Good afternoon. Thank you for joining us at our Aurinia Fireside Chat. Welcome to our 44th annual healthcare conference. I'm Stacy Ku, one of the biotech analysts at TD Cowen. Let's see if that's right here. With us we have Peter Greenleaf, CEO, Joe Miller, CFO, and Andrea Christopher, IR. Thank you all so much for being here. So we obviously have a lot of fundamental questions about the LUPKYNIS launch that we're gonna get into, but just given the recent update, we figured we should talk about the strategic conclusions first. So just provide some details around the strategic review and your near-term business plans. Yeah, I mean, so first, this is Peter Greenleaf. I wanna thank TD Cowen folks for having us here at the conference today. I think the first place to start is that not much has really changed in terms of what we need to do strategically as a company. I think in the near term, we've made the decision to streamline our operations and put our more of our fundamental focus down on our commercial launch, which we're now several years into, but obviously it's the biggest value driver we have in the company. And to keep our operations at a level where we can actually produce cash flows. I mean, if you look at what we announced in the first quarter for our fourth quarter performance, we had projected $120-$140 million in revenue for the calendar year 2023. On a net revenue basis, we produced almost $160 million, and on a total revenue basis, almost $180 million, about $176 million. That was against a, you know, a, a non-GAAP, overall operating expense of about $200 million. So in the first quarter, we made the decision to take some of our earlier stage research programs, one that was moving into early clinical studies, and push pause on those, make some infrastructure changes, get the company to cash flow positive, for a couple different reasons. I think, one, it makes us financially stronger, gives us the ability to not only explore different opportunities like a share repurchase program, but also to strengthen our balance sheet over the time. But I do wanna emphasize that regardless of, you know, what the review itself concluded, that, our strategy itself hasn't changed. We're still a single product company. We're focused on commercialization, and eventually we will have to diversify, whether that be through pipeline or through some sort of, you know, commercial approach where we can gain leverage. That does have to happen over time. Okay. And of course, just following up real brief, how does this process at least change the overall, standalone go-forward strategy in terms of commercialization of the LUPKYNIS launch? Maybe some of the benefits as well. Yeah, I mean, I think that the obvious benefit should be a singular focus as a company, right? You're not diluted in any way by focus on the regulatory side, the CMC side, or the research side of doing earlier stage programs. This gives us the ability as a management team to acutely focus down on the biggest value driver in the company today, which is the commercial product that we have through LUPKYNIS. You know, in the longer term, obviously, as we think out to, you know, what's next after LUPKYNIS, that's something we're gonna have to continue to think about and solve. But in the short term, it gives us laser-like focus on the thing that produces, you know, real financial gain for us today. And can be very helpful for the sales force, especially given around the noise around kind of potential sales. Okay. As we say, still big picture, looking at the fundamentals of the LUPKYNIS launch, we've spoken to you about this before, but our clinicians remain remarkably consistent in their long-term views of LUPKYNIS, which is the basis of our outperform rating. So what do you think needs to be done on a commercial front, to gain alignment with this commentary? Well, I mean, I think one of the things that's been great I mean, I've been with the company now for 5 years, and the product itself has never disappointed us in terms of what it's produced, in terms of data, whether it be, you know, the phase 2 data, the, you know, phase 3, pivotal that we did, and the 1-year data that that produced. That data taken out for 2 more years, both on safety and efficacy, so 3 years of data, and even the most recently produced biopsy data, across the board, in terms of reduction in proteinuria, the major measure, for lupus nephritis, this drug has performed exceptionally well. So we hear from our physicians that, that in most cases, they have seen the data, understand the data, and think it's impactful. The real area we have been focused on, we'll continue to focus on, that's gonna move the needle here, is more market and physician treatment oriented. There've been several studies done, one that's a very large study done by Optum that shows that one, rheumatologists don't treat lupus. They don't when it becomes more progressive lupus nephritis, this is when the nephrologist gets involved. We have to continue to drive the importance of early diagnosis, so every lupus patient getting a urine screen when they come into a rheumatologist's office, and aggressive treatment. And when I say aggressive treatment, I don't mean beyond what current guidelines are looking to and aspiring to, but just to get rheumatologists to actually and nephrologists to treat to guideline treatment targets. Those are the things that are gonna significantly move this market. 