Aurinia Pharmaceuticals Inc. Aktie

Hello, and welcome to the 2026 Aurinia Pharmaceuticals Annual General Meeting. The meeting will now come to order. My name is Kevin Tang, and I am Aurinia's Chief Executive Officer. Pursuant to Aurinia's bylaws, I will be acting as Chair of the meeting. I will ask Stephen Robertson, Corporate Secretary, to act as Secretary for this meeting, and I will ask Kyle Gould of Computershare Trust Company of Canada to act as the scrutineer of the meeting.

Has the Annual General Meeting been properly called?

The record date for this meeting was the close of business on April 14, 2026. I have an affidavit of a representative of Computershare Trust Company of Canada attesting that the materials prepared in connection with the meeting were delivered in accordance with the Business Corporations Act of Alberta and applicable securities laws to all shareholders of record as of the close of business on April 14, 2026. Therefore, this Annual General Meeting has been properly called.

I will not read the notice of meeting unless there are any objections.

There are no objections.

Great. Okay. So according to Aurinia's bylaws, quorum for the meeting is at least 2 shareholders present in person or proxy holding in the aggregate, not less than 33.3333% of the outstanding shares carrying the right to vote at this meeting.

The preliminary scrutineer's report indicates that 142 shareholders representing in person or by proxy, 67% of the shares issued and outstanding as of the record date are represented today.

I adopt the scrutineer's report on attendance and declare that a quorum is present. I declare that the Annual General Meeting is regularly called and properly constituted for the transaction of business. And therefore, I would like to ask the Secretary to explain the voting procedures to be followed at the meeting.

There is one outstanding class of shares in the corporation, common shares, which are entitled to vote. Each shareholder is entitled to 1 vote per common share held. Voting for each resolution will be by an online voting mechanism. Only registered shareholders or validly appointed proxy holders may vote at the meeting.

The online voting mechanism will be open for all resolutions at the same time. Voting for each matter will remain open until the Chair declares the voting close for that matter. At the appropriate time, you should see a voting icon on your screen and the resolution wording will be displayed.

To vote, select one of the voting options. Your response will be highlighted. A confirmation message will appear to show that your vote has been received. In order for your vote to be properly recorded, you must remain connected to the Internet. If you are not connected, your vote will not be recorded.

If you previously voted by completing and delivering a proxy and a choice was specified in the proxy, you should not cast another vote unless you wish to revoke your proxy.

Only registered shareholders or validly appointed proxy holders will be able to ask questions. If you wish to ask a question, select the messaging icon and type your question within the chat box at the bottom of the messaging screen. Click the send button, and you should receive a confirmation that your message has been received. If you have a question related to the proposals that are being considered at this meeting, please submit them now for consideration at the appropriate time.

Thank you, Stephen. Voting for all proposals is now open. Please cast your vote prior to voting being closed for each matter. Copies of the audited financial statements and auditor's report were made available to shareholders and were filed in Aurinia's annual report to shareholders on EDGAR and SEDAR+. Unless there are questions arising from the audited financial statements and auditor's report, I will consider them received by the shareholders as submitted to the meeting.

There are no questions.

In respect to our first item of business, Aurinia's management information circular and proxy statement that was provided to shareholders contains the names of and information about Aurinia's nominees to the Board of Directors.

There are 5 positions to be filled each until the next annual meeting. Can I have a motion please that Kevin Tang, Jeffrey Bailey, Kathy Goetz, Craig Johnson, and Tina Nova be elected to hold office until the next Annual Meeting of Shareholders.

So moved?

I second the motion.

Great. Is there any discussion on the motion?

There is no discussion.

Since there is no discussion, please cast your vote for each nominee individually.

[Voting]

Voting for this motion is closed. Based on the votes available to me, I declare that Kevin Tang, Jeffrey Bailey, Kathy Goetz, Craig Johnson and Tina Nova are elected to hold office as directors until the next Annual Meeting of Shareholders.

In respect of our second item of business, can I have a motion that PricewaterhouseCoopers LLP, chartered professional accountants, be appointed as auditors of the Corporation until the close of the next Annual Meeting of Shareholders or until a successor is appointed.

So moved?

I second the motion.

Is there any discussion on the motion?

There is no discussion.

Since there is no discussion, please cast your vote on the motion.

[Voting]

Voting on this motion is now closed. Based on the votes available to me, I declare the motion carried.

In respect to our third item of business, can I have a motion to approve on a nonbinding basis, a say-on-pay resolution regarding Aurinia's executive compensation as set out in Aurinia's management information circular and proxy statement for the meeting.

So moved?

I second the motion.

Is there any discussion on the motion?

There is no discussion.

Since there is no discussion, please cast your vote on a nonbinding advisory basis on the motion.

[Voting]

Voting for this motion is now closed. Based on the votes available to me, I declare the motion carried. The scrutineers will tabulate the votes and the results of the meeting will be available on EDGAR and SEDAR+ in due course following today's meeting.

This concludes all matters set out in the notice of meeting.

Is there any further business?

There is no further business.

Since there is no further business, I declare the Annual General Meeting of the corporation concluded. Thank you all very much.

Good morning. Welcome to the Aurinia Pharmaceuticals Fourth Quarter and Full Year 2025 Conference Call. Please be advised that a Q&A session will follow Aurinia prepared remarks. [Operator Instructions]. I will now turn the call over to Peter Greenleaf, President and Chief Executive Officer of Aurinia. Peter, please go ahead.

Good morning. We want to thank you all for joining us today to discuss Aurinia's Fourth Quarter and Full Year 2025 Update. Joining me on the call today are Joe Miller, our Chief Financial Officer; and Dr. Greg Keenan, our Chief Medical Officer.

On today's call, we will report fourth quarter and full year 2025 financial results and provide an update on recent business progress. During today's call, we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially.

We are pleased to have delivered strong LUPKYNIS sales in 2025, growing at a rate of 25% year-over-year. And for 2026, we expect net product sales of $305 million to $315 million, up 12% to 16% compared to 2025. And with that introduction, I'd like to now turn the call over to Joe to review our financial results. Joe?

Thank you, Peter. Total revenue for the fourth quarter of 2025 was $77.1 million, up 29% compared to $59.9 million for the same period of 2024. Net product sales of LUPKYNIS for the fourth quarter of 2025 were $74.2 million, up 29% compared to $57.6 million in 2024. Net income for the fourth quarter of 2025 was $210.8 million, up 14,957% from $1.4 million in 2024.

In the fourth quarter of 2025, the company recorded an income tax benefit of $175.1 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize. Net income before income taxes for the fourth quarter of 2025 was $35.7 million, up 2,875% from $1.2 million in 2024. Diluted earnings per share for the fourth quarter of 2025 was $1.53, up 15,200% from $0.01 in 2024.

Lastly, cash flows from operating activities for the fourth quarter of 2025 were $45.7 million, up 52% from $30.1 million in 2024. Total revenue for the year ended December 31, 2025, was $283.1 million, up 20% compared to the $235.1 million for the same period of 2024. As a reminder, the 2024 period included a milestone payment of $10 million associated with LUPKYNIS regulatory approval in Japan.

Excluding the onetime milestone, total revenue increased by 26% over the same period in 2024. Net product sales of LUPKYNIS for the year ended December 31, 2025, were $271.3 million, up 25% from $216.2 million in 2024. Net income for the year ended December 31, 2025, was $287.2 million, up 4,852% from $5.8 million in 2024. For the year ended December 31, 2025, the company recorded an income tax benefit of $173 million, primarily due to the release of its valuation allowance on deferred tax assets that the company now expects to realize.

Net income before income taxes for the year ended December 31, 2025, was $114.2 million, up 1,443% from $7.4 million in 2024. Diluted earnings per share for the year ended December 31, 2025, was $2.07, up 5,075% from $0.04 in 2024. Lastly, cash flows from operating activities the year ended December 31, 2025, were $135.7 million, up 206% from $44.4 million in 2024.

As of December 31, 2025, the company had cash, cash equivalents, restricted cash and investments of $398 million compared to $358.5 million at December 31, 2024. For the year ended December 31, 2025, the company repurchased 12.2 million common shares for $98.2 million and fully diluted shares outstanding were reduced from $149.8 million to $139.7 million.

As a result of LUPKYNIS continued momentum, we are pleased to announce our 2026 guidance. We expect total revenue of $315 million to $325 million, up 11% to 15% compared to 2025. We expect net product sales of $305 million to $315 million, up 12% to 16% compared to 2025. Now I would like to turn the call back over to Peter for some business updates.

Thanks, Joe. Turning now to aritinercept. We are very excited about the potential of this novel biologic in the treatment of a wide range of autoimmune diseases. As we've previously discussed, aritinercept is a dual BAFF April inhibitor that was well tolerated at all dose levels tested in the Phase I single ascending dose study. Single doses of aritinercept led to robust and long-lasting reductions in immunoglobulin supportive of once monthly dosing.

Aurinia has initiated a clinical study of aritinercept in one autoimmune disease and plans to initiate a clinical study in an additional autoimmune disease in the first half of 2026. So in summary, we continue to drive growth in our commercial LUPKYNIS business, while at the same time advancing the clinical development of aritinercept.

We want to thank you for joining us on today's call and we look forward to taking your questions. Now let me ask the operator to open up the line for Q&A. Operator?

