Earnings call transcript: Aurinia Pharmaceuticals Q4 2024 misses EPS forecast

Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $0.01, falling short of analysts’ expectations of $0.03. The company’s revenue also came in below forecasts, reaching $59.9 million against a projected $61.7 million. Following this announcement, Aurinia’s stock experienced a premarket decline of 4.65%, trading at $7.58, down from the previous close of $7.95. According to InvestingPro analysis, the company maintains a "GREAT" overall financial health score of 3.33/5, with particularly strong metrics in growth and cash flow management. The stock currently appears undervalued based on InvestingPro’s Fair Value analysis.

Key Takeaways

• Aurinia Pharmaceuticals missed both EPS and revenue forecasts for Q4 2024.
• The stock saw a premarket drop of 4.65% following the earnings release.
• Total (EPA:TTEF) revenue for 2024 increased by 34% year-over-year, reaching $235.1 million.
• The company remains focused on expanding its market presence and product offerings.

Company Performance

Aurinia Pharmaceuticals demonstrated significant revenue growth in 2024, with total revenue increasing by 34% compared to the previous year. The company’s flagship product, LUKINIS, reported net product sales of $216.2 million for the year, marking a 36% increase from 2023. Despite these gains, the company faced challenges in meeting analysts’ expectations for the fourth quarter, which affected its stock performance. InvestingPro data reveals impressive revenue growth of 38.72% in the last twelve months, though the company trades at a notably high EBITDA multiple. The company maintains strong liquidity with a current ratio of 5.6, indicating robust short-term financial health.

Financial Highlights

• Revenue: $59.9 million in Q4 2024, up 33% year-over-year.
• Full Year Revenue: $235.1 million, up 34% from 2023.
• Net Product Sales (LUKINIS): $57.6 million in Q4 2024, up 36% year-over-year.
• Cash and Investments: $358.5 million as of December 31, 2024.
• Cash Flow from Operations: $44.4 million for 2024.

Earnings vs. Forecast

Aurinia Pharmaceuticals reported an EPS of $0.01, missing the forecasted $0.03. Revenue also fell short of expectations, with actual figures at $59.9 million compared to the anticipated $61.7 million. This resulted in a negative surprise for the market, contributing to the stock’s premarket decline.

Market Reaction

Following the earnings announcement, Aurinia’s stock price dropped by 4.65% in premarket trading. The stock’s movement reflects investor concerns over the company’s ability to meet earnings expectations. The current price of $7.58 is closer to its 52-week low of $4.71, indicating a challenging market environment.

Outlook & Guidance

For 2025, Aurinia Pharmaceuticals has set a total revenue guidance of $250 million to $260 million, with net product sales expected to range from $240 million to $250 million. The company is advancing its pipeline, particularly with AUR200, and is preparing for potential generic competition. InvestingPro subscribers have access to additional insights, including 7 more exclusive ProTips and a comprehensive Pro Research Report that provides deep-dive analysis of Aurinia’s financial health, valuation metrics, and growth prospects. This detailed analysis is particularly valuable given that 4 analysts have recently revised their earnings expectations downward for the upcoming period.

Executive Commentary

CEO Peter Greenleaf stated, "We are now into our fifth year on the market, we believe that our historical financial results provide sufficient insight into the health of our business to project forward-looking results." He also emphasized the company’s commitment to defending its intellectual property rights for LUKINIS.

Risks and Challenges

• Potential generic competition could impact market share and pricing.
• The lupus nephritis market remains underdiagnosed, posing challenges for market penetration.
• Economic pressures and healthcare policy changes could affect sales and profitability.

Q&A

During the earnings call, analysts inquired about the company’s strategy for maximizing LUKINIS sales and its approach to potential generic competition. Executives highlighted the differentiation of AUR200 and the decision to stop reporting patient-start metrics, focusing instead on broader market strategies.

