Aurinia Pharmaceuticals Inc. (AUPH) Q4 2019 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Aurinia Pharmaceuticals Fourth Quarter and Year End 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host Dr. Glenn Schulman, Head of Investor Relations. Thank you. You may begin.

Thank you, Diego, and good afternoon, everyone. Welcome to Aurinia's year end 2019 results conference call. Joining me on the call today from the Aurinia team are Mr. Peter Greenleaf, President and CEO; our CFO, Dennis Bourgeault; Dr. Neil Solomons, our Chief Medical Officer; Mr. Michael Martin, Chief Operating Officer; and Mr. Max Colao, recently appointed Chief Commercial Officer. Following some prepared remarks the team will also be available for questions in during the Q&A session. So, this afternoon, we issued our press release detailing fourth quarter and year-end 2019 financial results. The press release and associated financial statement packages are available on our website at www.auriniapharma.com, along with the 6-K that was filed with the SEC as well. Before jumping in today’s brief presentation, I'd like to remind you all that today's call is being webcast live on Aurinia's investor relations website, and a replay will be available following the call. Also note the content of today's call is property of Aurinia, may not be reproduced or transcribed without prior written consent from Aurinia. For approval please feel free to reach out to me, Glenn Schulman, via email at ir@auriniapharma.com. Also during the course of this call, we may make forward-looking statements based on our current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's press release, our most recent filings with the Canadian securities authorities and reports that we file on form 6-K with the U.S. Securities and Exchange Commission. Lastly, please note that all the statements made during today's call are current as of today, Thursday March 05, 2020, and are based upon information currently available to us. Except as required by law, we assume no obligation to update any such statements as of this date. With all that, let me turn the call now over to Aurinia's CEO, Mr. Peter Greenleaf. Peter?

