Financial Data and Key Metrics Changes - For the three and six months ended June 30, 2025, total revenue was $70 million and $132.5 million, up 22% and 23% respectively from $57.2 million and $107.5 million in the same periods of 2024 [5][9] - Net product sales of Loop Kinus were $66.6 million and $126.5 million, up 21% and 22% respectively from $55 million and $103.1 million in the same periods of 2024 [5][9] - Cash flow generated from operations was $45.5 million for the six months ended June 30, 2025, compared to a negative $2.8 million in the same period of 2024 [5][9] - The company reported a net income of $21.5 million or $0.16 per share for the three months ended June 30, 2025, compared to a net income of $722,000 or $0.01 per share in the same period of 2024 [11][12] Business Line Data and Key Metrics Changes - The increase in total revenue and net product sales is primarily due to an increase in the number of Loop Kinus cartons sold to specialty pharmacies driven by further lupus nephritis market penetration [5][9] - Cost of revenue decreased to $7.1 million and $15.7 million for the three and six months ended June 30, 2025, compared to $8.9 million and $16.7 million in the same periods of 2024 [10] - Gross margin improved to 90.88% for the three and six months ended June 30, 2025, compared to 84.85% in the same periods of 2024 [11] Market Data and Key Metrics Changes - The company is seeing a strong uptick in the number of rheumatology prescribers, indicating a positive impact from updated guidelines [20] - The hospital business has been growing healthily since the publication of the guidelines, reflecting increased adoption in academic settings [21][22] Company Strategy and Development Direction - The company is increasing its full-year 2025 total revenue guidance from a range of $250 million to $260 million to a range of $260 million to $270 million [6] - The company plans to initiate further clinical studies for Aratinacept in at least two autoimmune diseases in the second half of the year [8] - The management emphasizes maintaining operational efficiency while advancing the clinical development of Aratinacept and Loop Kinus [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the Loop Kinus business and the potential of Aratinacept in treating various B cell-mediated diseases [16][17] - The company is optimistic about the future, with expectations of continued growth in the second half of the year despite historical summer slowdowns [28] Other Important Information - As of June 30, 2025, the company had cash, cash equivalents, restricted cash, and investments of $315.1 million [6][9] - The company repurchased $11.2 million of its common shares for $90.8 million during the six months ended June 30, 2025 [6][10] Q&A Session Summary Question: Potential for Aratinacept - Management sees potential in over 20 different B cell-mediated diseases for Aratinacept, but is not disclosing specific plans for competitive reasons [16][17] Question: Impact of Updated ACR Guidelines on Loop Kinus - Management noted a strong uptick in rheumatology prescribers and an increase in hospital business due to the updated guidelines [20][22] Question: Drivers of RAISE Guidance - Management indicated that the guidance range reflects historical trends and current business performance, with expectations of growth in the latter half of the year [28] Question: Development of AUR-200 - Management confirmed ongoing formulation work for AUR-200, aiming for a patient-friendly delivery method, potentially including an auto-injector [36] Question: R&D Spend and Cash Flow - Management did not provide specific guidance on future R&D expenses but emphasized the importance of maintaining operational efficiency and cash flow positivity [39][40] Question: Pediatric Exclusivity and Buyback Strategy - Management confirmed no changes to the exclusivity period and indicated that buyback strategies will depend on cash flow from operations and growth in the Loop Kinus business [51][56]

Core Insights - Aurinia Pharmaceuticals reported quarterly earnings of $0.16 per share, missing the Zacks Consensus Estimate of $0.17 per share, but showing significant improvement from $0.02 per share a year ago, resulting in an earnings surprise of -5.88% [1] - The company achieved revenues of $70.01 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 10.41% and up from $57.19 million year-over-year [2] - Aurinia has surpassed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] Future Outlook - The sustainability of Aurinia's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $64.44 million, and for the current fiscal year, it is $0.59 on revenues of $258.71 million [7] - The estimate revisions trend for Aurinia was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Medical - Drugs industry, to which Aurinia belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Xencor, is expected to report a quarterly loss of $0.78 per share, with revenues projected at $20.1 million, reflecting an 18.5% year-over-year increase [9]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial information, including financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section provides Aurinia Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 | (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Total current assets | $408,970 | $446,596 | | Total assets | $502,562 | $550,645 