Aurinia Pharmaceuticals Inc

Greetings and welcome to ARINIA Pharmaceuticals, Inc. first quarter 2023 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 zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jamie Harrell, Investor Relations for Arinia Pharmaceuticals. Thank you. You may begin.

Thank you, Operator, and thanks, everyone, for joining today's call and webcast to review and discuss Arinia's first quarter 2023 financial results and operational highlights. Joining me on the call this morning are Peter Greenlee, Chief Executive Officer, and Joe Miller, our Chief Financial Officer. This morning, Arinia issued a press release announcing its financial results and operational highlights for the first quarter of 2023. In addition, the company filed its quarterly financial statements on Form 10-Q. For more information, please refer to Arinia's filings with the U.S. Securities and Exchange Commission, which are also available on Arinia's website at ariniapharma.com. During this call, Arinia 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 discussion of factors that could affect Arrhenius' future financial results and businesses, please refer to the disclosures in Arrhenius' press release and his quarterly statements on the Form 10-Q and annual report on Form 10-K, along with his 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, May 4th, 2023, unless otherwise noted and are based upon information currently available to us at this time. Except as required by law, ARINIA assumes no obligation to update any such statements. Now, let me turn the call over to ARINIA's President and CEO, Peter Greenleaf. Peter?

Thanks, Jamie, and good morning, everyone. I want to thank you all for joining us on today's call. It's been a solid start to 2023, and we're excited to share our company progress through the first three months of the year with you this morning. Today we'll primarily focus on the company's first quarter, LoopKinus' commercial execution, and our financial results. We'll outline the key performance indicators and financial information for the brand alongside of focused commercial activities that we've been executing on. We'll walk you through recently launched initiatives in commercial, updates from our medical team, and development efforts from our regulatory group that we believe will further impact our trajectory in the U.S. and around the world. I'll then turn the call over to Joe Miller to provide additional details on our financial results. So let's get started with our first quarter 2023 business performance. And the short story is that we've seen significant progress over the last six months. I'm pleased to share that we had our best quarter to date in terms of net product revenue, number of new patients on therapy, and number of wallets shipped. We have also made significant progress on the Lucanus clinical, regulatory, and intellectual property fronts. Net product revenues were $34.3 million for the quarter, up 60% over Q1 the prior year and 21% compared to the fourth quarter of 2022. There are several factors that we attribute this performance to. The first, strong patient start form productivity in the first quarter, building off our strong PSF ramp that began in November and December of last year. We ended the quarter with PSFs approaching our highest levels ever at 466. This represents a 15% increase over the fourth quarter of 2022. As of April 28, 2023, we added an additional 138 PSFs, bringing our total year-to-date to 604 PSFs. Second, our team's execution in Q4-22 into the early part of Q1-2023 helped to mitigate year-over-year impact as patients worked through the normal new plan year insurance transitions. As previously discussed, in the first quarter, the insurance changeover process, policy changes, and patient copay resets can have a negative impact on continuity of care for patients. To attempt to counter this, we proactively deployed our support services teams towards patients and practices in order to help maintain consistent therapy. As a result of our efforts, we saw less disruption to our patients, and we believe it had a positive impact on our overall results. In addition, our commercial activities continue to see positive impact through our focus on clinical differentiation and educating physicians on the importance of screening and proper identifications of patients who would most benefit from LUCONIS therapy. Our strong clinical message differentiating LUCONIS from the current standard of care is working. especially with face-to-face healthcare provider interactions and focusing our call activity on top-tier physicians, we believe this has enabled us to gain traction in the promotionally sensitive lupus nephritis market. These efforts, covered with the powerful three-year extension data from the Aurora Pivotal Study, are making a real difference. Just as a small tactical example to add to this, In the first quarter, we closed with our highest calls per day since launch. And in the month of March, we had our highest number of repeat and new prescribers in a month since launch. Obviously, once we have a PSF, we measure the percentage we convert and how quickly we convert that PSF to a patient on therapy. Over the past several quarters, we continue to improve patient access to loop kinase. This has been accomplished by working closely with physicians, their office staff, and patients, and making meaningful strides to removing formulary barriers, step edits, and prior authorizations with the major payers and PBMs out there to help in the conversion to therapy. During this period, our conversion rates, that is, converting patient star forms to patients on therapy, remained very strong. with more than 85% of patients being converted onto drug. Even more importantly, we've made significant progress on reducing time to PSF to conversion to drug, with approximately 61% of patients on average getting on therapy in 20 days or less. This is up from a 48% average rate in the first quarter of the prior year. Meaningful progress and improvements on both fronts. We believe the three-year extension data from the Aurora clinical