Aurinia Pharmaceuticals - Earnings Call - Q1 2021

Transcript

Speaker 0

Good afternoon, ladies and gentlemen, and welcome to Arena Pharmaceuticals First Quarter twenty twenty one Financial Results Conference Event. At this time, all participants have been placed on a listen only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Glenn Schulman. Sir, the floor is yours.

Speaker 1

Thanks, Matthew, and good afternoon, everyone. Good afternoon, everyone. I'm pleased to welcome you to today's call discussing Aurinia's first quarter financial results. Joining

Speaker 2

me

Speaker 1

on the call this afternoon are Peter Greenleaf, our President and CEO Max Galao, Chief Commercial Officer Neil Solomons, Chief Medical Officer and Joe Miller, our Chief Financial Officer. This afternoon after the close, we issued a press release announcing our financial results and recent operational highlights, which is accessible from our website at www.veridiapharma.com and has been filed on a Form eight ks with the SEC as well. We also filed our financial statement and management discussion analysis in our quarterly report on Form 10 Q. I'd also like to remind everyone that today's call is being webcast live on IR website and a replay will be available approximately two hours after the completion of today's call. Please note that the content of today's call is the property of Aurinia.

It may not be recorded, reproduced, or transcribed without prior written consent obtained from Aurinia. For approval, please feel free to reach out to me, Glenn Schulman, via email at irareniapharma dot com. Also note that during the course of today's 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 our press release and on our quarterly report on Form 10 Q, which is publicly available, along with our most recent filings with the U.

S. Securities and Exchange Commission and Canadian security authorities. Also, please note that all of the statements made during today's call are current as of today, 05/06/2021, and are based on 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 of that, let me now turn the call over to Peter Greenleaf, Aurinia's president and CEO.

Peter, all yours.

Speaker 3

Thanks, Glenn, and I want to thank everyone for joining us today. I'm going to spend a couple of minutes upfront walking everyone through our activities for the first quarter, including the launch of Loop Kindness. We'll also review what's coming up in the back half of the year, a brief update on our ongoing clinical and R and D activities as well as a review of our financial position. So with respect to Loop Kinus launch, as you all know by now, we were granted FDA approval around the January. And once we had the approval in hand, we got to work getting the therapy to patients.

Max Kalau is here today, and he'll provide with with more specifics in a few minutes. But in short, we're executing the plan, and I have a great deal of confidence in the team and in the trends that we're currently seeing during the first quarter and into second quarter. We ended the first quarter with two months of hard data, which included 257 patient start forms and a solid, albeit, early conversion rate. These trends continue and have grown into the early '2. Things are off to a good start.

And just like any novel drug launch, the back half of the year is going to be that much more important. As mentioned by one of our sell side analyst notes, most launches only realize a small percentage, give or take less than 5% or so, of first year sales in their initial launch quarter. We had just sixty days. So when you look at this metric, we believe that we are right on trend and currently pointing in the right direction. It's also impressive to see these types of results in an environment highly impacted by COVID nineteen.

And now with vaccines being broadly available in The US and with current vaccination rates escalating around the country, we expect things to open up more broadly. A return to something close to pre COVID levels would be a big event, especially for patients, clinicians, as well as our reps who are out there in the field doing their jobs every day. On our end, we continue to ramp up all of our activities. Our commercial team is out in the field and continues to educate clinicians. We launched our consumer ad campaign for loop kindness, which leverages traditional and digital strategies.

We also continue to engage with the payer community and have seen more policies coming online and formulary inclusion for loop kindness, obviously increasing our access with additional commercial and government providers. A few other things I'd like to mention as we look forward to the rest of 2021. First, we're looking forward to the upcoming publication of the AURORA phase three clinical study in a peer reviewed journal. This manuscript has been accepted and should be published in the very near future. We will also have voclosporin data presented at the upcoming EULAR and ERA congresses in June.

Our data display and new cuts of data continue at every major medical event during 2021. On the clinical and regulatory fronts, we, along with our European and Japanese partner, Otsuka, are making the final preparations and remain on track to file the MAA for voclosporin in the EMA by the end of the current quarter. In addition, we also remain on track with our plans for approaching the PMDA in Japan this year. With respect to our post marketing commitments to the FDA, we plan to initiate our first pediatric adolescent study with voclosporin later this year as well as final finalizing our plans for a required lactation study. In addition, the AURORA two blinded two year continuation study is on target to achieve its database lock by the 2021, and we look forward to reporting to you all our top line results during the 2022.