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | $78,266 | $97,763 | | Total liabilities | $167,261 | $173,167 | | Total shareholders' equity | $335,301 | $377,478 | - Total assets decreased from **$550.6 million** at December 31, 2024, to **$502.6 million** at June 30, 2025. Total current assets decreased by **$37.6 million**, primarily due to a reduction in cash, cash equivalents, and short-term investments[11](index=11&type=chunk) - Total liabilities decreased from **$173.2 million** at December 31, 2024, to **$167.3 million** at June 30, 2025, driven by a reduction in current liabilities, particularly accrued expenses and deferred revenue[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Details the company's revenues, expenses, and net income or loss for the three and six months ended June 30, 2025 and 2024 | (in thousands, except per share data) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $70,008 | $57,192 | $132,473 | $107,495 | | Total operating expenses | $49,925 | $58,705 | $90,543 | $122,261 | | Income (loss) from operations | $20,083 | $(1,513) | $41,930 | $(14,766) | | Net income (loss) | $21,513 | $722 | $44,857 | $(10,027) | | Basic EPS | $0.16 | $0.01 | $0.33 | $(0.07) | | Diluted EPS | $0.16 | $0.01 | $0.32 | $(0.07) | - The company achieved significant net income for both the three and six months ended June 30, 2025, reversing losses from the prior year. Net income for the six months ended June 30, 2025, was **$44.9 million**, compared to a net loss of **$10.0 million** in the same period of 2024[12](index=12&type=chunk) - Total revenue increased by **22.4%** for the three months and **23.2%** for the six months ended June 30, 2025, compared to the same periods in 2024, primarily driven by net product sales[12](index=12&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Outlines changes in shareholders' equity, including common shares, additional paid-in capital, and accumulated deficit | (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------------------------------ | :---------------------- | :----------------------- | | Common Shares (Shares) | 140,883 | 132,668 | | Common Shares (Amount) | $1,187,696 | $1,122,582 | | Additional paid-in capital | $126,999 | $105,337 | | Accumulated deficit | $(936,570) | $(891,713) | | Total Shareholders' Equity | $377,478 | $335,301 | - Total shareholders' equity decreased from **$377.5 million** at December 31, 2024, to **$335.3 million** at June 30, 2025, primarily due to significant share repurchases totaling **$90.8 million** for the six months ended June 30, 2025[15](index=15&type=chunk)[50](index=50&type=chunk) - The company repurchased **11.2 million** common shares for **$90.8 million** during the six months ended June 30, 2025, under its Share Repurchase Plan[50](index=50&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $45,541 | $(2,755) | | Net cash provided by investing activities | $17,759 | $10,611 | | Net cash used in financing activities | $(93,731) | $(23,324) | | Net decrease in cash, cash equivalents and restricted cash | $(30,431) | $(15,468) | | Cash, cash equivalents and restricted cash, end of the period | $53,002 | $33,407 | - Operating activities generated **$45.5 million** in cash for the six months ended June 30, 2025, a significant improvement from a cash usage of **$2.8 million** in the prior year, primarily driven by increased net income and reduced restructuring payments[20](index=20&type=chunk)[67](index=67&type=chunk) - Cash used in financing activities increased substantially to **$93.7 million** for the six months ended June 30, 2025, mainly due to increased share repurchases[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Description of Business](index=8&type=section&id=1.%20Organization%20and%20Description%20of%20Business) Describes Aurinia Pharmaceuticals Inc.'s core business, primary product LUPKYNIS, and development pipeline - Aurinia Pharmaceuticals Inc. is a biopharmaceutical company focused on autoimmune diseases. Its primary commercial product is **LUPKYNIS (voclosporin)**, an FDA-approved oral therapy for active lupus nephritis (LN), launched in January 2021[22](index=22&type=chunk) - The company is also developing **aritinercept (AUR200)**, a dual inhibitor for B cell-activating factor (BAFF) and a proliferation-inducing ligand (APRIL), for potential treatment of autoimmune diseases[22](index=22&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Explains the basis of financial statement preparation and key accounting policies - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions, omitting certain annual disclosures[23](index=23&type=chunk) - The company's significant accounting policies and recent accounting pronouncements remain unchanged from the December 31, 2024, Annual Report on Form 10-K, except for the new **ASU 2023-09 on Income Tax Disclosures** effective for annual periods beginning after December 15, 2024[25](index=25&type=chunk)[26](index=26&type=chunk) [3. Earnings (Loss) Per Share](index=8&type=section&id=3.%20Earnings%20(Loss)%20Per%20Share) Details the calculation of basic and diluted earnings per share for the reporting periods - Basic EPS for Q2 2025 was **$0.16** (vs. **$0.01** in Q2 2024) and for H1 2025 was **$0.33** (vs. **$(0.07)** in H1 2024). Diluted EPS followed a similar trend[12](index=12&type=chunk) - For the six months ended June 30, 2025, **3.3 million** potential dilutive common shares (**2.2 million** RSUs, **0.6 million** performance awards, **0.5 million** stock options) were included in diluted EPS calculation, while **7.5 million** potential common shares were excluded as anti-dilutive[28](index=28&type=chunk) [4. Balance Sheet Details](index=9&type=section&id=4.