10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________________

FORM 10-Q

_____________________________________________

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_ to ____

Commission file number: 001-36421

__________________________________________

Aurinia Pharmaceuticals Inc.

(Exact Name of Registrant as Specified in its Charter)

__________________________________________

Alberta, Canada
(State or other jurisdiction of<br>incorporation or organization)
#1203-4464 Markham Street<br><br>Victoria, British Columbia V8Z 7X8	98-1231763
(Address of principal executive offices)	(I.R.S. Employer<br>Identification Number)

(250) 708-4272

Registrant’s telephone number, including area code

_____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the registrant's classes of common shares, as of the latest predictable date. As of August 3, 2022, the registrant had 141,892,181 of common shares outstanding.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of exchange on which registered
Common shares, no par value	AUPH	The Nasdaq Global Market LLC

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as ofJune30, 2022 (unaudited) and December 31, 2021	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the three monthsand six monthsendedJune 30, 2022 andJune30, 2021	2
	Condensed Consolidated Statements of Shareholders’ Equity (unaudited) for the threeand sixmonths endedJune 30, 2022 andJune 30, 2021	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for thesixmonths endedJune 30, 2022 andJune 30, 2021	4
	Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II.	OTHER INFORMATION	23
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
	Signatures	25

Item 1. Financial Statements

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets
Cash, cash equivalents and restricted cash	$	151,632	$	231,900
Short-term investments	240,104		234,178
Accounts receivable, net	18,173		15,414
Inventories, net	25,863		19,326
Prepaid expenses and other current assets	17,421		12,506
Total current assets	453,193		513,324
Non-current assets
Other non-current assets	12,355		11,838
Property and equipment, net	4,183		4,418
Acquired intellectual property and other intangible assets, net	7,338		8,404
Right-of-use assets, net	5,079		5,383
Total assets	482,148		543,367
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	32,380		34,947
Other current liabilities	1,293		4,640
Operating lease liabilities	953		1,059
Total current liabilities	34,626		40,646
Non-current liabilities
Deferred compensation and other non-current liabilities	16,323		15,950
Operating lease liabilities	7,431		7,680
Total liabilities	58,380		64,276
Commitments and contingencies (Note 17)
SHAREHOLDER’S EQUITY
Common shares - no par value, unlimited shares authorized, 141,892 and 141,600 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	1,180,884		1,177,051
Additional paid-in capital	74,004		59,014
Accumulated other comprehensive loss	(1,853)		(852)
Accumulated deficit	(829,267)		(756,122)
Total shareholders' equity	423,768		479,091
Total liabilities and shareholders’ equity	$	482,148	$	543,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)

	Three months ended				Six months ended
	June 30,				June 30,
	2022		2021		2022		2021
	(unaudited)
Revenue
Product revenue, net	$	28,148	$	6,591	$	49,640	$	7,475
License and collaboration revenue	43		29		176		59
Total revenue, net	28,191		6,620		49,816		7,534
Operating expenses
Cost of sales	1,599		308		1,855		356
Selling, general and administrative	51,532		44,322		96,729		84,127
Research and development	11,525		10,091		24,145		19,924
Other (income) expense, net	(476)		(967)		958		804
Total cost of sales and operating expenses	64,180		53,754		123,687		105,211
Loss from operations	(35,989)		(47,134)		(73,871)		(97,677)
Interest income	483		142		745		314
Net loss before income taxes	(35,506)		(46,992)		(73,126)		(97,363)
Income tax expense	9		18		19		26
Net loss	(35,515)		(47,010)		(73,145)		(97,389)
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities, net of tax of nil	(235)		7		(1,001)		13
Comprehensive loss	$	(35,750)	$	(47,003)	$	(74,146)	$	(97,376)
Basic and diluted loss per share	$	(0.25)	$	(0.37)	$	(0.52)	$	(0.76)
Weighted-average common shares outstanding used in computation of basic and diluted loss per share	141,726		128,222		141,734		127,814

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

(unaudited)

	Common Shares
Three Months Ended June 30, 2022	Shares	Amount		Additional<br>paid in<br>capital		Accumulated<br>Other<br>Comprehensive<br>(Loss) Income		Accumulated<br>Deficit		Total<br>Shareholders'<br>Equity
Balance at March 31, 2022	141,742	$	1,178,807	$	64,686	$	(1,618)	$	(793,752)	$	448,123
Shares issued on exercise of stock options and vesting of performance awards	23	172		(55)		—		—		117
Issuance of common shares in conjunction with ESPP program	127	1,905		(682)		—		—		1,223
Share-based compensation	—	—		10,055		—		—		10,055
Unrealized loss on available-for-sale securities	—	—		—		(235)		—		(235)
Net loss	—	—		—		—		(35,515)		(35,515)
Balance at June 30, 2022	141,892	$	1,180,884	$	74,004	$	(1,853)	$	(829,267)	$	423,768
	Common Shares
Three Months Ended June 30, 2021	Shares	Amount		Additional<br>paid in<br>capital		Accumulated<br>Other<br>Comprehensive<br>(Loss) Income		Accumulated<br>Deficit		Total<br>Shareholders'<br>Equity
Balance at March 31, 2021	128,121	$	952,673	$	43,889	$	(799)	$	(625,535)	$	370,228
Shares issued on exercise of stock options	275	1,899		(620)		—		—		1,279
Shared-based compensation	—	—		7,753		—		—		7,753
Unrealized gain on available-for-sale securities	—	—		—		7		—		7
Net loss	—			—		—		(47,010)		(47,010)
Balance at June 30, 2021	128,396	$	954,572	$	51,022	$	(792)	$	(672,545)	$	332,257
	Common Shares
Six Months Ended June 30, 2022	Shares	Amount		Additional<br>paid in<br>capital		Accumulated<br>Other<br>Comprehensive<br>(Loss) Income		Accumulated<br>Deficit		Total<br>Shareholders'<br>Equity
Balance at December 31, 2021	141,600	$	1,177,051	$	59,014	$	(852)	$	(756,122)	$	479,091
Shares issued on exercise of stock options and vesting of performance awards	165	1,928		(1,406)		—		—		522
Issuance of common shares in conjunction with ESPP program	127	1,905		(682)		—		—		1,223
Share-based compensation	—	—		17,078		—		—		17,078
Unrealized loss on available-for-sale securities	—	—		—		(1,001)		—		(1,001)
Net loss	—	—		—		—		(73,145)		(73,145)
Balance at June 30, 2022	141,892	$	1,180,884	$	74,004	$	(1,853)	$	(829,267)	$	423,768
	Common Shares
Six Months Ended June 30, 2021	Shares	Amount		Additional<br>paid in<br>capital		Accumulated<br>Other<br>Comprehensive<br>(Loss) Income		Accumulated<br>Deficit		Total<br>Shareholders'<br>Equity
Balance at December 31, 2020	126,725	$	944,328	$	39,383	$	(805)	$	(575,156)	$	407,750
Shares issued on exercise of stock options	1,152	9,518		(3,240)		—		—		6,278
Exercise of warrants	519	726		(695)		—		—		31
Shared-based compensation	—	—		15,574		—		—		15,574
Unrealized gain on available-for-sale securities	—	—		—		13		—		13
Net loss	—	—		—		—		(97,389)		(97,389)
Balance at June 30, 2021	128,396	$	954,572	$	51,022	$	(792)	$	(672,545)	$	332,257

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
	2022		2021
(in thousands)	(unaudited)
Cash flows used in operating activities:
Net loss	$	(73,145)	$	(97,389)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,678		1,264
Share-based compensation expense	17,078		15,574
Other, net	2,511		(2,904)
Net changes in operating assets and liabilities
Accounts receivable	(2,758)		(4,418)
Inventories, net	(7,953)		(3,449)
Prepaid expenses and other current assets	(4,914)		(1,987)
Non-current assets	(517)		229
Accounts payable, accrued and other liabilities	(6,242)		1,031
Lease liabilities	(355)		529
Net cash used in operating activities	(74,617)		(91,520)
Cash flows used in investing activities:
Purchase of investments	(232,955)		(216,987)
Proceeds from investments	225,677		164,651
Upfront lease payment	—		(11,838)
Purchase of non-current assets	(118)		(364)
Additions to internal use-software implementation costs	—		(1,039)
Net cash used in investing activities	(7,396)		(65,577)
Cash flows from financing activities
Proceeds from exercise of stock options and employee share purchase plan	1,745		6,278
Proceeds from exercise of warrants	—		30
Cash provided by financing activities	1,745		6,308
Net decrease in cash, cash equivalents and restricted cash	(80,268)		(150,789)
Cash, cash equivalents and restricted cash, beginning of period	231,900		272,350
Cash, cash equivalents and restricted cash, end of period	$	151,632	$	121,561
Supplemental cash flow information
Cash received for interest	$	528	$	376
Cash paid for taxes	$	(779)	$	(236)
Cash paid for amounts included in the measurement of lease liabilities	$	(572)	$	(128)
Supplemental disclosure of noncash transactions
Initial recognition of operating lease right-of-use asset	$	—	$	419
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash, cash equivalents	$	151,408	$	121,561
Restricted cash	224		—
Total cash, cash equivalents and restricted cash	$	151,632	$	121,561

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.Organization and Description of Business

Aurinia Pharmaceuticals Inc. (Aurinia or the Company) is a fully integrated biopharmaceutical company focused on delivering therapies to treat targeted patient populations that are impacted by serious diseases with a high unmet medical need. In January 2021, the Company introduced LUPKYNIS™ (voclosporin), the first U.S. Food and Drug Administration (FDA) approved oral therapy for the treatment of adult patients with active lupus nephritis (LN) and continue to conduct pre-clinical, clinical, and regulatory activities to support the voclosporin development program as well as our other assets.

On August 17, 2021, the Company announced the addition of two novel assets AUR200 and AUR300. AUR200 is currently undergoing pre-clinical development with projected submission of an Investigational New Drug Application (IND) to the FDA in 2023. The Company anticipates that an IND for AUR300 will also be submitted during 2023.

Aurinia's head office is located at #1203-4464 Markham Street, Victoria, British Columbia, Canada and its registered office is located at #201, 17873-106 A Avenue, Edmonton, Alberta. Aurinia also has a U.S. commercial office located at 77 Upper Rock Circle Suite 700, Rockville, Maryland, 20850 United States.

Aurinia is incorporated pursuant to the Business Corporations Act (Alberta). The Company’s common shares are traded on the Nasdaq Global Market (Nasdaq) under the symbol AUPH.

2.Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments considered necessary for fair presentation in accordance with U.S. GAAP. The condensed consolidated balance sheet as of December 31, 2021 was derived from audited annual consolidated financial statements but does not include all annual disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year or any other future periods.

These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Aurinia Pharma U.S., Inc. (Delaware incorporated) and Aurinia Pharma Limited (UK incorporated). All intercompany balances and transactions have been eliminated in consolidation and operate in one segment.

These unaudited condensed consolidated financial statements are presented in U.S. dollars which is the Company's functional currency therefore there is no currency translation adjustment upon consolidation as the remeasurement of gains or losses are recorded in the condensed consolidated statements of operations. All assets and liabilities denominated in a foreign currency are remeasured into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are remeasured at the average exchange rate during the period. Foreign exchange gains and losses arising on translation or settlement of a foreign currency denominated monetary item are included in the condensed consolidated statements of operations.

The Company is devoting the majority of our operational efforts and financial resources towards the commercialization and post approval commitments of our approved drug, LUPKYNIS. The Company is also expending efforts towards our newly acquired assets AUR200 and AUR300. Taking into consideration the Company's cash, cash equivalents, restricted cash and investments of $391.7 million as of June 30, 2022, the Company believes that it has sufficient resources to fund its operations for at least the next few years beyond the date that the unaudited condensed consolidated financial statements are issued.

Significant Accounting Policies

Other than as described below, the Company's significant accounting policies have not changed from those previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Restricted cash: Restricted cash consists of the 2021 Employee Share Purchase Plan (2021 ESPP) deposits of $0.2 million and $0.3 million as of June 30, 2022 and December 31, 2021, respectively.

Major Customers: The Company currently has two main customers for U.S. commercial sales of LUPKYNIS and one customer for sales of voclosporin in the European Union, Japan, as well as the United Kingdom, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein and Ukraine. Revenues from the two main customers in the U.S. accounted for approximately 54% and 45% respectively of the Company's total revenues for the three and six months ended June 30, 2022. In late March 2022, we provided a nominal additional discount to both of our two main customers, applicable for the remainder of the 2022 calendar year, in connection with holding additional amounts of LUPKYNIS on hand due to supply chain concerns. The Company monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. The Company regularly communicates with its customers regarding the status of receivable balances. Global economic conditions and customer specific factors may require the Company to periodically re-evaluate the collectability of its receivables and based on this evaluation the Company could potentially incur credit losses.

Accounts receivable, net: Accounts receivable are stated at their net realizable value. As of June 30, 2022 and December 31, 2021, accounts receivable, net are $18.2 million and $15.4 million. The timing between the recognition of revenue for product sales and the receipt of payment is not significant. Our standard credit terms, range from 30 to 45 days. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between the transfer of the promised good to the customer and receipt of payment will be one year or less. We estimate the allowance for doubtful accounts using the current expected credit loss model, or CECL model. Under the CECL model, the allowance for doubtful accounts reflects the net amount expected to be collected from the account receivables. We evaluate the collectability of these cash flows based on the asset’s amortized cost, the risk of loss even when that risk is remote, losses over an asset’s contractual life, and other relevant information available to us. Accounts receivable balances are written off against the allowance when it is probable that the receivable will not be collected. The allowance for doubtful accounts was $nil as of June 30, 2022 and as of December 31, 2021.

Share-Based Compensation: The Company follows ASC Topic 718, Compensation - Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards made to employees and directors. The Company records compensation expense based on the fair value on the grant date using the graded accelerated vesting method for all share-based payments related to stock options, performance awards (PAs), restricted stock units (RSUs) and purchases under the Company's 2021 ESPP. For stock options, forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. For RSUs and PAs, forfeitures are accounted for as they occur.

Recently adopted accounting pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes such as eliminating the exception to the general intraperiod tax allocation principle. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The Company adopted the ASU effective January 1, 2021, with no material impact on the condensed consolidated financial statements.

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which requires business entities to make annual disclosures about transactions with a government (including government assistance) by analogizing to a grant or contribution accounting model. The required disclosures include the nature of the transaction, the entity's related accounting policy, the financial statement line items affected and the amounts reflected in the current period financial statements, as well as any significant terms and conditions. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted the ASU effective January 1, 2022, with no material impact on the condensed consolidated financial statements.

3. Fair Value Measurements

The Company's financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities. The carrying value of accounts receivable, accounts payable and accrued

liabilities approximate their fair value because of their short-term nature. Estimated fair value of available-for-sale securities are generally based on prices obtained from commercial pricing services.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

•Level 1 - Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3 - Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table summarizes the financial assets (cash, cash equivalents, restricted cash and short-term investments) measured at fair value on a recurring basis:

	June 30, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Financial assets:
Cash, cash equivalents and restricted cash	$	151,632	$	—	$	—	$	151,632
Certificates of deposit	—		3,132		—		3,132
Corporate bond	—		80,852		—		80,852
Commercial paper	93,041		—		—		93,041
Treasury bill	—		11,002		—		11,002
Treasury bond	—		49,744		—		49,744
Yankee bond	—		2,333		—		2,333
Total financial assets	$	244,673	$	147,063	$	—	$	391,736	December 31, 2021
---	---	---	---	---	---	---	---	---
(in thousands)	Level 1		Level 2		Level 3		Total
Financial assets:
Cash, cash equivalents and restricted cash	$	231,900	$	—	$	—	$	231,900
Certificates of deposit	—		3,140		—		3,140
Corporate bond	—		21,820		—		21,820
Commercial paper	206,724		—		—		206,724
Treasury bill	—		2,494		—		2,494
Total financial assets	$	438,624	$	27,454	$	—	$	466,078

The Company's Level 1 instruments include cash, cash equivalents, restricted cash and commercial paper that are valued using quoted market prices. We estimate the fair values of our investments in corporate debt securities, government and government related securities and certificates of deposits by taking into consideration valuations obtained from third-party pricing services. The fair value of our short-term investments classified within Level 2 is based upon observable inputs that may include benchmark yield curves, reported trades, issuer spreads, benchmark securities and reference data including market research publications. At June 30, 2022, and December 31, 2021, the weighted average remaining contractual maturities of our Level 1 and 2 investments were 8 months for both periods. These investments are rated A-1, or higher, by Moody’s and Standard & Poor’s.

There were no sales of available-for-sale securities. No credit loss allowance was recorded as of June 30, 2022, as we do not believe the unrealized loss is a result of a credit loss due to the nature of our investments. We also considered the current and expected future economic and market conditions and determined that the estimate of credit losses was not significantly impacted.

Refer to Note 4, “Cash, Cash Equivalents, Restricted Cash and Short-Term Investments,” for the carrying amount and related unrealized gains (losses) by type of investment.

4. Cash, Cash Equivalents, Restricted Cash and Short-Term Investments

As of June 30, 2022 and December 31, 2021, the Company had $391.7 million and $466.1 million, respectively of cash, cash equivalents, restricted cash and short-term investments summarized below. As of June 30, 2022, $3.4 million are held to maturity debt securities which are carried at amortized cost which is approximately equal to their fair market value. As of June 30, 2022, $388.4 million are available-for-sale debt securities which are carried at fair market value. As of December 31, 2021, $446.9 million were classified as available-for-sale and $19.2 million were held-to-maturity.

	June 30, 2022
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized (Losses)		Estimated Fair Value
Cash, cash equivalents and restricted cash	$	151,632	$	—	$	—	$	151,632
Certificates of deposit	3,144		—		(11)		3,133
Corporate bond	78,001		—		(511)		77,490
Commercial paper	93,357		—		(316)		93,041
Treasury bill	11,045		—		(44)		11,001
Treasury bond	49,901		—		(157)		49,744
Yankee bond	2,342		—		(9)		2,333
Total	$	389,422	$	—	$	(1,048)	$	388,374
Total held to maturity securities at amortized cost							3,362
Total cash, cash equivalents, restricted cash and short-term investments							$	391,736
	December 31, 2021
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized (Losses)		Estimated Fair Value
Cash, cash equivalents and restricted cash	$	231,900	$	—	$	—	$	231,900
Certificates of deposit	3,144		—		(4)		3,140
Corporate bond	2,592		—		(1)		2,591
Commercial paper	206,764		—		(40)		206,724
Treasury bill	2,497		—		(2)		2,495
Total	$	446,897	$	—	$	(47)	$	446,850
Total held to maturity securities at amortized cost							19,228
Total cash, cash equivalents, restricted cash and short-term investments							$	466,078

As of June 30, 2022 and December 31, 2021, accrued interest receivable from the investments were $0.9 million and $0.1 million, respectively. During the three and six months ended June 30, 2022, the Company had $235 thousand and $1.0 million unrealized losses on available-for-sale securities, net of tax, respectively, which are included as a component of comprehensive loss on the consolidated statements of operations. Currently, the Company does not intend to sell investments that are in an unrealized loss position, and it is unlikely we will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity. We have determined that the gross unrealized losses on our investments at June 30, 2022, were temporary in nature. The Company's investments as of June 30, 2022 mature at various dates through February 2023.

5. Inventories, net

Inventories are valued under a standard costing methodology on a first-in, first-out basis and are stated at the lower of cost or net realizable value. The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of

costs. Capitalized costs of inventories for LUPKYNIS mainly include third party manufacturing costs, transportation, storage, insurance, and allocated internal labor.

The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories. During the quarter ended June 30, 2022, we recorded a write down of finished goods inventories of approximately $1.4 million, which was related to safety stock inventory that the Company carried to mitigate supply chain disruptions.

The components of inventory, net are as follows:

(in thousands)	June 30, 2022		December 31, 2021
Raw materials	$	2,217	$	2,217
Work in process	19,418		12,566
Finished goods	4,228		4,543
Total inventories	$	25,863	$	19,326

6.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are as follows:

(in thousands)	June 30, 2022		December 31, 2021
Prepaid assets	$	8,320	$	5,316
Prepaid deposits	4,109		4,762
Prepaid insurance	3,904		1,632
Other current assets	1,088		796
Total prepaid expenses and other current assets	$	17,421	$	12,506

7.Intangible Assets

The following table summarizes the carrying amount of intangible assets, net of accumulated amortization.