And behind the scenes, our R and D group is actively working on continued product differentiation for voclosporin. More to report in the future, but as you've seen, we continue to publish R and D work evaluating novel attributes of voclosporin related to its lack of impact on elements such as glucose and lipids. More to come in the future on this. And then lastly, on the financial front, we ended the first quarter with just over $360,000,000 which will support well us and our efforts well into 2023. So we have a strong balance sheet to support our ongoing activities.

I want to now turn the call over to Max Kalau, our Chief Commercial Officer, who'll provide you with some more detail about our first quarter launch activities. Then after that, Joe Miller, our CFO, will give you more details about how our first quarter financial results laid out. Want So with that, let me turn the call over to Max. Max?

Speaker 4

Thank you, Peter, and good afternoon, everyone. Let me begin with, the three takeaways that I'd like to capture from my remarks, and then I'll provide some supporting detail for all the key points. First, as Peter highlighted, I'm pleased to report that our progress and results in the first quarter are in line with our expectations. Our rare disease commercial model is working. Second, the dynamics of launching in the COVID environment are proving to be even more of a challenge than we initially expected.

And let me tell you, that's really saying something because we went into this environment with our eyes wide open. Even so, the headwinds have been stronger than forecast, and so more about this in a minute as well. The third takeaway is more promising, and that is an event both rare and significant that occurred after the quarter closed. It has the potential to generate additional momentum by providing clear payer guidance in establishing leukinase coverage policies. That's cause for excitement not only for us, but also for patients and their caregivers.

And I'll provide details in just a minute. But first, how about some greater detail around the first quarter? The metrics I'm going to share reflect forty eight business days of activity post approval. Over this time, we've tenaciously worked to drive with kindness adoption and to support HCPs and patients to gain access to treatment. To give you a sense of a back of the magnitude behind this effort, more than 2,000 HCPs have attended our education programs.

These have been a very effective forum for top KOLs to share their insight on the current state of the art in treating lupus nephritis and on the kindness in particular. In the field, we've engaged over 6,000 HCPs to educate and identify patients. This represents 50% of our target universe. That number is even more impressive when viewed in the context of the current COVID environment, where HCP access remains a formidable challenge. And when you consider that over 60% of these interactions have been face to face versus remote, you can see why I say the team's efforts have been truly tenacious.

As a result of these efforts, we received two fifty seven patient start forms into Aurinia Alliance in Q1. In terms of conversion rates, forty percent of these patients started treatment by the March. It's important to remember that this difference is not due to either bad start forms or lack of access. Rather, it reflects the time it takes for a script to be fully vetted by a payer and then reimbursed. That timing can be anywhere from twenty to as many as fifty days.

So the real point here is that Aurinia Alliance has clearly been effective in supporting patients and providers gain product access. Quantitatively, we see further evidence of this as patient start forms and patients on treatment continue to increase here in the second quarter. Qualitatively, the feedback from both patients and providers on Aurinia Alliance support has been exceptional. I'll share with you two brief quotes of the many comments that we've received. The first one is, quote, the support has been exceedingly helpful.

As much as I love hearing that, this next testimonial is the one I like even better. In reference to Arini Alliance, this particular individual described it as the best I've ever encountered. Our team has been just as tenacious with payers as we have with health care providers and patients. As a result of our proactive payer education efforts, we have today confirmed coverage for more than one hundred and twenty million lives, forty percent of the total. And even though it's still early, 11 payers have published Leukina specific coverage policies as of now.

All of the policies provide coverage to all patients according to the labeled indication and are consistent with how Leukinus was studied in its clinical trials. We expect the majority of payers to establish Leukinus policies next six months. So to sum up the first quarter, these metrics around the kindness prescribing and access actually ended up in line with what we anticipated. And as such, we remain confident in the credibility of our goal of establishing the kindness as the standard of care for LN and the viability of our commercial model to achieve that goal. In fact, we believe our metrics would even be more favorable were it not for the limiting effects of the ongoing COVID environment.

And this isn't mere conjecture. It's a belief that's grounded in data. As reported by the World Lupus Federation, lupus patient care has been disrupted significantly by the COVID-nineteen pandemic. In their recent survey of lupus patients, WLF reported that fifty percent of the participants had decreased access to care. Patients reported significant hurdles in seeing their physicians and in access to medical testing.

Our own data corroborates the impact of COVID on our launch trajectory. Consider this. Territories in Florida and Texas are outperforming territories in Massachusetts, New Jersey, and Michigan by multiples that range from five to 15 times. And this variability is not a reflection of inconsistent talent in the field. As I've mentioned on previous calls, we've recruited a seasoned, committed, and expert sales team for all geographies.