Full transcript - Aurinia Pharmaceuticals Inc (AUPH) Q4 2024:

Conference Operator: Greetings and welcome to the Aurinia Pharmaceuticals Fourth Quarter and Full Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode.

A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Andrea Christopher, Head of Corporate Communications and Investor Relations for Aurinia. Thank you. You may begin.

Andrea Christopher, Head of Corporate Communications and Investor Relations, Aurinia Pharmaceuticals: 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 President and Chief Executive Officer Joe Miller, Aurinia’s Chief Financial Officer and Doctor. Greg Keenan, Aurinia’s Chief Medical (TASE:BLWV) Officer. Today, we will review and discuss Aurinia’s fourth quarter and full year twenty twenty four financial results and provide an update on recent corporate progress as communicated in the company’s press release and annual report on Form 10 ks 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, annual report on Form 10 K 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, 02/27/2025, 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?

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Thanks, Andrea, and good morning, everyone. I want to thank you all for joining us on today’s call. On this morning’s call, I’ll provide an update on our fourth quarter and full year 2024 results and provide an update on our recent progress. I’ll then turn the call over to Joe Miller, our CFO, to provide additional details on our financial results. With the continued focus on commercial execution and operational efficiency, we achieved significant growth in total revenue and record setting net product sales in the fourth quarter of twenty twenty four.

For the fourth quarter of twenty twenty four, total revenue was $59,900,000 up 33% from $45,100,000 in the same period of 2023. For the full year 2024, total revenue was $235,100,000 up 34% from $175,500,000 in 2023. For the fourth quarter of twenty twenty four, net product sales of LUKINIS, the first FDA approved oral therapy for the treatment of adult patients with active LN, were $57,600,000 up 36% compared to $42,300,000 in the same period of 2023. For the full year of 2024, net product sales were $216,200,000 up 36% from $158,500,000 in 2023. The increase in both periods is primarily due to an increase in the number of loop kinase cartons sold to specialty pharmacies driven by further LN market penetration.

For three months ended 12/31/2024, cash flow generated from operations was $30,100,000 compared to $14,300,000 in the same period of 2023. For For the year ended 12/31/2024, cash flow generated from operations was $44,400,000 compared to cash flow used in operations of $33,500,000 in 2023. Following last year’s strategic restructuring, we are pleased with how our cash flow improved throughout 2024. Exiting the year, we have cash, cash equivalents, restricted cash and investments of $358,500,000 as of 12/31/2024. As we are now into our fifth year on the market, we believe that our historical financial results provide sufficient insight into the health of our business to project forward looking results.

Therefore, we’re not providing specific patient level metrics. With our strong 36% sales growth for lupkinis in 2024, we are poised for continued success and have a commercial strategy that is focused on four key growth drivers. First, we’ve sharpened our focus on expanding our base of business at academic medical centers and lupus centers. We’ve also targeted key rheumatology prescriber segments and identified key lupus nephritis patient types. This would include newly diagnosed patients, patients who are only on MMF and steroids, patients receiving treatment but not achieving treatment potential targets and potential for lupus nephritis restarts.

Second, we expect the new ACR lupus nephritis treatment guidelines to help drive positive momentum for lupus kinase this year and we’re continuing to create a treat to target mindset among rheumatologists that drives the overall treatment urgency to screen and treat lupus nephritis more aggressively. Third, we continue to reinforce the impressive three year efficacy data and safety data from our AURORA clinical program to clinically differentiate lupus nephritis and position it earlier in the treatment paradigm. And lastly, we’re focused on improving continuity of care for lupus nephritis patients by growing our hospital business and keeping patients on therapy for longer periods of time. We’re very pleased to start 2025 in a solid position with a highly efficient organization focused on lupus nephritis growth and therefore expect total revenue for 2025 in the range of $250,000,000 to $260,000,000 and net product sales in the range of $240,000,000 to $250,000,000 for 2025. Finally, we are also continuing to advance the development of our pipeline product AUR200, a potentially best in class dual AFAPRIL inhibitor for the potential treatment of a range of autoimmune diseases.