[Operator Instructions]. Our first question is coming from Maurice Raycroft from Jefferies.

This is Farzin on for Maurice. So your issued guidance for 2026 seems somewhat conservative given the 4Q run rate. So what are some of the specifics in forming the commercial outlook? And as it relates to the -- what you're seeing in the first 2 months of this year?

Farzin, on the first part, I don't think I got the first part of your question. Can you repeat it on what you're looking for there? I think you want to understand what's underlying the growth for the company for the year?

Right. Like what's the underlying assumptions for the 2026 guidance? And then what are you seeing in the first 2 months of the year to inform that?

Well, I think first off, our strategy for the commercial business of LUPKYNIS continues to be similar to what we've done for the last probably 6 to 12 months, and that's to continue to stand on the incredible data that we have in terms of the efficacy of the product and the treatment of lupus nephritis and the reduction of proteinuria as early as 3 and 6 months that we've seen leveraging the expanded data set that we had with the extension study we did with the AURORA trial, which gives longer-term data, the biopsy study.

And then last year, the introduction of the ACR and ULAR guidelines that actually did a really nice job, not just promoting novel products like LUPKYNIS, but more importantly, more aggressively using diagnostics to identify proteinuria earlier in patients suffering from lupus to identify lupus nephritis.

So our strategy hinges on really trying to change the whole treatment paradigm, the diagnostic paradigm and then the early treatment aggressively of proteinuria, and we believe our drug does that better than not the drugs that have historically been used to treat the disease and what's been seen to date with even the novel newly approved or novel drugs that have produced data.

As for the question about the first 2 months of the year, we're not really giving any steer for the quarter, but nothing is out of ordinary for what we've seen historically. We've tried to put emphasis on the best predictor for what we're seeing going forward has been past history. So we would refer you to Q1 of 2025 to look for any friends in the business.

Got it. Makes sense. And then a follow-up is on the -- you recently dominated the Phase III and the open label studies in the vocal study and the vocal extension, the pediatric study. And it mentioned like part DSMB recommendations. So can you clarify whether DSMB is asking to stop? Or is FDA refocused on the drug in any way?

Do you want to take that, Greg?

Yes. Thanks for the question. Greg Keenan here. So the local study in its current form was one where due to technical issues working with the clinicians that proved to be very, very difficult to recruit patients for that particular study. So we made a decision based on what we saw at that point that we terminate the study and plan to have negotiations soon with the FDA for further plans for meeting our pediatric commitments in lupus nephritis.

Yes. I think just one thing to add, in addition to that is, we have data from the work that we've done up to this point. We have in-market data that we know from treatment of patients, both on the adolescent and the pediatric side in the current market. So there's data that we can actually provide to the agency, and we look forward to a conversation with the agency about: One meeting commitment that we had to the agency and; two, what that would mean for how physicians should be guided in the treatment of pediatric patients.

Last point here, remember that this disease is primarily disease of women in the middle part of their life. It's not really a prominent pediatric condition. So while we had the commitment with the agency, this is not -- the burden of this disease in pediatric patients is quite small and the thereby the business opportunity being probably smaller than that.

Next question questions coming from Joseph Schwartz from Leerink Partners.

This is Will Soghikian on for Joseph Schwartz. Congrats on the quarter,and thanks for taking our questions. Just to start for us. I think previously you guys guided to a development update for aritinercept in early 2026. But can we still expect this update? And could you please provide some additional context for what this might entail. I understand that's the competitive reasons, you're keeping the indications of focus close to the vest. But what about the overall study design and the size? Just so we can have some visibility to the potential data disclosures? And is this a Phase Ib or Phase II and I have a quick follow up.

Well, thanks for the question. We're -- obviously from the last couple of calls, it should be obvious that we're excited about the therapeutic potential for BAFF April inhibition across a wide range of these B cell-mediated autoimmune diseases. As we mentioned on this call, we initiated a clinical study of aritinercept in one autoimmune disease, and we plan, obviously, as we said, to initiate another on our immune disease in the first half of 2026. At that time, we'll disclose the indications for each study in the second quarter of 2026. So look for more from us end. I can't say whether we're going to get into trial design, et cetera, that -- up until that point, but more to come by the second quarter of 2026.

Great. That's super helpful, Peter. And then just one on new LUPKYNIS. I guess things have been going pretty well. I think raising guidance twice last year is a great indication that there's still some growing demand and momentum here. So I guess could you qualitatively just talk about what's going better than expected? Are patients staying on therapy longer? Are you adding more patients on commercial drug than expected? Are you seeing a better mix of insurers? I guess, what's the main driver of this continued strong performance as we head into 2026?

While we don't give individual commercial metrics anymore, what I can tell you -- thank you for the question, is we are seeing growth across patients. We are seeing very solid and continued adherence to the product and persistency, and even the mix of our business when looking at the average price per commercial patient per year all continue to perform with a level of consistency, again. Why we've kind of steered to -- if you look at the historical growth pattern of this product over the last 3 years, it's probably the best way to think about its growth pattern going forward. And if you do that, I think you'll see why we landed in the guidance range that we did.

Our next question is coming from Arthur He from H.C. Wainwright.

Congrats on the quarter. So I just -- kind of follow up with the last question. So given the guidance for the 2026, I'm just curious how much the growth is coming from the rheumatologists versus nephrologist. And given we have the guidance -- the new guidance in hand for a while, do you believe we have reached a steady state of the guidance-driven prescribing? Or it's still too early like for the tails?

So let me break that question just in half. The first half was, are we seeing any break in terms of the trends on rheumatology prescribers as it relates to total revenue contribution versus nephrology? The answer to that is slightly. One of the things that is key to our mid- to longer-term strategy is to get earlier diagnosis and earlier treatment, which, by the way, I don't think is unique to Aurinia.

I think for the patients, for physicians and for the future of this disease, we're strong believers that earlier treatment with drugs like LUPKYNIS are only going to have a short- and longer-term patients benefit and probably save more kidneys and more patients, extend more patients' lives over time. So rheumatology is key to that. Since these patients are SLE patients before they ever become diagnosed as lupus nephritis and catching them early and getting more aggressive treatment is going to -- is really going to start in the rheumatologist office.

What I can tell you, because we aren't giving the specific metrics anymore, as we continue to see more prescribers in the room space. And while the business is pretty evenly broken between rheumatology and nephrology, it does favor the rheumatologists slightly, and that has been increasing over the last 2 years.

The second part of your question was centered on -- why am I blanking now? Can you repeat it for me?

Yes, I said like which meaning for the -- coming from the ACR guidance, post impact to the prescriber.

Well, I think it's -- for me, it's -- I'd ask Greg to jump in here, too, if I miss anything. The guidelines emphasize earlier diagnosis. And we know there's a long way to go here. They recommend that every time a lupus patient comes in that they get a urinalysis and look for proteinuria as well as other indicators of the disease progression when they visit. What we do know is that doesn't happen every time they visit.

And matter of fact, it probably happens less than 50% of the time that a patient visits in office. So if we can see that increase, we believe more proteinuria will be identified when more proteinuria is identified, if -- and this is the second part, it's identified, we see aggressive treatment. The guidelines say when you hit a certain target treatment level that the patients should then be treated. We also know from payer data and database data that's out there that, that doesn't happen either.

So more aggressive diagnosis, more aggressive to specific target of proteinuria. Lastly, the target of keeping a patient on drug for 3 to 5 years is clearly written in the guidelines, and we know that not just for LUPKYNIS, but for all drugs included treating this more like a chronic progressive disease than an acute flare up within the disease would all be a major progression for the treatment of the disease.

Yes. No, I just -- I agree with all the points. I think as clinicians become increasingly comfortable confident in the new agents to include LUPKYNIS more consistently treating for longer periods of time. And so that's something we look forward to continuing to support in rheumatology and nephrology communities.

Maybe just a quick one for Greg. So speaking of the aritinercept receptor. Greg, could you remind us how the ADA situation for the payer drug when you see in the health form here.

Right. So we mentioned one of the previous calls that you have seen antidrug antibodies that low titers at doses from 25 milligrams and above. At this point, as I noted previously, we didn't see any impact on association with injection site reactions or changes in the pharmacokinetic profile of those with positive ADAs relative to those that have not.

I'll just remind it's -- each ADA assays bespoke antibody. It's not uncommon for drugs to have ADA levels, and we're quite confident as we go into subsequent work in our clinical trial program that we'll be able to understand more of the impact of these things. At this point, we're very encouraged with what we see in our confidence is high in this molecule.

Our next question today is coming from Sahil Dhingra from RBC.

This is [ Sahas Badami ]. My question is related to the competitive landscape. So we have seen that Gazyva was recently approved in the LN indication. So first question is, have you seen any impact of the positioning of LUPKYNIS in the treatment landscape following that launch? And the related question is that is the approval of Gazyva incorporated in your guidance? And how do you think it will impact LUPKYNIS going forward?

So your first question about near-term impact from the launch, our answer would be no. We continue to see the business performing consistently as it has historically. The question of how it will perform on a go forward? Is it represented our guidance. I think our guidance represents a lot of factors, including new competition and progression of implementation of the guidelines and a multitude of different factors.