As I remarked a minute ago, this team has been able to gain access on a face to face basis over 60% of the time. But that's when access to clinicians is available in the first place. What we see is depressed results in those areas that have been subject to significantly higher degree of restrictions versus the less restrictive environments such as Florida and Texas. If there's a silver lining to this cloud, it's that the market traction we're obtaining in less restricted territories bodes well for the future. As more people become vaccinated, as states relax their COVID restrictions, and as LN care standards normalize.

What also bodes well for the future is the feedback from rheumatologists and nephrologists in our market research. In looking at two pulse research studies that we conducted after launch, we're seeing greater than seventy percent of those surveyed to have leukinase awareness and strong recall of leukinase messaging. Most promisingly, we see more than sixty percent of surveyed rheumatologists and nephrologists intending to increase their leukinase prescribing in the next three months. So we have multiple reasons to anticipate increasing prescribing momentum over the course of the year. And considering that we're still in the early phases of establishing payer access for leukinase, I wanted to highlight a milestone event that I alluded to earlier.

Namely is the completion of the Institute of Clinical and Economic Review or ICER, recently completed cost effectiveness assessment and its published guidance for payer policy. ICER is a completely independent organization that conducts and reviews analyses to determine the extent of additional clinical value a drug offers over and above therapeutic alternatives and the current standard of care. Also, it evaluates whether or not the drug is priced in alignment with its clinical value and provides payer policy guidance. In other words, it provides payers guidance on how to make a therapy available and what type of restrictions are appropriate to consider. In their analysis of leukinase, ICER leveraged the knowledge and perspective of multiple stakeholders.

For instance, there was insight from world leading KOLs in this therapeutic area, including Doctor. Brad Rovan, Doctor. Megan McKay. Also, solicited input from Kathleen Arnsten, President of the Lupus and Allied Diseases Association, and Linda Baum, President and CEO of the Black Women's Health Initiative. ICER actually sought input from payers themselves, such as Humana and Premier Blue Cross.

With all this multifaceted expertise and context, permit me to share some relevant verbatims from their report. Quote, leukinase is an important new treatment option. That's good, but it gets better. Quote, leukinus is priced in alignment with estimates of its benefits for patients. That's good too, but it gets better yet.

Quote, this should guide payers to design coverage criteria that do not narrow coverage from the FDA label and that there is no other treatment that could be considered a first step treatment prior to eligibility. Okay. I have one more to share with you, and it's the one I like the best. And it's the reason I'm so enamored with it is that it comes from ICER's president, Steve Pearson, who understandably prides himself on a skepticism of drug company pricing. But with regard to leukinase, he said, quote, it's a celebration to have new treatments like this.

How often do we see brand new drugs, their first indication, to be to be priced within shouting distance of a fair cost effectiveness range? Almost never. It's just that rare. We're fortunate to be able to welcome that event, end quote. And thank you, doctor Pearson.

His point about how rare it is understates the case. Four out of the 102 therapeutic assessments that ICER has completed over the years, only 12 therapies 12 therapies were judged to be cost effective. So again, you can appreciate why we look at this as a true milestone event. So to sum up, as I promised at the outset, let me summarize. We had a positive first quarter.

We're on track. No small accomplishment in this challenging COVID environment. And while I'm the last person in the world to say that these challenges are fully behind us, I do believe it's fair to forecast some reduction in these headwinds in the coming months. There are definitely visible signs of this. I mean, the uptake in rush hour traffic has to be encouraging, I suppose.

But seriously, to whatever degree that takes place, there are multiple factors that justify our expectation for increased momentum. And not the least of these is the feedback from providers and patients that their UPCR numbers have been cut in half, even though the patients have been receiving loop kindness for a short time. That type of encouragement continues to energize our incredibly dedicated Aurinia team who have gone above and beyond since launch. They've done a great job in communicating the LUKINUS value proposition, supporting providers and patients in the most challenging of environments. It's exciting to see their efforts beginning to come to full fruition.

I'd now like to turn the call over to Joe for a review of the financials. Joe?

Speaker 5

Thank you, Max, and good afternoon, everyone. As of 03/31/2021, Aurinia had cash, cash equivalents and investments of $361,000,000 compared to $423,000,000 at 12/31/2020. The decrease is primarily related to the commercial infrastructure spend to support the launch of Kindness coupled with an upfront investment made in connection with the previously discussed monoplant manufacturing facility and one time milestone payments triggered by the approval and first commercial sale of Luke Kindness, both of which were paid out in the quarter. Net cash used in operating activities was $53,500,000 for the quarter ended 03/31/2021, compared to $22,600,000 for the quarter ended 03/31/2020. The increase is primarily due to the commercial infrastructure spend to support the launch of Kinus.