'Cause, yeah, we walk into a physician's office, rheumatologists and nephrologists, and in most cases, they'll tell us that they see the efficacy of our drug, and they see that they're gonna utilize the drug. But then in many cases, they'll say, "Well, I don't have a lot of those patients." And we know that, one, less than 50% of patients that have lupus, when they go into an office, even get a urine screen. So we know that there's underdiagnosis happening out there. And two, when they actually do get diagnosed or they have positive proteinuria indicative of lupus nephritis, that somewhere around 30% of the time, a physician will actually treat. So it's almost the inverse of what you would think. You'd think it'd be 70%-80% of the time. If we can just move those two metrics and move them more towards aligning to guidelines is where we're gonna actually see real impact on this disease and growth in the market. Okay. And one piece, and you alluded to it a little bit, that we've really underappreciated is how much rheumatologists, for instance, really like their guidelines. So can you just walk through right now what you're seeing and how LUPKYNIS is being used? Obviously, there's lots of different areas that a clinician might reach for LUPKYNIS, but there's just a diversity in how we're hearing it; it's being used. So just walk us through that. At least what we see today in the market is that the treatment patterns seem to be such where a rheumatologist and nephrologist are treating when the disease is probably its most progressed, when a patient has a urinalysis and that urinalysis comes back at very, very high levels of proteinuria, 1 gram plus. The guidelines, whether it be EULAR, the European Guidelines in Rheumatology, ACR, the American Guidelines, or guidelines like KDIGO and ASN, where you're in the nephrology space, all target much lower levels of proteinuria. The quite obvious question is, well, why? Why aren't they treating it more aggressively? I think it's probably several factors. I think if a lupus patient initially presented at a nephrologist's office, I think the nephrologist would probably attack the disease at a very early level at a lower proteinuria level. But in most cases, these patients are initially being diagnosed in the rheumatologist's office, and the rheumatologist is just focused on other symptoms of lupus, whether it be skin or joint or fatigue. These are areas that obviously a rheumatologist today can attack with different medicines, and a urinalysis takes time. Usually it'll take another follow-up visit, or at least a phone call to get them on a drug. And when they're seeing such a high volume of patients coming through, you deduce pretty quickly that, you know, I guess it's somewhat obvious that they wouldn't be so focused. What it means for us is we've gotta change a paradigm here. We've gotta get physicians to think about this component of the disease as being the most severe, the one that's gonna actually have the worst morbidity attached to it in terms of if it progresses, and the highest cost economically in terms of what could happen, not just to the patient but to the system. And we've gotta change that progressively. To me, what this market really evolves and we start to see this drug and future drugs really start to get traction when the rheumatologist is the initial diagnoser, diagnoses it early, and does that initial treatment. Right now, it just seems like from the data we have, that diagnosis is happening late. It's happening when a patient has very high proteinuria. Then the patient is handed off to a nephrologist. It's co-managed, and it's managed in much more of an acute setting than more progressively by trying to get out in front of the disease and manage it for the long term. Okay. And can you remind us what's the split in rheumatologist versus nephrologist prescribing? Yeah, today it's still around 50%. So, you know, 50% rheum, 50% nephrologist. But, you know, my hope would be that a couple of years from now, you're gonna see much more progressive treatment from the rheumatology side of the equation. Okay. So as we end, let's say the third year roughly of launch, what are the different mechanisms that you and the team are implementing to increase the number of patient start forms? Obviously, we've talked about the broader market, but what are the things that your team can do, today? Well, I mean, if we could get into sort of the tactical incentives of what we