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What changed in Aurinia Pharmaceuticals Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Aurinia Pharmaceuticals Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+202 added−207 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Aurinia Pharmaceuticals Inc.'s 2025 10-K

202 paragraphs added · 207 removed · 165 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

53 edited+21 added−20 removed44 unchanged
Biggest changeThe AURORA Clinical Program is the only clinical program to include 3 years of LN treatment and follow-up. 2024 American College of Rheumatology (“ACR”) Lupus Nephritis Treatment Guidelines In part due to the clinical study results with LUPKYNIS, ACR now recommends triple immunosuppressive therapy, including treatment with a calcineurin inhibitor (the class of drugs that includes LUPKYNIS), as first-line therapy for patients with LN, with the goal of treatment being the preservation of kidney function (2024 ACR Guideline for the Screening, Treatment, and Management of Lupus Nephritis: Guideline Summary 2024).
Biggest changeKidney survival was determined by kidney failure (≥6 mg/dL SCr or the initiation of kidney replacement therapy). 2024 American College of Rheumatology (“ACR”) Lupus Nephritis Treatment Guideline Update In November 2024, the ACR released an updated guideline for the treatment of LN that emphasizes early and aggressive treatment to preserve kidney function. 2024 ACR Guideline for the Treatment of Lupus Nephritis Emphasizes Early and Aggressive Treatment to Preserve Kidney Function a 2024 ACR Guideline for the Screening, Treatment, and Management of Lupus Nephritis: Guideline Summary 2024 3 How LUPKYNIS Works LUPKYNIS is a novel, structurally modified calcineurin inhibitor (“CNI”) immunosuppressant indicated in combination with a background immunosuppressive therapy regimen for the treatment of adult patients with active LN.
There have been, and we expect there will continue to be, legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our future business. For example, ACA enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers.
There have been, and we expect there will continue to be, legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our future business. For example, the ACA enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers.
Additionally, in August 2022, the Inflation Reduction Act of 2022 (“IRA”) was passed by the U.S. Congress which, among other things, includes policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government, which took effect in 2023.
Additionally, in August 2022, the Inflation Reduction Act of 2022 (“IRA”) was passed by the U.S. Congress which, among other things, includes policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government, and took effect in 2023.
We also hire consultants and contract with third parties, as needed, to provide additional resources to support our business activities. None of our employees are represented by labor unions or covered by collective bargaining agreements, and we consider our relations with our employees to be good.
None of our employees are represented by labor unions or covered by collective bargaining agreements, and we consider our relations with our employees to be good. We also hire consultants and contract with third parties, as needed, to provide additional resources to support our business activities.
Centers for Medicare & Medicaid Services (CMS) payments and other transfers of value they make to U.S. physicians and teaching hospitals as well as physician ownership and investment interests in the manufacturer. • provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information. • section 1927 of the Social Security Act, which requires that manufacturers of drugs and biological products covered by Medicaid report pricing information to CMS on a monthly and quarterly basis, including the best price available to any customer of the manufacturer, with certain exceptions for government programs, and pay prescription rebates to state Medicaid programs based on a statutory formula derived from reported pricing information. • various state and/or foreign law equivalents of each of the above federal laws, such as the California Consumer Privacy Act, many of which differ from each other in significant ways and may not have the same effect, which complicates our compliance efforts.
Centers for Medicare & Medicaid Services (“CMS”) payments and other transfers of value they make to U.S. physicians and teaching hospitals as well as physician ownership and investment interests in the manufacturer. • provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information. • section 1927 of the Social Security Act, which requires that manufacturers of drugs and biological products covered by Medicaid report pricing information to CMS on a monthly and quarterly basis, including the best price available to any customer of the manufacturer, with certain exceptions for government programs, and pay prescription rebates to state Medicaid programs based on a statutory formula derived from reported pricing information. • various state and/or foreign law equivalents of each of the above federal laws, such as the California Consumer Privacy Act, many of which differ from each other in significant ways and may not have the same effect, which complicates our compliance efforts.
The laws that may affect our ability to operate include: • the federal Anti-Kickback Statute (“AKS”), which prohibits, among other things, persons from soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, an item or service reimbursable under a federal health care program, such as the Medicare and Medicaid programs.
The laws that may affect our ability to operate include: 14 • the federal Anti-Kickback Statute (“AKS”), which prohibits, among other things, persons from soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, an item or service reimbursable under a federal health care program, such as the Medicare and Medicaid programs.
Pricing for these services is determined by a supply agreement between us and our supplier. We expect no issues in obtaining contract manufacturing services with respect to the packaging of LUPKYNIS commercial cartons for the U.S. market. 10 GOVERNMENT REGULATION Pharmaceutical products, including LUPKYNIS, are subject to extensive government regulation. In the U.S., the FDA regulates pharmaceutical products.
Pricing for these services is determined by a supply agreement between us and our supplier. We expect no issues in obtaining contract manufacturing services with respect to the packaging of LUPKYNIS commercial cartons for the U.S. market. GOVERNMENT REGULATION Pharmaceutical products, including LUPKYNIS, are subject to extensive government regulation. In the U.S., the FDA regulates pharmaceutical products.
Examples of these initiatives include, but are not limited to, establishing formularies that govern the drugs and biologics that are eligible for reimbursement and the out-of-pocket obligations of member patients for such products. 12 Political, economic and regulatory influences are subjecting the healthcare industry in the U.S. to fundamental changes.
Examples of these initiatives include, but are not limited to, establishing formularies that govern the drugs and biologics that are eligible for reimbursement and the out-of-pocket obligations of member patients for such products. Political, economic and regulatory influences are subjecting the healthcare industry in the U.S. to fundamental changes.
Competing products include, but are not limited to, other dual BAFF/APRIL inhibitors (e.g., povetacicept, atacicept and telitacicept). MANUFACTURING AND SUPPLY CHAIN We rely on third-party manufacturers to supply commercial inventory for LUPKYNIS and semi-finished products and expect to continue to do so to meet our development and commercial needs.
Competing product candidates include, but are not limited to, other dual BAFF/APRIL inhibitors (e.g., povetacicept, atacicept and telitacicept). MANUFACTURING AND SUPPLY CHAIN We rely on third-party manufacturers to supply commercial inventory for LUPKYNIS and semi-finished products and expect to continue to do so to meet our development and commercial needs.
We believe we have enough inventory on hand and manufacturing capacity to meet forecasted demand. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza for the construction of a dedicated manufacturing facility for voclosporin (the “Monoplant"). The construction of the Monoplant began in January 2021 and manufacturing of voclosporin began in late June 2023.
We believe we have enough inventory on hand and manufacturing capacity to meet forecasted demand. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza for the construction of a dedicated manufacturing facility for voclosporin (the “Monoplant”). The construction of the Monoplant began in January 2021 and manufacturing of voclosporin began in late June 2023.
These include: 11 providing inaccurate billing or coding information to customers; improperly promoting a product’s off-label use; violating the federal Anti-Kickback Statute; or misreporting pricing information to government programs. • provisions of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services. • the federal Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act (the ACA), which require manufacturers of certain drugs and biologics to track and report to U.S.
These include: providing inaccurate billing or coding information to customers; improperly promoting a product’s off-label use; violating the federal Anti-Kickback Statute; or misreporting pricing information to government programs. • provisions of the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services. • the federal Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act (the “ACA”), which require manufacturers of certain drugs and biologics to track and report to U.S.
Certain documents are also filed with securities regulators in Canada and are available under our profile at the website www.sedarplus.ca. 14
Certain documents are also filed with securities regulators in Canada and are available under our profile at the website www.sedarplus.ca. 17
Additionally, physicians continue to treat LN with an off-label combination of MMF and corticosteroids alone or in combination with first generation calcineurin inhibitors such as tacrolimus. As a potential treatment for autoimmune disease, AUR200 is subject to competition from both FDA-approved and investigational products.
Additionally, physicians continue to treat LN with an off-label combination of MMF and corticosteroids alone or in combination with first generation CNIs such as tacrolimus. As a potential treatment for autoimmune disease, aritinercept is subject to competition from both FDA-approved and investigational products.
AUR200 contains a B cell maturation antigen (“BCMA”)-engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL (others use transmembrane activator and CAML interactor (“TACI”)-engineered extracellular binding domain). BCMA has a stronger natural affinity for APRIL than TACI (Mathur, J Clin Med 2023;12:1-18).
Aritinercept contains a B cell maturation antigen (“BCMA”)-engineered extracellular binding domain optimized for superior affinity to BAFF and APRIL (other dual BAFF/APRIL inhibitors use transmembrane activator and CAML interactor (“TACI”)-engineered extracellular binding domain). BCMA has a stronger natural affinity for APRIL than TACI (Mathur, J Clin Med 2023;12:1-18).
Aurinia is also developing AUR200, a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases. Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the U.S., and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd.
Aurinia is also developing aritinercept, a dual inhibitor of B cell-activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases. Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the United States (“U.S.”), and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd.
The process for clinical studies in the European Union and other countries is similar, and studies are heavily scrutinized by the designated ethics committees and regulatory authorities.
The process for clinical studies in the E.U. and other countries is similar, and studies are heavily scrutinized by the designated ethics committees and regulatory authorities.
In all of our manufacturing agreements and commercial supply agreements, we require that contract manufacturers produce drug substance and drug products in accordance with cGMP and all other applicable laws and regulations. We maintain confidentiality agreements with potential and existing manufacturers to protect our proprietary rights related to LUPKYNIS.
In all of our manufacturing agreements and commercial supply agreements, we require that contract manufacturers produce drug substance and drug products in accordance with the FDA’s current Good Manufacturing Practices (“cGMP”) and all other applicable laws and regulations. We maintain confidentiality agreements with potential and existing manufacturers to protect our proprietary rights related to LUPKYNIS.
Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic inspections by the FDA and certain state agencies for compliance with the FDA's current Good Manufacturing Practices (“cGMPs”), which impose certain procedural and documentation requirements on us and our third-party manufacturers.
Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements on us and our third-party manufacturers.
Our ability to successfully commercialize products depends in part on the extent to which reimbursement for the costs of our products and related treatments will be available in the U.S. and worldwide from government health administration authorities, private health insurers and other organizations. HUMAN CAPITAL As of February 26, 2025, we had 130 employees.
Our ability to successfully commercialize products depends in part on the extent to which reimbursement for the costs of our products and related treatments will be available in the U.S. and worldwide from government health administration authorities, private health insurers and other organizations. 16 HUMAN CAPITAL As of February 25, 2026, we had 128 full-time equivalent employees.
COMPETITION The pharmaceutical industry is competitive. While LUPKYNIS is the only FDA-approved oral therapy for the treatment of adult patients with active LN, BENLYSTA ® (belimumab, marketed by GSK plc), an injectable treatment, is also FDA-approved for LN.
COMPETITION The pharmaceutical industry is competitive. While LUPKYNIS is the only FDA-approved oral therapy for the treatment of adult patients with active LN, BENLYSTA ® (belimumab, marketed by GSK plc) and GAZYVA ® (obinutuzumab, marketed by Genentech, Inc.), injectable treatments, are also FDA approved for LN.
In accordance with the Hatch-Waxman Act, because LUPKYNIS is an NCE, should we file a patent infringement lawsuit within 45 days of receipt of the Notice Letter, the FDA cannot approve any ANDA any earlier than 7.5 years from the approval of the LUPKYNIS NDA unless a District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed.
In accordance with the Hatch-Waxman Act, because LUPKYNIS is an NCE and we filed a complaint for patent infringement within 45 days of the receipt of each Notice Letter, the FDA cannot approve the ANDAs for these applications any earlier than 7.5 years from the approval of the LUPKYNIS new drug application unless a District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed.
Patent Nos. 10,286,036 and 11,622,991 (the “2037 Patents”), which are listed in the FDA's Orange Book. The Notice Letter alleges that the 2037 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in the ANDA. We intend to vigorously defend LUPKYNIS and our intellectual property rights protecting LUPKYNIS.
Patent Nos. 10,286,036 and 11,622,991 in December 2037 (the “2037 Patents”), which are listed in the FDA's Orange Book. Each Notice Letter alleges that the 2037 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in the ANDA.
BAFF and APRIL receptor targets are expressed on B cells at different stages of B cell development (Mathur et al., J Clin Med 2023;12:1-18). Targeting both BAFF and APRIL depletes a broader set of B cells than targeting a single cytokine.