	June 30, 2022
(in thousands)	Gross Carrying<br>Value		Accumulated<br>Amortization		Net Carrying<br>Amount
Patents	$	1,450	$	(1,225)	$	225
Acquired intellectual property and reacquired rights	15,126		(9,321)		5,805
Internal-use software implementation costs	2,873		(1,565)		1,308
	$	19,449	$	(12,111)	$	7,338	December 31, 2021
---	---	---	---	---	---	---
(in thousands)	Gross Carrying<br>Value		Accumulated<br>Amortization		Net Carrying<br>Amount
Patents	$	1,471	$	(1,176)	$	295
Acquired intellectual property and reacquired rights	15,126		(8,804)		6,322
Internal-use software implementation costs	2,873		(1,086)		1,787
	$	19,470	$	(11,066)	$	8,404

Amortization expense for the three months ended June 30, 2022 and 2021 was $0.5 million for both periods and for the six months ended June 30, 2022 and 2021 was $1.0 million and $1.1 million, respectively.

8. Property and Equipment, net

Property and equipment, net are as follows:

(in thousands)	June 30, 2022		December 31, 2021
Construction in progress	$	488	$	393
Leasehold improvements	2,978		2,978
Office equipment	645		645
Furniture	976		976
Computer equipment	257		262
	5,344		5,254
Less accumulated depreciation	(1,161)		(836)
Property and equipment, net	$	4,183	$	4,418

9. Lease Obligations

The Company has the following lease obligations:

Victoria, British Columbia

During the fourth quarter of 2020, the Company entered into facility and furniture leases for its head office located in Victoria, British Columbia for a total space of 13,206 square feet of office space for the facility lease. The lease terms commenced on January 1, 2021 for the facility and furniture leases. As of June 30, 2022, the Company had $43 thousand right-of-use assets (ROU assets) and $43 thousand lease liabilities related to the leases. The Company recognized operating lease costs that are included in SG&A expenses in the condensed consolidated statements of operations. The incremental borrowing rate applied to the lease liabilities on January 1, 2021 was 4.08% based on financial position of the Company, geographical region and terms of lease.

During August 2020, the Company signed a lease for commercial office space in Victoria, British Columbia. The present value of the expected minimum lease payments for this lease are $2.2 million. As of June 30, 2022, the lease has not commenced and as a result, there has been no accounting recognition associated with the lease. On August 3, 2022, we provided notice of termination of the lease for commercial office space in Victoria on the basis that the landlord's work was not completed by the time required under the lease.

Rockville, Maryland

During March 2020, the Company entered into a lease for its U.S. commercial office in Rockville, Maryland for a total of 30,531 square feet of office space. The lease has a remaining term of approximately 9 years and has an option to extend for two five-year periods after the initial term of 11 years has elapsed and has an option to terminate after seven years. As of June 30, 2022, the Company had a right-of-use asset of $5.0 million and lease liability of $8.3 million included in the condensed consolidated balance sheets. As of December 31, 2021, the Company had a right of use asset of $5.2 million and lease liability of $8.6 million included in the condensed consolidated balance sheets. The Company recorded leasehold improvement incentives in the amount of $2.3 million as additions to the lease liability. The lease term commenced on March 12, 2020. When measuring the lease liability, the Company discounted lease payments using its incremental borrowing rate at March 12, 2020. The incremental borrowing rate applied to the lease liability on March 12, 2020 was 5.2% based on the financial position of the Company, geographical region and term of lease.

Edmonton, Alberta

The Company recognized the lease premises in Edmonton, Alberta as a short-term lease in which expenses are incurred in SG&A. The lease is not material to the Company's financial position.

Beginning January 1, 2021, the Company began to incur variable lease costs under the existing Victoria and Rockville leases. These costs include operation and maintenance costs included in SG&A and are expensed as incurred. The variable lease costs are not material to the Company's financial position.

The operating lease costs for the three and six months ended June 30, 2022 and June 30, 2021 are $0.3 million and $0.5 million for both periods respectively.

The following table represents the weighted-average remaining lease term and discount rate as of June 30, 2022:

	As of June 30, 2022
	Weighted Average Remaining Lease Term (years)	Weighted Average Discount Rate
Operating leases	9.1	5.22%

The following table provides a summary of operating lease liabilities payments for the next five years and thereafter:

(in thousands)	Operating Lease Payments
Remainder of 2022	$	566
2023	1,061
2024	1,085
2025	1,110
2026	1,135
Thereafter	5,638
Total future minimum lease payments	10,595
Less: lease imputed interest	(2,211)
Total future minimum lease payments	$	8,384

On December 15, 2020, the Company entered into a collaborative agreement with Lonza to build a dedicated manufacturing facility within Lonza’s existing small molecule facility in Visp, Switzerland. The dedicated facility (also referred to as "monoplant") will be equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacture of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand.

Following U.S. regulatory approval of LUPKYNIS in January 2021, the Company has commenced a capital expenditure payment program for the monoplant totaling approximately CHF 21.0 million. The first capital expenditure payment was made in February 2021 of $11.8 million (CHF 10.5 million) and was treated as an upfront lease payment and recorded under other non-current assets on the condensed consolidated balance sheets. The second payment is not due until the facility fulfills the required operational qualifications which is estimated to be during the first half of 2023. Upon completion of the monoplant, the Company will have the right to maintain sole dedicated use of the monoplant by paying a quarterly fixed facility fee. The Company expects to account for the arrangement as a finance lease under ASC 842. The present value of the minimum lease payments total approximately $74.0 million, beginning April 2023 and expiring in 2030, and are not included in the above table.

The Company has entered into an equipment and facility finance lease for a backup manufacturing encapsulation site that has not yet commenced and is therefore, not included in the above table. As part of the agreement, the Company expects to make payments of approximately $885 thousand prior to lease commencement and the future value of minimum lease payments will total approximately $119 thousand.

10.Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are as follows:

(in thousands)	June 30, 2022		December 31, 2021
Employee accruals	$	12,449	$	18,278
Commercial accruals	8,880		5,916
Accrued R&D projects	5,731		6,412
Other accrued liabilities	4,499		3,527
Income taxes payable	821		814
Total accounts payable and accrued liabilities	$	32,380	$	34,947

11.Deferred Compensation and Other Non-current Liabilities

The Company recorded other non-current liabilities of $16.3 million and $16.0 million as of June 30, 2022 and December 31, 2021, respectively. The balance as of June 30, 2022 and December 31, 2021 primarily included deferred compensation arrangements whereby certain executive officers as of March 8, 2012 were provided with future potential employee benefit obligations for remaining with the Company, for a certain period of time. These obligations were also contingent on the occurrence of uncertain future events. Other non-current liabilities also include milestone payments deemed probable to be paid in the future.

12.License and Collaboration Agreements

Otsuka Contract

On December 17, 2020, the Company entered into a collaboration and license agreement with Otsuka Pharmaceutical Co., Ltd. (Otsuka) for the development and commercialization of oral LUPKYNIS in the EU, Japan, as well as the United Kingdom, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein and Ukraine (collectively, the "Otsuka Territories").

As part of the agreement, Aurinia received an upfront cash payment of $50.0 million for the license agreement and has the potential to receive up to $50.0 million in regulatory related milestones. Aurinia will receive tiered royalties on future sales ranging from 10 to 20 percent (dependent on achievement of sale thresholds) on net sales upon commercialization, along with additional milestone payments based on the attainment of certain annual sales by Otsuka. In addition, certain manufacturing services and product sales are provided to Otsuka on a cost-plus basis.

The remaining forms of consideration are variable because they are dependent on achieving milestones or are based on aggregate future net sales for the regions. None of the regulatory milestones have been included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including the magnitude of a potential reversal of revenue, uncertainty about if or when the milestone related performance obligations might be achieved, and that receipt of the milestones are outside the control of the Company since they are dependent on efforts to be undertaken by Otsuka and regulatory approval by various foreign government agencies. Any consideration related to sales-based royalties (and sales-based thresholds) will be recognized when the related sales occur.

For three and six months ended June 30, 2022, the Company recorded $13 thousand and $117 thousand, respectively, of collaboration revenue related to manufacturing services provided under the Otsuka contract.

In furtherance of the collaboration and license agreement with Otsuka mentioned above, on August 1, 2022, the Company entered into a commercial supply agreement with Otsuka, formalizing the terms of its obligations to supply LUPKYNIS to Otsuka in the Otsuka Territories, on a cost-plus basis.

Riptide License

On August 17, 2021, AUR300 (M2 macrophage modulation via CD206 binding) was secured through a global licensing and research agreement with Riptide Bioscience, Inc. (Riptide), a private company. As part of the agreement, in 2021 the Company paid Riptide an upfront license fee of $6.0 million which was expensed as research and development on the condensed

consolidated statements of operations. During the first quarter of 2022, Aurinia paid $4.0 million for the achievement of a one-time milestone. Additional payments are due upon certain development, clinical and regulatory milestones, and royalties will be payable upon commercialization. It is anticipated that clinical development for AUR300 will commence during 2023.

13.Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share. The numerator and denominator used in the calculation of basic and diluted net loss per common share are as follows:

	Three months ended<br>June 30,				Six Months Ended<br>June 30,
(in thousands, except per share data)	2022		2021		2022		2021
Net loss	$	(35,515)	$	(47,010)	$	(73,145)	$	(97,389)
Weighted average common shares outstanding	141,726		128,222		141,734		127,814
Net loss per common share (expressed in $ per share)	$	(0.25)	$	(0.37)	(0.52)		(0.76)

The Company did not include the securities in the following table in the computation of the net loss per common share because the effect would have been anti-dilutive during each period:

	Six months ended<br>June 30,
(in thousands)	2022	2021
Stock options	14,355	14,339
Unvested performance awards	—	439
Unvested restricted units	2,008	—
Warrants	—	1,014
	16,363	15,792

14.Share-based Compensation

The Company's Amended and Restated Equity Incentive Plan (the Plan), which was adopted and approved by the Company's shareholders in June 2021, allows for an issuance of up to an aggregate of 23.8 million shares (inclusive of then outstanding awards) and provides for grants of stock options, performance awards, restricted stock and restricted stock units (RSUs) that may be settled in cash and common shares. Also in June 2021, the Company's shareholders adopted and approved the Company's 2021 ESPP, which allows for the issuance of up to 2.5 million shares. The 2021 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (the “Code”) but also permits the Company to include the employees, including non-United States employees, in offerings not intended to qualify under Section 423. The purpose of the 2021 ESPP is to provide eligible employees with opportunities to purchase the Company’s common shares at a discounted price.

During the second quarter of 2022, the Company modified the 2021 ESPP for the current and future offerings. The new ESPP terms shortened the plan from four (4) purchases over a 24 month Offering Period to two (2) purchases over a 12 month offering period. Additionally, the ESPP now contains a rollover mechanism; that is, if the stock price on the purchase date is less than the offering price (as that is determined under the 2021 ESPP), that offering is then canceled and any participants are rolled into the new 12 month offering period at the lower price.

As a result of the modification, $475 thousand of incremental expense was added to the estimated expense for the November 2022 and May 2023 purchase dates (to be amortized over the new 12 month offering period). Additionally, the originally scheduled purchase date in November 2023 is no longer planned given the new 12 month offering period; therefore, the modification also resulted in a “repurchase for no consideration” under ASC 718. The Company recognized an additional $651 thousand of unamortized expense for the cancelled November 2023 purchase, which was recorded during the second quarter of 2022.

Inducements

The Company’s Compensation Committee granted 11 new employees inducement stock options to purchase an aggregate of 93,200 common shares, at a per share exercise price of $11.38, the closing price of Aurinia's common stock on June 3, 2022, and an aggregate of 54,300 inducement RSUs. The inducement RSUs have a grant date and vesting commencement date of June 6, 2022. The stock options and RSUs were granted as inducements material to the new employees entering employment with Aurinia in accordance with Nasdaq Listing Rule 5635(c)(4).

Stock Options

The Plan requires the exercise price of each option not to be less than the closing market price of the Company’s common shares on the day immediately prior to the date of grant. The board of directors approves the vesting criteria and periods at its discretion. The options issued under the plan are accounted for as equity-settled share-based payments.

The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted. The Company considers historical volatility of its common shares in estimating its future stock price volatility. The risk-free interest rate for the expected life of the options was based on the yield available on government benchmark bonds with an approximate equivalent remaining term at the time of the grant. The expected life is based upon the contractual term, taking into account expected employee exercise and expected post-vesting employment termination behavior.

The following weighted average assumptions were used to estimate the fair value of the options granted during the six months ended June 30, 2022 and June 30, 2021:

	2022			2021
Annualized volatility	70		%	66		%
Risk-free interest rate	1.83		%	0.35		%
Expected life of options in years	5.0 years			4.0 years
Estimated forfeiture rate	11.7		%	8.8		%
Dividend rate	0.0		%	0.0%
Fair value per common share option	$	7.00		$	6.59

The following table summarizes the option award activity during the six months ended June 30, 2022:

	June 30, 2022
	Number of shares (in thousands)	Weighted average exercise price
Outstanding - Beginning of Period	12,074
Granted	3,061	11.96
Exercised	(77)	6.75
Forfeited	(703)	15.73
Outstanding - End of Period	14,355

All values are in US Dollars.

Performance Awards and Restricted Stock Units

On October 23, 2020, the Company issued 439,000 PAs to executive management of the Company whose vesting was contingent upon meeting specific performance metrics based on the results for the year ended December 31, 2021. Each PA which vested entitled the participant to receive common shares on the basis of the performance metrics set. On March 18, 2021 performance metrics were set and formally communicated. Therefore, March 18, 2021 was the grant date and the fair value on the grant date was $13.56. As of June 30, 2022, approximately 88,000 PAs vested based on performance metrics achieved and 351,000 were canceled as of December 31, 2021 as performance metrics were not met.

On August 6, 2021, the Company granted approximately 619,000 PAs and RSUs. The grant date for the PAs and RSUs was August 6, 2021 and the fair value on the grant date was $14.42 as this was the date performance measures were set and communicated to employees. The PAs vest on the employee's first anniversary of the grant date and the employee must achieve at least one of the performance metrics to obtain the portion of the award associated with the metric. The RSUs have no

performance metrics and will vest on the one year anniversary of the grant.

During the quarter, the Company has granted RSUs and intends to grant RSUs throughout the year under the Plan, as well as inducements for certain new hires. The RSUs are fair valued based on the market price of our common shares on the date of the grant.

The following table summarizes the PAs and RSU activity for the six months ended June 30, 2022:

	June 30, 2022
	Number of shares (in thousands)	Weighted average exercise price
Outstanding - Beginning of Period	347
Granted	1,863	12.01
Vested	(88)	13.56
Forfeited	(114)	13.99
Outstanding - End of Period	2,008

All values are in US Dollars.

Compensation Expense

The Company recognized share-based compensation expense for the three and six month periods ended June 30, 2022 and June 30, 2021 as follows:

	Three months ended<br>June 30,				Six Months Ended<br>June 30,
(in thousands)	2022		2021		2022		2021
Research and development	$	1,066	$	1,089	$	2,042	$	2,163
Selling, general and administrative	8,883		6,548		14,855		13,189
Capitalized under inventories	106		116		181		222
Share-based compensation expense	$	10,055	$	7,753	$	17,078	$	15,574

As of June 30, 2022, there was $39.2 million of unrecognized share-based compensation expense related to unvested awards granted which is expected to be recognized over a weighted-average period of approximately 1.4 years.

15.Income Taxes

The effective tax rates for the three and six months ended June 30, 2022 and June 30, 2021 differed from the federal statutory rate applied to losses before income taxes primarily as a result of the mix of income, losses and valuation allowances. The Company recognized an income tax expense of $9 thousand and $19 thousand for the three and six months ended June 30, 2022. respectively. The Company recognized an income tax expense of $18 thousand and $26 thousand for the three and six months ended June 30, 2021, respectively. The expense recognized for these periods is a result of income in certain jurisdictions. The Company currently has tax expense in certain jurisdictions that are not offset by tax benefits.

Uncertain Tax Positions

The Company was under examination by the Canadian Revenue Agency for years 2017 and 2018. In March 2022, the Company was notified by the Canadian Revenue Agency that the examination is now complete and there were no findings and as a result, there is no additional tax expense or benefit recognized in regards to the audit. There are no outstanding tax audits ongoing at June 30, 2022.

16.Related Party Transactions

ILJIN SNT Co., Ltd (ILJIN) was considered to be a related party due to their equity ownership of over 5% as per their public filing. The outstanding related party amount payable to ILJIN was the result of a settlement completed on September 20, 2013 between ILJIN and the Company. During 2021, Aurinia paid ILJIN $6.0 million upon achievement of specific milestones. The amount payable to ILJIN is nil as of June 30, 2022 and December 31, 2021.

17.Commitments and Contingencies

The Company may, from time to time, be subject to claims and legal proceedings brought against it in the normal course of business. Such matters are subject to many uncertainties. Management believes the ultimate resolution of such contingencies will not have a material adverse effect on the consolidated financial position of the Company. The Company's material commitments and contingencies have not changed in any material manner from those previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and the quarterly report for the quarter ended June 30, 2022.

Other Funding Commitments

In the normal course of business, the Company enters into agreements with contract research organizations, contract manufacturing organizations and other third parties for services to be provided to the Company. Generally, these agreements provide for termination upon notice, with specified amounts due upon termination based on the timing of termination and the terms of the agreement. The actual amounts and timing of payments under these agreements are uncertain and contingent upon the initiation and completion of services to be provided to the Company.

18.Subsequent Event

The Company’s Compensation Committee granted 10 new employees an aggregate of 123,100 inducement stock options and an aggregate of 73,700 inducement RSUs. The options have a per share exercise price of $8.18, the closing price of Aurinia's common stock on July 29, 2022. The inducement RSUs have a grant date and vesting commencement date of August 1, 2022. The stock options and RSUs were granted as inducements material to the new employees entering employment with Aurinia in accordance with Nasdaq Listing Rule 5635(c)(4).

On July 14, 2022, Aurinia announced the appointment of Volker Knappertz, MD, as Executive Vice President (EVP), Research and Development and Scott Habig has been named Chief Commercial Officer. Max Colao, former Chief Commercial Officer is leaving the Company immediately to tend to personal matters. In connection with the announced appointments, the Company's Compensation Committee granted an aggregate of 488,095 inducement stock options and an aggregate of 290,343 inducement RSUs.

In July 2022, Aurinia announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending voclosporin (brand name, LUPKYNIS) for marketing authorization to treat adults with active LN. Upon approval by the EMA, we would be eligible for up to an additional $30.0 million as an approval related milestone, in addition to low double-digit royalties on sales and revenues for the supply of product to Otsuka under a cost-plus arrangement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report. The information in this discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act, which are subject to the “safe harbor” created by those sections, as well as “forward-looking information” as defined in applicable Canadian securities laws. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans; objectives of management; the key potential benefits of LUPKYNIS; our belief that we have sufficient financial resources to fund our current plans for at least the next few years; and our potential to receive certain payments and royalties under our agreement with Otsuka; and that an IND is expected to be submitted for AUR200 and AUR300 in 2023; the receipt of up to $30 million in milestone payments from Otsuka upon EMA approval. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “propose,” “intend,” “continue,” “potential,” “possible,” “foreseeable,” “likely,” “unforeseen” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We have made numerous assumptions about the forward-looking statements and information contained herein, including among other things, assumptions about: the accuracy of reported data from third party studies and reports; that our IP rights are valid and do not infringe the IP rights of third parties; our assumptions relating to the capital required to fund operations for the next 12 months; the assumption that our current good relationships with our suppliers, service providers and other third parties will be maintained; assumptions relating to the burn rate of our cash for operations; assumptions relating to the capital required to fund operations for the next few years; assumptions relating to the progress of our pre-clinical activities that our third party service providers will comply with their contractual obligations. Even though management believes that the assumptions made, and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. We discuss many of these risks, uncertainties and other factors in greater detail under the heading “Risk Factors” in Part I, Item 1A of our 2021 Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission on February 28, 2022 and with applicable Canadian securities regulatory authorities. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this discussion completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by our cautionary statements. Except as required by law, we assume no obligation to update our forward-looking statements publicly, or to update the reasons that actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Overview

Aurinia is a fully integrated biopharmaceutical company focused on delivering therapies to treat targeted patient populations that are impacted by serious diseases with a high unmet medical need. In January 2021, we introduced LUPKYNIS® (voclosporin), the first FDA-approved oral therapy for the treatment of adult patients with active LN and continue to conduct pre-clinical, clinical, and regulatory activities to support the voclosporin development program as well as our other assets.