Well, thanks, Glenn, and I want to thank you all for taking the time to join us this afternoon. As Glenn mentioned, we issued fourth quarter and year end 2019 financial results earlier this afternoon. In addition, we also provided a recap of our recent accomplishments including the positive voclosporin AURORA Phase III results, our recent regulatory interactions as well as some important commercial operational highlights. Today's call should be brief as I'm sure everyone is busy with both earning season here and all of the activity that's been in the market as of late. Since our last call in December, when we reported out the AURORA Phase III results, the management team has been heads down focused on preparing to file an NDA for lupus nephritis. Aurinia is currently in the midst of a significant build out and expansion in order to make sure that we are optimized as an organization to launch voclosporin following potential approval in early 2021. For those who may be newer to the story, last December, Aurinia reported positive results from our confirmatory Phase III trial evaluating voclosporin in combination with mycophenolate, or simply MMF, and low-dose corticosteroids, in the treatment of lupus nephritis. The global study in which 357 patients with active lupus nephritis were enrolled, met its primary endpoint of Renal Response rates of 40.8% for voclosporin versus 22.5% for the control arm and here doubling of the response rates with a p-value of less than 0.001. Additionally, all of the pre-specified hierarchical secondary endpoints were achieved at statistical significance in favor of voclosporin, which included Renal Response at 24 weeks, Partial Renal Response at 24 weeks and 52 weeks, time to achieve a UPCR of less than or equal to 0.5, and time to a 50% reduction in UPCR. As discussed in December, the robustness of the data was seen across all pre-specified subgroup analyses including age, sex, race, biopsy class, prior use of MMF, et cetera all were in the favoring voclosporin. As important as the efficacy seen, voclosporin was well tolerated with no unexpected safety signals. In terms of presenting additional results from AURORA study, I'm pleased to report that later this month we will have two late breaking oral presentations, one at the NKF Spring Meeting and one at lupus, the Lupus 2020 meeting, and we are hoping to have additional opportunities to present AURORA results at the European Medical Congresses this summer, ERA and EULAR, and in the fall at both AACR and ASN. As Glenn and I mentioned earlier, Dr. Neil Solomons, our Chief Medical Officer, is with us today and happy to address any questions you may have from that previously reported dataset during our Q&A session. Following these results, just a couple of months ago, the Aurinia team has executed on our plan to prepare for regulatory and commercial success. With the AURORA data in hand, the team had a very positive pre-NDA meeting with the FDA's division of Pulmonary, Allergy and Rheumatology products at the – at around the end of last month. The team presented information about all of the safety and efficacy data that will be included in the NDA filing as well as reviewed the format and content of the planned application. Subsequent to the meeting, we also received acceptance of our request to begin a rolling submission of the NDA to the FDA and have gained agreement on the rolling review plans for filing modules to the NDA. In summary, we believe there was no – there were no obstacles raised by the FDA that would prevent the submission of the complete NDA filing by the end of the second quarter of 2020 as previously planned and guided previously. In combination with the positive lupus nephritis results and our interactions with the FDA, I'd like to take a few moments to introduce you all today to Mr. Max Colao, our recently appointed Chief Commercial Officer, and update you on the recent and frankly rapid build out of a world class commercial team. Max, who doesn't look at all like he has this experience, but has nearly 30 years of world-class industry commercial operations experience. Prior to joining Aurinia, Max led U.S. commercial leadership roles and U.S. commercial operations at Alexion, launching multiple rare disease therapies. Prior to that, Max spent nearly 20 years at Amgen holding roles of increasing responsibility across various marketing and sales teams, most notably leading U.S. launches, commercialization and pricing strategies in the areas of rheumatology, dermatology, and autoimmune disorders. Most recently, Max was a Chief Commercial Officer and Head of Business Development at Abeona, a public biotech company advancing cell and gene therapies for rare diseases, where Max led their efforts for commercialization and business development. As part of this rapidly forming commercial team, we've been fortunate enough to bring aboard, a number of experienced commercial leaders to execute both the swift and efficient launch. This would include folks like Chris Hays, our Vice President of Marketing, Fran Lynch, Vice President of Sales, Cara Felish, Heading up our Commercial Operations and Tim Hermes working on all of our Market Access work. The individuals who joined Aurinia, bringing with them extensive launch experience from past roles in global pharma companies operating in the rheumatology, nephrology, and autoimmune space. The depth of knowledge and experience these individuals and others I don't have a chance to highlight today that have joined the team over the past few months is truly a testimony to the potential of voclosporin and what is built here at Aurinia. So before turning the call over to Dennis to walk you through the financials, just a quick review of our upcoming milestones. As I mentioned earlier, we had our pre-NDA meeting with the FDA during the first quarter as planned. Looking forward, we have been cleared to begin our rolling NDA submission to the agency and on-track to complete the NDA filing by the end of the second quarter. We will provide additional details when available later this year, but we continue to expect to be granted priority review which would set us up for an a potential advisory committee meeting during the fourth quarter of the year and a potential approval during the first quarter of next year. Briefly, in addition to lupus nephritis, we continue to evaluate voclosporin as a potential treatment for primary FSGS. As you recall, we made some protocol amendments to this exploratory study last summer and continue to enroll subjects with primary FSGS. We look forward to providing updates on this program during the back half of the year. Lastly on the dry eye front, the AUDREY Phase2/3 study evaluating voclosporin ophthalmic solution or VOS in a dose ranging study compared to vehicle remains on track to enroll approximately 480 subjects with dry eye syndrome and produce results also during the second half of this year. We are definitely having more fun than we can handle here at the company, but it's built on the strength of the confirmatory voclosporin results for lupus nephritis and work to further expand the breadth of these indications including FSGS and dry eye that voclosporin can potentially address. We sincerely look forward to providing additional updates on our commercial launch strategy and our approach to the market in penetrating it and working to market the drug later this year. With that, let me pass the call over now to Dennis to review our financial results and from there we'll open up the microphone to any questions that you might have. Dennis?