Aritinercept BAFF and APRIL are important cytokines that regulate B cell survival and differentiation, whose targets are expressed on B cells at different stages of B cell development (Mathur et al., J Clin Med 2023;12:1-18). Targeting both BAFF and APRIL depletes a broader set of B cells, including plasma cells, than targeting a single cytokine.
Patent No. 7,332,472: Patent protection for patents related to the composition of matter of voclosporin are expected to be extended in the U.S. and certain other major markets, including many European markets, until October 2027 under the Hatch-Waxman Act in the U.S., the Supplementary Protection Certificate program in the E.U. and comparable patent extension laws in other countries.
Patent protection for patents related to the composition of matter of voclosporin are expected to be extended in certain other major markets, including many European markets, until October 2027 under the Supplementary Protection Certificate program in the E.U. and comparable patent extension laws in other countries. • U.S. Patent No. 10,286,036: In May 2019, we were granted U.S.
Other Laws and Regulations We are subject to a variety of financial disclosure and securities trading regulations as a public company in the U.S., including laws relating to the oversight activities of the U.S. Securities and Exchange Commission (the “SEC”) and the regulations of the Nasdaq Global Market, on which our common shares are traded.
Other Laws and Regulations We are subject to a variety of financial disclosure and securities trading regulations as a public company in the U.S., including laws relating to the oversight activities of the U.S.
The term “remuneration” has been broadly interpreted to include anything of value, including for example gifts, cash payments, donations, the furnishing of supplies or equipment, • waivers of payment, ownership interests, and providing any item, service or compensation for something other than fair market value. • federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent.
The term “remuneration” has been broadly interpreted to include anything of value, including for example gifts, cash payments, donations, the furnishing of supplies or equipment. • waivers of payment, ownership interests, and providing any item, service or compensation for something other than fair market value. • federal false claims and civil monetary penalties laws, including the U.S.
Acts as an immunosuppressant through inhibition of T-cell activation and cytokine production Clinical Study Overview of LUPKYNIS FDA approval of LUPKYNIS was based on our pivotal Phase 3 AURORA 1 study (“AURORA 1”), which demonstrated the ability of LUPKYNIS treatment to significantly improve outcomes for patients when added to the then-typical standard of care, MMF and corticosteroids.
Robust Clinical History FDA approval of LUPKYNIS was based on our pivotal Phase 3 AURORA 1 study (“AURORA 1”), which demonstrated the ability of LUPKYNIS treatment to significantly improve outcomes for patients when added to the then-typical standard of care, mycophenolate mofetil (“MMF”) and corticosteroids.
Federal Food, Drug, and Cosmetic Act (the “FDCA”), which can prevent the approval of generic versions of the NCE for 5 to 7.5 years from the date of the initial approval of the NCE.
In the U.S., NCEs approved by the FDA are eligible for market exclusivity under the U.S. Federal Food, Drug, and Cosmetic Act (the “FDCA”), which can prevent the approval of generic versions of the NCE for 5 to 7.5 years from the date of the initial approval of the NCE.
In the absence of a court ruling, the 30-month stay will be extended by such amount of time (if any) that is required for 7.5 years to have elapsed from the date of NDA approval of the NCE. We also have NCE-equivalent exclusivity for voclosporin in certain European countries, which provides exclusivity for 10 years in Europe post-approval.
In the absence of a court ruling, the 30-month stay will be extended by such amount of time (if any) that is required for 7.5 years to have elapsed from the date of NDA approval of the NCE. See “Intellectual Property” below.
(“Lonza”), Aurinia’s contract manufacturing partner for voclosporin. Otsuka has obtained regulatory approval of LUPKYNIS in Japan, the E.U., the U.K. and Switzerland. PRODUCT PORTFOLIO LUPKYNIS (voclosporin) In January 2021, the Company introduced LUPKYNIS, the first FDA-approved oral therapy for the treatment of adult patients with active lupus nephritis (“LN”).
Otsuka has obtained regulatory approval of LUPKYNIS in Japan, the E.U., the U.K. and Switzerland. PRODUCT PORTFOLIO LUPKYNIS (voclosporin) In January 2021, the Company introduced LUPKYNIS, the first FDA-approved oral therapy for the treatment of adult patients with active LN. The Company markets LUPKYNIS in the U.S. directly through its own commercial organization.
Otsuka Collaboration In December 2020, Aurinia entered into a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in Japan, the European Union (the “E.U.”), the U.K., Switzerland, Russia, Norway, Belarus, Iceland, Liechtenstein and Ukraine (collectively, the “Otsuka Territories”) in exchange for: (i) a $50 million upfront cash payment; (ii) regulatory and commercial milestone payments; and (iii) royalties ranging from 10% to 20% on net sales in the Otsuka Territories. 1 In August 2022, Aurinia entered into a commercial supply agreement with Otsuka to: (i) supply LUPKYNIS inventory to Otsuka at cost, plus a margin; and (ii) provide manufacturing and other services, including sharing the capacity of a dedicated manufacturing facility at Lonza Ltd.
For the year ended December 31, 2025, the Company repurchased 12.2 million of its common shares for $98.2 million. 1 Otsuka Collaboration In December 2020, Aurinia entered into a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in Japan, the European Union (the “E.U.”), the United Kingdom (the “U.K.”), Switzerland, Russia, Norway, Belarus, Iceland, Liechtenstein and Ukraine (collectively, the “Otsuka Territories”) in exchange for: (i) a $50 million upfront cash payment; (ii) regulatory and commercial milestone payments; and (iii) royalties ranging from 10% to 20% on net sales in the Otsuka Territories.
LUPKYNIS Rapidly Reduced Proteinuria in Fewer Days in AURORA 1 a a Rovin et al., Lancet 2021;397:2070-2080 b Secondary endpoint In the pivotal Phase 3 study (AURORA 1) and Phase 2 study (AURA-LV), adverse reactions occurring in ≥3% of patients treated with LUPKYNIS and ≥2% higher than placebo are shown below. 5 Adverse Reactions Occurring in ≥3% of Patients Treated with LUPKYNIS 23.7 mg Twice a Day and ≥2% Higher than Placebo in AURORA 1 and AURA-LV a a LUPKYNIS Prescribing Information In AURORA 2, a double‑blind, placebo-controlled extension study of adults with active LN who completed AURORA 1, LUPKYNIS demonstrated safety comparable to that seen in AURORA 1 with no unexpected safety signals observed through 3 years (LUPKYNIS Prescribing Information and Saxena et al., Arthritis Rheumatol 2024;76(1):59-67 ).
Adverse Reactions Occurring in ≥3% of Patients Treated with LUPKYNIS 23.7 mg Twice a Day and ≥2% Higher than Placebo in AURORA 1 and AURA-LV a a LUPKYNIS Prescribing Information In AURORA 2, a double‑blind, placebo-controlled extension study of adults with active LN who completed AURORA 1, LUPKYNIS demonstrated safety comparable to that seen in AURORA 1 with no unexpected safety signals observed through 3 years (LUPKYNIS Prescribing Information and Saxena et al., Arthritis Rheumatol 2024;76(1):59-67 ). 6 Aritinercept Aritinercept is a dual inhibitor of B cell-activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases.
SLE, commonly known as lupus, is a chronic autoimmune disease where the body's immune system mistakenly attacks its own healthy tissues and organs. Over 200,000 people in the United States are estimated to have SLE (U.S. Centers for Disease Control and Prevention 2024), of which 20% to 60% develop LN (KDIGO Lupus Nephritis Work Group, Kidney Int 2024;105(1S):S1-S69). a U.S.
Over 200,000 people in the U.S. are estimated to have SLE (U.S. Centers for Disease Control and Prevention 2024), of which 20% to 60% develop LN (KDIGO Lupus Nephritis Work Group, Kidney Int 2024;105(1S):S1-S69). Lupus Nephritis Is Among the Most Severe and Dangerous Complications of Systemic Lupus Erythematosus a U.S.
Patents claiming this subject matter have been issued in Japan and Israel, with terms extending to May 2038, and are pending in various other jurisdictions.
Patents claiming this subject matter have been issued in Japan and Israel, with terms extending to 12 May 2038, and are pending in various other jurisdictions. We have also applied for a patent term extension for the issued Japanese counterpart patent and are awaiting confirmation from the JPO.
The Monoplant is equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacturing of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand. Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs (approximately $4.0 million) for the exclusive right to use the Monoplant through March 31, 2030.
The Monoplant is equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacturing of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand.
Encapsulation Catalent Pharma Solutions (“Catalent”) is currently the sole supplier for the preparation of our voclosporin capsules. Pricing for these services is determined by a supply agreement between Catalent and us.
Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs for the exclusive right to use the Monoplant through March 31, 2030. 13 Encapsulation Catalent Pharma Solutions (“Catalent”) is currently the sole supplier for the preparation of our voclosporin capsules. Pricing for these services is determined by a supply agreement between us and Catalent.
Our principal executive office is located at #140, 14315 - 118 Avenue, Edmonton, Alberta, Canada T5L 4S6 and our phone number is +1 (250) 744-2487. Our website address is www.auriniapharma.com.
CORPORATE INFORMATION Aurinia is organized as a corporation under the Business Corporations Act (Alberta). We have one wholly owned subsidiary, Aurinia Pharma U.S., Inc., a Delaware corporation. Our principal executive office is located at #140, 14315 - 118 Avenue, Edmonton, Alberta, Canada T5L 4S6 and our phone number is +1 (250) 744-2487. Our website address is www.auriniapharma.com.
Coverage and Reimbursement In the U.S. and internationally, sales of LUPKYNIS, and any other products that we market in the future, and our ability to generate revenues on such sales, are dependent, in significant part, on the availability of adequate coverage and reimbursement from third-party payors, such as state and federal governments, managed care providers and private insurance plans.
Securities and Exchange Commission (the “SEC”) and the regulations of the Nasdaq Global Market, on which our common shares are traded. 15 Coverage and Reimbursement In the U.S. and internationally, sales of LUPKYNIS, and any other products that we market in the future, and our ability to generate revenues on such sales, are dependent, in significant part, on the availability of adequate coverage and reimbursement.
Cash Position As of December 31, 2024, Aurinia had cash, cash equivalents, restricted cash and investments of $358.5 million, compared to $350.7 million at December 31, 2023. For the year ended December 31, 2024, the Company repurchased 6.1 million of its common shares for $41.0 million.
Cash Position As of December 31, 2025, Aurinia had cash, cash equivalents, restricted cash and investments of $398.0 million, compared to $358.5 million at December 31, 2024.
Employees receive an annual base salary and are eligible to earn performance-based cash bonuses. To create and maintain a successful work environment, we offer a comprehensive package of additional benefits that support the physical and mental health and wellness of all of our employees and their families.
To create and maintain a successful work environment, we offer a comprehensive package of additional benefits that support the physical and mental health and wellness of all of our employees and their families. Additionally, we grant equity awards in order to allow for directors, officers and employees of Aurinia to share in the performance of the Company.
These organizations routinely implement cost-cutting and reimbursement initiatives that have the ability, or potential, to impact a patient’s overall access to our product.
In the U.S., such reimbursement comes primarily from third-party payors, such as state and federal governments, managed care providers and private insurance plans. These organizations routinely implement cost-cutting and reimbursement initiatives that have the ability, or potential, to impact a patient’s overall access to our product.
(“Otsuka”), for the European and Japanese market. For the year ended December 31, 2024, net product sales were $216.2 million, up 36% from $158.5 million in 2023.
(“Otsuka”), for the European and Japanese market. For the year ended December 31, 2025, net product sales were $271.3 million, up 25% compared to $216.2 million in 2024. LUPKYNIS Net Product Sales Cash Flows from Operating Activities For the year ended December 31, 2025, cash flows from operating activities were $135.7 million, up 206% compared to $44.4 million in 2024.
In this study, patients receiving LUPKYNIS with MMF plus corticosteroids compared to patients receiving MMF plus corticosteroids alone experienced a significantly higher rate of complete renal response (“CRR”) at both Week 52 (primary endpoint) and Week 24 (secondary endpoint). 4 Significantly More Patients on LUPKYNIS Achieved a Complete Renal Response in AURORA 1 a a Rovin et al., Lancet 2021;397:2070-2080 b Stringent criteria of complete renal response as: Urine Protein-to-Creatinine Ratio (“UPCR”) of ≤0.5 mg/mg, maintained stable eGFR, sustained corticosteroids, and no administration of rescue medications LUPKYNIS in combination with MMF and corticosteroids reduced proteinuria twice as fast as MMF and corticosteroids alone.
