About a week ago Aurinia Pharmaceuticals cratered by 55.75% to close at $1.81 per share. The ironic thing is that the company had announced positive phase 2 results in patients with Lupus Nephritis. If the company posted positive phase 2b results in this patient population then why did the share price tank by so much? The reason for the drop is because there were 13 patients that died in the trial. Even with good efficacy it doesn’t matter when patient deaths are involved. Let’s get one thing right here, as of yet there is no evidence to prove that Aurinia’s drug Voclosporin caused these deaths.
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It’s just that in the world of biotech, when patient deaths are involved, investors sell first and ask questions later. That’s because there is no way of knowing until the issue is resolved. So investors lock in profits, and thus the stock falls. Which is the main reason why the stock tanked by 55.75% despite announcing positive phase 2b results in patients with Lupus Nephritis. In addition, about 10 of the 13 deaths had occurred in patients that took the low dose are in the study. This led investors to believe that a low dose of the drug may have been responsible for the patient deaths. Again, this is all speculative for the moment. Nobody knows exactly if the drug arm caused the deaths.
The good news is that many analysts are siding with the management team at Aurinia. They are all claiming that these deaths were part of the patients’ illness, and not because of the dosing received by Voclosporin. Up to date, the company’s drug has been safe and tolerable to take. Therefore, the drug causing these patient deaths is not a logical conclusion. The company is set to meet up with the FDA in the fourth quarter of 2016, where it will discuss a potential path of approval for Voclosporin.
The phase 2b trial recruited patients with Lupus Nephritis. There were a total of 265 patients recruited into the clinical trial, to test Voclosporin against a placebo. More specifically, Voclosporin was added together with Roche’s Cellcept, and then tested against a placebo compound. It is a good idea that the company chose to test its drug in combination with Roche’s drug Cellcept. The Cellcept drug helps patients with lupus, especially those who have signs of kidney disease.
The final result was that the low dose drug arm of the study saw 32.6% of patients achieve complete remission, while the high dose arm saw 27.3% with complete remission. Considering that the placebo arm only saw 19.3% of patients achieve complete remission, both drug arms performed far better. Lupus Nephritis is inflammation of the kidney in the body. This inflammation is caused by systemic lupus. It is a huge unmet medical need, one in which a treatment is needed for. At least 60% of lupus patients will get Lupus Nephritis.
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The problem with these patients getting Lupus Nephritis is when the kidney can no longer perform its function of handling proteins. If such a dilemma is not contained then it can lead to kidney failure. The Lupus market is a big market. It is estimated to be a $4 billion market, therefore even taking into account only 60% of the population has Lupus Nephritis, then that means any company that develops a drug stands to make billions of dollars. As long as Aurinia can put the death issue behind itself, then it definitely has a path forward for FDA approval.
[Image Courtesy of Wikipedia]