At 3:08 p.m. on Friday January 21, Aurinia Pharmaceuticals received approval from the United States Food and Drug Administration (FDA) for its lupus nephritis treatment, Lupkynis (previously voclosporin). On the following Monday, Aurinia’s stock price (TSX:AUP) closed at $23.91, up 26.7 per cent from Friday’s close at $18.87, giving the company a total market value at the time of more than $3 billion.
“It’s a huge story of persistence,” says Rob Huizinga, executive vice president of research, who estimates that the odds of FDA approval are as low as 10,000 to one. “There are times when things are dark. You say, wait a second: I believe in the drug; we believe what it does; we believe in where the data is going. Let’s continue and persist.”
American sales are the holy grail for a company like Aurinia, representing 80 to 90 per cent of their market. The FDA approval indicates a high likelihood that the company will achieve the $60 to 80 million sales targets predicted by analysts. A few months prior to the FDA approval Aurinia signed a $100 million deal ($50 million upfront with $50 million more in future milestones), plus 20 per cent of royalties on all sales, with the Japanese pharmaceutical company Otsuka to develop and market Lupkynis in Europe and Asia.
Aurinia’s headquarters are in Victoria, with 50 staff working across departments that include business development and licensing; the American commercial hub is in Maryland with 240 employees; there are small clusters in Edmonton and in Europe.
The drug itself is manufactured in Switzerland, packaged into capsules in Florida and blister packed and distributed out of Kansas City.
Michael Martin, Aurinia’s chief business officer and cofounder says “we’re all entrepreneurs. We’re going to do something else someday in the sector. The more people that you can bring in with high caliber, experience and talents, the better — it just builds the cluster.”
He notes the life sciences sector has been “basically ignored here [in Canada] for 20 to 30 years.” The country’s manufacturing capacity has become a focus as the world races for COVID vaccines. Martin predicts that “a major infusion of capital will come from the government in the life sciences, wherever the clusters are: Montreal, Toronto and Vancouver/Victoria.
“We’re going to be able to expand our workforce here to work on these new products that we’re going to bring in,” says Martin, whose ambitions for Aurinia are to maintain their reputation for innovation. “If we can raise more capital, we can do bigger things, we can do better things. That’s priority one.”
Conquering a single rare disease
Lupus nephritis is a subset of the rare disease lupus. When lupus autoantibodies attack the kidneys it’s called lupus nephritis. If under-treated or untreated, it can lead to kidney function or kidney failure, requiring dialysis or transplant, and it can be fatal. For those reasons, says chief medical officer and cofounder Neil Solomons, “It’s a very nasty disease.”
It primarily affects young women; 90 per cent of sufferers are women of childbearing age. In the U.S., approximately 100,000 to 200,000 people have the condition which primarily affects Black, Hispanic and Asian women. There is less data on the numbers in Canada, but Solomons estimates approximately 10,000 to 20,000 cases.
It’s a difficult disease to study. The challenge to find enough participants with the active disease means a global sample group — Aurinia’s trials took place in 27countries. Patience and travel are required to find and assemble those groups; funds have to be raised for studies that take around two years.
“You have to get the master [research participant] having active disease — as they’re flaring — to get them at the right time to analyze results,” says Solomons. “You spend all this money, then you flip over the card and see if the drug works.”
The results of the study that came out in 2019 were really good. The company decided it was time to apply for FDA approval — another daunting task. In fact, they had already started the New Drug Application process four months before the results came out, with the review for the FDA taking another eight months.
“You’re doing all these things concurrently because every day is valuable for patients,” says Huizinga. “[Martin is] flying around, talking to investors raising money. We’re [Solomons and I] flying around talking to investigators, trying to get patients into trials.”
Huizinga estimates the volume of paperwork required for the final application, if printed, would fill two semi trucks. Within that mass of information are years of data; one misreported number can undermine the whole application.
“Until you get the final approval, you never quite know what’s going to go on [the FDA may request another study at any point],” says Solomons. “In the mean time, you’ve done two studies and spent hundreds, literally hundreds of millions of dollars, and seven or eight years of your life.”
Meeting of the minds
Solomons and Martin met working at Aspreva, a company set up in Victoria based on a deal with Roche, where Solomons had been employed in the company’s U.K. office, to work on less common diseases for their successful renal transplant drug, CellCept. A merger with the Swiss company Vifor saw Aspreva’s Victoria office begin to shrink, while emerging research showed that the multi-targeted therapy used in renal transplants could get better results than CellCept alone. That gave the entrepreneurial pair some ideas.