Significantly More Patients on LUPKYNIS Achieved a Complete Renal Response in AURORA 1 as Early as Week 24 a a Rovin et al., Lancet 2021;397:2070-2080 b CRR was defined as UPCR of ≤0.5 mg/mg, stable renal function (defined as eGFR ≥60 mL/min/1.73 m2 or no confirmed decrease from baseline in eGFR of >20%), no sustained corticosteroids and no administration of rescue medications LUPKYNIS in combination with MMF and corticosteroids reduced proteinuria twice as fast as MMF and corticosteroids alone.
Additionally, we have exclusivity for 8 years in Japan post-approval. INTELLECTUAL PROPERTY We own granted patents, including U.S. patents, covering LUPKYNIS for composition of matter and methods of use. U.S. Patent Nos. 7,332,472, 10,286,036 and 11,622,991 are listed in the U.S. FDA Orange Book. • U.S.
We also have NCE-equivalent exclusivity for voclosporin in certain European countries, which provides exclusivity for 10 years in Europe post-approval. Additionally, we have exclusivity for 8 years in Japan post-approval. INTELLECTUAL PROPERTY We own granted patents, including U.S. patents, covering LUPKYNIS for composition of matter and methods of use. U.S.
We also hire consultants and contract with third parties, as needed, to provide additional resources to support our business activities. 13 Our key human capital management objectives are to identify, recruit, integrate, retain and motivate our new and existing employees. We believe that our compensation and benefit programs are appropriately designed to attract and retain qualified talent.
Our key human capital management objectives are to identify, recruit, integrate, retain and motivate our new and existing employees. We believe that our compensation and benefit programs are appropriately designed to attract and retain qualified talent. Employees receive an annual base salary and are eligible to earn performance-based cash bonuses.
The larger the initial reduction in proteinuria in the first several months of management, the lower the risk of ESKD (Chen et al., Clin J Am Soc Nephro 2008;3(1):46-53).
Centers for Disease Control and Prevention 2024 b Tamirou et al., Ann Rheum Dis 2016 2 Proteinuria reduction is associated with long-term renal preservation. The larger the initial reduction in proteinuria in the first several months of management, the lower the risk of end-stage kidney disease (“ESKD”) (Chen et al., Clin J Am Soc Nephro 2008;3(1):46-53).
Initial results from this study are expected in the second quarter of 2025. 8 SALES AND MARKETING ORGANIZATION Aurinia employs an experienced sales and marketing team dedicated to the commercialization of LUPKYNIS, supported by professionals in commercial operations, commercial supply chain, patient services and market access functions.
SALES AND MARKETING ORGANIZATION Aurinia employs an experienced sales and marketing team dedicated to the commercialization of LUPKYNIS, supported by professionals in commercial operations, commercial supply chain, patient services and market access functions. REGULATORY EXCLUSIVITY We received New Chemical Entity (“NCE”) exclusivity for LUPKYNIS in the U.S., which initially provided for exclusivity until January 22, 2026.
The FDA testing and approval process requires substantial time, effort and financial resources. We cannot assure you that any of our product candidates will ever obtain approval.
The FDA testing and approval process requires substantial time, effort and financial resources.
B Cell Maturation a a Schrezenmeier et al., J Am Soc Nephrol 2018;29:741-758 Based on preclinical in vitro testing, AUR200 has high binding affinity for both BAFF and APRIL as compared to competitor dual BAFF/APRIL inhibitors, atacicept and telitacicept.
Aritinercept may prevent the activation of autoreactive B cells and reduce their numbers and associated immunoglobulins (antibodies) in the body, thereby reducing important drivers of B cell-mediated autoimmune diseases. 7 B Cell Maturation a a Schrezenmeier et al., J Am Soc Nephrol 2018;29:741-758 Aritinercept has high binding affinity for both BAFF and APRIL as compared to other dual BAFF/APRIL inhibitors.
The Company markets LUPKYNIS in the U.S. directly through its own commercial organization. In Japan, the European Union (the “E.U.”), the United Kingdom (the “U.K.”) and Switzerland, LUPKYNIS is marketed by Aurinia’s collaboration partner, Otsuka Pharmaceutical Co., Ltd. (“Otsuka”). About Lupus Nephritis (LN) LN is among the most severe and dangerous complications of systemic lupus erythematosus (“SLE”).
In Japan, the E.U., the U.K. and Switzerland, LUPKYNIS is marketed by Aurinia’s collaboration partner, Otsuka. About Lupus Nephritis LN is among the most severe and dangerous complications of systemic lupus erythematosus (“SLE”). SLE, commonly known as lupus, is a chronic autoimmune disease where the body's immune system mistakenly attacks its own healthy tissues and organs.
Although we may not submit claims directly to payors, manufacturers can be held liable under these laws in a variety of ways.
False Claims Act (“FCA”), which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent. Although we may not submit claims directly to payors, manufacturers can be held liable under these laws in a variety of ways.
IgG4 is considered the least inflammatory across the IgG subclasses, in part because it poorly activates the complement system (Oskam et al., Front Immun 2023;14:1-11). 6 AUR200 BAFF and APRIL are important cytokines that regulate B cell survival and differentiation (Mathur et al., J Clin Med 2023;12:1-18).
Aritinercept contains an immunoglobulin (“Ig”) G4 fragment crystallizable (“Fc”) domain with no appreciable effector function (other dual BAFF/APRIL inhibitors use IgG1 Fc domain). IgG4 is considered the least inflammatory across the IgG subclasses, in part because it poorly activates the complement system (Oskam et al., Front Immun 2023;14:1-11).
AUR200 Is a High Affinity Dual BAFF/APRIL Inhibitor a a Morales et al., ACR Convergence 2022 7 Based on preclinical in vitro testing, AUR200 potently inhibits both BAFF- and APRIL-mediated B cell proliferation as compared to competitor dual BAFF/APRIL inhibitors, atacicept and telitacicept.
Aritinercept Is a High Affinity Dual BAFF/APRIL Inhibitor a a Data on file 8 Aritinercept potently inhibits both BAFF- and APRIL-mediated B cell proliferation as compared to other dual BAFF/APRIL inhibitors. Aritinercept Potently Inhibits BAFF- and APRIL-Mediated B Cell Proliferation a a Data on file The initial clinical study of aritinercept was a single ascending dose (“SAD”) study.
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LUPKYNIS Net Product Sales Cash Flow Provided by (Used in) Operating Activities For the year ended December 31, 2024, cash flow provided by (used in) operating activities was $44.4 million, compared to $(33.5) million in 2023.
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In August 2022, Aurinia entered into a commercial supply agreement with Otsuka to: (i) supply LUPKYNIS inventory to Otsuka at cost, plus a margin; and (ii) provide manufacturing and other services, including sharing the capacity of a dedicated manufacturing facility at Lonza Ltd. (“Lonza”), Aurinia’s contract manufacturing partner for voclosporin.
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Centers for Disease Control and Prevention 2024 b Tamirou et al., Ann Rheum Dis 2016;75:526-531 2 Kidney damage from LN can be progressive and is associated with long-term adverse outcomes. Proteinuria is a significant risk factor for kidney damage. Even low levels of proteinuria may be associated with significant kidney damage.
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LUPKYNIS Targets LN with a Dual Mechanism of Action Clinical Study Overview of LUPKYNIS LUPKYNIS has a robust clinical study history.
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Nearly 90% of SLE patients with proteinuria Kidney Int Rep ., 2020;5(7):1066–1068).
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The primary endpoint of complete renal response (“CRR”) at week 52 was achieved in significantly more patients treated with LUPKYNIS in combination with MMF and corticosteroids compared to patients treated with placebo in combination with MMF and corticosteroids alone (40.8% vs. 22.5%; p Lancet 2021;397:2070-2080).
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LN Class by Proteinuria Level in Patients with SLE a a De Rosa et al., Kidney Int Reports 2020;5(7):1066-1068 Even a single flare of LN can cause irreversible nephron loss, which can potentially shorten the lifespan of the kidneys by decades (Anders et al., Nat Rev Dis Primers 2020;6(1):7).
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CRR was defined as urine protein-to-creatine ratio (“UPCR”) of ≤0.5 mg/mg, stable renal function (defined as “eGFR” ≥60 mL/min/1.73 m 2 or no confirmed decrease from baseline in eGFR of >20%), no sustained corticosteroids and no administration of rescue medications.
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Every subsequent flare contributes to the accrual of kidney damage, further shortening kidney lifespan and increasing the risk of adverse long-term outcomes such as end-stage kidney disease (“ESKD”) (Anders et al., Nat Rev Dis Primers 2020;6(1):7).
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Further, CRR at week 24 (secondary endpoint) was achieved in significantly more patients treated with LUPKYNIS in 4 combination with MMF and corticosteroids compared to patients treated with placebo in combination with MMF and corticosteroids alone (32.4% vs. 19.7%; p=0.002) (Rovin et al., Lancet 2021;397:2070-2080).
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Nephron loss and podocyte damage often lead to loss of kidney function as measured by glomerular filtration rate (“GFR”) and proteinuria (Anders et al., Nat Rev Dis Primers 2020;6(1):7 and Maria et al., Nat Rev Rheumatol 2020;16(5):255-267). Proteinuria as a marker of kidney damage routinely precedes GFR decline (Cravedi et al., Br J Clin Pharmacol 2013;76(4):516-523).
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LUPKYNIS Rapidly Reduced Proteinuria in Fewer Days in AURORA 1 a a Rovin et al., Lancet 2021;397:2070-2080 b Secondary endpoint In 2025, the Company conducted new LUPKYNIS data analyses that support LUPKYNIS’ robust clinical benefit in the treatment of patients with LN.
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Even a Single Flare of LN Can Reduce the Lifespan of the Kidney a a Adapted with permission from Anders et al., Nat Rev Dis Primers 2020;6(1):7; "CKD" means chronic kidney disease. 3 Proteinuria reduction is associated with long-term renal protection.
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This post-hoc analysis was conducted with data from the Phase 3 (AURORA 1 and AURORA 2) and Phase 2 (AURA-LV) studies that formed the basis of the 2021 FDA approval of LUPKYNIS and the 2024 FDA approval of the supplemental NDA for LUPKYNIS.
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Kidney survival was determined by kidney failure (≥6 mg/dL SCr or the initiation of kidney replacement therapy). Mycophenolate mofetil (“MMF”) and corticosteroids alone frequently fail to substantially reduce proteinuria, with only 20% to 30% of patients achieving a complete response at 1 to 2 years. Thus, the need remains for additional treatment options (Fanouriakis et al., Ann Rheum Dis 2024;83:15-29).
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The new analyses, which show that LUPKYNIS also was associated with a statistically significant and clinically meaningful reduction in the risk of Renal-Related Events or Death, reinforce the robust efficacy and favorable safety profile of LUPKYNIS. 5 Time to Renal-Related Event or Death a (AURORA 1 Phase 3 Population) a Time to renal-related event or death is defined as the time to the first occurrence of death, treatment failure, worsening proteinuria or worsening eGFR In the pivotal Phase 3 study (AURORA 1) and Phase 2 study (AURA-LV), adverse reactions occurring in ≥3% of patients treated with LUPKYNIS and ≥2% higher than placebo are shown below.
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How LUPKYNIS Works LUPKYNIS is a calcineurin-inhibitor immunosuppressant indicated in combination with a background immunosuppressive therapy regimen for the treatment of adult patients with active LN. LUPKYNIS targets LN with a dual mechanism of action: 1. Promotes podocyte stability, reducing proteinuria 2.
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The primary objective of the SAD study was to assess the safety, tolerability and pharmacodynamics (“PD”) of aritinercept after single ascending subcutaneous administration in healthy volunteers. The study investigated aritinercept (at doses of 5 mg, 25 mg, 75 mg, 150 mg, 225 mg and 300 mg) and placebo, administered by subcutaneous injection, in 61 healthy subjects.
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The ACR-recommended goal of therapy is to reach proteinuria ≤0.5 mg/mg by 6-12 months. LUPKYNIS’ rapid effect on reducing proteinuria facilitates achieving this treatment goal. AUR200 AUR200 is a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases.
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Aritinercept Single Ascending Dose Study: Design SC=subcutaneous 9 Study results showed that aritinercept was well tolerated at all dose levels tested. There were no treatment-related Grade ≥3 adverse events (“AEs”), there were no treatment-related serious adverse events (“SAEs”) and there were no discontinuations due to treatment-related AEs.
