Tiny biotech Au­rinia Phar­ma­ceu­ti­cals is look­ing to slay a gi­ant in Glax­o­SmithK­line’s Benlysta — which just scored a big ap­proval in lu­pus nephri­tis — with its late-stage vo­closporin on the cusp of an FDA ap­proval. Look­ing to take its com­mer­cial plans glob­al, Au­rinia has tapped a Japan­ese phar­ma to ac­cel­er­ate its po­ten­tial vo­closporin launch.

Au­rinia will hand over li­cens­ing rights for lu­pus nephri­tis can­di­date vo­closporin in the EU, Japan and else­where to Ot­su­ka Phar­ma­ceu­ti­cal as the late-stage drug rapid­ly ap­proach­es its FDA re­view date, the com­pa­nies said Thurs­day.

The com­mer­cial tie-up comes with­in hours of British drug­mak­er Glax­o­SmithK­line get­ting the FDA green­light for its Benlysta as the first-ap­proved ther­a­py for LN. Au­rinia’s $AUPH share prices were trad­ing down 12.7% on Thurs­day to around $13.24 at press time, un­der­scor­ing in­vestors’ neg­a­tive re­ac­tion to the news.

Au­rinia will re­ceive an up­front cash pay­ment of $50 mil­lion as part of its deal with Ot­su­ka as well as the pos­si­bil­i­ty for an ad­di­tion­al $50 mil­lion con­tin­gent on sales and reg­u­la­to­ry mile­stones. Au­rinia will then pull in tiered roy­al­ties of 10% to 20% on sales in the EU, Japan, UK, Rus­sia, Nor­way, Switzer­land, Be­larus, Ice­land, Licht­en­stein and Ukraine.

To meet its end, Ot­su­ka ex­pects to file a mar­ket­ing ap­pli­ca­tion for vo­closporin with the EMA in the sec­ond quar­ter and plans to sub­mit in Japan “at a lat­er date,” the com­pa­nies said. Vo­closporin is fac­ing an FDA re­view date of Jan. 22.

Au­rinia, a biotech with no ap­proved ther­a­pies in its port­fo­lio, has a lot rid­ing on LN, a se­vere form of lu­pus that can lead to end-stage re­nal fail­ure, dial­y­sis and kid­ney re­place­ment. But be­ing sec­ond to mar­ket af­ter Big Phar­ma GSK and Benlysta, a nine-year vet­er­an in lu­pus with es­tab­lished re­la­tion­ships with nephrol­o­gists, will be no easy task.

Af­ter ear­li­er test­ing marred by pa­tient deaths, Au­rinia re­leased Phase III da­ta in De­cem­ber 2019 show­ing vo­closporin in com­bi­na­tion with my­cophe­no­late and low-dose cor­ti­cos­teroids im­proved the speed of and over­all re­nal re­sponse rates in pa­tients with LN over place­bo.

Pa­tients giv­en vo­closporin record­ed re­nal re­sponse of 40.8%, while those on the con­trol arm ex­pe­ri­enced a rate of 22.5% — meet­ing the main goal of the study (p < 0.001) at 52 weeks. Vo­closporin al­so post­ed sta­tis­ti­cal­ly sig­nif­i­cant im­prove­ments across all pre-spec­i­fied sec­ondary end­points, in­clud­ing re­nal re­sponse at 24 weeks, par­tial re­nal re­sponse at dif­fer­ent time points and time to achieve uri­nary pro­tein-to-cre­a­ti­nine ra­tio.

Six deaths oc­curred in the study, one in the vo­closporin arm and five in the con­trol group. Se­ri­ous ad­verse events were re­port­ed in 20.8% of vo­closporin pa­tients, ver­sus 21.3% in the con­trol arm.

Au­rinia has had a rough go of it this year, cut­ting an­oth­er late-stage pro­gram for vo­closporin oph­thalmic so­lu­tion (VOS) in No­vem­ber af­ter flop­ping a Phase II/III study in dry-eye dis­ease. Au­rinia por­trayed that for­mu­la­tion as a next-gen fol­low-up to Resta­sis, but the drug couldn’t make its mark in im­prov­ing pa­tients’ con­di­tion.

A win in LN would help turn the tide in Au­rinia’s fa­vor, but it’s al­so rac­ing time as an­oth­er big play­er, Roche’s Gazy­va, looks to en­ter the mar­ket. In June 2019, Roche post­ed Phase II da­ta show­ing Gazy­va on top of stan­dard-of-care ther­a­py best­ed stan­dard of care alone in achiev­ing com­plete re­nal re­sponse for lu­pus nephri­tis pa­tients. The drug earned the FDA’s break­through tag in Sep­tem­ber 2019.

The Endpoints News team is continuing to track IPO filings for 2021, and we’ve designed a new tracker page for the effort.

Check it out here: Biopharma IPOs 2021 from Endpoints News

You’ll be able to find all the biotechs that have filed and priced so far this year, sortable by quarter and listed by newest first. As of the time of publishing on Feb. 25, there have already been 16 biotechs debuting on Nasdaq so far this year, with an additional four having filed their S-1 paperwork.

S&P Global has taken a look at the dominant forces shaping the pharma market and come to the conclusion that there will be more downgrades than upgrades in 2021 — the 8th straight year of steady decline.

But it’s not all bad news. Some things are looking up, and there’s still plenty of money to be made in an industry that enjoys a 30% to 40% profit margin, once you factor in steep R&D expenses.

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