Aurinia Pharmaceuticals Inc

Greetings and welcome to Arena Pharmaceutical's third quarter 2024 earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require appropriate 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, Andrea Christopher, head of Corporate Communications and Investor Relations for Arenaforms Instituticals. Thank you. You may now begin.

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, Arena's President and Chief Executive Officer, Joe Miller, our Chief Financial Officer, and Dr. Greg Keenan, our Chief Medical Officer. Today, we will review and discuss ARINIA's 2024 third quarter financial and operational results, as communicated in the company's press release issued this morning. The company also filed its quarterly financial statements on Form 10-Q this morning. For more information, please refer to ARINIA's filings with the U.S. Securities and Exchange Commission and Canadian securities authorities, which are also available on ARINIA's website at ARINIApharma.com. During today's 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 business, please refer to the disclosures in Arrhenius' press release, its quarterly report on Form 10-Q, and its annual report on Form 10-K, and all of its recent filings with the U.S. Securities and Exchange Commission and Canadian securities authorities. Please note that all statements made during today's call are current as of today November 7, 2024, unless otherwise noted and are based upon information currently available to us. Except as required by law, Arunia assumes no obligation to update any such statement. Now, let me turn the call over to Arunia's President and CEO, Peter Greenleaf. Peter?

Thanks, Andrea, and good morning, everyone. I want to thank everybody for joining us on the call today. On this morning's call, I'll provide the details on our third quarter business metrics and how we are preparing for the rest of the year. I'll then turn the call over to Joe Miller, our CFO, to provide additional details on our financial results. With continued focus on commercial execution, we achieved a strong third quarter performance. For the third quarter of 2024, total net revenue was $67.8 million, compared to $54.5 million for the same period in 2023, representing a 24% growth. For the first nine months of 2024, total net revenue was $175.3 million compared to $130.4 million for the same period in 2023, representing 34% growth. For the third quarter of 2024, net product revenue was $55.5 million compared to $40.8 million for the same period in 2023, representing 36% growth. For the first nine months of 2024, net product revenue was $158.6 million compared to $116.2 million for the same period in 2023, this representing 36% growth. The company generated approximately $17 million in cash flow from operations in the third quarter, reflecting continued strong operational execution and further strengthening of our financial positions. The company had cash, cash equivalents, restricted cash and investments at $348.7 million as of September 30th, 2024. In terms of commercial performance and metrics for the third quarter, we added 364 PSFs and 146 new patients who were either restarting loop kinase or receiving it through the hospital pharmacy. Together, these total 510, compared to 436 PSFs in the prior year third quarter, representing 17% year-over-year growth. We also achieved 25% growth in total patients on loop kinase therapy, with approximately 2,422 patients on therapy as of September 30th of 2024. This compared to 1,939 patients as of September 30th of 2023. This significant year-over-year growth was driven by patients restarting loop kinase after being off therapy for an extended period of time, as well as hospital fills and maintaining high persistency rates year-over-year. We're encouraged by the continued increase in our persistency rates across all time periods and that our rapid conversion time and overall conversion and adherence rates remain consistent and consistently at high levels. Finally, we're off to a strong fourth quarter start, and we're looking forward to communicating those results next year when we report full year results. As a result of our strong commercial performance, we're reiterating our net product revenue guidance range of $210 million to $220 million. In summary, we're very pleased with our net revenue and cash flow from operations figures for the quarter. which represent record performance for the company. We also achieved several very important milestones in the third quarter. We announced that the first participant has been dosed in a phase one study of AUR200, our Bath-April dual antagonist for autoimmune disorders. We look forward to sharing initial results from this study and advancing clinical developments into 2025. We also announced that Japanese regulatory authorities approved Lupkinus to treat lupus nephritis, triggering the recognition of an additional $10 million milestone payment in the quarter. The company anticipates low double-digit royalties on net sales once Lupkinus is launched in Japan. Our successful partnership with Otsuka has allowed us to bring Lupkinus to lupus nephritis patients across Europe and now Japan, where there's a high rate of lupus nephritis. Additionally, there were five presentations on lupkinis at the recent American Society of Nephrology Kidney Week meeting. These presentations described the critical role lupkinis plays in advancing the treatment of lupus nephritis, especially in populations disproportionately impacted by the disease. An analysis of baseline data from the ENLIGHT-LN registry provided important insights into real-world treatment patterns. Data were also presented supporting a growing body of evidence that Leukinus, through a unique mechanism of action, favorably affects podocytes, which in turn should improve kidney health in adults with active lupus nephritis. Now, let me shift gears and discuss today's announcement that we are restructuring our operations to sharpen our commercial and R&D efforts. Our goal through this initiative is to implement a highly focused, industry-leading operational strategy that will enable us to lean further into key areas of the commercial loop kindness business that have historically delivered optimal returns by accelerating clinical development of AUR 200. We also expect the restructuring to further strengthen our balance sheet. Going forward, our targeted commercial strategy for Loop Kindness will allow us to lean further into key areas of business that have historically been our highest growth drivers. As part of the restructuring, we will be reducing our workforce by approximately 45%. We anticipate that this initiative will further improve operational efficiency with anticipated post-restructuring annualized cash-based operating expense savings of more than $40 million. This initiative will further strengthen our financial position and provide more flexibility to engage in future business-building activities. I'd like to now turn the call over to Joe Miller, our CFO, 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 to any questions you might have. Joe?