Earnings Call Transcript
Aurinia Pharmaceuticals Inc. (AUPH)
Earnings Call Transcript - AUPH Q3 2020
Operator, Operator
Greetings, and welcome to the Aurinia Pharmaceuticals Third Quarter 2020 results. Please note that this conference is being recorded. I will now turn the conference over to our host, Dr. Glenn Schulman, Head of IR. Thank you. You may begin.
Glenn Schulman, Head of IR
Thanks, Diego, and good afternoon, everyone. Welcome to Aurinia's Third Quarter 2020 Results Conference Call. Joining me on the call today from the Aurinia team are Mr. Peter Greenleaf, President and CEO; Mr. Max Colao, Chief Commercial Officer; Mr. Joe Miller, Chief Financial Officer; and Dr. Neil Solomons, Chief Medical Officer here at Aurinia. This afternoon, we issued our press release and associated financial statement package detailing the third quarter 2020 financial results, both of which are available on our website at www.auriniapharma.com. And filed on a Form 6-K with the SEC as well. Before jumping into some brief remarks from the team, I'd like to remind everyone that today's call is being webcast live on Aurinia's Investor Relations website, and a replay of the call will be available approximately 2 hours after the completion of today's meeting. Please also note that the content of today's call is the property of Aurinia. It may not be recorded, reproduced or transcribed without prior written consent obtained from Aurinia. For approval, please feel free to reach out to me, Glenn Schulman via e-mail at ir@auriniapharma.com. During the course of this call, we may make forward-looking statements based upon our current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties and our actual results may differ materially. For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's press release, our most recent filings with Canadian securities authorities and reports that we file on Form 6-K with the U.S. Securities and Exchange Commission. Also, please note that all the statements made during today's call are current as of today, Tuesday, November 10, 2020, and are based upon information currently available to us. Except as required by law, we assume no obligation to update any such statements as of this date. So as I said this afternoon, we'll have some brief remarks from the team, after which we'll host a Q&A session. So with all that, let me turn the call over to Mr. Peter Greenleaf, Aurinia's President and CEO. Peter?
Peter Greenleaf, President and CEO
Well, thanks, Glenn. And I want to thank you all for taking the time to join us this afternoon on our third quarter update call. Since taking the reins here at Aurinia about 1.5 years ago, I couldn't be more impressed with how the Aurinia team has executed across all aspects of the company. While results aren't always what we set out to realize, I'm continually impressed by the professionalism, the dedication and the focus of our team across the globe. I know it was just a week ago, we had a call with you all to discuss our AUDREY results. And we are here today to provide a broader update on our third quarter financial results as well as a review of where things are heading as we move into 2021. To be clear, as we've said before, we are squarely focused on voclosporin and its upcoming PDUFA date as a potentially first approved treatment for lupus nephritis. As we reported today, we ended the third quarter with cash, cash equivalents and investments of approximately $421 million to support our activities and are fully funded to execute on our launch plans for voclosporin following its approval. 2020 has definitely been an interesting year for all of us. But despite the broader challenges, we have been fortunate to secure the resources necessary to achieve our goals as well as evolve the organization to meet the needs of people suffering from lupus nephritis. Strong resources, a solid strategy, and great people to execute, combined with the potential of voclosporin is what we need to succeed. And today, all of those pieces are in place. Over the summer, we announced our NDA filing for voclosporin was accepted by the U.S. Food and Drug Administration, granted priority review and given a PDUFA action date of January 22, 2021. During the review period, we have had ongoing and collegial conversations with the agency. The review process appears to be on track. And as we've stated previously, we are not expecting to have an advisory committee meeting prior to the action date. At this point, we've completed the mid-cycle review with the agency and are awaiting confirmation on our late-cycle review meeting. All work streams at this point are lined up and as expected heading into the PDUFA date in January. Looking beyond the U.S., we continue to advance our global regulatory and development strategy for voclosporin. In Europe, our interactions with the EMA continue and our expectation is to file an MAA for voclosporin during the second quarter of next year. This timeline is in sync with our previous guidance and dovetails with our ongoing ex-U.S. partnering conversations. As we head into 2021, we also plan to advance our PMDA interactions and look forward to providing additional updates and details on our timelines for Japan early next year. In addition to the regulatory process, we continue to work to differentiate the profile of voclosporin relative to older generation CNIs and other therapies that are currently in development for lupus nephritis. Voclosporin has always been strongly positioned, given its characteristics as a new chemical entity. Of course, we look to continue to build upon that. The drug's robust efficacy, rapidity of activity, overall safety and tolerability profile observed in both the AURA-LV and the AURORA clinical trials combined with the differentiating aspects observed in vitro, including lack of impact on glucose and lipids and even the potential for antiviral activity being evaluated through an investigator-initiated trial for COVID-19 that was just recently communicated at a study in Leiden, the Netherlands. All of this supports our belief in this molecule and its differentiated applicability for patients. And of course, should the FDA give us the approval, we look forward to the rapidity of launching this drug in the U.S. and markets around the world. So with that intro, I'll turn the mic over to Neil for a brief update on our ongoing pipeline activities, after which Max Colao will provide some additional insight into our commercial readiness. From there, Joe will detail our third quarter results, and then I'll come back on to close up for Q&A. With that, let me turn it over to Dr. Solomons. Neil?
