Q2 2024 Aurinia Pharmaceuticals Inc Earnings Call

Speaker Change: Good day, ladies and gentlemen. Welcome to Aurinia Pharmaceuticals' second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Pharmaceuticals, Second Quarter, 2024, Earnings Call. At this time, all participants are in a listen-only mode.

Operator: Pharmaceutical's second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, then zero on your telephone keypad. As a reminder, this conference is being recorded. I would like to turn the conference over to your host, Andrea Christopher, Head of Corporate Communications and Investor Relations for Aurinia Pharmaceuticals. Thank you. You may begin.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, then zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker Change: If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded.

Andrea Christopher: I would like to turn the conference over to your host, Andrea Christopher, Head of Corporate Communications and Investor Relations for Aurinia Pharmaceuticals. Thank you. You may begin.

Andrea Levin Christopher: Please note that all statements made during today's call are current as of today, Thursday, August 1, 2024, 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.

Speaker Change: I would like to turn the conference over to your host, Andrea Christopher, Head of Corporate Communications and Investor Relations for Aurinia Pharmaceuticals.

Peter S. Greenleaf: On this morning's call, we will focus on the company's second quarter performance. I'll then turn the call over to Dr. Greg Keenan, our Chief Medical Officer, to give an update on our medical work across the business, including the development of our pipeline asset, AUR200.

Andrea Christopher: Thank you, operator, and thank you to everyone for joining today's call and webcast. Joining me on the call this morning are Peter Greenleaf, Aurinia's Chief Executive Officer, Joe Miller, our Chief Financial Officer, and Dr. Greg Keenan, our Chief Medical Officer. Today we will review and discuss Aurinia's 2024 second quarter financial and operational results. As communicated in the company's press release issued the first morning. The company also filed its quarterly financial statements on Form 10-Q 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 AuriniaFarma.com.

Speaker Change: Schwartz. Thank you. You may begin.

Andrea Christopher: Thank you, Operator, and thank you to everyone for joining today's call and webcast.

Speaker Change: Joining me on the call this morning are Peter Greenleaf, Aurinia's Chief Executive Officer, Joe Miller, our Chief Financial Officer, and Dr. Greg Keenan, our Chief Medical Officer. Today we will review and discuss Aurinia's 2024 second quarter financial and operational results as communicated in the company's press release issued this morning.

Speaker Change: The company also filed its quarterly financial statements on Form 10-Q 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.

Andrea Christopher: 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. An actual result may differ materially. For discussion of factors that could affect Aurinia's future financial results in business, please refer to the disclosures in Aurinia's press release, its quarterly report on Form 10-Q, and its annual report on Form 10-K, and all of its recent 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, Thursday, August 1st, 2024, unless otherwise noted, and are based upon information.

Speaker Change: During today's call, Aurinia may make forward-looking statements based on current expectations.

Speaker Change: These forward-looking statements are subject to a number of significant risks and uncertainties, and actual results may differ materially.

Speaker Change: for a discussion of factors that could affect Aurinia's future financial results and business.

Speaker Change: Please refer to the disclosures in Aurinia's press release, its quarterly report on Form 10-Q , and its annual report on Form 10-K , and all of its recent filings with the U.S. Securities and Exchange Commission and Canadian securities authorities.

Speaker Change: Please note that all statements made during today's call are current as of today, Thursday, August 1st, 2024, 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.

Andrea Christopher: It is currently available to us, except as required by law. Aurinia assumes no obligation to update any such statements.

Andrea Christopher: Now, let me turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?

Peter S. Greenleaf: Greg will be followed by Joe Miller, our CFO, to provide additional details on our financial results and highlights. Now, let me provide some details on our second quarter business metrics and how we're preparing for the rest of the year. With the continued focus on commercial execution and accelerating the company's operations towards cash flow positivity, we achieved a strong second quarter performance. Year-to-date total net revenue was $107.5 million for the six months ended June 30, 2024, as compared to $75.9 million for the same period in 2023, representing growth of approximately 42%. Net product revenue, consisting of lupkinis and botulisporin product sales, was $55 million for the three months ended June 30, 2024, and $41.1 million for the same period in 2023. This represents growth of approximately 34%.

Speaker Change: Now, let me turn the call over to Aurinia's President and CEO , Peter Greenleaf. Peter?

Peter Greenleaf: Thanks, Andrea.

Peter Greenleaf: Good morning, everyone. I want to thank everybody for joining us on today's call. On this morning's call, we will focus on the company's second quarter performance.

Peter Greenleaf: Thanks, Andrea, and good morning, everyone. I want to thank everybody for joining us on today's call.

Speaker Change: On this morning's call, we will focus on the company's second quarter performance. I'll then turn the call over to Dr. Greg Keenan, our Chief Medical Officer, to give an update on our medical work across the business, including the development of our pipeline asset, AUR200.

Peter Greenleaf: I'll then turn the call over to Dr. Greg Keenan, our Chief Medical Officer, to give an update on our medical work across the business, including the development of our pipeline asset, Aur200.

Peter Greenleaf: Greg will be followed by Joe Miller, our CFO, to provide additional details on our financial results and highlights. Now, let me provide some details on our second quarter business metrics and how we're preparing for the rest of the year. With the continued focus on commercial execution and accelerating the company's operations towards cash flow positivity, we achieved a strong second quarter performance. For the second quarter of 2024, Aurinia achieved $57.2 million in total net revenue. This is versus $41.5 million in revenue for the same period in 2023, representing growth of approximately 38%. Year-to-date total net revenue was $107.5 million for the six months ended June 30th, 2024, as compared to $75.9 million for the same period in 2023, representing growth of approximately 42%.

Speaker Change: Greg will be followed by Joe Miller, our CFO , to provide additional details on our financial results and highlights.

Peter S. Greenleaf: Net product revenue is $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%. We also achieved approximately $15.8 million in positive free cash flow in the second quarter ahead of our initial projections, which further strengthens our financial position and provides more flexibility to engage in business building activities for the future. The company had cash, cash equivalents, and restricted cash and investments of $330.7 million as of June 30, 2024.

Joe Miller: For the second quarter of 2024, Aurinia achieved $57.2 million in total net revenue. This is versus $41.5 million in revenue for the same period in 2023, representing growth of approximately 38%.

Peter Greenleaf: Net Product Revenue, consisting of loop kindness and vocalist born product sales, was $55 million for the three months ended June 30, 2024, and $41.1 million for the same period in 2023. This represents growth of approximately 34%. Net Product Revenue was $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%. We also achieved approximately $15.8 million in positive free cash flow in the second quarter, ahead of our initial projections, which further strengthens our financial position and provides more flexibility to engage in business building activities for the future.

Joe Miller: Net product revenue is $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%.

Peter Greenleaf: The company had cash, cash equivalence, and restricted cash and investments of $330.7 million as of June 30, 2024. In terms of commercial performance metrics, we added 428 patient star forms and approximately 127 new patients who are either restarting Loop Kindness or receiving it through a hospital pharmacy. Together, these total approximately 555 PSFs in combination with restarts in hospital fills as compared to 451 PSFs in the prior year, second quarter, representing substantial year-over-year growth. We also achieved 22% growth in total patients on loop kindness therapy, with approximately 2,336 patients on therapy as of June 30, 2024, as compared to 1,911 patients as of June 30, 2023.

Joe Miller: The company had cash, cash equivalents, and restricted cash and investments of $330.7 million as of June 30, 2024.

Peter S. Greenleaf: In terms of commercial performance metrics, we added 428 patient start forms and approximately 127 new patients who are either restarting LoopKindness or receiving it through a hospital pharmacy. We also achieved 22% growth in total patients on lupokinase therapy with approximately 2,336 patients on therapy as of June 30, 2024, as compared to 1,911 patients as of June 30, 2023. From April 1, 2024 through July 31, 2024, we added approximately 538 PSFs and approximately 155 new patients from restarts in the hospital channel.

Speaker Change: In terms of commercial performance metrics, we added 428 patient start forms and approximately 127 new patients who are either restarting LoopKindness or receiving it through a hospital pharmacy.