%20Balance%20Sheet%20Details) Provides disaggregated information for specific balance sheet accounts, including fair value measurements and inventory Fair Value Measurement (in thousands) | | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Total cash, cash equivalents, restricted cash and short-term investments | $315,133 | $358,476 | Inventory, net (in thousands) | | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Raw materials | $771 | $1,702 | | Work in process | $43,165 | $36,623 | | Finished goods | $2,567 | $903 | | Total inventory, net | $46,503 | $39,228 | Intangible Assets, Net (in thousands) | | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Total intangible assets, net | $4,046 | $4,355 | Accrued Expenses (in thousands) | | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Accrued sales rebates and fees | $25,000 | $24,568 | | Accrued payroll and related expenses | $7,256 | $18,639 | | Accrued research and development expenses | $6,495 | $3,990 | | Accrued restructuring expenses | $312 | $10,855 | | Total accrued expenses | $49,704 | $64,971 | [5. Commitments and Contingencies](index=12&type=section&id=5.%20Commitments%20and%20Contingencies) Outlines the company's contractual obligations, including lease payments and potential liabilities - The company has a finance lease for the Monoplant, a dedicated voclosporin manufacturing facility, with a lease term through **March 31, 2030**, and quarterly fixed facility fees of **3.6 million Swiss Francs**[37](index=37&type=chunk)[38](index=38&type=chunk) Future Minimum Lease Payments (in thousands) | | Finance Lease Payments | Operating Lease Payments | | :------------------------------------ | :--------------------- | :----------------------- | | Remainder of 2025 | $9,091 | $575 | | 2026 | $18,186 | $1,169 | | Total lease payments | $86,385 | $7,471 | - Finance lease expense for amortization of ROU assets was **$4.4 million** for Q2 2025 and **$8.8 million** for H1 2025. Interest expense on finance lease liabilities was **$1.1 million** for Q2 2025 and **$2.2 million** for H1 2025[41](index=41&type=chunk) [6. Deferred Compensation and Other Noncurrent Liabilities](index=13&type=section&id=6.%20Deferred%20Compensation%20and%20Other%20Noncurrent%20Liabilities) Details the nature and changes in deferred compensation and other long-term liabilities - Deferred compensation and other noncurrent liabilities increased to **$12.0 million** at June 30, 2025, from **$9.4 million** at December 31, 2024, related to employee retention arrangements with former executive officers[45](index=45&type=chunk) [7. License and Collaboration Agreements](index=13&type=section&id=7.%20License%20and%20Collaboration%20Agreements) Describes key licensing and collaboration agreements, including terms with Otsuka - Aurinia has a collaboration and licensing agreement with **Otsuka** for oral voclosporin in certain territories, including Japan and the E.U., which includes milestone payments and royalties[46](index=46&type=chunk) - Collaboration revenue from manufacturing and other services provided to Otsuka increased to **$3.4 million** for Q2 2025 (from **$2.2 million** in Q2 2024) and **$5.9 million** for H1 2025 (from **$4.4 million** in H1 2024)[47](index=47&type=chunk) [8. Shareholders' Equity](index=13&type=section&id=8.%20Shareholders'%20Equity) Details changes in shareholders' equity, including share repurchase programs and common share activity - The Board approved an increase of an additional **$150 million** to the Share Repurchase Plan on July 31, 2025, bringing the total authorized repurchase to **$300 million**[48](index=48&type=chunk)[60](index=60&type=chunk) - For the six months ended June 30, 2025, the company repurchased **11.2 million** common shares for **$90.8 million**. From July 1 to July 29, 2025, an additional **1.1 million** shares were repurchased for **$8.4 million**[50](index=50&type=chunk)[61](index=61&type=chunk) [9. Equity Incentive Plans](index=14&type=section&id=9.%20Equity%20Incentive%20Plans) Summarizes activity under the company's stock option, performance award, and RSU plans Stock Option Activity (Six Months Ended June 30, 2025) | | Number of shares (in thousands) | Weighted-average exercise price $ | | :------------------------------------ | :------------------------------ | :------------------------------ | | Outstanding at December 31, 2024 | 9,276 | 11.05 | | Granted | 2,391 | 7.61 | | Exercised/released | (227) | 6.89 | | Cancelled/forfeited | (1,820) | 12.22 | | Outstanding at June 30, 2025 | 9,620 | 10.08 | Performance Awards and RSUs Activity (Six Months Ended June 30, 2025) | | Number of shares (in thousands) | Weighted-average fair value price | | :------------------------------------ | :------------------------------ | :------------------------------ | | Unvested balance, December 31, 2024 | 7,986 | 8.08 | | Granted | 1,421 | 6.80 | | Vested | (2,634) | 8.58 | | Forfeited | (2,023) | 8.17 | | Unvested balance, June 30, 2025 | 4,750 | 7.38 | Share-based Compensation Expense (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $335 | $87 | $428 | $(2,079) | | Selling, general and administrative | $4,877 | $8,078 | $1,364 | $15,615 | | Capitalized in inventory, net | $228 | $421 | $239 | $787 | | Share-based compensation expense | $5,440 | $8,586 | $2,031 | $14,323 | [10. Restructuring](index=15&type=section&id=10.