Thanks Peter. At December 31, 2019 Aurinia had cash and cash equivalents of $306 million. This amount is compared to $125.9 million of cash and short term investments we had at December 31, 2018. As a reminder, our year end cash balance at December 31, 2019 includes net proceeds of $179.9 million received pursuant to the completed public offering of Aurinia stock on December 12, 2019. Net cash used in operating activities for the year ended December 31, 2019 was $63.5 million compared to $51.6 million for the year ended December 31, 2018. We believe we currently have sufficient finance resources to fund our operating plans, which includes our ongoing research and development programs, completing the voclosporin lupus nephritis NDA submission to the FDA, conducting additional requisite pre-commercial and launch activities as well as manufacturing and packaging the commercial drug supply necessary for the voclosporin launch. In addition, we believe we have adequate funding to support our corporate and working capital needs through 2021. For the year ended December 31, 2019 Aurinia recorded a consolidated net loss of $123.8 million or $1.33 per common share, which included a non-cash increase of $41.1 million related to the estimated fair value adjustment of derivative warrant liabilities during 2019 and at December 31, 2019. The net loss before the change in estimated fair value of derivative warrant liabilities and income taxes was $82.6 million or $0.89 per common share for the year ended December 31, 2019. This compared to a consolidate net loss of $64.1 million or $0.76 per common share in 2018, which included a non-cash increase of $10 million in the estimated fair value of derivative warrant liabilities for the year ended December 31, 2018. The net loss before the change in estimated fair value to derivative warrant liabilities and income taxes was $54.1 million or $0.63 per common share for the year ended December 31, 2018. The change in the reevaluation of the derivative warrant liabilities is primarily driven by the sharp increase in our share price last quarter. Aurinia share price was significantly higher in December of 2019 when 1.8 million derivative warrants were exercised and at December 31, 2019 when the share closing share price was $20.26 compared to the Aurinia share prices $6.82 at December 31, 2018. The increase in our share price resulted in a large increase in the estimated fair value with the derivative warrants for 2019. The derivative warrant liability will ultimately be eliminated upon the exercise of the warrants and does not result in any cash outlaid by Aurinia. A total of 3.6 million derivative warrants were exercised in 2019 with approximately 1.7 million derivative warrant outstanding at December 31, 2019. Aurinia incurred research and development expenses of $52.9 million for the year ended December 31, 2019 as compared to $41.4 million for the year ended December 31, 2018. The increase in research and development expenses in 2019, included $6.62 million to manufacture voclosporin for potential future commercial use and higher costs related to the AURORA 2 extension trial, the DDI study and the dry eye studies, partially offset by a decrease in AURORA trial costs. Aurinia incurred corporate administration and business development expenses of $22.2 million for the year ended December 31, 2019 as compared with $13.7 million for the same period of fiscal 2018. The increase in these expenses reflected higher corporate activity levels including pre-commercial and launch readiness activities, higher professional and recruiting fees, insurance costs and personnel compensation costs. Non-cash compensation expense was $7.4 million for the year ended December 31, 2019, compared to $6.9 million for the year ended, December 31, 2018. That was included in both research and development and corporate, general and business development expenses. For those interested in our fourth quarter results, they are presented in both the press release we issued this afternoon, as well as our MD&A for the year ended December 31, 2019. With that review, I will pass it back to Peter for some concluding remarks. Peter?

Thanks Dennis. And before opening up to Q&A, I'd like to say that Aurinia really is truly a unique opportunity. Voclosporin has previously shown its potential in both the AURA and AURORA lupus nephritis trials as well as the exploratory Phase 2 dry eye study. The strategic objectives of the company remain focused on voclosporin, its clinical development programs, pre-commercial and regulatory activities. Furthermore, we are working to build additional value around the VOS dry eye syndrome program and are focused on completing the AUDREY trial and reporting out those dose ranging results later this year. As mentioned during the past few months, we've been heads down focused on executing our plans to responsibly scale the organization and prepare for the filing and potential approval of an NDA during the first quarter of 2021 for voclosporin as a first-line treatment in combination with the standard-of-care for the treatment of lupus nephritis. With a strong balance sheet of approximately $306 million at the end of last year, we are adequately funded through 2021 to execute on our development and our commercial launch plans. So I want to thank you today for your attention and the team is here to take your questions. So with that, let me ask the operator to please open up for a Q&A session.

Thank you. At this time, we'll conduct our question-and-answer session. [Operator Instructions] Our first question comes from Alethia Young with Cantor Fitzgerald. Please state your question.

Hey guys, thanks for taking my questions and congrats on all the progress over the past couple of months. It's been very interesting to watch unfold. So a couple, I know you talked about the pre-NDA meeting, but just kind of broad stroke, can you kind of help us think about anything that’s particularly trying to frame or if you think there might be an AdCom of sorts. And then my second question is, beyond, obviously the IP things, I just wonder commercially since you guys are gearing up there, what can you guys kind of do to help build a brand loyalty of sorts and providing perhaps an infrastructure or kind of creating an own brand that kind of might live longer than perhaps even the IP? Thanks.

Thanks Alethia. And thanks for getting the question right out of the gates here. I'll start and then I'll ask maybe Neil to jump in on the first question. I'll do the same thing. And then, Max has been here, all is about a couple of days, but I'll give my entry level answer to that. And then I ask Max to build on from his experience. So listen, we had a good interaction with the FDA. I think there were no real roadblocks that we saw from within that. Neil, you can probably give a little more color, but I think roadblocks are which usually looking for in this and the problems, we really didn't see anything that turned our eyes. What would you – how would you build on that, Neil?

