On November 2, 2023 BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX) reported its financial results for the third quarter ended September 30, 2023, and provided a corporate update (Press release, BioCryst Pharmaceuticals, NOV 2, 2023, View Source [SID1234636737]).

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"With nearly three years of launch data, we have excellent visibility into the pattern of growth for ORLADEYO and we remain on track to achieve the no less than $320 million in ORLADEYO revenues we have expected for 2023. Our solid base and the consistent addition of new patients each quarter, combined with the ongoing improvement in our percentage of paid patients and launches in new global markets, are all driving peak revenues to $1 billion," said Jon Stonehouse, president and chief executive officer of BioCryst.

Program Updates

ORLADEYO (berotralstat): Oral, Once-daily Treatment for Prevention of Hereditary Angioedema (HAE) Attacks

"Strong, steady new patient switches continue to fuel the growth in ORLADEYO as more and more patients want to experience the benefits of the only oral, once-daily therapy to prevent HAE attacks," said Charlie Gayer, chief commercial officer of BioCryst.

ORLADEYO net revenue in the third quarter of 2023 was $85.7 million (+29.8 percent year-over-year (y-o-y)).

Total growth in patients taking ORLADEYO continued on a strong, linear trajectory.

The ongoing APeX-P trial in pediatric HAE patients who are 2 to <12 years of age continues to enroll as expected.

Sales from outside the U.S. contributed 12.2 percent of global ORLADEYO net revenues in the third quarter.

Austria has approved the reimbursement of ORLADEYO for the targeted prophylaxis of hereditary angioedema (HAE) in patients 12 years of age or older.
Upcoming R&D Day—November 3, 2023

BioCryst will host a Research and Development (R&D) Day at 1:00p ET on Friday, November 3 at its Discovery Center of Excellence in Birmingham, AL. At the R&D Day, the company plans to describe its drug discovery process and introduce additional therapies from its pipeline. The live webcast and replay of the R&D Day will be available online in the investors section of the company website at www.biocryst.com.

Third Quarter 2023 Financial Results

For the three months ended September 30, 2023, total revenues were $86.7 million, compared to $75.8 million in the third quarter of 2022 (+14.4 percent y-o-y). The increase was primarily due to an increase in ORLADEYO net revenue of $19.7 million, partially offset by a reduction in RAPIVAB (peramivir injection) revenue of $8.8 million, compared to the third quarter of 2022.

Research and development expenses for the third quarter of 2023 decreased to $46.9 million from $52.7 million in the third quarter of 2022 (-11.0 percent y-o-y), primarily due to the discontinuations of the BCX9930 and BCX9250 programs, partially offset by additional investment in BCX10013 and pipeline programs.

Selling, general and administrative expenses for the third quarter of 2023 increased to $50.7 million, compared to $36.9 million in the third quarter of 2022 (+37.1 percent y-o-y). The increase was primarily due to increased investment to support the commercial launch of ORLADEYO.

Interest expense was $27.3 million in the third quarter of 2023, compared to $24.8 million in the third quarter of 2022 (+10.1 percent y-o-y). The increase was due to additional interest to service the Pharmakon debt secured in April 2023.

Net loss for the third quarter of 2023 was $36.1 million, or $0.19 per share, compared to a net loss of $42.5 million, or $0.23 per share, for the third quarter of 2022.

Cash, cash equivalents, restricted cash and investments totaled $399.2 million at September 30, 2023, compared to $462.6 million at September 30, 2022. Operating cash use for the third quarter of 2023 was $16.5 million (-43.9 percent y-o-y).

Financial Outlook for 2023

The company expects full year 2023 global net ORLADEYO revenue to be no less than $320 million. The company continues to be disciplined in its approach to capital allocation and is reducing its outlook for operating expenses for full year 2023, not including non-cash stock compensation, to between $365 million and $375 million, reflecting an expected decline from 2022 operating expenses.

Conference Call and Webcast

BioCryst management will host a conference call and webcast at 8:30 a.m. ET today to discuss the financial results and provide a corporate update. The live call may be accessed by dialing 1-866-777-2509 for domestic callers and 1-412-317-5413 for international callers. A live webcast and replay of the call will be available online in the investors section of the company website at www.biocryst.com.