Speaker Change: Together, these total approximately 555 PSFs in combination with restarts and hospital fills, as compared to 451 PSFs in the prior year's second quarter, representing substantial year-over-year growth.

Peter Greenleaf: This significant year-over-year growth was driven by increased new starts. Patients restarting loop kindness after being off therapy for an extended period of time are hospital fills and improving persistency rates year over year. From April 1, 2024, through July 31, 2024, we added approximately 538 PSFs and approximately 155 new patients from restarts in the hospital channel. We continued to sustain a high conversion rate in the quarter with approximately 85% of PSFs converting to patients on therapy. We also sustained a rapid conversion time, with approximately 60% of patients starting therapy within 20 days. Our overall adherence rate remained high at 88% through the second quarter, and we continued to achieve strong persistency, with approximately 56% of patients remaining on therapy at 12 months.

Speaker Change: This significant year-over-year growth was driven by increased new starts, patients restarting loop kindness after being off therapy for an extended period of time, our hospital fills, and improving persistency rates year-over-year.

Speaker Change: We continue to sustain a high conversion rate in the quarter with approximately 85% of PSFs converting to patients on therapy.

Peter S. Greenleaf: We also sustained a rapid conversion time, with approximately 60% of patients starting therapy within 20 days. Our overall adherence rate remained high at 88% through the second quarter, and we continued to achieve strong persistency with approximately 56% of patients remaining on therapy at 12 months. So, in summary, we believe our second quarter accomplishments reflect solid execution against our previously announced business priorities. Importantly, as one example of these initiatives, Aurinia is launching a new marketing campaign that reinforces the company's commercial strategy to accelerate market growth by encouraging rheumatologists to prescribe lupokinase and do it earlier in the lupus nephritis treatment paradigm and to maintain that therapy for at least three years in accordance with current treatment guidelines.

Speaker Change: Our overall adherence rate remained high at 88% through the second quarter and we continue to achieve strong persistency with approximately 56% of patients remaining on therapy at 12 months.

Peter Greenleaf: Additionally, in the second quarter, 51% and 46% of patients remained on therapy at 15 and 18 months, respectively.

Speaker Change: Additionally, in the second quarter, 51% and 46% of patients remained on therapy at 15 and 18 months, respectively.

Peter Greenleaf: So, in summary, we believe our second quarter accomplishments reflect solid execution against our previously announced business priorities. Based on this, we're narrowing our pro-year net-product revenue guidance range to a range of $210 to $220 million from the previously established guidance range of $200 to $220 million. Looking forward to the second half of the year, we have several innovative commercial initiatives planned, as well as some upcoming key milestones. Arinia is launching a new marketing campaign that reinforces the company's commercial strategy to accelerate market growth by encouraging rheumatologists to prescribe loop-kindness and do it earlier in the lupus nephritis treatment paradigm, and to maintain that therapy for at least three years in accordance with current treatment guidelines.

Speaker Change: Based on this, we're narrowing our full-year net product revenue guidance range to a range of $210-$220 million from the previously established guidance range of $200-$220 million.

Speaker Change: Looking forward to the second half of the year, we have several innovative commercial initiatives planned, as well as some upcoming key milestones.

Speaker Change: Importantly...

Speaker Change: and to maintain that therapy for at least three years in accordance with current treatment guidelines.

Peter Greenleaf: This innovative and eye-catching campaign highlights the importance of prescribing loop-kindness as part of the foundation therapy to treat Lupus nephritis from the start to reduce the risk of irreversible kidney damage caused by protein urea.

Peter S. Greenleaf: This innovative and eye-catching campaign highlights the importance of prescribing lupokinase as part of the foundation therapy to treat lupus nephritis from the start to reduce the risk of irreversible kidney damage caused by proteinuria. Upon approval, we expect to receive a milestone payment from Atsuka for $10 million, as well as low double-digit royalties on net sales once Loopkinis is launched in Of course, I'll then return you to the end of the call for a quick recap and then open up the mic in order to have you ask your questions. So with that, let me turn it over to Dr. Keenan, Greg.

Peter Greenleaf: Our commercial activities outside the U.S. continue to grow. Otsook is launching efforts in Europe for generating meaningful collaboration revenues, and we are also working diligently with Otsook to seek approval for loop-kindness in Japan. Recall that Otsuka filed the JNDA with the Japanese regulatory authorities in November of 2023 for the hopeful approval of loop-kindness to treat adults with lupus nephritis. And we anticipate a response in the second half of this year on that filing. Upon approval, we expect to receive a milestone payment from Otsook for $10 million, as well as low double-digit royalties on net sales once Loop-Kindness is launched in Japan.

Speaker Change: Our commercial activities outside the U.S. continue to grow. ATSUKA's launch efforts in Europe are generating meaningful collaboration revenues, and we are also working diligently with ATSUKA to seek approval for LoopKindness in Japan.

Peter Greenleaf: In terms of our pipeline, we're excited to let you know that we continue to progress AUR 200 into the clinic. Importantly, we anticipate funding the development of AUR 200 with available cash flow that will not impact previously announced post-restructuring operating expense targets. And as a reminder, we expect to recognize $50 to $55 million in annual cost savings following the restructuring, with approximately 75% of that that will be recognized in 2024.

Speaker Change: In terms of our pipeline, we're excited to let you know that we continue to progress AUR200 into the clinic.

Speaker Change: And as a reminder, we expect to recognize $50-55 million in annual cost savings following the restructuring, with approximately 75% of that that will be recognized in 2024.

Gregory Keenan: So, with that, I'd now like to turn the call over to Dr. Greg Keenan, our Chief Medical Officer, for a more in-depth discussion on our medical affairs strategy and greater detail on our near-term AUR 200 development strategy.

Greg Keenan: So with that, I'd now like to turn the call over to Dr. Greg Keenan, our Chief Medical Officer, for a more in-depth discussion on our medical affairs strategy and greater detail on our near-term AUR200 development strategy.

Joseph Miller: Greg will be followed by Joe Miller, our CFO, for a more detailed review of our financial results.

Speaker Change: Greg will be followed by Joe Miller, our CFO , for a more detailed review of our financial results.

Peter Greenleaf: Of course, I'll then return to the end of the call for a quick recap and then to open up the mic in order to have you ask your questions.

Speaker Change: Of course, I'll then return you to the end of the call for a quick recap and then to open up the mic in order to have you ask your questions.

Gregory Keenan: So, with that, let me turn it over to Dr. Keenan, Greg. Thanks, Peter, and good morning, everyone. I'd like to take a few minutes to provide you with an overview of our medical and scientific efforts as it pertains to loop-kindness and our AUR 200 development plans. Our medical affairs strategy is focused on important scientific engagement with the lupus nephritis treating community. and the second quarter, our medical affairs team had approximately 180 interactions with the top 30 experts in Lupus nepritis. In the first half of the year, we had over 1,200 engagements with both rheumatologists and nephrologists.

Speaker Change: So, with that, let me turn it over to Dr. Keenan, Greg.

Gregory Keenan: Thanks Peter and good morning everyone. I'd like to take a few minutes to provide you with an overview of our medical and scientific efforts as they pertain to lupkinase and our AUR200 development plan. Our medical fair strategy is focused on important scientific engagement with the lupus nephritis treating community. In the second quarter, our medical affairs team had approximately 180 interactions with the top 30 experts in lupus nephritis. In the first half of the year, we had over 1200 meetings with both rheumatologists and nephrologists.

Greg Keenan: Our medical affairs strategy is focused on important scientific engagement with the lupus nephritis treating community. In the second quarter, our medical affairs team had approximately 180 interactions with the top 30 experts in lupus nephritis.

Gregory Keenan: Collectively, these discussions are focused on strategies to identify appropriate Ellen patients for whom Lupinus should be considered, and understand the clinical attributes of Lupinus that make it an optimal therapy in the management of LN. Additionally, across more than 70 sites participating in the N-Lite registry, we've enrolled 32 patients this quarter and are head of our goal to fully enroll the registry by the end of next year. This is a registry that monitors important outcome measures and safety of men, amongst LN patients taking Lupinus and receiving care in US community and academic practices.