pay for and what we value. And obviously, in the first year of a launch, everything's about identifying the immediate patients, and that's what we pay for. Today, what we pay for a balance in terms of our sales representatives and the effort that we have on our people, a balance between identifying new patients and working on the adherence message, keeping patients on therapy over time, getting new physicians to utilize a drug, getting more depth per prescription. But patient identification is clearly one of those measures that we incent all of our customer-facing people on and even our internal people. In addition to that, though, the emphasis on in our total tactical mix on really deploying the resources outside of our data to our advantage. One, guidelines are to our advantage. They say treat earlier. They say diagnose earlier. So educating on guidelines is critical. I don't know. I-I've been quite a few disease areas over the last 30 years, and it's very rare when you have guidelines that, that pretty much point to where you want the market to be. Usually, guidelines will point to where the market is, and you have to progress the guidelines to where you want it to be. I can tell you in this market today, the guidelines, whether it be on diagnosis or treatment or duration of treatment, are all ahead of where the actual market is. So guidelines are a key tactical tool appropriately used in that equation. And so is epidemiology data. Well, I think there's appreciation that lupus nephritis can be serious and lead to chronic kidney disease and dialysis and transplantation and potentially even death, but in actual practice, it doesn't get realized that way. There just seems to be this. It's not there yet. And when it gets there, it's probably not the rheumatologist's problem. It's probably the nephrologist's problem. We've gotta connect the epidemiology data with those guidelines. And then when you put our data in the mix, we're probably the only product to date that's been able to achieve what those guidelines are trying to achieve. And that's lowering proteinuria, doing it quickly, and sustaining that over time without major impact to, you know, other areas of the body through the benefit, you know, the balance of benefit-risk. Okay. One thing that is, I think, underappreciated. Obviously, there's a major focus, rightly so, on patient start forms, but the persistency beyond 12 months. So just remind us what you're seeing there, and as you go even longer, kind of how it stabilize where it stabilizes. And obviously, that leads to our next question, which is your views on, you know, the recent data, the 3-year data, the biopsy results. Are clinicians going to shift towards prescribing LUPKYNIS for 3 years? So I think I'll sort of invert the question as to the last part or answer the last part first. We launched the drug with one-year data, so we got approval from the FDA with one-year data. And we're a new molecular entity, obviously, but we've come from a class of drugs called calcineurin inhibitors. And calcineurin inhibitors have classically had baggage around how long they can be used. I mean, they're standard of care in areas like transplantation. And there, the physicians know that when these drugs are used at super high doses over long periods of time, that they can actually be nephrotoxic. Now, our drug's not shown this, but we also haven't studied it in super high doses over 5- and 10-year periods. So the key question at launch wasn't just, "You have this great data. You have this great data. At one year, what's the longer-term impact," right, both in safety and efficacy? Now we have two additional years' data, both in terms of proteinuria reduction and eGFR as a major as a major way of measuring kidney function out to that time period. We have biopsy data that was a sub-study from our original pivotal study that shows at least out to 18 months that there is no degradation in terms of kidney function as measured by biopsy or by eGFR. This has been really important. I think it a direct quantitative measure of this, you know, when we initially launched the drug, 12-month persistency was at or around 50% and so maybe slightly below. Today, we're at about 55% at 12 months. At 18 months, it seems to drop to about 45%. And then from 18-24, it's we've seen this leveling-off effect, which in the small end of patients we had six months ago, that seemed to be just a slower running-off, and now it seems to be more of a leveling-off. It's always hard to quantify what the direct impact is coming from, but I can tell you it's a much more holistic conversation now to be able to walk in and say, "We're the only drug that has 3 years of data here in this disease state. In terms of calcineurin inhibitor, we're different mechanistically. Here's why. Structurally, here's why," and how that benefit actually gets pulled through both at 3 years and on the biopsy side at 18 months. So the data has been very