On November 2, 2023 Bicycle Therapeutics plc (NASDAQ: BCYC), a biotechnology company pioneering a new and differentiated class of therapeutics based on its proprietary bicyclic peptide (Bicycle) technology, reported financial results for the third quarter ended September 30, 2023, and provided recent corporate updates (Press release, Bicycle Therapeutics, NOV 2, 2023, View Source [SID1234636736]).

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"In the third quarter, we took important steps toward achieving our goal of quickly getting our novel therapies to those who need them. We are extremely pleased to have aligned with the FDA on an expedited clinical development plan and regulatory pathway for BT8009, our lead investigational therapy for metastatic bladder cancer, and that the agency selected BT8009 to be part of a new program that will help facilitate its expedited CMC development. Through close collaboration with the FDA, we will work to ensure BT8009’s commercial manufacturing readiness keeps pace with its expedited clinical development timeframe," said Kevin Lee, Ph.D., CEO of Bicycle Therapeutics. "With a strengthened balance sheet through the proceeds of an upsized equity offering completed in July, we believe we are well-positioned to conduct our Phase 2/3 registrational trial, scheduled to begin in the first quarter of 2024, to support the potential accelerated approval of BT8009 in a broad metastatic bladder cancer population. Additionally, we continue to advance our research and development efforts across our pipeline, and we look forward to providing clinical updates on BT8009, BT5528 and BT7480 at our R&D Day next month."

Third Quarter 2023 and Recent Highlights

BT8009 Selected to Participate in U.S. Food and Drug Administration (FDA) Program to Expedite Commercial Manufacturing Readiness. In October, Bicycle Therapeutics announced the FDA selected BT8009 to participate in the new Chemistry, Manufacturing and Controls (CMC) Development and Readiness Pilot (CDRP) Program, which was created to facilitate CMC development for therapies with expedited clinical development timeframes, based on the anticipated clinical benefits of earlier patient access to the therapy. BT8009 is one of up to nine products selected for the inaugural cohort of the CDRP Program.
Announced Expedited Clinical Development Plan and Regulatory Pathway for BT8009 in Metastatic (Urothelial) Bladder Cancer. In September, Bicycle Therapeutics announced the company will proceed with its plan to expedite development of BT8009 for metastatic bladder cancer following recent discussions with the FDA. The company aligned with the FDA on a Phase 2/3 registrational trial, called Duravelo-2, that has an innovative design allowing for potential accelerated approval in untreated (first-line) and previously treated (second-line plus) metastatic bladder cancer. The company plans to initiate the Duravelo-2 trial in the first quarter of 2024.
In Cohort 1, two doses of BT8009 plus standard pembrolizumab regimen will be initially assessed. Following selection of the optimal dose, BT8009 plus pembrolizumab will be evaluated against chemotherapy. Potential accelerated approval will be determined by objective response rate (ORR), and progression-free survival (PFS) will be used to confirm clinical benefit.
In Cohort 2, two doses of BT8009 as monotherapy will be initially studied. Following selection of the optimal dose, an additional arm of BT8009 plus standard pembrolizumab regimen will be added. Potential accelerated approval for BT8009 monotherapy and in combination with pembrolizumab will be determined by ORR compared to historical control data. Discussions with the FDA about the design of the confirmatory trial for previously treated metastatic bladder cancer are ongoing.
Raised Net Proceeds of $215.1 Million in Public Offering. In July, Bicycle Therapeutics announced the closing of an underwritten public offering resulting in gross proceeds of approximately $230.0 million, including the full exercise of the underwriters’ option to purchase additional shares. Net proceeds were approximately $215.1 million. In addition, the company also received net proceeds from Bicycle’s at-the-market (ATM) offering program during the third quarter of 2023 totaling $19.4 million.
Pipeline updates planned at upcoming Research & Development (R&D) Day on December 14, 2023, in New York

Bicycle Therapeutics will provide updates from the company’s Phase 1/2 clinical trials for BT8009, a Bicycle Toxin Conjugate (BTC) targeting Nectin-4, a well-validated tumor antigen; BT5528, a BTC targeting EphA2; and BT7480, a Bicycle TICA targeting Nectin-4 and agonizing CD137. The company will also provide an overview of its novel Bicycle technology, the broad capabilities of its drug discovery platform and potential future pipeline programs.

The R&D Day will begin at 8 a.m. ET on Thursday, December 14, 2023, and will conclude at approximately 12 p.m. ET. Analysts and investors who are interested in attending in person can RSVP to [email protected]. A webcast of the event will be accessible from the Investor section of the company’s website, www.bicycletherapeutics.com. A replay of the webcast will be archived and available following the event.