As a reminder, in the prior year, the company was still in the development phase of Loop Kinus and as a result, we did not incur any material related selling expenses. The company believes we have sufficient capital financial resources to fund our current plans, which include funding commercial activities, manufacturing and packaging of commercial drug supply, conducting our planned R and D programs, including our FDA related post approval commitments and operating activities into at least 2023. For the quarter ended 03/31/2021, Arena recorded a consolidated net loss of 50,400,000.0 or $0.40 per common share as compared to a net loss of $25,900,000 or $0.23 per common share for the quarter ended 03/31/2020. Revenues were $1,030,000 for the quarter ended 03/31/2021 and 2020, respectively. The increase was a result of commercial sales of lukemia, which began in January 2021.

Cost of sales were $48,000 and $0 for the quarters ended 03/31/2021 and 2020, respectively. The increase was related to commercial sales of luteinus. Gross margin for the quarter was approximately 95%. Research and development expenses were $9,800,000 and $13,800,000 for the quarter ended 03/31/2021 and 03/31/2020 respectively. The decrease in expense is primarily due to low contract research organization expenses and other third party clinical trial expenses following the approval of lupinin, including a reduction in NDA preparation costs, capitalization of supply costs following approval as well as the termination of the dry eye trial in 2020.

R and D share based compensation expense for the quarter was approximately $1,100,000 Selling, general and administrative expenses were $39,300,000 and $11,100,000 for the quarters ended 03/31/2021 and 03/31/2020, respectively. The increase is primarily due to the expansion of our commercial infrastructure, administrative functions and patient assistance programs, all in support of the Kindness launch. Selling, general and administrative share based compensation expense for the quarter was approximately $6,600,000 With that, I'd like to hand the call back over to Peter for some closing remarks. Peter?

Speaker 3

Thanks, Joe and Max, and I want to thank you all for taking the time with us today. In close, it's early days, but we're feeling good about the Leukinus launch. And we want you to hear directly from us that we're executing the plan and right on track with our internal projections. As we review, there's gonna be a lot of activity going on in the back half of the year. And especially as things open up here in The States, we're excited about seeing greater progression.

So we look forward to providing even more updates, additional updates in the quarters to come and the months to come. But for now, we'd like to open it up to any questions that you might have. So let me, let me now turn it over to the operator for, opening up lines for questions.

Speaker 0

Certainly. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone.

Please hold while we poll for questions. Your first question is coming from Alethia Young. Your line is live.

Speaker 6

Hey, guys. Thanks for taking my question, and congrats on on the new start number. It looks pretty good. A couple of things. One, I guess, I know it's early, but can you kinda give us your perspective on what you're seeing in the real world around titration?

I know we've spoken with some doctors that are not always following the titration regimen, so I just wondered kinda how we think about that. And then, just another question. Can you give us an update kinda on some of the Medicaid, formularies and different things like that, if that is indeed applicable and just thinking about get broadening out access. And and then the last one is just, you know, what you're hearing or what your how your Salesforce is counter detailing or educating against, you know, Goodxiva. I'm sorry.

No. I've been listed, actually. You know, if it happens to come up in the conversation. Thanks.

Speaker 3

Why don't I start out with the first and maybe the third question there and then ask, you know, Max to build on the third and maybe give us commentary on the government pay side of the equation. You know, the simple answer, Bolethia, on on titration, this is for those, that that don't know. This is the eGFR dosing protocol that we have in place. I guess our experience has been this, that it's, you know, only with a a few number of weeks out there and and limited access to direct, information from office to office is that it's that it's on track. So our our net calcs in turn of in terms of what we think of a net value per patient per year has seemed to be playing out in the in the early weeks of the launch.

So on track with what our assumptions would be, my answer there, Alethia. And then, you know, on the Benlysta thing, our our you first, you can feel very comfortable that our team understands our data and understands theirs. And, you know, it's it's not the primary that comes up in conversation, I think. And I'd ask Max Galao to build on this from what he's hearing at the, at the field level. You know, the primary is is getting physicians to, one, identify what patient might be appropriate for leukinase therapy and then ensuring that they're, you know, that they're committed to differentiating the product versus other therapies that might be available or, you know, challenging them on why they, you know, may not have a sense of urgency to lower proteinuria in these patients.

So there's a big education factor, in trying to change the way physicians have historically treated. So I think that's coming up more often than, hey. When I'm making a treatment decision, do I use Benlysta, or do I use loop kinase? So let me turn it to, to Max and see if he can dig a little more into maybe that question and and the public payer side of the equation. Max?