Gregory Keenan: Collectively, these discussions are focused on strategies to identify appropriate LN patients for whom lupkinase should be considered. Additionally, across more than 70 sites participating in the NLITE registry, we've enrolled 32 patients this quarter and are ahead of our goal to fully enroll the registry by the end of next year. This is a registry that monitors important outcome measures and safety events amongst LN patients taking lupkinase and receiving care in U.S. community and academic practice.

Greg Keenan: Collectively, these discussions are focused on strategies to identify appropriate LN patients for whom loop kinase should be considered.

Gregory Keenan: We've submitted an abstract to a major academic society for their fall meeting, which will provide the first view of the diverse demographics of Lupinus patients. Our medical team attended key meetings in the US, including CCRE and NKF, as well as 38 additional regional and international symposia and medical society meetings in the quarter. Notably, at both ERA and ULAR, an analysis of the clinical value of Lupinus in combination with MMF and Lotto steroids versus MMF and steroids alone was delivered in oral sessions. Four manuscripts were published this quarter as well, including a Lupinus cost-effectiveness model, as well as pre-clinical work demonstrating differences in lipid metabolism and electrolyte metabolism relative to first-generation C&I.

Gregory Keenan: Our medical team attended key meetings in the U.S., including CCR East and NKF, as well as 38 additional regional and international symposia and medical society meetings in the quarter. Notably, at both ERA and EULAR, an analysis of the clinical value of lupkinase in combination with MMF and low-dose steroids versus MMF and steroids alone was delivered in oral sessions. Four manuscripts were published this quarter as well, including a loop kinase cost-effectiveness model as well as preclinical work demonstrating differences in lipid metabolism and electrolyte metabolism relative to first-generation CNI.

Greg Keenan: Notably, at both ERA and ULAR, an analysis of the clinical value of lupkinase in combination with MMF and low-dose steroids versus MMF and steroids alone were delivered in oral sessions.

Gregory Keenan: As Peter's mentioned, we are also moving forward with AUR200, our potential next-generation therapy for autoimmune disease. It's a highly potent and specific immune modulator targeting BAP and April. AUR200 is an IgG-4 FC fusion protein containing a structurally engineered B-cell maturation antigen BCMA domain. There's no appreciable effector function on this molecule. AUR200 binds and neutralizes BAP in April, thus affecting B-cell survival and maturation, resulting in a decrease in B-cell populations and immunoglobulins. We believe AUR200 has the potential to serve as a best-in-class treatment in diseases with high unmet need. We intend to develop it in disease areas where there are a few current market entrants.

Greg Keenan: We are also moving forward with AUR200, our potential next-generation therapy for autoimmune disease.

Speaker Change: It's a highly potent and specific immune modulator targeting BAP and April . AUR200 is an IgG4-FC fusion protein containing a structurally engineered B-cell maturation antigen, BCMA domain.

Gregory Keenan: There's no appreciable effect or function on this model. We anticipate having data available from this SAD study in the first half of 2025, which will inform our subsequent development program. I'll now turn the call over to Joe Miller.

Greg Keenan: There is no appreciable effect or function on this molecule.

Greg Keenan: We intend to develop it in disease areas where there are few current market entrants.

Gregory Keenan: Our overall development strategy for AUR200 includes exploring one larger indication and one fast-to-market smaller indication that meets the FDA criteria for orphan and rare diseases. We expect to have first patients entering our phase one single ascending dose study of AUR200 in the third quarter of this year. We anticipate having data available from the SAD study in the first half of 2025, which will inform our subsequent development program. Deliverables from our SAD program will include data on safety, tolerability, pharmacokinetics, and biomarkers. We're excited to move forward with this high potential differentiated molecule that could make a significant impact earlier than the treatment algorithm in numerous autoimmune diseases with high immense need.

Greg Keenan: Our overall development strategy for AUR200 includes exploring one larger indication and one fast-to-market, smaller indication that meets the FDA criteria for orphan and rare diseases.

Greg Keenan: We expect to have first patients entering our phase one single ascending dose study of AUR200 in the third quarter of this year. We anticipate having data available from this SAD study in the first half of 2025, which will inform our subsequent development program.

Greg Keenan: Deliverables from our SADD program will include data on safety, tolerability, pharmacokinetics, and biomarkers.

Greg Keenan: We're excited to move forward with this high-potential, differentiated molecule that could make a significant impact earlier in the treatment algorithm in numerous autoimmune diseases with high immediate need.

Joseph Miller: I'll now turn the call over to Joe Miller. Joe?

Greg Keenan: I'll now turn the call over to Joe Miller. Joe?

Joseph Miller: Thank you, Greg, and good morning, everyone. Let's take a few minutes and go into detail regarding our financial results for the second quarter and six months ended June 30th, 2024. As of June 30th, 2024, we had cash, cash equivalents, restricted cash, and investments of 330.7 million compared to 350.7 million at December 31st, 2023, and 320.1 million at the end of Q1, 2024. The decrease from year-end cash, cash equivalents, restricted cash, and investments is primarily related to the continued investment in commercialization activities and post-approval commitments of Loop Kindness, model plant payments, share repurchases, and restructuring related payments, partially offset by an increase in cash receipts from sales of Loop Kindness and cash payments from Otsuka.

Joseph M. Miller: Thank you, Greg. Good morning, everyone.

Joe Miller: Thank you, Greg, and good morning, everyone. Let's take a few minutes and go into detail regarding our financial results for the second quarter and six-month end of June 30, 2024.

Joseph M. Miller: Let's take a few minutes and go into detail regarding our financial results for the second quarter and six months ended June 30th, 2024. As of June 30, 2024, we had cash, cash equivalents, restricted cash, and investments of $330.7 million compared to $350.7 million at December 31, 2023 and $320.1 million at the end of Q1. As Peter mentioned, our free cash flow in the second quarter of 2024 was approximately 15.8 million, ahead of initial projections and demonstrating the positive impact of the restructuring efforts the company undertook in the first quarter of 2024.

Joe Miller: As of June 30, 2024, we had cash, cash equivalents, restricted cash, and investments of $330.7 million compared to $350.7 million at December 31, 2023, and $320.1 million at the end of Q1, 2024.

Greg Keenan: The decrease from year-end cash, cash equivalents, restricted cash, and investments is primarily related to the continued investment in commercialization activities and post-approval commitments of kindness,

Greg Keenan: Schwartz. Model plant payments.

Greg Keenan: and restructuring related payments partially offset by an increase in cash receipts from sales of LoopKindness and cash payments from Otsuka.

Joseph Miller: Through July 31st, Aurenia had repurchased 3.4 million shares for approximately $18.6 million at an average cost of $5.36. As Peter mentioned, our free cash flow in the second quarter of 2024 was approximately $15.8 million ahead of initial projections and demonstrating the positive impact of the restructuring efforts that the company undertook in the first quarter of 2024. Total net revenue was $57.2 million for the quarter ended June 30th, 2024, and $41.5 million for the same period in 2023, representing growth of approximately 38%. Year-to-date net revenue was $107.5 million for the six months ended June 30th, 2024, compared to $75.9 million for the same period in 2023, representing growth of approximately 42%.

Speaker Change: Through July 31, Aurinia had repurchased 3.4 million shares for approximately $18.6 million at an average cost of $5.36.

Joseph M. Miller: Total net revenue was $57.2 million for the quarter ended June 30, 2024, and $41.5 million for the same period in 2023, representing growth of approximately 38%. Year-to-date net revenue was $107.5 million for the six months ended June 30, 2024, compared to $75.9 million for the same period in 2023, representing growth of approximately 42%. The increase is primarily due to an increase in sales of LubeKindness to our two main specialty pharmacies, driven predominantly by further penetration into the LN market. Additionally, we had sales of semi-finished products to Atsuka as they continue to commercialize in the Atsuka territories and prepare for approval launch in Japan.

Joe Miller: Total net revenue was $57.2 million for the quarter ended June 30, 2024, and $41.5 million for the same period in 2023, representing growth of approximately 38 percent.