Financial Results

Cash and cash equivalents were $572.1 million as of September 30, 2023, compared to $339.2 million as of December 31, 2022. The increase in cash and cash equivalents is primarily due to $215.1 million in net proceeds from the underwritten public offering in July 2023, $34.2 million of year-to-date net proceeds from our ATM offering program and $95.0 million received from our collaboration agreements with Novartis and Bayer, offset by cash used in operating activities.
R&D expenses were $39.9 million for the three months ended September 30, 2023, compared to $22.8 million for the three months ended September 30, 2022. The increase in expense of $17.1 million was primarily due to increased clinical program expenses for BT8009 development and other discovery and platform-related activities, as well as increased personnel-related expenses, including incremental non-cash share-based compensation expense of $0.7 million.
General and administrative expenses were $16.3 million for the three months ended September 30, 2023, compared to $10.0 million for the three months ended September 30, 2022. The increase of $6.3 million for the three months ended September 30, 2023, as compared to the same period in the prior year was primarily due to an increase in professional and consulting fees as well as an increase in personnel-related expenses, including incremental non-cash share-based compensation expense of $1.3 million.
Net loss was $49.9 million, or $(1.26) basic and diluted net loss per share, for the three months ended September 30, 2023, compared to net loss of $28.3 million, or $(0.96) basic and diluted net loss per share, for three months ended September 30, 2022.

On November 2, 2023 Be Biopharma, Inc. ("Be Bio"), a company pioneering the discovery and development of Engineered B Cell Medicines (BCMs) reported that it will present new preclinical data in an oral presentation at the 65th Annual Meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper) taking place December 9-12, 2023, in San Diego, California (Press release, Be Biopharma, NOV 2, 2023, View Source [SID1234636735]). The research will describe the development of an ex vivo precision-engineered B Cell Medicine (BCM) that produces active and sustained levels of factor IX (FIX). The abstract is now available online in a special issue of the ASH (Free ASH Whitepaper) official journal, Blood.

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"We look forward to presenting our research at the ASH (Free ASH Whitepaper) annual meeting, the pre-eminent global congress for scientific exchange in hematology," said Dr. Rick Morgan, Chief Scientific Officer, Be Bio. "Our team of dedicated researchers is inspired by the potential of this bold new class of medicines."

Details of the oral presentation are as follows:

Title: Development of an Ex Vivo Precision Gene Engineered B Cell Medicine That Produces Active and Sustained Levels of FIX for the Treatment of Hemophilia B
Session Name: 703 Cellular Immunotherapies: Basic and Translational: Novel Approaches for Next Generation Cellular Immunotherapies
Session Date: Sunday, December 10, 2023
Presentation Time: 9:30 AM PST
Room: San Diego Convention Center, Room 6A
Publication Number: 463

About Engineered B Cell Medicines – A New Class of Cellular Medicines
Imagine what could "Be?" In nature, a single B cell engrafts in the bone marrow and can produce thousands of proteins per second at constant levels over decades. B cells are nature’s exquisite medicine factories, manufacturing proteins to fight disease and maintain health. Unleashing the power of B cells is driving a new class of cellular medicines – Engineered B Cell Medicines (BCMs). BCMs have the potential to be durable, allogeneic, redosable and administered without toxic conditioning. The promise of BCMs could transform therapeutic biologics with broad application — across protein classes, patient populations and therapeutic areas.

On November 2, 2023 Bausch Health Companies Inc. (NYSE/TSX: BHC) ("Bausch Health" or the "Company" or "we" or "our") reported its third-quarter 2023 financial results and other key updates from the quarter (Press release, Bausch Health, NOV 2, 2023, View Source [SID1234636734]).

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"We are pleased with our solid third-quarter performance, as each of our business segments posted year-over-year revenue growth on both a reported and organic basis. We remain focused on advancing our R&D pipeline, strengthening our balance sheet and executing on our commercial strategies to drive global growth," said Thomas J. Appio, Chief Executive Officer, Bausch Health.