%20Restructuring) Describes the company's strategic restructuring initiatives and associated expenses - The company underwent two strategic restructurings in 2024, reducing headcount by approximately **25%** (February) and an additional **45%** (November) to focus on LUPKYNIS growth and aritinercept development[55](index=55&type=chunk) - Restructuring expense for the six months ended June 30, 2025, was **$1.6 million**, primarily for one-time termination benefits, contract termination costs, and other restructuring costs related to the November Restructuring[56](index=56&type=chunk) - Restructuring activities were substantially completed in the first half of 2025[56](index=56&type=chunk) [11. Income Taxes](index=15&type=section&id=11.%20Income%20Taxes) Provides information on income tax expense and effective tax rates for the reporting periods - Income tax expense for the three months ended June 30, 2025, was **$0.6 million** (vs. **$0.8 million** in 2024) and for the six months was **$1.6 million** (vs. **$1.5 million** in 2024), primarily due to U.S. source income[59](index=59&type=chunk) - The effective tax rates differed from the federal statutory rate mainly due to valuation allowances[58](index=58&type=chunk) [12. Subsequent Events](index=15&type=section&id=12.%20Subsequent%20Events) Discloses significant events occurring after the balance sheet date - On July 31, 2025, the Board approved an additional **$150 million** increase to the Share Repurchase Plan[60](index=60&type=chunk) - From July 1, 2025, through July 29, 2025, the company repurchased **1.1 million** common shares for **$8.4 million** under the Share Repurchase Plan[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Aurinia's financial condition and operational results, highlighting improved net product sales, positive cash flow, and the impact of restructuring for the periods ended June 30, 2025 and 2024 [Overview](index=16&type=section&id=Overview) Provides a high-level summary of Aurinia's business, key product performance, and financial highlights - Aurinia is a biopharmaceutical company focused on autoimmune diseases, with **LUPKYNIS (voclosporin)** as its FDA-approved oral therapy for active lupus nephritis (LN)[65](index=65&type=chunk) - Net product sales increased by **21%** to **$66.6 million** for Q2 2025 and **23%** to **$126.5 million** for H1 2025, driven by increased LUPKYNIS cartons sold[66](index=66&type=chunk) - Cash flow from operating activities was **$45.5 million** for H1 2025, a significant improvement from **$(2.8) million** in H1 2024. Excluding restructuring payments, cash flow from operations was **$57.0 million**[67](index=67&type=chunk) - As of June 30, 2025, cash, cash equivalents, restricted cash, and investments totaled **$315.1 million**, down from **$358.5 million** at December 31, 2024, partly due to **$90.8 million** in share repurchases[68](index=68&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Analyzes the company's revenues and expenses, detailing changes in net product sales, cost of revenue, and operating expenses Results of Operations (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net product sales | $66,574 | $55,028 | $126,545 | $103,101 | | License, collaboration and royalty revenue | $3,434 | $2,164 | $5,928 | $4,394 | | Total revenue | $70,008 | $57,192 | $132,473 | $107,495 | | Cost of revenue | $7,115 | $8,909 | $15,689 | $16,661 | | Selling, general and administrative | $26,018 | $44,934 | $46,357 | $92,629 | | Research and development | $7,432 | $4,080 | $13,175 | $9,631 | | Restructuring | $114 | $1,072 | $1,647 | $7,755 | | Other expense (income), net | $9,246 | $(290) | $13,675 | $(4,415) | | Income (loss) from operations | $20,083 | $(1,513) | $41,930 | $(14,766) | | Net income (loss) | $21,513 | $722 | $44,857 | $(10,027) | - Net product sales increased by **$11.5 million (21%)** for Q2 2025 and **$23.4 million (23%)** for H1 2025, primarily due to increased LUPKYNIS cartons sold and market penetration[71](index=71&type=chunk) - License, collaboration, and royalty revenue increased by **$1.3 million** for Q2 2025 and **$1.5 million** for H1 2025, mainly from increased manufacturing services provided to Otsuka[74](index=74&type=chunk) - Cost of revenue decreased by **$1.8 million** for Q2 2025 and **$1.0 million** for H1 2025, primarily due to a decrease in sales of low-gross-margin LUPKYNIS inventory to Otsuka, leading to improved gross margins of **90%** (Q2 2025) and **88%** (H1 2025)[77](index=77&type=chunk) - SG&A expense decreased significantly by **$18.9 million** for Q2 2025 and **$46.3 million** for H1 2025, primarily due to lower employee-related costs and non-personnel expenses resulting from 2024 strategic restructuring efforts[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - R&D expense increased by **$3.4 million** for Q2 2025 and **$3.5 million** for H1 2025, driven by increased development activities for aritinercept and voclosporin, partially offset by lower employee headcount[84](index=84&type=chunk)[85](index=85&type=chunk) - Restructuring expense decreased to **$0.1 million** for Q2 2025 and **$1.6 