As it relates to Gazyva, we actually -- and all new potential competitors, as I mentioned earlier, I do think there's major room that can be made improvement that can be made both in awareness building at the patient level, awareness building on the treatment guidelines and diagnostic guidelines for the treatment of lupus nephritis, identification and more aggressive treatment of the disease. And all of these things will grow the market significantly before you ever get into the question of what's the better treatment option?

And there, we believe we have an incredibly competitive profile because the guidelines emphasize rapid reduction in proteinuria as early as 3 to 6 months. And I would challenge those on the call to go back and all these drugs stand on their own merits and will be used by physicians based upon the labels that they get. But if you look closely at the data, in terms of rapid improvement and reduction in proteinuria, generally speaking, the novel competitors that we're seeing in the marketplace appear to not have the ability to reduce proteinuria levels to target treatment guideline levels as quickly as what we've seen with LUPKYNIS. Greg, what would you add?

Just to put a punctuation on that point. In our pivotal trial, we saw a 50% reduction in proteinuria within 1 month's time from initiation of LUPKYNIS in those that were studied. And we know that for hitting the primary endpoint, our study was designed to show the benefits at 12 months. the goals were achieved for the most part by 6 months' time, I remind you that with Gazyva, the primary endpoint is at week 76, and it took that long to be able to get important clinical responses, complete renal response. It took 1.5 years.

So the speed with which works is notable. Also emphasize relative to Peter's point, Gazyva and B-Cell targeted agents are one access of the immune system, LUPKYNIS the only indicated treatment for LN that targets the T-cell and also has a photocyte protection effect. So, these are complementary maxims action, the speed with which LUPKYNIS works is notable. And to Peter's point, the awareness with regard to aggressive treatment that will be created by additional important agents in this area will just improve the likelihood of getting better patient outcomes.

Thank your. Next question today is coming from David Martin from Bloomberg.

Congratulations on the quarter. I realize LUPKYNIS was launched in the U.S. market first. Do you expect the other global markets will catch up to the U.S. as far as penetration in the lupus nephritis patient population?

While I can't speak directly for Otsuka, our partner in Europe and in Japan, I can give you what we hear through them and what we understand about the market, I think the short answer there, David, is no. Every country has individual pricing and reimbursement and guidelines as to how they implement the global guidelines to the treatment of the disease. Pricing in every market is different and historically has been lower than what we've seen in the U.S. and North America. So at least from our expectation standpoint and contribution to this company, as we've said historically, we don't see it as a major contributor for our balance of the overall LUPKYNIS business.

Now that being said, it has been every year a good contributor to our growth and sustaining of the business. Just on a relative basis, it's not a large percentage. And we don't expect that it's going to see the same type of aggressive treatment pricing and/or reimbursement that we see in the United States.

Okay. And second question, are docs -- are you finding -- are they combining B and T-cell therapies or choosing one or the other?

I think it's a really good question and one that we plan to continue to think about and potentially explore moving forward and welcome Greg's comments here, but just one intro, if you think about it, there's a rationale to potentially combine B-cell and more T cell-mediated therapies that could potentially even reduce proteinuria faster, but -- faster and/or more effectively.

But in addition, what we see probably in the market more often is that lupus patients more are being initiated or looked at as potential candidates for B-cell -- novel B-cell therapies earlier in the treatment paradigm. And what needs to be considered as a lupus patient when they have controlled symptoms of their lupus, i.e., maybe fatigue or skin condition or tender and aching joints. If those are controlled, yet they have a breakthrough of proteinuria, we often get the question of how to initiate a drug like LUPKYNIS if they're already on a B-cell and they don't want to take them off of that B-cell.

So point being there are two reasons to potentially address this: One is to more effectively manage lupus nephritis; the other is, would you -- could you not stop one therapy to continue another and is there a safe and efficacious reason for that. And we are seeing it, and we are discussing and planning internally to potentially look at how we might address this through research and development work in the combination of the two. Greg?

Craig? Yes. So thanks, Peter. And the only thing I'd add because it is logical to consider combining these. I'll point out that the targeted approach of specific B-cell and T-cell related targeting makes logical sense relative to nonspecific immunosuppression, think of MMF and higher doses of glucocorticoids. So an additional question we get is what's the possibility of reducing some of those other nonspecific agents.

So relative to your question, the science and the academics in the field are very much posing this as a logical way to do much more targeted, efficient treatment of patients with lupus general but lupus nephritis specifically. So more work to be done there. It's a logical question, and we intend to think about that a lot more in the upcoming months.

Our next question today is coming from Olivia Brayer from Cantor Fitzgerald.

On aritinercept, what's the cadence of updates that we should expect from that program. I mean it sounds like next quarter, we got some more meat on the bone. But beyond that, when can we start to expect to see more meaningful updates and data behind the program?

And then given that you are looking at two indications, is there one that you maybe have higher or feel like your program has a better chance in?

Thanks for the question, Olivia. So I would expect to hear more in second quarter of 2026. I kind of leave it at that because we're not giving any future view as to what we're going to disclose or not disclose for that matter. And I would say we don't have a preferential indication in mind in terms of probability for success or one we feel more committed to.

I will say, what we're excited about the most here is the fact that this looks like not just from our work but from the work of everyone working on both BAFF April combination or straight BAFF or straight April that these products can address a multitude of different autoimmune diseases, inflammatory conditions. And that's probably what we're the most excited about.

And we're trying to take a very thoughtful methodical approach to where we start, where we create a beachhead. And if we're successful there, we think there's great opportunity to potentially build that -- potentially build from there. And I think that's been proven by those who are doing work here as well. So more to come. A little bit of a nonanswer, I apologize for that, but -- it's not because we don't want to talk more about the details of our plan. We just want to be purposeful about how we roll it out.

Okay. Understood. And then a follow-up on Gazyva. What are you guys hearing in terms of what Roche is doing to grow that market? And what's maybe been the initial feedback from physicians just around how they're thinking about sequencing therapies now that there are multiple options available?

Surprisingly, it's been a little bit quiet. I mean, it's much like Benlysta, the -- the focus appears to be on the larger piece of the population. For context purposes, you've got an SLE population that's hundreds of thousands of patients in the U.S. and an LN population, which is a subset of that SLE population that's probably tens of thousands of patients.

So if you think about it strategically and from a positioning standpoint, and I think as many are aware, Gazyva has also produced their data in lupus and it looks like they'll have a good regulatory pathway in lupus as well, you probably want to position these products further upstream for earlier treatment in lupus was the potential to, and not that they've done research this way, avoid kidney complications down the road.

We know that's how Benlysta is currently positioned in the marketplace, and I would think it highly likely that Gazyva is going to be positioned there as well. We don't have any specifics on marketing materials or how they're positioning it in lupus nephritis specifically. But Greg did give a good articulation earlier of where we see the competitive profile here. And we honestly and truly do believe that a rising tide lifts all boats here. More patients getting identified with nephritis, more patients getting aggressively treated with lupus, awareness building, treatment guideline adoption, all grow this market for patients and for the drugs that are trying to be utilized here for those patients.

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

No. I want to thank everybody for joining us on the call today. We look forward to further updates in the future, and have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation.

Good morning. Welcome to the Aurinia Pharmaceuticals Third Quarter 2025 Conference Call. [Operator Instructions] I will now turn the call over to Peter Greenleaf, President and Chief Executive Officer of Aurinia.

Thank you all for joining us to discuss Aurinia's third quarter 2025 update. Joining me on the call today are Joe Miller, our Chief Financial Officer; and Dr. Greg Keenan, our Chief Medical Officer.

Before we begin our discussion, I'd like to direct your attention to Slide 2, which contains important information regarding forward-looking statements.

Additionally, we note that on November 2, Aurinia filed a complaint against Dr. George Tidmarsh arising from his statements about voclosporin. The complaint is pending in the United States District Court for the District of Maryland and is available online. If you have questions regarding the complaint, we refer you to the complaint itself as we will not be commenting further on this matter.

On today's call, we will report third quarter 2025 financial results and provide an update on recent business progress. We're pleased to report that third quarter 2025 LUPKYNIS sales experienced continued momentum following last year's inclusion in the American College of Rheumatology lupus nephritis treatment guidelines, growing at a rate of 27% for the quarter year-over-year. As a result, we're raising LUPKYNIS sales guidance for 2025 for the second time this year to $265 million to $270 million.

Further, we have conducted new LUPKYNIS data analyses, which we will share shortly that reinforce LUPKYNIS' robust clinical profile in the treatment of patients with lupus nephritis.

And lastly, following the positive Phase I results that were announced in June, we're excited to be advancing aritinercept toward clinical studies in 2 autoimmune diseases.

I'd like to turn the call over now to Joe to review our financial results. Joe?

Thank you, Peter. For the third quarter of 2025, total revenue was $73.5 million, up 8% from $67.8 million in the same period of 2024. As a reminder, the 2024 period included a milestone payment of $10 million associated with LUPKYNIS regulatory approval in Japan. Excluding the onetime milestone, total revenue increased by 27% over the same period in 2024.

Net product sales of LUPKYNIS were $70.6 million, up 27% from $55.5 million in 2024. Net income was $31.6 million, up 119% from $14.4 million in 2024.

Diluted earnings per share was $0.23, up 130% from $0.10 in 2024.

