Aurinia Pharmaceuticals: The World Awaits

| About: Aurinia Pharmaceuticals (AUPH)


Supportive results announced February 14 on a Phase 1 Japan bridge study.

Positive for treatment of various ethnic groups.

48-week data is on the horizon.

Numerous future conditions to be treated.

Early on the morning of February 14, Aurinia Pharmaceutical (NASDAQ:AUPH) issued a press release stating the results of the Phase I Japanese bridging study for efficacy and safety of Voclosporin in Japanese patients returned supportive data. With the looming 48-week data release, this news cannot come at a more perfect time for the company.

With the resignation of former CEO Charles Rowland, and succession by Co-Founder Dr. Richard M. Glickman on February 6, many investors and observers were questioning the future of the company and product.

With any major event such as replacing of the CEO there will be extra scrutiny. The world of market speculation lasted for a brief moment only Feb 6th as the company only experienced a small drop in it's stock price before continuing the rise it has seen since the post-dilution bottom of $2.02.

The Phase I success leads to more opportunity for the company. Glickman said:

Japan represents an important market opportunity for voclosporin to treat patients with active lupus nephritis. The results of this study will support our upcoming discussions with Japanese regulatory authorities and potential partners as we continue our efforts to bring this important therapy to patients around the globe.

Dr. Glickman said it best. With more funding needed to complete the global Phase III study, slated to begin 2Q 2017, as well as the expected NDA, the Japanese trial results couldn't have come at a better moment in time.

Not only does it show tremendous opportunity for the renal community, and those suffering from LN as a whole, but from an investor's standpoint as it warrants further the belief among many that the Japanese licensing/partner deal is right around the corner.

Voclosporin, or Orelvo, is moving into the Phase III AURORA trial as discussed above. Design of the study as found on the clinical trials site here.

Primary Outcome Measures:

  • The number of subjects achieving renal response [Time Frame: 24 Weeks]

Secondary Outcome Measures:

  • Time to UPCR of ≤0.7 mg/mg. [Time Frame: 52 Weeks]
  • Partial renal response [Time Frame: Weeks 24 and 52]
  • Time to 50% reduction in UPCR from baseline. [Time Frame: 52 Weeks]
  • Renal response at Week 52 [Time Frame: 52 Weeks]
  • Duration of renal response [Time Frame: 52 Weeks]
  • Change from baseline in laboratory parameters at each time point [Time Frame: 52 Weeks]
  • Renal response with low-dose steroids [Time Frame: 52 Weeks]
  • Quality of Life questionnaires [Time Frame: Weeks 12, 24 and 52]
  • Change from baseline in the SELENA-SLEDAI Index score [Time Frame: Weeks 24 and 52]

What does this mean for the patient and investing community? Not only is the primary and secondary end points in line with the Phase II study, and in some cases less stringent, it is my belief that as the safety profile is proven once again the company will move into it's development of the drug for other conditions.

Cyclosporine, of which Voclosporin is a derivative, is used currently to treat many diseases. Voclosporin has proven to be a more tolerated treatment option allowing the lower dose of steroids to be administered which makes it the "holy grail" as many top industry experts have called it. A deeper look into the excitement of the community has been expressed in previous conferences so we won't dive too much into those. AURA-LV study findings and information can be read in this good article here. Dr. Dooley, who is quoted in the article by Sharon Worcester, has financial ties to the company, but the facts are accurate.

I have compiled a list of conditions currently being treated by calcineurin inhibitors:

  • Cogan's Syndrome
  • Crohn's Disease
  • Evan's Syndrome
  • Focal Segmental Glomerulosclerosis
  • Graft-versus-host disease
  • Idiopathic Thromocytopenic Purpura
  • Inflammatory Bowel Disease (IBS)
  • Nephrotic Syndrome
  • Organ Transplant, Rejection Prophylaxis
  • Organ Transplant, Rejection Reversal
  • Pemphigoid
  • Pemphigus
  • Psoriasis
  • Psoriatic Arthritis
  • Rheumatoid Arthritis
  • Ulcerative Colitis
  • Ulcerative Colitis, Active

On February 16, Dr. Glickman presented at the Leerink Partners 6th annual Global Healthcare Conference. The webcast can be listened to here. There were several mentions of further exploring the drug in other conditions and given the fact that Aurinia has IP protection through 2027 on the product, it further supports my theory that treating Lupus Nephritis is not the end of the story.

The company has $40m cash on hand according to a statement made in the conference. Enough to see them through the end of 2017, but short of the estimated $50m needed to finish the AURORA trial, and the $75m estimated for the New Drug Application (NDA).

Dr. Glickman reiterated the notion that the company is now focused more than ever on shareholder value and is extensively working on funding options outside of equity offerings. This point is the biggest reason why I was personally so big on the Japanese safety data coming out positively. There are numerous companies that are foaming at the mouth with large war chests waiting to take a bite at exclusivity in the region.

Tops on my list to watch for is Takeda (OTCPK:TKPHF, OTCPK:TKPYY). They have recently made a purchase of ARIAD for $24/share. They also stated that prior to that they had $15b to spend in 2017 to rejuvenate their pipeline. Aurinia's Voclosporin would look very good on their shelf not only for their own shareholder value, but for the renal community in Japan.

The company still has approximately $225m of their shelf prospectus available to tap into which remains a risk. Unless a licensing or partnership deal can be worked in the 2017 timeframe that will loom over the minds of investors.

With the AURORA trial expected to commence in April 2017, and have all available data at the end of 2019 there is some time between now and the goal. The strategic appointment of Dr. Glickman and the movements being taken in the injection of funding into the R&D department, as noted in the use of funds from the last public offering, are a step in the right direction. A long road is ahead of the company, the patients, and the investing community and all that is left now is to perform.

The only thing standing between global progress in the fight against the deadly disease of lupus nephritis is time.

The world waits.

Author's note: This is my first writing for the SA site. While I have strong opinions on a lot of various topics, and I plan to follow up with many articles to come, please excuse the novice approach! I will progress as the writing continues!

Disclosure: I am/we are long AUPH.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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