Neil Solomons, Chief Medical Officer
Thanks, Peter, and good afternoon, everyone. Just a brief update from the clinical and regulatory world. My team has been working steadfast on their goal of continuing to differentiate voclosporin from other therapies and working to enhance the overall awareness of the broad data set generated with voclosporin for lupus nephritis. Over the past weekend, voclosporin was detailed in 2 poster presentations during the 2020 American College of Rheumatology annual meeting. The first presentation detailed the previously announced drug-drug interaction study, which showed that voclosporin had no impact on mycophenolic acid or MPA, the active moiety of MMF. Further, the pooled safety and efficacy data from the AURA-LV and AURORA trials in LN, it was reported that voclosporin achieved significantly faster improvements in proteinuria. This is particularly important for people with lupus nephritis who are racing against time to achieve long-term kidney health. As we say at Aurinia, time is of the essence. On the regulatory front, and as Peter mentioned, we have recently completed the mid-cycle review of the voclosporin NDA with the FDA and continue our interactions as we head towards the late-cycle review with the agency. All that said, the timelines are on track for our January 22, 2021, PDUFA date. Looking beyond the U.S., we have commenced interactions with the EMA with reviewed scientific discussions with the rapporteur and co-rapporteur due to occur early next year. With these activities, we are on track to file the MAA in quarter 2 of 2021. Lastly, I just wanted to take another moment to comment on the AUDREY dry eye program, which we reported results on last week. Once again, our sincerest thanks to all the patients and investigators who participated in the clinical research. Although the results are disappointing, the team continues to work on fully dissecting and understanding results. But as we announced last week, the VOS program remains suspended and Aurinia does not plan to conduct any additional clinical studies. With that brief overview, I'd like to pass it along to Max for an overview of voclosporin's commercial readiness. Max?
Max Colao, Chief Commercial Officer
Thanks, Neil, and good afternoon, everyone. I appreciate this opportunity to provide some additional detail on the progress we've made over the last quarter to prepare ourselves to realize the full potential this opportunity presents for patients, health care professionals, and the company. So first, let me highlight why we see this opportunity as so significant. Lupus nephritis is one of the most serious and life-threatening complications of systemic lupus erythematosus (SLE). There are currently no FDA-approved treatments for lupus nephritis. The current standard of care typically results in suboptimal long-term health outcomes. For example, 70% to 80% of patients on the current standard of care treatment are typically women, particularly women of color of childbearing age. They fail to achieve a complete response to therapy in 1 year. Furthermore, these patients still show signs of active kidney disease that can lead to kidney failure. However, in our pivotal Aurora and AURA studies, voclosporin has shown great promise as a potential treatment for lupus nephritis. Patients treated with voclosporin, in combination with the standard of care, achieved statistically superior and faster response rates when compared to the standard of care alone. These results were consistent across patient subgroups, including different races and ethnic backgrounds. As a company developing a pioneering therapy with such potential, we see ourselves as not only having a unique opportunity for people affected by lupus nephritis but also an obligation to these patients as well. To that point, let me provide some insight on our preparedness for a launch. I have no desire to come across as immodest, but I do feel it is fair to say we have now assembled a world-class, rare disease commercial team at Aurinia. This exceptional and dedicated group have their focus on highlighting the importance of early diagnosis and on improving long-term health outcomes in lupus nephritis. As a result of this focus, we have already undertaken initiatives with payers and clinicians. Importantly, these activities have been undertaken in collaboration with some of the most widely published and recognized lupus key opinion leaders. Already, we have reached payers covering 100 million lives. We've been highly encouraged to see that at each of our national and regional education programs, as many as 100 physicians have been in attendance virtually. As a result of these initiatives, we expect to reach the overwhelming majority of payers and more than 1,000 MDs treating lupus and LN by the end of the year. We are leveraging technology to the fullest so that our progress isn't delayed or undermined by the current pandemic. In fact, in all areas that are critical to successful commercialization—education, promotion, access, patient services—the entire commercial team is aligned for a launch that aims for voclosporin to be quickly and widely adopted by the lupus nephritis community. We are now ready to quickly launch and get voclosporin into the hands of patients if and when its approval is granted by the agency. That's quite a testament to the experience, talent, and commitment of my commercial team colleagues, particularly during these stressful times. So I would like to conclude my portion of the call with a deeply sincere thank you to all of them for their inspiring commitment to making a tremendous contribution to the health of patients with lupus nephritis. After approval, and with the final label in hand, I look forward to providing you all with more specifics on the launch of voclosporin. I'll now pass it over to Joe for a recap of our financial results. Joe?