Bausch Health (excl. B+L) R&D Update
•RED-C: prevention and delay of first episode of hepatic encephalopathy
◦Enrollment of two global Phase 3 trials on track and expected to be completed in Q1 2024
•Amiselimod (S1P modulator): treatment of mild to moderate Ulcerative Colitis
◦Phase 2 study completed enrollment in July 2023 and induction portion of the study is expected to be completed in Q4 2023
•CABTREOTM: first triple combination product for the treatment of acne vulgaris
◦Received FDA approval on October 20, 2023
◦Commercial launch expected in Q1 2024
◦New Drug Submission was submitted to Health Canada on May 30, 2023
•Clear + Brilliant Touch: fractionated laser device for skin rejuvenation
◦Planned regulatory submissions on track for Europe, Canada, and Asia Pacific markets in 2024
•Next Generation Fraxel: fractionated laser device for skin resurfacing
◦FDA submission planned in Q1 2024 and approval is expected 1H 2024

Third Quarter 2023 Revenue Performance
Total reported revenues were $2.24 billion for the third quarter of 2023, compared with $2.05 billion in the third quarter of 2022, an increase of $192 million, or 9%. Excluding the impact of foreign exchange of $6 million and acquisitions, divestitures, and discontinuations of $19 million, revenue increased by 9% organically1 compared with the third quarter of 2022.

Reported revenues by segment were as follows:

Three Months Ended September 30, Reported Change
Change at Constant Currency1
(Non-GAAP)
Change in Organic Revenue1
(Non-GAAP)
(in millions) 2023 2022 Amount Pct.
Total Bausch Health Revenues $2,238 $2,046 $192 9 % 9 % 9 %
Bausch Health (excl. B+L) $1,231 $1,104 $127 12 % 10 % 10 %
Salix segment $614 $544 $70 13 % 13 % 13 %
International segment $275 $250 $25 10 % 3 % 4 %
Solta Medical segment $83 $72 $11 15 % 17 % 17 %
Diversified segment $259 $238 $21 9 % 9 % 9 %
Bausch + Lomb segment $1,007 $942 $65 7 % 8 % 7 %

Salix Segment
Salix segment reported and organic1 revenues were $614 million for the third quarter of 2023, compared with $544 million for the third quarter of 2022, an increase of $70 million, or 13%. Sales growth was driven by Xifaxan, Relistor, and Trulance.

International Segment
International segment reported revenues were $275 million for the third quarter of 2023, compared with $250 million for the third quarter of 2022, an increase of $25 million, or 10%. Excluding the impact of foreign exchange of $17 million and divestitures and discontinuations of $1 million, segment revenues increased organically1 by 4% compared with the third quarter of 2022, led by strong performances in Latin America and Poland.

Solta Medical Segment
Solta Medical segment reported revenues were $83 million for the third quarter of 2023, compared with $72 million in the third quarter of 2022, an increase of $11 million, or 15%, which was driven by growth in the Asia Pacific region. Excluding the impact of foreign exchange of $1 million, segment revenues increased organically1 by 17% compared with the third quarter of 2022.

Diversified Segment
Diversified segment reported revenues were $259 million for the third quarter of 2023, compared with $238 million for the third quarter of 2022, an increase of $21 million, or 9% on both a reported and organic1 basis, primarily attributable to increases in sales in Generics and Neurology.

Bausch + Lomb Segment
Bausch + Lomb segment reported revenues were $1,007 million for the third quarter of 2023, compared with $942 million for the third quarter of 2022, an increase of $65 million, or 7%. Excluding the impact of foreign exchange of $10 million, acquisitions of $15 million and divestitures and discontinuations of $3 million, the Bausch + Lomb segment revenue increased organically1 by 7%, compared with the third quarter of 2022, driven by increases across all business units.

Consolidated Operating Income
Consolidated operating income was $14 million for the third quarter of 2023, compared with operating income of $244 million for the third quarter of 2022, a decrease of $230 million. The change is primarily due to an increase in goodwill impairments, higher selling, general and administrative expenses, and investments in research and development, which were partially offset by higher revenues and associated gross profit, and lower amortization of intangible assets.

Net (Loss) Income Attributable to Bausch Health
Net loss attributable to Bausch Health for the third quarter of 2023 was $378 million, compared with net income attributable to Bausch Health of $399 million for the third quarter of 2022, a decrease of $777 million, primarily due to the decrease in Operating Income and a gain on extinguishment of debt of $570 million recorded in the third quarter of 2022.