LUPKYNIS is an orally administered CNI immunosuppressant that has been demonstrated to improve near and long-term outcomes in LN when used in combination with mycophenolate mofetil (MMF) (although MMF is not currently approved as such) and steroids. By inhibiting calcineurin, LUPKYNIS reduces cytokine activation and blocks interleukin IL-2 expression and T-cell mediated immune responses. LUPKYNIS also potentially stabilizes podocytes, which can protect against proteinuria. Voclosporin, the active ingredient in LUPKYNIS, is made by a modification of a single amino acid of the cyclosporine molecule. The mechanism of action of LUPKYNIS has been validated with certain earlier generation CNIs for the prevention of rejection in patients undergoing solid organ transplants and in several autoimmune indications, including uveitis, keratoconjunctivitis sicca, psoriasis, rheumatoid arthritis, and for LN in Japan. We believe that LUPKYNIS possesses pharmacologic properties with the potential to demonstrate best-in-class differentiation.

Aurinia announced during the fourth quarter of 2021 the initiation of ENLIGHT-LN, a U.S. based prospective, observational registry of adult patients with LN treated with LUPKYNIS. The registry is intended to support the interests of patients,

clinicians, regulatory bodies, payers and industry by obtaining longitudinal data on LUPKYNIS. During the first quarter of 2022, we began actively enrolling patients.

In July 2022, Aurinia announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending voclosporin (brand name, LUPKYNIS) for marketing authorization to treat adults with active LN. Upon approval by the EMA, we would be eligible for up to an additional $30 million as an approval related milestone, in addition to low double-digit royalties on net sales and revenues for the supply of product to Otsuka under a cost-plus arrangement.

Critical Accounting Policies and Significant Judgments and Estimates

There have been no material changes to the Company’s critical accounting policies and significant judgments and estimates as described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Results of Operations

Three and Six Months ended June 30, 2022 compared to Three and Six Months ended June 30, 2021

The following table sets forth our results of operations for the three and six months ended June 30, 2022 and June 30, 2021.

	Three months ended June 30,						Six Months Ended June 30,
	2022		2021		Change		2022		2021		Change
	(in thousands)						(in thousands)
Revenue
Product revenue, net	$	28,148	$	6,591	$	21,557	$	49,640	$	7,475	$	42,165
License and collaboration revenue	43		29		14		176		59		117
Total revenue, net	28,191		6,620		21,571		49,816		7,534		42,282
Operating expenses											—
Cost of sales	1,599		308		1,291		1,855		356		1,499
Selling, general and administrative	51,532		44,322		7,210		96,729		84,127		12,602
Research and development	11,525		10,091		1,434		24,145		19,924		4,221
Other (income) expense, net	(476)		(967)		491		958		804		154
Total cost of sales and operating expenses	64,180		53,754		10,426		123,687		105,211		18,476
Loss from operations	(35,989)		(47,134)		11,145		(73,871)		(97,677)		23,806
Interest income	483		142		341		745		314		431
Net loss before income taxes	(35,506)		(46,992)		11,486		(73,126)		(97,363)		24,237
Income tax expense	9		18		(9)		19		26		(7)
Net loss	$	(35,515)	$	(47,010)	$	11,495	$	(73,145)	$	(97,389)	$	24,244

Revenues

Total net revenue was $28.2 million and $6.6 million for the three months ended June 30, 2022 and June 30, 2021, respectively. Total revenue was $49.8 million and $7.5 million for the six months ended was June 30, 2022 and June 30, 2021, respectively. Our net revenues primarily consisted of product revenue, net of adjustments, for LUPKYNIS following FDA approval in late January 2021. Revenue growth is attributed to further progress in the launch of LUPKYNIS, driven predominantly by further

penetration in the lupus nephritis market. No product sales commenced and no product marketing was permitted prior to January 22, 2021.

Cost of Sales

Cost of sales were $1.6 million and $308 thousand for the three months ended June 30, 2022 and June 30, 2021, respectively. Cost of sales were $1.9 million and $356 thousand for the six months ended June 30, 2022 and June 30, 2021, respectively. The increase for both periods was primarily due to an increase in product related revenue, coupled with safety stock inventory reserves. No product sales commenced prior to January 22, 2021.

Gross margin for the three months ended June 30, 2022 and June 30, 2021 was approximately 94% and 95% respectively. Gross margin for the six months ended June 30, 2022 and June 30, 2021 was approximately 96% and 95% respectively.

Selling, General and Administrative Expenses

SG&A expenses increased to $51.5 million for the three months ended June 30, 2022 compared to $44.3 million for the three months ended June 30, 2021. For the six months ended June 30, 2022 and June 30, 2021, SG&A expenses were $96.7 million and $84.1 million, respectively. SG&A expenses consisted of the following:

	Three Months Ended<br>June 30,				Six Months Ended<br>June 30,
(in thousands)	2022		2021		2022		2021
Salaries, incentive pay and employee benefits	$	19,542	$	19,548	$	42,065	$	38,742
Professional fees and services	15,669		12,709		26,567		21,426
Share-based compensation expense	8,883		6,548		14,855		13,189
Other corporate costs	4,370		3,529		7,998		7,334
Travel, trade shows and sponsorships	3,068		1,988		5,244		3,436
	$	51,532	$	44,322	$	96,729	$	84,127

The primary drivers for the increase for the three and six months ended June 30, 2022 as compared to the same periods ended June 30, 2021 were an increase in share-based compensation expense and professional fees related to corporate legal matters and increased investment in infrastructure to support the commercialization of LUPKYNIS. For the six months ended June 30, 2022, salaries also increased due to an increase in employee related expenses.

Research and Development Expenses

R&D expenses were $11.5 million and $10.1 million for the three months ended June 30, 2022 and June 30, 2021, respectively. For the six months ended June 30, 2022 and June 30, 2021, R&D expenses were $24.1 million and $19.9 million, respectively. R&D expenses consisted of the following:

	Three Months Ended<br>June 30,				Six Months Ended<br>June 30,
(in thousands)	2022		2021		2022		2021
Contract research organizations (CRO) and developmental expenses	$	5,658	$	5,074	$	12,385	$	9,706
Clinical supply and distribution	1,534		1,138		3,096		2,370
Salaries, incentive pay and employee benefits	2,997		2,713		6,270		5,737
Share-based compensation expense	1,066		1,089		2,042		2,163
Other costs	270		77		352		(52)
	$	11,525	$	10,091	$	24,145	$	19,924

The primary driver for the increase for the three and six months ended June 30, 2022 as compared to the same periods ended June 30, 2021 were due to an increase in CRO and developmental expenses related to AUR200 and AUR300.

Liquidity and Capital Resources

As of June 30, 2022, we had cash, cash equivalents and restricted cash and investments of $391.7 million compared to cash, cash equivalents and restricted cash and investments of $466.1 million at December 31, 2021. The decrease in cash, cash equivalents and restricted cash and investments is primarily related to the continued investment in commercialization activities, advancement of our pipeline and a payment for the achievement of a one-time milestone, partially offset by an increase in cash receipts from sales of LUPKYNIS. Cash, cash equivalents and restricted cash and investments are primarily held in U.S. dollars. As of June 30, 2022 and December 31, 2021, we had working capital of $418.6 million and $472.7 million, respectively.

We are devoting the majority of our operational efforts and financial resources towards the commercialization and post approval commitments of our approved drug, LUPKYNIS. We are also expending efforts towards our AUR200 and AUR300 assets. Taking into consideration the cash and cash equivalents and investments as of June 30, 2022, we believe that our cash position is sufficient to fund our current plans which include funding commercial activities, our FDA related post approval commitments, manufacturing commercial drug supply, funding our supporting commercial infrastructure, conducting our planned R&D programs, investing in our pipeline and funding our supporting corporate and working capital for at least the next few years.

Cash Flow Summary

The following table summarizes our cash flows for the six months ended June 30, 2022 and June 30, 2021:

	Six Months Ended June 30,
(in thousands)	2022		2021
Net cash (used in) provided by:
Operating activities	$	(74,617)	$	(91,520)
Investing activities	(7,396)		(65,577)
Financing activities	1,745		6,308
Net decrease in cash and cash equivalents	$	(80,268)	$	(150,789)

Net cash used in operating activities was $74.6 million for the six months ended June 30, 2022 compared to $91.5 million for the six months ended June 30, 2021. For the six months ended June 30, 2022, cash used in operating activities was primarily related to the continued investment in commercialization activities, payments made for our ongoing post approval obligations, advancement of our pipeline, inventory purchases and a payment for the achievement of a one-time milestone, partially offset by an increase in cash receipts from sales of LUPKYNIS. For the six months ended June 30, 2021 cash used in operating activities of $91.5 million was due to the continued support of commercialization efforts, inventory purchases and a one-time payment to a related party upon achievement of specific milestones. The decrease in net cash used in operating activities in 2022 compared to 2021 is primarily due to an increase in cash receipts from sales of LUPKYNIS.

Cash used in investing activities during the six months ended June 30, 2022 was $7.4 million compared to cash used in investing activities of $65.6 million during the six months ended June 30, 2021. The decrease was primarily related to purchases of investments offset by proceeds of maturities of investments and a nonrecurring upfront lease payment during the six months ended 2021.

Cash provided by financing activities during the six months ended June 30, 2022 was $1.7 million compared to cash provided by financing activities of $6.3 million during the six months ended June 30, 2021. The decrease was primarily due to less proceeds from the exercise of stock options.

Off‑Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off‑balance sheet arrangements as such term is defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Act.

Contractual Obligations

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Our activities can expose us to market risks which include interest rate risk, foreign currency risk, inflation risk and credit risk. Risk management is carried out by management under policies approved by our Board of Directors, with oversight provided by the Audit Committee of our Board of Directors. Our overall risk management program seeks to minimize adverse effects on our financial performance.

Interest Rate Risk

Financial assets and financial liabilities with variable interest rates expose us to cash flow interest rate risk. We manage our interest rate risk by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct

operations on a day-to-day basis. As of June 30, 2022 our investment portfolio includes cash, cash equivalents, restricted cash and investments of $391.7 million that earn interest at market rates. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. Our investments held during the year were comprised of highly rated instruments such as certificates of deposits, money market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities. As of June 30, 2022, these instruments have a maturity of less than a year.

As of June 30, 2022 a hypothetical decrease of 10 basis points on our interest rates of our investments would result in $0.2 million less interest in our portfolio.

Accounts receivable, accounts payable and accrued liabilities bear no interest. We do not believe that the results of operations or cash flows would be affected to any significant degree by a sudden change in market interest rates relative to our investment portfolio.

Foreign Currency Risk

We are exposed to financial risk related to the fluctuation of foreign currency exchange rates. Foreign currency risk for the Company is the risk variations in exchange rates between the U.S. dollar and foreign currencies, primarily with the Canadian dollar, Swiss Franc and Great British Pound, which could affect our operating and financial results. As of June 30, 2022, a 10% increase of the Canadian dollar would have increased the net loss by $0.1 million assuming all other variables remained constant. An assumed 10% weakening of the Canadian dollar would have had an equal but opposite effect to the amounts shown above, on the basis all other variables remain constant. There were no other foreign currency fluctuations that would have had a material impact on our financial condition or results of operations as of June 30, 2022.

Inflation Risk

Inflation has increased during the periods covered by this Quarterly Report, and is expected to continue to increase for the near future. Inflation may generally affect us by increasing our cost of labor, commercial support, manufacturing and clinical trial expenditures.

Credit Risk

Our exposure to credit risk generally consists of cash and cash equivalents, investments and accounts receivable. We place our cash and cash equivalents with highly rated financial institutions and invest the excess cash in highly rated investments. Our investment policy limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restriction on maturities and concentrations by asset class and issuer.

We are subject to credit risk in connection with our accounts receivable due from our two customers which accounted for 99% of our net trade accounts receivable balances as of June 30, 2022. We monitor economic conditions, the creditworthiness of our customers and government regulations and funding, both domestically and abroad. We regularly communicate with our customers regarding the status of receivable balances. During the quarter ended June 30, 2022, we did not recognize any allowance for doubtful accounts receivable related to credit risk for our customers.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2022, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings.

From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Except as set out below, there are no material developments to report in respect of the litigation described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 or the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

On June 16, 2022, the Company filed a reply to the petition for inter partes review filed by Sun Pharmaceuticals Inc. on February 24, 2022, with respect to U.S. Patent 10,286,036. On July 26, 2022, the United States Patent and Trademark Office's Patent Trial and Appeal Board instituted the inter partes review. A determination on patentability is expected on or prior to July 26, 2023.

Item 1A. Risk Factors.

Under Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 we identified important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Quarterly Report. There has been no material change in our risk factors subsequent to the filing of our prior reports referenced above except as mentioned below. However, the risks described in our reports are not the only risks we face. Additional risks and uncertainties that we currently deem to be immaterial or not currently known to us, as well as other risks reported from time to time in our reports to the SEC, also could cause our actual results to differ materially from our anticipated results or other expectations.

In response to the ongoing armed conflict in Ukraine, the U.S. government, numerous state governments, the EU and other countries in which we conduct business have imposed a wide range of economic sanctions that restrict commerce and business dealings with Russia, certain regions of Ukraine and certain entities. This conflict may also precipitate or amplify the other risks described herein and in our Annual Report on Form 10-K for the year ended December 31, 2021, Part I. Item A. Risk Factors including risks relating to cyber security, global economic conditions and supply chains which could adversely affect our business, operations and financial condition and results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

The following exhibits are filed as part of this report:

Exhibit<br>Number	Description
3.1	Articles of Amalgamation, as amended, as currently in effect (filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K with the SEC on February 24, 2021 and incorporated herein by reference)
3.2	Amended and Restated By-Law No. 2 amended as of April 23, 2021 (filed as Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on April 27, 2021 and incorporated herein by reference)
10.22+#	Employment Agreement between Aurinia Pharma U.S. Inc., and Volker Knappertz, M.D., dated July 11, 2022
10.23+#	Employment Agreement between Aurinia Pharma U.S. Inc., and Scott Habig dated June 27, 2022
10.46#	Supply Agreement by and between Aurinia Pharmaceuticals Inc. and Otsuka Pharmaceutical Co. Ltd. dated August 1, 2022
31.1*	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*	Filed herewith.
---	---
**	Furnished herewith. Exhibits 32.1 and 32.2 are being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.
+	Indicates a management contract of compensatory plan.
#	Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because they are not material and are the type that Aurinia treats as private or confidential.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AURINIA PHARMACEUTICALS INC.
August 3, 2022	By:	/s/ Peter Greenleaf
		Peter Greenleaf
		Chief Executive Officer, Director<br>(Principal Executive Officer)
August 3, 2022	By:	/s/ Joseph Miller
		Joseph Miller
		Chief Financial Officer<br>(Principal Financial and Accounting Officer)

Document

Exhibit 10.22

EMPLOYMENT AGREEMENT AURINIA PHARMA U.S., INC.

PRIVATE AND CONFIDENTIAL

July 11, 2022

Volker Knappertz, M.D.

[redacted]

Re: Terms of Employment with Aurinia Pharma U.S., Inc.

Dear Dr. Knappertz:

This Employment Agreement (“Agreement”) sets forth the terms and conditions of your employment with Aurinia Pharma U.S., Inc. (the “Corporation”), a Delaware corporation and wholly owned subsidiary of Aurinia Pharmaceuticals Inc., a corporation under the laws of the Province of Alberta (“Parent”) and will constitute your employment agreement. Those terms and conditions are set out below:

1. Position and Duties. You will be employed by the Corporation as Executive VP, Research and Development, having such duties and functions as are customary and usual for the title and reporting to Parent’s Chief Executive Officer.

2. Term. The terms and conditions of this Agreement shall have effect as of and from the date your employment commences on July 18, 2022 (the “Effective Date”), and your employment shall continue until terminated as provided in this Agreement.

3. Base Salary. The Corporation shall pay you a base salary at the rate of USD $500,000 per year (the “Base Salary”), payable semi-monthly and subject to applicable withholdings. As a managerial employee of the Corporation, you are not entitled to overtime pay, and your compensation noted above represents your pay for all hours worked for the Corporation.

4. Annual Review. The Board of Directors of Parent (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”), in conjunction with Parent’s Chief Executive Officer, shall review your Base Salary annually. This review shall not result in a decrease of your Base Salary, nor shall it necessarily result in an increase in your Base Salary, and any increase shall be in the sole discretion of the Board or Compensation Committee.

5. Discretionary Performance Bonus. Parent shall review the performance of your duties and functions under this Agreement annually (our fiscal year is a calendar year), and you shall be eligible to earn an annual target bonus equal to 50% of your Base Salary (the “Bonus”). Whether you receive such a bonus, and the amount of any such bonus, shall be determined by Parent’s Board of Directors (the “Board”) in its sole discretion, and shall be based upon both achievement of the Corporation’s corporate objectives and your individual performance objectives. The Corporation will not pro rate your Bonus for the 2022 calendar year, notwithstanding the Effective Date. Any bonus shall be paid within thirty (30) days after the Board’s determination that a bonus shall be awarded. You must be employed as of the date of payment in order to be eligible to receive a Bonus (except as provided below). Therefore, if your employment is terminated either by you or the Corporation for any reason prior to the Bonus being paid, you will not have earned the

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Bonus and no partial or prorated bonus will be paid other than as may be provided for elsewhere in this Agreement.

6. Benefits. You will be eligible to participate in the Corporation’s standard benefit plans, subject to the applicable terms and conditions of such plans. Please note that the Corporation may change benefits from time to time in its sole discretion.

7. Vacation. During your employment with the Corporation under this Agreement, you will be entitled to paid time off in accordance with Corporation policy. The Corporation reserves the right, acting reasonably, to request that vacations be scheduled so as not to conflict with critical business operations.

8. Reimbursement for Expenses. During your employment under this Agreement, the Corporation shall reimburse you for reasonable travel and other expenses actually and properly incurred by you in connection with the performance of your duties and functions, subject to and in accordance with the policies of the Corporation from time to time (including, but not limited to, the Share Ownership Policy and the Clawback Policy).

9. Equity. You will be granted an initial equity grant of USD $1,250,000.00 stock options and USD $1,250,000.00 restricted stock units (the stock options and restricted stock units collectively comprising the “Initial Grant”) on the first Monday (provided such Monday is a business day, otherwise the next business day thereafter) of the month immediately following the Effective Date (for purposes of the Initial Grant, the “Grant Date”). This Initial Grant is intended to serve as an inducement for you to join the Corporation and to satisfy the requirements for inducement grants pursuant to Nasdaq Listing Rule 5634(c)(4) which permits the Corporation to issue you security-based compensation without shareholder approval in order to induce you to enter into an employment arrangement as an employee of the Corporation. The stock options awarded to you will vest over a three-year period, with 12/36th of the vesting on the 12-month anniversary of the Grant Date, and the remaining options vesting equally in monthly installments over the following twenty-four (24) months of continuous service. The stock options awarded to you will have an exercise price per share equal to the closing price of the Parent’s common shares as reported on the Nasdaq on the day immediately prior to the Grant Date and will have a term of of ten (10) years from the Grant Date. The restricted stock units awarded to you will vest in 1/3 tranches on the first, second and third anniversary of the Grant Date, respectively. Any additional stock options or other equity- based awards granted to you will be upon such terms as the Board or the Compensation Committee may determine in its discretion.

10. Termination By You For Good Reason Or By The Corporation Other Than For Cause.

(a) If your employment terminates due to your resignation for Good Reason (as that term is defined in the attached Schedule A but without necessity of a Change in Control (defined in Schedule A) having occurred) or by the Corporation for any reason other than for Cause (as that term is defined below), the Corporation shall pay you severance as described in this Section 10, in exchange for your execution of a release of claims approved by the Corporation.

(b) You shall be entitled to 12 months (such period of time, the “Severance Period”) of severance pay, each month of pay based on your Base Salary at the time of your termination of employment (or prior to reduction triggering Good Reason if termination is due to resignation for Good Reason from a reduction of Base Salary). Severance will be paid in equal installments in accordance with the Corporation’s normally scheduled payroll dates. The Corporation will determine in its sole discretion which personal and corporate objectives have been accomplished in part or in full pursuant to Section 5 (Discretionary Performance Bonus) through

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

the date of termination. Based on the objectives which have been accomplished in part or in full, you will be eligible to receive a lump sum payment of a performance bonus but not later than the earlier of (i) March 15 of the applicable following year or (ii) the date that performance bonuses are otherwise paid to Parent's officers for such year.

(c) Provided that you timely elect continued coverage under COBRA, then the Corporation will pay your COBRA premiums during the Severance Period. This benefit will cease in the event you are no longer eligible for COBRA or you obtain no less favorable health insurance coverage through new employment (and you agree to use commercially reasonable efforts to obtain such coverage).

(d) The Corporation will arrange for you to be provided with such outplacement career counselling services as are reasonable and appropriate for your role with the Corporation to assist you in seeking new employment, up to a maximum cost of $50,000.

(e) You shall be entitled to payment of all accrued but unused vacation in accordance with Corporation policy and applicable state law.

(f) You shall not be required to mitigate the amount of any payment provided for in this Section 10 by seeking other employment or otherwise, nor will any sums actually received reduce the severance payments.