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AUR200 contains an immunoglobulin (“Ig”) G4 fragment crystallizable region (“Fc”) domain with no appreciable effector function (others use IgG1 Fc domain).
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There was one Grade ≥3 AE and one SAE (same event) of concussion due to motor vehicle accident reported as not treatment related. AEs that occurred in more than one subject included injection site reactions (24% aritinercept, 13% placebo), headache (11% aritinercept, 7% placebo), upper respiratory tract infection (7% aritinercept, 0% placebo) and back pain (4% aritinercept, 0% placebo).
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By inhibiting BAFF and APRIL, drugs like AUR200 may prevent the activation of autoreactive B cells and reduce their numbers and associated antibodies in the body, thereby treating autoimmune diseases.
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All injection site reactions were Grade 1. Anti-drug antibodies were detected in the majority of subjects at dose levels of 25 mg and higher. The presence of anti-drug antibodies was not associated with any changes in safety, pharmacokinetic (“PK”) or PD parameters. Single doses of aritinercept led to robust and long-lasting reductions in immunoglobulins (antibodies) in humans.
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AUR200 Potently Inhibits BAFF- and APRIL-Mediated B Cell Proliferation a a Morales et al., ACR Convergence 2022 In preclinical testing in non-human primates, subcutaneous dosing of AUR200 resulted in significant and sustained reductions in the B cell antibodies immunoglobulin A (“IgA”) and immunoglobulin M (“IgM”). AUR200 was well-tolerated with no adverse findings at any of the doses tested.
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Specifically, mean reductions from baseline to Day 28 of up to 48%, 55% and 20% were observed for IgA, IgM and IgG, respectively. The PD effects are supportive of once-monthly dosing.
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AUR200 Depletes B Cell Antibodies in Non-Human Primates a a Morales et al., ACR Convergence 2022 A single ascending dose (“SAD”) study to assess the safety, tolerability and pharmacodynamics of AUR200 in healthy volunteers was initiated in September 2024 and is ongoing.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+11 added−16 removed76 unchanged
Biggest changeWe may not be directly subject to certain of these laws and regulations, such as privacy and security requirements under HIPAA; however, we may be subject to criminal penalties for knowingly, aiding and embedding these violations. • Section 1927 of the Social Security Act, which requires that manufacturers of drugs and biological products covered by Medicaid report pricing information to CMS on a monthly and quarterly basis, including the best price available to 21 any customer of the manufacturer, with certain exceptions for government programs, and pay prescription rebates to state Medicaid programs based on a statutory formula derived from reported pricing information. • Various state and/or foreign law equivalents of each of the above federal laws, such as the California Consumer Privacy Act, many of which differ from each other in significant ways and may not have the same effect, which complicates our compliance efforts.
Biggest changeWe may not be directly subject to certain of these laws and regulations, such as privacy and security requirements under HIPAA; however, we may be subject to criminal penalties for knowingly, aiding and abetting these violations. • section 1927 of the Social Security Act, which requires that manufacturers of drugs and biological products covered by Medicaid report pricing information to CMS on a monthly and quarterly basis, including the best price available to any customer of the manufacturer, with certain exceptions for government programs, and pay prescription rebates to state Medicaid programs based on a statutory formula derived from reported pricing information. • various state and/or foreign law equivalents of each of the above federal laws, such as the California Consumer Privacy Act, many of which differ from each other in significant ways and may not have the same effect, which complicates our compliance efforts. 24 If we are found to be in violation of any of the laws or regulations described above or any other laws or regulations that apply to us (including any changes made to such laws or regulations, or new laws or regulations implemented, by applicable government entities), we may be subject to substantial penalties, including civil and criminal penalties, damages, fines and possible exclusion from participation in Medicare, Medicaid and other federal health care programs.
In the U.S. and markets in other countries, patients generally rely on third-party reimbursement for all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicaid and Medicare, and commercial payors is critical to market acceptance of our products.
In the U.S. and markets in other countries, patients generally rely on third-party reimbursement for all or part of the costs associated with their treatment. In the U.S., adequate coverage and reimbursement from governmental healthcare programs, such as Medicaid and Medicare, and commercial payors is critical to market acceptance of our products.
If our intellectual property does not protect LUPKYNIS from generic competition, LUPKYNIS net product sales may decline, and/or we may incur additional costs for patent protection, including patent infringement litigation costs arising out of ANDA submissions by generic companies to manufacture and sell generic products or arising out of 505(b)(2) submissions, which could have a material adverse effect on our business, results of operations and financial condition, and our business may suffer.
If our intellectual property does not protect LUPKYNIS from generic competition, LUPKYNIS’ net product sales may decline, and/or we may incur additional costs for patent protection, including patent infringement litigation costs arising out of ANDA submissions by generic companies to manufacture and sell generic products or arising out of 505(b)(2) submissions, which could have a material adverse effect on our business, results of operations and financial condition, and our business may suffer.
For material details about our intellectual property portfolio protecting LUPKYNIS, see the section titled “Intellectual Property” in Item 1. We have and plan to file additional patent applications that, if issued, would provide further protection for LUPKYNIS.
For material details about our intellectual property portfolio protecting LUPKYNIS, see the section titled “Intellectual Property” in Item 1. We have filed and plan to file additional patent applications that, if issued, would provide further protection for LUPKYNIS.
The term “remuneration” has been broadly interpreted to include anything of value, including for example gifts, cash payments, donations, the furnishing of supplies or equipment, waivers of payment, ownership interests, and providing any item, service or compensation for something other than fair market value. • U.S. false claims and civil monetary penalties laws, including the FCA, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent.
The term “remuneration” has been broadly interpreted to include anything of value, including for example gifts, cash payments, donations, the furnishing of supplies or equipment, waivers of payment, ownership interests, and providing any item, service or compensation for something other than fair market value. • false claims and civil monetary penalties laws, including the FCA, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent.
In the event of such an accident, we could be held liable for any damages that result and such liability could exceed our resources. Item 1B. Unresolved Staff Comments None.
In the event of such an accident, we could be held liable for any damages that result and such liability could exceed our resources. Item 1B. Unresolved Staff Comments. None. 27
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the work they perform is compromised due to the failure to adhere to regulatory requirements or for other reasons, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the work they perform is compromised due to the failure to adhere to regulatory requirements or for other reasons, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of aritinercept.
We are exposed to the risk of employee, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations misconduct, which could include intentional failures to comply with regulatory standards and requirements, such as FDA regulations, federal and state healthcare fraud and abuse laws and regulations, or similar laws and regulations established and enforced by comparable foreign regulatory authorities.
We are exposed to the risk of misconduct by employees, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations, which could include intentional failures to comply with regulatory standards and requirements, such as FDA regulations, federal and state healthcare fraud and abuse laws and regulations, or similar laws and regulations established and enforced by comparable foreign regulatory authorities.
We rely on third parties to provide certain services relating to our commercial distribution, clinical studies and other activities. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200, or the commercialization of LUPKYNIS.
We rely on third parties to provide certain services relating to our commercial distribution, clinical studies and other activities. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of aritinercept, or the commercialization of LUPKYNIS.
If the clinical sites participating in our clinical studies do not enroll patients in a timely manner, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200. We have agreements with contract research organizations and other third parties to provide services relating to our clinical programs.
If the clinical sites participating in our clinical studies do not enroll patients in a timely manner, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of aritinercept. We have agreements with contract research organizations and other third parties to provide services relating to our clinical programs.
RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES The commercial success of LUPKYNIS and the clinical success of AUR200 will depend on our ability to obtain an uninterrupted supply from our contract manufacturers. We rely on sole-source contract manufacturers to produce LUPKYNIS and clinical drug supply and expect to continue to do so to meet our commercial and development needs.
RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES The commercial success of LUPKYNIS and the clinical success of aritinercept will depend on our ability to obtain an uninterrupted supply from our contract manufacturers. We rely on sole-source contract manufacturers to produce LUPKYNIS and clinical drug supply and expect to continue to do so to meet our commercial and development needs.
If AUR200 is not found to be safe and effective, we would be unable to obtain regulatory approval to manufacture, market and sell AUR200. We can provide no assurances that the FDA, EC or other regulatory authorities will approve AUR200 or, if approved, what the scope of the approved indication might be.
If aritinercept is not found to be safe and effective, we would be unable to obtain regulatory approval to manufacture, market and sell aritinercept. We can provide no assurances that the FDA, EC or other regulatory authorities will approve aritinercept or, if approved, what the scope of the approved indication might be.
Any of these events could have a material adverse effect on our business, results of operations and financial condition, and our business may suffer. 17 Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Any of these events could have a material adverse effect on our business, results of operations and financial condition, and our business may suffer. 20 Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Pharmaceutical product candidates are subject to extensive government regulations related to development, clinical studies, manufacturing and commercialization. In order to sell any product that is under development, we must first receive regulatory approval. To obtain regulatory approval, we must conduct nonclinical and clinical studies that demonstrate that AUR200 is safe and effective.
Pharmaceutical product candidates are subject to extensive government regulations related to development, clinical studies, manufacturing and commercialization. In order to sell any product that is under development, we must first receive regulatory approval. To obtain regulatory approval, we must conduct nonclinical and clinical studies that demonstrate that aritinercept is safe and effective.
The long-term commercial success of LUPKYNIS and clinical success of AUR200 will depend in part on the ability of our contract manufacturers to supply cGMP-compliant API and drug product without interruption. If there is an interruption in the supply from our contract manufacturers, our business may suffer.
The long-term commercial success of LUPKYNIS and clinical success of aritinercept will depend in part on the ability of our contract manufacturers to supply cGMP-compliant API and drug product without interruption. If there is an interruption in the supply from our contract manufacturers, our business may suffer.
We rely on clinical sites to enroll patients in our clinical studies. The rate of enrollment of patients into our clinical studies at these clinical sites is dependent on a number of factors, including the number of eligible patients and the interest level of investigators, study staff and patients in our clinical studies relative to other enrolling studies.
The rate of enrollment of patients into our clinical studies at these clinical sites is dependent on a number of factors, including the number of eligible patients and the interest level of investigators, study staff and patients in our clinical studies relative to other enrolling studies.
Our development of AUR200 may be delayed or halted for various reasons, including: • insufficient financial resources; • insufficient supplies of drug product to treat the patients in the studies; • failure of patients to enroll in the studies at the rate we expect; • ineffectiveness of AUR200; • patients experiencing unexpected side effects or other safety concerns being raised during treatment; • changes in governmental regulations or administrative actions; • failure to conduct studies in accordance with required clinical practices; • inspection of clinical study operations or study sites by the FDA or other regulatory authorities, resulting in a clinical hold; • political unrest effecting clinical sites; • a shutdown of the U.S. government, including the FDA; or 19 • natural disasters, public health crises or other catastrophic events impacting any of our clinical sites.
Our development of aritinercept may be delayed or halted for various reasons, including: • insufficient supplies of drug product to treat the patients in the studies; • failure of patients to enroll in the studies at the rate we expect; • ineffectiveness of aritinercept; • patients experiencing unexpected side effects or other safety concerns being raised during treatment; • changes in governmental regulations or administrative actions; • failure to conduct studies in accordance with required good clinical practices; • inspection of clinical study operations or study sites by the FDA or other regulatory authorities, resulting in a clinical hold; • political unrest affecting clinical sites; • a shutdown of the U.S. government, including the FDA; • an adverse determination by an FDA advisory committee; • insufficient financial resources; or • natural disasters, public health crises or other catastrophic events impacting any of our clinical sites.
Regulatory authorities enforce cGCPs through periodic inspections of study sponsors, principal investigators and clinical sites.
Regulatory authorities enforce GCPs through periodic inspections of study sponsors, principal investigators and clinical sites.
The process of obtaining FDA, EC and other regulatory authority approvals is costly, time-consuming, uncertain and subject to unanticipated delays. The FDA, EC and other regulatory authorities have substantial discretion in the approval process and may not agree that we have demonstrated that AUR200 is safe and effective.
The process of obtaining FDA, European Commission (“EC”) and other regulatory authority approvals is costly, time-consuming, uncertain and subject to unanticipated delays. The FDA, EC and other regulatory authorities have substantial discretion in the approval process and may not agree that we have demonstrated that aritinercept is safe and effective.
LUPKYNIS is our only approved product and our only source of net product sales. Prior to the year ended December 31, 2024, we had negative operating cash flow for multiple years.