Joseph Miller: Net product revenue, consisting of loop kindness, Vocla Spore and product sales, was $55 million for the quarter ended June 30th, 2024, and $41.1 million for the same period in 2023, representing growth of approximately 34%. Net product revenue was $103.1 million for the six months ended June 30th, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%. The increase is primarily due to an increase in sales of loop kindness toward two main specially pharmacies driven predominantly by further penetration into the LN market. Additionally, we had sales of semi-finished product to Etzuka as they continued to commercialize in the Etzuka territories and prepare for approval launch in Japan.

Speaker Change: Net product revenue, consisting of LoopKindness, Vaclav Sporum product sales, was $55 million for the quarter ended June 30, 2024, and $41.1 million for the same period in 2023, representing growth of approximately 34%.

Speaker Change: Net product revenue was $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%.

Joseph Miller: License collaboration and royalty revenue was $2.2 million and $394,000 for the quarters ended June 30th, 2024, and June 30th, 2023. License collaboration and royalty revenue was $4.4 million, and $466,000 for the six months ended June 30th, 2024, and June 30th, 2023. The increase is primarily due to manufacturing service revenue from Etzuka, related to the share capacity services that commenced in late June of 2020.

Speaker Change: Licensed Collaboration and Royalty Revenue was $2.2 million and $394,000 for the quarters ended June 30, 2024 and June 30, 2023.

Joseph M. Miller: Licensed collaboration and royalty revenue was $4.4 million and $466,000 for the six-month ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to manufacturing service revenue for Matsuka related to the share capacity services that commenced in late June 2023. Total cost of sales and operating expenses, inclusive of restructuring costs in the second quarter of 2024, were $58.7 million and $57.7 million for the quarters ended June 30, 2024, and June 30, 2023.

Speaker Change: Licensed collaboration and royalty revenue was $4.4 million and $466,000 for the six-month ended June 30, 2024 and June 30, 2023.

Speaker Change: The increase is primarily due to manufacturing service revenue for Matsuka related to the share capacity services that commenced in late June of 2023.

Joseph Miller: 23. Total cost of sales and operating expenses inclusive of restructuring costs in the second quarter of 2024 were 58.7 million and 57.7 million for the quarters ended June 30th, 2024, and June 30th, 2023. Total cost of sales and operating expenses inclusive of restructuring costs in the first half of 2024 were 122.3 million and 121.7 million for the six months ended June 30th, 2024, and June 30th, 2023.

Joseph Miller: Let me now give you a further breakdown of operating expenses, drivers, and fluctuations. Cost of sales were 8.9 million and 1.6 million for the quarters ended June 30th, 2024, and June 30th, 2023. Cost of sales were 16.7 million and 2 million for the six months ended June 30th, 2024, and June 30th, 2023. The increase is primarily due to the amortization of the model plan finance rate of use asset, which was placed in the service in late June of 2023, semi-finished product sales to Etzuga, and increased sales of loop kindness. Gross margin was approximately 84% and 96% for the quarters ended June 30th, 2024, and June 30th, 2023.

Speaker Change: The increase is primarily due to the amortization of the MonoPlan Finance Right of Use Asset, which was placed into service in late June of 2023, semi-finished product sales to Otsuka, and increased sales of LoopKindness.

Joseph M. Miller: Gross margin was approximately 84% and 96% for the quarters ended June 30, 2024 and June 30, 2023. Gross margin was approximately 85% and 97% for the six months ended June 30, 2024 and June 30, 2023. The primary driver for the decrease was lower employee and overhead costs due to a reduction in general administrative headcount, which occurred late in the first quarter of 2024, partially offset by an increase in legal fees.

Speaker Change: Gross margin was approximately 84% and 96% for the quarters ended June 30, 2024 and June 30, 2023. Gross margin was approximately 85% and 97% for the six months ended June 30, 2024 and June 30, 2023.

Joseph Miller: Gross margin was approximately 85% and 97% for the six months ended June 30th, 2024, and June 30th, 2023. Gross margin for the quarter and full year of 2024 were negatively impacted by the amortization of the model plan and lower margin sales of semi-finished product to Etzuga for distribution in Europe and anticipation of product approval in Japan. SG&A expenses inclusive of share-based compensation were 44.9 million and 47.1 million for the quarters ended June 30th, 2024, and June 30th, 2023. SG&A expenses inclusive of share-based compensation were 92.6 million and 97.2 million for the six months ended June 30th, 2024, and June 30th, 2023.

Speaker Change: Gross margin for the quarter and full year of 2024 were negatively impacted by the amortization of the monoplant and lower margin sales of semi-finished product to Atsuka for distribution in Europe in anticipation of product approval in Japan.

Speaker Change: SG&A expenses, inclusive of share-based compensation, were $44.9 million and $47.1 million for the quarters ended June 30, 2024 and June 30, 2023.

Speaker Change: SG&A expenses, inclusive of share-based compensation, were $92.6 million and $97.2 million for the six months ended June 30, 2024 and June 30, 2023.

Joseph Miller: The primary driver for the decrease were lower employee and overhead costs due to reduction in general administrative headcount, which occurred late in the first quarter of 2024, partially offset by an increase in legal fees. Non-cash SG&A share-based compensation expense included with SG&A expenses was 8.1 million and 9.8 million for the quarters ended June 30th, 2024, and June 30th, 2023. Non-cash SG&A share-based compensation expense included with an SG&A expenses was 15.6 million and 17.4 million for the six months ended June 30th, 2024 and June 30th, 2023. R&D expenses inclusive of share-based compensation expense were 4.1 million and 12.7 million for the quarter ended June 30th, 2024, and June 30th, 2023.

Speaker Change: The primary driver for the decrease was lower employee and overhead costs due to a reduction in general administrative headcount, which occurred late in the first quarter of 2024, partially offset by an increase in legal fees.

Joseph M. Miller: Non-cash SG&A share-based compensation expense, included with SG&A expenses, was $8.1 million and $9.8 million for the quarters ended June 30, 2024 and June 30, 2023. R&D expenses, inclusive of share-based compensation expense, were $4.1 million and $12.7 million for the quarters ended June 30, 2024 and June 30, 2023. Non-cash R&D share-based compensation expense, which was included with R&D expenses, was a $2.1 million credit and a $3.7 million expense for the six months ended June 30, 2024 and June 30, 2023.

Joseph Miller: R&D expenses inclusive of share-based compensation expense were 9.6 million and 25.8 million for the six months ended June 30th, 2024, and June 30th, 2023. The primary drivers for the decrease would lower employee costs due to reduction in headcount, which occurred late in the first quarter of 2024, a decrease of CRO development expenses related to ceasing development of our AUR 300 program, and time of expenses related to AUR 200. Non-cash R&D share-based compensation expense included within R&D expense was 87,000 and 2.1 million for the quarters ended June 30th, 2024, and June 30th, 2023.

Speaker Change: R&D expenses inclusive of share-based compensation expense were $9.6 million and $25.8 million for the six months ended June 30, 2024 and June 30, 2023.

Joseph Miller: R&D. Non-cash R&D share-based compensation expense included with an R&D expense was a $2.1 million credit and a $3.7 million expense for the six months ended June 30, 2024, and June 30, 2023. The non-cash R&D share-based compensation credit in the six months ended June 30, 2024, is due to the reversals of expense for forfeitures related to a reduction in headcount which occurred in the first quarter of 2024. Restructuring expenses were approximately $1.1 million and 0 for the quarters ended June 30, 2024, and June 30, 2023. Restructuring expenses were approximately $7.8 million and 0 for the six months ended June 30, 2024, and June 30, 2023.

Speaker Change: Non-cash R&D share-based compensation expense included with an R&D expense was a $2.1 million credit and a $3.7 million expense for the six months ended June 30, 2024 and June 30, 2023.

Speaker Change: Restructuring expense were approximately $7.8 million and zero for the six months ended June 30, 2024 and June 30, 2023.

Joseph Miller: Restructuring expenses primarily included employee severance, one-time benefit payments, and contract termination expenses. The company does not expect to incur additional material restructuring-related expenses going forward. Other income net was $290,000 and $3.6 million for the quarters ended June 30, 2024, and June 30, 2023. Other income net was $4.4 million and $3.3 million for the six months ended June 30, 2024, and June 30, 2023. The change is primarily driven by changes in the fair value assumptions related to our deferred compensation liability and the foreign exchange remaserman of the model plant lease liability, which commenced in June 2023 and is denominated in Swiss francs.