million** for H1 2025, down from **$1.1 million** and **$7.8 million** respectively in 2024, as restructuring activities were substantially completed[88](index=88&type=chunk) - Other expense (income), net, shifted to an expense of **$9.2 million** for Q2 2025 and **$13.7 million** for H1 2025, primarily due to foreign exchange remeasurement of the Monoplant finance lease liability and changes in deferred compensation liability fair value[89](index=89&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash position, cash flow generation, and strategies for funding future operations - As of June 30, 2025, Aurinia had **$315.1 million** in cash, cash equivalents, restricted cash, and investments[90](index=90&type=chunk) - Cash flow from operating activities was **$45.5 million** for the six months ended June 30, 2025, compared to a cash outflow of **$2.8 million** in the prior year period[90](index=90&type=chunk) - The company expects to fund future operations with existing cash or cash generated from operations and may seek additional capital through equity or debt financings if needed[91](index=91&type=chunk)[92](index=92&type=chunk) [Critical Accounting Estimates](index=20&type=section&id=Critical%20Accounting%20Estimates) States that there have been no material changes to critical accounting estimates since the prior annual report - There have been no material changes to the company's critical accounting policies and significant judgments and estimates since the Annual Report on Form 10-K for the year ended December 31, 2024[93](index=93&type=chunk) [Off-Balance Sheet Arrangements](index=20&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of any off-balance sheet arrangements during the reporting periods - The company did not have any off-balance sheet arrangements during the periods presented or currently[94](index=94&type=chunk) [Contractual Obligations](index=20&type=section&id=Contractual%20Obligations) Notes no material changes to contractual obligations since the prior annual report - There have been no material changes outside the ordinary course of business to the company's contractual obligations and commitments since the Annual Report on Form 10-K for the year ended December 31, 2024[95](index=95&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes to quantitative and qualitative disclosures regarding market risks since the December 31, 2024, Annual Report on Form 10-K - No material changes to quantitative and qualitative disclosures about market risks have occurred since the December 31, 2024, Annual Report on Form 10-K[96](index=96&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=20&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of the company's disclosure controls and procedures - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025[97](index=97&type=chunk) [Changes in Internal Control over Financial Reporting](index=20&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any material changes in internal control over financial reporting during the quarter - There were no material changes in internal control over financial reporting during the most recent quarter[98](index=98&type=chunk) [PART II. OTHER INFORMATION](index=21&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing patent infringement lawsuits against generic drug manufacturers seeking to market LUPKYNIS before patent expiry - Aurinia received Paragraph IV notices from eight generic drug companies (Hikma, Lotus, Galenicum, Zydus, Teva, Dr. Reddy's, DifGen, Sandoz) seeking to market generic LUPKYNIS before the **December 2037** patent expiry[101](index=101&type=chunk) - The company filed patent infringement complaints against all eight generic manufacturers in **April and May 2025**[102](index=102&type=chunk) - Due to the patent infringement complaints filed within **45 days** of notice, the FDA cannot approve the ANDAs for these generic products earlier than **7.5 years** from LUPKYNIS's new drug application approval, as per the Hatch-Waxman Act[103](index=103&type=chunk) - Aurinia intends to vigorously enforce its intellectual property rights relating to LUPKYNIS[104](index=104&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, highlighting potential adverse impacts from changes in U.S. economic laws or policies affecting pharmaceutical imports - No material changes to risk factors have occurred since the December 31, 2024, Annual Report on Form 10-K, except for potential impacts from changes in U.S. economic laws or policies[105](index=105&type=chunk) - A national security investigation into pharmaceutical imports by the U.S. federal government could lead to measures like pricing restrictions, tariffs, or trade restrictions, potentially harming Aurinia's business as it imports products from Switzerland[106](index=106&type=chunk) - Retaliatory actions by international governments in response to U.S. economic policies, such as tariffs on pharmaceutical imports, could materially affect Otsuka's voclosporin business and, consequently, Aurinia's business[107](index=107&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common share repurchase activities, including the increased authorization and shares repurchased under the plan - The Board approved an additional **$150 million** for the Share Repurchase Plan on July 31, 2025, increasing the total authorized amount[108](index=108&type=chunk) - As of June 30, 2025, the company repurchased **11,159,291** common shares for an average price of **$8.09** per share during the first six months of 2025[110](index=110&type=chunk) - The company has a Rule 10b5-1 stock repurchase plan to purchase common shares in accordance with applicable regulations[110](index=110&type=chunk) [Item 3. Defaults Upon Senior Securities](index=22&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities - There were no defaults upon senior securities[111](index=111&type=chunk) [Item 4. Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Reports no mine safety disclosures - There were no mine safety disclosures[112](index=112&type=chunk) [Item 5. Other Information](index=22&type=section&id=Item%205.%20Other%20Information) States that there is no other information to report - There is no other information to report[113](index=113&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the report, including organizational documents and certifications - Exhibits include Articles of Amalgamation, Amended and Restated By-Law No. 2, Certifications of Principal Executive and Financial Officers (**31.1, 31.2, 32.1, 32.2**), and Inline XBRL documents (**101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104**)[114](index=114&type=chunk) [Signatures](index=24&type=section&id=Signatures) Contains the required signatures for the financial report

[Financial Highlights and Business Update](index=1&type=section&id=Financial%20Highlights%20and%20Business%20Update) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Aurinia reported strong financial performance for Q2 and H1 2025, with significant year-over-year growth in total revenue, net product sales, and a shift from net loss to substantial net income. Operating cash flow also turned positive [Cash Position](index=1&type=section&id=Cash%20Position) Cash Position | Metric | June 30, 2025 (USD) | December 31, 2024 (USD) | | :----- | :------------------ | :---------------------- | | Cash, cash equivalents, restricted cash and investments | $315.1 million | $358.5 million | [Revenue Performance](index=1&type=section&id=Revenue%20Performance) Revenue Performance | Revenue Type | Q2 2025 (USD) | Q2 2024 (USD) | YoY Change (Q2) | H1 2025 (USD) | H1 2024 (USD) | YoY Change (H1) | | :----------- | :------------ | :------------ | :-------------- | :------------ | :------------ | :-------------- | | Total Revenue | $70.0 million | $57.2 million | +22% | $132.5 million | $107.5 million | +23% | | Net Product Sales (LUPKYNIS) | $66.6 million | $55.0 million | +21% | $126.5 million | $103.1 million | +23% | | License, Collaboration & Royalty Revenue | $3.4 million | $2.2 million | +55% | $5.9 million | $4.4 million | +34% | [Net Income (Loss)](index=1&type=section&id=Net%20Income%20%28Loss%29) Net Income (Loss) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | H1 2025 (USD) | H1 2024 (USD) | | :----- | :------------ | :------------ | :------------ | :------------ | | Net Income (Loss) | $21.5 million | $0.7 million | $44.9 million | $(10.0) million | [Cash Flow from Operations](index=1&type=section&id=Cash%20Flow%20from%20Operations) Cash Flow from Operations | Metric | H1 2025 (USD) | H1 2024 (USD) | | :----- | :------------ | :------------ | | Cash Flow Provided by (Used in) Operating Activities | $45.5 million | $(2.8) million | | Cash Flow from Operations (Excluding restructuring payments) | $57.0 million | N/A | [Share Repurchase Program](index=1&type=section&id=Share%20Repurchase%20Program) Aurinia's Board approved an additional $150 million for its share repurchase plan. The company has repurchased 18.3 million common shares for $138.4 million to date, including $90.8 million in H1 2025 - The Board has approved an increase to the previously announced share repurchase plan of an additional **$150 million** of common shares[4](index=4&type=chunk) - To date, purchases under the share repurchase plan have totaled **18.3 million** common shares for **$138.4 million**, beginning on February 21, 2024[4](index=4&type=chunk) - For the six months ended June 30, 2025, the Company repurchased **11.2 million** of its common shares for **$90.8 million**[3](index=3&type=chunk) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) Aurinia increased its full-year 2025 guidance for both total revenue and net product sales, reflecting positive outlook for the year Full Year 2025 Guidance | Guidance Metric | Previous Range (2025, USD) | New Range (2025, USD) | | :-------------- | :------------------------- | :-------------------- | | Total Revenue | $250 million - $260 million | $260 million - $270 million | | Net Product Sales | $240 million - $250 million | $250 million - $260 million | [CEO Commentary and Product Development](index=2&type=section&id=CEO%20Commentary%20and%20Product%20Development) CEO Peter Greenleaf highlighted continued solid growth for LUPKYNIS, supported by new treatment guidelines. He also announced positive Phase 1 results for aritinercept, a new dual inhibitor, with plans to advance it into clinical studies for autoimmune diseases in the second half of 2025 - Solid growth for LUPKYNIS is partially driven by the new 2024 American College of Rheumatology lupus nephritis treatment guidelines, which recommend its incorporation into first-line therapy[7](index=7&type=chunk) - Positive results from the Phase 1 study of aritinercept, a dual inhibitor of BAFF and APRIL, showed it was well tolerated and