Speaker 4

Yeah. Thanks. Thanks, Peter, and thanks, Alethia. Yeah. You're Peter's spot on.

You know, really the what our focus is is really creating that urgency in terms of, you know, bringing the patient in and and starting a treatment. We're definitely seeing that, you know, there's just a large number of patients who with high high levels of proteinuria that are not controlled. And so it it's really it's really working through creating that urgency and explaining the value proposition of lupus kinase. In terms of Medicaid, so it's a great question. So as of April 1, we've now confirmed that ninety percent of Medicaid lives have coverage.

So we now are months out, and the mandated Medicaid coverage is in place. And so we've confirmed ninety percent of lives now having coverage.

Speaker 6

Oh, wow. Thanks. Ninety percent. That's awesome. Congrats again.

Speaker 3

Thanks, Alethia. Any more questions?

Speaker 6

No. I'll hop back

Speaker 2

in for Okay.

Speaker 3

Thank you. Operator, next question.

Speaker 0

Certainly. Your next question is coming from Ken Casciatore. Your line is live.

Speaker 7

Hey. Thanks, guys. Good evening. I know you you reviewed a lot of different, metrics, so I'm just gonna ask a a couple here to help us out. Just wondering as we get to the current moment, is the pace accelerating of enrollment forms and conversion of those enrollment forms?

So can you take us up to real time? Are you seeing a a constant and steady building, or were we working through a little bit of a bolus? So just love to hear how you frame that out. And then also, now that you have engaged the number of clinicians that you suggest, just wondering, as you're getting almost a real time survey of the patient landscape, can you talk about your views of actual patient size? I know it's a debate amongst us investors of how many LN patients are out there and accessible.

I would think with your interactions you're able to kind of get a really good sense of that. So you can talk about any learnings in this kind of early interaction. And then also, Peter, hate to ask the question, but there's been commentary previous from you all about is the street consensus number achievable. Can you just kind of frame your commentary around what you're seeing consensus and how we should be thinking about that? Thanks so much.

Speaker 3

Okay. Thanks, Ken. For well, first, let me just go into all the numbers that we gave for the quarter were sort of locked into the quarter. So I wanna try to stay very consistent to that. What I can tell you about both patient start forms and the, time from a patient start form turning into a patient on drug have both steadily increased and or decreased, meaning, our our, patient start forms per day per week continue to to increase on pace, as Max said, with what our expectations are into q two.

And with that, a subsequent decrease we're seeing, as policies start to come online, as as, you know, our our Aurinia Alliance work with physicians and patients starts to come more online, a decrease in the time it takes from a patient to go from a patient initial start form to, to actual drugs. So so we feel good about the numbers as although we didn't quote exactly what the numbers are through this time period in the quarter, we feel good at the trends that we're seeing. So I'll I'll kinda I'll kinda leave it at that. One thing you did mention is did we see a bolus of patients in the first quarter through patient start forms? Recall that we have an ongoing two year extension in our AURORA our original phase three AURORA trial.

So we didn't have a group of, you know, 30 or 40 patients that came out of that trial and went on to commercial drugs. So there was no bolus there. And, since we didn't have approval, and our reps were newly trained, we were not, you know, out there identifying specifically patients for therapy to keep our, you know, our reps in the right zone from a compliance standpoint. So what you see generated has been the grassroots effort, in the first, you know, just just about just under, actually, two months of of the first quarter of launch. You asked a question about patient size.

I think our answer is gonna be consistent here. You know, I think we still believe there's somewhere between eighty to a hundred thousand patients, with active lupus nephritis in The US. And of that, we think we have, an ability to play in about eighty percent of of those patients. Now what I will put a strong caveat on is we have seen, you know, in this COVID environment, access, restrictions at certain centers, which is obvious. Many of the major medical institutions, especially tertiary care centers, are pretty locked down.

Right? So lupus clinics in many of those centers, are not happening, or they're happening virtual. And as the data max shared, patient visits in general and follow-up diagnostic patients for patients with or or visits for patients with lupus are down almost fifty percent according to a very sizable patient survey done by the World Lupus Foundation. So, you know, it's kinda hard to tell what we're learning in terms of real world on the ground data because of the COVID environment. But we still stay very confident in those higher, those higher level numbers.

As we learn more and things open up more, we'll make sure to relay some of that information to the markets. And then lastly, your last question was centered around where consensus is, and I will just reiterate that we feel comfortable in the zone of where consensus is. And, you know, as we're hard charging with our business, that has not changed in the first quarter. Any follow on questions, Ken?