Speaker Change: Restructuring expenses primarily included employee severance, one-time benefit payments, and contract termination expenses.

Speaker Change: The company does not expect to incur additional material restructuring related expenses going forward.

Speaker Change: Other income net was $290,000 and $3.6 million for the quarters ended June 30th, 2024 and June 30th, 2023.

Speaker Change: Other income net was $4.4 million and $3.3 million for the six months ended June 30, 2024 and June 30, 2023.

Speaker Change: The change is primarily driven by changes in the fair value assumptions related to our deferred compensation liability and the foreign exchange remeasurement of the monoplant lease liability, which commenced in June of 2023 and is denominated in Swiss francs.

Joseph Miller: Interest income was $4.2 million and $4.1 million for the quarters ended June 30, 2024, and June 30, 2023. Interest income was $8.7 million and $7.9 million for the six months ended June 30, 2024, and June 30, 2023. Interest expense was $1.2 million and $65,000 for the quarters ended June 30, 2024, and June 30, 2023. Interest expense was $2.5 million and $65,000 for the six months ended June 30, 2024, and June 30, 2023. The interest expense is related to the amortization of our model plant financing lease. For the quarters ended June 30, 2024, Arriniya recorded net income of $722,000 or $0.01 net income per common share as compared to a net loss of $11.5 million or $8.00 net loss per common share for the quarter ended June 30, 2023.

Speaker Change: Interest income was $4.2 million and $4.1 million for the quarters ended June 30, 2024 and June 30, 2023. Interest income was $8.7 million and $7.9 million for the six months ended June 30, 2024 and June 30, 2023.

Joseph M. Miller: Interest expense was $1.2 million and $65,000 for the quarters ended June 30, 2024, and June 30, 2023. Interest expense was $2.5 million and $65,000 for the six months ended June 30, 2024, and June 30, 2023. The interest expense is related to the amortization of our mono plan finance.

Speaker Change: The interest expense was $2.5 million and $65,000 for the six months ended June 30, 2024 and June 30, 2020.

Aurinia: For the quarter's end of June 30, 2024, Aurinia recorded net income of $722,000 or $0.01 net income per common share as compared to a net loss of $11.5 million or $0.08 net loss per common share for the quarter end of June 30, 2023.

Joseph Miller: For the six months ended June 30, 2024, Arriniya recorded a net loss of $10 million, or $0.7 net loss per common share, as compared to a net loss of $37.7 million, or $0.26 net loss per common share for the six months ended June 30, 2023.

Speaker Change: For the six months ended June 30, 2024, Aurinia recorded a net loss of $10 million, or $0.07 net loss per common share, as compared to a net loss of $37.7 million, or $0.26 net loss per common share, for the six months ended June 30, 2023.

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

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

Peter Greenleaf: Thank you, Joe. We're looking forward to a continued robust performance for the second half of 2024, including solid commercial execution, advancing AUR200 into the clinic with first patient's dose, and a strong balance sheet with cash flow generation.

Operator: I want to thank you all for your time today, and we'll now open the lines for any questions you might have.

Peter Greenleaf: I want to thank you all for your time today, and we'll now open the lines for any questions you might have.

Operator: Operator? At this time, we will conduct the question-and-answer session. If you would like to ask a question, please press star, then the number one on your telephone keypad now, and you will be placed in the queue in the order received. Once again, please press star, then the number one on your telephone keypad now, and you will be placed in the queue in the order received.

Operator: At this time, we will conduct the question and answer session. If you would like to ask a question, please press star, then number one on your telephone keypad now, and you will be placed in the queue in the order received. Once again, please press star, then number one on your telephone keypad now, and you will be placed in the queue in the order received.

Speaker Change: At this time, we will conduct the question and answer session. If you would like to ask a question, please press star then the number 1 on your telephone keypad now, and you will be placed in the queue in the order received.

Unnamed Analyst: Got it. Thank you for taking the question.

Peter Greenleaf: Once again, please press star, then the number 1 on your telephone keypad now, and you will be placed in the queue in the order received.

Operator: David. Your first question comes from Mori Raycroft with Jeffries. Your line is open.

Farzin Haque: Good morning. This is Farzin Haque from Mori. Thank you for taking our questions. So your growth in PSS and patient restarts in 2Q came in a bit lower than 1Q, and then this month is also looking slightly lean.

Speaker Change: So, your growth in PSFs and patient restarts in 2Q came in a bit lower than 1Q, and then this month is also looking slightly lean. So, how should we expect about the cadence in the summer months, given the typical seasonal impacts you've seen in the past, and how does that factor into your adjusted guidance?

Farzin Haque: How should we expect about the cadence in the summer months given the typical seasonal impacts you've seen in the past, and how does the factoring to your guidance?

Peter Greenleaf: Thank you for the question, Farzin. The simple answer is the quarterly performance from Q1 to Q2 and then friend going into, because as we know we report PSS up until the date of a call. Our consistent year over year and there's growth year over year, albeit your observation that Q1 to Q2 are weekly run rate on new patients in combination is slightly down, but that's consistent with what we've seen over the last several years moving into the summer months. But if you look at the trend year over year, we are up on both on all metrics Q1, Q2, and the run rate going in on a weekly basis into Q3.

Speaker Change: Thank you for the question, Prasad. The simple answer is the quarterly performance from Q1 to Q2 and the trend going into, because as we know we report PSFs up until the date of the call,

Peter Greenleaf: is slightly down, but that's consistent with what we've seen over the last several years moving into the summer months.

Peter Greenleaf: Last point, there's the obvious we need to continue to grow new patients. We're not backing away from that. We need to continue to see PSF growth. We need to continue to see the hospital channel grow, and we need to continue to see consistent growth out of our patient restarts. But the numbers are year over year still growing, albeit your observation is in fact right.

Peter Greenleaf: Last point, there's the obvious, we need to continue to grow new patients. There's, there's, we're not, we're not backing away from that. We need to continue to see PSF growth, we need to continue to see the hospital channel grow, and we need to continue to see consistent growth out of our patient restarts. But the numbers are, year over year, still growing, albeit your observation is in fact right.

Farzin Haque: Sorry, it makes sense.

Farzin Haque: You achieved the free casual positivity and have a strong balance sheet.

Speaker Change: You achieved a free cash flow positivity and have a strong balance sheet. So, wondering, should we expect any potential in-licensing of assets or other BD options?

Peter Greenleaf: So, wondering should we stick to any potential in licensing or assets or other BD options?

Peter Greenleaf: Yeah, I think there's the obvious observation that we, barring AUR 200, which has moved into the process moving into the clinic, that we are a single product company.

Speaker Change: Yeah, I think there's the obvious observation that we, barring AUR200, which has moved into the, is in the process of moving into the clinic, that we are a single product company. And as we've said on other calls, we think it's important strategically to continue to diversify our pipeline and of course be open to commercial opportunities as well. But our priority has been more focused on later stage pipeline. But your observation that our balance sheet and the need for diversification is there, and as a company, strategically, we continue to work on that.

Peter Greenleaf: And, as we've said on other calls, we think it's important, strategically, to continue to diversify our pipeline. And of course, be open to commercial opportunities as well, but our priority has been more focused on later stage pipeline. But your observation that our balance sheet and the need for diversification is there, and as a company strategically, we continue to work on that.

Joseph Schwartz: Thank you for taking us questions. Your next question comes from Joseph Schwartz with BeerLink Partners. Your line is open.

Peter Greenleaf: Your next question comes from Joseph Schwartz with LearLink Partners. Your line is open.

Joseph Schwartz: Thanks a lot.

Joseph Schwartz: I was going to ask something on the kindness and then also on AUR 200. So, I guess, as we've discussed before, there seems to be an area of significant upside. If the overall Ellen market embraces more regular urine screening, I was wondering if you could help us understand how much success you've had influencing this behavior and how we should think about your ability to move the needle going forward. Do you have a strong understanding of which practices are not doing this and how effective can you be targeting such sites with your MSLs to educate physicians and encourage more identification of patients that might benefit from the kind of.