11. Termination by the Corporation For Cause; Death; Disability; Voluntary Quit. Upon your termination of employment for any reason under this Section 11, you shall be entitled only to payment of your salary through the last day of employment and any unreimbursed business expenses.

The Corporation may terminate your employment for Cause at any time, with or without notice. For purposes of this Agreement, “Cause” shall include, but is not limited to, any of the following:

(a) the commission of theft, embezzlement, fraud, obtaining funds or property under false pretenses, or similar acts of misconduct with respect to the property of the Corporation or its employees or the Corporation’s customers or suppliers;

(b) your entering of a guilty plea or conviction for any crime involving fraud, misrepresentation, or breach of trust or for any other felony that impacts adversely on the Corporation;

(c) willful misconduct or gross negligence in performance of your duties hereunder, including your refusal to comply in any material respect with the directives of the Corporation or the Board so long as such directives are not inconsistent with your position and duties or inconsistent with any other legal obligation or requirement, and such refusal to comply is not remedied by you within ten (10) working days after written notice from the Corporation or the Board, which written notice shall state that failure to remedy such conduct may result in termination for Cause, provided that if not already provided notice and opportunity to be heard on the matter, then within five (5) working days after written notice from the Corporation or the Board, you are permitted to address the Parent’s Chief Executive Officer to rebut the allegation; or

(d) your material breach of any element of this Agreement, which breach (if determined in good faith by the Corporation or the Board to be curable) is not remedied within thirty (30) working days after written notice from the Corporation or the Board, which written notice shall state that failure to remedy such conduct

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

may result in termination for Cause, provided that if not already provided notice and opportunity to be heard on the matter, then within fifteen (15) working days after written notice from the Corporation or the Board, you are permitted to address the Parent’s Chief Executive Officer to rebut the allegation of material breach.

12. Termination Following Change in Control of Parent or Corporation. Concurrently with execution and delivery of this Agreement, you and Parent shall enter into a “Change in Control Agreement” in the form attached hereto as Schedule A, which sets out the compensation provisions to be applicable in the event of the termination of your employment with the Corporation in certain circumstances following a “Change in Control” (as defined in the Change in Control Agreement) of Parent (as defined in the Change in Control Agreement). Further, the compensation provisions of Schedule A shall be applicable in the event of the termination of your employment with the Corporation in certain circumstances following a “Change in Control” (as defined in the Change in Control Agreement, but with “Corporation” substituted for “Parent” wherever appearing in the definition and mutatis mutandis as necessary elsewhere in Schedule A to effect the intent for you to receive compensation pursuant to this Section 12) of the Corporation (as defined in the Change in Control Agreement)

13. Taxes. You expressly acknowledge and agree that the Corporation will be entitled to make any tax withholding from your compensation as it deems reasonably necessary to comply with applicable taxation laws, rules, and regulations, provided that in circumstances other than regularly recurring withholdings, the Corporation provides advance notice to you and an opportunity to rebut, whether to the Corporation or the applicable governmental authority.

14. Compliance with Insider Trading Guidelines and Restrictions. Parent may from time to time publish trading guidelines and restrictions for its employees, officers, and directors as are considered by the Board, in its discretion, prudent and necessary for a publicly listed company. It is a term of your employment of the Corporation that you comply with such guidelines and restrictions, provided you have been informed in advance that such guidelines and restrictions have application to you. At this time you are informed the guidelines and restrictions that may be found at this link below which will have application to you on commencement of employment with the Corporation: (https://d1io3yog0oux5.cloudfront.net/_d1351079de66c6b106099f3a4eca5152/auriniapharma/db/268/1285/file/Insider+Trading+Policy+%28December+2021%29+%28002%29.pdf)

15. Location. You will be required to perform your duties and functions for Aurinia from a remote work location selected by you (on the Effective Date this will be your home) or as otherwise mutually agreed.

16. Service to Employer. During your employment under this Agreement, you will:

(a) perform your duties to the Corporation in good faith;

(b) act in and promote the best interests of the Corporation;

(c) apply your skill and experience to the performance of your duties and responsibilities and devote substantially the whole of your working time, attention, and energies to the business and affairs of the Corporation;

(d) comply with all lawful policies and procedures put in place by the Corporation from time to time (including, but not limited to, the Share Ownership Policy and the Clawback Policy); and

(e) except as set forth below, not, without the prior approval of the Board, carry on or be engaged in any other business or occupation or become a director, officer,

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

employee, or agent of or hold any position or office with any other corporation, firm, or person, except as a volunteer for a non-profit organization or in respect of civic or community activities, provided that such activities do not materially interfere with the performance of your duties under this Agreement.

17. At-Will Employment. Your employment with the Corporation is “at-will,” which means either you or the Corporation may terminate the employment relationship at any time with or without cause or notice. You understand and agree that neither your job performance nor promotions, commendations, bonuses, or the like from the Corporation give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of your employment with the Corporation.

18. No Additional Compensation upon Termination. It is agreed that neither you nor the Corporation shall, as a result of the termination of your employment, be entitled to any notice, fee, salary, bonus, severance, or other payments, benefits, or damages arising by virtue of, or in any way relating to, your employment or any other relationship with the Corporation (including termination of such employment or relationship) in excess of what is specified or provided for in Section 10 (Termination Other Than For Cause) or Section 12 (Termination Following Change in Control of Parent or Corporation), whichever is applicable. For the avoidance of doubt, in the event of the termination of your employment, you may be entitled to either the benefits set forth in Section 10 of this Agreement or in the Change in Control Agreement (as modified by Section 12 of this Agreement), but not both.

19. Section 409A.

(a) Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to you, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Internal Revenue Code of 1986, as amended (the “Code”), Section 409A, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Each payment (including any installment payment) and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any severance payments or benefits under this Agreement that would be considered Deferred Payments will be paid on, or, in the case of installments, will not commence until, the sixtieth (60th) day following your separation from service, or, if later, such time as required by Section 18(c). Except as required by Section 18(c), any installment payments that would have been made to you during the sixty (60) day period immediately following your separation from service but for the preceding sentence will be paid to you on the sixtieth (60th) day following your separation from service and the remaining payments shall be made as provided in this Agreement.

(c) Notwithstanding anything to the contrary in this Agreement, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), to the extent delayed commencement of any portion of the Deferred Payments to which you are entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if your die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.

(d) Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

(e) Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments for purposes of clause (a) above.

(f) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Corporation and you agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

(g) For purposes of this Agreement, “Section 409A Limit” will mean two (2) times the lesser of: (i) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding the taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred. Notwithstanding the foregoing, the Corporation makes no representation or warranty and shall have no liability to you or any other person if any provisions of this Agreement are determined to constitute deferred compensation under Section 409A but do not satisfy an exemption from, or the conditions of, Section 409A.

20. Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to you (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 20, would be subject to the excise tax imposed by Section 4999 of the Code, then your severance benefits will be either:

(a) delivered in full, or

(b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state, and local income taxes and the excise tax imposed by Section 4999, results in the receipt by you on an after- tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.

If a reduction in the severance and other benefits constituting “parachute payments” is necessary so that no portion of such severance benefits is subject to the excise tax under Section 4999 of the Code, the reduction shall occur on a non-discretionary basis in such a way as to minimize the reduction in the economic value deliverable to you. Where one payment or benefit has the same value for this purpose and they are payable at different times, they will be reduced on a pro rata basis. If, as a result of subsequent events or conditions, it is determined that payments have been reduced by more than the minimum amount required, then an additional payment shall be made to you in an amount equal to the excess reduction within 60 days of the date on which the amount of the excess reduction is determined, but not later than December 31 of the year in whichthe excess reduction is determined. In the event that acceleration of vesting of equity award compensation is

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of your equity awards.

Unless the Corporation and you otherwise agree in writing, any determination required under this Section 20 will be made in writing by an independent firm (without a pre-existing personal or business relationship with either you, the Corporation or Parent or any affiliate of the foregoing) immediately prior to the Change in Control (the “Firm”), whose determination will be conclusive and binding upon you and the Corporation for all purposes. For purposes of making the calculations required by this Section 20, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Corporation and you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 20. The Corporation will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 20.

21. Confidentiality and Assignment of Inventions. Concurrently with execution and delivery of this Agreement and in consideration of your employment by the Corporation, you and the Corporation will enter into a “Confidentiality Agreement and Assignment of Inventions” in the form attached hereto as Schedule B.

22. Disclosure of Conflicts of Interest. During your employment with the Corporation, you will promptly and fully disclose to the Corporation in writing:

(a) the nature and extent of any interest you or your Associates (as hereinafter defined) have or may have directly or indirectly, in any contract or transaction or proposed contract or transaction with the Parent, the Corporation or any other subsidiary, affiliate, or successor of the Parent or the Corporation;

(b) every office you may hold or acquire, and every property you or your Associates possess or intend to acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Corporation or the Parent or your duties and obligations under this Agreement; and

In this Agreement the expression “Associate” shall include all those persons and entities that are included within the definition or meaning of “associate” as set forth in Section 1(1) of the Securities Act (British Columbia), as amended, or any successor legislation of similar force and effect, and shall also include your spouse, children, parents, brothers and sisters. For this purpose, the definition of “associate” in the Securities Act (British Columbia) is as follows if used to indicate a relationship with any person:

i. a partner, other than a limited partner, of that person,

ii. a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

iii. an issuer in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer or

iv. a relative, including the spouse, of that person or a relative of that person’s spouse, if the relative has the same home as that person.

23. Avoidance of Conflicts of Interest. You acknowledge that it is the policy of the Corporation that all interests and conflicts of the sort described in Section 22(Disclosure of Conflicts of Interest) be avoided, and you agree to comply with all policies and directives of the Board from time to

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

time regulating, restricting, or prohibiting circumstances giving rise to interests or conflicts of the sort described in Section 22 (Disclosure of Conflicts of Interest). During your employment with the Corporation, without Board approval in its sole discretion, you shall not enter into any agreement, arrangement or understanding with any other person or entity that would in any way conflict or interfere with this Agreement or your duties or obligations under this Agreement or that would otherwise prevent you from performing your obligations hereunder, and you represent and warrant that you or your Associates have not entered into any such agreement, arrangement, or understanding.

24. Provisions Reasonable. It is acknowledged and agreed that:

(d) both before and since the Effective Date, the Corporation and Parent have operated and competed and will operate and compete in a global market, with respect to the business of the Corporation and Parent set out in Schedule C attached hereto (the “Business”);

(e) competitors of the Corporation, Parent, and the Business are located in countries around the world;

(f) in order to protect the Corporation and Parent adequately, any enjoinder of competition would have to apply worldwide;

(g) during the course of your employment by the Corporation, both before and after the Effective Date, on behalf of the Corporation and Parent, you have acquired and will acquire knowledge of, and you have come into contact with, initiated and established relationships with and will come into contact with, initiate and establish relationships with, both existing and new clients, customers, suppliers, principals, contacts and prospects of the Corporation and Parent, and that in some circumstances you have been or may well become the senior or sole representative of the Corporation and Parent dealing with such persons; and

(h) in light of the foregoing, the provisions of Section 25 (Restrictive Covenant) below are reasonable and necessary for the proper protection of the business, property and goodwill of the Corporation and the Business.

25. Restrictive Covenant. Subject to the exceptions set out in Schedule D attached hereto, and as added and deleted from time-to-time, you agree that you will not, either alone or in partnership, or in conjunction with any person, firm, company, corporation, syndicate, association, or any other entity or group, whether as principal, agent, employee, director, officer, shareholder, consultant, or in any capacity or manner whatsoever, whether directly or indirectly, for the Term of Employment and continuing for a period of 12 months from the termination of your employment, regardless of the reason for such termination:

(a) carry on or be engaged in, concerned with, or interested in, or advise, invest in, or give financial assistance to, any business, enterprise, or undertaking that:

(i) is involved in the Business or in the sale, distribution, development, or supply of any product or service that is competitive with the Business or any product or service of the Business; or

(ii) competes with the Corporation or Parent with respect to any aspect of the Business;

provided, however, that the foregoing will not prohibit you from acquiring, solely as an investment and through market purchases, securities of any such enterprise or undertaking that are publicly traded (including on private secondary markets available to accredited investors), so long as you are not part of any control group of such entity and such securities, which if converted, do not constitute more than 5% of the outstanding voting power of that entity;

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

(b) solicit, agree to be employed by, or agree to provide services to any person, firm, company, or other entity that was a client, customer, supplier, principal, shareholder, investor, collaborator, strategic partner, licensee, contact, or prospect of the Corporation or Parent during the time of your employment with the Corporation-, for any business purpose that is competitive with the Business or any product or service of the Business; or

(c) divert, entice, or take away from the Corporation or Parent, or attempt to do so or solicit for the purpose of doing so, any business of the Corporation or Parent, or any person, firm, company, or other entity that was an employee, client, customer, supplier, principal, shareholder, investor, collaborator, strategic partner, licensee, contact, or prospect of the Corporation or Parent during the time of your employment with the Corporation whether before or after the Effective Date.

26. Indemnification. Parent agrees to indemnify and hold you harmless to the fullest extent permitted by the laws of Canada and the State of Delaware and under the bylaws of Parent and the Corporation. In connection therewith, Parent and the Corporation shall maintain the protection of insurance policies for your benefit (and the benefit of the Parent’s and the Corporation’s directors and officers) against all costs, charges, and expenses whatsoever incurred or sustained by you in connection with any action, suit, or proceeding to which you may be made a party by reason of you being or having been a director, officer, or employee of the Parent or the Corporation or both. This provision shall survive any termination of your employment hereunder.

27. Remedies. You acknowledge and agree that any breach or threatened breach of any of the provisions of Section 14 (Compliance with Insider Trading and Guidelines and Restrictions), Section 16 (Service to Employer), Section 21 (Confidentiality and Assignment of Inventions), Section 22 (Disclosure of Conflicts of Interest), Section 23 (Avoidance of Conflicts of Interest) or Section 25 (Restrictive Covenant) could cause irreparable damage to the Corporation or its partners, subsidiaries, or affiliates, that such harm could not be adequately compensated by the Corporation’s recovery of monetary damages, and that in the event of a breach or threatened breach thereof, the Corporation shall have the right to seek an injunction, specific performance, or other equitable relief as well as any equitable accounting of all your profits or benefits arising out of any such breach. It is further acknowledged and agreed that the remedies of the Corporation specified in this Section 27 are in addition to and not in substitution for any rights or remedies of the Corporation at law or in equity, and that all such rights and remedies are cumulative and not alternative, and that the Corporation may have recourse to any one or more of its available rights or remedies as it shall see fit.

28. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns. Your rights and obligations contained in this Agreement are personal and such rights, benefits and obligations shall not be voluntarily or involuntarily assigned, alienated or transferred, whether by operation of law or otherwise, without the prior written consent of the Corporation. This Agreement shall otherwise be binding upon and inure to the benefit of your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.

29. Agreement Confidential. Both parties shall keep the terms and conditions of this Agreement confidential except as may be required to enforce any provision of this Agreement or as may otherwise be required by any law, regulation or other regulatory requirement.

30. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware and the parties hereto agree to the exclusive jurisdiction of the state and federal courts of such state.

31. Exercise of Functions. The rights of Parent or the Corporation as provided in this Agreement may be exercised on behalf of the Parent or the Corporation only by the Board.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

32. Entire Agreement. The terms and conditions of this Agreement are in addition to and not in substitution for the obligations, duties and responsibilities imposed by law on employees of corporations generally, and you agree to comply with such obligations, duties and responsibilities. Except as otherwise provided in this Agreement and except for any documentation regarding benefits under benefit plans, equity award agreements and related documentation, agreements and related documentation regarding indemnification rights and documents regarding your rights as a shareholder, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and (except for the terms reserved to the Corporation’s discretion) may only be varied by further written agreement signed by you and the Corporation. This Agreement supersedes any previous communications, understandings and agreements between you and the Corporation regarding your employment. It is acknowledged and agreed that this Agreement is mutually beneficial and is entered into for fresh and valuable consideration with the intent that it shall constitute a legally binding agreement.

33. Further Assurances. The parties will execute and deliver to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement.

34. Surviving Obligations. Your obligations and covenants under Section 21 (Confidentiality and Assignment of Inventions), Section 25 (Restrictive Covenant) and Section 27 (Remedies) shall survive the termination of this Agreement. Parent’s and the Corporation’s obligations under Section 10 (Termination By You For Good Reason Or By The Corporation Other Than For Cause), Section 12 (Termination Following Change in Control of Parent or Corporation), and Section 26 (Indemnification) shall survive the termination of this Agreement.

35. Independent Legal Advice. You hereby acknowledge that you have obtained or have had an opportunity to obtain independent legal advice in connection with this Agreement, and further acknowledge that you have read, understand, and agree to be bound by all of the terms and conditions contained herein.

36. Notice. Any notice or other communication required or contemplated under this Agreement to be given by one party to the other shall be delivered or mailed by prepaid registered post to the party to receive same at the address as set out below:

If to the Corporation or Parent:

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations & Strategy

If to Volker Knappertz, M.D.:

Volker Knappertz, M.D. [redacted]

Any notice delivered shall be deemed to have been given and received on the first business day following the date of delivery. Any notice mailed shall be deemed to have been given and received on the fifth business day following the date it was posted, unless between the time of mailing and actual receipt of the notice there shall be a mail strike, slow-down or other labor dispute which might affect delivery of the notice by mail, then the notice shall be effective only if actually delivered.

37. Severability. If any provision of this Agreement or any part thereof shall for any reason be held to be invalid or unenforceable in any respect, then such invalid or unenforceable provision or part shall be severable and severed from this Agreement and the other provisions of this Agreement shall remain in effect and be construed as if such invalid or unenforceable provision or part had never been contained herein.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

38. Waiver. Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by any other act or conduct or by any indulgence, delay or omission. Any waiver shall only apply to the specific matter waived and only in the specific instance in which it is waived.

39. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement.

If you accept and agree to the foregoing, please confirm your acceptance and agreement by signing the enclosed duplicate copy of this letter where indicated below and by returning it to us. You are urged to consider fully all the above terms and conditions and to obtain independent legal advice or any other advice you feel is necessary before you execute this agreement.

Yours truly,

AURINIA PHARMA U.S., INC.

(a Delaware corporation)

By: /s/ Max Donley

Accepted and agreed to by Volker Knappertz, M.D. as of July11, 2022

/s/ Volker Knappertz, M.D.

Volker Knappertz, M.D.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

SCHEDULE A

AURINIA PHARMACEUTICALS INC.

July 11, 2022

Volker Knappertz, M.D.

[redacted]

Dear Dr. Knappertz:

Re: Change in Control Agreement

Aurinia Pharmaceuticals Inc., a corporation under the laws of the Province of Alberta (“Parent”), considers it essential to the best interests of its members to foster the continuous employment of its senior management team, including the senior management of Aurinia Pharma U.S., Inc. (the “Corporation”), a Delaware corporation and a wholly owned subsidiary of Parent. In this regard, the Board of Directors of Parent (the “Board”) has determined that it is in the best interests of Parent and its shareholders that appropriate steps should be taken to reinforce and encourage management’s continued attention, dedication and availability to the Parent and the Corporation in the event of a Potential Change in Control (as defined in Section 2), without being distracted by the uncertainties which can arise from any possible changes in control of the Parent.

In order to induce you to agree to remain in the employ of the Corporation, such agreement evidenced by the employment agreement entered into as of the date of this Agreement between you and the Corporation (the “Employment Agreement”) and in consideration of your agreement as set forth in Section 3below, the Corporation agrees that you shall receive and you agree to accept the severance and other benefits set forth in this Agreement should your employment with the Corporation be terminated subsequent to a Change in Control (as defined in Section 2 below) in full satisfaction of any and all claims that now exist or then may exist for remuneration, fees, salary, bonuses or severance arising out of or in connection with your employment by the Corporation or the termination of your employment:

1. Term of Agreement.

This Agreement shall be in effect for a term commencing on the Effective Date of the Employment Agreement (as therein defined) and ending once all benefits called for under this Agreement have been distributed to you or if earlier, termination of your employment prior to a Change in Control.

2. Definitions.

(a) “Affiliate” means a corporation that is an affiliate of Parent under the Securities Act

(British Columbia), as amended from time to time.

(b) “Base Salary” shall mean the annual base salary, as referred to in Section 3 (Base Salary), of the Employment Agreement.

(d) “Cause” shall have the meaning set out in Section 11 (Termination by the Corporation for Cause) of the Employment Agreement.