Speaker 7

No. Thanks, Peter. I appreciate it, and thanks to the whole team.

Speaker 3

Thank you. Operator, we have another question in the queue.

Speaker 0

Certainly. Your next question is coming from Joseph Schwartz. Your line is live.

Speaker 8

Great. Thanks for all of the helpful insights about the launch. It's good to hear, the encouraging leading indicators. I was wondering if you could just expand a little bit by passing on some of the most common adoption patterns you're seeing, so far. For example, is it mostly physicians that you've met with in person or virtually?

Is that also the case? And who have submitted start forms and for which patients are they reaching for voclosporin? Is it larger practices or academic practices versus smaller practices and community practices at this point given what I heard you say about the greater appreciation for the importance of proteinuria at some places? Who who've been the early adopters, and how do you expect the adoption patterns to evolve at the ground level? Yeah.

Speaker 3

Thanks, Joe. And let me let me turn that right to, to Max Kalau, and he can give you a little bit more color, you know, from the first sixty days or so of what we're seeing in terms of doc and physician trends, Max?

Speaker 4

Thanks. Trends. Absolutely. So yeah. The so the prescribers, it's 50% of them.

It's really kinda splits down the middle between rheumatologists and nephrologists, 50% on each side. Most of our prescribing at this point is in the community. Now, you know, there's most of the patients are in the community. Now the issue there is that, you know, the the physicians in the community will only have a handful of patients. Right?

So you have to reach many physicians in the community to drive adoption. In the lupus centers, we've talked about this before. There are about 60 lupus centers in The United States. They're most they're all within academic centers. They're definitely the areas where we have the most difficult time gaining access.

Some of the lupus centers are actually still virtual. Some of them plan to be virtual till till year end. But we've gotten adoption in 50% of the lupus centers, and we have some leading lupus centers that are starting to leading to start to lead the way, including Hopkins, UCSF, SUNY downstate. So so we're pleased to see that we are, you know, making progress even though it's it's it's more challenging because of the the access issues.

Speaker 8

Yeah. Right. I can appreciate that.

Speaker 4

And and I'll make one more point, which is in terms of patients. So the patients that that are going on treatment are across all, you know, class three, four, five primarily.

Speaker 8

Okay. That's where I was going next, actually. And, you know, are are you finding that physicians are are is is there really no, set of common patterns? I mean, how how are the physicians choosing these patients? Is it the next patients that were, you know, set to come in?

Anyway, are they reaching out in any cases to their, worst cases? Are they is it patients that are, you know, the most refractory and advanced?

Speaker 4

Yeah. I would say that it reflects the you know, I would say that it reflects what we see to be the largest patient opportunity, you know, at launch, which are basically the patients that that may that likely have been treated, but are treated and they're not achieving their proteinuria targets.

Speaker 3

Yeah. And and, Joe, the one thing I would add that was already said, and I think it's an important point, we're seeing some regional differences. Right? Like, where access is much higher, we're seeing a a higher productivity, and, we think that trend is going to evolve, you know, as as things open up in some other geographies more. That's the only thing I would add.

Speaker 1

Very, very helpful. Thanks again.

Speaker 3

Thanks, Joe. Operator, do we have another question?

Speaker 0

Certainly. Your next question is coming from Maury Raycroft. Your line is live.

Speaker 9

Hi, everyone. Congrats on the progress, and thanks for taking my questions. First one is just checking in to see if it's possible to see some of the AURORA two data at EULAR. So just wanted to clarify on that. Or what else should we be expecting at at EULAR meeting?

Speaker 3

Yeah. Neil's on the phone. Neil, I don't know if we've, submitted our any of our, I think I don't know about to see what the deadlines are for ULUR. But you wanna give any commentary on, what might be seen this year around Aurora to the AURORA two or or the AURORA two year extension?

Speaker 10

Yeah. I mean, obviously, the AURORA two continues in a blinded fashion, but there are interim cuts that have been made for, the regulatory submissions. So there was a cut made obviously for the FDA submission ninety days, but also a cut made for the MAA in Europe, is going in at the June. And there is a presentation, at EULA that has some of that, AURORA two, aggregate data, that's going to be presented, in June. We don't have the exact date or time, and the upshot's not being released yet, but you will see some of that.

And, obviously, towards the back half of the year, there's ASN and ACR, and it's our intention to submit even more data there.

Speaker 9

Got it. Okay. That's helpful. And for the AURORA two extension data, just wondering if you tested that in your market research surveys with KOLs and if that had any impact on their future use of loop kindness or if there's any any additional color you can provide on, the market research and, and some of the the results you saw there.