Joseph Schwartz: Ellen Market embraces more regular urine screening. I was wondering...

Speaker Change: influencing this behavior and how we should think about your ability to move the needle.

Joseph Schwartz: Do you have a strong understanding of which practices are not doing this? How effective can you be targeting such sites with your MSLs to educate physicians and encourage?

Speaker Change: more identification of patients that might benefit from leukemia.

Peter Greenleaf: So, three point answer to the question, Joe. One is through our awareness studies that we do, our attitude and awareness studies that we do on a quarterly basis. It's clear that both rheumatologists, which by the way is the primary mover on this one because rheumatologists are going to be the one seeing an SLE patient and doing the initial diagnosis in the urine screen. Awareness is up significantly since we've been talking about this. Now, we juxtaposed that talking to it, meaning educating physicians on the guidelines, with the guidelines saying the need to do urine screens on every visit of an SLE patient, but that awareness is up.

Peter Greenleaf: Second, we pull data on actual urine screen analysis that's done, and we don't target it down to directly the office. We just look at an aggregate to see if urine screening is up. We have not seen massive increases. Now, albeit we're in the summer, we're moving into the summertime period.

Speaker Change: But that awareness is up. Second, we pull data on actual urine screen analysis that's done. And we don't target it down to directly the office. We just look at an aggregate to see if urine screening is up.

Speaker Change: We have not seen massive increases, now albeit we're in the summer, we're moving into the summertime period, so I think we need to continue to monitor this over time, but that awareness has not translated into a higher rate of diagnosing yet, so, but the positive momentum is awareness is higher.

Peter Greenleaf: So, I think we need to continue to monitor this over time, but that awareness has not translated into a higher rate of diagnosing yet. So, but the positive momentum is awareness is higher.

Peter Greenleaf: Your question around targeting, yeah, I think we have a very good understanding of who the high prescribers are and who the high target rheumatologists are with a high number of loopless patients. And part of our plan is to call on both with our MSLs and with our sales representatives to call on those target accounts.

Peter Greenleaf: The last point I will make is obviously I mentioned in the call that we've launched a new campaign initiative across the business, and that campaign initiative is exclusively targeted towards the point that you bring up that there's this, this delink between what the aspirations and the goals of therapy are and how actual practices happening from diagnosis through the treatment. And we think once that can catch up, there's significant growth for the market. So, our new campaign is all centered around that.

Speaker Change: The last point I will make is, obviously, I mentioned in the call that we've launched a new campaign initiative across the business, and that campaign initiative is exclusively targeted towards the point that you bring up, that there's this de-link between the

Speaker Change: what the aspirations and the goals of therapy are, and how actual practice is happening from diagnosis through to treatment. And we think once that can catch up, there's significant growth for the market. So our new campaign is all centered around that. So positive momentum, haven't seen it actually materialize yet, but feeling good about the message, at least sticking with physicians.

Joseph Schwartz: So, positive momentum; haven't seen it actually materialize yet, but feeling good about the message at least sticking with physicians. Thanks. That's helpful.

Peter Greenleaf: And then can you talk about your decision to bring a UR 200 forward again? Is this driven by the strategic interest in the space? Can you talk about how the preclinical data for this agent compares to the many assets and late stage development, and what indications are you thinking about pursuing? Yeah, so as we've said all along, our restructuring efforts were to first bring the company into a more optimized phase, knowing that both we had a UR 200. We also had a UR 300 alongside of it. We knew that a UR 300 we had to take back to form the reformulation.

Speaker Change: Thanks, that's helpful. And then, can you talk about your decision to bring AUR200 forward again? Is this driven by the strategic interest in the space?

Peter Greenleaf: So, we exhibited that asset, and by doing so, we had the ability to cut a significant amount of our operating expense. On a UR 200, we said, well, we'll do a market check as well as keep moving the product forward or the asset forward, and then determine after doing a market check whether we're to partner it or whether we should take it forward on our own. While we had interest, it was our determination. One, based upon how those potential conversations went and two, based on the excitement in the space, we've always been excited about the possibility of be selling a vision for April and Beth by the April and Beth pathway.

Speaker Change: On AUR200, we said, well, we'll do a market check as well as keep moving the product forward or the asset forward, and then determine after doing a market check whether we're to parter it or whether we should take it forward on our own.

Gregory Keenan: And we made the decision to take it forward on our own and did it in a way where we're not changing at least our 24 operating expense guidance and what we've given in terms of estimates for operating free cash flow for the year.

Gregory Keenan: Last two questions were centered around any data. I'll tee to Greg Keenan talk about that in a second, but on the indication front, I'll oversimplify to say we're going to try to, as Greg said, target an area that might be under orphan designation and alongside of that to try to target a much larger area. But that would not be in the IGAN space, not that we don't think the product could work in IGAN, but obviously IGAN has been the primary focus of other April, Beth inhibitors who are further ahead of us on the differentiation side.

Schwartz: Schwartz. The last two questions were centered around any data. I'll T to Greg Keenan and talk about that in a second. But on the indication front, I'll oversimplify to say we're going to try to, as Greg said,

Gregory Keenan: Let me give Greg to just talk a little bit about what we've seen to date with the compound. Sure, so thanks, Peter. With some pre clinical work that we've done, we've been able to make some comparisons relative to some of the earlier. Beth, April inhibitors, namely, tell a tacisept and a tacisept, and we find that our KDs and IC50s are lower, meaning we have a more potent compound and equivalent milligram amount of drug. And so we think that is going to be a favorable attribute for anywhere 200 as we advance it. We don't have those comparisons for povitacisept relative to how this particular strategy fits compared to other B cell inhibitors and depletors.

Gregory Keenan: comparisons relative to some of the earlier BAP, APRIL inhibitors, namely teletassassept and atassassept. We find that our KDs and IC50s are lower, meaning we have a more potent compound and an equivalent milligram amount of drug. And so we think that is going to be a favorable attribute for AUR200 as we advance, that we don't have those comparisons for povatassassept. Relative to how this particular strategy fits compared to other B cell inhibitors and depletors, we think that given the presumed combination of efficacious reductions in B cells and reductions in quantitative immune globulins that we expect to see against the backdrop of Hence, we think it will be a very useful agent in many B cell-driven diseases.

Gregory Keenan: We think that given the presumed combination of efficacious reductions in B cells and reductions in quantitative immune globulins that we expect to see against the backdrop of perhaps a maintenance of the ability to. Have an adaptive immune response. We think that the efficacy and safety profile will be one that compares favorably relative to other B cell depleting strategies. Hence, we think it will be a very useful agent in many B cell-driven diseases.

Greg Keenan: efficacious reductions in B cells and reductions in quantitative immune globulins that we expect to see against the backdrop of perhaps a maintenance of the ability to have an adaptive immune response. We think that the efficacy and safety profile will be one that compares favorably relative to other B cell depleting strategies. Hence, we think it will be a very useful agent in many B cell driven diseases.

Joseph Schwartz: Thanks for all the color. Thanks, Joe.

Stacy Ku: Your next question comes from Stacy Ku with TD Cowan; your line is open. Thanks so much for taking our questions. So we had a few. Just back to the hospital channel that we asked about last time. I know, I know it's still early days, but just help us understand where you think that's going to progress this year and next few years. It seems like the patient restarts in hospital channel additions are going to be quite important as we think about who kind of is moving forward. And then some metrics around these patient restarts, what's the average amount of time off treatment before the restart?

Operator: Your next question comes from Stacy Ku with TD Cowan. Your line is open.

Stacy Ku: Thanks so much for taking our questions. We had a few.

Speaker Change: Thanks so much for taking our questions. So we had a few. Just back to the hospital channel that we asked about last time. I know it's still early days, but just help us understand where you think that's going to progress this year and the next few years.

Stacy Ku: Just back to the hospital channel that we asked about last time. I know it's still early days, but just help us understand where you think that's going to progress this year and the next few years. It seems like the patient restarts and hospital channel additions are going to be quite important as we think about who kind of moving forward. And then some metrics around these patient restarts. What's the average amount of time off treatment before the restart?