Lastly, cash flows from operating activities were $44.5 million, up 162% from $17 million in 2024.

For the 9 months ended September 30, 2025, total revenue was $205.9 million, up 17% from $175.3 million in the same period of 2024. Again, the 2024 period included a $10 million milestone payment associated with LUPKYNIS approval in Japan. Excluding the onetime milestone, total revenue increased by 25% over the same period in 2024.

Net product sales of LUPKYNIS were $197.2 million, up 24% from $158.6 million in 2024. Net income was $76.4 million, up 1,677% from $4.3 million in 2024. Diluted earnings per share was $0.55, up 1,733% from $0.03 in 2024.

Lastly, cash flows from operating activities were $90 million, up 529% from $14.3 million in 2024. As of September 30, 2025, we have cash, cash equivalents, restricted cash and investments of $351.8 million compared to $315.1 million at June 30, 2025, and $358.5 million at December 31, 2024.

As previously mentioned, for the 3 and 9 months ended September 30, 2025, cash flows from operating activities were $44.5 million and $90 million, respectively. For the 9 months ended September 30, 2025, the company repurchased 12.2 million shares for $98.2 million and diluted shares outstanding were reduced from 149.8 million to 138.2 million.

As a result of LUPKYNIS continued momentum, we are pleased to increase our 2025 guidance for the second time this year. For total revenue, we are increasing guidance from a range of $260 million to $270 million to a range of $275 million to $280 million.

For net product sales, we are increasing guidance from a range of $250 million to $260 million to a range of $265 million to $270 million.

Now I'd like to turn the call over to Greg for some scientific updates. Greg?

Thank you, Joe. We are pleased to share some new analyses of the results of the clinical studies that form the basis of the FDA's approval of LUPKYNIS. These analyses were recently shared with the FDA in response to an information request.

As a reminder, LUPKYNIS was granted full FDA approval based on a statistically significant and clinically meaningful improvement in complete renal response at week 52 and was bolstered with the supplemental NDA with 2 additional years of evidence. New analyses, which show that LUPKYNIS also was associated with a statistically significant and clinically meaningful reduction in the risk of renal-related events or death, reinforce the robust efficacy and favorable safety profile of LUPKYNIS.

As you can see from the Kaplan-Meier curve on this slide, LUPKYNIS was associated with a statistically significant and clinically meaningful 53% reduction in the risk of renal-related events or death. This analysis used the AURORA 1 Phase III population. We have included the complete tables contained in our information request response in the appendix of this presentation, which is available on our website.

Turning to aritinercept. We are very excited about the potential of this novel biologic in the treatment of a wide range of autoimmune diseases. Aritinercept is a dual BAFF/APRIL inhibitor that contains a BCMA-engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL and an IgG4 Fc domain with no appreciable effector function.

As a reminder, BAFF and APRIL are cytokines that regulate B cell survival and differentiation with BAFF more targeted at differentiating and mature B cells and APRIL more targeted plasma cells. By targeting both BAFF and APRIL, aritinercept depletes a broader set of B cells, including plasma cells compared to antibodies such as Benlysta that target only BAFF.

In our Phase I study, we enrolled 61 healthy subjects in a standard single ascending dose study design. The study investigated aritinercept doses of 5, 25, 75, 150, 225 and 300 milligrams and placebo, administered by subcutaneous injection. The study included an expanded cohort of 150 milligrams, which will be our starting dose in our next studies.

You can see our safety results on this slide. Aritinercept was well tolerated at all dose levels tested. There were no treatment-related Grade 3 or higher adverse events. There were no treatment-related serious adverse events, and there were no discontinuations due to treatment-related adverse events. Adverse events that occurred in more than 1 subject were injection site reactions, headaches, upper respiratory tract infections and back pain. All injection site reactions were grade 1.

While antidrug antibodies, or ADAs, were detected in the majority of subjects at dose levels of 25 milligrams and higher, the presence of ADAs was not associated with any changes in safety, pharmacokinetic or pharmacodynamic parameters.

On this slide, you can see the pharmacodynamic effects of aritinercept treatment. Single doses of aritinercept led to robust and long-lasting reductions in immunoglobulins. Specifically, mean reductions from baseline to day 28 of up to 48%, 55% and 20% were observed for IgA, IgM and IgG, respectively.

Importantly, we believe that these long-lasting pharmacodynamic effects support once-monthly dosing.

With that, I will turn the call over to Peter.

Thanks, Greg. We're obviously very excited about these results. Aurinia is on track to initiate clinical studies of aritinercept in 2 autoimmune diseases by the end of 2025. We're very excited about the wide range of therapeutic possibilities for aritinercept and look forward to disclosing further details about our development plan in early 2026.

So in summary, we continue to drive growth in the commercial LUPKYNIS business, while at the same time, advancing the clinical development of aritinercept.

We want to thank you all for joining us on today's call, and we look forward to taking your questions.

So now let me ask the operator to open up the line for Q&A. Operator?

[Operator Instructions]

Our first question is from Stacy Ku with TD Cowen.

Congrats on the quarter. If you could put the LUPKYNIS regulatory questions to the side, just given your positive commentary around ACR guidelines and LUPKYNIS use, just hoping you could provide a few metrics may be around prescriber habits that you're seeing in real time. In addition, obviously, still very early days, but how are clinicians using LUPKYNIS versus Gazyva?

Thanks, Stacy. So why don't I start with just giving you a little bit of more qualitative feedback on what we're seeing and why we feel good about the LUPKYNIS business. And then maybe, Greg, you can build in a little bit on that.

If you look at where -- and as we've said previously, we're not going to give down to patient level metrics at this stage of launch because we're now into the fifth year of being on the market, and we think the consistency of our performance somewhat speaks for itself as you look at now consecutive changes in our guidance for the year and year-over-year growth that's been and quarter-over-quarter growth that's been fairly consistent.

But to answer your question more directly, our strategy and where we're probably seeing the majority of growth coming from is, one, we first off, sharpened our commercial focus on high target, high-volume prescribers and primarily in the rheumatologist space, where we have seen each quarter consistent growth in rheumatology new and existing prescribers.

Second, we think the ACR guidelines have been truly a wind in our sails. I think this goes for patients. It goes for more new drugs coming into the market. And I think it also applies to both the balance between rheumatologists using the product and nephrologists. But remember, the guidelines themselves are more aggressive on diagnosis criteria. We ask that every patient actually gets a proactive screening, urinalysis on every visit.

And then when they do actually hit certain criteria that the treatment with aggressive therapies, triple concomitant immunosuppression be consistent across the board. So whether it's the ACR guidelines, the KDIGO guidelines or recommendations from the nephrology groups, the guideline exercise in terms of what they're at least outlining for the treatment of lupus nephritis has been aggressive.

And then lastly, we continue to see our efficacy profile pulling through for the product, and we continue to see hospital sales growing pretty consistently for us. So Greg, do you want to give any commentary on how -- we don't have any early read on Gazyva, but Greg being a rheumatologist could probably give some good perspective coming off of the most recent ACR conference. Greg?

Yes. Thank you, Peter. So Stacy, just to close what Peter was saying, at the ACR meeting this year, I think my takeaway was that the clinicians are that much more familiar with the lupus nephritis portion of the SLE management guidelines, and they do very much believe getting aggressive quickly with triple therapy is a key thing. They also, at least in my impression, perceive Gazyva to be something that will replace rituximab in their treatment armamentarium.

I'd point out relative to B-cell-mediated treatments such as Benlysta and Gazyva, LUPKYNIS is a T cell-mediated agent as well as helps protect podocytes. So there is a complementarity there going with one doesn't exclude the other.

And then finally, I think in discussions I've had with individual rheumatologists, they are increasingly impressed with the speed with which you can achieve goals with LUPKYNIS relative to B cell modulators, which take longer and also the ability to aggressively taper steroids. So there's a lot of attributes of our drug that are increasingly being thought of as important for the management of lupus nephritis as clinicians increasingly gain familiarity with LUPKYNIS.

Our next question is from Olivia Brayer with Cantor.

Can you talk through some of the trends that you're seeing into 4Q so far and just overall level of confidence in continued growth from here, especially thinking through 2026 dynamics? Asking in light, obviously, of Roche's recent approval.

And then what can you tell us at this point about your APRIL/BAFF program? Have you internally selected which indications you'll be moving forward with and trial design? And if you can't disclose that today, can you tell us how and when you plan to announce your strategy and time lines? And just any feedback from the agency that you've gotten so far from that program?

Thanks, Olivia. So first off, we're obviously very pleased with the positive momentum of LUPKYNIS. And then we've had the opportunity to raise guidance for the second time this year. I don't think we see anything inconsistent with that as we now move into the fourth quarter. So as I said, we're obviously very excited with the continued positive momentum we've seen with the product.

As to your question around our APRIL/BAFF program, during our call, we mentioned that in the early part of 2026, we -- and we have not given specific guidance as to when. But in the early part of 2026, we look forward to disclosing more about the program.

Okay. Understood. And maybe if I can just sneak in one more. Anything at ASN this year that we should be focused on from you all?

Greg, do you want to -- I mean, outside of the normal LUPKYNIS stuff and anything new we produce with aritinercept as we move forward. But this year...