led to robust and long-lasting reductions in immunoglobulins[7](index=7&type=chunk) - Aurinia plans to initiate clinical studies for aritinercept in at least two autoimmune diseases in the second half of 2025[7](index=7&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [About Aurinia](index=2&type=section&id=About%20Aurinia) Aurinia is a biopharmaceutical company focused on developing therapies for autoimmune diseases. Its flagship product, LUPKYNIS, is the first FDA-approved oral therapy for active lupus nephritis, and it is also advancing aritinercept for other autoimmune conditions - Aurinia is a biopharmaceutical company focused on delivering therapies to people living with autoimmune diseases with high unmet medical needs[9](index=9&type=chunk) - LUPKYNIS (voclosporin) is the first FDA-approved oral therapy for the treatment of adult patients with active lupus nephritis, introduced in January 2021[9](index=9&type=chunk) - Aurinia is developing aritinercept (AUR200), a dual inhibitor of B cell-activating factor (BAFF) and a proliferation-inducing ligand (APRIL), for the potential treatment of autoimmune diseases[9](index=9&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements based on management's expectations, which are subject to substantial risks and uncertainties that could cause actual outcomes to differ materially. Investors are advised to consult the company's SEC and Canadian Securities Authorities filings for detailed risk factors - The press release contains forward-looking information and statements based on management's expectations and assumptions, involving substantial risks and uncertainties[10](index=10&type=chunk) - Risks and uncertainties include those associated with LUPKYNIS net product sales and the timing of clinical study results[10](index=10&type=chunk) - Additional information on risks and uncertainties can be found in Aurinia's most recent Annual Report on Form 10-K and other public filings with the SEC and Canadian Securities Administrators[10](index=10&type=chunk) [Webcast & Investor Inquiries](index=2&type=section&id=Webcast%20%26%20Investor%20Inquiries) Aurinia hosted a webcast and conference call on July 31, 2025, to discuss financial results. General investor inquiries can be directed via email - A webcast and conference call was hosted on July 31, 2025, at 8:30 a.m. ET to discuss the financial results[8](index=8&type=chunk) - General investor inquiries can be sent to ir@auriniapharma.com[11](index=11&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Aurinia's total assets decreased to $502.6 million from $550.6 million at December 31, 2024, primarily due to reductions in cash, cash equivalents, restricted cash, and short-term investments. Total liabilities and shareholders' equity also saw decreases Condensed Consolidated Balance Sheets | Balance Sheet Item | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :----------------- | :------------------------------- | :----------------------------------- | | Total assets | $502,562 | $550,645 | | Total liabilities | $167,261 | $173,167 | | Total shareholders' equity | $335,301 | $377,478 | | Cash, cash equivalents and restricted cash | $53,002 | $83,433 | | Short-term investments | $262,131 | $275,043 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three and six months ended June 30, 2025, Aurinia reported significant improvements in net income and diluted EPS compared to the prior year. Total revenue increased, while selling, general and administrative expenses decreased substantially Condensed Consolidated Statements of Operations | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | H1 2025 (in thousands USD) | H1 2024 (in thousands USD) | | :----- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Total Revenue | $70,008 | $57,192 | $132,473 | $107,495 | | Net Income (Loss) | $21,513 | $722 | $44,857 | $(10,027) | | Diluted EPS | $0.16 | $0.01 | $0.32 | $(0.07) | | Selling, General and Administrative Expenses | $26,018 | $44,934 | $46,357 | $92,629 | | Research and Development Expenses | $7,432 | $4,080 | $13,175 | $9,631 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating activities generated $45.5 million in cash, a positive reversal from the prior year. Investing activities provided $17.8 million, while financing activities used $93.7 million, primarily due to share repurchases Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | H1 2025 (in thousands USD) | H1 2024 (in thousands USD) | | :----------------- | :------------------------- | :------------------------- | | Net cash provided by (used in) operating activities | $45,541 | $(2,755) | | Net cash provided by investing activities | $17,759 | $10,611 | | Net cash used in financing activities | $(93,731) | $(23,324) | | Repurchase of common shares | $(89,485) | $(18,435) |