Speaker Change: It seems like the patient restarts and hospital channel additions are going to be quite important as we think about who kind of is moving forward. And then some metrics around.

Stacy Ku: Obviously, probably above 12 months, but just help us understand why they're coming back. Is it a relapse? How do you capture these patients and convert them into more chronic therapy? And then, last question, is going to be on the long-term trajectory. Just your thoughts around the competitive landscape.

Stacy Ku: Obviously, probably above 12 months, but just help us understand why they're coming back. Is it relapse? How do you capture these patients convert them into more chronic therapy?

Speaker Change: Why they're coming back? Is it a relapse? How do you capture these patients and convert them into more chronic therapy?

Stacy Ku: And then the last question is going to be on the long-term trajectory, just your thoughts around the competitive landscape. So we believe brochures over two of the map will have their phase three read out this summer. For lupus nephritis, they're just curious in thoughts there. Thanks so much.

Speaker Change: And then last question is going to be on the long-term trajectory, just your thoughts around the competitive landscape. So, we believe Roche's Obituzumab will have their Phase III readout this summer for lupus nephritis, so just curious your thoughts there. Thanks so much.

Stacy Ku: Yeah, making sure I have all these.

Peter S. Greenleaf: Yeah, making sure I have all these. Let me start first with the hospital channel. Because we haven't broken these out, let me give a little bit more direction on kind of how these have rolled through. I think right now, the smaller of the two numbers in terms of restarts on the hospital channel has clearly been the hospital channel, and we've talked about that. It's hard to say we have enough to really trend it out yet, Stacy, but we're seeing growth.

Peter Greenleaf: Let me start first with the hospital channel. Because we haven't broken these out, let me give a little bit more direction on kind of how these have rolled through. I think right now the smaller of the two numbers in terms of restarts in the hospital channel has clearly been the hospital channel. And we've talked about that. It's hard to say we have enough to really trend it out yet, Stacey, but we're seeing growth in the tens of patients; call it 10 to 20 patients, 30 patients a quarter. And my hope would be that continues. And we start to see this be a significant growth element per quarter, moving from a couple of 10 patients per queue to more than that.

Speaker Change: And my hope would be that continues and we start to see this be a significant growth.

Peter Greenleaf: But we'll have to see how it trends. We're excited about it. It has moved from almost being just, you know, one of these two diseases to now being as I as 30, 40, 50 patients a quarter. And on a base of, you know, 4 to 5 to 600 patients per quarter of new new patients, you know, 10 to 20 percent of that base coming from the hospital channel. I hope would be that that's going to continue to grow. And everything points to that. The average, in terms of restarts, they have to be in order to be a restart in our qualification.

Speaker Change: We're excited about it. It has moved from almost being just onesies, twosies to now being as high as 30, 40, 50 patients a quarter. And on a base of.

Speaker Change: and everything points to that.

Speaker Change: The average in terms of restarts, they have to be, in order to be a restart in our qualification, they have to be off therapy for at least four months.

Peter Greenleaf: They have to be off therapy for at least four months. I don't think I have that by hands of those restarts that we have, what their average has been. But for us, know that they fall out of our system and they become a restart when they've been off therapy for at least four months.

Peter Greenleaf: Your last question on competition. Obviously, lots of folks targeting the LN space and, more importantly, targeting it as a precursor towards lupus, especially with the B-cell therapies. The most recent activity updates that you're referring to are both Seth Nello and Roche's product, Gziva. The two that my understanding from what they've reported, Roche hopes to have data soon, hopes to file this year, potentially be on market if data is positive by as soon as next year. And then Seth Nello is more protracted.

Speaker Change: Your last question on competition. Obviously, lots of folks targeting the LN space, more importantly, targeting it as a precursor towards lupus, especially with the B-cell therapies. The most recent activity updates that you're referring to are both Safnello and Roche's product Gaziva. The two that my understanding from what they've reported, Roche hopes to have data soon, hopes to file this year, potentially be on market if data is positive by as soon as next year. And then Safnello is more protracted.

Peter Greenleaf: Let me start with Seth Nello. Obviously, they ran a phase to study that study did not show a difference in terms of statistically significant difference in terms of reduction in protein area, but they did move forward with a phase three. So we'll see, and that's a couple of years off. Both by different pathways and Greg can build on this if I miss anything, are targeting B-cell. So it's our belief that, much like Benlista, the data will probably work, but will probably have a more protracted impact in terms of their impact in reducing protein area to the levels that the guidelines are calling for, where the guidelines are targeting three month, six month, one year reductions in protein area.

Speaker Change: Let me start with Safnello. Obviously, they ran a Phase II study. That study did not show a statistically significant difference in terms of reduction in proteinuria, but they did move forward with a Phase III. So we'll see, and that's a couple years off.

Gregory Keenan: And so far, we've not seen B-cell inhibition be able to hit the target levels at those early stages. Now at two years, they seem to work about as good as we do, and these have not been cross-compared, obviously, but in the study data for each individual agent appear to show that they work about as good as we do at a year at two years. These patients have a serious complication of their disease. They can't wait for two years. So we think our positioning, based upon the rapidity of response and magnitude of response early, puts us at a competitive advantage, even though the studies haven't been cross-compared.

Gregory Keenan: Greg, what I miss. No, I think you're spot on. I think the punchline is there's definitely a role for who've kind of said many of these scenarios, and it does, with the evidence we've shown, work very, very quickly. And these B-cell depleting agents just take that much longer, and that's something clinicians need to be mindful of.

Gregory Keenan: Other modalities, we haven't seen any new interest and/or information on and seem to be well off in the time period. The two big ones coming soon are the larger companies. Hopefully, one of these larger companies will also start to focus on educating docs and patients in the LN market and help us with the expansion in the market development work that we're doing. They obviously have more resources and more dollars to do that.

Stacy Ku: Okay, that's really helpful.

Stacy Ku: Thank you so much.

Ed Arce: Thanks, Stacy. Your next question comes from Ed Arce with HC Wainwright. Your line is open.

Operator: Your next question comes from Ed Arce with HC Wainwright. Your line is open.

Speaker Change: Thanks Stacey.

Speaker Change: Your next question comes from Ed Arce with HC Wainwright. Your line is open.

Ed Arce: Hi guys, thanks for taking my questions, and congrats on the quarter. A few questions for me. First, I just wanted to ask. I know this has already been discussed a little bit, but wanted to get a little bit more clarity, if I could. Good on the PSF and hospital restart numbers, both sequentially down, just thinking about, you know, the regular annual seasonality. First quarter obviously has the insurance restarts and is typically a little light. So I'm wondering if you can discuss the seasonality. If there's any from one queue to two queue.

Ed Arce: Hi guys, thanks for taking my questions and congrats on the quarter. A few questions from me. First, I just wanted to...

Ed Arce: I know this has already been discussed a little bit, but I wanted to get a little bit more clarity if I could on...

Speaker Change: The PSF and hospital restart.

Speaker Change: numbers both sequentially down

Speaker Change: Just thinking about, you know, the regular annual seasonality, first quarter obviously has the insurance restarts, it's typically a little light, so I'm wondering if you can discuss the seasonality, if there's any, from 1Q to 2Q.

Ed Arce: And how that fits overall with you lowering the end of your guidance range for this year. And then on the income statement, just looking at your restructuring, I know you have guided initially to 11 to 15 million. You really only have less than eight so far. Just wanted to confirm there won't be any further charges in the third quarter.

Ed Arce: And then lastly, if you could, the number of share buybacks in the quarter, the number and the amount spent.

Peter Greenleaf: And then I will follow up. Thanks.

Peter Greenleaf: OK, well, let me, I'll let Joe handle both the PNL and or income statement questions that were asked on the PSF hospital thing and the one queue to two queue in relation to how we've guided for the year. As I said previously, and I want to reiterate, I think there's a level of consistency in terms of the business trends that we've seen from one queue to two queue and the effect of which we still characterize more qualitatively as patients, just less patient activity in the offices as well as less doc activity in the offices during the summertime.

Antonio Eduardo Arce: Okay, um...

