Aurinia Pharmaceuticals(AUPH) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net sales for Q2 2022 were $28.2 million, with LUPKYNIS product revenues contributing $28.1 million, compared to $6.6 million in Q2 2021 [21] - The net loss for Q2 2022 was $35.5 million or $0.25 per share, an improvement from a net loss of $47 million or $0.37 per share in Q2 2021 [25] - Cash, cash equivalents, and restricted cash decreased to $391.7 million as of June 30, 2022, from $466.1 million at the end of 2021, primarily due to investments in commercialization and pipeline advancement [20] Business Line Data and Key Metrics Changes - The number of patients on therapy grew to 1,274, up 19% from 1,071 at the end of Q1 2022 [8] - Approximately 70% of commercial patients remained on treatment at six months, and about 60% remained at nine months [8] - The company added 409 prescription start forms (PSFs) in Q2, bringing the year-to-date total to 867 PSFs as of June 30, 2022 [10] Market Data and Key Metrics Changes - The company is evaluating potential seasonality trends affecting lupus treatments, particularly in light of COVID-19 impacts in previous years [11] - The CHMP recommended LUPKYNIS for marketing authorization in Europe, with a decision expected by the end of Q3 2022 [14] Company Strategy and Development Direction - The company aims to enhance partnerships with major medical centers to improve patient access and diagnosis of lupus nephritis [12] - A renewed focus on patient retention strategies and education is being implemented to improve prescription refill rates and overall patient engagement [13] - The company reaffirmed its guidance for LUPKYNIS net sales of $115 million to $135 million for the full calendar year 2022 [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth despite current market challenges, emphasizing the importance of patient retention and new patient acquisition [32] - The company remains well-positioned with a healthy balance sheet, including nearly $400 million in cash and no significant debt [19] - Management highlighted ongoing efforts to protect intellectual property rights amid legal challenges [18] Other Important Information - The company is advancing its R&D pipeline, with plans to submit INDs for AUR200 and AUR300 in 2023 [17] - The gross margin for Q2 2022 was approximately 94%, slightly down from 95% in Q2 2021, attributed to increased costs related to safety stock reserves [22] Q&A Session Summary Question: What strategic changes are expected with new leadership? - Management indicated a renewed focus on major medical centers and patient retention strategies to drive growth [30][31] Question: Are there more discontinuations in community or academic settings? - Most patients are currently coming from community settings, and management is monitoring persistency across both settings [35] Question: Insights on patient start forms dynamics? - Management acknowledged seasonality impacts and emphasized ongoing initiatives to drive patient engagement and prescription growth [37][40] Question: Confidence in the strength of the 036 patent amid IPR process? - Management expressed high confidence in their patents and commitment to defending them [42][43] Question: Comments on refill rates? - Refill rates improved in Q2, and management is focused on patient education and retention to sustain this trend [63][64]