Thanks. Alethia, the pre-NDA meeting in my experience went very, very well. Like we’re saying no roadblocks, a good interaction, good collegiate discussion. A lot of the review is on the – from the FDA division have been following and working with this on this program for a number of years. They’re all very pleased to see the results including reviews from other divisions as well, who are going to be brought into it. So like Peter said, no surprises, a good interaction in terms of whether there will be advisory committee. I think we've advised before is our expectation that there will be, we're not sure it's a new molecular entity. There's no drugs approved in this indication. So our standing assumption is that there will be, but we don’t know until probably through the review.

And then bridging into the second question, which centered around IP but more the commercialization strategy. And I think it's actually a really good lead into how we intend to really try to provide both value to the patients in this market space and provide opportunity to hold our exclusivity as long as possible both outside of know-how and IP and into the commercialization strategy. So, just for recap, our intellectual property, our composition of matters is out past 2028 when you add in Hatch-Waxman and the regulatory process that we'll go through, at the end of 2027 or early 2028. We have an extended patent that's a method of use patent that brings us based on the EGFR protocol dosing that we did in both the AURA and the AURORA trial, that takes our IP all the way out to 2037. As I said, in addition to that, we fully intend to put a commercial model that protects the – what we believe the exclusivity of our business model in place that that starts at the manufacturing process of the drug. It's not insignificant to do and without disclosing too much, I'll just tell you it's our intention to try to lock up the elements in an appropriate way. As back as early as the formulation of the API of the drug, we'll take that all the way through the packaging process into the way we set up our 3PL, the distribution model that we put in place. And then on the back end of that, the way that our sales organization and medical organization interact with KOLs and physicians and the customer care support services that we put in place that hopefully create a commercial model. That's hard to penetrate for companies that aren't going to invest at a very, very high level. For those I think that are aware of and have experience of this much more of the rare disease approach to marketing and selling than more of the specialty pharmacy model. So Max, might – you have anything to add to that or – again, Max, welcome to the team.

Thanks. Thanks Peter. And so this is my day four. So clearly in kind of the getting my bearing space, but I've appreciated the great foundational work that's been done by the Aurinia team already and clearly, focused on onboarding the very seasoned talented team that's coming on board with me. And as Peter laid out, in terms of this wrap around commercial model from patients and physician that's going to hinge on building a world-class commercial team. And that's going to be clearly my focus over the next 90 days.

Thanks Max. Alethia. Anything else from you?

No, that's great. Thanks a lot guys.

Thank you.

Thank you. Our next question comes from Justin Kim with Oppenheimer & Company. Please state your question.

Good afternoon. Thanks for taking the question. Maybe can you remind us of the plans to meet with European regulators and the updates – our plan is to update that front.

Yes. Neil – so I don’t know, we’ve gone much deeper than this, but what we said is, we have every intention to follow on with the EMA application process there that we’re about six months behind the U.S. regulatory filing status and potential approval. So I think you can just knock on six months everything else we’re doing. We’re using both the sources of our internal people and some external consultants in work in order to continue to move that forward. We’ve also said that Japan is probably a little more protracted to that because we need to go meet with the PMDA, have a conversation about the patients that we’ve studied in AURORA and what the expectation will be and whether we have enough to actually move forward there. I guess the last thing I would say is we’ve also said that commercially we have the desire to a partner ex-U.S. and that would include the European Union. And as part of that depending on when we can bring on a partner, they could be an integral part of helping us through that process as well, but that we’re resourced to do so. Any more detail you want to add to that Neil.

No, no, those filings which is submitted behind the U.S. filing.

Okay, great, great. Thanks for all the color. Just maybe then on the commercial market for lupus nephritis, as we think about a potential launch with voclosporin, are there any important differences the team sees between rheumatologists and nephrologists, either from the way they initially perceived the data with AURORA or even AURORA previously and sort of maybe whether they had different practices from a prescribing perspective and have different comfort with different types of off-label agents?

