Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) has released its financial results for the second quarter ended June 30, 2017. Amounts, unless specified otherwise, are expressed in U.S. dollars.

“Our Phase III clinical trial (AURORA) evaluating voclosporin for the treatment of lupus nephritis is underway, and we are enrolling patients,” said Richard Glickman, Aurinia’s CEO and Chairman of the Board. “The clinical team continues to initiate sites around the globe implementing an aggressive patient recruitment program. We are on track to complete enrollment in eighteen months.”

Operational highlights

On May 17, 2017, we announced that the first patient was dosed in AURORA, the Company’s Phase III confirmatory clinical trial evaluating voclosporin for the treatment of lupus nephritis (LN).

On June 4, 2017 and June 14, 2017, we presented additional data from our global Phase IIB AURA-LV (AURA) study in LN during the 54th European Renal Association-European Dialysis and Transplant Association Congress (ERA-EDTA) and the European Annual Congress of Rheumatology (EULAR 2017).

As previously reported, treatment with low dose voclosporin showed statistically improved efficacy over the control arm at 24 and 48 weeks. The data presented at ERA-EDTA demonstrated this improved efficacy was attained while maintaining stable serum magnesium, potassium and blood pressure levels. Well-known side effects with other calcineurin inhibitors at their effective dose include hypomagnesemia and hyperkalemia, which are associated with renal impairment and require monitoring or intervention.

The data presented at EULAR 2017 demonstrated that over the course of the 48-week trial, patients on voclosporin stayed in remission approximately twice the amount of time as those in the control group.

Financial Results for the Second Quarter Ended June 30, 2017

Cash, cash equivalents and short term investments were $189.8 million as at June 30, 2017 compared to $202.1 million as of March 31, 2017, and $39.6 million as at December 31, 2016. We believe, based on our current plans, that we have the financial resources to complete the AURORA trial and the regulatory submission process.

For the three months ended June 30, 2017, we reported a consolidated net loss of $2.4 million or $0.03 per common share. This loss included a non-cash revaluation adjustment (gain) of $7.5 million related to the estimated fair value quarterly adjustment of derivative warrant liabilities at June 30, 2017. After adjusting for this non-cash impact, the net loss before change in estimated fair value of derivative warrant liabilities was $9.9 million.

This compared to a consolidated net loss of $3.3 million or $0.10 per common share, which included a non-cash revaluation adjustment (gain) on revaluation of derivative warrant liability of $1.4 million at June 30, 2016. After adjustment for the non-cash impact of the revaluation, the net loss before change in estimated fair value of derivative warrant liabilities for the three months ended June 30, 2016 was $4.6 million.

The change in the revaluation of the derivative warrant liabilities is primarily driven by the change in our share price. Our share price decreased at June 30, 2017 compared to March 31, 2017 which resulted in a revaluation gain. These derivative warrant liabilities will ultimately be transferred to equity upon the exercise or expiry of these warrants and therefore are non-cash adjustments.

We incurred net research and development costs of $7.1 million for the three months ended June 30, 2017, as compared to $2.4 million for the same period in 2016. The increase in research and development costs for the three months ended June 30, 2017 reflected AURORA trial commencement costs, including activities such as clinical site initiations, regulatory submissions, drug manufacturing and drug distribution.

We incurred corporate, administration and business development costs of $2.9 million for the three months ended June 30, 2017, as compared with $1.8 million for the same period in 2016. These costs included a non-cash stock compensation expense of $718,000 for the three months ended June 30, 2017 compared to $9,000 for the three months ended June 30, 2016.

Shares of Aurinia closed today at $5.71, down $0.24 or -4.03%. AUPH has a 1-year high of $10.54 and a 1-year low of $1.74. The stock’s 50-day moving average is $6.35 and its 200-day moving average is $6.13.

On the ratings front, AUPH has been the subject of a number of recent research reports. In a report issued on June 5, Cantor analyst Elemer Piros reiterated a Buy rating on AUPH, with a price target of $14.00, which implies an upside of 145% from current levels. On May 18, H.C. Wainwright’s Ed Arce reiterated a Buy rating on the stock and has a price target of $10.00.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Elemer Piros and Ed Arce have a yearly average return of 0.0% and 23.7% respectively. Piros has a success rate of 44% and is ranked #3265 out of 4628 analysts, while Arce has a success rate of 45% and is ranked #180.

Aurinia Pharmaceuticals, Inc. operates as a biopharmaceutical company. It focuses on discovering and developing immunomodulating therapeutics. The company’s pipeline includes voclosporin for the treatment of lupus nephritis.