Yes. I mean we -- so we just have a couple of presentations talking about use in the real world are our presentations. I think increasingly nephrologists are the bedrock of management for lupus nephritis, and we're looking forward to participating in the meeting and hearing more of their thoughts, but there's nothing terribly notable from our perspective going into ASN this year.

Our next question is from Maury Raycroft with Jefferies.

Congrats on the quarter. Just wondering for the FDA information request, can you say more about what triggered that? I guess, is that related to the Tidmarsh issues or...

We can't speak specifically to why we received an information request from the FDA. But I think as you can see through the slide deck and through our comments through the actual commentary that we did during our actual call today, the data that we've disclosed and is out there publicly is actually quite favorable for the product. Greg, do you have any additional comments?

Yes. I'd just say that the FDA's prerogative is to ask for comments and questions at any time. And concurrent with that, I'll just point out to slightly different way than we've looked at our data before.

But to Peter's point, the evidence is very favorable, and that was one of the reasons why we wanted to share this specific set of results with the community as we have sent this all back to the FDA as well for their consideration.

Okay. Understood. And for aritinercept, can you clarify if you're in a MAD phase with healthy volunteers? And would you report more data in early 2026 along with the selected indications?

As we've said, we're going into 2 autoimmune diseases, moving into 2 autoimmune diseases. And then on the back end of that, that we would disclose in early 2026 more details on those programs, Maury.

Okay. Are you in MAD dosing though, with the healthy volunteers? Or is that...

We're in the process. And I think in order to achieve the objectives we've laid out in the call, we would have to be moving into that phase.

Our next question is from Joseph Schwartz with Leerink Partners.

This is Will on for Joe. Congrats on a strong quarter here. I have one question on the FDA request and then one on AUR200. So just to start on the request, do you expect a response from the FDA? Just curious about that.

And then for AUR200, I can appreciate that you guys are going to provide additional updates in early 2026 on that. But could you just help us give us a little bit more information on the process of selecting these indications and perhaps the puts and takes of choosing one or the other? Any color there would be helpful.

Thanks, Will. Well, let me first just reinforce one more time that we received and responded to an information request regarding LUPKYNIS. To reinforce, this data set contained our responses included in the slides in your deck that has been posted on our K, 11, 21 and 22 of today's presentation. It is also available on our website.

The data contains measurement requested by the FDA, and each of these measurements is defined by the FDA, what the FDA actually requested. As you can see, if you look at these slides and these analyses, you'll see that we actually had new data, at least in terms of presenting that new data. We had a 53% reduction in risk of renal-related events and/or death.

We think this reinforces the robust efficacy and favorable safety profile of the product. We can't determine and/or predict whether the FDA will have more questions. As Greg just mentioned, FDA holds the ability to ask questions whenever they want, but we think this request and response was actually quite favorable.

In terms of disclosure of how -- and what we were getting about in terms of the indications for aritinercept, I think just like any company when looking at different indications, you have to think about how we think APRIL/BAFF could play a role in the disease, one. The unmet medical need in each one of these major disease areas.

And I think you have to connect that back somewhat to how we think APRIL/BAFF play or do not play a role in those diseases.

And probably third, market size, of course, and probability of success. These are all the normal things that any company would think about when going into these indications. And I can just tell you that these are all things that we've considered, and we look forward to disclosing more as we enter 2026 and beyond.

Our next question is from Arthur He with H.C. Wainwright.

Another strong quarter. So just a couple of quick ones. So first of all, so traditionally, fourth quarter will be the strongest quarter for you guys. I'm just curious what possible holdback or risk-wise can prevent you guys to outbeat the fourth quarter?

And regarding the impact from the ACR guidance, what's your thinking about the impact or the positive impact from that? It's more like first couple of innings or getting in the middle of -- I'm not sure -- I don't think it's getting late innings yet.

Well, thanks for the question, Arthur. First off, on the ACR guidelines, and this is not necessarily, and I welcome Greg's commentary here because we've done this at a couple of companies with a couple of drugs in different categories as it relates to rheumatologists and other diseases, but specifically rheumatologists.

The guidelines -- I mean, listen, they're written the way we think the evidence drives they should be written, and they're quite positive for patients and quite positive probably for our drug and other drugs. They take time. Physician treatment behaviors don't change overnight. And I think we're seeing positive momentum, but I think that positive momentum will only continue to improve over time with better diagnosis rates and better treatment rates that better align to those guidelines.

Your first question related to the guidance that we've given for the year in the first and the fourth quarter. You're right. Historically, that has been the trend for our product. I think we have been in a mode of wanting to ensure that we give a guidance range that we intend to hit and/or beat. And I think that's what you've seen in our guidance range of $265 million to $270 million for the full year. And I think that's all we're going to comment on at this stage of the game, Arthur. Thank you for the question.

Maybe just a quick one regarding the BAFF/APRIL program. Given this -- in the space, multiple players came in and also angle differently in terms of indication-wise, given the history of the company and strong suit from you guys, have you contemplating a non-kidney indication? Or you can give us more color later on?

What I can tell you is we take into account strategically the fact that we have a focus on rheumatology. I mean, I think often we forget lupus is treated by rheumatologists and lupus nephritis, while it is a separate condition, it is an associated condition with lupus.

So our concentration is rheumatologists and nephrologists. So I think you can feel comfortable that we take into account both of those, nephrology and rheumatology. And I guess I would just conclude too, that we're not blind to the fact that an APRIL/BAFF inhibitor, we believe, has every ability to work in a multitude of different diseases.

And we've mentioned historically that our internal work has shown upwards of 20-plus indications that could be affected through further development in this class and area of drugs. So we're not boxed in, Arthur, in our thinking to just rheumatology and nephrology. And as I said, we look forward to sharing more about that as we move into 2026 and beyond.

Our next question is from David Martin with Bloom Burton.

You did a great job of describing all the positive drivers bringing new patients on to LUPKYNIS. I'm wondering, are you seeing positive trends in persistence? Are the patients staying on it longer?

Yes, David, we've seen an upward trend in persistency that directly aligned to when we published, issued the data around the extension trial and the subsequent data around the biopsy sub-study. I mean, you've been covering us for a long time, and I think you know this area quite well.

Obviously, calcineurin inhibitors are new for -- not new because they understand the class of drugs, but rheumatologists in their day-to-day practice don't use calcineurin inhibitors as often or as aggressively as nephrologists do. So I think these data sets showing that we had safety and efficacy and that the drug was well tolerated all the way out to 3 years in the AURORA study and then subsequently to have an 18-month biopsy confirmed substudy of that study to show that not only was there no negative effect on kidney function as measured through eGFR and histology, but that it looked like it could have some at least balancing effect, if not improvement effect on those patients.

All have been very helpful in terms of the comfort level of rheumatologists and nephrologists continuing to keep patients on drug over longer periods of time. I don't think any of those changes have hit a materiality sort of level, but I can tell you that they've not declined and they continue to improve over time.

Our next question is from Doug Miehm with RBC Capital Markets.

Congrats on the quarter. Just one question from me on aritinercept. Peter, are you contemplating bringing the 150? I want to make sure I heard that or the 225 ahead in the clinical trial program in terms of what you're going to dose?

Yes. We've not sent out the exact way we intend to structure these trials. And as I said, look, we look forward to sharing more about that in the future. But I don't know, Greg, if you want to -- I mean, obviously, the 150 and above seem to hit the mark. But Greg, do you have anything?

Well, that way, we were just trying to provide a little bit more color on our confidence that we have a dose that ought to be efficacious relative to what we've seen with regard to pharmacodynamic marker changes. So we indicated in our prepared statement that 150-milligram dosing will be one of the dosing levels that we'll use going forward. But of course, we're embarking on kind of multiple ascending dose studies, so we'll have higher doses as well. But what we indicated was 150 is definitely viable and we're taking that forward.

Okay. Because I just have a follow-up question then. So the 150 is where you had the expanded cohort, seems to be on a risk-reward basis, maybe one of the more attractive levels. I'm just wondering why then when you look at the data that you provided versus the competitive products, you were calling out the 225 versus the 150? And the 225 does look better than everything else, all measures that we can see here. But I'm just wondering why you weren't providing the 150 in terms of those data.

Well, I think it's a great question. And I think it gets to wanting to understand at a deeper level how we intend to go forward with the multi-ascending dose study and/or studies that will help us better understand and tease out what the exact dose we're going to want to be going forward with when we move into even further clinical development studies.

So your question, I think, is appropriately -- it's a good one. But at this stage of the game, we're not disclosing all of those details, and we look forward to disclosing them in 2026. So thank you for the question.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Peter Greenleaf for closing remarks.

Thank you very much, everyone, for joining us on today's call. We're excited about the momentum we've seen now through 3 quarters of the year, and we look forward to providing details on year-end and 2026 in our next call. Have a great day. Thank you very much.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and have a wonderful day.

Greetings, and welcome to the Aurinia Pharmaceuticals Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Joe Miller, Chief Financial Officer for Aurinia. Thank you. You may begin.

Thank you, operator, and thank you, everyone, for joining today's call and webcast. Joining me on the call this morning are Peter Greenleaf, Aurinia's President and Chief Executive Officer; and Dr. Greg Keenan, Aurinia's Chief Medical Officer.