Adjusted net income attributable to Bausch Health (non-GAAP)1 for the third quarter of 2023 was $377 million, compared with $277 million for the third quarter of 2022, an increase of $100 million primarily due to higher revenues and gross profit, partially offset by higher selling, general and administrative expenses and investments in research and development.

(Loss) Earnings Per Share Attributable to Bausch Health
GAAP loss per share attributable to Bausch Health for the third quarter of 2023 was $1.03, compared with earnings per share of $1.10 for the third quarter of 2022.

Adjusted EBITDA Attributable to Bausch Health (non-GAAP)1
Adjusted EBITDA attributable to Bausch Health (non-GAAP)1 was $830 million for the third quarter of 2023, as compared to $766 million for the third quarter of 2022, an increase of $64 million.

Cash Provided by (Used in) Operating Activities
The Company generated $281 million of cash from operating activities in the third quarter of 2023 compared with cash used of $1,263 million in the third quarter of 2022. The increase in cash flow reflects improved operating results as well as the impact in 2022 of a reduction of $1.2 billion from restricted cash in connection with the settlement of legacy U.S. securities litigation.

Balance Sheet Highlights as of September 30, 2023:
•Cash and cash equivalents of $780 million.
•Bausch Health (excl. B+L) had availability under its 2027 revolving credit facility of $952 million and Bausch + Lomb had availability of approximately $300 million under its revolving credit facility.
•Bausch Health (excl. B+L) has an accounts receivable credit facility which provides for up to $600 million of availability, $350 million of which was drawn as of September 30, 2023.

2023 Financial Outlook
The Company updated its full-year revenue and Adjusted EBITDA (non-GAAP)1 guidance:

Previous Guidance (as of Aug. 3, 2023) Current Guidance (as of Nov. 2, 2023)
BHC BHC
(excl. B+L) B+L BHC BHC
(excl. B+L) B+L
Revenues (in Billions) $8.45 – $8.65 $4.50 – $4.65 $3.95 – $4.00 $8.585 – $8.710 $4.550 – $4.625 $4.035 – $4.085
Organic1 growth vs. Prior Year
2%-5% 4%-6%
Adjusted EBITDA1 (in Billions)
$3.00 – $3.15 $2.30 – $2.40 $0.70 – $0.75 $3.01 – $3.11 $2.30 – $2.35 $0.71 – $0.76

Other than with respect to GAAP revenues, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP)1 to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because deductions (such as restructuring, gain or loss on extinguishment of debt and litigation and other matters) used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP)1. These statements represent forward-looking information and may represent a financial outlook, and actual results may vary. Please see the risks and assumptions referred to in the "Forward-looking Statements" section of this news release. The guidance in this news release is only effective as of the date it is given and will not be updated or affirmed unless and until the Company publicly announces updated or affirmed guidance.

Conference Call Details
Date:
Thursday, November 2, 2023
Time: 8:00 a.m. ET
Webcast: View Source

A replay of the conference call will be available on the investor relations website.

On November 2, 2023 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the Company) reported its financial results for the three and nine months ended September 30, 2023 (Press release, Aurinia Pharmaceuticals, NOV 2, 2023, View Source [SID1234636733]). Amounts are expressed in U.S. dollars.

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Net product revenue was $40.8 million for the three months ended September 30, 2023 and $25.5 million for the same period in 2022, representing growth of approximately 60%. Net product revenue was $116.2 million for the nine months ended September 30, 2023 and $75.1 million for the same period ended 2022, representing growth of approximately 55%.

Total net revenue was $54.5 million for the three months ended September 30, 2023 and $55.8 million for the same period in 2022. Total net revenue was $130.4 million for the nine months ended September 30, 2023 and $105.6 million for the same period in 2022.

"We are very pleased with our overall results for the first nine months of the year. Reporting another strong quarter of results reinforces our ability to execute and deliver against key metrics. Our team continues to focus on business fundamentals and steady performance," said Peter Greenleaf, President, and Chief Executive Officer of Aurinia. "We continue to deliver new data on LUPKYNIS and grow the overall LN market. In addition, we received a $10.0 million milestone from our collaboration partner outside the U.S. as a result of securing pricing and reimbursement approvals in three of the five major European markets."

For the fiscal year 2023, the Company is narrowing its net product revenue guidance to a range of $155 – $160 million for net product sales of LUPKYNIS. This guidance range is based on assumptions regarding PSF run rates, consistent conversion rates, time to convert, persistency and pricing.

