first off, we're obviously very pleased with the positive momentum of LUPKYNIS. And then we've had the opportunity to raise guidance for the second time this year. I don't think we see anything inconsistent with that as we now move into the fourth quarter. So as I said, we're obviously very excited with the continued positive momentum we've seen with the product. As to your question around our APRIL/BAFF program, during our call, we mentioned that in the early part of 2026, we -- and we have not given specific guidance as to when. But in the early part of 2026, we look forward to disclosing more about the program.
Olivia Brayer: Okay. Understood. And maybe if I can just sneak in one more. Anything at ASN this year that we should be focused on from you all?
Peter Greenleaf: Greg, do you want to -- I mean, outside of the normal LUPKYNIS stuff and anything new we produce with aritinercept as we move forward. But this year...
Greg Keenan: Yes. I mean we -- so we just have a couple of presentations talking about use in the real world are our presentations. I think increasingly nephrologists are the bedrock of management for lupus nephritis, and we're looking forward to participating in the meeting and hearing more of their thoughts, but there's nothing terribly notable from our perspective going into ASN this year.
Operator: Our next question is from Maury Raycroft with Jefferies.
Maurice Raycroft: Congrats on the quarter. Just wondering for the FDA information request, can you say more about what triggered that? I guess, is that related to the Tidmarsh issues or...
Peter Greenleaf: We can't speak specifically to why we received an information request from the FDA. But I think as you can see through the slide deck and through our comments through the actual commentary that we did during our actual call today, the data that we've disclosed and is out there publicly is actually quite favorable for the product. Greg, do you have any additional comments?
Greg Keenan: Yes. I'd just say that the FDA's prerogative is to ask for comments and questions at any time. And concurrent with that, I'll just point out to slightly different way than we've looked at our data before. But to Peter's point, the evidence is very favorable, and that was one of the reasons why we wanted to share this specific set of results with the community as we have sent this all back to the FDA as well for their consideration.
Maurice Raycroft: Okay. Understood. And for aritinercept, can you clarify if you're in a MAD phase with healthy volunteers? And would you report more data in early 2026 along with the selected indications?
Peter Greenleaf: As we've said, we're going into 2 autoimmune diseases, moving into 2 autoimmune diseases. And then on the back end of that, that we would disclose in early 2026 more details on those programs, Maury.
Maurice Raycroft: Okay. Are you in MAD dosing though, with the healthy volunteers? Or is that...
Peter Greenleaf: We're in the process. And I think in order to achieve the objectives we've laid out in the call, we would have to be moving into that phase.
Operator: Our next question is from Joseph Schwartz with Leerink Partners.
Will Soghikian: This is Will on for Joe. Congrats on a strong quarter here. I have one question on the FDA request and then one on AUR200. So just to start on the request, do you expect a response from the FDA? Just curious about that. And then for AUR200, I can appreciate that you guys are going to provide additional updates in early 2026 on that. But could you just help us give us a little bit more information on the process of selecting these indications and perhaps the puts and takes of choosing one or the other? Any color there would be helpful.
Peter Greenleaf: Thanks, Will. Well, let me first just reinforce one more time that we received and responded to an information request regarding LUPKYNIS. To reinforce, this data set contained our responses included in the slides in your deck that has been posted on our K, 11, 21 and 22 of today's presentation. It is also available on our website. The data contains measurement requested by the FDA, and each of these measurements is defined by the FDA, what the FDA actually requested. As you can see, if you look at these slides and these analyses, you'll see that we actually had new data, at least in terms of presenting that new data. We had a 53% reduction in risk of renal-related events and/or death. We think this reinforces the robust efficacy and favorable safety profile of the product. We can't determine and/or predict whether the FDA will have more questions. As Greg just mentioned, FDA holds the ability to ask questions whenever they want, but we think this request and response was actually quite favorable. In terms of disclosure of how -- and what we were getting about in terms of the indications for aritinercept, I think just like any company when looking at different indications, you have to think about how we think APRIL/BAFF could play a role in the disease, one. The unmet medical need in each one of these major disease areas. And I think you have to connect that back somewhat to how we think APRIL/BAFF play or do not play a role in those diseases. And probably third, market size, of course, and probability of success. These are all the normal things that any company would think about when going into these indications. And I can just tell you that these are all things that we've considered, and we look forward to disclosing more as we enter 2026 and beyond.
Operator: Our next question is from Arthur He with H.C. Wainwright.
Yu He: Another strong quarter. So just a couple of quick ones. So first of all, so traditionally, fourth quarter will be the strongest quarter for you guys. I'm just curious what possible holdback or risk-wise can prevent you guys to outbeat the fourth quarter? And regarding the impact from the ACR guidance, what's your thinking about the impact or the positive impact from that? It's more like first couple of innings or getting in the middle of -- I'm not sure -- I don't think it's getting late innings yet.