(e) “Change in Control” of Parent (or Corporation for purposes of Section 12 of the Employment Agreement and benefits related thereto) shall be deemed to have occurred:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

(i) any merger or consolidation in which voting securities of Parent possessing more than fifty percent (50%) of the total combined voting power of Parent’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction and the composition of the board of directors of Parent following such transaction is such that the directors of Parent prior to the transaction constitute less than fifty percent (50%) of the membership of the board of directors of Parent following the transaction;

(ii) any acquisition, directly or indirectly, by a person or related group of persons (other than Parent or a person that directly or indirectly controls, is controlled by, or is under common control with, Parent) of beneficial ownership of voting securities of Parent possessing more than fifty percent (50%) of the total combined voting power of Parent’s outstanding securities;

(iii) any acquisition, directly or indirectly, by a person or related group of persons of the right to appoint a majority of the directors of Parent; and

(iv) any sale, transfer or other disposition of all or substantially all of the assets of Parent;

provided however, that a Change in Control shall not be deemed to have occurred if such Change in Control results solely from the issuance, in connection with a bona fide financing or series of financings by Parent or any of its Affiliates, of voting securities of Parent or any of its Affiliates or any rights to acquire voting securities of Parent or any of its Affiliates which are convertible into voting securities. This definition of Change in Control is intended to conform to the definitions of “change in ownership of a corporation” and “change in ownership of a substantial portion of a corporation’s assets” provided in Treasury regulation Sections 1.409A-3(i)(5)(v) and (vii).

(f) “Date of Termination” shall mean, if your employment is terminated, the date specified in the Notice of Termination.

(g) “Good Reason” shall mean the occurrence of one or more of the following events, without your express written consent, within 12 months of Change in Control:

(i) a material change in your status, position, authority or responsibilities that does not represent a promotion from or represents an adverse change from your status, position, authority or responsibilities in effect immediately prior to the Change in Control;

(ii) a material reduction by the Corporation or Parent, in the aggregate, in your Base Salary, or incentive, retirement, health benefits, bonus or other compensation plans

provided to you immediately prior to the Change in Control, unless an equitable arrangement has been made with respect to such benefits in connection with a Change in Control;

(iii) a failure by the Corporation or Parent to continue in effect any other compensation plan in which you participated immediately prior to the Change in Control (except for reasons of non-insurability), including but not limited to, incentive, retirement and health benefits, unless an equitable arrangement has been made with respect to such benefits in connection with a Change in Control;

(iv) a material breach of the Employment Agreement, including but not limited to, requiring you to no longer perform your duties and functions from the work location of your choice (excepting reasonably necessary travel in the ordinary course of business consistent with your past employment with the Corporation);

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

(v) any request by the Parent or any affiliate of Parent that you participate in an unlawful act; or

(vi) any purported termination of your employment by the Corporation after a Change in Control which is not effected pursuant to a Notice of Termination satisfying the requirements of clause (h)below and for the purposes of this Agreement, no such purported termination shall be effective.

In order to resign for Good Reason, you must provide written notice of the event giving rise to Good Reason to the Parent’s Board of Directors within 90 days after the condition arises, allow the Parent or the Corporation 30 days to cure such condition, and if Parent or the Corporation fails to cure the condition within such period, your resignation from all positions you then hold with the Parent and Corporation must be effective not later than 90 days after the end of the 30-day cure period.

(h) “Notice of Termination” shall mean a notice, in writing, communicated to the other party in accordance with Section 6below, which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

(i) “Potential Change in Control” of Parent shall be deemed to have occurred if:

(i) Parent enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(ii) any person (including Parent) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

(iii) the Board adopts a resolution to the effect that, for the purposes of this Agreement, a Potential Change in Control of Parent has occurred.

3. Potential Change in Control.

You agree that, in the event of a Potential Change in Control of Parent occurring after the Effective Date, and until 12 months after a Change in Control, subject to your right to terminate your employment by issuing and delivering a Notice of Termination for Good Reason, you will continue to diligently carry out your duties and obligations, on the terms set out in the Employment Agreement.

4. Compensation Upon Termination Following Change in Control.

Subject to compliance by you with Section 3,upon your employment terminating pursuant to a Notice of Termination within 12 months after a Change in Control, the Corporation agrees that you shall receive and you agree to accept the following payments in full satisfaction of any and all claims you may have or then may have against the Corporation, for remuneration, fees, salary, benefits, bonuses or severance, arising out of or in connection with your employment by the Corporation or the termination of your employment:

(a) If your employment shall be terminated by the Corporation for Cause or by you other than for Good Reason, the terms of the Employment Agreement shall govern and the Corporation shall have no further obligations to you under this Agreement.

(b) If your employment by the Corporation shall be terminated by you for Good Reason or by the Corporation other than for Cause, then you shall be entitled to the payments and benefits provided below:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

(i) subject to the withholding of all applicable deductions, the Corporation shall pay you a lump sum equal to (A) 150% of 12 months’ Base Salary, as referred to in Section 3 (Base Salary) and as adjusted from time to time in accordance with Section 4 (Annual Review) of the Employment Agreement, plus (B) Bonus at 100% of target for the year of termination;

(ii) to the extent permitted by law and subject to the terms and conditions of any benefit plans in effect from time to time, the Corporation shall maintain the benefits and payments set out in Section 6 (Benefits) of the Employment Agreement during the 18-month period following your termination date. The Corporation may, at its option, satisfy any requirement that the Corporation provide coverage under any benefit plan by (i) reimbursing your premiums under Title X of the Consolidated Budget reconciliation Act of 1985, as amended (“COBRA”) after you have properly elected continuation coverage under COBRA (in which case you will be solely responsible for electing such coverage for your eligible dependents), or (ii) providing the ash equivalent of such benefit as would have been provided during the Severance Period or a payment equivalent to the premium cost of such coverage during the Severance Period or providing coverage under a separate plan or plans providing coverage that is no less favorable to you than the terms of the plans in effect on your termination date. If the cash equivalent or premium cost is provided, such cash equivalent shall be paid in a lump sum in cash within 60 days following the date of termination of your employment.

(iii) the Corporation shall arrange for you to be provided with such outplacement career counselling services as are reasonable and appropriate, to assist you in seeking new employment; and

(iv) all stock options or other equity-based awards granted to you by Parent under any stock option or other equity-based award agreement that is entered into between you and the Corporation and is outstanding at the time of termination of your employment, which stock options or other equity-based awards have not yet vested, shall immediately vest upon the termination of your employment and shall be fully exercisable (to the extent applicable) by you in accordance with the terms of the agreement or agreements under which such options or other equity awards were granted.

You shall not be required to mitigate the amount of any payment provided for in this Section 4by seeking other employment or otherwise, nor will any sums actually received reduce the severance payments. The foregoing payments shall be subject to the provisions of Sections 19 and 20 of the Employment Agreement.

5. Binding Agreement.

This Agreement shall enure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you die while any amount would still be payable to you under this Agreement if you had continued to live, that amount shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate.

6. Notices.

Any notice or other communication required or contemplated under, this Agreement to be given by one party to the other shall be delivered or mailed by prepaid registered post to the party to receive same at the addresses set out below:

If to the Corporation or Parent:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations and Strategy

If to NAME:

Volker Knappertz, M.D. [redacted]

Any notice delivered shall be deemed to have been given and received on the first business day following the date of delivery. Any notice mailed shall be deemed to have been given and received on the fifth business day following the date it was posted, unless between the time of mailing and actual receipt of the notice there shall be a mail strike, slow-down or other labor dispute which might affect delivery of the notice by mail. In such event, the notice shall be effective only if delivered.

7. Modification: Amendments: Entire Agreement.

This Agreement may not be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be specifically designated by the Board. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Except as set forth in your Employment Agreement, no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

8. Governing Law.

This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware and the parties hereto agree to the exclusive jurisdiction of the state and federal courts of such state.

9. Validity.

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

10. No Employment or Service Contract

Nothing in this Agreement shall confer upon you any right to continue in the employment of the Corporation for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation or you, which rights are hereby expressly reserved by each, to terminate your employment at any time for any reason whatsoever, with or without cause.

If the foregoing sets forth our agreement on this matter, kindly sign and return to Parent a copy of this letter.

AURINIA PHARMA U.S., INC.

(a Delaware corporation)

By: /s/ Max Donley

Date: July 11, 2022___________________

AURINIA PHARMACEUTICALS INC.

(a Province of Alberta corporation)

By:/s/ Stephen Robertson

Date: July 11, 2022___________________

Accepted and agreed to by Volker Knappertz, M.D. as of July11, 2022

/s/ Volker Knappertz, M.D.

Volker Knappertz, M.D.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

SCHEDULE B

CONFIDENTIALITY AGREEMENT AND ASSIGNMENT OF INVENTIONS

AURINIA PHARMA U.S., INC.

PRIVATE AND CONFIDENTIAL

July 11, 2022

Volker Knappertz, M.D. [redacted]

Dear Dr. Knappertz:

The purpose of this letter is to confirm and record the terms of the agreement (the “Agreement”) between you and Aurinia Pharma U.S., Inc. (“U.S. Sub”), a Delaware corporation and a wholly owned subsidiary of Aurinia Pharmaceuticals Inc., a corporation under the laws of the Province of Alberta (“Parent” and, together with U.S. Sub, “Aurinia”), concerning the terms on which you will (i) receive from and disclose to Aurinia proprietary and confidential information; (ii) agree to keep the information confidential, to protect it from disclosure and to use it only in accordance with the terms of this Agreement; and (iii) assign to Parent all rights, including any ownership interest which may arise in all inventions and intellectual property developed or disclosed by you over the course of your work during your employment with U.S. Sub. The effective date (“Effective Date”) of this Agreement is July 18, 2022, provided and subject to your employment agreement between you and Aurinia dated as of July [___], 2022, taking effect in accordance with Section 2 (Term) thereof.

In consideration of the offer of employment by Aurinia, you and Aurinia hereby agree as follows:

1. INTERPRETATION

1.1 Definitions. In this Agreement:

(a) “Confidential Information”, subject to the exemptions set out in Section 2.8, shall mean any information relating to Aurinia’s Business (as hereinafter defined), whether or not conceived, originated, discovered, or developed in whole or in part by you, that is not generally known to the public or to other persons who are not bound by obligations of confidentiality and:

(i) from which Aurinia derives economic value, actual or potential, from the information not being generally known; or

(ii) in respect of which Aurinia otherwise has a legitimate interest in maintaining secrecy;

and which, without limiting the generality of the foregoing, shall include;

(iii) all proprietary information licensed to, acquired, used or developed by Aurinia in its research and development activities including but not restricted to the development and commercialization of pharmaceutical products for the treatment of Lupus and related diseases, other scientific strategies and concepts, designs, know-how, information, material, formulas, processes, research data and proprietary rights in the nature of copyrights, patents, trademarks, licenses and industrial designs;

(iv) all information relating to Aurinia’s Business, and to all other aspects of Aurinia’s structure, personnel, and operations, including financial, clinical,

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence; programs, devices, concepts, inventions, designs, methods, processes, data, know-how, unique combinations of separate items that is not generally known and items provided or disclosed to Aurinia by third parties subject to restrictions on use or disclosure;

(v) all know-how relating to Aurinia’s Business including, all biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information, and all applications, registrations, licenses, authorizations, approvals and correspondence submitted to regulatory authorities;

(vi) all information relating to the businesses of competitors of Aurinia including information relating to competitors’ research and development, intellectual property, operations, financial, clinical, regulatory, marketing, advertising and commercial strategies, that is not generally known;

(vii) all information provided by Aurinia’s agents, consultants, lawyers, contractors, licensors or licensees to Aurinia and relating to Aurinia’s Business; and

(viii) all information relating to your compensation and benefits, including your salary, vacation, stock options, rights to continuing education, perquisites, severance notice, rights on termination and all other compensation and benefits, except that you shall be entitled to disclose such information to your bankers, advisors, agents, consultants and other third parties who have a duty of confidence to you and who have a need to know such information in order to provide advice, products or services to you.

(b) “Inventions” shall mean any and all discoveries, developments, enhancements, improvements, concepts, formulas, processes, ideas, writings, whether or not reduced to practice, industrial and other designs, patents, patent applications, provisional patent applications, continuations, continuations-in-part, substitutions, divisionals, reissues, renewals, re-examinations, extensions, supplementary protection certificates or the like, trade secrets or utility models, copyrights and other forms of intellectual property including

all applications, registrations and related foreign applications filed and registrations granted thereon.

(c) “Work Product” shall mean any and all Inventions and possible Inventions relating to Aurinia’s Business resulting from any work performed by you for Aurinia that you may invent or co-invent during your involvement in any capacity with Aurinia, except those Inventions invented by you entirely on your own time that do not relate to Aurinia’s Business or do not derive from any equipment, supplies, facilities, Confidential Information or other information, gained, directly or indirectly, by you from or through your involvement in any capacity with Aurinia.

(d) “Aurinia’s Business” shall mean the businesses actually carried on by Aurinia, directly or indirectly, whether under an agreement with or in collaboration with, any other party including but not exclusively, the development and commercialization of pharmaceutical products for the treatment of Lupus Nephritis, Dry Eye Syndrome, Focal Segmental Glomerulosclerosis, and related diseases.

2. CONFIDENTIALITY

2.1 Basic Obligation of Confidentiality. You hereby acknowledge and agree that in the course of your involvement with Aurinia, Aurinia may disclose to you or you may otherwise have access or be exposed to Confidential Information. Aurinia hereby agrees to provide such access to you and you

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

agree to receive and hold all Confidential Information on the terms and conditions set out in this Agreement. Except as set out in this Agreement, you will keep strictly confidential all Confidential Information and all other information belonging to Aurinia that you acquire, observe or are informed of, directly or indirectly, in connection with your involvement, in any capacity, with Aurinia.

2.2 Fiduciary Capacity. You will be and act toward Aurinia as a fiduciary in respect of the Confidential Information.

2.3 Non-disclosure. Unless Aurinia first gives you written permission to do so under Section

2.7 of this Agreement, you will not at any time, either during or after your involvement in any capacity with Aurinia;

(a) use or copy Confidential Information or your recollections thereof;

(b) publish or disclose Confidential Information or your recollections thereof to any person other than to employees of Aurinia who have a need to know such Confidential Information for their work for Aurinia;

(c) permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement;

(d) permit or cause any Confidential Information to be stored off the premises of Aurinia, including permitting or causing such Information to be stored in electronic format on personal computers, except in accordance with written procedures of Aurinia, as amended from time to time in writing; or

(e) communicate the Confidential Information or your recollections thereof to another employee of Aurinia in a public place or using methods of communication that are capable

of being intercepted (such as unencrypted messages using the internet or cellular phones) or overheard, without the written permission of Aurinia.

2.4 Taking Precautions. You will take all reasonable precautions necessary or prudent to prevent material in your possession or control that contains or refers to Confidential Information from being discovered, used or copied by third parties.

2.5 Aurinia’s Ownership of Confidential Information. As between you and Aurinia, Aurinia shall own all right, title and interest in and to the Confidential Information, whether or not created or developed by you.

2.6 Control of Confidential Information and Return of Information. All physical materials produced or prepared by you containing Confidential Information, including, without limitation, biological material, chemical entities, test results, notes of experiments, computer files, photographs, x-ray film, designs, devices, formulas, memoranda, drawings, plans, prototypes, samples, accounts, reports, financial statements, estimates and materials prepared in the course of your responsibilities to or for the benefit of Aurinia, shall belong to Aurinia, and you will promptly turn over to Aurinia’s possession every original and copy of any and all such items in your possession or control upon request by Aurinia. You shall not permit or cause any physical materials containing Confidential Information to be stored off the premises of Aurinia, unless in accordance with written procedures of Aurinia, as amended from time to time in writing (if not already developed, the parties agree to reasonably cooperate in developing said written procedures for application to your remote work location). You shall not intentionally (whether or not for material gain to you) transfer any of Aurinia’s biological material to another person outside of Aurinia, unless a material transfer agreement has been signed by both Aurinia and the other party. You shall not intentionally bring (whether or not for material gain to you) onto the premises of Aurinia (for the avoidance of doubt your remote work location is not considered a part of the premises of Aurinia, unless you consciously bring biological material of Aurinia to such location), any biological material from another person outside of Aurinia, unless in accordance with written procedures of Aurinia, as amended from time to time in writing.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

2.7 Purpose of Use. You will use Confidential Information only for purposes authorized or directed by Aurinia.

2.8 Exemptions. Your obligation of confidentiality under this Agreement will not apply to any of the following:

(a) information that is already known to you, though not due to a prior disclosure of Confidential Information by Aurinia or by a person who is obliged to maintain the confidentiality of that information and who obtained knowledge of the information, directly or indirectly, from Aurinia;

(b) information disclosed to you by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the Confidential Information, directly or indirectly, from Aurinia;

(c) information that is developed by you independently of Confidential Information received from Aurinia and such independent development can be documented by you;

(d) other particular Confidential Information which Aurinia expressly exempts by written instrument signed by Aurinia;

(e) information or material that is in the public domain through no fault of your own; and

(f) information or material that you are obligated by law to disclose, to the extent of such obligation, provided that:

(i) in the event that you are required to disclose such information or material, then, as soon as you become aware of this obligation to disclose, you will, subject to applicable law, provide Aurinia with prompt written notice so that Aurinia may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement;

(ii) if Aurinia agrees that the disclosure is required by law, it will give you written authorization to disclose the information for the required purposes only;

(iii) if Aurinia does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and

(iv) if a protective order or other remedy is not obtained or if compliance with this Agreement is waived, you will furnish only that portion of the Confidential Information that is legally required and will exercise all reasonable efforts to obtain confidential treatment of such Confidential Information.

3. ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS

3.1 Notice of Invention. You agree to promptly and fully inform Aurinia of all your Work Product, whether or not patentable, throughout the course of your involvement, in any capacity, with Aurinia, whether or not developed before or after your execution of this Agreement. On your ceasing to be employed by U.S. Sub for any reason whatsoever, you will immediately deliver up to Aurinia all of your Work Product. You further agree that all of your Work Product shall at all times be the Confidential Information of Aurinia.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

all of your Work Product during your involvement, in any capacity, with Aurinia and all other rights and interests of a proprietary nature in and associated with your Work Product, including all patents, patent applications filed and other registrations granted thereon. To the extent that you retain or acquire legal title to any such rights and interests, you hereby declare and confirm that such legal title is and will be held by you only as trustee and agent for Aurinia. You agree that Aurinia’s rights hereunder shall attach to all of your Work Product, notwithstanding that it may be perfected or reduced to specific form after you have terminated your relationship with Aurinia. You further agree that Aurinia’s rights hereunder are worldwide rights and are not limited to the United States but shall extend to every country of the world.

3.3 Moral Rights. Without limiting the foregoing, you irrevocably waive any and all moral rights arising under the Copyright Act (Canada), as amended, as applicable, or any successor legislation of similar force and effect or similar legislation in other applicable jurisdictions or at common law that you may have with respect to your Work Product, and agree never to assert any moral rights which you may have in your Work Product, including, without limitation, the right to the integrity of such Work Product, the right to be associated with the Work Product, the right to restrain or claim damages for any distortion, mutilation or other modification or enhancement of the Work Product and the right to restrain the use or reproduction of the Work Product in any context and in connection with any product, service, cause or institution, and you further confirm that Aurinia may use or alter any such Work Product as Aurinia sees fits in its absolute discretion.

3.4 Goodwill. You hereby agree that all goodwill you have established or may establish with clients, customers, suppliers, principals, shareholders, investors, collaborators, strategic partners, licensees, contacts or prospects of Aurinia relating to the business or affairs of Aurinia (or of its partners, subsidiaries or affiliates), both before and after the Effective Date, shall, as between you and Aurinia, be and remain the property of Aurinia exclusively, for Aurinia to use, alter, vary, adapt and exploit as Aurinia shall determine in its discretion.

3.5 Assistance. You hereby agree to reasonably assist Aurinia, at Aurinia’s request and expense, in:

(a) making patent applications for your Work Product, including instructions to lawyers and/or patent agents as to the characteristics of your Work Product in sufficient detail to enable the preparation of a suitable patent specification, to execute all formal documentation incidental to an application for letters patent and to execute assignment documents in favor of Aurinia for such applications;

(b) making applications for all other forms of intellectual property registration relating to your Work Product;

(c) prosecuting and maintaining the patent applications and other intellectual property relating to your Work Product; and

(d) registering, maintaining and enforcing the patents and other intellectual property registrations relating to your Work Product.

3.6 Assistance with Proceedings. You further agree to reasonably assist Aurinia, at Aurinia’s request and expense, in connection with any defense to an allegation of infringement of another person’s intellectual property rights, claim of invalidity of another person’s intellectual property rights, opposition to, or intervention regarding, an application for letters patent, copyright or trademark or other proceedings relating to intellectual property or applications for registration thereof.