We initiated a Phase one study last September and expect to report out initial results from this study in the second quarter of twenty twenty five. I’d now like to turn the call over to Joe Miller, our CFO, for a more detailed review of the fourth quarter and full year financial results. I’ll then return to end the call for a quick wrap up and open up the line to any questions you might have. Joe?

Joe Miller, Chief Financial Officer, Aurinia Pharmaceuticals: Thank you, Peter, and good morning, everyone. Let’s take a few minutes to discuss the fourth quarter and full year twenty twenty four financial results. For the three months ended 12/31/2024, total revenue was $59,900,000 compared to $45,100,000 for the same period of 2023. For the year ended 12/31/2024, total revenue was $235,100,000 compared to $175,500,000 in 2023. As Peter mentioned, we had cash, cash equivalents, restricted cash and investments of $358,500,000 as of 12/31/2024 and generated cash flows from operations of $44,400,000 We are continuing to be opportunistic with our share repurchase program and expect to fund any future discretionary share repurchases with cash flows from operations and cash currently on hand.

As of 02/25/2025, the company has repurchased approximately $9,700,000 of its common shares for approximately $70,000,000 since the launch of the program in the first quarter of twenty twenty four. For the three months ended 12/31/2024, cost of revenue was $5,600,000 compared to $5,400,000 in the same period of 2023. For the year ended 12/31/2024, cost of revenue was $28,200,000 compared to $14,100,000 in 2023. The increase for the full year is primarily due to the amortization of the finance right of use lease asset recognizing connection with the mono plant, which was placed into service in late twenty twenty three and therefore only partially impacted by prior year cost of revenue. For the three months ended 12/31/2024, gross margin was 91% compared to 88% in the same period of 2023.

For the year ended 12/31/2024, gross margin was 88% compared to 92% in 2023. For the three months ended 12/31/2024, total operating expenses were $61,500,000 compared to $74,800,000 in the same period of 2023. For the year ended 12/31/2024, total operating expenses were $239,800,000 compared to $267,200,000 in 2023. The decrease in both pre reads is primarily due to lower personnel costs including share based compensation and overhead costs as a result of our strategic restructuring efforts in 2024 coupled with a reduction in non personnel R and D expenses a result of ceasing development of the company’s AUR300 development program. These savings in both periods are partially offset by a one time termination benefits, contract terminations and other costs associated with our strategic restructuring efforts undertaken throughout 2024.

For the three months ended 12/31/2024, net income was $1,400,000 or $0.01 of earnings per share compared to net loss of $26,900,000 or $0.19 of net loss per share in the same period of 2023. For the year ended 12/31/2024, net income was $5,800,000 or $0.04 of earnings per share compared to a net loss of $78,000,000 or $0.54 of net loss per share in 2023. With that, I’d like to hand the call back over to Peter for some closing remarks. Peter?

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Thanks, Joe. In summary, implementing a highly focused industry leading operational strategy has allowed us to lean further into the highest growth drivers for the commercial lube kindness business, accelerate clinical development of AUR200 and further strengthen our balance sheet. We now have more flexibility to engage in activities that can strategically enhance our business. I want to thank you all for your time today. We’ll now open the lines for any questions.

Operator?

Conference Operator: Thank you. We’ll now be conducting a question and answer session. Our first question is from Stacy Ku with TD Cowen. Please proceed with your question.

Vish, Analyst, TD Cowen: Hi, good morning. This is Vish on for Stacy. And congrats on the year and thanks so much for taking our questions. We had a couple. So thanks for talking about your kind of growth key growth drivers.

And so as we think about those in about 2025, can you give us some more details around with the current sales force, how you are maximizing the opportunity for lupkinas, especially given the addition to the ACR guidelines? Maybe some more details on these prescriber segments. And then on the and then the second question is probably on the AUR 200 asset. So we’re really looking forward to the Q2 readout. Can you remind us what sort of data we can expect and what we’ll be able to kind of clean or infer from it?