LUPKYNIS is our only approved product and our only source of net product sales. Prior to the year ended December 31, 2024, we had negative cash flows from operating activities for multiple years.
If we need to obtain additional financing in the future, such financing could result in dilution to your investment, adversely affect the trading price of our common shares and/or create future operating and financial restrictions. As of December 31, 2024, we had cash, cash equivalents, restricted cash and investments of $358.5 million.
If we need to obtain additional financing in the future, such financing could result in dilution to your investment, adversely affect the trading price of our common shares and/or create future operating and financial restrictions. As of December 31, 2025, we had cash, cash equivalents, restricted cash and investments of $398.0 million.
Although we intend to vigorously defend our intellectual property rights protecting LUPKYNIS, we may incur significant patent litigation costs, and, if any entity that may file an ANDA is successful in the introduction of the generic product described in its ANDA, then LUPKYNIS net product sales may decline, which could have a material adverse effect on our business, results of operations and financial condition.
We expect to incur significant patent litigation costs to protect our intellectual property rights relating to LUPKYNIS, and, if any entity that may file an ANDA is successful in the introduction of the generic product described in its ANDA, then LUPKYNIS net product sales may decline, which could have a material adverse effect on our business, results of operations and financial condition.
Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medication they will pay for and establish reimbursement levels. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products.
Government authorities and other third-party payors, such as private health insurers and pharmacy benefit managers, decide which medication they will pay for and establish reimbursement levels. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular pharmaceutical products.
Patent Nos. 10,286,036 and 11,622,991 (the “2037 Patents”), which are listed in the FDA's Orange Book. The Notice Letter alleges that the 2037 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in the ANDA.
Patent Nos. 10,286,036 and 11,622,991 in December 2037 (the “2037 Patents”), which are listed in the FDA's Orange Book. The Notice Letters allege that the 2037 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in the ANDAs.
If we, the investigators or the clinical sites fail to comply with applicable cGCPs, the clinical data generated in our clinical studies may be deemed unreliable and the regulatory authorities may require us to perform additional clinical studies before approving our marketing applications, which would delay or compromise the regulatory approval process.
If we, the investigators or the clinical sites fail to comply with applicable GCPs, the clinical data generated in our clinical studies may be deemed unreliable and the regulatory authorities may require us to perform additional clinical studies before approving our marketing applications, which would delay or compromise the regulatory approval process. 23 We rely on clinical sites to enroll patients in our clinical studies.
The volume and trading price of our common shares may fluctuate significantly, and you may lose all or part of your investment.
RISKS RELATED TO OWNERSHIP OF OUR COMMON SHARES The volume and trading price of our common shares may fluctuate significantly, and you may lose all or part of your investment. The volume and trading price of our common shares may fluctuate significantly.
In the U.S., we rely on two specialty pharmacies to distribute LUPKYNIS to patients.
We rely on two specialty pharmacies and a specialty distributor in the U.S. to distribute LUPKYNIS to patients.
Our overall financial performance, including but not limited to, net product sales and net cash provided by or used for operating activities, including any milestone, royalty and other payments resulting from our collaboration and license agreement and commercial supply agreement with Otsuka, is difficult to predict and may fluctuate from quarter to quarter and year to year.
Our overall financial performance, including but not limited to, net product sales and cash flows from operating activities, including any milestone, royalty and other payments resulting from our collaboration and licensing agreement and commercial supply agreement with Otsuka, is difficult to predict and may fluctuate from quarter to quarter and year to year.
We do not know whether any clinical studies we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain regulatory approval to market AUR200. Results from studies of AUR200 may not be sufficient to obtain regulatory approvals to market our product candidate on a timely basis, if at all.
We do not know whether any clinical studies we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain regulatory approval, including for aritinercept. Results from studies of aritinercept may not be sufficient to obtain regulatory approvals to market it on a timely basis, if at all.
We may be subject to additional competition from future products. In an effort to remain competitive in the marketplace, we may determine to change our pricing, dosage forms and strengths and other marketing strategies for LUPKYNIS, including altering the amount or availability of discounts or rebates.
In an effort to remain competitive in the marketplace, we may determine to change our pricing, dosage forms and strengths and other marketing strategies for LUPKYNIS, including altering the amount or availability of discounts or rebates.
In addition, if third parties file patent applications or obtain patents claiming inventions also claimed by us in issued patents or pending applications, we may have to participate in interference proceedings in the U.S. Patent and Trademark Office (“USPTO”) to determine priority of invention.
In addition, if third parties file patent applications or obtain patents claiming inventions also claimed by us in issued patents or pending applications, we may have to participate in interference proceedings in the USPTO to determine priority of invention.
We participate in the Medicaid Drug Rebate Program, administered by Centers for Medicare and Medicaid Services, and other federal and state government pricing programs in the U.S., and we may in the future participate in additional government pricing programs.
We participate in the Medicaid Drug Rebate Program, administered by CMS, and other federal and state government pricing programs in the U.S., and we may in the future participate in additional government pricing programs.
Our development of AUR200 may be delayed or halted.
Our development of aritinercept may be delayed or halted.
Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act, which require manufacturers of certain drugs and biologics to track and report to U.S.
Physician Payment Sunshine Act requirements, under the ACA, which require manufacturers of certain drugs and biologics to track and report to U.S.
These include provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information in the U.S. and the General Data Protection Regulation (“GDPR”) in the European Union.
These include provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information in the U.S. and the GDPR in the E.U.
There is a high failure rate for pharmaceutical product candidates proceeding through clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy, despite having progressed through nonclinical studies and initial clinical studies.
Promising results shown in early-stage clinical studies may still suffer significant setbacks in subsequent clinical studies. There is a high failure rate for pharmaceutical product candidates proceeding through clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy, despite having progressed through nonclinical studies and initial clinical studies.
Even where claims are submitted to insurance carriers for defense and indemnity, there can be no assurance that the claims will be fully covered by insurance or that the indemnitors or insurers will remain financially viable to cover the cost of such claims. Any such claims or lawsuits could materially impact our financial condition, and our business may suffer.
Even where claims are submitted to insurance carriers for defense and indemnity, there can be no assurance that the claims will be fully covered by insurance or that the indemnitors or insurers will remain financially viable to cover the cost of such claims.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
The laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.
Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the U.S. False Claims Act (“FCA”) and other laws and regulations.
Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the FCA and other laws and regulations.
In December 2020, we entered into a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in Japan, the E.U., the U.K., Switzerland, Russia, Norway, Belarus, Iceland, Liechtenstein and Ukraine 15 (collectively, the “Otsuka Territories”) in exchange for: (i) a $50 million upfront cash payment; (ii) regulatory and commercial milestone payments; and (iii) royalties ranging from 10% to 20% on net sales in the Otsuka Territories.
In December 2020, we entered into a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in the Otsuka Territories in exchange for: (i) a $50 million upfront cash payment; (ii) regulatory and commercial milestone payments; and (iii) royalties ranging from 10% to 20% on net sales in the Otsuka Territories.
We rely on clinical sites to comply with study protocols and regulations applicable to clinical study conduct. We and these clinical sites are required to comply with current Good Clinical Practices (“cGCP”), which are regulations and guidelines 20 enforced by the FDA and comparable foreign regulatory authorities for products in clinical development.
We rely on clinical sites to comply with study protocols and regulations applicable to clinical study conduct. We and these clinical sites are required to comply with Good Clinical Practices (“GCP”), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities governing the conduct of clinical investigations.
Changes in either the patent laws or interpretation of the patent laws in the U.S. or other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the U.S.
Changes in either the patent laws or interpretation of the patent laws in the U.S. or other countries may diminish the value of our patents or narrow the scope of our patent protection.
If any such actions are instituted against us, and we are not successful in defending ourselves, those actions, including the imposition of significant fines or other sanctions, could have a material adverse effect on our business and results of operations.
If any such actions are instituted against us, and we are not successful in defending ourselves, those actions, including the imposition of significant fines or other sanctions, could have a material adverse effect on our business and results of operations. 26 Business interruptions resulting from geopolitical actions, natural disasters, public health crises or other catastrophic events could have an adverse impact on our business.
On February 25, 2025, we received a paragraph IV notice of certification (the “Notice Letter”) related to a submission of an ANDA to the FDA seeking authorization to manufacture, use or sell a generic version of LUPKYNIS in the U.S., prior to the expiry of U.S.
In February and March 2025, we received paragraph IV notices of certification (the “Notice Letters”) related to submissions of ANDAs to the FDA seeking authorization to manufacture, use or sell a generic version of LUPKYNIS in the U.S., prior to the expiry of U.S.
If we are unable to hire and retain key employees, we may be unable to effectively execute on our operating plan, and our business may suffer. Our employees, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations may engage in misconduct, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.
Our employees, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations may engage in misconduct, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.
The most commonly reported adverse reactions in our AURORA 1 and AURORA 2 clinical studies (≥3%) were: glomerular filtration rate decreased, hypertension, diarrhea, headache, anemia, cough, urinary tract infection, abdominal pain upper, dyspepsia, alopecia, renal impairment, abdominal pain, mouth ulceration, fatigue, tremor, acute kidney injury, and decreased appetite.
The most commonly reported adverse reactions occurring in ≥3% of patients treated with LUPKYNIS 23.7 mg twice a day and ≥2% higher than placebo in AURORA 1 and AURA-LV were: glomerular filtration rate decreased, hypertension, diarrhea, headache, anemia, cough, urinary tract infection, abdominal pain upper, dyspepsia, alopecia, renal impairment, abdominal pain, mouth ulceration, fatigue, tremor, acute kidney injury and decreased appetite.
Furthermore, it may not be possible for investors to enforce judgments obtained in U.S. courts based upon the civil liability provisions U.S. laws against any of those persons.
Because all or a substantial portion of the assets of these persons are located outside of the U.S., it may not be possible to effect service of process upon those persons. Furthermore, it may not be possible for investors to enforce judgments obtained in U.S. courts based upon the civil liability provisions U.S. laws against any of those persons.
Business interruptions resulting from geopolitical actions, natural disasters, public health crises or other catastrophic events could have an adverse impact on our business. Business interruptions resulting from geopolitical actions, such as war and terrorism, natural disasters, public health crises, such as a pandemic, or other catastrophic events could have an adverse impact on our business.
Business interruptions resulting from geopolitical actions, such as war and terrorism, natural disasters, public health crises, such as a pandemic, or other catastrophic events could have an adverse impact on our business. For example, if one of these events were to adversely affect one of our contract manufacturers, our supply of LUPKYNIS could be interrupted.
RISKS RELATED TO DRUG DEVELOPMENT AND REGULATORY APPROVAL Drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies may not be predictive of future study results. Clinical testing is expensive, can take many years to complete and its outcome is inherently uncertain. Failure can occur at any time during the clinical study process.
Clinical testing is expensive, can take many years to complete and its outcome is inherently uncertain. Failure can occur at any time during the clinical study process. The results of nonclinical studies and early clinical studies of aritinercept may not be predictive of the results of later-stage clinical studies.
If the development of AUR200 is delayed or halted, we may incur significant additional expenses, and the potential approval of AUR200 may be delayed or could be made impossible to obtain, which would have a material adverse effect on our business and financial condition, and our business may suffer.
If the development of aritinercept is delayed or halted, we may incur significant additional expenses, and the potential approval of aritinercept may be delayed or could be made impossible to obtain, which would have a material adverse effect on our business and financial condition, and our business may suffer. 22 Compliance with ongoing post-marketing obligations for LUPKYNIS may uncover new safety information that could give rise to a product recall, updated warnings or other regulatory actions.
In February 2024, the Board approved a share repurchase program of up to $150 million of our common shares (the “Share Repurchase Plan”). The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, legal requirements, including applicable blackout period restrictions, and other factors.
The timing and amount of repurchase transactions will be determined by the Company based on its evaluation of market conditions, share price, legal requirements, including applicable blackout period restrictions, and other factors. A reduction in repurchases under, or the completion of, our share repurchase programs could have a negative effect on the market price of our common shares.
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services. • The U.S.
These include: providing inaccurate billing or coding information to customers; improperly promoting a product’s off-label use; violating the AKS; or misreporting pricing information to government programs. • HIPAA, which prohibits, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services. • the U.S.
In addition, proposed or actual changes to applicable tax legislation may significantly impact our ability to utilize our net operating losses and tax credit carryforwards to offset taxable income in the future. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.
