auph-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________

FORM 10-Q

_____________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________ to ________________

Commission file number: 001-36421

__________________________________________

Aurinia Pharmaceuticals Inc.

(Exact Name of Registrant as Specified in its Charter)

__________________________________________


Alberta, Canada
(State or other jurisdiction of incorporation or organization)
#1203-4464 Markham Street Victoria, British Columbia V8Z 7X8			46-4129078
(Address of principal executive offices)			(I.R.S. Employer Identification Number)

(250) 708-4272

Registrant’s telephone number, including area code

_____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the registrant's classes of common shares, as of the latest predictable date. As of November 2, 2021, the registrant had 129,670,345 of common shares outstanding.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common shares, no par value	AUPH	The Nasdaq Global Market LLC

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2021 and September 30, 2020

Condensed Consolidated Statements of Shareholders’ Equity (unaudited) for the three and nine months ended September 30, 2021 and September 30, 2020

Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and September 30, 2020

Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	September 30, 2021		December 31, 2020
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	57,587	$	272,350
Short-term investments	228,813		125,979
Accounts receivable, net	9,814		—
Inventories, net	19,293		13,927
Prepaid expenses and other current assets	13,712		7,171
Total current assets	329,219		419,427

Non-current assets
Long-term investments	—		24,380
Other non-current assets	11,838		247
Property and equipment, net	4,551		4,786
Acquired intellectual property and other intangible assets, net	8,926		9,332
Right-of-use assets	5,532		5,489
Total assets	360,066		463,661

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	29,970		24,797
Other current liabilities (of which $2,000 and $6,000, due to related party in 2021 and 2020, respectively)	6,456		6,412
Operating lease liabilities	1,111		788
Total current liabilities	37,537		31,997

Non-current liabilities
Other non-current liabilities	16,562		16,295
Operating lease liabilities	7,795		7,619
Total liabilities	61,894		55,911
Commitments and contingencies (Note 18)
SHAREHOLDER’S EQUITY
Common shares - no par value, unlimited shares authorized, 129,570 and 126,725 shares issued and outstanding as at September 30, 2021 and December 31, 2020, respectively	967,159		944,328
Additional paid-in capital	54,607		39,383
Accumulated other comprehensive loss	(794)		(805)
Accumulated deficit	(722,800)		(575,156)
Total shareholder’s equity	298,172		407,750
Total liabilities and shareholders’ equity	$	360,066	$	463,661

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(unaudited)				(unaudited)
Revenue
Product revenue, net	$	14,638	$	—	$	22,113	$	—
License revenue	29		29		88		88
Total revenue	14,667		29		22,201		88
Operating expenses:
Cost of sales	254		—		610		—
Selling, general and administrative	44,128		30,702		127,196		57,204
Research and development	20,066		12,243		39,990		37,154
Amortization of intangible assets	517		316		1,576		902
Other (income) expense, net	55		(917)		859		1,066
Total cost of sales and operating expenses	65,020		42,344		170,231		96,326
Loss from operations	(50,353)		(42,315)		(148,030)		(96,238)
Interest income	106		170		420		1,381
Net loss before income taxes	(50,247)		(42,145)		(147,610)		(94,857)
Income tax expense (benefit)	8		(15)		34		(251)
Net loss	(50,255)		(42,130)		(147,644)		(94,606)
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities, net of tax of nil	(2)		—		11		—
Comprehensive loss	$	(50,257)	$	(42,130)	$	(147,633)	$	(94,606)
Basic and diluted loss per share	$	(0.39)	$	(0.34)	$	(1.15)	$	(0.82)
Weighted-average common shares outstanding used in computation of basic and diluted loss per share	128,443		122,357		128,084		115,738

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

(unaudited)


	Common Shares
Three Months Ended September 30, 2021	Shares	Amount		Additional paid in capital		Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total Shareholders' Equity
Balance at June 30, 2021	128,396	$	954,572	$	51,022	$	(792)	$	(672,545)	$	332,257
Shares issued on exercise of stock options	1,172	12,579		(3,505)		—		—		9,074
Exercise of warrants	2	8		(2)		—		—		6
Share-based compensation	—	—		7,092		—		—		7,092
Other comprehensive income	—	—		—		(2)		—		(2)

SEC Form 10-Q filed by Aurinia Pharmaceuticals Inc