Thank you very much.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Vish, thank you for the questions. Let me start with the first and then I might ask Greg to jump in if I miss anything on the second. Your first question on sort of post our restructuring, maximizing the opportunity as it relates to lupkinus. As we went through in the call, I think we’ve got four key areas we’re focused on. And let me try to at least relate two of those to how we address them post the restructuring.

The first is a strong focus on rheumatology. As we all know, LN patients are SLE patients that progress to worsening outcomes and they present well, they present probably originally at a primary care physician’s office, but once diagnosed they’re with the rheumatologist. And if our goal is to drive the ACR guidelines and what they propose should be the treatment of the disease and the diagnosis of the disease, initial diagnosis and initial treatment really should happen aggressively within the rheumatologist office. So as we restructured our group, one of the things we put a very high priority on was focusing on high prescribing SLE and LN offices, which we would pick up from both codes through actually looking at patient, not actual patient, but patient charts that we’re able to look at in a blinded fashion. So the high prescribing rheumatology offices, one area, hugely important.

The guidelines you mentioned in your question, hugely important since we know that there’s an under diagnosis and an under treatment of the disease. And then lastly, we’ve focused our resources again against the hospital segment because we know that major medical centers around the country that have lupus centers that are lupus centers and have lupus clinics are critically important to capturing patients early in their diagnosis if they have elevated proteinuria. So those are just a few examples of how we’ve not just tightened our resources, but focus them down against two segments that we think are critically important. On your second question, which focus on AUR200, as you heard on the call, we’re looking forward to disclosing what we see from our single ascending dose trial that’s ongoing and will beat out at the end of 2Q this year. I think what you can expect to see are normal pharmacodynamics and normal pharmacokinetic data.

Obviously, in the April BAF space, there are some important markers such as IgG, IgA, IgM that we would hope to be able to show as well. This data is going to be critically important in understanding what dose we take into the MAD study and what structure we actually use in that study as we progress out of the SAD and into the MAD. I don’t think I missed anything there, did I Greg? No. Thank you.

Next (LON:NXT) question?

Conference Operator: Our next question is from Olivia Breyer with Cantor Fitzgerald. Hi, good morning. Thank you for the questions. How are you all thinking about lute kinase growth beyond 2025? It looks like you’re guiding to about thirteen percent this year at the midpoint.

So is low double digits the right way to think about growth rate these next few years? And then on AUR-two hundred, will you guys actually be disclosing the dose for the MAD portion and indication selection in that second quarter update? And is there anything you can tell us at this point about half life and potential dose frequency for your candidate? Thank you, guys.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Thanks, Olivia. So we haven’t historically and don’t intend to today give long term guidance on lupkinase, but you can see what we’ve sort of centered our metrics upon and it’s listen, this product has been on the market now for four going into its fifth year and we think those historical trends are the best way to think about the product on a go forward basis. So hopefully that’s helpful. On AUR-two hundred and the SAD data, I will just hold back on saying what we will or won’t disclose because we actually have to see the data first. I think as we move into the MAD study, it would probably be good and there would probably be an expectation out there that will give some steer as to how we’re going to conduct the MAD.

But I guess I would just ask that we get this ad data first, see what it shows us. I think it will be really strong context for what we think we have in this versus others that are also doing development in this space. And then the next natural question is, well, how does that inform the MAD study, which we’re just a few months away from. So look forward to having that conversation.

Conference Operator: Okay, understood. Thanks, Peter. What about in terms of timelines for obviously, I know we have to see the SAD data first, but in terms of next steps and timelines for that MAD portion of the study, can you guys put any kind of numbers or timelines around that?

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Yes, I guess I would go back to what I just said. Let us get the SAD data first and then we’ll tell you what we intend to do in the MAD and that will inform how long that’s going to take and what our projections are to completion of that. So more to come.