4. GENERAL

4.1 Term and Duration of Obligation. The term of this Agreement is from the Effective Date and terminates on the date that you are no longer working at or for Aurinia. Except as otherwise agreed in a written instrument signed by Aurinia, Article 2 shall survive the termination of this Agreement, including your obligations of confidentiality and to return Confidential Information, and shall endure, with respect to each item of Confidential Information, for so long as those items fall within the

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

definition of Confidential Information. Sections 1.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 4.1, 4.2, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10,4.11, 4.12 and 4.13 shall also survive the termination of this Agreement.

4.2 Binding Nature of Agreement. This Agreement is not assignable by you. You agree that this Agreement shall be binding upon your heirs and estate.

4.3 Non-Competition. While you are an employee of Aurinia, you will not provide services to or enter into a contract of employment or service in any capacity for any business which is in any way competitive with Aurinia’s Business without the prior written consent of Aurinia.

4.4 No Solicitation of Employees, Consultant or Contractors. You agree that during the period of your employment and for the one (1) year period thereafter, you will not, as an officer, director, employee, consultant, owner, partner or in any other capacity either directly or indirectly or through others,except on behalf of Aurinia, solicit, induce, encourage, or participate in soliciting, inducing or encouraging any person known to you to be an employee, consultant, or independent contractor of Aurinia to terminate his or her relationship with Aurinia.

4.5 No Conflicting Obligations. You represent and warrant that you will not use or disclose to other persons at Aurinia information that (i) constitutes a trade secret of persons other than Aurinia during your employment at Aurinia, or (ii) which is confidential information owned by another person. You represent and warrant that you have no agreements with or obligations to others with respect to the matters covered by this Agreement or concerning the Confidential Information that are in conflict with anything in this Agreement.

4.6 Equitable Remedies. You acknowledge and agree that a breach by you of any of your obligations under this Agreement may result in damages to Aurinia that may not be adequately compensated by monetary award. Accordingly, in the event of any such breach by you, in addition to all other remedies available to Aurinia at law or in equity, Aurinia shall be entitled as a matter of right to apply to a court of competent jurisdiction for such relief by way of restraining order, injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of this Agreement, without having to prove damages to the court.

4.7 Publicity. You shall not, without the prior written consent of Aurinia, make or give any public announcements, press releases or statements to the public or the press regarding your Work Product or any Confidential Information.

4.8 Severability. If any covenant or provision of this Agreement or of a section of this Agreement is determined by a court of competent jurisdiction to be void or unenforceable in whole or in part, then such void or unenforceable covenant or provision shall not affect or impair the enforceability or validity of the balance of the section or any other covenant or provision.

4.9 Time of Essence/No Waiver. Time is of the essence hereof and no waiver, delay, indulgence, or failure to act by Aurinia regarding any particular default or omission by you shall affect or impair any of Aurinia’s rights or remedies regarding that or any subsequent default or omission that is not expressly waived in writing, and in all events time shall continue to be of the essence without the necessity of specific reinstatement.

4.10 Further Assurances. The parties will execute and deliver to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement.

4.11 Notices. All notices and other communications that are required or permitted by this Agreement must be in writing and shall be hand delivered or sent by express delivery service or certified or registered mail, postage prepaid, or by facsimile transmission (with written confirmation copy by registered first-class mail) to the parties at the addresses indicated below.

If to the Corporation or Parent:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations and Strategy

If to Volker Knappertz, M.D.:

Volker Knappertz, M.D.

[redacted]

Any such notice shall be deemed to have been received on the earlier of the date actually received or the date five (5) days after the same was posted or sent. Either party may change its address or its facsimile number by giving the other party written notice, delivered in accordance with this Section 4.11.

4.12 Amendment. No amendment, modification, supplement or other purported alteration of this Agreement shall be binding unless it is in writing and signed by you and by Aurinia.

4.13 Entire Agreement. This Agreement supersedes all previous dealings, understandings, and expectations of the parties and constitutes the whole agreement with respect to the matters contemplated hereby, and there are no representations, warranties, conditions or collateral agreements between the parties with respect to such transactions except as expressly set out herein.

4.14 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware and the parties hereto agree to the exclusive jurisdiction of the state and federal courts of such state.

4.15 Independent Legal Advice. You hereby acknowledge that you have obtained or have had an opportunity to obtain independent legal advice in connection with this Agreement, and further acknowledge that you have read, understand, and agree to be bound by all of the terms and conditions contained herein.

4.16 Acceptance. If the foregoing terms and conditions are acceptable to you, please indicate your acceptance of and agreement to the terms and conditions of this Agreement by signing below on this letter and on the enclosed copy of this letter in the space provided and by returning the enclosed copy so executed to us. Your execution and delivery to Aurinia of the enclosed copy of this letter will create a binding agreement between us.

[Signature Page Follows]

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Thank you for your cooperation in this matter.

Yours truly,

AURINIA PHARMA U.S., INC.

By:/s/ Max Donley

Accepted and agreed to by Volker Knappertz, M.D. as of July11, 2022

/s/ Volker Knappertz, M.D.

Volker Knappertz, M.D.

/s/ Stephen Robertson

Witness Signature

Stephen Robertson

Witness Name

EVP, General Counsel, Corporate Secretary and Chief Compliance Officer

Occupation

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

SCHEDULE C

DESCRIPTION OF BUSINESS

“Aurinia’s Business” shall mean the businesses actually carried on by the Corporation, directly or indirectly, whether under an agreement with or in collaboration with, any other party including but not exclusively, related to the development and commercialization of pharmaceutical products for the treatment of Lupus Nephritis, and other autoimmune diseases of the human kidney.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

SCHEDULE D

EXCEPTIONS TO RESTRICTIVE COVENANT

None

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Document

Exhibit 10.23

EMPLOYMENT AGREEMENT AURINIA PHARMA U.S., INC.

PRIVATE AND CONFIDENTIAL

June 27, 2022

Scott Habig

[redacted]

Re: Terms of Employment with Aurinia Pharma U.S., Inc.

Dear Scott:

1. Position and Duties. You will be employed by the Corporation as Chief Commercial Officer, having such duties and functions as assigned by the Parent’s Chief Executive Officer (to whom you will report). Please note that the Corporation may change titles, duties, reporting relationships, and/or compensation from time to time in its sole discretion.

3. Base Salary. The Corporation shall pay you a base salary at the rate of USD $450,000 per year (the “Base Salary”), payable semi-monthly and subject to applicable withholdings. As a managerial employee of the Corporation, you are not entitled to overtime pay, and your compensation noted above represents your pay for all hours worked for the Corporation.

4. Sign-On Bonus. If you join the Company, you will also be eligible to earn a one-time bonus of $100,000, less applicable withholdings (the “Sign-On/Retention Payment”). The Company will advance you the Sign-On/Retention Payment, prior to its being earned, within thirty (30) days after your Start Date. You will earn the Sign-On/Retention Payment if you remain continuously employed with the Company through the one-year anniversary of your Start Date. If your employment with the Company terminates for any reason prior to the one-year anniversary of your Start Date, you agree to repay, within thirty (30) days of your last day of employment with the Company, the entire Sign-On/Retention Payment paid to you by the Company in advance of becoming earned.

5. Annual Review. The Board of Directors of Parent (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”), in conjunction with the Chief Executive Officer, shall review your Base Salary annually. This review shall not result in a decrease of your Base Salary, nor shall it necessarily result in an increase in your Base Salary, and any increase shall be in the sole discretion of the Board or Compensation Committee.

6. Discretionary Performance Bonus. Parent shall review the performance of your duties and functions under this Agreement annually, and you shall be eligible to earn an annual target bonus equal to 50% of your annual Base Salary. Whether you receive such a bonus, and the amount of any such bonus, shall be determined by Parent’s Board of Directors (the “Board”) in its sole discretion, and shall be based upon both achievement of the Company’s corporate objectives and your individual performance objectives. Any bonus shall be paid within thirty (30) days after the Board’s determination that a bonus shall be awarded. You must be employed as of the date of payment in order to be eligible to receive a performance bonus. Therefore, if your

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

employment is terminated either by you or the Company for any reason prior to the bonus being paid, you will not have earned the bonus and no partial or prorated bonus will be paid.

7. Benefits. You will be eligible to participate in the Corporation’s standard benefit plans, subject to the applicable terms and conditions of such plans. Please note that the Corporation may change benefits from time to time in its sole discretion.

8. Vacation. During your employment with the Corporation under this Agreement, you will be entitled to paid time off in accordance with Corporation policy. The Corporation reserves the right, acting reasonably, to request that vacations be scheduled so as not to conflict with critical business operations.

9. Reimbursement for Expenses. During your employment under this Agreement, the Corporation shall reimburse you for reasonable travel and other expenses actually and properly incurred by you in connection with the performance of your duties and functions, subject to and in accordance with the policies of the Corporation from time to time (including, but not limited to, the Share Ownership Policy and the Clawback Policy).

10. Equity. You will be granted an initial equity grant of $1,125,000.00 stock options and $1,125,000.00 restricted stock units (the “Initial Grant”) on a date determined by the Corporation in accordance with its internal policies and practices (the “Grant Date”). This Initial Grant is intended to serve as an inducement for you to join the Corporation and to satisfy the requirements for inducement grants pursuant to Nasdaq Listing Rule 5634(c)(4) which permits the Corporation to issue you security-based compensation without shareholder approval in order to induce you to enter into an employment arrangement as an employee of the Corporation. The stock options awarded to you will vest over a three-year period, with 12/36th of the vesting on the 12-month anniversary of the grant date, and the remaining options vesting equally in monthly installments over the following twenty-four (24) months of continuous service. The stock options awarded to you will have an exercise price per share equal to the closing price of the Parent’s common shares as reported on the Nasdaq on the day immediately prior to the Grant Date and will have a term of ten (10) years. The restricted stock units awarded to you will vest 1/3 tranches on the first, second and third anniversary of the grant date, respectively. Any additional stock options or other equity-based awards granted to you will be upon such terms as the Board or the Compensation Committee may determine in its discretion.

11. Termination By The Corporation Other Than For Cause.

(a) If your employment terminates for any reason other than for Cause (as that term is defined below), the Corporation shall pay you severance as described in this Section 10, in exchange for your execution of a release of claims approved by the Corporation.

(b) You shall be entitled to 12 months of severance, each month of pay based on your Base Salary at the time of your termination of employment (such period of time, the “Severance Period”). Severance will be paid in equal installments in accordance with the Corporation’s normally scheduled payroll dates.

(d) The Corporation will arrange for you to be provided with such outplacement career counselling services as are reasonable and appropriate to assist you in seeking new employment, up to a maximum cost of $10,000.

(e) You shall be entitled to payment of all accrued but unused vacation in accordance with Corporation policy and applicable state law.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

12. Termination by the Corporation For Cause; Death; Disability; Voluntary Quit. Upon your termination of employment for any reason under this Section 11, you shall be entitled only to payment of your salary through the last day of employment and any unreimbursed business expenses.

The Corporation may terminate your employment for Cause at any time, with or without notice. For purposes of this Agreement, “Cause” shall include, but not be limited to, the following:

(b) your entering of a guilty plea or conviction for any crime involving fraud, misrepresentation, or breach of trust or for any serious criminal offence that impacts adversely on the Corporation;

(d) your material breach of any element of this Agreement, which breach (if determined in good faith by the Corporation or the Board to be curable) is not remedied within ten (10) working days after written notice from the Corporation or the Board, which written notice shall state that failure to remedy such conduct may result in termination for Cause.

13. Termination Following Change in Control of Parent. Concurrently with execution and delivery of this Agreement, you and Parent shall enter into a “Change in Control Agreement” in the form attached hereto as Schedule A, which sets out the compensation provisions to be applicable in the event of the termination of your employment with the Corporation in certain circumstances following a “Change in Control” of Parent (as defined in the Change in Control Agreement).

14. Taxes. You expressly acknowledge and agree that the Corporation will be entitled to make any tax withholding from your compensation as it deems reasonably necessary to comply with applicable taxation laws, rules, and regulations.

15. Compliance with Insider Trading Guidelines and Restrictions. Parent may from time to time publish trading guidelines and restrictions for its employees, officers, and directors as are considered by the Board, in its discretion, prudent and necessary for a publicly listed company. It is a term of your employment of the Corporation that you comply with such guidelines and restrictions.

16. Location. You will be required to perform your duties and functions for Aurinia from a remote work location or as otherwise mutually agreed.

17. Service to Employer. During your employment under this Agreement, you will:

(a) perform your duties to the Corporation in good faith;

(b) act in and promote the best interests of the Corporation;

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

(d) comply with all lawful policies and procedures put in place by the Corporation from time to time (including, but not limited to, the Share Ownership Policy and the Clawback Policy); and

(e) except as set forth below, not, without the prior approval of the Board, carry on or be engaged in any other business or occupation or become a director, officer, employee, or agent of or hold any position or office with any other corporation, firm, or person, except as a volunteer for a non-profit organization or in respect of civic or community activities, provided that such activities do not materially interfere with the performance of your duties under this Agreement.

18. At-Will Employment. Your employment with the Corporation is “at-will,” which means either you or the Corporation may terminate the employment relationship at any time with or without cause or notice. You understand and agree that neither your job performance nor promotions, commendations, bonuses, or the like from the Corporation give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of your employment with the Corporation.

19. No Additional Compensation upon Termination. It is agreed that neither you nor the Corporation shall, as a result of the termination of your employment, be entitled to any notice, fee, salary, bonus, severance, or other payments, benefits, or damages arising by virtue of, or in any way relating to, your employment or any other relationship with the Corporation (including termination of such employment or relationship) in excess of what is specified or provided for in Section 10 (Termination Other Than For Cause) or Section 12 (Termination Following Change in Control of Parent), whichever is applicable. For the avoidance of doubt, in the event of the termination of your employment, you may be entitled to either the benefits set forth in Section 10 of this Agreement or in the Change in Control Agreement, but not both.

20. Section 409A.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if your die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.

21. Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable to you (i) constitute “parachute payments” within the meaning of Section 280G of the Code and (ii) but for this Section 19, would be subject to the excise tax imposed by Section 4999 of the Code, then your severance benefits will be either:

(a) delivered in full, or

(b) delivered as to such lesser extent which would result in no portion of such severance benefits being subject to the excise tax under Section 4999 of the Code,

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

you in an amount equal to the excess reduction within 60 days of the date on which the amount of the excess reduction is determined, but not later than December 31 of the year in which

the excess reduction is determined. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of your equity awards.

Unless the Corporation and you otherwise agree in writing, any determination required under this Section 19 will be made in writing by an independent firm immediately prior to the Change in Control (the “Firm”), whose determination will be conclusive and binding upon you and the Corporation for all purposes. For purposes of making the calculations required by this Section 19, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Corporation and you will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section

The Corporation will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 19.

22. Confidentiality and Assignment of Inventions. Concurrently with execution and delivery of this Agreement and in consideration of your employment by the Corporation, you and the Corporation will enter into a “Confidentiality Agreement and Assignment of Inventions” in the form attached hereto as Schedule B.

23. Disclosure of Conflicts of Interest. During your employment with the Corporation, you will promptly and fully disclose to the Corporation in writing:

(c) the nature and extent of any interest you or your Associates (as hereinafter defined) have or may have, directly or indirectly, in any contract or transaction or proposed contract or transaction with the Parent, the Corporation or any other subsidiary, affiliate, or successor of the Parent or the Corporation;

(d) every office you may hold or acquire, and every property you or your Associates may possess or acquire, whereby directly or indirectly a duty or interest might be created in conflict with the interests of the Corporation or the Parent or your duties and obligations under this Agreement; and

(e) the nature and extent of any conflict referred to in subsection (b) above.

(i) a partner, other than a limited partner, of that person,

(ii) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

(iii) an issuer in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer or

(iv) a relative, including the spouse, of that person or a relative of that person’s spouse, if the relative has the same home as that person.

24. Avoidance of Conflicts of Interest. You acknowledge that it is the policy of the Corporation that all interests and conflicts of the sort described in Section 22 (Disclosure of Conflicts of Interest) be avoided, and you agree to comply with all policies and directives of the Board from time to

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

25. Provisions Reasonable. It is acknowledged and agreed that:

(f) both before and since the Effective Date, the Corporation and Parent have operated and competed and will operate and compete in a global market, with respect to the business of the Corporation and Parent set out in Schedule C attached hereto (the “Business”);

(g) competitors of the Corporation, Parent, and the Business are located in countries around the world;

(h) in order to protect the Corporation and Parent adequately, any enjoinder of competition would have to apply worldwide;

(i) during the course of your employment by the Corporation, both before and after the Effective Date, on behalf of the Corporation and Parent, you have acquired and will acquire knowledge of, and you have come into contact with, initiated and established relationships with and will come into contact with, initiate and establish relationships with, both existing and new clients, customers, suppliers, principals, contacts and prospects of the Corporation and Parent, and that in some circumstances you have been or may well become the senior or sole representative of the Corporation and Parent dealing with such persons; and

(j) in light of the foregoing, the provisions of Section 25 (Restrictive Covenant) below are reasonable and necessary for the proper protection of the business, property and goodwill of the Corporation and the Business.

26. Restrictive Covenant. Subject to the exceptions set out in Schedule D attached hereto, you agree that you will not, either alone or in partnership, or in conjunction with any person, firm, company, corporation, syndicate, association, or any other entity or group, whether as principal, agent, employee, director, officer, shareholder, consultant, or in any capacity or manner whatsoever, whether directly or indirectly, for the Term of Employment and continuing for a period of 12 months from the termination of your employment, regardless of the reason for such termination:

(a) carry on or be engaged in, concerned with, or interested in, or advise, invest in, or give financial assistance to, any business, enterprise, or undertaking that:

(i) is involved in the Business or in the sale, distribution, development, or supply of any product or service that is competitive with the Business or any product or service of the Business; or

(ii) competes with the Corporation or Parent with respect to any aspect of the Business;

provided, however, that the foregoing will not prohibit you from acquiring, solely as an investment and through market purchases, securities of any such enterprise or undertaking that are publicly traded, so long as you are not part of any control group of such entity and such securities, which if converted, do not constitute more than 5% of the outstanding voting power of that entity;

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

after the Effective Date, for any business purpose that is competitive with the Business or any product or service of the Business; or

27. Indemnification. Parent agrees to indemnify and hold you harmless to the fullest extent permitted by the laws of Canada and the State of Connecticut and under the bylaws of Parent and the Corporation. In connection therewith, Parent and the Corporation shall maintain the protection of insurance policies for your benefit (and the benefit of the Parent’s and the Corporation’s directors and officers) against all costs, charges, and expenses whatsoever incurred or sustained by you in connection with any action, suit, or proceeding to which you may be made a party by reason of you being or having been a director, officer, or employee of the Parent or the Corporation or both. This provision shall survive any termination of your employment hereunder.

28. Remedies. You acknowledge and agree that any breach or threatened breach of any of the provisions of Section 14 (Compliance with Insider Trading and Guidelines and Restrictions), Section 16 (Service to Employer), Section 21 (Confidentiality and Assignment of Inventions), Section 22 (Disclosure of Conflicts of Interest), Section 23 (Avoidance of Conflicts of Interest) or Section 25 (Restrictive Covenant) could cause irreparable damage to the Corporation or its partners, subsidiaries, or affiliates, that such harm could not be adequately compensated by the Corporation’s recovery of monetary damages, and that in the event of a breach or threatened breach thereof, the Corporation shall have the right to seek an injunction, specific performance, or other equitable relief as well as any equitable accounting of all your profits or benefits arising out of any such breach. It is further acknowledged and agreed that the remedies of the Corporation specified in this Section 27 are in addition to and not in substitution for any rights or remedies of the Corporation at law or in equity, and that all such rights and remedies are cumulative and not alternative, and that the Corporation may have recourse to any one or more of its available rights or remedies as it shall see fit.

29. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Corporation and its successors and assigns. Your rights and obligations contained in this Agreement are personal and such rights, benefits and obligations shall not be voluntarily or involuntarily assigned, alienated or transferred, whether by operation of law or otherwise, without the prior written consent of the Corporation. This Agreement shall otherwise be binding upon and inure to the benefit of your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.

30. Agreement Confidential. Both parties shall keep the terms and conditions of this Agreement confidential except as may be required to enforce any provision of this Agreement or as may otherwise be required by any law, regulation or other regulatory requirement.

31. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware and the parties hereto agree to the exclusive jurisdiction of the state and federal courts of such state.

32. Exercise of Functions. The rights of Parent or the Corporation as provided in this Agreement may be exercised on behalf of the Parent or the Corporation only by the Board.