helpful. Okay. Wonderful. So as you think back to future growth drivers, you have talked about some patient restarts, also adoption in the hospital setting. So just provide more details there and, and try to help set expectations in terms of contribution to recovery. Yeah, I think as you can appreciate, we show quite a few metrics, and there's always this major drawback of every time we see a new one, we report on it. I hopefully the transparency's appreciated 'cause it's a new market. We're in the process of developing it. We're a newly launched drug. And I think a lot of these things we're learning about the market are gonna be critical for investors, I think, to understand future drugs as they come into the market as well. So when looking at the hospital first, the hospital channel for the first year and a half to us from the global pandemic had been completely closed off, literally like police tape, do not enter. You couldn't go in to see a family member, let alone have a drug sales rep walk through the front door. So I think we were underpenetrated in terms of our impact in the hospital. And a nephritis patient is showing up in a hospital primarily in two ways, either through the front door in the emergency room, decompensated for other problems, and then being identified, or they're lupus patients coming to an academic center, and they're coming to a lupus clinic to meet with worldwide thought leaders about their disease. There's a different way that we need to impact those centers than just going to a physician's office. And we've put some specialized teams together to go after certain segments of that market. We have not gone into business solutions yet, like we don't contract with integrated healthcare networks. We're not individual contract hospital contracting. And I think those remain business opportunities that we can explore. But we're in there. We have access. We've started to see some patient pull through in that channel. They don't use start forms. Hospitals purchase directly, so it's a new patient coming through a new channel. On the restart front, we've known from some of the data that we have internally that's hard to tease away from an ICD-9 code or a patient, looking directly at, at a blinded patient audit. But we know that from talking to physicians, that physicians treat this disease episodically, that once they see proteinuria elevated, they give a drug. And regardless of the drug, they do this with MMF as well. Once they're able to reduce proteinuria, they then the majority of them remove drug. Our question has always been, if they remove drug, do they then put a patient back on drug over time? And I think most recently, in the last quarter, for the first time, we saw a numeric improvement or a numerical significance to the number of patients who had restarted. Well, what's the difference between that and a patient who had, you know, poor persistency, right? Well, here, at least in our system, a patient because we have a closed system of distribution, a patient fills out a patient start form. If they don't get drug for greater than, say, 120 days, they fall out of our system. So they're no longer tracked as a patient in terms of whether, you know, they're still persistent or not. We say they're a patient that's no longer on our drug. Well, what we found is there's a group of patients that appear to be coming back. They were treated. Their proteinuria was reduced. Then physicians retreat them after that 120-day period. Just to give you the significance of it, in the last quarter, between hospital restarts and excuse me, hospital starts and patient restarts, we saw about 100 new patients within the quarter. This is on a basis of somewhere around 450-500 PSFs that we've been seeing. So it's a significant jump-up. And it's I think it bodes well for the product. It doesn't bode well for how the guidelines say physicians should be treating, which is keeping a patient on drug for an average of 3-5 years, which I see as an opportunity, but the market isn't there yet. Last point, this isn't just about LUPKYNIS. They're not using our drug just this way. They use MMF and steroids the same way. Okay. Do you expect this kind of 100 pa, let's say 100 patient restarts and hospital additions to be roughly a consistent contributor? Maybe not expectations about growth, but do you expect to be stable or a little bit lumpy as we look through the year? I mean, we've only reported one quarter on it, but we reported data through, I think, February 9th of into when we reported the fourth quarter, we reported the second week in February. And we reported what we know about start forms, hospital starts, and restarts, to that time period. And I think we had about 40 or so till February 9th in Q1. So I think it shows that it's continuing. But it's a quarter and a couple weeks of data. So let's see. My full expectation is we gotta continue to tap the hospital channel. We gotta continue to challenge patients