Yes, I think it’s actually a very good question and we’ll look forward to digging much more deeply into this answer as we continue to post the data, refresh the work we’ve done around patient flow modeling and mapping. But I think to very high level answer your question, the rest of my team who’s here please jump in. Obviously there are two different specialties. I mean the rheumatologists are the ones who are primarily treating the SLE patients and when these patients progress on to lupus nephritis where you have much more active kidney involvement in these patients need specialized service from nephrologist, they’re brought into the equation. But I think it’s a joint treatment that, that both the nephrologists and the rheumatologists work together to treat these patients. But it is part of the process. These patients are originally showing up with SLE in the room’s office and then they’re moving on to a nephrologist. And I think we’re going to have to cover both. But my early thinking would be you’re going to have to spend probably more time with the rheumatologists in terms of the more active treatment and the time that a patient is spending in the office itself. It’s not saying what is more important than the other. I just think in terms of finding these patients, capturing them, capturing them early and even potential expansion in the future, rheumatology is going to be a very important component of how we market and sell this drug. To get into specifics about how they feel about different drugs, treatment protocol, et cetera, we’re in the process of doing all that now and I wouldn’t want to differentiate without having had that the data and our messaging sort of locked and ready to go. And as I said in the conference earlier in the call, we’re going to be ready to do that after probably the midpoint of the year this year and we’ll look forward giving you much more detail on our launch plans. I mean the detail that we can’t share as we get closer to that time period, our potential launch.

Okay, great, great. Maybe then as a last point here, I know we’ve talked previously about this a little bit, but with the strength and balance sheet, can you give any sort of high level thoughts on the Company’s appetite to diversify the pipeline and maybe even in license or bring in assets?

Yes. Actually it’s a great question and should be obvious to our investors that as part of building the company while voclosporin has the potential to be a pipeline in a product on that diversifying and adding more strengths to our pipeline is critical. The main capability of the organization today, disregarding what we’re in the process of building is clinical development. And quite frankly, clinical development and autoimmune disease, lupus and lupus nephritis is an area that I would say the company has some pretty unique capabilities. So we want to ensure that we continue to leverage that. So to answer your question very directly, yes, we want to diversify the pipeline. Business development is important component of how we see building the company in a prioritized way. And since we are a small company building, if you look at the business development quote unquote tactics, we have just strategically strengthened the company. One, we’ve got to go out, we’ve got to find partners globally to help us launch lupus nephritis around the world if and when we’re approved. Two, we’ve got a dry eye program that, that could potentially at the right time benefit from a potential partner. We haven’t said exactly when but we are and we’ll continue to engage with the appropriate companies that have interest in both commercially and in from a development standpoint in the areas of ophthalmology and specifically dry eye syndrome. And then I would say sort of as a third priority, but all working in parallel. We want to go out and find unique new science to bring into the company. That would strengthen the future of around voclosporin and build the pillars of the company and the foundation of the company. So the short answer is yes, but in a prioritized way.

Perfect. Thanks for the color and congrats on the quarter.

Thanks, Justin.

Thanks, Justin.

Thank you. Our next question comes from Ed Arce with HC Wainwright. Please state your question.

Hi, good afternoon, everyone. Thanks for taking my questions and let me add my congrats on a great year last year on all the progress. First, I wanted to ask just the high level question on your overall objectives and goals as you build out the commercial team, obviously you’ve done a lot already. And as Max said, he’s on day four, but if perhaps either Max or Peter can perhaps give us some more details around specific goals, objectives, either quantitative, if you have any sense of that at this point or just qualitatively. Thanks.

Thanks for the question. I’ll start and then ask Max for his four day commentary. I think you had to think a lot about that before you took the job. So I’m sure, he will have something to add. Let’s say out of the gates and then what I’m not, I can’t give you a lot of quant today, although, as we get closer to launch the sensitivity to the quad side is going to increase. Reason for that is not because we’re being Hedgie, it’s because we’ve got work to do. And we’ll get into the priorities around this specific marketing elements. Next, but from a corporate standpoint, from a leadership standpoint, from the board where I sit right out of the gates when we had the data, we said we were going to be dead on serious about ensuring that the largest market opportunity and market potential opportunity in the world, the U.S. was where we’re going to focus our efforts and that we were going to rapidly build U.S. team to be able to do that. In addition to other announcements you’ll hear, not only have we hired within two months of data or less, what I believe is a world class leadership team of this commercial organization. We’ve gone one level down and we’ve started the process of even hiring more folks that you’re not hearing about, because we just don’t have enough time on these calls. But we’ve been very serious about putting the infrastructure in place to ensure that we have a rapid and successful uptake and launch if in fact we’re approved by the FDA. In parallel with that, we need to do the basic work around what the elements of promotion will be, elements of pricing and access, the elements of good commercial packaging, supply chain distribution, setup of 3PL, customer care, service efficacy, everything that goes into building a specialty launch plan, and one that, as I said earlier, we’re really taking more of an orphan rare disease view too. So all of those are in motion, but since the date is only two months old, we’re really not at a point right now, where we’re ready to say, here’s how things map out from a messaging standpoint, here’s exactly how many FTEs we need to target the customer base in the U.S. We’re not ready to give pricing outside of just general what I would point people to in terms of what the market is doing today, not necessarily us. And we’ll look forward to giving you more detail on that in the near future as Max gets, to understand more than where the laboratories are here and gets his feet wet in the plans that have been built up to this point. Max, what would you add?