Third Quarter 2023 and Recent Highlights

Full results from AURORA 2 (the long-term extension study of the Phase 3 AURORA trial) were published in Arthritis & Rheumatology, the official peer-reviewed journal of the American College of Rheumatology, demonstrating kidney preservation over the 3-year study period as measured by eGFR (estimated glomerular filtration rate) along with additional efficacy, safety, and tolerability of LUPKYNIS over the study duration.
A total of 14 LUPKYNIS clinical abstracts were accepted for presentation at the upcoming American Society of Nephrology and the American College of Rheumatology being held in November 2023. Led by several leading experts in nephrology and rheumatology, these presentations reinforce the long-term safety and efficacy profile of LUPKYNIS for the treatment of adults with active lupus nephritis (LN), a serious complication of systemic lupus erythematosus (SLE). The robust set of data demonstrates Aurinia’s deep commitment to sustained research in autoimmune diseases, including lupus.
Received notification that the pricing and reimbursement milestone was secured. As a result, this triggered a $10 million milestone from Otsuka Pharmaceutical Co. Ltd (Otsuka). Additionally, LUPKYNIS received marketing acceptance in Scotland by the Scottish Medicines Consortium.
Appointed three new directors to the Board of Directors – Dr. Karen Smith, Jeffrey Bailey, and Dr. Robert Foster.
LUPKYNIS Product Performance Highlights

There were approximately 1,939 patients on LUPKYNIS therapy at September 30, 2023, compared with 1,354 at September 30, 2022, representing an increase of approximately 43% year over year.
Aurinia added 436 patient start forms (PSFs) during the three months ended September 30, 2023, compared to 374 during the three months ended September 30, 2022, representing an increase of approximately 17% over the same period last year.
Through the end of October 2023, the Company recorded approximately 1,510 PSFs since January 1, 2023.
Conversion rates remain consistent with approximately 90% of PSFs converted to patients on therapy.
Time to convert has improved to an all-time high with the large majority (64%) of patients on therapy by 20 days.
Adherence improved from 84% at September 30, 2022 to 87% at September 30, 2023.
Persistency at 12 months has maintained at 54%; and remained stable at further months on therapy: 48% at 15 months and 43% at 18 months.
Financial Results for the Three and Nine Months Ended September 30, 2023

Total net revenue was $54.5 million and $55.8 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Total net revenue was $130.4 million and $105.6 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Net product revenue was $40.8 million and $25.5 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Net product revenue was $116.2 million and $75.1 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase for both periods is primarily due to an increase in product sales to our two main customers for LUPKYNIS, driven predominantly by further penetration of the LN market.

License, royalty and collaboration revenue was $13.7 million and $30.3 million for the three months ended September 30, 2023 and September 30, 2022, respectively. License, royalty and collaboration revenue was $14.2 million and $30.5 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The decrease for both periods is due to the recognition of a $30.0 million regulatory milestone from Otsuka following the EC marketing authorization of LUPKYNIS in September 2022 partially offset by the recognition of a $10.0 million pricing and reimbursement milestone as well as recognition of collaboration revenue from Otsuka in the quarter ended September 2023.

Total cost of sales and operating expenses were $70.8 million and $65.3 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Total cost of sales and operating expenses were $192.4 million and $189.0 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. Further breakdown of cost of sales and operating expense drivers and fluctuations are highlighted in the following paragraphs.

Cost of sales were $6.8 million and $2.4 million for the three months ended September 30, 2023 and September 30, 2022, respectively. The increase is primarily due to increased sales of LUPKYNIS, coupled with the amortization of the monoplant finance right of use asset, which was placed into service in late June 2023.

Cost of sales were $8.8 million and $4.3 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase is primarily due to increased sales of LUPKYNIS coupled with the amortization of the monoplant finance right of use asset, partially offset by higher inventory reserves in 2022 due to the write-down of FDA validation batches.

Gross margin for the three months ended September 30, 2023 and September 30, 2022 was approximately 88% and 96%, respectively. Gross margin for the nine months ended September 30, 2023 and September 30, 2022 was approximately 93% and 96% respectively.

Selling, general and administrative (SG&A) expenses, inclusive of share-based compensation, were $47.8 million and $52.2 million for the three months ended September 30, 2023 and September 30, 2022, respectively. The decrease is primarily due to a decrease in professional fees and services (including legal fees with respect to litigation matters that occurred during the three months ended September 30, 2022), partially offset by an increase in share-based compensation expense.