Peter Greenleaf: Well, thanks for the question, Arthur. First off, on the ACR guidelines, and this is not necessarily, and I welcome Greg's commentary here because we've done this at a couple of companies with a couple of drugs in different categories as it relates to rheumatologists and other diseases, but specifically rheumatologists. The guidelines -- I mean, listen, they're written the way we think the evidence drives they should be written, and they're quite positive for patients and quite positive probably for our drug and other drugs. They take time. Physician treatment behaviors don't change overnight. And I think we're seeing positive momentum, but I think that positive momentum will only continue to improve over time with better diagnosis rates and better treatment rates that better align to those guidelines. Your first question related to the guidance that we've given for the year in the first and the fourth quarter. You're right. Historically, that has been the trend for our product. I think we have been in a mode of wanting to ensure that we give a guidance range that we intend to hit and/or beat. And I think that's what you've seen in our guidance range of $265 million to $270 million for the full year. And I think that's all we're going to comment on at this stage of the game, Arthur. Thank you for the question.
Yu He: Maybe just a quick one regarding the BAFF/APRIL program. Given this -- in the space, multiple players came in and also angle differently in terms of indication-wise, given the history of the company and strong suit from you guys, have you contemplating a non-kidney indication? Or you can give us more color later on?
Peter Greenleaf: What I can tell you is we take into account strategically the fact that we have a focus on rheumatology. I mean, I think often we forget lupus is treated by rheumatologists and lupus nephritis, while it is a separate condition, it is an associated condition with lupus. So our concentration is rheumatologists and nephrologists. So I think you can feel comfortable that we take into account both of those, nephrology and rheumatology. And I guess I would just conclude too, that we're not blind to the fact that an APRIL/BAFF inhibitor, we believe, has every ability to work in a multitude of different diseases. And we've mentioned historically that our internal work has shown upwards of 20-plus indications that could be affected through further development in this class and area of drugs. So we're not boxed in, Arthur, in our thinking to just rheumatology and nephrology. And as I said, we look forward to sharing more about that as we move into 2026 and beyond.
Operator: Our next question is from David Martin with Bloom Burton.
David Martin: You did a great job of describing all the positive drivers bringing new patients on to LUPKYNIS. I'm wondering, are you seeing positive trends in persistence? Are the patients staying on it longer?
Peter Greenleaf: Yes, David, we've seen an upward trend in persistency that directly aligned to when we published, issued the data around the extension trial and the subsequent data around the biopsy sub-study. I mean, you've been covering us for a long time, and I think you know this area quite well. Obviously, calcineurin inhibitors are new for -- not new because they understand the class of drugs, but rheumatologists in their day-to-day practice don't use calcineurin inhibitors as often or as aggressively as nephrologists do. So I think these data sets showing that we had safety and efficacy and that the drug was well tolerated all the way out to 3 years in the AURORA study and then subsequently to have an 18-month biopsy confirmed substudy of that study to show that not only was there no negative effect on kidney function as measured through eGFR and histology, but that it looked like it could have some at least balancing effect, if not improvement effect on those patients. All have been very helpful in terms of the comfort level of rheumatologists and nephrologists continuing to keep patients on drug over longer periods of time. I don't think any of those changes have hit a materiality sort of level, but I can tell you that they've not declined and they continue to improve over time.
Operator: Our next question is from Doug Miehm with RBC Capital Markets.
Douglas Miehm: Congrats on the quarter. Just one question from me on aritinercept. Peter, are you contemplating bringing the 150? I want to make sure I heard that or the 225 ahead in the clinical trial program in terms of what you're going to dose?
Peter Greenleaf: Yes. We've not sent out the exact way we intend to structure these trials. And as I said, look, we look forward to sharing more about that in the future. But I don't know, Greg, if you want to -- I mean, obviously, the 150 and above seem to hit the mark. But Greg, do you have anything?
Greg Keenan: Well, that way, we were just trying to provide a little bit more color on our confidence that we have a dose that ought to be efficacious relative to what we've seen with regard to pharmacodynamic marker changes. So we indicated in our prepared statement that 150-milligram dosing will be one of the dosing levels that we'll use going forward. But of course, we're embarking on kind of multiple ascending dose studies, so we'll have higher doses as well. But what we indicated was 150 is definitely viable and we're taking that forward.
Douglas Miehm: Okay. Because I just have a follow-up question then. So the 150 is where you had the expanded cohort, seems to be on a risk-reward basis, maybe one of the more attractive levels. I'm just wondering why then when you look at the data that you provided versus the competitive products, you were calling out the 225 versus the 150? And the 225 does look better than everything else, all measures that we can see here. But I'm just wondering why you weren't providing the 150 in terms of those data.
Peter Greenleaf: Well, I think it's a great question. And I think it gets to wanting to understand at a deeper level how we intend to go forward with the multi-ascending dose study and/or studies that will help us better understand and tease out what the exact dose we're going to want to be going forward with when we move into even further clinical development studies. So your question, I think, is appropriately -- it's a good one. But at this stage of the game, we're not disclosing all of those details, and we look forward to disclosing them in 2026. So thank you for the question.
Operator: Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Peter Greenleaf for closing remarks.
Peter Greenleaf: Thank you very much, everyone, for joining us on today's call. We're excited about the momentum we've seen now through 3 quarters of the year, and we look forward to providing details on year-end and 2026 in our next call. Have a great day. Thank you very much.
Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time, and have a wonderful day.