Joseph Miller, Chief Financial Officer
Thanks, Max. On the financial front, Aurinia ended the third quarter of 2020 with cash, cash equivalents and investments of $421 million compared to $306 million at December 31, 2019. Net cash used in operating activities was $30.3 million for the third quarter ended September 30, 2020, compared to $11.8 million for the third quarter ended September 30, 2019. As we detailed in today's press release, we reported a consolidated net loss of $34.1 million or $0.28 per common share for the third quarter ended September 30, 2020, as compared to a consolidated net loss of $19 million or $0.21 per common share for the third quarter ended September 30, 2019. The loss for the third quarter ended September 30, 2020, reflected a non-cash decrease of $2.6 million in the estimated fair value of derivative warrant liabilities compared to a non-cash decrease of $4.5 million in the estimated fair value of derivative warrant liabilities for the same period in 2019. The derivative warrant liabilities will ultimately be eliminated on the exercise or forfeiture of the warrants and will not result in any cash outlay by the company. The outstanding warrants expire on December 28, 2021. The loss before the change in estimated fair value of derivative warrant liabilities and income taxes was $36.7 million for the third quarter ended September 30, 2020, compared to $23.5 million for the same period in 2019. R&D expenses decreased to $4.8 million for the third quarter of September 30, 2020, compared to $17.8 million for the same period in 2019. The decrease is due to a decrease in activities related to clinical trials and exploratory development work, the capitalization of previously expensed inventory, and the capitalization of internal development costs. In accordance with IFRS, the capitalization of inventory and internal development costs is appropriate when approval of the NDA is reasonably assured. Management believes that approval by the FDA of voclosporin as a treatment for LN was reasonably assured following the acceptance of the NDA by the FDA in the third quarter of this year. Non-cash stock compensation expense charged to R&D increased to $814,000 for the third quarter ended September 30, 2020, compared to $596,000 for the same period in 2019. The increase in stock option compensation expense for the three months ended September 30, 2020, reflected higher stock option grants resulting from the hiring of new employees and an increase in the fair value of the stock options granted due to an increase in our share price. Corporate administration and business development expenses increased to $31.1 million for the third quarter of 2020 compared to $6.1 million for the same period in 2019. The increase reflects the investment incurred to build out our commercial and administrative organizations to support the launch of voclosporin as a treatment for LN, subject to FDA regulatory approval being granted. Since the release of the positive results of our AURORA trial in December of 2019, we have moved quickly to develop our commercial and administrative capabilities across the organization, including the expansion of our commercial team. Non-cash stock compensation expense charged to corporate administration and business development increased to $3.8 million for the third quarter ended September 30, 2020, compared to $1.4 million for the same period in 2019. The increase in stock option compensation expense for the three months ended September 30, 2020, reflected higher option grants resulting from the hiring of approximately 135 new employees and an increase in the fair value of the stock options granted due to an increase in our share price. With that review, I'll pass it back to Peter for some closing remarks. Peter?
Peter Greenleaf, President and CEO
Thanks, Joe. And with a strong balance sheet and cash, cash equivalents and investments of approximately $421 million at the end of September, we're amply funded to support the launch of voclosporin. As I said before, strong resources, a strong strategy and great people to execute, combined with the potential of voclosporin is exactly what we need to succeed, and I believe that all those pieces are in place. So with that, operator, can you please open up to a Q&A session? Thank you, everyone.
Operator, Operator
Our first question comes from Ken Cacciatore with Cowen & Company.
Ken Cacciatore, Analyst
Yes, I was just wondering if you could comment on the review and interaction in a little more detail around manufacturing, if there's been an inspection on the site? And then wondering on the commercialization. Just could you point to any examples of what you would say are really quality orphan or specialty launches, kind of any of the good learnings you can take from that, and share from us what they've done right and what you're trying to emulate?