Under the provisions of the applicable tax legislation, our net operating loss and tax credit carryforwards are subject to review and possible adjustment by applicable tax regulatory authorities. In addition, proposed or actual changes to applicable tax legislation may significantly impact our ability to utilize our net operating losses and tax credit carryforwards to offset taxable income in the future.
LUPKYNIS’s competition as a treatment in LN patients includes BENLYSTA and physicians continuing to treat LN with an off-label combination of MMF and corticosteroids alone or in combination with first generation calcineurin inhibitors such as tacrolimus. If we are unable to further change treatment practices, further growth of LUPKYNIS net product sales will be limited, and our business may suffer.
LUPKYNIS’s competition as a treatment in LN patients includes BENLYSTA and GAZYVA and physicians continuing to treat LN with an off-label combination of MMF and corticosteroids alone or in combination with first generation CNIs such as tacrolimus.
The commercial success of LUPKYNIS in certain ex-U.S. territories is dependent on the fulfillment of contractual obligations under our out-license agreement and commercial supply agreement.
Any such claims or lawsuits could materially impact our financial condition, and our business may suffer. 18 The commercial success of LUPKYNIS in certain ex-U.S. territories is dependent on the fulfillment of contractual obligations under our collaboration and licensing agreement and commercial supply agreement.
Even if we decide to pay dividends, the timing, amount and form of future dividends will depend on future results of operations, financial condition, contractual restrictions and other factors.
Even if we decide to pay dividends, the timing, amount and form of future dividends will depend on future results of operations, financial condition, contractual restrictions and other factors. You should not rely on dividend income from your investment. Our capital requirements and our potential need for, and ability to obtain, additional financing are uncertain.
The amount of the annual limitation is determined based on the value of a company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. We may not be able to use some or all of our net operating loss and tax credit carryforwards.
This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of a company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.
We can provide no assurance that we will repurchase common shares at favorable prices, if at all. GENERAL RISK FACTORS Our ability to hire and retain key employees is uncertain. The market for effective professionals in the pharmaceutical industry is competitive and hiring and retaining these professionals is expensive and challenging.
Additionally, the Canada Income Tax Act includes an excise tax on share repurchases, which will increase the cost of share repurchases. We can provide no assurance that we will repurchase common shares at favorable prices, if at all. GENERAL RISK FACTORS Our ability to hire and retain key employees is uncertain.
In the past two years, we have faced “withhold” campaigns against nominees for director from some of our shareholders and such actions could continue in the future. Responding to actions by shareholder activists may disrupt our business and divert the attention of management and employees, and can have an impact on the price of our common shares.
Responding to actions by shareholder activists may disrupt our business, divert the attention of management and employees and impact the price of our common shares. 25 We have never paid a dividend on our common shares. We have never paid a dividend on our common shares.
Although we may not submit claims directly to payors, manufacturers can be held liable under these laws in a variety of ways. These include: providing inaccurate billing or coding information to customers; improperly promoting a product’s off-label use; violating the AKS; or misreporting pricing information to government programs. • The U.S.
Although we may not submit claims directly to payors, manufacturers can be held liable under these laws in a variety of ways.
Compliance with ongoing post-marketing obligations for LUPKYNIS may uncover new safety information that could give rise to a product recall, updated warnings or other regulatory actions. After a regulator, such as the FDA, approves a product for marketing, the product’s sponsor must comply with post-marketing obligations.
After a regulator, such as the FDA, approves a product for marketing, the product’s sponsor must comply with post-marketing obligations.
In addition, governments outside of the U.S. tend to impose strict price controls, which may adversely affect our revenues or our royalty payments received from license agreements. RISKS RELATED TO OWNERSHIP OF OUR COMMON SHARES The volume and trading price of our common shares may fluctuate significantly, and you may lose all or part of your investment.
In addition, governments outside of the U.S. tend to impose strict price controls, which may adversely affect our revenues or our royalty payments received from license agreements. Changes or developments in U.S. economic laws or policies, including the reaction of other countries thereto, may have a material adverse effect on our business.
We may also be subject to other potential tax consequences. Under the provisions of the applicable tax legislation, our net operating loss and tax credit carryforwards are subject to review and possible adjustment by applicable tax regulatory authorities.
Our ability to use our net operating loss carryforwards and tax credit carryforwards to offset future taxable income may be subject to certain limitations. We may also be subject to other potential tax consequences.
We are an Alberta, Canada corporation, and some of our directors and officers reside outside of the U.S. Because all or a substantial portion of the assets of these persons are located outside of the U.S., it may not be possible to effect service of process upon those persons.
You may be unable to enforce actions against us, or certain of our officers under U.S. laws. We are an Alberta, Canada corporation, and some of our officers reside outside of the U.S.
If Centers for Medicare and Medicaid Services were to terminate our rebate agreement, no federal payments would be available under Medicaid or Medicare for LUPKYNIS, which could harm our business. We have reported on various commercial metrics relating to LUPKYNIS, and no single metric is indicative of, or directly correlated to, our current or future financial performance.
If CMS were to terminate our rebate agreement, no federal payments would be available under Medicaid or Medicare for LUPKYNIS, which could harm our business. 19 RISKS RELATED TO PATENTS AND PROPRIETARY TECHNOLOGY LUPKYNIS’s market exclusivity periods will depend on the validity and enforceability of issued and pending patents covering LUPKYNIS.
Removed
We have reported on various commercial metrics relating to LUPKYNIS activity, including the number of prescriptions/PSFs, persistency rates, the number of patients on therapy, patient restarts and patients resulting from hospital fills. None of these metrics, in and of themselves, is indicative of current or future financial performance.
Added
If we are unable to further change treatment practices, further growth of LUPKYNIS net product sales will be limited, and our business may suffer. We may also be subject to additional competition from future products.
Removed
Even when a patient becomes a patient on LUPKYNIS therapy, there is no guarantee that they will be a patient for which we recognize revenue, or that they will remain on therapy for any period of time.
Added
We have filed complaints alleging patent infringement against each of the senders of the Notice Letters.
Removed
A patient on therapy who discontinues treatment generally results in zero future revenue, and discontinuations can occur at any time once a patient commences therapy.
Added
We may not be able to use some or all of our net operating loss and tax credit carryforwards. 21 RISKS RELATED TO DRUG DEVELOPMENT AND REGULATORY APPROVAL Drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies of aritinercept may not be predictive of future study results.
Removed
Our net product sales are primarily the result of our net sales of LUPKYNIS to two specialty pharmacies and a specialty distributor in the U.S., and net sales of LUPKYNIS inventory to our collaboration partner, Otsuka, for the European and 16 Japanese market. Revenue from the two specialty pharmacies do not necessarily correlate to any of our commercial metrics.
Added
The U.S. federal government has announced that it has commenced a national security investigation of imports of “pharmaceuticals and pharmaceutical ingredients.” Depending on the findings of its investigation, the U.S. federal government could implement additional measures related to the import of pharmaceuticals and pharmaceutical ingredients.
Removed
Revenue from Otsuka has no relevance to any of the above noted metrics. Our revenue could therefore fluctuate in a manner contrary to any trend of our commercial metrics. RISKS RELATED TO PATENTS AND PROPRIETARY TECHNOLOGY LUPKYNIS’s market exclusivity periods will depend on the validity and enforceability of issued and pending patents covering LUPKYNIS.
Added
The degree and extent of those measures or other measures the U.S. federal government could implement (such as pricing restrictions, tariffs or other trade restrictions or deterrents on foreign companies doing business outside of the U.S.) are not fully known at this time.
Removed
Our restructuring efforts and associated organizational changes may not adequately reduce our operating costs, may lead to additional workforce attrition and may cause operational disruptions. On February 15, 2024, we announced a strategic restructuring that reduced headcount by approximately 25% and discontinued Aurinia’s AUR300 development program.
Added
Aurinia is an Alberta, Canada incorporated company, and we manufacture and import certain products in our supply chain into the U.S. primarily from Switzerland.
Removed
On November 7, 2024, we announced another strategic restructuring that further reduced headcount by approximately 45% to sharpen the Company's focus on continued LUPKYNIS growth and the rapid development of AUR200.
Added
If implemented, and depending on the degree and extent (including how directly they relate to our operations) of any changes or developments in U.S. economic laws or policies, additional measures related to “pharmaceuticals and pharmaceutical ingredients” could have a material adverse effect on Aurinia’s business.
Removed
The restructuring efforts may not adequately reduce our operating costs and could yield unintended consequences, such as loss of institutional knowledge and expertise, employee attrition and a reduction in employee morale, as well as substantial demands on our employees, all of which may materially adversely affect our revenues, results of operations or financial condition, and our business may suffer. 18 Our ability to use our net operating loss carryforwards and tax credit carryforwards to offset future taxable income may be subject to certain limitations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDuring 2024, we refreshed our business continuity program to assess the resilience of our processes and systems against potential threats, including cyber-attacks. Our refreshed crisis management and business continuity program establishes crisis management instructions with a detailed plan for each business department outlining critical processes, internal and external dependencies and recovery strategies.
Biggest changeOur crisis management and business continuity program establishes crisis management instructions with a detailed plan for each business department outlining critical processes, internal and external dependencies and recovery strategies. In addition, routine information security training and updates are regularly rolled out to our employees, and we track certain metrics that we believe help ensure we have a strong security posture.
In addition, our Chief Information Officer ("CIO") is responsible for leading the assessment and management of cybersecurity risks. Our CIO, who has held this position since 2021, has over 20 years of experience in information security and holds an MBA from The George B. Delaplaine School of Business and Economics.
In addition, our Chief Information Officer (“CIO”) is responsible for leading the assessment and management of cybersecurity risks. Our CIO, who has held this position since 2021, has over 20 years of experience in information security and holds an MBA from The George B. Delaplaine School of Business and Economics.
This policy promotes the management and execution of our information security framework for preserving the confidentiality, integrity, availability and 24 privacy of our information assets, including by helping enable us to better oversee, monitor and identify certain risks related to the processing of information by authorized third-party service providers.
This policy promotes the management and execution of our information security framework for preserving the confidentiality, integrity, availability and privacy of our information assets, including by helping enable us to better oversee, monitor and identify certain risks related to the processing of information by authorized third-party service providers.
We also have an Information Technology ("IT") Steering Committee to help ensure security and compliance across our IT services. We have in the past, and may in the future, engage third parties to assess the effectiveness of our cybersecurity prevention and response systems and processes.
We also have an Information Technology (“IT”) Steering Committee to help ensure security and compliance across our IT services. We have in the past, and may in the future, engage third parties to assess the effectiveness of our cybersecurity prevention and response systems and processes.
We implement a layered strategy for overseeing and identifying material risks from cybersecurity threats associated with our use of third party service providers, including: (i) the use of a suite of Microsoft tools (including Microsoft Defender); (ii) a cloud IT strategy that eliminates any central platform; (iii) engaging a cybersecurity firm that monitors our systems 24/7 and provides daily alerts and updates; (iv) regular cybersecurity training for all employees and contractors; and (v) policies and procedures that govern employee activities along with technical controls in place to enforce those policies and procedures.
We implement a layered strategy for overseeing and identifying material risks from cybersecurity threats associated with our use of third party service providers, including: (i) the use of a suite of Microsoft tools (including Microsoft Defender); (ii) a cloud IT strategy that eliminates any central platform; (iii) engaging a cybersecurity firm that constantly monitors our systems and provides daily alerts and updates; (iv) regular cybersecurity training for all employees and contractors; and (v) policies and procedures that govern employee activities along with technical controls in place to enforce those policies and procedures.
We do not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which we are aware are reasonably likely to materially affect our Company.
To date, cybersecurity threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our business strategy, results of operations or financial condition. We do not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which we are aware are reasonably likely to materially affect our Company.
See “We rely significantly on information technology and any failure, inadequacy, or security lapse of that technology, including any cybersecurity incidents, could harm us” in the “Risk Factors” section of this Annual Report for further information. Governance One of the key functions of our Board is informed oversight of our risk management process.
See “ Our business and operations may be materially adversely affected in the event of computer system failures or security breaches ” in the “Risk Factors” section of this Annual Report for further information. Governance One of the key functions of our Board is informed oversight of our risk management process.
Removed
In addition, routine information security training and updates are regularly rolled out to our employees, and we track certain metrics that we believe help ensure we have a strong security posture. To date, cybersecurity threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties update We lease 4,375 square feet of office space in Edmonton, Alberta, which serves as our principal executive office. We lease 30,531 square feet of office space in Rockville, Maryland, which serves as our commercial office. We believe these facilities are adequate to meet our current and future needs. Item 3.