SG&A expenses, inclusive of share-based compensation, were $145.0 million and $148.9 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The decrease was primarily due to a decrease in professional fees and services (including legal fees) and other corporate costs (including rent and insurance), partially offset by an increase in share-based compensation expense.

Non-cash SG&A share-based compensation expense included within SG&A expenses was $9.6 million and $6.6 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Non-cash SG&A share-based compensation expense included within SG&A expenses, was $27.0 million and $21.5 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Research and development (R&D) expenses, inclusive of share-based compensation, were $13.6 million and $11.0 million for the three months ended September 30, 2023 and September 30, 2022, respectively. The primary drivers for the increase were due to an increase in CRO and developmental costs as the Company advances its preclinical assets.

R&D expenses, inclusive of share-based compensation expense, were $39.4 million and $35.1 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase was primarily due to an increase in costs to advance the Company’s preclinical assets coupled with an increase in share-based compensation expense partially offset by the decrease in costs associated with the completion of the AURORA 2 continuation study and drug interaction study, which were substantially completed in 2022.

Non-cash R&D share-based compensation expense included with R&D expense was $2.0 million and $1.5 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Non-cash R&D share-based compensation expense included with R&D expenses was $5.7 million and $3.5 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Other (income) expense, net was $2.6 million and $(0.3) million for the three months ended September 30, 2023 and September 30, 2022, respectively. The change is primarily related to expenses incurred for shareholder matters partially offset by foreign exchange gain related to the revaluation of the monoplant finance lease liability.

Other (income) expense, net was $(0.7) million and $0.6 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The change is primarily related to change in fair value assumptions driven predominantly by rising interest rates related to our deferred compensation liability and foreign exchange gain on revaluation of the monoplant finance lease liability, partially offset by expenses incurred for shareholder matters.

Interest income was $4.5 million and $1.5 million for the three months ended September 30, 2023 and September 30, 2022, respectively. Interest income was $12.4 million and $2.2 million for the nine months ended September 30, 2023 and September 30, 2022, respectively. The increase for both periods is due to higher yields on our investments as a result of increased interest rates.

For the three months ended September 30, 2023, Aurinia recorded a net loss of $13.4 million or $0.09 net loss per common share, as compared to a net loss of $9.0 million or $0.06 net loss per common share for the three months ended September 30, 2022. For the nine months ended September 30, 2023, Aurinia recorded a net loss of $51.1 million or $0.36 net loss per common share, as compared to a net loss of $82.1 million or $0.58 net loss per common share for the nine months ended September 30, 2022.

Financial Liquidity at September 30, 2023

As of September 30, 2023, Aurinia had cash, cash equivalents and restricted cash and investments of $338.5 million compared to $389.4 million at December 31, 2022. The decrease is primarily related to the continued investment in commercialization activities and post approval commitments of our approved drug, LUPKYNIS, inventory purchases, advancement of our pipeline and monoplant payments, partially offset by an increase in cash receipts from sales of LUPKYNIS.

Aurinia believes that it has sufficient financial resources to fund its operations, which include funding commercial activities, such as FDA related post approval commitments, manufacturing and packaging of commercial drug supply, funding its supporting commercial infrastructure, advancing its R&D programs and funding its working capital obligations for at least the next few years.

This press release is intended to be read in conjunction with the Company’s unaudited condensed consolidated financial statements and Management’s Discussion and Analysis for the quarter ended September 30, 2023 in the Company’s Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, including risk factors disclosed therein, which will be accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedarplus.ca or on EDGAR at www.sec.gov/edgar.

Conference Call Details

Aurinia will host a conference call and webcast to discuss the quarter ended September 30, 2023 financial results today, Thursday, November 2, 2023 at 8:30 a.m. ET. The audio webcast can be accessed under "News/Events" through the "Investors" section of the Aurinia corporate website at www.auriniapharma.com. In order to participate in the conference call, please dial the corrected call-in number for participants +1 (877) 407-9170 / + 1 201-493-6756 (Toll-free U.S. & Canada). An audio webcast can be accessed under "News/Events" through the Investors section of the Aurinia corporate website at www.auriniapharma.com. A replay of the webcast will be available on Aurinia’s website.