Today, we will review and discuss Aurinia's second quarter 2025 financial results and provide an update on recent corporate progress as communicated in the company's press release and quarterly report on Form 10-Q issued this morning. For more information, please refer to Aurinia's filings with the U.S. Securities and Exchange Commission and Canadian securities authorities, which are also available on Aurinia's website at auriniapharma.com.

During today's call, Aurinia may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially. For a discussion of factors that could affect Aurinia's future financial results and business, please refer to the disclosures in Aurinia's press release, quarterly report on Form 10-Q and all other filings with the U.S. Securities and Exchange Commission and Canadian securities authorities.

Please note that all statements made during today's call are current as of today, July 31, 2025, unless otherwise noted and are based upon information currently available to us. Except as required by law, Aurinia assumes no obligation to update any such statements. Now let me turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?

Thanks, Joe, and good morning, everyone. I want to thank everybody for joining us today. On this morning's call, I'll provide an update on our second quarter results and provide an update on all corporate initiatives. I'll then turn the call back over to Joe to provide additional detail on our financial results. We continue to achieve strong growth in total revenue and net product sales in the 3 and 6 months ended June 30, 2025. For the 3 and 6 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, respectively, in the same periods of 2024.

For the 3 and 6 months ended June 30, 2025, net product sales of LUPKYNIS, the first FDA-approved oral therapy for the treatment of adult patients with active lupus nephritis, or LN, were $66.6 million and $126.5 million, up 21% and 23%, respectively, from $55 million and $103.1 million in the same periods of 2024. The increase for both periods is primarily due to an increase in the number of LUPKYNIS cartons sold to specialty pharmacies, driven by further LN market penetration. For the 6 months ended June 30, 2025, cash flow generated from operations was $45.5 million. This is compared to a negative $2.8 million in cash flow used in operations in the same period of 2024. Excluding $11.5 million in cash payments made in 2025 in connection with the November 2024 restructuring, cash flow generated from operations was $57 million for the 6 months ended June 30, 2025.

As of June 30, 2025, we have cash, cash equivalents, restricted cash and investments of $315.1 million. This is compared to $358.5 million at December 31, 2024. For the 6 months ended June 30, 2025, the company repurchased $11.2 million of its common shares for $90.8 million, including commissions and excise tax. As a result of the sustained growth we've seen in the first half of 2025, we are increasing our full year 2025 total revenue guidance from a range of $250 million to $260 million to a range of $260 million to $270 million and our net product sales guidance from a range of $240 million to $250 million to a range of $250 million to $260 million. Finally, we reported positive results from our aritinercept Phase I single ascending dose study on June 30, 2025. Aritinercept is a dual BAFF APRIL inhibitor. It contains a BCMA engineered extracellular binding domain that's optimized for superior affinity to APRIL and BAFF. We remain on track to initiate further clinical studies for aritinercept in at least 2 autoimmune diseases in the second half of this year.

We are very excited about the wide range of therapeutic possibilities for aritinercept, but for competitive reasons, we will not be disclosing further detail about our future plans at this time.

I'd now like to turn the call back over to Joe for a more detailed review of the second quarter 2025 financial results. I'll then return at the end of the call for a quick recap and to open up the line for any questions you might have. Joe?

Thank you, Peter. Let's take a few minutes to discuss the second quarter 2025 financial results. For the 3 and 6 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 comparable periods of 2024. As Peter mentioned, we had cash, cash equivalents, restricted cash and investments of $315.1 million as of June 30, 2025, and generated cash flows from operations of $45.5 million compared to $2.8 million in cash flow used in operations in the same period of 2024. Excluding $11.5 million of cash payments made in connection with the November 2024 restructuring, cash flow generated from operations was $57 million for the 6 months ended June 30, 2025.

We are continuing to be opportunistic with our share repurchase plan and expect to fund any future discretionary share repurchases with cash flows from operations and cash currently on hand. The company repurchased 18.3 million of its common shares for $138.4 million, excluding commissions and excise tax since the launch of the program in the first quarter of 2024 through today. Additionally, today, we announced that the Board has approved an increase to the share repurchase plan of up to an additional $150 million of common shares over the initially approved $150 million Board authorization. For the 3 and 6 months ended June 30, 2025, cost of revenue was $7.1 million and $15.7 million, respectively, compared to $8.9 million and $16.7 million in the comparable periods in 2024.

The decrease for both periods is primarily due to a decrease in sales of LUPKYNIS inventory to Otsuka, which is sold under a cost-plus arrangement and has a lower gross margin than our other LUPKYNIS sales. For the 3 and 6 months ended June 30, 2025, gross margin was 90% and 88%, respectively, compared to 84% and 85% in the same periods in 2024. For the 3 and 6 months ended June 30, 2025, total operating expenses were $49.9 million and $90.5 million, respectively, compared to $58.7 million and $122.3 million in the comparable periods of 2024. The decrease for both periods is primarily due to lower personnel expenses, including share-based compensation and overhead costs as a result of our strategic restructuring efforts in 2024.

This was partially offset by an increase in R&D-related expenses as we continue to advance our development activities for aritinercept and voclosporin and other noncash expenses related to the remeasurement of our Swiss franc-denominated monoplant finance lease liability and changes in our fair value assumptions related to our deferred compensation liability. For the 3 months ended June 30, 2025, net income was $21.5 million or $0.16 of earnings per share compared to $722,000 or $0.01 of earnings per share in the same period of 2024. For the 6 months ended June 30, 2025, net income was $44.9 million or $0.33 of earnings per share compared to a net loss of $10 million or $0.07 net loss per share in the same period of 2024.

With that, I'd like to hand the call back over to Peter for some closing remarks. Peter?

Thanks, Joe. In summary, we continue to drive growth in the commercial LUPKYNIS business, move forward with the clinical development of aritinercept and maintain excellent operational efficiency. I want to thank you all for your time today.

We'll now open the lines for any questions you may have. Operator?

[Operator Instructions] Our first question comes from the line of Stacy Ku with TD Cowen.

This is Vish on for Stacy. Congrats on a great quarter. So you reported some encouraging data for aritinercept. And I understand that you're not for competitive reasons, disclosing any details, but could you at least guide us through how you're thinking about the potential for aritinercept? Where do you think it could generate or add the most value so that us and investors could appreciate how you're thinking about the development? And based on the PK/PD data from the SAD study, how are you thinking about maybe potentially doses to be moved forward for the POC studies? And I have one follow-up.

Yes. I mean I'll start, and I'll ask Greg to jump in where I might miss or where he sees some add-on here. Listen, I think the potential of these B-cell mediated diseases and APRIL/BAFS potential ability to affect these B cell-mediated diseases is apparent today, obviously, in the data that's been rolled out in areas like IgAN. But we, as a company, have done our own assessment internally. We think there's upwards of 20 to north of 20 different B-cell-mediated diseases that you could look at potentially for these compounds. So while we're not disclosing exactly where we're going in our exact approach for competitive reasons at this stage, know that we see a pretty wide open field in terms of other areas that could potentially be addressed even outside of the kidney indications that have been explored to date. So we'll look forward to talking more about that in the future. But at this point, as we've said, we're not disclosing for competitive purposes, but no, we're looking at a range of indications. Greg, do you want to talk maybe a little bit about the dose side of the single ascending dose study?

Sure. Thank you, Peter. Yes, based on the evidence from the single ascending dose study, we're very confident now that a Q4-week dosing schedule is justified with evidence, especially with regard to kinetics, the pharmacokinetics and the pharmacodynamics of -- that we've demonstrated with the single ascending dose. So we think Q4-week dosing will be something we can explore and confidently be able to demonstrate some important evidence as we move forward into the multiple ascending dose studies.

Got it. And then my follow-up was on LUPKYNIS. Actually, clearly, the sales are doing well and you're raising guidance. So can you just detail some effects that you are seeing of the updated ACR guidelines on LUPKYNIS adoption? Maybe discuss how rheumatology versus nephrology prescribing is going and what that looks like right now?

Yes. I think we're encouraged by the guidelines. And I think two evidence points, I guess, I would give you that the guidelines are having some impact, albeit they're not quantitative, they'll give you a directional feel for how they're impacting our business. We've seen a really strong uptick in the number of rheumatology prescribers. The guidelines themselves alongside of -- we've got the 2-year extension of the original AURORA study that's been out there. We had the biopsy substudy that was published in a rheumatology journal. I think that, in combination with the guidelines has driven higher prescribing that we're seeing in rheumatology offices, so an increase there.

And then in addition, we're seeing an increase in our hospital business. And I think that's a direct reflection of the academic setting and fellows and teaching institutions adopting those guidelines and using them more proactively. So while it's not a quantitative answer, it can give you a really good feel for how we think they're impacting. Rheumatologists are using more of our drug. They're growing at a faster rate than nephrologists right now. And then in addition, our hospital business has been growing in a healthy way since the guidelines have been published.

Our next question comes from the line of Maury Raycroft with Jefferies.

This is James on for Maury. Congrats on the progress. Just another question on LUPKYNIS and then I have a follow-up question. For the raised guidance, can you talk more about the drivers and what you're seeing from new patient starts and hospital restarts trends in the initial 4 weeks in 3Q and learnings from prior summer months that informs your commercial outlook for 2025?