Peter Greenleaf, President and CEO
And I'll take the first one and then to give Max a little preparation time. I'll let him take the commercialization one second. I can hopefully build upon that. But on the manufacturing front, Ken, we can't really say the FDA doesn’t necessarily notify us when they're doing the inspections. But obviously, we note that there are inspections ongoing, and we know there are, as of our most recent interaction with our reviewer, that everything seems to be on target. I can tell you that our preparedness for those inspections, whether they be Aurinia-specific facilities or our partners around the world are right on target with where we want them to be. As we've said previously, we partner with Lonza on our API manufacturing, one of the world's largest API manufacturers, and then with Catalent here in the United States on our encapsulation and then through to packaging, again, one of the largest in the country and of the world for that matter. So we feel really confident in the fact that these facilities get reviewed very often and for different drugs reviewed many, many times a year. So everything seems to be on target, and our preparedness is there. Max, on the commercialization front, anything you would point to in terms of a drug and/or an analog to, say, what success looks like here?
Max Colao, Chief Commercial Officer
Sure. Thanks for the question. Yes, we've been actively looking at analogs in the specialty space—analogs that have launched in COVID-19. We've looked at analog competitors, and we've also not just looking at—learning from what's worked, but also looking for underperforming. Products that we looked at specifically on specialty include ONPATTRO, Ocaliva, Civista; underperforming include Reald, NUPLAZID, Neurotech, PADCEV; LN competitors include Enlibre, Fencerra, NUCALA. I would say some of the key learnings have been early and targeted investments, prioritized access, and patient support. From the underperforming examples, we saw ineffective prelaunch payer engagement and little commercial investment pre-approval. Some of the COVID-19 learnings include that companies rapidly pivoted to digital and accelerated DTC, as they pivoted to virtual engagement. Yes, we've taken all these learnings and incorporated them into our launch plan.
Peter Greenleaf, President and CEO
Thank you, Ken, and thank you, Max. The only thing I would add is that we need to have metrics and measurement in place as we approach the launch. It’s essential to have a solid launch strategy and the right team. We know we need to exceed expectations, and the market tends to recognize successful launches particularly for drugs that surpass these expectations. For instance, TEPEZZA at Horizon has done an outstanding job of executing its launch. We are examining those who not only approached the drug and patients correctly by ensuring it reaches doctors and patients, but also those who understood market expectations. We are committed to measuring and analyzing our performance against all these factors.
Operator, Operator
Our next question comes from Alethia Young with Cantor Fitzgerald.
Alethia Young, Analyst
Congratulations on the progress. Most of my questions are fairly high level, but I have one specific to ask. I know you are likely in the field doing checks, but could you share how patients in the lupus nephritis community have been responding to COVID-19? Are they visiting doctors less frequently? The reason I ask is that it seems like you might be launching a product while we are still navigating COVID, so I wanted to understand what those current patterns look like. My next question, which I hear frequently, is about competition. Given that there are larger companies like EU pharmas with assets in this space, how does a company like yours compete? Is it through contracting with payers, or is there a better strategy in place? Some high-level insights on this would be really helpful for everyone.
Peter Greenleaf, President and CEO
Thanks, Alethia. I'll start with the second question first, and then I'll ask Neil and Max to share insights from our market research regarding what physicians are saying about patient visits and more. Our medical affairs team is actively engaging with physicians daily, so we can provide some guidance on this. We are aware of a major competitor in the market, a large pharmaceutical company. It's important to note that companies our size often cannot invest the same amount of resources into issues or opportunities as larger firms with significant funding. However, our team has a wealth of experience from both small and large organizations and knows how to launch successful drugs. Success in launches isn't solely about financial resources; it's about effective strategy, skilled individuals, a motivated field team, and a strong drug with an impactful efficacy profile. We believe that dedicated people are essential to making a difference alongside our strategy and this promising drug. We're confident in our ability to compete and have conducted market research that supports our expectations for this drug's profile. We feel optimistic about our future. Regarding resources, we are well-equipped, though raising capital isn't always popular. Many companies falter by under-investing based on low expectations for drug launches. Our robust financial position allows us to make the right investment choices, enhancing our commercial prospects. We currently have only one immediate competitor in lupus nephritis, giving us some time to establish a strong presence. For the second question about patient responses and visits, I'll turn it over to Neil to share insights from our operations team in the field, and then we’ll see if Max has anything to add. Dr. Neil?