33. Entire Agreement. The terms and conditions of this Agreement are in addition to and not in substitution for the obligations, duties and responsibilities imposed by law on employees of corporations generally, and you agree to comply with such obligations, duties and responsibilities. Except as otherwise provided in this Agreement and except for any documentation regarding benefits under benefit plans, equity award agreements and related documentation, agreements and related documentation regarding indemnification rights and documents regarding your rights as a shareholder, this Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and (except for the terms reserved to the Corporation’s discretion) may

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

only be varied by further written agreement signed by you and the Corporation. This Agreement supersedes any previous communications, understandings and agreements between you and the Corporation regarding your employment. It is acknowledged and agreed that this Agreement is mutually beneficial and is entered into for fresh and valuable consideration with the intent that it shall constitute a legally binding agreement.

34. Further Assurances. The parties will execute and deliver to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement.

35. Surviving Obligations. Your obligations and covenants under Section 21 (Confidentiality and Assignment of Inventions), Section 25 (Restrictive Covenant) and Section 27 (Remedies) shall survive the termination of this Agreement. Parent’s and the Corporation’s obligations under Section 10 (Termination by the Corporation Other Than For Cause) and Section 26 (Indemnification) shall survive the termination of this Agreement.

36. Independent Legal Advice. You hereby acknowledge that you have obtained or have had an opportunity to obtain independent legal advice in connection with this Agreement, and further acknowledge that you have read, understand, and agree to be bound by all of the terms and conditions contained herein.

37. Notice. Any notice or other communication required or contemplated under this Agreement to be given by one party to the other shall be delivered or mailed by prepaid registered post to the party to receive same at the address as set out below:

If to the Corporation or Parent:

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations & Strategy

If to Scott Habig:

Scott Habig

[redacted]

38. Severability. If any provision of this Agreement or any part thereof shall for any reason be held to be invalid or unenforceable in any respect, then such invalid or unenforceable provision or part shall be severable and severed from this Agreement and the other provisions of this Agreement shall remain in effect and be construed as if such invalid or unenforceable provision or part had never been contained herein.

39. Waiver. Any waiver of any breach or default under this Agreement shall only be effective if in writing signed by the party against whom the waiver is sought to be enforced, and no waiver shall be implied by any other act or conduct or by any indulgence, delay or omission. Any waiver shall only apply to the specific matter waived and only in the specific instance in which it is waived.

40. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

Yours truly,

AURINIA PHARMA U.S., INC.

(a Delaware corporation)

By: /s/ Max Donley

Accepted and agreed to by Scott Habig as of June 27, 2022

/s/Scott Habig

Scott Habig

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

SCHEDULE A

AURINIA PHARMACEUTICALS INC.

June 27, 2022

Scott Habig

[redacted]

Dear Scott:

Re: Change in Control Agreement

1. Term of Agreement.

This Agreement shall be in effect for a term commencing on the Effective Date of the Employment Agreement (as therein defined) and ending on the date of termination of the Employment Agreement.

2. Definitions.

(a) “Affiliate” means a corporation that is an affiliate of Parent under the Securities Act

(British Columbia), as amended from time to time.

(b) “Base Salary” shall mean the annual base salary, as referred to in Section 3 (Base Salary), of the Employment Agreement.

(d) “Cause” shall have the meaning set out in Section 11 (Termination by the Corporation for Cause) of the Employment Agreement.

(e) “Change in Control” of Parent shall be deemed to have occurred:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

percent (50%) of the membership of the board of directors of Parent following the transaction;

(iii) any acquisition, directly or indirectly, by a person or related group of persons of the right to appoint a majority of the directors of Parent; and

(iv) any sale, transfer or other disposition of all or substantially all of the assets of Parent;

(f) “Date of Termination” shall mean, if your employment is terminated, the date specified in the Notice of Termination.

(g) “Good Reason” shall mean the occurrence of one or more of the following events, without your express written consent, within 12 months of Change in Control:

(ii) a material reduction by the Corporation or Parent, in the aggregate, in your Base Salary, or incentive, retirement, health benefits, bonus or other compensation plans

provided to you immediately prior to the Change in Control, unless an equitable arrangement has been made with respect to such benefits in connection with a Change in Control;

(iv) any request by the Parent or any affiliate of Parent that you participate in an unlawful act; or

(v) any purported termination of your employment by the Corporation after a Change in Control which is not effected pursuant to a Notice of Termination satisfying the requirements of clause (h) below and for the purposes of this Agreement, no such purported termination shall be effective.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

such period, your resignation from all positions you then hold with the Parent and Corporation must be effective not later than 90 days after the end of the 30-day cure period.

(h) “Notice of Termination” shall mean a notice, in writing, communicated to the other party in accordance with Section 6 below, which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

(i) “Potential Change in Control” of Parent shall be deemed to have occurred if:

(i) Parent enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(ii) any person (including Parent) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

(iii) the Board adopts a resolution to the effect that, for the purposes of this Agreement, a Potential Change in Control of Parent has occurred.

3. Potential Change in Control.

4. Compensation Upon Termination Following Change in Control.

Subject to compliance by you with Section 3, upon your employment terminating pursuant to a Notice of Termination within 12 months after a Change in Control, the Corporation agrees that you shall receive and you agree to accept the following payments in full satisfaction of any and all claims you may have or then may have against the Corporation, for remuneration, fees, salary, benefits, bonuses or severance, arising out of or in connection with your employment by the Corporation or the termination of your employment:

(i) subject to the withholding of all applicable statutory deductions, the Corporation shall pay you a lump sum equal to 18 months’ Base Salary;

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

providing coverage under a separate plan or plans providing coverage that is no less favorable to you than the terms of the plans in effect on your termination date. If the cash equivalent or premium cost is provided, such cash equivalent shall be paid in a lump sum in cash within 60 days following the date of termination of your employment.

(iii) the Corporation shall arrange for you to be provided with such outplacement career counselling services as are reasonable and appropriate, to assist you in seeking new employment; and

5. Binding Agreement.

6. Notices.

If to the Corporation or Parent:

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations and Strategy

If to NAME:

Scott Habig

[redacted]

Any notice delivered shall be deemed to have been given and received on the first business day following the date of delivery. Any notice mailed shall be deemed to have been given and received on the fifth business day following the date it was posted, unless between the time of mailing and actual receipt of the notice there shall be a mail strike, slow-down or other labor dispute which might affect delivery of the notice by mail. In such event, the notice shall be effective only if delivered.

7. Modification: Amendments: Entire Agreement.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

8. Governing Law.

9. Validity.

10. No Employment or Service Contract

If the foregoing sets forth our agreement on this matter, kindly sign and return to Parent a copy of this letter.

AURINIA PHARMA U.S., INC.

(a Delaware corporation)

/s/ Max Donley

Date: June 27, 2022___________________

AURINIA PHARMACEUTICALS INC.

(a Province of Alberta corporation)

/s/ Stephen Robertson

Date: June 27, 2022___________________

Accepted and agreed to by Scott Habig as of June 27, 2022

/s/ Scott Habig

Scott Habig

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

SCHEDULE B

CONFIDENTIALITY AGREEMENT AND ASSIGNMENT OF INVENTIONS

AURINIA PHARMA U.S., INC

PRIVATE AND CONFIDENTIAL

June 27, 2022

Scott Habig

[redacted]

Dear Scott:

The purpose of this letter is to confirm and record the terms of the agreement (the “Agreement”) between you and Aurinia Pharma U.S., Inc. (“U.S. Sub”), a Delaware corporation and a wholly owned subsidiary of Aurinia Pharmaceuticals Inc., a corporation under the laws of the Province of Alberta (“Parent” and, together with U.S. Sub, “Aurinia”), concerning the terms on which you will (i) receive from and disclose to Aurinia proprietary and confidential information; (ii) agree to keep the information confidential, to protect it from disclosure and to use it only in accordance with the terms of this Agreement; and (iii) assign to Parent all rights, including any ownership interest which may arise in all inventions and intellectual property developed or disclosed by you over the course of your work during your employment with U.S. Sub. The effective date (“Effective Date”) of this Agreement is July 18, 2022, provided and subject to your employment agreement between you and Aurinia dated as of July 18, 2022 taking effect in accordance with Section 2 (Term) thereof.

In consideration of the offer of employment by Aurinia, you and Aurinia hereby agree as follows:

1. INTERPRETATION

1.1 Definitions. In this Agreement:

(i) from which Aurinia derives economic value, actual or potential, from the information not being generally known; or

(ii) in respect of which Aurinia otherwise has a legitimate interest in maintaining secrecy;

and which, without limiting the generality of the foregoing, shall include;

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

(iv) all information relating to Aurinia’s Business, and to all other aspects of Aurinia’s structure, personnel, and operations, including financial, clinical, regulatory, marketing, advertising and commercial information and strategies, customer lists, compilations, agreements and contractual records and correspondence; programs, devices, concepts, inventions, designs, methods, processes, data, know-how, unique combinations of separate items that is not generally known and items provided or disclosed to Aurinia by third parties subject to restrictions on use or disclosure;

(vii) all information provided by Aurinia’s agents, consultants, lawyers, contractors, licensors or licensees to Aurinia and relating to Aurinia’s Business; and

all applications, registrations and related foreign applications filed and registrations granted thereon.

2. CONFIDENTIALITY

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

2.2 Fiduciary Capacity. You will be and act toward Aurinia as a fiduciary in respect of the Confidential Information.

2.3 Non-disclosure. Unless Aurinia first gives you written permission to do so under Section

2.7 of this Agreement, you will not at any time, either during or after your involvement in any capacity with Aurinia;

(a) use or copy Confidential Information or your recollections thereof;

(c) permit or cause any Confidential Information to be used, copied, published, disclosed, translated or adapted except as otherwise expressly permitted by this Agreement;

(e) communicate the Confidential Information or your recollections thereof to another employee of Aurinia in a public place or using methods of communication that are capable

of being intercepted (such as unencrypted messages using the internet or cellular phones) or overheard, without the written permission of Aurinia.

2.6 Control of Confidential Information and Return of Information. All physical materials produced or prepared by you containing Confidential Information, including, without limitation, biological material, chemical entities, test results, notes of experiments, computer files, photographs, x-ray film, designs, devices, formulas, memoranda, drawings, plans, prototypes, samples, accounts, reports, financial statements, estimates and materials prepared in the course of your responsibilities to or for the benefit of Aurinia, shall belong to Aurinia, and you will promptly turn over to Aurinia’s possession every original and copy of any and all such items in your possession or control upon request by Aurinia. You shall not permit or cause any physical materials to be stored off the premises of Aurinia, unless in accordance with written procedures of Aurinia, as amended from time to time in writing. You shall not transfer any biological material to another person outside of Aurinia, unless a material transfer agreement has been signed by both Aurinia and the other party. You shall not accept any biological material from another person outside of Aurinia, unless in accordance with written procedures of Aurinia, as amended from time to time in writing.

2.7 Purpose of Use. You will use Confidential Information only for purposes authorized or directed by Aurinia.

2.8 Exemptions. Your obligation of confidentiality under this Agreement will not apply to any of the following:

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

(a) information that is already known to you, though not due to a prior disclosure by Aurinia or by a person who obtained knowledge of the information, directly or indirectly, from Aurinia;

(b) information disclosed to you by another person who is not obliged to maintain the confidentiality of that information and who did not obtain knowledge of the information, directly or indirectly, from Aurinia;

(c) information that is developed by you independently of Confidential Information received from Aurinia and such independent development can be documented by you;

(d) other particular information or material which Aurinia expressly exempts by written instrument signed by Aurinia;

(e) information or material that is in the public domain through no fault of your own; and

(f) information or material that you are obligated by law to disclose, to the extent of such obligation, provided that:

(ii) if Aurinia agrees that the disclosure is required by law, it will give you written authorization to disclose the information for the required purposes only;

(iii) if Aurinia does not agree that the disclosure is required by law, this Agreement will continue to apply, except to the extent that a Court of competent jurisdiction orders otherwise; and

3. ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS

3.2 Assignment of Rights. You will assign, and do hereby assign, to Parent or, at the option of Parent and upon notice from Parent, to Parent’s designee, your entire right, title and interest in and to all of your Work Product during your involvement, in any capacity, with Aurinia and all other rights and interests of a proprietary nature in and associated with your Work Product, including all patents, patent applications filed and other registrations granted thereon. To the extent that you retain or acquire legal title to any such rights and interests, you hereby declare and confirm that such legal title is and will be held by you only as trustee and agent for Aurinia. You agree that Aurinia’s rights hereunder shall attach to all of your Work Product, notwithstanding that it may be perfected or reduced to specific form after you have terminated your relationship with Aurinia. You further agree that Aurinia’s rights hereunder are worldwide rights and are not limited to the United States but shall extend to every country of the world.

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

3.5 Assistance. You hereby agree to reasonably assist Aurinia, at Aurinia’s request and expense, in:

(b) making applications for all other forms of intellectual property registration relating to your Work Product;

(c) prosecuting and maintaining the patent applications and other intellectual property relating to your Work Product; and

(d) registering, maintaining and enforcing the patents and other intellectual property registrations relating to your Work Product.

4. GENERAL

4.2 Binding Nature of Agreement. This Agreement is not assignable by you. You agree that this Agreement shall be binding upon your heirs and estate.

4.4 No Solicitation of Employees, Consultant or Contractors. You agree that during the period of your employment and for the one (1) year period thereafter, you will not, as an officer, director,

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

employee, consultant, owner, partner or in any other capacity either directly or indirectly or through others,

except on behalf of Aurinia, solicit, induce, encourage, or participate in soliciting, inducing or encouraging any person known to you to be an employee, consultant, or independent contractor of Aurinia to terminate his or her relationship with Aurinia.

4.10 Further Assurances. The parties will execute and deliver to each other such further instruments and assurances and do such further acts as may be required to give effect to this Agreement.

If to the Corporation or Parent:

Aurinia Pharmaceuticals Inc. 1203 – 4464 Markham Street Victoria, B.C. V8Z 7X9

Attention: EVP, Operations and Strategy

If to Scott Habig:

Scott Habig

[redacted]

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

4.12 Amendment. No amendment, modification, supplement or other purported alteration of this Agreement shall be binding unless it is in writing and signed by you and by Aurinia.

[Signature Page Follows]

Thank you for your cooperation in this matter. Yours truly,

AURINIA PHARMA U.S., INC.

By:/s/ Max Donley

Accepted and agreed to by Scott Habig. as of June 27, 2022

/s/ Scott Habig

Scott Habig

/s/ Stephen Robertson

Witness Signature

Stephen Robertson

Witness Name

EVP, General Counsel, Corporate Secretary and Chief Compliance Officer

Occupation

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

SCHEDULE C

DESCRIPTION OF BUSINESS

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 10.23

SCHEDULE D

EXCEPTIONS TO RESTRICTIVE COVENANT

None

Certain identified information has been excluded from this exhibit because it both (i) is not

material and (ii) would be competitively harmful if publicly disclosed.

Document

Exhibit 10.46

SUPPLY AGREEMENT

by and between

AURINIA PHARMACEUTICALS INC.

and

OTSUKA PHARMACEUTICAL CO., LTD.

AUGUST 1, 2022

Table of Contents

Article 1 Interpretation	1
1.1Commercial Supply under Collaboration Agreement	1
1.2Priority	2
1.3Collaboration Agreement Definitions	2
1.4Local Definitions	2
1.5Applicable Terms of the Collaboration Agreement	5
Article 2 Manufacture and Supply	5
2.1General	5
2.2Commitment to Supply	5
2.3Commitment to Purchase	5
2.4Commitment to Use CMOs	6
2.5Commitment to Support Manufacture	6
2.6Otsuka Commitment to Package and Manufacture	6
2.7Compliance with Applicable Laws	6
2.8Quality Agreement	7
Article 3 Forecasting	7
3.1Forecasts Generally	7
3.2Long Term Production Forecast	8

3.3Rolling Forecasts	8
3.4Permitted Changes to the Rolling Forecasts	8
3.5Other Proposed Changes	9
3.6Example	9
3.7Binding Elements of Forecasts	10
3.8Allocation of Shortfalls	10
Article 4 Purchase Orders and Acceptance	11
4.1Purchase Orders	11
4.2Purchase Order Sizes	12
4.3Aurinia’s Cancellation of Purchase Orders	12
4.4Otsuka’s Modification or Cancellation of Purchase Orders	13
4.5Unplanned Delay or Cancellations	13
4.6Extended Delays	13
Article 5 Manufacture	13
5.1Timing of Product Delivery	13
5.2Changes to Manufacturing	13
5.3Recordkeeping	13
5.4Audit and Inspections	13
5.5Inspections by a Governmental Authority	14
5.6Remaining Shelf Life	14
5.7Material Failure to Supply	14
5.8Instructions to Dispose and Settle	15
Article 6 Testing, Samples and Release	15
6.1Acceptance/Rejection	15
6.2Disputes	16
6.3Remedies for Non-Conformance	16

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

6.4Limited Remedies	17
Article 7 Delivery	17
7.1Delivery	17
7.2Title	17
7.3Storage Fees	17
Article 8 Cooperation and Consultation	18
8.1Project Managers	18
8.2Manufacturing and Supply Subcommittee	18
8.3Manufacturing Discussions Not Subject to Dispute Resolution	19
8.4Submission of Certain Projects to Manufacturing & Supply Subcommittee	19
8.5Outcomes in Respect of Certain Submissions	20
8.6New and Amended CMO Agreements	20
8.7Parties Bound by Changes to CMO Agreements	21
8.8Commercially Reasonable Efforts or Best Efforts to Obtain an Outcome	21
Article 9 Price	21
9.1Supply Price	21
9.2Price Adjustments	21
9.3Other Manufacturing Costs	22
9.4Other Product Costs	22
9.5Certain Costs to be Allocated Reasonably	23
9.6Lonza Fixed Fees	24
9.7Allocation Method for Certain Lonza Costs	24
9.8Pass Through of Other Manufacturing Costs	25
9.9US GAAP	25
Article 10 Payment Terms	26

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

10.1Payment Timing	26
10.2Payment Terms for Existing Compound	26
10.3Payment Terms for New Compound	26
10.4Payment Terms for Bulk Product and Semi-Finished Product	27
10.5Exchange Rate; Manner and Place of Payment	27
Article 11 Representations and Warranties	27
11.1Aurinia Representations and Warranties	27
11.2Pass-Through	27
11.3Otsuka Representations and Warranties	27
11.4Limited Warranties	27
Article 12 Limitations of Liability	28
12.1No Additional Risk	28
12.2Pass Through of Liabilities and Remedies	28
Article 13 Term and Termination	28
13.1Term	28
13.2Termination by Otsuka	29
13.3Termination by Aurinia	29
Article 14 Effects of Termination	29
14.1Consequences in any Event	29
14.2Consequences on Early Termination of Collaboration Agreement	29
14.3Survival; Accrued Rights	29
Article 15 Dispute Resolution	30
15.1Incorporation of Dispute Resolution Terms	30
15.2Disputes involving the Parties and CMO(s)	30
15.3Exclusions from Dispute Resolution	30
15.4Tolling	31

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Commercial Supply Agreement

This Commercial Supply Agreement (this “Agreement”) is entered into as of August 1, 2022 (the “Effective Date”), by and between Aurinia Pharmaceuticals Inc., a corporation organized and existing under the laws of Alberta, having an address at 1203-4464 Markham Street, Victoria, BC V8Z 7X8 Canada (“Aurinia”) and Otsuka Pharmaceutical Co., Ltd., a corporation organized and existing under the laws of Japan, having an address at 2-9, Kanda Tsukasa-machi, Chiyoda-ku, Tokyo 101-8535, Japan (“Otsuka”). Aurinia and Otsuka may be referred to herein individually as a “Party” or collectively as the “Parties.”

RECITALS

Whereas, Otsuka and Aurinia have established a collaboration to Develop, Manufacture, Commercialize and conduct Medical Affairs for Products on the terms and conditions set forth in the Collaboration and License Agreement between the Parties entered into as of December 17, 2020 (the “Collaboration Agreement”); and

Whereas, pursuant to the Collaboration Agreement, Aurinia will Manufacture and supply, itself or through a CMO in compliance with all Applicable Laws, including cGMP, all Clinical Samples, Compound and Products for use in the Development and Commercialization of Products in the Otsuka Territory under one or more supply agreements, including this Commercial Supply Agreement;

AGREEMENT

Now, Therefore, in consideration of the foregoing premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Aurinia and Otsuka hereby agree as follows:

Article 1 Interpretation

1.1 Commercial Supply under Collaboration Agreement

1.1.1 Otsuka and Aurinia are entering into this Agreement pursuant to the terms of the Collaboration Agreement, Section 7.2. Except as expressly stipulated in this Agreement, nothing in this Agreement is intended to modify the Collaboration Agreement.