Yes. I want to start and then Joe, if I miss anything, please jump in. So I think the best way to think about our guidance range is on the lower end to the midpoint of our revised guidance, you'd have to see either a flattening of our business or a declining of our business in the summer months and back to growth in the back half of the year. The higher end of our guidance range is continued growth through 3Q and 4Q. If you look historically, James, at how our sales have progressed. And as we've said on previous calls, we now think history is probably the best way to predict how this business moves forward. The summer months have -- we've seen a slowing in some of our metrics.

In particular, the PSFs have been a little lighter historically in the summer months. And our revenue has been relatively flat to the previous quarter, so flat to 2Q using history. So the way we're looking at our guidance range is the low to mid you see the historical trends, high to beat above is we keep growing quarter-on-quarter. And we're really encouraged by everything we're seeing in the business right now. So we're excited to take up the guidance range, and that's kind of how we're thinking about it, James.

Got it. And then a second one for your BAFF/APRIL inhibitor aritinercept. Can you talk more about when we can see the next data update from the MAD phase and more on rare/orphan autoimmune diseases that you aim to pursue. What are the gating factors to picking specific disease settings to pursue? Are you waiting for competitor updates? Or is it more related to evolving internal strategy?

Well, I mean, I wouldn't assume that we're waiting, and I wouldn't assume that we're ruminating on any of this. I would say -- I would assume we're moving forward. We're just not communicating externally for public reasons exactly what our approach is going to be or the timing of those programs. As we've said, we want to go after at least two B-cell-mediated diseases. We're going to get those enrolling by this year, by the end of this year. And we'll look forward in the future to talking more about it. But at this stage, that's all we're giving, James.

Our next question comes from the line of Joseph Schwartz with Leerink Partners.

This is Will on for Joe. Congrats on the progress this quarter. So I just have one on the B-cell program and then a quick follow-up. So on the prior data call, you had mentioned that you were doing some formulation work for AUR200. Is this work still ongoing? Or is it going to be completed prior to the initiation of these future studies later this year? And can you just help us understand the point of this formulation work? Is it specifically to do an auto-injector? Or what's the ultimate goal here? And I have a quick follow-up.

Yes. As we said on our previous call, Will, our goal would be to try to get it in the most patient-friendly potential formulation and device possible, and that could include an auto-injector. And we actually think looking at the doses we've seen to date, the molecular size that we have -- we could have the possibility to do that. But obviously, once you're in single ascending dose studies, you're not optimized towards -- or at least we haven't to those formulations yet. And that's -- it's parallel pathing with the development work that we're doing. But everything points to us being able to -- from what we've seen in the single ascending dose and in the preclinical work that we've done up to this point that those goals would be attainable.

Great. And then just quickly, a question for Joe. As we see the development of AUR200 ramp up, how should we be thinking about R&D spend moving forward? And can you help us put some brackets or kind of general commentary around the cost for these trials? And do you expect to remain cash flow positive during the development of this asset?

Thanks for the question, Will. We haven't provided any specific guidance on operating expenses and/or cash flows going forward. Obviously, as we are moving through 2025, the trial costs were fairly manageable, and you would expect as you kind of move from Phase I and II and on that the costs will increase. But as of right now, we're not giving any specific long-term guidance on OpEx, R&D expenses and/or cash flows.

Yes. I think that's right, Joe. And the only thing I would say is it should be evident to investors that efficient operations and cash flow from operations, however we decide to deploy it is a priority for us as an organization. So that won't change on a go-forward basis.

Our next question comes from the line of Arthur He with H.C. Wainwright.

Congrats on the decent rise. I just had two questions regarding the 200. So Greg, do you guys plan to present the detail data at any medical conference from the SAD study?

Greg, maybe can talk to what our intentions are. I think you should just appreciate that, obviously, we have ongoing patent work, et cetera, with the compound. So what's publicly detailed, we would have that ability to do, but stuff that has not yet been publicly talked about, probably not. Greg, any intentions?

No, nothing more than that. It will be presented in an upcoming meeting, but we haven't determined which meeting at this point.

Okay. Got you. And the second question on the 200. So maybe, Peter, I just want to gauge like at what kind of situation or circumstance you guys would be -- feel comfortable to disclose the information about the details of indication going after for the 200. Just curious.

Well, I mean, the obvious answer is when we move into a certain phase of development, it becomes public information and available on clinicaltrials.gov. So that would be my absolute answer. We haven't really discussed it with our Board, Arthur, or we have, and we've deduced and concluded that for competitive purposes, obviously, we've got people that are ahead of us and behind us, and we want to hold what we're doing close to the vest and ensure that we don't lead people down the path of exactly what we're doing. We haven't determined yet when we would disclose. But do realize from the line of questioning here and on our previous call, that there is a lot of appetite to understand what our plans are.

Our next question comes from the line of Doug Miehm with RBC Capital Markets.

Just with respect to Paragraph IV filers, there's no change there. No change as it stands right now in terms of the exclusivity period and adding pediatric onto that. Any updates?

No. And just to clarify that the pediatric trial work that we're doing was part of the original filing, but was not an extension body of work. So the July 2028 worst-case scenario is not inclusive of 6 months of pediatric exclusivity, Doug. No, no changes. We still have patents going all the way out to 2037. We still have our method of use patents, and we continue to do more work around both patents and other work in the company to ensure the longevity of LUPKYNIS. I would just reinforce that the longevity of this asset to us is paramount and it comes to defending the IP that we have around the compound, and it's a priority for the company. So we'll update you when we have more to talk about. But as you know, the legal process on ANDA filings and the subsequent patent infringement lawsuits is pretty protracted. So I wouldn't expect to hear weekly updates from us.

Okay. Second question just has to do with the buyback, and you're aggressive there. There's an obvious opportunity today. As we think about the future, though, given the amount that you're likely to spend on the R&D side being it's going to increase probably fairly materially, will we think that we could see scaled back buybacks as we think about beyond 2025? I'll leave it there.

Doug, as we've said, it's up to the Board's discretion and as to how they deploy that cash. Obviously, management gives input to our belief as to what we should do. I wouldn't miss that LUPKYNIS continues to grow for us. And the cash flows we reported in this quarter, if you carry those forward and you carry forward continued growth of LUPKYNIS, the amount of cash flow from operations is -- becomes fairly significant.

Now we're not giving long-term or even mid- to short-term guidance on cash flows, but you can do the math. And I think it gives us a very unique position as a biotech company in this space to pay our bills. We have cash on our balance sheet. We have cash flows from operations, so we can pay for the things we want to do, continuing to drive LUPKYNIS and developing our pipeline and we have the unique ability to either collect cash -- more cash on our balance sheet and grow that over time or deploy it towards buying back shares, which is positive for all shareholders.

So while we're not giving anything for '26, and I don't disagree that, obviously, your R&D expenses go up as you move into further clinical trials, don't miss the fact that if LUPKYNIS, which we fully believe will continue to grow, grows, our cash flow from operations and our balance sheet are still very, very strong.

Thank you and this concludes we have reached the end of the question-and-answer session. And this also concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation, and have a great day.

Good morning, and welcome to Aurinia's Aritinercept Phase I Study Results Conference Call.

[Operator Instructions]

I will now turn the call over to Peter Greenleaf, Chief Executive Officer of Aurinia. Please go ahead, sir.

Good morning. Thank you all for joining us to discuss the results from our Aritinercept Phase I single ascending dose study. Aritinercept has been previously referred to as AUR 200. Joining me on the call are Dr. Greg Keenan, our Chief Medical Officer; and Joe Miller, our Chief Financial Officer. Before beginning our discussion, I'd like to direct your attention to Slide 2 and which contains important information regarding forward-looking statements. With that introduction, let me now turn the call over to Dr. Greg Keenan to walk you through the ritinercept Phase I study results. Greg?

Thank you, Peter. It's a pleasure speaking with you today about Aritinercept and the results of our Phase I single ascending dose study. Aritinercept is a dual BAFF APRIL inhibitor. It contains a BCMA engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL. Other dual BAFF and APRIL inhibitors used as TACI-engineered extracellular binding domains. BCMA has a stronger natural affinity for APRIL and TACI. Aritinercept also contains an IgG4 Fc domain with no appreciable effector function. Other dual BAFF/APRIL inhibitors use IgG1 Fc domains. IgG4 is considered the least inflammatory across the IgG subclasses in part because it poorly activates the complement system.

Before we talk about our Aritinercept results, just a few words on the important roles of BAFF and APRIL in the immune system, and why modulating these cytokines may be a good treatment approach for a wide range of autoimmune diseases. Both of these cytokines regulate B cell survival and differentiation, with BAFF more targeted at differentiating and mature B cells and APRIL were targeted at plasma cells. Thus, targeting both BAFF and APRIL depletes a broader set of B cells, including plasma cells than targeting a single cytokine. Aritinercept may prevent the activation of autoreactive B cells and reduce their numbers in associated immune globulins in the body, thereby reducing important drivers of B cell-mediated autoimmune diseases. Aritinercept has high binding affinity for both BAFF and APRIL. As you can see in this slide, when compared in vitro studies to Atacicept and Telitacept to BAFF/APRIL inhibitors from other sponsors, Aritinercept has 3- to 8-fold higher binding affinity. Additionally, as you can see in this slide, Aritinercept potently inhibits both BAFF and APRIL mediated B-cell proliferation as compared to the competitor dual BAFF/APRIL inhibitors. Compared to Atacicept and Telitacept, Aritinercept is 6 to 53 fold more potent at inhibiting BAFF and APRIL mediated B-cell proliferation.