Neil Solomons, Chief Medical Officer
Yes. Thanks, Peter. I mean, so our experience on the clinical side is limited to the follow-up visits from our AURORA 2 study. But obviously, we have a number of U.S. sites and a number of patients in the U.S. And certainly, what we found is aside from probably a couple of months back in March or April, where some of the visits were being delayed, these lupus nephritis patients have all been threatening disease. We find they're getting their tests, they're getting their urinalysis, they're getting their blood tests, and they're often seen in different parts of the hospital. So certainly, the experience in the clinical trial setting has been relatively normal. There's been no problems of access for our clinical trial monitors to the sites. Also on the medical affairs side as well, although more challenging, they're a very resourceful bunch, and they've managed to really maintain and build up a very, very high level of contact with the lupus prescribers. But I think it's probably best if I hand over to Max to add a bit of color to what I've said. Max?
Max Colao, Chief Commercial Officer
Yes. And thanks for the question. We've been following this closely, both in terms of just the general market trends and also through our field intelligence. There has been a decline in specialty patient visits, but prior to this resurgence of COVID, though, the patient visits were about 97% of baseline about a month ago. So the visits were coming back, even though about 20% of them were virtual. That is consistent with what we've been hearing from nephrologists and rheumatologists in terms of their lupus and LN patients. The follow-up is happening; some of it is happening virtually and maybe a little less than what it's been in the past. We remain confident and encouraged by what we're seeing in terms of the patient visits and that the opportunity is successful.
Operator, Operator
Our next question comes from Joseph Schwartz with SVB Leerink.
Joseph Schwartz, Analyst
I was reflecting on the quick pace of AURORA trial enrollment despite the strict patient enrollment criteria. It seems there was a careful approach, possibly because of past experiences. Can you provide insight into the team that managed this selective enrollment? How do you view the labeling in relation to the enrollment criteria—do you think it will be broader? The current environment is indeed challenging. Additionally, could you elaborate on the sales and MSL teams responsible for the launch? How should we assess the launch pace in connection with the AURORA trial enrollment speed?
Peter Greenleaf, President and CEO
Yes. Let me—why don't I start and then ask Neil to build upon maybe what I'll say. I would say—I think it's one thing to talk about the difficulty of enrolling clinical trials in both a competitive environment, and an environment where you're trying to find patients globally and compare that to necessarily what the market opportunity might be. Our trials, when we look at both the Phase II and the Phase III that we did, give us access to a very large percentage of those patients with active lupus nephritis upwards of—we believe upwards of north of 80% of those patients. We'll have to see where the label comes out, obviously, but our trial criteria gives us that open access point. So we don't see the difficulty of trials being a direct correlation to potentially how the asset then reacts and/or what you see in terms of prescription uptake. And we can track that through ICD 9 codes and what patients are out there, what we know from the patients who are actively suffering from the disease. So I think the 2 are separate and distinct. But let me not answer that question fully. Let me also ask Neil to build on that with me.
Neil Solomons, Chief Medical Officer
Yes. So I mean, thanks, Joe, for the question. You said one thing that's not quite true or at least perhaps, I'd just like to build on. You were talking about the restrictions that we put on compared to maybe the first trial. A lot of those restrictions were kind of qualitative rather than hard and fast rules in the protocol. The protocols are actually very similar. It was more—we learned a lot about the drug between the 2 studies, and we learned about the kind of patients and comorbidities that may result in perhaps a more difficult outcome in certain countries. If you look at the actual entry inclusion/exclusion criteria, they were very, very similar. And of course, they parlay into the label as we move forward. And of course, when the drug actually launches, we will have learned even more about the drug.
Peter Greenleaf, President and CEO
Maybe on the second part of your question, Joe, I can ask Max Colao to join me here and give his thoughts on early uptake, what are the key drivers of that for us? And I'll see if I can add anything to that. Max?
Max Colao, Chief Commercial Officer
Sure. Thanks, Peter. Thanks for the question. Yes. So as I mentioned, we're encouraged that the patient opportunity is accessible. At the same time, we're still—we're heading into a time where COVID infections are increasing. As COVID increases, access to the actual physicians becomes more challenging geographically. So I would say that that's going to be a determinant to our early uptake was just the extent of access to physicians. But again, we're—continue to be very encouraged in terms of what we hear from physicians and what we've heard in market research, what we've heard about our value proposition. So I would—I suppose my guidance would be similar to other therapies that are launching during COVID times.