Huizinga has a background in nephrology, the study of kidneys, and is one of a kind in Canada; he has been researching the disease at a molecular level for 18 years. He developed the global clinical program of voclosporin at Isotechnika prior to its merger with Aurinia.
“We pieced together the jigsaw puzzle of Mike’s business sense, my experience in developing drugs in transplant and Rob’s experiences working in a transplant unit,” says Solomons. “It was clear to me that the approach of suppressing the immune systems that had been very successful in transplant could be transferred to treat a number of autoimmune diseases, such as lupus nephritis.”
Previous treatments damp down immune activity from attacking the body. At Aspreva, Martin and Solomons saw improved outcomes for lupus nephritis: one in five patients went into remission, which was ultimately the goal — treatments that stop the conditions enough to avoid dialysis or transplant — but still left a lot of room for improvement. Adding Isotechnika’s drug, voclosporin, to the drug they were using at Aspreva saw an improvement in remission rates; twice the number of patients in remission in half the time.
“That’s a really meaningful benefit to patients,” says Huizinga.
“It sounds fairly straightforward,” says Solomons. “We have one drug and add another drug on, and we get better results. It’s a bit more complicated; but that’s what we do.”
Solomons and Martin initially founded Private Aurinia — which, at one point in 2010,was known to the pair as Project Phoenix: Rising from the Ashes and later became Aurinia Pharmaceuticals — and bought the rights for the indication of lupus nephritis (voclosporin) from Isotechnika, a company whose unfortunate financial position, on the brink of bankruptcy, put off Aurinia’s potential investors. That led to a reverse merger with Isotechnika in 2013. Its public listing on the Toronto Stock Exchange allowed the company to raise capital for Aurinia more effectively. They brought in entrepreneur Richard Glickman, whose contacts made the next phase of growth possible.
“We merged these organizations,” says Martin, “and, basically right away, we closed $52 million financing, followed by $172 million after our first data, and then another $200 million — we’ve probably raised $1.6 billion over the last seven years.”
The value of FDA approval
Until very recently there were no drugs formally approved to treat lupus nephritis. Doctors could recommend medication off-label, but that meant more risks for both doctors and patients. Insurance companies put up barriers to claims for generic drugs. Liability issues are high for doctors who are making their own decisions to prescribe medications and patients are left to weigh risks for themselves.
One wallet of 60 capsules of Lupkynis costs close to $4,000, and a patient might need up to three wallets a month. For Canadians who benefit from universal healthcare, it can be hard to comprehend these costs. For Americans, the cost means life or death. At $60,000, for example, the annual cost of Lupkynis is a deal compared to the annual cost of dialysis at $150,000.
“The encouragement for physicians to prescribe is that we have this large safety dataset, specifically looking at patients, like lupus nephritis patients,” says Huizinga. “We have the answer to those specific questions that they’re looking for. We have the safety data set; we have the efficacy datasets. That gives them the comfort that they need — a company with a label from the FDA.”
The company has been growing steadily from its modest headquarters in the Vancouver Island Technology Park, tucked behind Camosun’s Interurban campus. But that’s about to change. In a year Aurinia will move into the fully renovated Times Colonist building, almost doubling their floor space from 12,000 to 20,000 square feet.
Aurinia is one of Canada’s largest by market cap biotech companies, vying with Zymeworks in Vancouver for second place and after AbCellera, whose recent IPO left their market cap higher than Aurinia’s.
“In the history of life sciences in Canada, you develop a drug to point ‘X’, and then you get munched by a big company of some kind,” says Huizinga. “Here, we’re developing a sustainable industry that’s going to benefit the city; it’s going to benefit the life science quarter tremendously in the long term. No matter what happens with the organization, we’re going to have them develop that expertise here.”
Up until now, admits Martin, the company has “been agnostic to where people live. We just hired the best people.” While that won’t change, Victoria will benefit from the opportunity for top international talent to relocate. The company’s ambition to continue researching and developing new products, rather than resting on their heels to roll out and sell a successful drug, will be a draw for people who want that innovation and growth.
“These are people that have great skill sets, that are a lot more resilient to economic changes, because we’re working on something that’s very global in nature,” says Martin. “I’m very excited about that part; that the research people we bring in, the development people — the product development people — these are thought leader jobs, really well educated. They can really help impact the community here. It’s building a life sciences community here that’s sustainable.”