Seems like a fair and balanced article. Do you all agree?
From the Biotech Mailbag, January 27th.
I don't follow Depomed (DEPO) close enough to comment, but Aurinia Pharmaceuticals (AUPH) has an opportunity to ease investor concerns about the safety of its experimental lupus nephritis drug voclosporin when a 48-week update from the phase II study is announced later this quarter (likely in the middle of February).
Lupus nephritis is a chronic disease (and a form of lupus) in which a person's own immune system attacks their kidneys, causing inflammation that progressively destroys kidney function. There are no drugs approved today specifically to treat lupus nephritis, so doctors use a combination of immunosuppressive drugs and steroids with mixed results.
As a reminder, Aurinia shares sold off hard last August when the 24-week results from the voclosporin study were announced. The primary endpoint of the study was met with 33% of low-dose voclosporin patients achieving complete remission compared to 19% of placebo patients, with statistical significance. Key secondary efficacy endpoints were also met in vocolosporin's favor. [There was a high dose of voclosporin in the study but it was less effective.]
Investors freaked out over an imbalance in patient deaths in the phase II study. Ten patients in the low-dose voclosporin died compared to one patient in the placebo arm and two patients in the high-dose voclosporin arm.
You can understand why investors were concerned.
Since August, Aurinia has dug into the study's safety data and believes strongly that voclosporin did not cause the patient deaths. Their argument, explained to me by Aurinia Vice President of Clinical Affairs Rob Huizinga in San Francisco during the J.P. Morgan Healthcare Conference, makes sense.
If voclosporin was contributing to the deaths, the rate of overall adverse events in the study, including deaths, would be higher. They were not. The overall adverse-event rate and the mortality rate in Aurinia's study were consistent with safety results from other lupus nephritis studies.
So, why did so many patients in the low-dose voclosporin arm die? Because through a fluke in the study's randomization by geography, patients from less-developed Asian countries like Bangladesh, the Philippines Sri Lanka were placed into the low-dose voclosporin arm, Huizinga notes. These patients had more severe disease at baseline than other patients entered into the study and they also had poorer access to quality health care.
Seven of the 10 patients in the low-dose voclosporin arm who died came from Bangladesh, Aurinia discovered. They all died within 60 days of starting the study.
The most reassuring data point to rule out voclosporin's role in the patient deaths would be no more deaths. As of early January, when I met with Huizinga, there had been zero additional deaths in the phase II study. The company receives daily updates on adverse events, including mortality, from study monitors.
Aurinia continues to follow lupus nephritis patients in the study and will report 48-week data.
No additional patient deaths will be good news for voclosporin. Investors also want to see the rate of complete remission seen with the drug at 24 weeks extend out to 48 weeks.
Will a positive 48-week update from the voclosporin phase II study cause Aurinia's stock price to move higher? You'd think it would, for no other reason that safety concerns about the drug would be mostly put to rest. Is that enough to counteract the current Trump-averse, risk-off market for biotech?
A phase III study has already been designed but won't start until the second quarter. There's a long wait for top-line results, which generally keeps investors on the sidelines. Aurinia raised $28 million in December, but that doesn't entirely satisfy the company's cash needs. Management has expressed a desire to raise additional money by partnering voclosporin in Europe instead of selling additional equity or raising debt.
Aurinia's current market cap is far below fair value if voclosporin's phase III study succeeds and the drug reaches the market. There's an opportunity here. The issue is time and having the patience to wait for the drug to advance.