Peter Greenleaf, President and CEO
And the last thing I would add to that: I think the biggest driver, Joe, for us is going to be, one, the label and when we get it. And then we've got to have motivated people that want to go out and drive this, and we think we've got that. I mean, the sales force is still the #1 conduit to physicians and aiding them to understand the approval of a drug, the dosing, administration of the drug, the data on a drug. We've got a highly motivated and passionate group of people who are going to go out and drive that. If we had underfunded there, that would be a major concern of mine. Access is still going to be an issue to Max's point, but at the end of the day, we have other tactics to try to support that, whether they be online tactics. We've said in previous calls that we purposely went out and hired a sales force—a team that's highly tenured and not only highly tenured, but highly tenured in rare disease and with significant experience in the areas of nephrology and rheumatology so that if they need access, most of these people, if not all of these people know the people they're calling on. There won't be people introducing themselves for the first time. Sorry, you had a follow-on question there too, Joe. Let me let you ask that?
Joseph Schwartz, Analyst
It's really helpful context. So I was just wondering who are the most likely patients to need the drug or be early adopters at the outset? Is it patients in a flare? And if so, like how often does that happen? How are you helping centers visualize which patients to want to provide the drug for first?
Peter Greenleaf, President and CEO
Yes. I think I'll start and then ask Max to catch anything I miss. But we're going to set a very aspirational target in what we ask for, dependent, of course, upon approval and what the label allows us in the sort of degrees of freedom we have that the label provides us to ask for those patients. But we studied this drug in addition to the standard of care, and we ran it directly against the standard of care. So—and up to 80% of patients with active lupus nephritis have ability, at least from the studies that we've done, to get access to this drug. So we're going to go in and challenge a standard of care. We're also going to try to support good diagnosis, good patient education to drive more patients and to create higher awareness and increase the total diagnosis pool of patients that might be getting an inadequate response to their current meds. So I think we have a pretty wide-open field in what we can ask for, and we have tactics to support trying to gain even broader access to that, all dependent, of course, upon the label that we see and the hopeful approval we see come our PDUFA date in January. Max, anything I'm missing on there?
Max Colao, Chief Commercial Officer
No, I think you hit the nail on the head. We see ourselves as positioned to reset the standard of care with voclosporin. And as Peter said, we compared ourselves to the standard of care in our pivotal three trials. Those are the types of patients that we will go after right from the outset.
Operator, Operator
Our next question comes from Maury Raycroft with Jefferies.
Maury Raycroft, Analyst
Congrats on the update. So you conducted the drug-drug interaction analysis with MMF. And then the analysis showing how drug monitoring is not needed when on voclosporin. So just wondering if you think these data will go into the label? And can you contextualize these data competitively? And maybe talk about how important the findings are to payers, doctors, and patients?
Peter Greenleaf, President and CEO
Neil should comment on the DDI study and the particulars around that. The one thing I can say is, competitively, this sets us up quite well. Listen, if anybody wanted to compare us, and why we might be in a different mechanism, not mechanism but a different compound here. This is one of the main drivers of that difference. The fact that you can flat dose this product is incredibly important in terms of its competitive profile. We've done market research with physicians, and that obviously is one key area they see and one they find highly favorable. Neil, on the study itself and what our thoughts are around the label, you want to give your directional answer to that?
Neil Solomons, Chief Medical Officer
Yes. The drug-drug interaction trial, in terms of getting the label, I think what we won't have is we won't have a comment saying that there's interaction with MPA. Now, of course, cyclosporine does have an interaction with MPA; it reduces the AUC quite significantly—the exposure, and hence, the efficacy of MMF. And we're not going to have that. This was done in lupus patients. It was a formal drug-drug interaction study precisely to disprove the thesis that voclosporin is similar to cyclosporine. It's not, and it behaves differently other than that. In terms of the therapeutic drug monitoring, or lack of requirement for that, again, that supports our dosing. Our dosing is that we start with the flat dosing and we adjust according to GFR. And of course, there's intellectual property around that as well. In terms of commercial differentiation, that's pretty unique—there's not many drugs that do that. And of course, the other drugs in the class require trough levels therapeutic drug monitoring to even try to get to the right target, which has not actually been determined. So that's a further competitive advantage from voclosporin.
Maury Raycroft, Analyst
Got it. And I'm guessing doctors definitely appreciate these points. Can you talk about the payer perspective on some of these points?
Peter Greenleaf, President and CEO
Yes. I think to some degree, payers are going to take the base data, and then you're going to take lead from the thought leader physicians and medical directors that are within the plans. All the research that we've done up to this point is pointing quite positive to that. I mean, the data speaks for itself. And then when other scenarios of step-throughs and other things are put in front of them, we feel very good about what our profile looks like going into a potential launch. Payers, obviously, look first at the data, and then look to get advice from their physicians that advise them, both directly and indirectly. Everything we've done so far, Maury, in terms of our market research with both payers, physicians, and patients has pointed to a good payer profile in terms of what the data actually shows. Now we got to go through those strokes once we have an FDA approval, and we price the drug. We have those actual conversations, but feel very, very comfortable that Max and his team are out there having those preliminary conversations in terms of education through our medical science liaisons on the data itself. So I think we're right on target with where we need to be. I can tell you things look quite favorable. I would tell you, I've launched other drugs in the past that didn't have as much of an open window. So we feel really good about it.