Speaker 3

Yeah. I mean, I'll I'll start. And, and, obviously, the guy who's the closest to it, Max Klaus, should should build on whatever I might miss here. But, listen. I mean, Max said it.

Right? Like, the intent to utilize the drug by both rooms and nephrologists is is greater than 50%. Right? So I think it's encouraging, and that's irregardless of the AURORA two extension, study. I wonder, Max, if we've done any research specifically asking about that, but I think it's intuitive, you know, to assume that that with that data, it's only gonna strengthen our position.

You know, I mean, it's primarily a safety study, but showing that the drug continues to be safe after that time period is only gonna strengthen, docs' conviction around the product and the amount of time they can use the product. Do we have anything specific, Max?

Speaker 4

Not specific to AURORA two, but what we do have specific to in the market research is that, you know, the efficacy messages are resonating. The and there's both strong recall and high impact from the efficacy messages. The, definitely, we see that the physicians are looking for more safety data, and we believe that that AURORA two will be, important in helping to kind of illustrate, especially with the long term treatment, the consequences of long term treatment. So, yeah, we're we're we're looking forward to that.

Speaker 9

Got it. Okay. Thanks for taking my questions.

Speaker 0

Thank you. Thanks,

Speaker 3

Maury. Operator, any another question?

Speaker 0

Absolutely. Your next question is coming from Justin Kim. Your line is live.

Speaker 2

Hi. Good afternoon. Thanks for taking the question. Just one for me. Is the team able to characterize what a goal depth of engagement might be for a target prescriber?

Maybe just to say it another way, how many sort of interactions on average may be ideal before physician had enough comfort in writing a script, etcetera, and how that sort of engagement has been impacted by the pandemic or improved over the the recent months?

Speaker 3

Yeah. I I think we actually have some of that data. And Max, I don't know if you want to go maybe into a little Yeah. Of that

Speaker 4

Sure. And so and I alluded to this. You know, in the areas really in the South where access is more open and actually we can get frequency with physicians, that's where we're seeing the highest levels of prescribing. And your question is spot on. You know, the it takes multiple engagements for with the physician to get comfortable, to identify the patient, to get into Aurinia Alliance.

You know, on average across the nation, we've had about I think it's about two and a half engagements across all of the prescriber base. But in the areas where we see the highest prescribing, that that average goes into, like, seven, ten, and and above.

Speaker 2

Mhmm. Got it. And and maybe just another one as a follow-up. How long does the team expect to reach that sort of double doubling of of the physicians engaged? Is there a sort of a a time estimate in terms of how long that might take?

Speaker 3

Yeah. I like, listen, I think we have our our internal projections of, you know, how rep reps getting out there and talking to docs, but, you know, the live engagements, you know, is gonna evolve. So I'm not I'm not sure we have a, you know, a we we definitely don't hold that up as a metric to our Salesforce. You know? We want you to see x number of physicians, x number of times.

Max, would you have a more, you know, quantifiable answer to that?

Speaker 4

No. That's that's spot on. Because of the regional differences around access, we we haven't set specific targets. But, you know, but but what again, what we're seeing is that that frequency increases as as we you know, as things open up.

Speaker 2

Understood. Thanks so much, and congrats on the progress.

Speaker 3

Thanks, Justin. Operator, do we have another call? Or

Speaker 0

Yes. Your next question is coming from Ed Arc. Your line is live.

Speaker 11

Hi, everyone. Thanks for taking my questions, and congrats on the early progress of launch. First first question is just on, you know, the the the first obvious tier as you just get into the launch, which is patient access and reimbursement. You mentioned at this point, you've already got a 120,000,000 lives covered, and 11 payers have actually published the kind of specific coverage plans. I was wondering first if you are free to disclose any of those 11 payers.

And then with those policies, are there any specific sort of restrictions along the coverage pathway that are of interest, you know, especially given the the the broad label and very favorable, you know, ICER recommendation. Just curious if there were any sort of odd restrictions placed by any of those. And then lastly, you mentioned the the the number of start forms and the conversions. Again, it's early days. I'm just wondering if there have been any payer declinations so far.

Thanks again.

Speaker 3

Max, I'll, I'll t d you on the on the payer and, and other questions that I just ran through. Happy to add color, but you're the closest. Max, you may be on mute.

Speaker 4

Yeah. Thanks for that. So so thanks for the question. And so, yeah, the 11 payers, they include, let's see, Aetna, Cigna, Highmark, Anthem, a number of the Blue Crosses, HealthNow. So so that's the those are the ones that have published loop kind of specific coverage policies.