Yes. I would just add, and again, this is qualitative, right. So the – as Peter pointed out, the foundational work to the – basically the frame of the capabilities is in place. Now it’s a matter of kind of bringing it to life. And that’s bringing it to life, there’s – clearly there’s work to do to flush out exactly the details. But I would say that the foundation is there and now it’s just a matter of building on top of it and that’s my priority.

What else can we answer for you?

Great. Just a couple quick follow-ups. One, on the AURORA 2 extension study, just any commentary you’d like to share on, if there’s perhaps any enrollment target with that and how you feel about the proportion of patients coming out of AURORA into AURORA 2. And then lastly, just you went pretty quickly through some of these meetings. I think there were two late breakers later this month and several of this – later this year, if you could go through that again. Appreciate it. Thanks again.

Yes, thanks. I’m going to let Neil handle this, but I think you should take away on the last point of your question. We are – it is our goal that every local and global nephrology, big nephrology and rheumatology meeting to have a presence in upward data at those meetings. And that we have late breakers and coming in both oral and poster presentations at NKF and Lupus 2020. Neil, on the extension and anything more you want to add on the data display for the year.

Yes. So at the AURORA 2 continuation study, I’m finished enrolling because of course patients had to rollover from AURORA into AURORA 2. And obviously, that study was completed last year. So there’s no further enrollment into that. In terms of the target number of patients, we got what we expected. Bearing in mind, the study was not necessarily given the go ahead and all countries, but it wasn’t in the majority of countries. And the patients had to have a clinical response to get into that study. In addition, not every patient, who is eligible, consents to go into that, which is typical for all clinical trials. Nevertheless, we were very pleased with the proportion of patients who got into AURORA 2 it was at least what we’d have hopeful.

And any other questions?

Thank you. Our next question comes from Joseph Schwartz from SVB Leerink. Please state your question.

Great. Thanks very much and congrats on all the progress. I was wondering if you could tell us how you see the dosing adjustment protocol being executed in the real world in terms of things like, how intensive does it need to be on the part of the physician and patient. And is there anything that you can do to facilitate the monitoring and interpretation of GFR or other data in order to ensure that the drugs used in the most effective and encumbered manner.

Well, first off, let me lean into this one a little. Since we’ve had a lot of investor questions about, specifically, the eGFR dosing protocol and data that was produced in the original Phase 2 trial moving into the Phase 3. As we’ve said, we presented the majority of the – we spend the primary for sure tolerability data in the Phase 3 was presented, and then all pre-specified secondary endpoints were presented. So the majority – the vast majority of data has been presented, but there is other data opportunities, we’re going to look to expand the data that we collected in the AURORA study. Of which, the eGFR dosing protocol and what it showed in terms of consistency from Phase 2 to Phase 3, what that looked like. Without getting into the details of that data, I can tell you that one of the upcoming meetings or both actually both the NKF and the Lupus 2020, that data will be presented. We don’t want to get out in front of it and present it on a conference call. We think it’s more appropriate to have it done at a clinical meeting and that there – without getting into the details of the data that there is consistency from Phase 2 to Phase 3 and what we saw. So we look forward to having outside investigators and our internal folks talk to you more about that in the future. As it pertains to how that actually starts to appear in real world. In both studies, this was part of the protocol of the study. So it is our hope that it’ll be in the indications and usage of the package insert and that physicians will to ensure this dosing – this customized dosing protocol for patients optimizes the effect of the drug that they’re getting, that it will be broadly adopted. And speaking as a commercial guy, I can tell you, I think the – it gives a great opportunity for a sales representative and/or a medical affairs person to get in front of a physician and talk specifically more about intimate patient care management. And that’s not an easy thing to do, when you’re a sales representative just coming in with marketing messaging. The protocol, it’s a tailored approach. And I think it allows for a deeper conversation between a sales representative and the physician themselves. And we would tend to appropriately exploit that for the best outcomes in patients. And we’ll look forward to showing you how that appears in label, sales aids, et cetera, if and when we get the drug approved.

Yes. Okay. That makes sense. And then what sort of interim data from your FSGS trial do you expect to report in 2020? Is there a certain number of patients or duration of therapy that you’re aiming to accrue before you provide it?