Operator, Operator
Our next question comes from Justin Kim with Oppenheimer & Company.
Justin Kim, Analyst
Just curious, have you had any conversations with KOLs on whether you expect the lupus nephritis population to be earlier or later candidates for potential COVID-19 vaccine and whether you foresee any special considerations on vaccines implemented over the course of voclosporin treatment?
Peter Greenleaf, President and CEO
That's a—thanks, Justin. That's a great question. I actually do not have an answer to it because we have not—I have not pulsed any docs on this. I would turn to Neil, who may be hearing more of this through follow-on work with our sites. But I don't have an answer for you on that one as I wouldn't probably for any other drugs, including drugs that I or my children might be on. I don't know that any guidance has been put out there nationally or globally and specifically to the LN population, I can't comment. Neil, do you know? Have you heard anything?
Neil Solomons, Chief Medical Officer
Not specifically. In very general terms, it was a conversation we had earlier that these obviously are higher risk patients because of their condition and because their immunological kind of disordered immune system, so to speak. I would imagine they would be higher up the ladder. But other than that, I don't know anything. I don't know whether Max would you have any experience with those discussions?
Max Colao, Chief Commercial Officer
Yes, Neil. No, I would not have any perspective on those discussions at this point.
Justin Kim, Analyst
Okay. Got it. Just curious. And then Dr. Roven provided a really interesting CAGR at ASN on how he saw the treatment landscape changing in lupus nephritis. With regards to potentially reaching patients beyond the eGFR status included in AURORA, can you just discuss how you see that potentially broadening over time? And what types of clinical evidence or physician experience may support that expansion?
Peter Greenleaf, President and CEO
I'm going to weigh heavy on you on this one since I not that I haven't—one, I haven't seen the presentation, and number two, you might have more of a directional answer, idea where Dr. Roven was going with that.
Neil Solomons, Chief Medical Officer
Yes. I mean, so it's such a really good question. We kind of set a cutoff of eGFR which we kept over 2 studies at 45. Most of the patients with the worst eGFR that—those that are really not doing very well, may actually not be suitable for C&I therapy anyway. Regardless, we were in—or getting into label discussions with the agency, and we don't know how they're going to pan out on what the recommendation is going to be on the label. But certainly, it's a consideration because there are some patients in our study. As you can imagine, the eGFRs fluctuate widely, whose eGFRs at least in pricing a steroid pulse are actually reasonably low and did pretty well. eGFR, as a function of disease severity, may not be ultimately for a few years down the line, absolute contraindications to this class of drugs. Whether that comes from physician experience or any Phase IV clinical trials that we decide to do. We're not sure yet. This is something that we have to take onboard when we see how the label goes and how the drug's received in the community.
Justin Kim, Analyst
Okay. Got it. Just maybe a final housekeeping sort of question. Noticing that the G&A trap has sort of been recognized on the P&L. Can you maybe discuss on a personnel level and sort of as an organization, how much growth we can expect sort of into 4Q? And maybe whether that caps out going into 2021 or whether there would be a little bit more growth there as well?
Peter Greenleaf, President and CEO
Yes. Obviously, we haven't given any revenue and/or expense guidance. So let me try to directionally give you an answer. Maybe you can try to model it out from there. But listen, we've hired the majority of the people that we need to. And obviously, people are the majority of our costs as we end into the last quarter and into this quarter. So as you see those numbers, I think a steady state around modeling sort of the people-based numbers there is probably not a bad idea. Obviously, marketing costs and elements of sales costs are going to go up over time. Obviously, our costs at least as it pertains to voclosporin investment and the pipeline are going to go down over time because of the recent announcement around dry eye. We hope to find a way to fulfill that soon with a diversified pipeline. But as for now, that's the way I would model it. But I think if you were to look at this quarter and into next quarter, it will give you a good idea of what our expense base is. And then if you work around sales and marketing costs around averages and successful launches, you'll probably get there, Justin. But as I said, we haven't really given guidance on it, especially quarterly guidance. So—but thank you for the question.
Operator, Operator
Our next question comes from Ed Arce with H.C. Wainwright.