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Summary of Aurinia Pharmaceuticals (AUPH) Conference Call Company Overview - **Company**: Aurinia Pharmaceuticals - **Product**: Aretinirecept (previously referred to as AUR200) - **Focus**: Development of treatments for autoimmune diseases Key Points from the Conference Call Phase One Study Results - Aretinirecept is a dual BAF and APRIL inhibitor designed to modulate immune responses in autoimmune diseases [3][4] - The Phase one study involved 61 healthy subjects with a standard single ascending dose design [7] - Doses tested: 5 mg, 25 mg, 75 mg, 150 mg, 225 mg, and 300 mg [7] - Aretinirecept was well tolerated with no treatment-related grade three or higher adverse events [7][9] - Injection site reactions occurred in 24% of subjects receiving Aretinirecept compared to 13% for placebo [9] - Significant reductions in immunoglobulins were observed: IgA (up to 76%), IgM (up to 67%), and IgG (up to 43%) [6] Pharmacokinetics and Pharmacodynamics - Aretinirecept demonstrated a half-life of 6 to 8 days after a single dose [9] - Mean reductions from baseline to day 28 for immunoglobulins were: IgA (48%), IgM (55%), and IgG (20%) [10] - The drug's pharmacodynamic effects support the potential for once-monthly dosing [10] Future Plans - Aurinia plans to initiate further clinical studies in at least two autoimmune diseases in the second half of the year [13][16] - Specific details on future studies and indications were not disclosed for competitive reasons [13][16] Competitive Landscape - The BAF and APRIL inhibitor space is becoming increasingly competitive, with many potential targets identified [24] - Aurinia is focusing on a range of B cell-mediated autoimmune diseases, with an internal review identifying over 20 potential targets [24] Intellectual Property and Development Strategy - Aurinia continues to file for intellectual property related to Aretinirecept, although specific details on the IP life were not disclosed [20] - The company intends to conduct further studies independently without seeking external funding [21] Safety and Administration - No dose-dependent effects were observed for upper respiratory infections or back pain, which were mild and transient [30] - Future formulations are expected to allow for self-administration at home via prefilled syringes or auto-injectors [32] Additional Insights - The study's design included a higher number of patients in the 150 mg dose group to better understand pharmacodynamic impacts [25][26] - Aretinirecept's binding affinity is significantly higher than that of competitor drugs, indicating a potential advantage in efficacy [5][6] This summary encapsulates the key findings and strategic directions discussed during the conference call, highlighting Aurinia Pharmaceuticals' advancements and future plans in the autoimmune disease treatment landscape.

LUPKYNIS Commercialization and Growth - The company aims to accelerate LUPKYNIS commercialization by improving screening, diagnosis, and treatment rates[4, 5] - The company also aims to continue LUPKYNIS commercial growth[4] - LUPKYNIS is the first FDA-approved oral therapy for the treatment of lupus nephritis[7] - In AURORA 1, 408% of patients on LUPKYNIS achieved a complete renal response at Week 52, compared to 225% on placebo, MMF, and corticosteroids, representing an 81% increase[32] - In AURORA 1, patients treated with LUPKYNIS were 64% more likely to achieve complete renal response at Week 24 than those on MMF + corticosteroids alone[32] - LUPKYNIS reduced proteinuria in a median of 169 days compared to 372 days for placebo, MMF, and corticosteroids[35] AUR200 Development - The company is advancing the AUR200 development program, a dual BAFF/APRIL inhibitor for autoimmune diseases[5, 43] - AUR200 has high binding affinity for both BAFF and APRIL compared to competitor dual BAFF/APRIL inhibitors[51] - In non-human primates, AUR200 lowered IgA by up to 76% and IgM by up to 67% after 4 weekly doses[56, 57] Financial Performance and Guidance - Total revenue increased by 34% from $1755 million in 2023 to $2351 million in 2024[62] - Net product sales increased by 36% from $1585 million in 2023 to $2162 million in 2024[62] - The company projects 2025 total revenue between $2500 million and $2600 million, representing a 6% to 11% increase from 2024[63] - The company projects 2025 net product sales between $2400 million and $2500 million, representing an 11% to 16% increase from 2024[63]

Company Overview - Aurinia Pharmaceuticals (AUPH) shares increased by 7.5% to $8.63 in the last trading session, with a notable trading volume that exceeded the average [1] - The stock has shown a modest gain of 0.6% over the past four weeks [1] Product Performance - The rise in stock price is linked to positive investor sentiment regarding Lupkynis, the company's only marketed drug for treating adults with active lupus nephritis (LN) [2] - Sales of Lupkynis grew by 25% year-over-year, reaching $60 million in the first quarter of 2025 [2] Earnings Expectations - Aurinia is projected to report quarterly earnings of $0.18 per share, reflecting an 800% increase year-over-year [3] - Expected revenues for the upcoming quarter are $64.23 million, which is a 12.3% increase from the same quarter last year [3] - The consensus EPS estimate has remained stable over the last 30 days, indicating no recent revisions in earnings estimates [4] Industry Context - Aurinia holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5] - In the same medical-drugs industry, Corcept Therapeutics (CORT) also holds a Zacks Rank of 3 (Hold) and has seen a 0.5% increase in its stock price, but has returned -4.7% over the past month [5][6]

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Investors in Aurinia Pharmaceuticals Inc. (AUPH) need to pay close attention to the stock based on moves in the options market lately. That is because the July 18, 2025 $2.00 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. I ...