Yes. Well, I mean, and Neil can please build on this, if he has more to build. But I think our first objective is more simple than that. As we’ve said and we’re not the only ones doing work in FSGS, so I think investors know that that this is a little bit of a tough patient population to crack. It’s been our observation that, because this is not some neurodegenerative disease that has special single center treatment that these patients fall across the total N of nephrologists that are out there today. So it’s a little bit of a needle in a haystack exercise in terms of trying to find them. We’ve been working hard. We’ve relaxed some of the criteria in the protocol to try to ensure that when we do find them, we’re not putting them into trial. And we continue to work on that. It’s going to be very dependent on, what we see towards the end of the year as to what we’re going to report, how many patients we have in. But remember, this is an exploratory study. We’re dosing at the same way, we dosed in lupus nephritis. And I believe, we’d be looking at the same sort of efficacy endpoints that we would be looking in lupus nephritis. But I’m outside my pay grade there. So let me let Neil actually answer what outcomes we might be looking at in addition to.

Yes. The primary outcome is response, which is kind of complete or partial remission, which is, I guess either a 50% reduction in proteinuria or reduction to a kind of physiological level, very similar to lupus nephritis. In terms of what we present, as Peter said, we’re going to take the customer data, when we have sufficient patients. And then we have kind of a broad range of 80% to somewhat, permute data from those who’ve completed a 24 weeks, some that we interim. But I think that’s probably as much as we can say about at this point.

Okay. Great. Thanks for taking my question.

Thanks, Joe.

Our next question comes from David Martin with Bloom Burton. Please state your question.

Thanks for taking my questions. I wanted to go back to a response Neil had a couple of callers ago. He said to get into a AURORA 2 the patients needed a clinical response. I’m just wondering, you’re bringing the placebo patients in as well. Do they necessarily need a clinical response to get into AURORA 2?

Yes.

That was Neil and he said, yes.

Okay.

It’s a double-blind continuation, David. So, we’re never that wrong. Some of those will be placebo patients, some of them be active.

Okay. But I would expect there to be a lot of placebo patients who haven’t responded during the 12 months of AURORA. So they’re just excluded from AURORA 2.

I’m not – I’m blinded to the extent, where I know which patients were attended, they continued blinded, David. You may be correct, but we don’t have that information.

Okay. Next question is, you mentioned the data that’s going to be presented or the conferences you’re going to present at this year. Is there going to be any element of AURORA 2 data in there? Are you going to report on things like time to end-stage renal disease or time to transplant?

No. We were not presenting any AURORA 2 data.

Okay. But you will be updating the FDA with AURORA 2 data though.

Yes. Correct. That’s exactly right, David.

Okay. And you had said, you’re still in the early stages of crafting the messaging for the rheumatologists and nephrologists. But I’m wondering, what your thoughts are, given some of the B cell therapies have generated some positive results recently, albeit, slower than voclosporin and getting to their responses. But how do you think this is all going to play out with MMF, steroids, voclosporin and B cell therapies? How are these all going go together?

Well, I think there is a – there may be a scientific question underlying, how this stuff all sort of works in harmony. But I can tell you we studied MMF and steroids in combination with our drugs. So I think the ask of a room and/or a nephrologist is a fairly simple one, it’s add our drug to this already cocktail approach to treatment of these patients and here’s how to dose it. And the drug works rapidly and if a patient is not currently controlled, I have a real question as to why a physician wouldn’t put them on the drug immediately. I do think it’s very interesting, which by the way, I don’t think Neil, will want to give much speculation on. And I’m not a clinician or a drug developer. But I do think there’s an interesting question surrounding the rapidity of the response that you see with voclosporin in combination with this current standard of care. And how that will relate to biologicals that seem to work and work as potentially close to how we work at a very short period of time, all the way out to years. Initially, my question would be, why would you wait that long? Why would you use a drug that actually is going to take two years to see the same effect of a drug that looks very similar and as early as a number of weeks or a number of months? But I guess, there is a clinical question as to, can these things work in harmony in a rapid sort of maintenance and remission sort of a response and remission world much like other autoimmune disease, like Crohn's and Colitis. But right now that's not really the way the disease is treated. The disease is they try to get these patients in rapid response and held in that remission over time and they keep the drug cocktail on for some time. So our hope would be that we'd just be added to that. As it pertains to messaging, we got to get down to the finer points of the data that are going to be the most intriguing to the audiences we're calling on and we're in the process of doing that research right now.

Okay. Thank you.

Thank you. Our next question comes from Maury Raycroft with Jefferies. Please state your question.