Ed Arce, Analyst
Congrats on the continued progress. I have 3, one regulatory and 2 commercial. So first one is you mentioned in your prepared remarks that you're preparing for a late-cycle review with the agency coming up. Can you tell us when that is? And what specific aspects do you expect to be discussed at that meeting?
Peter Greenleaf, President and CEO
Yes. I would say the late-cycle review Ed is on normal course. When we said we're waiting, if you just sort of map out when these things are expected to hit, we're right on track with what the review cycle should be. So I wouldn't read into whether that's ahead of schedule or behind. It's right on the money as to when these things should come through. Neil, you want to try to take a swing? It can be so varied as to the areas that are covered in any one of those late-cycle reviews. But Neil, you want to—have you been closer to the day-to-day conversations? Maybe take a swing at that?
Neil Solomons, Chief Medical Officer
Yes, sure. I mean, it's a statutory meeting, Ed. So obviously, we knew we were going to have it, and we knew the approximate date as well. What it does is it ties up, gives the agency a further opportunity to sort of tie up their review to address any questions or obviously what they need from us so that they can complete their review as part of the open dialogue that we have, but it's kind of more formalized. We get actually written guidance about what we're required to provide them. And it's done usually in a timely manner. But it really is, I guess, the last odds and ends just statutory review before the label negotiations really start intensifying.
Ed Arce, Analyst
Okay. Great. Fair enough. So turning to commercial. As you noted in your release, you're working on being fully prepared for the potential launch by year-end. Given that the PDUFA date is only 3 weeks after that. Just wondering what specifically does that entail between now and year-end? What is left really to do? Or is it just kind of wrapping things up that I would imagine most everything is already well underway? Just wondering specifically what is still left to do and get in place by the end of the year?
Peter Greenleaf, President and CEO
It's a good question without going into the absolute specifics. If I were on the call on the other side, listening and the company said, we'll be ready to launch this thing on the PDUFA date. My natural question would be, well, what if you have an early approval, will you be ready? And while we're in no way projecting that we will have an early approval, we want to increase the confidence of our investors and the docs and patients out there who could be recipients of this drug, if and when approved, that we'll have the ability to start not just marketing this drug and selling it with ground troops and our tactics ready to roll once we have a label. More importantly, that we'll be able to start shipping product. Too often, I think companies are caught with an approval date that is far removed from their actual launch date or when they start shipping. I will agree with your statement that what else would we have to do? Well, probably not a whole heck of a lot to be prepared because we're preparing almost a month ahead of what our potential action date is with the FDA. So the communication is meant to be an internal battle cry—to be prepared if we end up on our PDUFA date, know that we will be even that much more prepared. It's a ticking and tying of tactics, people, resource deployment, packaging, getting labels onto that packaging, and being ready to ship. It's all those elements and to increase the confidence that we should be well ahead of our PDUFA date to be prepared to do that.
Ed Arce, Analyst
Okay, great. Then the final question for me is related to some commentary earlier in the Q&A about some of the key factors in competitive environment, especially when you've got a very large global pharma relative to small biotechs, and of course, one of the things that was mentioned really at the end of the day is the right drug, the best drug, perhaps, especially when it comes to the actual data itself. So wondering in your discussions, what do you find are the key points of differentiation that appear to especially resonate with payers and clinicians, especially relative to Benlysta and Gazyva?
Peter Greenleaf, President and CEO
We—I wouldn't say we put together a Chinese menu of restaurant menu of different options for physicians to choose from in terms of what attributes do you like versus approved and unapproved drugs. We do ask questions to some degree to try to get an idea of what attributes of our drug they see as being the most important, starting with first what attributes they see as being the most important in the disease state in terms of controlling patients and keeping patients out of bad outcomes. Then we try to obviously go back and then apply how many of those apply to our drug. I can tell you there's a solid list there. Max, since you're closer to the day-to-day research and how we've been doing this, anything you want to add as it pertains to competitive profile, etc.?
Max Colao, Chief Commercial Officer
Yes. I would say that with payers specifically, the efficacy of voclosporin resonates very strongly, also the time to response. A key metric that the payers focus on is the number needed to treat to get an additional response, which is about 5 with voclosporin, and that resonates strongly with payers.
Operator, Operator
Thank you. There are no further questions at this time. I'll turn it back to management for closing remarks. Thank you.
Peter Greenleaf, President and CEO
Thank you, operator. On behalf of the company and our Board of Directors, I want to thank you all for joining us on the call today. We really and truly do hope you share our excitement about what's on the horizon this year for Aurinia. We want to thank you all for your continued support, and we would like you to please have a great and safe evening. Thank you.
Operator, Operator
Thank you. That concludes today's call. All parties may disconnect. Have a great evening.