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Aurinia Pharmaceuticals Inc. (AUP) is on the brink of a milestone few Canadian biotechnology companies have reached. On Friday, the Victoria drug developer will learn if the U.S. Food and Drug Administration has approved its application to sell its drug for people who suffer from lupus nephritis (LN).

Lupus is a chronic disease that prompts the immune system to attack the body’s organs. LN occurs when the kidneys are attacked and it can cause kidney failure and death. Until recently there was no FDA-approved drug to treat it.

A 357-patient study in December, 2019, found those who took Aurinia’s drug, voclosporin, were nearly twice as likely as those on a placebo to show improved kidney health. That prompted Aurinia to seek a priority FDA review for approval. Chief executive Peter Greenleaf believes Aurinia has a “north of 80-per-cent probability” of getting it. “Drugs that make it to this process get much higher probability of getting across the finish line,” he said in an interview.

It’s rare for a Canadian biotech to deliver positive results from late-stage human trials and rarer still to get FDA approval. Drug development is a risky business – it takes years of clinical work and patient studies, and can cost hundreds of millions of dollars. Just 10 per cent of drugs that pass their first human safety trial make it to market, said David Martin, an analyst with Bloom Burton.

But it’s almost unheard of for a Canadian biotech to do what Aurinia has planned next: take its drug to market itself.

Biotechs often sell out before getting to commercialization, or license out go-to-market activities to pharmaceutical giants. That’s not Aurinia’s plan. While it has struck a deal with Japan’s Otsuka Pharmaceutical Co., Ltd, to commercialize voclosporin in Japan, Britain and seven European countries, Aurinia plans to sell and distribute the drug itself in the lucrative U.S. market.

And Mr. Greenleaf, an American industry veteran who joined in 2019 (and works from Rockville, Md.), isn’t waiting for the FDA to start. Aurinia spent the past year gearing up and Mr. Greenleaf says he hopes to have voclosporin “in the hands of doctors as fast as possible” after the nod comes – assuming it comes. “We’re ready to start shipping.”

The company has inked manufacturing deals and grown its ranks to 300 people from 50, hiring sales and support staff to educate doctors and advocacy groups, ensure patient access and work on reimbursement. To finance the ramp-up, Aurinia has raised nearly US$400-million from investors and got a US$50-million payment from Otsuka; it will get more as the drug advances to market in Otsuka’s territories.

Aurinia was founded by three former executives of Victoria-based Aspreva Pharmaceuticals Corp.: Mr. Greenleaf’s predecessor Richard Glickman; chief business officer Michael Martin; and chief medical officer Neil Solomons. Aspreva had worked to develop a treatment for LN. It was sold in 2008 and the trio left to start Aurinia’s forerunner. They licensed voclosporin, originally developed to prevent organ-transplant rejections, from Edmonton’s Isotechnika Pharma Inc., then did a reverse takeover of Isotechnika in 2013 and listed on Nasdaq in 2015.

Lupus primarily affects women of childbearing age and of African, Latin American and Asian descent. Before there were drugs for lupus nephritis, treatment involved a mix of steroids and cancer drugs; side effects include loss of hair, vision and mobility, thinning of bone marrow, lethargy, nausea, anemia and depression.

FDA approval of voclosporin “would be life changing,” said New York resident Monique Gore-Massy, who has been hospitalized repeatedly for LN and can’t work or have children. “I’ve been waiting for something like this.”

Aurinia has had setbacks. Its attempt to develop voclosporin to treat dry eye disease flopped in efficacy trials. In early human trials in 2016 for treating lupus nephritis, more patients died taking the drug than a placebo, though further data showed the deaths were in developing countries with poor standards of care and the drug was safe.

Even with FDA approval, challenges would await. Aurinia believes its U.S. customer base could be in the high tens of thousands, but “there’s a lot we have to learn,” Mr. Greenleaf said. “It’s one of the first approved products. How many patients are actually out there? We know there’s a lot but we don’t know exactly.”

Aurinia hasn’t set the drug price. It’s expected to be in the tens of thousands of dollars annually per patient. That may affect user numbers. While Ms. Gore-Massey has private insurance through her husband, she says she doesn’t know “if the insurance company will approve it” or if she’ll be able to afford the drug without the coverage.

Aurinia’s patent protection is set to expire in 2027 and pending approval from the FDA, the patents could extend to 2037.

Meanwhile, Aurinia faces competition. Its stock, which soared on news of its 2019 trial results, fell 14.7 per cent in mid-December when GlaxoSmithKline PLC’s Benlysta – an intravenously-administered treatment for lupus – got FDA approval for use against LN. Roche Holding AG is also developing a LN drug. “Now the focus shifts to: ‘Will voclosporin be approved? How fast can sales be ramped? And to what level?’” Mr. Martin said.

Despite its commercialization efforts, Aurinia could also sell out. Mr. Martin puts the odds at 50-50.

Mr. Greenleaf sounds open to that possibility.

“If someone is willing to come forward [with] a table-clearing offer … as long as it’s the best thing for shareholders and [employees] and the patients, we’d be more than happy to take that path,” he said.

Editor’s note: A previous version of this story incorrectly stated that Aurinia’s patent protection is due to expire in 2022. it is in fact set to expire in 2027.

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