Speaker Change: Well, let me, I'll let Joe handle all the, um...

Joe Miller: PNL and or impact income statement questions that were asked on the PSF hospital thing and the 1Q to 2Q in relation to how we've guided for the year

Peter Greenleaf: Which I think makes a lot of sense based upon the fact that we have a relatively young patient population has been consistent since we've launched the product. And the trends that we've seen so far this year align with what we've seen historically and are up year over year, albeit there is a recognition we'd like them to be up even more. As it relates to our guidance for the year, we've posted, I think, in total about a hundred and seven million year date. We would have to see in order to hit the low end range of our guidance of what was previously 200, we would have to see a significant decrease in the business in the back half of the year.

Peter S. Greenleaf: Which I think makes a lot of sense based upon the fact that we have a relatively young patient population. The trends that we've seen so far this year align with what we've seen historically and are up year over year, albeit there is a recognition that we'd like them to be up even more. As it relates to our guidance for the year, we've posted, I think, in total, about $107 million year-to-date.

Joe Miller: which I think makes a lot of sense based upon the fact that we have a relatively young patient population, has been consistent since we've launched the product. And the trends that we've seen so far this year align with what we've seen historically

Speaker Change: and are up year over year.

Peter S. Greenleaf: We would have to see a significant decrease in the business in the back half of the year. We don't project that, Ed. We project that even if we have a down summer consistency, and if we are consistent, we will fall within that guidance range and be well within that guidance range. So we feel comfortable about it based upon that assumption.

Speaker Change: The low end range of our guidance of what was previously 200, we would have to see a significant decrease in the business in the back half of the year.

Joseph Miller: We don't project to that end; we project even if we have a down summer consistency, and if we are consistent, we will fall within that guidance range and be well in that guidance range. So we feel comfortable about it based upon that assumption. If we see a great summer performance, we should be at the higher end of that guidance range or maybe when we report three to we adjust that. But we feel comfortable with the range that we've given based upon that in terms of the charges.

Speaker Change: We don't project that, Ed, we project...

Peter S. Greenleaf: If we see a great summer performance, we should be at the higher end of that guidance range, or maybe when we report 3Q, we'll adjust that. But we feel comfortable with the range that we've given based on that.

Ed Arce: If we see a great summer performance, we should be at the higher end of that guidance range, or maybe when we report 3-Q, we adjust that.

Peter S. Greenleaf: In terms of the charges, I think if you go back to the transcript, Joe actually addresses them, but I'll have him address them again. And then 5X, what we did in the Q was in the transcript as well, but let us reiterate it for you. Thanks for the question, Ed.

Ed Arce: But we feel comfortable with the range that we've given based upon that.

Joseph Miller: I think if you go back on the transcript, Joe actually addresses problem address it again and then five acts what we did in the queue was was in the transcript as well, but let us reiterate it for you. Thanks for the question, Ed. Yeah, so on the restructuring charge for all intents and purposes, all restructuring activities were completed in the second quarter. So we do not anticipate any further material spend related to the restructuring plan that was announced early in the first quarter. So yes, you're right, we had roughly approximately $8 million of total restructuring-related costs; about 1.1 million of that reflected in Q2.

Speaker Change: In terms of the charges, I think, if you go back on the transcript, Joe, actually addressed this, but I'll have him address it again. And then buybacks, what we did in the queue was in the transcript as well, but let us reiterate it for you.

Joseph M. Miller: Yeah, so on the restructuring charge, for all intents and purposes, all restructuring activities were completed in the second quarter. So we do not anticipate any further material spend related to the restructuring plan that was announced early in the first quarter. So yes, you're right.

Joseph M. Miller: We had roughly $8 million of total restructuring related costs, about $1.1 million of that reflected in Q2, slightly less than our guidance range initially, but we don't expect anything further thereafter. In regards to your second question related to the share repurchase program, I think we disclosed on March 31st that we acquired approximately 2.4 million shares. As of July 31st, we have repurchased approximately 3.4 million shares. So roughly, in the time between March 31 and July 31st, approximately 1 million additional shares have been repurchased.

Joseph Miller: Slightly less than our guidance range initially, but we don't expect anything further thereafter.

Joseph Miller: In regards to your second question related to the share repurchase program, I think we disclose that March 31st that we acquired approximately 2.4 million shares. As of July 31st, we have repurchased approximately 3.4 million shares. So roughly in the time between March 31 and July 31st, approximately 1 million shares. So roughly in the time between March 31 and July 31st, approximately 1 million shares have been repurchased.

Ed Arce: Great.

Unnamed Analyst: Great, fantastic. Then, last question, perhaps this is for Greg, regarding AUR200,

Ed Arce: Fantastic.

Gregory Keenan: Then last question, perhaps this is for Greg. Regarding the AUR 200, you've decided to move forward and have stated there's a sad study data readout expected in the first half of next year. I'm wondering if you could provide any detail around the biomarker data that you expect to report.

Joe Miller: You've decided to move forward and...

Gregory Keenan: Thanks. Thanks for the question. So, as you know, a bath April inhibitors, they block the maturation and proliferation of short-lived plasma cells. Specifically, the ones that are thought to generate the pathologic antibodies that drive disease. So, from the standpoint of healthy volunteers, we can get an early impression as to whether or not we'll have an impact on those measures, namely quantitative immunoglobulins. So IGGM and IGA will be looking to see what percentage relative to baseline those levels drop over time. Of course, it's only a single dose. And so the impact may be relatively modest, but it will give us an early impression as to whether or not we've got a molecule here that is biologically active.

Gregory Keenan: Thanks for the question. As you know, BAF-APRIL inhibitors block the maturation and proliferation of short-lived plasma cells, specifically the ones that are thought to generate the pathologic antibodies that drive disease. So, from the standpoint of healthy volunteers, we can get an early impression as to whether or not we'll have an impact on those measures, namely quantitative immune globulin, I.e., IgG, IgM, and IgA. We'll be looking to see how much relative to baseline of those levels drop over time.

Speaker Change: Antibodies that drive disease. So from the standpoint of healthy volunteers, we can get an early impression as to whether or not we'll have an impact on those measures, namely quantitative immune globulin. So IgG, IgM, and IgA. We'll be looking to see

Gregory Keenan: Of course, it's only a single dose, and so the impact may be relatively modest, but it will give us an early impression as to whether or not we've got a molecule here that is biologically active. So that will be the key set of numbers that we'll be looking at as it relates to biological activity. Thank you.

Gregory Keenan: So that will be the key set of numbers that we'll be looking at as it relates to biologic activity. The essence of what we're trying to do here is look at those who were ahead of us too and what they've reported on and try to give as much like-to-like data. So the question that was asked previously around how do you see your molecule sort of mapping towards the others who might be ahead of you. Each one is slightly different now. They're hitting these targets. So we think even that early biomarker data will have key points of differentiation in both shaping how we move into further clinical development and the indications we go after.

Gregory Keenan: I think the essence of what we're trying to do here is look at those who were ahead of us too and what they've reported on and try to give as much like-to-like data as possible. So the question that was asked previously around how do you see your molecule sort of mapping towards the others who might be ahead of you? Each one is slightly different in how they're hitting these targets. So we think even early biomarker data will have key points of differentiation in shaping how we move into further clinical development, the indications we go after, and how we should be looking at this compound relative to potential competitors in the APRILBAP space.

Speaker Change: shaping how we move into further clinical development, the indications we go after, and how we should be looking at this compound relative to potential competitors in the April lab space.

Gregory Keenan: And how we should be looking at this compound relative to potential competitors in the April BAF space.

Ed Arce: Very helpful. Thank you so much.

Peter Greenleaf: Thanks, Ed. At this time, there are no further questions.

Speaker Change: Thanks, Ed.

Peter Greenleaf: I'd like to turn the call back over to our speakers for any further remarks. I know further remarks. So I want to thank everybody for joining us on the call today. We look forward to continuing to keep you updated on our business as we move forward. Thanks for your time, everyone.

Operator: Thank you, everyone, for attending the Aurinia Pharmaceuticals Second Quarter, 2024 earnings call.

Operator: Have a wonderful rest of your day.