AUPH - Aurinia sheds 22% as lackluster Lupkynis uptake leads to guidance cut

Canadian biotech Aurinia Pharmaceuticals ( NASDAQ: AUPH ) lost ~22% pre-market Thursday even after announcing better-than-expected financials for Q3 2022 as the company lowered its full-year guidance citing weak demand for lupus nephritis therapy Lupkynis.

“Unfortunately, we experienced a slight decline in new patient start forms over the second quarter ended June 30, 2022, which is potentially the result of reduced lupus nephritis diagnoses and patient visits in the quarter,” Chief Executive Peter Greenleaf said.

Given the market conditions, Aurinia ( AUPH ) has trimmed its 2022 net revenue guidance related to Lupkynis sales to $100M -105M from $115M - $135M, estimated three months ago.

However, the company’s revenue for the quarter more than tripled from a year ago to $55.8M thanks to a $30M regulatory milestone payment from its Japanese partner Otsuka Pharmaceuticals for the European approval of Lupkynis in September.

While patients on Lupkynis rose ~6% during the quarter from Q2 2022 to ~1,354, the product revenue climbed ~74% YoY to $25.5M even as patient start forms added during the quarter stood at 374, indicating a ~9% YoY decline from the prior-year period.

Gross margin slipped to ~96% from ~98% a year ago, and the SG&A expenses jumped ~17% YoY to $52.5M while net loss contracted ~82% YoY to $9.0M. At the end of the quarter, Aurinia ( AUPH ) reported $376.6M in cash and equivalents, marking a ~19% decline from 2021 year-end.

The company provided preliminary guidance for 2023, indicating $120M - $140M in net revenue from Lupkynis sales.

According to consensus, Aurinia ( AUPH ) is expected to report $135.6M and $229.2M in revenue for 2022 and 2023, respectively.

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