Conference Operator: Okay, understood. Looking forward to it. Thank you guys.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Thanks, Olivier.

Conference Operator: Our next question is from Farzin Hayth with Jefferies. Hi. This is Amin on for Maury. Thank you for taking our questions. Two from us.

One on the guidance, just following up with the previous question. You issued a guidance of two two forty to two fifty and it seems to be somewhat conservative given the 4Q run rate. What are you seeing in initial two months of this year that informs you the commercial outlook for 2025? And then on exclusivity, lupkinase has orange book exclusivity protection until January 26, if I’m not mistaken? And as expected, an NDA was filed by LOTUS earlier this month.

Maybe talk about your strategy there and is the base case assumption is still that the earliest generic can come to market in first half twenty twenty eight?

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Yes. Let me start on the first question, which was our guidance range and what have we seen early in the year. I think our guidance range is, as we said on the call, very much driven by what we know now after our being in our fifth year on the market and looking very closely at our historical financial results and using that to sort of project out where we see the year. As you may see, obviously, the low end of that projection is sort of flattish to slightly up versus where we were in Q4. The higher end of that range obviously gets us into a higher growth category.

So we feel good about the numbers across the board. Do we think they’re conservative? No, we think they’re based on what we’re seeing in the marketplace today. On your second question, I think your point was, there was a little bit of a reiteration of some dates and times in the mid portion of twenty twenty eight, I think we can reaffirm. But I do want to just confirm for folks that we’re aware, obviously, we’ve been aware that ANDA filings would begin this year.

We have a robust patent portfolio covering Loukinis for its unique chemical entity and obviously also the unique dosing paradigm, which could take us all the way out to 02/1937. As any company would and we fully intend to do, we fully intend to vigorously defend lupitis and our intellectual property rights protecting the product. So more to come as things continue to evolve here, but nothing’s changed in terms of the dates and times, Parsit. Thank you for the question.

Conference Operator: Our next question is from Joseph Schwartz with Leerink Partners.

Olivia Breyer, Analyst, Cantor Fitzgerald: Hey, all. This is Will for Joe today. Thanks for taking our question and congrats on the progress this quarter. So just two from us. I guess first, could you just go back and talk a little bit more about your decision to no longer report PSS for the final quarter in 2024?

I guess I’m just trying to understand why you might make that switch in the middle of the year rather than something as you move forward in 2025? How should you be thinking about a trajectory to launch about metrics like this? And then one on AUR200, given it has a lower KD and IC50 as compared to other anti able assets, is it fair to assume that the higher potency should allow for a lower or less frequent dose? I guess when we’re looking at the NHP data, it looks like dosing was once weekly, which is in line with other assets. So can you help us understand this dynamic and the potential differentiation here versus other therapies in development?

Thank you.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: So I’ll start with the first question, then I’ll ask Greg to jump in and obviously remind I mean, want to state what we’ve reported, not necessarily what’s speculative. So as we said on the call, we’re now five years into this, so we’re into our fifth year under market. And we believe confidently that our historical financial results provide enough insight, sufficient insight into the health of our business to project it on a forward basis. We’re excited to have grown the product more than 35% this year in 2024, and we’re guiding lupus kinus revenues this year at $240,000,000 to $250,000,000 and at a total company basis $250,000,000 to $260,000,000 We made the decision at year end because we thought it was the best time. I think you mentioned midyear.

We actually believed that doing it now was the best time to do it. We look forward to reporting out on the key commercial strategy areas that I mentioned on the call and mentioned in the previous question, as we focused on them as our drivers for 2025 and beyond. Greg, do you want to take the next one?