And like I said, all of them are aligned to the labeled indication. All of them, you know, are consistent with how it's how leukinase is studied. And I would say out of all those lives in the in the covered by the 11 policies, 90% of them don't have any step through requirements. And then the ones that do the primary step through requirement is is through MMF and steroids. So those are those are the the coverage policies.

Of course, we've had payer denials. That that's common just because even though if if there isn't a covered you know, if there isn't a Lukana specific policy, then it's it's unclear what the criteria is. And so you don't you do and this is typical in any rare disease launch. You do go through a denial and appeal process on a set of, you know, a set of prescriptions. That's just par for the course.

But that's you know, from what we've seen in terms of denials, appeals, and working through the process, there's nothing really that stands out that would be different than than what we've seen in other rare disease launches.

Speaker 11

Great. Thanks, Max. Appreciate it.

Speaker 3

Operator, do we have another question?

Speaker 0

Thank you. Your next question is coming from David Martin. Your line is live.

Speaker 12

Yes. Thanks for taking my questions. The first one relates to the last question that you were asked. So the 11 payers that you named, what percent of the 100,000,000 lives do they represent?

Speaker 4

Yeah. The so on that one, you know, it's hard to, you know, exactly quantify that. I would say it's, you know, kind of a very rough estimate would be, you know, 20%.

Speaker 12

And if they don't if amongst those 80,000,000 otherwise, there isn't a, a specific coverage plan in place, how how are the request for reimbursement handled, and what what is the reimbursement in those situations?

Speaker 4

Yeah. So every payer has a nonformulary request process, And it's simply it's it's typically just a generic prior authorization type of form where the physician articulates the rationale of why they wanna use, you know, the the name therapy. And so that's the that's the process if there isn't a coverage policy in place.

Speaker 12

Okay. Another question. Are any patients or many patients coming on to loop kinase as they start MMF and steroids, or are most of them coming on only after they failed those?

Speaker 4

Yeah. So so, you know, we don't have visibility to exactly all of the treatments that that the patients are on. And when they've started treatments, we don't have the visibility through Aurinia Alliance. But I can just tell you anecdotally that we we are hearing of of, you know, newly diagnosed patients coming on, leukinus, even though the bulk of the patients that are on leukinus are ones that have been on other treatments and just are not getting to the proteinuria goal.

Speaker 12

Okay. And, last question. Has there been any pushback? Like, you mentioned that some doctors are waiting for the long term safety data. Are any not prescribing it until they get that data because calcineurin inhibitors do have you know, the older ones have a history of, long term nephrotoxicity.

And is there any pushback because there are cheaper calcineurin inhibitors on the market?

Speaker 3

Well, I mean, let let me start there. First off, I I just wanna make sure, you know, we put the right context out there. It's calcineurin inhibitor data in terms of nephrotoxicity has been seen in primarily the transplant population in higher doses. That's not to say it doesn't the problem doesn't accrue to us, and it's not to say that we don't get the question because we do. You know?

And we we do hear from some, some physicians out there, not a hesitancy to wait to utilize the product, but I think one of the areas we gotta, you know, focus on and really put intention intensity of our education efforts around impact, not just our not just our data, but also around disease state awareness and what the impact of not aggressively treating is on these patients. We do hear that, you know, well, yeah, I I know the drug. I know the data, and, you know, I'll consider it for, you know, patients that, you know, that I consider for first generation CNI. You know, like, this is a better C and I. Obviously, those physicians don't even really understand how we study the drug, and I think that's just a matter of education.

But, Max, you know, you can build on and I wouldn't say that that is a n that is representative of the full community. We I'm just being, you know, completely clear that we do hear that question. I don't know that we hear a lot that I'm not gonna utilize the product until I see two year data. Have we, Max?

Speaker 4

You know, I I I would characterize just very consistent when you launch, you know, a new therapy that's been studied in clinical trials. You you have a subset of physicians that will that are cautious, and they wanna see more data, more safety data. Right? And I think that's just very consistent with with what we're seeing is very consistent with what we've seen in other launches.

Speaker 12

Okay. Great. Thank you.

Speaker 3

Thanks, David. Operator, anyone else left in the queue?

Speaker 0

There are no further questions in the queue at this time.

Speaker 3

Okay. Beautiful. Well, listen. I wanna thank everybody for, joining us, after business hours on the East Coast. And as I said in my closing comments, I want to, thank you and promise everyone that as we continue to make significant progress here, we'll, look forward to laying that out over the quarter and, quarters and months to come.

Thank you for your time tonight. Take care.

Speaker 0

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.