Biggest changeItem 2. Properties. We lease 4,375 square feet of office space in Edmonton, Alberta, which serves as our principal executive office. We lease 30,531 square feet of office space in Rockville, Maryland, which serves as our commercial office. We believe these facilities are adequate to meet our current and future needs. 28
Removed
Legal Proceedings We are not currently a party to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 25 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company has entered into a Rule 10b5-1 stock repurchase plan for the purpose of establishing a trading plan to purchase the Company’s common shares in a manner intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in accordance with applicable Canadian securities laws. 26 Performance Graph The following line graph compares the cumulative total shareholder return through December 31, 2024, by an investor who invested $100 on December 31, 2019 in each of: (i) our common shares; (ii) the Nasdaq Biotechnology Index; and (iii) the Nasdaq Composite Index.
Biggest changePerformance Graph The following line graph compares the cumulative total shareholder return through December 31, 2025, by an investor who invested $100 on December 31, 2020 in each of: (i) our common shares; (ii) the Russell 3000 Biotechnology Index; and (iii) the Russell 3000 Index.
The historical share price performance of our common shares shown in the performance graph is not necessarily indicative of future share price performance. Cumulative Total Return Date Ended Ticker December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Aurinia Pharmaceuticals Inc.
The historical share price performance of our common shares shown in the performance graph is not necessarily indicative of future share price performance. Cumulative Total Return Date Ended Ticker December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 Aurinia Pharmaceuticals Inc.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are traded on The Nasdaq Global Market under the symbol “AUPH”. Holders of Record As of February 20, 2025, we had 112 registered holders.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares are traded on The Nasdaq Global Market under the symbol “AUPH”. Holders of Record As of February 25, 2026, we had 110 registered holders.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers In February 2024, the Board approved a share repurchase program of up to $150 million of shares of our common shares (“Share Repurchase Plan”). Purchases under the share repurchase program commenced on February 21, 2024.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers In February 2024, the Board approved a share repurchase program of up to $150 million of shares of our common shares, excluding commissions and excise tax (“Share Repurchase Plan”).
For the year ended December 31, 2024, the Company repurchased 6.1 million of its common shares for $41.0 million. The timing and amount of future repurchase transactions will be determined by management based on its evaluation of market conditions, share price, legal requirements, including applicable blackout period restrictions, and other factors.
The timing and amount of future repurchase transactions will be determined by the Company based on its evaluation of market conditions, share price, legal requirements, including applicable blackout period restrictions, and other factors. Under Alberta law, the repurchased common shares are cancelled and not reissued.
AUPH $ 100.00 $ 68.26 $ 112.88 $ 21.32 $ 44.37 $ 44.32 NASDAQ Biotechnology Index ^NBI $ 100.00 $ 125.69 $ 124.89 $ 111.27 $ 115.42 $ 113.84 NASDAQ Composite Index ^IXIC $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, except to the extent that we specifically incorporate this information by reference therein, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
AUPH $ 100.00 $ 165.37 $ 31.24 $ 65.00 $ 64.93 $ 115.33 Russell 3000 Biotechnology Index ^RGUSHBT $ 100.00 $ 92.16 $ 70.15 $ 69.15 $ 63.12 $ 83.61 Russell 3000 Index ^RAY $ 100.00 $ 125.64 $ 101.49 $ 127.81 $ 158.22 $ 185.32 This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, except to the extent that we specifically incorporate this information by reference therein, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Under Alberta law, the repurchased common shares are cancelled and not reissued. The following table summarizes the common share activity of our repurchased shares under the Share Repurchase Plan.
The following table summarizes the common share activity of our repurchased shares under the Share Repurchase Plan for the year ended December 31, 2025.
Removed
Period Total number of shares purchased Average price paid per share in $ Total number of shares purchased as part of publicly announced program Maximum approximate dollar value of shares that may yet be purchased under program (in thousands) (1) 2/21/2024-2/29/2024 1,732,787 $5.77 1,732,787 $140,000 3/1/2024-3/31/2024 640,587 $4.98 640,587 $136,809 4/1/2024-4/30/2024 1,049,556 $4.93 1,049,556 $131,638 5/1/2024-5/31/2024 891 $4.99 891 $131,633 11/1/2024-11/30/2024 2,371,612 $8.43 2,371,612 $111,633 12/1/2024-12/31/2024 257,206 $8.98 257,206 $109,325 Total 6,052,639 6,052,639 (1) Does not include broker commissions.
Added
On July 31, 2025, the Company announced that the Board had approved an increase to the previously announced Share Repurchase Plan of an additional $150 million of our common shares. Purchases under the Share Repurchase Plan, which to date have totaled 18.3 million of its common shares for $138.6 million, excluding commissions and excise tax, began on February 21, 2024.
Added
Period Total number of shares purchased Average price paid per share in $ Total number of shares purchased as part of publicly announced program Maximum approximate dollar value of shares that may yet be purchased under program (in thousands) (1) 1/1/2025-1/31/2025 2,042,590 $8.01 2,042,590 $92,971 2/1/2025-2/28/2025 1,905,425 $7.89 1,905,425 $77,934 3/1/2025-3/31/2025 1,859,484 $8.29 1,859,484 $62,521 4/1/2025-4/30/2025 2,300,518 $7.73 2,300,518 $44,733 5/1/2025-5/31/2025 1,512,761 $8.07 1,512,761 $32,520 6/1/2025-6/30/2025 1,538,513 $8.10 1,538,513 $20,064 7/1/2025-7/31/2025 1,068,136 $7.89 1,068,136 $161,634 8/1/2025-8/31/2025 22,286 $9.85 22,286 $161,415 Total 12,249,713 12,249,713 (1) Does not include broker commissions. 30 The Company has entered into a Rule 10b5-1 stock repurchase plan for the purpose of establishing a trading plan to purchase the Company’s common shares in a manner intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in accordance with applicable Canadian securities laws.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes our SG&A expense for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Change Personnel-expense: Salaries, incentive pay and benefits $ 73,231 $ 82,768 $ (9,537) Share-based compensation 31,641 36,511 (4,870) Total personnel expense 104,872 119,279 (14,407) Non-personnel expense: Professional fees and services 33,809 32,874 935 Marketing and advertising 14,094 18,287 (4,193) Travel, sponsorships and trade shows 8,605 11,281 (2,676) Other 10,648 13,315 (2,667) Total non-personnel expense 67,156 75,757 (8,601) Total SG&A expense $ 172,028 $ 195,036 $ (23,008) The decrease in SG&A personnel-expense and non-personnel expense were primarily a result of lower employee-related general and administrative costs, including share-based compensation, and overhead costs resulting from our strategic restructuring efforts in 2024.
Biggest changeNon-personnel-related expense includes: (i) selling, patient services, pharmacovigilance, marketing, advertising, travel, sponsorships and trade shows; and (ii) other general and administrative costs, including consulting, legal, patent, insurance, accounting, information technology and facilities. 33 The following table summarizes our SG&A expense for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Personnel expense: Salaries, incentive pay and benefits $ 44,563 $ 73,231 $ (28,668) Share-based compensation 12,724 31,641 (18,917) Total personnel expense 57,287 104,872 (47,585) Non-personnel expense: Professional fees and services 26,600 33,809 (7,209) Marketing and advertising 3,208 14,094 (10,886) Travel, sponsorships and trade shows 4,897 8,605 (3,708) Other 9,802 10,648 (846) Total non-personnel expense 44,507 67,156 (22,649) Total SG&A expense $ 101,794 $ 172,028 $ (70,234) The decrease in SG&A personnel and non-personnel expense was primarily due to lower employee-related costs, including share-based compensation, and lower marketing, professional fees and services and other overhead resulting from our strategic restructuring efforts in 2024.
Cost of Revenue Cost of revenue consists primarily of expense associated with: (ii) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant; (ii) manufacturing; and (iii) shipping, storage and distribution. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza for the construction of a dedicated manufacturing facility for voclosporin (the “Monoplant”).
Cost of Revenue Cost of revenue consists primarily of expense associated with: (i) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant; (ii) manufacturing; and (iii) shipping, storage and distribution. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza for the construction of a dedicated manufacturing facility for voclosporin (the “Monoplant”).
We can provide no assurance that additional financing will be available to us on favorable terms, or at all. Refer to the Notes to Consolidated Financial Statements, including Note 5, of Item 15 of this Annual Report for Aurinia’s material cash requirements from known contractual and other obligations as of December 31, 2024.
We can provide no assurance that additional financing will be available to us on favorable terms, or at all. Refer to the Notes to Consolidated Financial Statements, including Note 5 of Item 15 of this Annual Report for Aurinia’s material cash requirements from known contractual and other obligations as of December 31, 2025.
You should review the “Risk Factors” set forth in this Annual Report for a discussion of important factors that could cause our actual results may differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis. The following generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
You should review the “Risk Factors” set forth in this Annual Report for a discussion of important factors that could cause our actual results to differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis. The following generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Discussion of 2022 and year-to-year comparisons between 2023 and 2022 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 15, 2024.
Discussion of 2023 and year-to-year comparisons between 2024 and 2023 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025.
If actual results vary materially from our estimates, we adjust these estimates, which will affect net product sales and earnings in the period such estimates are adjusted. As of December 31, 2024, we did not have any material adjustments to variable consideration estimates based on actual results.
If actual results vary materially from our estimates, we adjust these estimates, which will affect net product sales and earnings in the period such estimates are adjusted. For the year ended December 31, 2025, we did not have any material adjustments to variable consideration estimates based on actual results.
Non-personnel-related expense includes subcontractors and materials used for R&D activities, including development, clinical trials, clinical supply and distribution, and other professional services.
Non-personnel-related expense includes contract research organizations, contract manufacturing organizations and materials used for R&D activities, including development, clinical trials, clinical supply and distribution, and other professional services.
Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs (approximately $4.0 million) for the exclusive right to use the Monoplant through March 31, 2030. For the year ended December 31, 2024, cost of revenue was $28.2 million, compared to $14.1 million in 2023.
Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs for the exclusive right to use the Monoplant through March 31, 2030. For the year ended December 31, 2025, cost of revenue was $32.7 million, compared to $28.2 million in 2024.
Aurinia is also developing AUR200, a dual inhibitor of B cell activating factor (BAFF) and a proliferation inducing ligand (APRIL) for the potential treatment of autoimmune diseases.
Aurinia is also developing aritinercept, a dual inhibitor of B cell-activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases.
The change is primarily due to: (i) changes in the foreign exchange remeasurement of the finance lease liability recognized in connection with the Monoplant, which commenced in late June 2023 and is denominated in Swiss Francs; (ii) changes in the fair value assumptions related to our deferred compensation liability; and (iii) a one-time expense in 2023 related to shareholder matters.
The change is primarily due to: (i) changes in the foreign exchange remeasurement of the finance lease liability recognized in connection with the Monoplant, which is denominated in Swiss Francs; and (ii) changes in the fair value assumptions related to our deferred compensation liability.
(“Otsuka”), for the European and Japanese market. The two specialty pharmacies, specialty distributor and Otsuka are considered our customers for accounting purposes. For the year ended December 31, 2024, net product sales were $216.2 million, up 36% from $158.5 million in 2023.
(“Otsuka”), for the European and Japanese market. The two specialty pharmacies, specialty distributor and Otsuka are considered our customers for accounting purposes. 32 For the year ended December 31, 2025, net product sales were $271.3 million, up 25% compared to $216.2 million in 2024.
Net Product Sales Revenue from product sales is recognized when the customer obtains control of our product, which typically occurs on delivery. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of prompt-pay discounts, customer fees, government rebates, co-payment assistance, payor rebates and administration fees for which 31 reserves are established.
Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of customer discounts, customer fees, government rebates, co-payment assistance, payor rebates and administration fees for which reserves are established.
We expect our SG&A expense to decrease in 2025 as we realize the full benefits of our strategic restructuring efforts. Research and Development Expense Research and development (“R&D”) expense consists of personnel and non-personnel expenses. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in research and development functions.
We expect our SG&A expense in 2026 to remain substantially consistent with 2025. Research and Development Expense Research and development (“R&D”) expense consists of personnel and non-personnel expenses. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in research and development functions.
For the year ended December 31, 2024, gross margin was 88%, compared to 92% in 2023. Selling, General and Administrative Expense Selling, general and administrative (“SG&A”) expense consists of personnel and non-personnel expenses to support growing sales of LUPKYNIS. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in sales, finance and administrative functions.