Greg Keenan, Chief Medical Officer, Aurinia Pharmaceuticals: Sure. So you were referencing information that had been reported or presented at American College Rheumatology Meeting twenty twenty two. And what you alluded to was the fact that AUR-two hundred in the preclinical models that we’ve conducted, we’ve identified that there’s a lower KD and lower IC50. Lower means resulting in equivalent impact with lower amounts of compound just like you’re alluding to. So we think that the potency of AUR200 with the work we’ve done thus far pre clinically is very attractive with regard to the amount of compound you need and perhaps the frequency with which you need to give the drug that is less milligram per milligram basis and perhaps less frequent dosing.

Of course, we’re doing conducting the single ascending dose study right now has been as has been discussed earlier. And in people, we’ll learn exactly what will be the take forward frequency of dosing and the milligram amount that would be appropriate in diseases that we select later. So thanks for the question. Good information at

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: this point, and we’re ready to move forward.

Conference Operator: Our next question is from Ed Arcey with H. C. Wainwright.

Ed Arcey, Analyst, H.C. Wainwright: Hey guys, thanks for taking my questions. Two from me. Firstly, just wanted to ask again on the ACR treatment guidelines, as you mentioned, one of the key drivers for continuing growth. Wanted to get your perspectives on your thoughts on the impact of prescriber perspectives and ultimately their script writing and uptake of lupusiness, especially since historically script writing from rheumatologists has been a bit more difficult to penetrate than nephrologists. And then secondly, with regard to AUR200, just wondering if you could help us understand, as you think about the timeline coming out of the SAD and then later this year into the MAD studies, what’s the longer term timeline look like as you think about ultimately selecting an initial indication and moving into an early Phase II?

Thank you.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: Thanks for the question, Ed. On the ACR treatment guidelines, to oversimplify for folks on the call, the two biggest areas and there really are actually, I’ll go quickly three that we see as being hugely beneficial for the market, treatment, patients and physicians. One is early diagnosis and treat to target guidelines. Basically, do proteinuria screens on every patient that has SLE when they enter the office there and that’s a rheumatologist office. That doesn’t happen today.

Second, when they hit a target level UPCR to treat And we know today that somewhere around when they hit those target levels only thirty percent of those patients even get treated, huge opportunity. And then lastly, regardless of the product that they’re on that they need to be kept on that product for up to three to five years. And we know today that no matter what the product is, there’s more of a mindset to treat to a time period where the protein area goes down and then selectively potentially they remove medication, which we know from our data that patients then have to be restarted on the product. So all three of those are benefits to patients with LN, the overall market and of course our product. So impact on behaviors, what I can tell you is greater than 50% of our prescriptions today come from rheumatologists and that number is slowly growing.

We have not seen massive change at least in the macro data that we have in terms of earlier diagnoses yet, but we have to recognize that the ACR guidelines only came out in November. So I think there’s plenty of time ahead where these guidelines along with the Eulard guidelines and the Codigo guidelines are all very positive for the LN market going forward and our product. So we’ll look forward to reporting numbers on market, Ed, as we go forward, but that’s the high level. We’re seeing some impact and we look forward to seeing more impact on actual treatment and diagnosis behaviors moving forward. In terms of your question on AUR200 time and once we get out of the SAD into the MAD, our longer term timelines, Well, what I would say is let us get through the single ascending dose trial.

Let us articulate what our approach to the multi is going to be. And I think that will whether we give guidance to longer term or not, it will at least give some steer towards where we’re going and how long that might take. But I think we got to get through this ad, it’s not far away, look at what those kinetics and dynamic data tell us and use that as an informed decision to move into the MAD study. So more to come. Thank you for the questions, Ed.

Conference Operator: Thank you. This concludes our question and answer session. I would like to hand the floor back over to Peter Greenleaf for any closing comments.

Peter Greenleaf, President and Chief Executive Officer, Aurinia Pharmaceuticals: I want to thank you all for joining us today. We look forward to a strong 2025 and we’ll keep you updated along the way. Have a great day folks.

Conference Operator: This concludes today’s presentation. You may disconnect your lines at this time. Thank you for your participation.

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