to not just stay on drug but to get restarted on drug if their proteinuria gets elevated. So it's a great expectation, obviously, of ours that we would see that continue. Okay. Peter or Joe, do you wanna talk through your assumptions for 2024 revenue guidance? I know you just talked about Q1, but what gives you conviction in the range? Just walk through the different scenarios between, let's say, the low or high end of your guidance you've provided. You want me to start, and you jump on? Go ahead. Sure. We always oversimplify this one, but I think in order to get to the high end of the range and then I'll kick it to Joe who'll hopefully get maybe a little more specific than this, you gotta have new patient; you have to see new patient growth. So, PSFs, hospitals, restarts, those numbers have to grow. If we end up with quarters that are flat, I still think there's the possibility that we're in that range, but it gets hard to believe the outside of the range and that type of growth unless you have quarter-on-quarter consistent new patient start growth. There are ways to get from 200 to 210 with minimal new patient growth. It gets harder to get to 210 to beyond, without it. the lower end of the range, I think, you know, even just with optimization of our business and continuing good persistency, restarts, and, you know, marginal growth on new patients can get you there. Joe, what am I missing? Nothing further to add. Good job. Wonderful. So, one piece that's also a bit underappreciated and obviously, we haven't spoken about in a while, but given kind of the new strategic, approach or, let's say, path forward, let's talk about, durability for LUPKYNIS, the runway you have to, to launch the drug. What are your current assumptions around exclusivity? Remind us the normal timeline of engagement with ANDA filers and, how that relates to your expected protection with, the 036 and, 140 patents. Yeah, 036 and 140 being the method of use patents that we have that take us from 2028 all the way out to 2037. So just as a refresher, method our, our base composition of matter plus the Hatch-Waxman benefits we get with our patent term extensions that we file for every year get you to 2028, so the, the start of 2028. So the, the short answer is, you know, in terms of ANDA filers, is you're, you're you could have an ANDA filer prior to that, but probably with a 30-month stay of execution, probably back down off of 28 forward 30 months. And that's probably in and around where you could have your first ANDA filer. Obviously, when there's an ANDA filer who will be filing for that entry period of 2028, we would file an infringement lawsuit based upon their infringing on the method of use patents that we have, which are two, which take us from 2028 all the way out to 2037. And remember that the method of use patents are based upon the data that we produced in the phase 2 and the phase 3 trial, where when a physician takes an eGFR measurement on a patient and they hit a certain level, the physician is encouraged. And it's in our label. This is in our dosing administration of our package insert. It says to dose the product this way. They reduce the dose. And what we saw was an improvement in efficacy. And the USPTO saw that as being unique to the product and unique to the molecule itself. That's why we have the patents. But obviously, from there, you're then in, they're filing an ANDA, and you're filing a lawsuit. So, you know, the best-case scenario, we have all the way out to 2037. You know, the worst-case scenario you would see is probably 2028. And, you know, anywhere in between, if in fact you end up where like 80%-90% of any of these patent infringement suits go, which is to some sort of an agreed settlement or a court-driven settlement, could be anywhere in between. Obviously, making sure that we maximize that area under the curve between now and 2028 is critical. I think if you look at our current valuation, you know, based upon how much cash we have on hand, we mean we've at least through the end of the year, we had $350 million or so in cash. There's a couple bucks in our share that you just attribute to the cash since we're no longer an R&D burning machine, and we're gonna move to cash, cash flow positivity. And then the real question comes down to what's the value of the asset itself. And, you know, I think, maybe we're not getting all the credit we deserve in terms of what, what this product can do and how long it can do it for. Okay. And just to confirm, the earliest timeline for a potential ANDA filer, that's really like a deadline. It's all depending on when they file, but you could have a filer in as early as 2025, yeah. Okay. Got it. First quarter of 2025. Okay. Wonderful. So we'd like to end with just some high-level thoughts. Obviously, you've talked about achieving profitability. So walk through the timeline and, and your overall thoughts there. So, just to separate out the difference on profitability