Hi everyone. Good afternoon and thanks for taking my questions. Based on your response to Joe Schwartz’s question earlier, I guess congrats on the hint and what seems like you're seeing consistent results on the dosing protocol benefit between the Phase 2 and the Phase 3. So now that you have the two studies showing that this dosing protocol works, how does it translate, I guess, does it strengthen your IP story? Thanks.

Well. First off, I'll qualify just like I did that on – I'm not an M.D. Ph.D. that I'm not in J.D. either. Although, I think I can play one pretty well in the board room sometimes. Listen, I don't know the answer to that question. I think it only helps, because obviously the uniqueness of what we observe that was patented came from the original AURA study and then do uniqueness of what that patent – why that patent was given was then reinforced in the Phase 3. I think that only helps not hurts. But when we get the question from investors, the answer is somewhat opaque because I – it doesn't invalidate our patent – not to have the consistency from one trial to the other. I just think it helps to show that yet again, it's unique and if it did not repeat, then maybe the question could have been there as to, whether this was a unique observation? Well, we can tell you now without showing you, the data today is that the consistency is there and I think that's a net positive. But I am not an intellectual property attorney. So but we do think it's a net benefit because what was unique was consistent across Valtrex.

Got it. That's helpful. And you guys reported some preclin data recently at the Keystone Symposia meeting comparing voclosporin versus tacrolimus on glucose insulin parameters. Just wondering if you can talk about the observations there and provide any insight into how the drugs benefit on glucose or diabetes can factor into the drugs value proposition?

Neil is going to handle that one for sure. But I do want to just give one frontend important point that this is a different molecule and these types of studies are part of the way outside of just the AURA and AURORAs data and getting it – looking at the actual chemical structure, as to why our drug is different. And this is just one of those examples. So anything you want to add to the observation, Neil?

Well, I mean – I think what it showed, I mean, first to start the day to the Keystone summit, that actually gave us some insights into why to tacrolimus actually causes problems of glucose intolerance and secondary to apoptosis of the either cells to the pancreas, which voclosporin doesn't. It doesn’t surprise us clinically. We kind of did this part upfront. We observed from previous studies, head-to-head studies in fact that voclosporin does not have the same impact. It didn't appear to have any impact at all on glucose metabolism in our lupus nephritis trials, it hasn’t transplanted, did not had significantly less impact on diabetes after renal transplant. And then we kind of worked backwards to find out why that was. And we found that tag has a very specific issue with causing cell death in other cells in the pancreas, which voclosporin doesn't. So we've got a nice story there. We've got a reason to believe in, we've got clinical data to support it, so sort of cemented by the observations of findings in the lupus nephritis study. So again, if you sort of look at it from a 50,000 feet is what Peter says, we've got to – this is surprisingly have a different molecule, which isn't affect human safety profile. These drugs used differently. And I've got an awful lot of preclinical, non-clinical work to backup our proposition.

Got it. Thank you. Can any of the findings on glucose or diabetes, could you think that could end up in the label?

Yes. We have perhaps some discussion. We not had those detailed discussions yet.

Got it. Okay. Thank you very much.

Yes, Maury, just one thing to add, I do think a lot of this work as a team is prepared it. It's a nice – it'd be a nice to do to get this in the label. But a lot of this too just to continue to reinforce and build confidence that we're prepared for all potential roads this could take us on was to supplement, questions that could come from advisory committees, et cetera. So we have a host of data to be able to support the molecule outside of just the labeled setting. Thank you for the question, Maury.

Got it. Thank you.

Our next question comes from David Martin with Bloom Burton. Please state your question.

Yes. Just to follow-up on the last question. Are there any other preclinical differentiation studies that may readout this year? Not beta cell insulin tolerance type studies, but other areas of potential differentiation?

I can tell you, we've not disclosed all the preclinical and early research work that we continue to do to support the differentiation of the compound. Just know that we're doing it and the short answer is yes, but we've not disclosed specifically the work that we're doing.

Okay. Thanks.

Thank you. Ladies and gentlemen, there were no further questions at this time. I'll now turn it back to Mr. Peter Greenleaf for closing remarks. Thank you.

Thank you, operator and thank you to all investors and analysts that have joined us here today. I want to thank you for your time. We're really excited about where things are going in the horizon. We have up in front of us here at Aurinia and we'll look forward to continue to bring us – bring you all along on the ride with us over the next couple of weeks and months. Thanks for joining the call today.

Thank you. This concludes today's conference. All parties may disconnect. Have a good evening.