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Aurinia- From Dry Eye to Lupus Nephritis

Aurinia Pharmaceuticals (AUPH) is a clinical stage biopharmaceutical company focused on developing and commercializing therapies to treat targeted patient populations that are suffering from serious diseases with a high unmet need, explains small cap expert Tom Bishop, editor of BI Research.

The company is currently developing voclosporin, an investigational drug, for the potential treatment of lupus nephritis, FSGS and dry eye syndrome. Aurinia has shifted from an early stage company with one program to a late stage clinical company with multiple programs.

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In terms of an update of the three ongoing clinical trials: Aurinia wrapped up enrollment of its pivotal Phase 3 lupus nephritis clinical trial back in September, earlier than expected, and also over-enrolled due to tremendous interest inasmuch as there is no FDA approved therapy today.

Given this is a 52-weel trial, preliminary results are due by the end of 2019. If positive, and based on Phase 2 it should be, this will result in a regulatory filing for voclosporin (which has fast track designation) by Q2 2020.

Management believes the efficacy and safety data supporting this drug to be substantial. If approved, voclosporin will be the first FDA approved therapy for the treatment of lupus nephritis.

The company believes it can handle marketing of voclosporin to the relatively more limited number of nephrologists- “it won’t take too huge a sales force and we are actually building out that capability, in the event that we don't get acquired” … interesting wording by the way.

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Meanwhile, regarding the successful Phase 2 trial for voclosporin in which it demonstrated significant efficacy and superiority (and faster onset of relief) over industry leader Restasis, which is a very exciting development, Aurinia is still finalizing its plans to initiate a Phase 2b/3 clinical study in late 2019.

Aurinia is not an ocular company, so once they have definitive data it would ultimately out-license, sell the rights to voclosporin — or be acquired. Financially, as of 3/30 Aurinia had $144 million in cash (with no debt) up from $126 million at yearend after completing a $30 million ATM with Jeffries issuing 4.6 million shares at an average price of $6.52.

So the company is well set financially to fund its trials and submit an NDA for lupus nephritis and generally fund itself into 2020. While there are never any guarantees I think the stars are aligning nicely here and I have a good feeling about this one. The current doldrums continue to afford a great buying opportunity.

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