versus cash flow positivity 'cause we fully intend to be cash flow positive. But when you get to profitability, now we're moving from a non-GAAP measure to a GAAP measure. And you know, in terms of profitability, we've not given any guidance to that yet. But let's back down for what we have from what we have said. And that is, we're doing a restructure in the organization. We'll take a first-quarter charge of somewhere between $11 million and $14 million, hit in the first quarter for the cost of change of that restructure. And we believe on a full-year basis, annual expense savings of about $50-$55 million, which we'll realize year one about 70% of. But on a go-forward basis with no increase in straight operating expense, all the addition in terms of revenue, that nets out will be on top of that. So, you know, we will be cash flow positive this year. We'll be significantly cash flow positive. And as we've said, we're gonna deploy some of that resource towards buying back shares. We have an approved share buyback program up to $150 million and some of it towards just enhancing our balance sheet, making us stronger in terms of our cash position and ability to do other, more, you know, other deals down the road to diversify around LUPKYNIS. Okay. Wonderful. We have a few moments for Q&A if there's any questions. Go ahead. So a couple questions. Based on the clinical trial data, which I don't have it with me, what's the percentage of complete responders to LUPKYNIS, in all-comers treatment setting? If you give it to 1,000 patients. How many? I'd wanna say the number in terms of complete response is north of 50%. But one could argue that there's still a long way to go from there, right? Like, but I think in our clinical trials, although complete response was not the primary measure of the trial, it was reduction in proteinuria. Correct. You said complete response being 50%. That's a big number. I can go back and check it just to be sure. If you say 50%, that's a pretty solid. I wanna say that's what it was in our clinical trial. We can get back to you on that. Yeah. I will. I'll also check it. The second question is regarding the IP expiration. Is it, hard stop is the early 2028, or it goes well beyond that? 37, depending on the you move from your approval benefits and your patent term extensions post-28, and you ride, oh we ride on our method of use patents out past then. So your ANDA filing if someone files something, still that precludes them, right? Even if they file an application. Well, an ANDA filer can file whenever they want. It's when what they're actually, when they file, what they think they will have to defend in terms of whether they're infringing or not. The Hatch-Waxman benefits we get in terms of our patent term extensions, they it would be very difficult for them to try to upend those. In terms of formulation patents, method of use patents, they could decide that those are things that they wanna argue. But in terms of our base composition of matter and the benefits we get from the approval, that's out to the end of 2027, early 2028. The thing is, still kind of a bit puzzling. Where is the uptake problem? You know, I mean, we have this one drug, so to say, in, besides Benlysta, if you want to do that. Where is the adoption problem with LUPKYNIS? Well, I, I think you gotta look at the market two ways. You gotta look at the market as it exists today. And we think there's somewhere around and you need to keep me honest on time here, approximately 80,000-120,000 patients who actually suffer from lupus nephritis. Of that, about 30% are diagnosed. And of that, a smaller percentage is even treated. Right now, if you look at our penetration, depending on whether you look at it versus MMF and steroids or versus novel drugs or versus CNIs, we're the market-leading CNI. We've got over 20% penetration in the treated patients. You need to get more patients on novel drugs versus these generics they've used historically. But the real opportunity is getting that 80,000-120,000 patients treated when today, only 30,000 of those patients even see any drug therapy at all. Okay. I see a huge disconnect here. Somewhere, we can talk about it, you know. Yeah. As I said, I think it's a disconnect between where guidelines are and how patients actually and how physicians actually treat. And I'm more than happy to sidebar with you and talk to you about it after. To round up the conversation, now that it is approved for lupus nephritis, and you want us to get in front of rheumatologists, they don't talk to each other. There is obviously a disconnect too, right? Well, I think there's an established paradigm. I-it's very different doc to doc, region to region, but there is an established paradigm as to where that handoff happens. But it's not universal. It varies by physician. It varies by region of the country we're talking about. Okay. Wonderful. No questions. Thank you. With that, we'll end. Thank you so much.