Selling, General and Administrative Expense Selling, general and administrative (“SG&A”) expense consists of personnel and non-personnel expenses to support growing net product sales of LUPKYNIS. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in sales, finance and administrative functions.
While our significant accounting policies are more fully described in the notes to our consolidated financial statements in Item 15 of this Annual Report, we believe that the following critical accounting policy and underlying estimates are most critical to understanding our reported financial results.
While our significant accounting policies are more fully described in the notes to our consolidated financial statements in Item 15 of this Annual Report, we believe that the following critical accounting policy and underlying estimates are most critical to understanding our reported financial results. 35 Net Product Sales Revenue from product sales is recognized when the customer obtains control of our product, which typically occurs on delivery.
Other (Income) Expense, Net For the year ended December 31, 2024, other (income) expense, net was $(4.3) million, compared to $8.4 million in 2023.
For the year ended December 31, 2025, restructuring expense was $1.6 million, compared to $23.1 million in 2024. Other Expense (Income), Net For the year ended December 31, 2025, other expense (income), net was $9.5 million, compared to $(4.3) million in 2024.
Liquidity and Capital Resources As of December 31, 2024, Aurinia had cash, cash equivalents, restricted cash and investments of $358.5 million, compared to $350.7 million at December 31, 2023 . For the year ended December 31, 2024, the Company repurchased 6.1 million of its common shares for $41.0 million.
Liquidity and Capital Resources As of December 31, 2025, Aurinia had cash, cash equivalents, restricted cash and investments of $398.0 million, compared to $358.5 million at December 31, 2024 . For the year ended December 31, 2025, cash flows from operating activities were $135.7 million, compared to $44.4 million in 2024.
Restructuring Expense Restructuring expense consists primarily of one-time termination benefits to affected employees, including severance and health care benefits, contract terminations and other costs related to our strategic restructuring efforts in 2024. On February 15, 2024, we announced a strategic restructuring that reduced headcount by approximately 25% and discontinued Aurinia’s AUR300 development program.
We expect our R&D expense to continue to increase as we progress our development activities. 34 Restructuring Expense Restructuring expense consists primarily of one-time termination benefits to affected employees, including severance and health care benefits, contract terminations and other costs related to our strategic restructuring efforts in 2024.
On November 7, 2024, we announced another strategic restructuring that further reduced headcount by approximately 45% to sharpen the Company's focus on continued LUPKYNIS growth and the rapid development of AUR200. For the year ended December 31, 2024, restructuring expense was $23.1 million, compared to nil in 2023.
In February 2024, we announced a strategic restructuring that reduced headcount by approximately 25% and discontinued Aurinia’s AUR300 development program. In November 2024, we announced another strategic restructuring that further reduced headcount by approximately 45% to sharpen the Company's focus on continued LUPKYNIS growth and the development of aritinercept.
For the year ended December 31, 2024, cash flow provided by (used in) operating activities was $44.4 million, compared to $(33.5) million in 2023. Based on our current operating plans and projections, the Company expects to fund future operations with existing cash or cash generated from operations.
For the year ended December 31, 2025, the Company repurchased 12.2 million of its common shares for $98.2 million. Based on our current operating plans and projections, the Company expects to fund future operations with existing cash or cash flows from operating activities.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Change Revenue Net product sales $ 216,186 $ 158,533 $ 57,653 License, collaboration and royalty revenue 18,947 16,980 1,967 Total revenue 235,133 175,513 59,620 Operating expenses Cost of revenue 28,248 14,148 14,100 Selling, general and administrative 172,028 195,036 (23,008) Research and development 20,785 49,641 (28,856) Restructuring 23,106 — 23,106 Other (income) expense, net (4,347) 8,379 (12,726) Total operating expenses 239,820 267,204 (27,384) Loss from operations (4,687) (91,691) 87,004 Interest income 16,970 16,997 (27) Interest expense (4,835) (2,775) (2,060) Net income (loss) before income taxes 7,448 (77,469) 84,917 Income tax expense 1,696 551 1,145 Net income (loss) $ 5,752 $ (78,020) $ 83,772 28 Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the U.S., and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth our results of operations for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Revenue Net product sales $ 271,345 $ 216,186 $ 55,159 License, collaboration and royalty revenue 11,710 18,947 (7,237) Total revenue 283,055 235,133 47,922 Operating expenses Cost of revenue 32,665 28,248 4,417 Selling, general and administrative 101,794 172,028 (70,234) Research and development 32,505 20,785 11,720 Restructuring 1,647 23,106 (21,459) Other expense (income), net 9,530 (4,347) 13,877 Total operating expenses 178,141 239,820 (61,679) Income (loss) from operations 104,914 (4,687) 109,601 Interest income 13,573 16,970 (3,397) Interest expense (4,330) (4,835) 505 Net income before income taxes 114,157 7,448 106,709 Income tax (benefit) expense (173,045) 1,696 (174,741) Net income $ 287,202 $ 5,752 $ 281,450 Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the United States (the “U.S.”), and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd.
The following table summarizes our R&D expense for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Change Personnel expense: Salaries, incentive pay and benefits $ 6,461 $ 14,546 $ (8,085) Share-based compensation (1,329) 7,533 (8,862) Total personnel expense 5,132 22,079 (16,947) Non-personnel expense: Contract research organizations and developmental expenses 12,526 17,858 (5,332) Clinical supply and distribution 2,530 9,104 (6,574) Other 597 600 (3) Total non-personnel expense 15,653 27,562 (11,909) Total R&D expense $ 20,785 $ 49,641 $ (28,856) The decrease in R&D personnel-expense was primarily a result of a reduction of headcount from our strategic restructuring efforts in 2024, including the reversal of non-cash, share-based compensation expense related to forfeited, unvested equity awards.
The following table summarizes our R&D expense for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Personnel expense: Salaries, incentive pay and benefits $ 8,016 $ 6,461 $ 1,555 Share-based compensation 1,295 (1,329) 2,624 Total personnel expense 9,311 5,132 4,179 Non-personnel expense: Contract research organizations and developmental expenses 12,344 12,526 (182) Clinical supply and distribution 10,466 2,530 7,936 Other 384 597 (213) Total non-personnel expense 23,194 15,653 7,541 Total R&D expense $ 32,505 $ 20,785 $ 11,720 The increase in R&D personnel and non-personnel expense was primarily due to an increase in employee-related costs, including share-based compensation, and higher clinical supply and distribution costs to support our development activities.
The increase is primarily due to an increase in: (i) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant, which was placed into service in late June 2023; (ii) Aurinia’s net sales of LUPKYNIS inventory to Otsuka; and (iii) Aurinia’s net sales of LUPKYNIS in the U.S.
The increase is primarily due to an increase in: (i) Aurinia’s net product sales of LUPKYNIS in the U.S.; and (ii) Aurinia’s net product sales of LUPKYNIS inventory to Otsuka. For the years ended December 31, 2025 and 2024, gross margin was 88%.
For the year ended December 31, 2024, license, collaboration and royalty revenue was $18.9 million, up 11% from $17.0 million in 2023. The increase is primarily due to an increase in manufacturing services provided to Otsuka for sharing the capacity of the Monoplant, which commenced in late 2023.
For the year ended December 31, 2025, license, collaboration and royalty revenue was $11.7 million, down 38% compared to $18.9 million in 2024. The year ended December 31, 2024 included a milestone payment of $10.0 million associated with LUPKYNIS regulatory approval in Japan.
Removed
Aurinia recognized revenue for a $10.0 million milestone in 2024 for the approval of LUPKYNIS for the treatment of LN in Japan by the Japanese Ministry of Health, Labour and Welfare and a $10.0 million milestone in 2023 for pricing and reimbursement approval in certain European jurisdictions.
Added
Income Tax (Benefit) Expense For the year ended December 31, 2025, income tax (benefit) expense was $(173.0) million, compared to $1.7 million in 2024. The change is primarily due to the release of the Company’s valuation allowance on deferred tax assets that the Company now expects to realize.
Removed
Non-personnel-related expense includes: (i) selling, patient 29 services, pharmacovigilance, marketing, advertising, travel, sponsorships and trade shows; and (ii) other general and administrative costs, including consulting, legal, patent, insurance, accounting, information technology and facilities.
Added
Income taxes Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Removed
The decrease in R&D non-personnel expense was primarily a result of discontinuing our AUR300 development program in February 2024, and the timing of development activities for our AUR200 program. 30 We expect our R&D expenses to increase for the foreseeable future as we advance AUR200 through clinical development and continue to meet our post-approval obligations with the FDA related to LUPKYNIS.
Added
The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is applied against any deferred tax asset if, based on available evidence, it is “more likely than not” that some or all of the deferred tax assets will not be realized.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company maintains cash balances with a limited number of highly reputable financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation and Canada Deposit Insurance Corporation.
Biggest changeCredit Risk Financial instruments that potentially expose the Company to credit risk consist of cash, cash equivalents, investments and accounts receivable. 36 The Company maintains cash balances with a limited number of highly reputable financial institutions in excess of amounts insured by the Federal Deposit Insurance Corporation and Canada Deposit Insurance Corporation.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks Interest Rate Risk Financial instruments that potentially expose the Company to interest rate risk consist of cash, cash equivalents, restricted cash and investments. These instruments consist of certificates of deposits, money market instruments and investments in U.S. treasury securities, U.S. government agency securities and highly rated corporate debt securities.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Interest Rate Risk Financial instruments that potentially expose the Company to interest rate risk consist of cash, cash equivalents, restricted cash and investments. These instruments consist of certificates of deposits, money market instruments and investments in U.S. treasury securities, U.S. government agency securities and highly rated corporate debt securities.
To date, the Company has not experienced any losses associated with credit risk and continues to believe that this exposure is not significant. The Company’s major customers, which include two specialty pharmacies and our collaboration and license partner, Otsuka, accounted for the majority of our accounts receivable as of December 31, 2024.
To date, the Company has not experienced any losses associated with credit risk and continues to believe that this exposure is not significant. The Company’s major customers, which include two specialty pharmacies and our collaboration and license partner, Otsuka, accounted for the majority of our accounts receivable as of December 31, 2025.
The timing between the recognition of revenue and the receipt of payment is not significant. Our standard credit terms range from 30 to 45 days. The Company has had no historical write-offs related to our customers or receivables. 32
The timing between the recognition of revenue and the receipt of payment is not significant. Our standard credit terms range from 30 to 45 days. The Company has had no historical write-offs related to our customers or receivables. 37
Net product sales from the two specialty pharmacies represent 88% of total revenues for the year ended December 31, 2024, compared to 91% for the same period in 2023. We monitor economic conditions and the creditworthiness of our customers. We regularly communicate with our customers regarding the status of receivable balances and have not experienced any issues with collectability.
Net product sales from the two specialty pharmacies represent 87% of total revenues for the year ended December 31, 2025, compared to 88% for the same period in 2024. We monitor economic conditions and the creditworthiness of our customers. We regularly communicate with our customers regarding the status of receivable balances and have not experienced any issues with collectability.
As of December 31, 2024, these instruments had a weighted average remaining maturity of 7 months. As of December 31, 2024, a hypothetical 1% increase or decrease in interest rates would have resulted in a $2.8 million fluctuation of annual interest income in our investment portfolio.
As of December 31, 2025, these instruments had a weighted average remaining maturity of 8 months. As of December 31, 2025, a hypothetical 1% increase or decrease in interest rates would have resulted in a $3.2 million fluctuation of annual interest income in our investment portfolio.
As of December 31, 2024, we recognized a $72.5 million finance lease liability on our consolidated balance sheet related to the Monoplant. A hypothetical 10% increase or decrease in the Swiss Franc compared to the U.S. dollar would have a $7.5 million fluctuation in the valuation of the lease liability.
As of December 31, 2025, we recognized a $68.8 million finance lease liability on our consolidated balance sheet related to the Monoplant. A hypothetical 10% increase or decrease in the Swiss Franc compared to the U.S. dollar would have a $6.9 million fluctuation in the valuation of the lease liability.
As of December 31, 2024, there were no other foreign currency fluctuations that would have had a material impact on our financial condition or results of operations. Credit Risk Financial instruments that potentially expose the Company to credit risk consist of cash, cash equivalents, investments and accounts receivable.
As of December 31, 2025, there were no other foreign currency fluctuations that would have had a material impact on our financial condition or results of operations.

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