study is also having an impact on prescribing behavior and patient persistency. At the end of the first quarter 2023, 51% of patients remain on therapy after 12 months. We are pleased to see this level of patient retention. In February, we reported 45% of patients remain on therapy out to 15 months. We now see 47% of patients remain on therapy at 15 months, as the number of patients across that time period continues to grow. And while we've only seen a small number of patients through 18 months of therapy, it looks at about 41% are remaining on therapy through that time. So consistent with prior periods, patients adhering to treatment regimen, which is dosing and tablets per day, remains reasonably stable to prior periods at about 80 to 85%. Through March 31st of this year, we now have a total of 1,731 patients on therapy. This represents an increase of 61% over the first quarter of 2022. So to recap, our sales performance in Q1 was driven by improvements in all major commercial areas. Our commercial team's execution in the field, educating healthcare practitioners on the importance of screening, treating, and maintaining patients on therapy continues to drive momentum. Based on everything I've just discussed, we're increasing our net product revenue guidance for 2023 from 120 to 140 million to 135 to 155 million. This guidance range is primarily based on assumptions regarding prescription start forms, consistent conversion rates, time, and speed of conversion, as well as maintaining our current persistency rates and pricing. In addition, it also includes the impact of potential summer seasonality that we've seen the last two years. Recently, we kicked off two new initiatives that further drive and impact our top commercial strategic imperatives around leukokinase and lupus nephritis. The first was, of course, distinguishing leukokinase from first-generation CNIs, obviously critical. To further strengthen our clinical differentiation story, we recently announced top-line data from our renal biopsy substudy of the Aurora Clinical Program. which I think as you all know includes both the Aurora original study and the Aurora extension study, and this study was taken out, this segment of study was taken out 18 months of therapy. And this will be presented this week at the Congress of Clinical Rheumatology East Region meeting. These data demonstrated loop kinase treated patients showed histologic activity improvement with stable chronicity scores similar to the active control arm of MMF and low dose steroids alone. Meaning that patients are not demonstrating any further worsening of kidney function or nephrotoxicity at 18 months. We believe these data further differentiate loop kinase from first generation calcium urine inhibitors. The second area, was to reinforce the need for screening, routine monitoring, and treatment by engaging and educating patients to get uncomfortable and get more engaged with their healthcare practitioners about their care. On the patient front, we believe an informed patient can play a major role in their own disease management when they understand the need and they actually seek out routine urine screening and treatment. Many of you may have seen Irinia's most recent announcement that Grammy Award-winning singer Toni Braxton, who has been living with lupus since 2008, is the new spokesperson for the Get Uncomfortable campaign. Since its launch in October of 2022, Get Uncomfortable has been a high-performing component of our strategic marketing mix to activate lupus nephritis patients to prioritize their kidney health. It has generated nearly 30 million impressions across social and digital media with hundreds of thousands of visits to the campaign website. This is where patients can find a specialist in their area to complete routine testing and discuss management of their lupus nephritis. In just the first five days of launching Toni Braxton as the new spokesperson, we have reached an audience of nearly 550 million people. over 30 online articles, and television appearances that reach our target audience. This outreach has generated pull-through engagement on social media, which is, of course, the Get Up Uncomfortable website, and has created 20,000 website visits in just three days. Moving now to intellectual property. I would like to briefly highlight our recent progress to further strengthen our loop kinase patent position. The U.S. Patent Office issued a new method of use patent, patent number 991, reflecting the unique and proprietary dosing regimen and further refines the method of using loop kinase in combination with MMF and corticosteroids using EGFR as a method of pharmacodynamically dosing the product in patients with lupus nephritis from the dosing used in both the Aurora-1 and the Aurora Extension Trial. This patent has the potential to provide an additional layer of patent protection for lupkinus up to 2037. We're currently working to list this newly issued patent in the Orange Book. Closing out with our globalization effort for lupkinus, Our partnership with Otsuka has resulted in significant launch momentum outside the U.S. this year. As announced yesterday, NICE, the U.K.' 's governing body for value-based healthcare, issued a recommendation that lupkinus can be used in combination with MMF to treat patients with lupus nephritis. The U.K. agency just issued their reimbursement guidance, and lupkinus will be soon available across the entire United Kingdom. And as a reminder, upon pricing and reimbursement approval in three of the five major EU countries, the company would be eligible for an additional $10 million milestone. In Japan, we currently are working towards a PMDA submission in the second half of 2023. We anticipate approval the second half of 2024. The combination of these European market approvals and our pending Japanese submission further support our globalization efforts for Leucanus. So I'd now like to turn the call over to Joe for a more detailed review of our financial results. I'll then return at the end of the call for a quick recap and to open up the line for any questions that you might have. Joe?