On this side, you can see our results in nonhuman primates. Aritinercept reduced the immunoglobulins IgA, IgM and IgG by up to 76%, 67% and 43%, respectively. Aritinercept was well tolerated with no adverse findings in any of the doses tested. Moving to our Phase I results. We enrolled 61 healthy subjects in the standard single ascending dose study design. Subjects were treated with placebo or 1 of 6 subcutaneous doses Aritinercept, 5, 25, 75, 150, 225 and 300 milligrams. You can see our safety results on this slide. Aritinercept was well tolerated at all dose levels tested. There are no treatment-related Grade 3 or higher adverse events. There were no treatment-related serious adverse events, and there were no discontinuations due to treatment-related adverse events. There was one SAE, a concussion due to motor vehicle accident reported as not treatment-related. Adverse events that occurred in more than one subject were injection site reactions, which occurred in 24% of subjects who received Aritinercept versus 13% of subjects who received placebo. All injection site reactions were Grade 1. Headaches, which occurred in 11% of subjects who received Aritinercept versus 7% of subjects who received placebo, upper respiratory tract infection, which occurred in 7% of subjects who received Aritinercept versus 0% of subjects who received placebo and back pain, which occurred in 4% of subjects who received Aritinercept versus 0% of subjects who received placebo.

This slide depicts the pharmacokinetic curves of subcutaneous Aritinercept, a half-life of 6 to 8 days after a single dose in the target dose range was observed. On this slide, you can see the pharmacodynamic effects of Aritinercept treatment. Single doses of Aritinercept led to robust and long-lasting reductions in immunoglobulins. Specifically, mean reductions from baseline to day 28 and of up to 48%, 55% and 20% were observed for IgA, IgM and IgG, respectively. Importantly, we believe these long-lasting pharmadynamic effects support once-monthly dosing. On the next 3 slides, we provide some comparative results to provide context. Please note that these are cross-trial comparisons and therefore, should be interpreted with caution. On this slide, you can see that our Aritinercept's effect on IGA compares favorably to BAFF and APRIL inhibitors from Vertex, Vera and RemiGen as well as Otsuka's anti APRIL. On this slide, you can see the same comparison for IgM. Again, Aritinercept compares favorably.

And finally, on this slide, you can see the same comparison for IgG with Aritinercept again comparing favorably. With this, I will turn the presentation back over to Peter.

Thanks, Greg. We're obviously very excited about these results. In summary, our Aritinercept was well tolerated at all dose levels that we tested, and single doses of Aritinercept led to robust and long-lasting reductions in immunoglobulins supportive of once monthly dosing. Aurinia plans to initiate further clinical studies of Aritinercept and at least 2 autoimmune diseases in the second half of this year. We're very excited about the wide range of therapeutic possibilities for Aritinercept but for competitive reasons, we'll not be disclosing further detail about our future plans at this time.

We want to thank you all for joining us on today's call, and we look forward to taking your questions. So with that, let me ask the operator to now open up the line for Q&A. Operator?

[Operator Instructions]

Our first question is coming from Stacy Ku from TD Cowen.

Congratulations on the progress. So understanding you're not able to maybe talk about the clinical study specifically that you're planning to do next. Maybe can you comment on your current deliberations, would you be wanting to stay within your current commercial infrastructure, or maybe a Lupus or something in renal diseases? Or are you even thinking kind of more widely to think about maybe neuromuscular or even dermatology? So that's the first question. Just any kind of thoughts on what a potential clinical trial design would look like? And just to confirm, would this be Phase Ia kind of proof concept?

And then the second question, if we could sneak one in, is if you've disclosed kind of doses you're planning to move forward? Could you even, looking at the safety, what are -- how are you thinking about that?

Stacy, thanks for the question. So as you know, there's a lot of excitement about BAFF/APRIL inhibitor space at this stage. And I think a large part of that is because of the wide range of B cell-mediated autoimmune diseases that are out there, which these potential compounds could be effective. So as we said on the call, we plan to initiate clinical studies in at least 2 of these autoimmune diseases in the second half of the year. But for competitive reasons, we've made a decision not to disclose any more at this time.

Obviously, there's alignment to our therapeutic area that's interesting, but also as the space continues to widen, I think it's going to become more competitive even on dose selection. So we're trying to leave it at that. In terms of the doses, we're intending to take forward. Obviously, Greg, I can kind of ask you maybe just to elaborate a little bit on that. Do you want to go, Greg?

Sure. Thanks, and thanks, Stacy, for the question. At this point, we're not prepared to indicate the specific dose level that our dose levels will take forward into the multiple setting dose study. But I think it's fair to say when you see the evidence specifically, the kinetics of the drug higher doses performing well with regard to half-life on the one hand, and with regard to the impact on pharmacodynamics. And the other it's definitely fair to say that in our single ascending dose study, we captured in a bracketed way, doses that are very viable, and we're going to use the information from the SAD study to inform which dose or doses we take to that, but we're very encouraged with the SAD results and the information it provides to inform the multiple setting dose study.

Next question today is coming from Maury Raycroft from Jefferies.

Congrats on the update. Maybe just to -- I think the data speak for itself for the most part. Wondering if you can just remind me what the IP life is for the drug? And also wondering strategically from a BD standpoint, would you consider running the studies on your own or potentially consider partnering these out?

So IP life on the product, we continue to file IP in and around the compound. So we haven't disclosed the full life on it, but know that we continue to add to the patent portfolio as early as the results that we're seeing from this STAT/SAD study. And then second, the other question was about -- can you repeat the second question, Maury?

BD and whether you run the studies on your own or potentially partner out?

Yes. No, our thought is we're going to take this study forward on our own. We don't need funding. Obviously, we've got good cash flows coming from operations. So our intention right now is to take this forward on our own.

Next question today is coming from Joe Schwartz from Leerink Partners.

I was wondering if you could just give us some insight into your thought process around what indications you're most likely to pursue. Is there anything which could give you a sustainable competitive advantage in any of them relative to other APRIL BAFFs, which there are many and they're all further ahead, and a lot of different indications. Is there -- are there any indications that might be particularly well suited where Aurinia might be able to control their destiny in those indications in particular?

And then what is the time line to generate Phase II data in these studies? And then we noticed that the 150-milligram dose group had almost 3x as many patients. I was just wondering why that was?

Well, on the indications, as we've already said, we've done a pretty extensive internal review on all the potential B-cell mediated diseases, autoimmune diseases that we could potentially look at here, and I think in our initial assessment, we had upwards of 20 different potential targets you could go after. Obviously, the focus primarily has been centered as of late on IgAN and some emerging new areas. So we think -- part of this is going to be a competitive process moving forward and why we're not disclosing more details on the 2 that we intend to move forward with.

But obviously, this is going to be important for everyone developing in this space moving forward. And if everyone's hypothesis around the potential breadth and depth of indications works out, this could be a very large area. So we're excited about that. Greg, do you want to talk maybe just a little bit about the 150 milligram?

Sure. Yes, and thanks for the question. Going into the study, the development of the single ascended dose study, our allometric scaling relative to the nonhuman primate based work we had done indicator suggested that 150 milligrams or thereabouts is going to be an important dose to thoroughly explore to be able to understand the magnitude of impact on pharmacodynamic changes. So that's why we "enriched" that particular dose level.

As we build it out, you can see for yourself the impact of that dose with fine precision relative to the other doses. And we think when we look at it now that it really helped inform our thinking of the firmness the effect that we see both with regard to PD, and really clarified and firmed up the kinetics of the drug in general. So it's basically a dose to explore very specific aspects of the pharmacodynamics and pharmacokinetics of the drug.

Your next question today is coming from Arthur He from H.C. Wainwright.

Congratulations on the data. It's very impressive, a single dose immunoglobulin reduction. So I had one question on the safety and one on the injection side. So for safety, Greg, could you give us more color on the upper respiratory infection and also the back pain. Is this more -- has any dose dependent lean towards the higher dose or it's more across the board?

Sure. Thank you, Peter. So just specifically, obviously, this is a small study. So we didn't observe any dose-dependent effects on upper respiratory tract infections, for example, where it was a very modest number of events, and these were relatively mild and very self-limited, did not require any intervention. So we were very encouraged by those. So no dose effect there. With regard to back pain, the same thing goes for that. These were very transient events that resolved with essentially no intervention. So transient, mild, benign.

That's great. And my second question is regarding injection volume. Could you give us more color on that? And the reason I ask is -- do you think your drug also could be suitable for the self administration at home?

Well, thanks for the question. Our formulation for early clinical studies is less concentrated than what will be our commercial formulation. Right now, our formulation development is ongoing, and we're confident that given the physiochemical properties of Aritinercept , our target dose range, our commercial formulation, and the formulation we'll use in later-stage clinical studies will enable a single monthly injection from either a prefilled syringe or an auto-injector and the standard gauge needle. And the hope would be that, that could be administered at home as well.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

We want to thank everybody for joining us on the call today, and we look forward to giving further updates moving forward. Thank you very much, and have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.