1.1.2 Notwithstanding any term of the Collaboration Agreement, Aurinia’s sole obligation to Manufacture the Semi-Finished Product or Bulk Product for the Commercialization of the Product by Otsuka shall be as set out in this Agreement. Without limiting the generality of the foregoing, after the execution of this Agreement and the related commercial Quality Agreement(s), the Parties’ sole obligations with respect to Manufacture and supply of Product shall be as set out in this Agreement and the commercial Quality Agreement and, once executed, Article 7 (excluding Section 7.7) of the Collaboration Agreement is hereby superseded and replaced by the terms of this Agreement except with respect to the Parties’ obligations with respect to the supply of and payment for Semi-Finished Product and Clinical Samples to Otsuka or its Affiliates for Development in the Otsuka Territory.

1.2 Priority

In the event and to the extent that any provision set out herein contradicts any provision contained in the Collaboration Agreement, the provision of this Agreement shall prevail to the extent of such inconsistency. In the event of a conflict between the provisions of this Agreement and the Quality Agreement solely with respect to quality practice activities outlined in the Quality Agreement, the provisions of the Quality Agreement shall prevail. Otherwise, including with respect to the allocation of

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

risk, intellectual property rights, liability and financial responsibility, the provisions of this Agreement and the Collaboration Agreement shall prevail over the provisions of the Quality Agreement.

1.3 Collaboration Agreement Definitions

Unless otherwise expressly defined in this Agreement, terms with an initial capital letter shall have the meaning set out therefore in the Collaboration Agreement.

1.4 Local Definitions

Whenever used in this Agreement with an initial capital letter, the terms set out below shall have the meanings specified herein:

1.4.1 “Best Efforts” means the efforts that a prudent, law-abiding person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

1.4.2 “Binding Period” has the meaning set out in Section 3.7.

1.4.3 “Blister” means placement of Bulk Product in blister packs and all Manufacturing activities associated with same. The term “Blistering” has a correlative meaning.

1.4.4 “Blistering Supply Agreement” means, as of the Effective Date, the CMO Agreement(s) with PCI (as same may be amended, supplemented, renewed or restated, including as contemplated in Section 8.6.1) or any replacement, additional or new agreement for the Blistering of Bulk Product to make Semi-Finished Product, including as contemplated in Section 8.6.1.

1.4.5 “Bulk Product” means, unless otherwise agreed between the Parties, Encapsulated Compound in bulk ready for shipment for Blistering. “Bulk Product” includes “Product” as defined in the Encapsulation Supply Agreement.

1.4.6 “Calendar Month” means each month of the Gregorian calendar.

1.4.7 “Capital Program Fee” shall have the meaning set out in the Monoplant Agreement.

1.4.8 “Catalent” means Catalent Pharma Solutions, LLC, and its Affiliates as identified or authorized by the Encapsulation Supply Agreement in effect as of the Effective Date.

1.4.9 “Client-supplied Material” shall have the meaning set out in the applicable CMO Agreement.

1.4.10 “CMO” means a Third Party contract manufacturer for the supply of Compound, Bulk Product or Semi-Finished Product or any component thereof for the Otsuka Territory.

1.4.11 “CMO Agreement(s)” means the Compound Supply Agreement(s), the Blistering Supply Agreement(s) and the Encapsulation Supply Agreement(s).

1.4.12 “Commercially Reasonable Efforts” shall have the meaning set out therefore in the Collaboration Agreement, subject to Section 8.8.

1.4.13 “Compound” means Voclosporin or VCS having the chemical structure set forth in Exhibit 1.45 of the Collaboration Agreement. “Compound” includes “Final Product” as defined in the Compound Supply Agreements.

1.4.14 “Compound Production Schedule” has the meaning set out in Section 3.1.3.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

1.4.15 “Compound Supply Agreement” means, as of the Effective Date, the CMO Agreements with Lonza set out on Exhibit 1.37 of the Collaboration Agreement, including the Monoplant Agreement, (as same may be amended, supplemented, renewed or restated, including as contemplated in Section 8.6) or any replacement, additional or new agreement for the supply of Compound, including as contemplated in Section 8.6.1.

1.4.16 “Encapsulate” means formulate Compound and encapsulate same in gelcaps and all Manufacturing activities associated with same. The terms “Encapsulation”, “Encapsulated” and “Encapsulating” have correlative meanings.

1.4.17 “Encapsulation Supply Agreement” means, as of the Effective Date, the CMO Agreements with Catalent and its Affiliates set out on Exhibit 1.37 of the Collaboration Agreement (as same may be amended, supplemented, renewed or restated, including as contemplated in Section 8.6) or any replacement, additional or new agreement for the Encapsulation of Product, including as contemplated in Section 8.6.

1.4.18 “Facility” has the meaning set out in the Monoplant Agreement.

1.4.19 “Finished Product” means Bulk Product or Semi-Finished Product supplied to Otsuka under this Agreement and further Packaged by or on behalf of Otsuka which is released and ready for distribution and sale by or on behalf of Otsuka.

1.4.20 “Fixed Facility Fee” shall have the meaning set out in the Monoplant Agreement.

1.4.21 “Long Term Production Forecast” has the meaning set out in Section 3.2.

1.4.22 “Lonza” means Lonza Ltd and its Affiliates as identified or authorized by the Monoplant Agreement.

1.4.23 “Manufacturing and Supply Subcommittee” means the Manufacturing and Supply Subcommittee established by the JCC to review and discuss matters pertaining to the Manufacture and supply of Bulk Product and Semi-Finished Product for the Otsuka Territory as set out in Section 8.2.

1.4.24 “Material Failure to Supply” means, other than due to an event for which Aurinia or its CMO(s) claim the benefit of the Force Majeure provisions hereof or of a CMO Agreement, Otsuka giving written notice to Aurinia that, for each of any [redacted] commencing after the [redacted], Aurinia has failed or in the event it is evident that Aurinia will fail to supply at least [redacted] of the combined total of Bulk Product and Semi-Finished Product to be supplied in accordance with the terms of this Agreement and the Purchase Orders and following written notice of such failures from Otsuka within [redacted] of such failures, Aurinia fails to cure such failures within [redacted] of such written notice, except where such failure would not have occurred but for the breach of this Agreement or Applicable Law, negligence or willful misconduct of Otsuka.

1.4.25 [redacted].

1.4.26 “New CMO Agreement” has the meaning set out in Section 8.6.1.

1.4.27 “PCI” means Packaging Coordinators, LLC and its Affiliates as identified or authorized by the CMO Agreements with PCI set out on Exhibit 1.37 of the Collaboration Agreement.

1.4.28 “Product” means Bulk Product or Semi-Finished Product; and includes by amendment of this Agreement any other oral product presentations of Compound that may be developed (e.g., tablets).

1.4.29 “Project Manager” has the meaning set out in Section 8.1.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

1.4.30 “Prompt” or “Promptly” means within a reasonable time in light of all the circumstances.

1.4.31 “Purchase Order” has the meaning set forth in Section 4.1.

1.4.32 “Ramp-Up Period” means the period commencing on the Effective Date and ending [redacted] following Operational Qualification of the Facility in accordance with the terms of the [redacted].

1.4.33 “Rolling Forecast” has the meaning set out in Section 3.3.

1.4.34 “Semi-Finished Product” means, unless otherwise agreed between the Parties, Blistered Bulk Product ready for shipment for secondary Packaging. “Semi-Finished Product” includes “Packaged Product” as defined in the Blistering Supply Agreement.

1.4.35 “Specifications”, in respect of Bulk Product or Semi-Finished Product, means the specifications as of the Effective Date in Exhibit 1.4.35, as same are amended under the CMO Agreements as required or permitted pursuant to this Agreement.

1.4.36 “Stock Keeping Unit” or “SKU” means a unique stock keeping unit of Product to identify products that have the same distinguishing characteristics as may be agreed between the Parties from time to time. As of the Effective Date, the Parties agree that there are three SKUs, one for each of: Bulk Product for Europe; Bulk Product for making Semi-Finished Product for Japan; and Semi-Finished Product for Japan.

1.4.37 “Year 1 Forecast” has the meaning set out in Section 3.3.1.3.

1.4.38 “Year 2 Forecast” has the meaning set out in Section 3.3.1.2

1.4.39 “Year 3 Forecast” has the meaning set out in Section 3.3.1.1.

1.5 Applicable Terms of the Collaboration Agreement

The following terms of the Collaboration Agreement: Article 9 (Payment, Records and Audit) (excluding 9.2, Exchange Rate), Section 11.5 (Disclaimer), Article 12 (Indemnification), Article 13 (Confidentiality), Section 14.7 (Confidential Information), Article 15 (Dispute Resolution), and Article 16 (General) constitute part of this Agreement as if set forth herein.

Article 2 Manufacture and Supply

2.1 General

Subject to the terms of this Agreement and the Quality Agreement(s),

2.1.1 Aurinia will Manufacture and supply, itself or through a CMO in compliance with all Applicable Laws, including cGMP: all Bulk Product; and Semi-Finished Product as specified by Otsuka in accordance with this Agreement; for use in the Commercialization of Products in the Otsuka Territory.

2.1.2 Subject to the terms of this Agreement especially Article 8, Aurinia may, in its sole and absolute discretion, make decisions and incur costs regarding the Manufacture (excluding Packaging by Otsuka as contemplated hereby) of Product for the Otsuka Territory and the Parties shall share such costs on the terms set out in this Agreement.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

2.2 Commitment to Supply

Aurinia will supply to Otsuka or its Affiliates for Commercialization in the Otsuka Territory either Bulk Product or Semi-Finished Product, in each case as specified by Otsuka from time to time in accordance with the terms of this Agreement and the Purchase Orders.

2.3 Commitment to Purchase

Subject to the terms and conditions of this Agreement, Section 7.7 of the Collaboration Agreement and any Clinical Supply Agreement:

2.3.1 Otsuka shall purchase 100% of its demand for Product, including Compound, Bulk Product, and, subject to Section 2.3.2.1, Semi-Finished Product, exclusively from Aurinia; and

2.3.2 Otsuka shall not directly or indirectly acquire or use Compound, Bulk Product, Semi-Finished Product or Finished Product except as follows:

.1 Bulk Product purchased from Aurinia shall be Packaged by or on behalf of Otsuka into Semi-Finished and Finished Product; and

.2 Semi-Finished Product purchased from Aurinia or Packaged from Bulk Product as contemplated in Section 2.3.2.1 shall be Packaged by or on behalf of Otsuka into Finished Product;

for Commercialization of Finished Product in the Otsuka Territory in accordance with terms of the Collaboration Agreement.

2.4 Commitment to Use CMOs

Neither Aurinia nor any of its Affiliates will have the right to do any one of the following:

2.4.1 Manufacture Compound;

2.4.2 Encapsulate Compound into Bulk Product; or

2.4.3 Blister Bulk Product into Semi-Finished Product;

directly (rather than through a CMO) for supply to the Otsuka Territory unless:

2.4.4 the Cost of Goods for such Manufacturing activity by Aurinia or its Affiliates plus Otsuka’s share of the other costs referred to in Section 9.3.2 in the aggregate;

will be likely to be less than

2.4.5 the Cost of Goods for such Manufacturing activity by CMOs plus Otsuka’s share of the other costs referred to in Section 9.3.1, 9.6 and 9.8 in the aggregate.

2.5 Commitment to Support Manufacture

Otsuka shall cooperate with Aurinia and use Commercially Reasonable Efforts to support the Manufacturing and other activities taken under this Agreement and the CMO Agreements in a timely manner as may be necessary or useful for Aurinia to perform Aurinia’s obligations under the CMO Agreements in respect of the supply of Product to Otsuka under such CMO Agreements, including:

2.5.1 responding Promptly to Aurinia requests;

2.5.2 making and communicating decisions as requested, acting reasonably;

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

2.5.3 supplying any reasonably requested information, documentation, data or materials in the control of Otsuka;

2.5.4 providing or approving, prior to the procurement of applicable components, all artwork, advertising and information.

2.6 Otsuka Commitment to Package and Manufacture

Otsuka shall, at its cost and expense, Package or have Packaged, and otherwise Manufacture or have Manufactured, Bulk Product and Semi-Finished Product supplied by or on behalf of Aurinia for the Commercialization of Finished Product in the Otsuka Territory.

2.7 Compliance with Applicable Laws

Each Party shall perform, and each will ensure that its Affiliates, licensees and Sublicensees (as applicable), and Representatives, and, Aurinia will manufacture and supply Bulk Product and Semi-Finished Product itself or through the CMO(s) under this Agreement in a good scientific manner, in compliance with all Applicable Laws.

2.8 Quality Agreement

The Parties will agree upon and enter into one or more commercial Quality Agreements containing reasonable and customary terms and conditions regarding quality assurance, quality control and compliance with cGMP.

Article 3 Forecasting

3.1 Forecasts Generally

3.1.1 To enable planning for the Manufacture of Compound, and the subsequent scheduling of the Manufacture of Bulk Product and Semi-Finished Product, the purchase of necessary long lead time Raw Materials (as defined in any applicable CMO Agreement), and for Manufacturing capacity planning purposes, the Parties shall on a regular basis discuss Otsuka’s future demand for Product and Otsuka shall deliver to Aurinia the Long Term Production Forecast and the Rolling Forecasts.

3.1.2 Each Long Term Production Forecast and Rolling Forecast will be delivered [redacted] in advance of each Calendar Quarter, and will breakdown the demand for Product by month and by SKU.

3.1.3 In consultation with Otsuka, Aurinia will incorporate Otsuka’s Rolling Forecasts into Aurinia’s planning process for Compound production consistent with the terms of the Compound Supply Agreements to support the requirements in the Rolling Forecasts and the requirements of Aurinia and Other Aurinia Licensees and for Third Parties for other products containing the Compound (including any potential need to produce a greater amount of Compound (including Lonza Intermediate or Lonza Final Product (as each is defined in the Monoplant Agreement)) and to supply the applicable CMOs in accordance with the applicable CMO Agreements for Encapsulation and Blistering in order to meet, among other things, the requirements in the then-applicable Binding Periods (collectively, the “Compound Production Schedule”). Aurinia will provide to Otsuka those elements of the Compound Production Schedule necessary for Otsuka to be able to evaluate the plan against Otsuka’s requirements in the Rolling Forecasts (including the plan for Manufacturing of Product for Otsuka and information regarding inventories of Compound available to meet Otsuka’s requirements in the Rolling Forecast) for review and comment, which comments Aurinia shall reasonably consider. Aurinia shall instruct the CMOs to manufacture the Compound for Otsuka separately from the Compound for Aurinia or any Other Aurinia Licensees and use Commercially Reasonable Efforts to cause CMOs to distinguish the Compound for Otsuka from the Compound for Aurinia or

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

any Other Aurinia Licensees by the order number, batch number or other equivalent means.

3.1.4 In order for the Parties to take advantage of the forecasting and planning process set out in this Article, and for the Parties to be able to rely on the Rolling Forecasts and Purchase Orders arising therefrom, there are necessary limits on the changes to the forecasting and ordering process. Throughout the planning process, including in respect of changes where the actual demand exceeds what was contemplated in the Rolling Forecasts as changed as permitted hereby, the Parties will cooperate and act in good faith and with a view to the efficient Manufacture of Product for Otsuka, Aurinia and Other Aurinia Licensees and for Third Parties for other products containing the Compound.

3.2 Long Term Production Forecast

Otsuka shall, concurrently with the delivery of each Rolling Forecast referred to in Section 3.3, deliver to Aurinia a written forecast showing Otsuka’s good faith non-binding estimated monthly requirements for Bulk Product and Semi-Finished Product by SKU for a minimum of the following [redacted] (each, a “Long Term Production Forecast”, which forecast will set out Otsuka’s good faith estimate of both the base case and upside forecasts at the time of delivery of the forecast.

3.3 Rolling Forecasts

3.3.1 At least [redacted] prior to the commencement of each Calendar Quarter, Otsuka shall deliver to Aurinia a written rolling forecast specifying Otsuka’s good faith estimated monthly requirements for Bulk Product and Semi-Finished Product by SKU for the following [redacted] (the “Rolling Forecast”) comprised of the following elements:

.1 Calendar Quarters [redacted] (the “[redacted] Forecast”);

.2 Calendar Quarters [redacted] (the “[redacted] Forecast”); and

.3 Calendar Quarters [redacted] (the “[redacted] Forecast”);

3.3.2 Aurinia, on receipt of each Rolling Forecast, will, in consultation with Otsuka, generate an Compound forecast based on the estimated requirements for Bulk Product and Semi-Finished Product set out in such Rolling Forecast.

3.3.3 In the event Aurinia believes it may not be able to meet the requirements of any Rolling Forecast, due to CMO capacity or otherwise, Aurinia shall notify Otsuka within [redacted] of receipt of such Rolling Forecast, and the Parties shall cooperate and agree in good faith appropriate changes to the Rolling Forecast.

3.4 Permitted Changes to the Rolling Forecasts

To enable planning for the Manufacture of Compound, and the subsequent scheduling of the Manufacture of Bulk Product and Semi-Finished Product, the purchase of necessary long lead time Raw Materials (as defined in the applicable CMO Agreement), and for Manufacturing capacity planning purposes, it is the intention of the Parties that the variance in forecasted demand for Bulk Product and Semi-Finished Product by SKU for each four Calendar Quarter period narrows as such period comes closer to being binding on the Parties. To facilitate the narrowing of the variances, except as otherwise agreed between the Parties:

3.4.1 no changes to the Rolling Forecast for Bulk Product or Semi-Finished Product by SKU may be made in respect of Calendar Quarters forming part of the Binding Period for such Bulk Product or Semi-Finished Product;

3.4.2 the Rolling Forecast for Bulk Product or Semi-Finished Product by SKU for a [redacted] Calendar Quarter period may be modified by Otsuka in a subsequent Rolling Forecast to

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

increase or decrease the forecasted demand for each such Product in such subsequent Rolling Forecast by up to:

.1 [redacted] in the aggregate from when such [redacted] Calendar Quarter period becomes the [redacted] Forecast to when such [redacted] Calendar Quarter period becomes the [redacted] Forecast; and

.2 [redacted] in the aggregate from when such [redacted] r Calendar Quarter period becomes the [redacted] Forecast to when such [redacted] Calendar Quarter period becomes the [redacted] Forecast;

3.4.3 no forecast for a Calendar Quarter in the Rolling Forecast may be modified to exceed the availability of Compound or long lead time Raw Materials (as defined in any applicable CMO Agreement) ordered and Manufactured in the ordinary course of business in reliance on Otsuka’s forecasts as contemplated by Section 3.7;

3.4.4 except for the Binding Period, Otsuka may move the forecast for any month in a Calendar Quarter to any other month in the same Calendar Quarter;

3.4.5 a change made pursuant to any one of Section 3.4.1 through 3.4.4 may be made only if such change does not violate the limitation in changes set out in any other Section of Sections 3.4.1 through 3.4.4; and

3.4.6 any change made by Otsuka pursuant to this Section 3.4 will not relieve Otsuka of any payment obligations arising prior to such change, and Otsuka will bear any costs associated with such change.

3.5 Other Proposed Changes

If a forecast or a change to a forecast described in Section 3.4 may impact a production schedule with a CMO, or the actual or anticipated inventories of Product of Otsuka, or the aggregated inventories of Aurinia or any Other Aurinia Licensees for Product and Third Parties for other products containing the Compound, or require the consent of a CMO, the Parties will consult with each other and, on request by Otsuka, Aurinia will use Commercially Reasonable Efforts to arrange for such change with the applicable CMO(s); or the Parties modify such requests or changes, acting reasonably.

3.6 Example

3.7 [redacted] Binding Elements of Forecasts

Aurinia may rely on and Otsuka shall place Purchase Orders in accordance with Article 4 for, the following periods:

3.7.1 in respect of Bulk Product, the next [redacted] of the then-most-current Rolling Forecast; and

3.7.2 in respect of Semi-Finished Product, the next [redacted] of the then-most-current Rolling Forecast; and

3.7.3 in respect of Compound, the next [redacted] of the then-most-current Rolling Forecast; and

3.7.4 in respect of long lead-time Raw Materials (as defined in each CMO Agreement), the entirety of the then-most-current Rolling Forecast;

each, the applicable “Binding Period”.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

3.8 Allocation of Shortfalls

3.8.1 In the event that Compound, Bulk Product or Semi-Finished Product is in short supply such that Aurinia believes in good faith that it will not be able to fulfill its supply obligations hereunder, Aurinia will provide Prompt written notice to Otsuka thereof and the Parties will Promptly discuss such situation. Provided that Otsuka has not exercised and waives its rights in respect of a Material Failure to Supply in respect of such shortfall, Aurinia will:

.1 use Commercially Reasonable Efforts to remedy the situation giving rise to such shortage; and

.2 allocate to each of Otsuka and Aurinia an amount of

(a) available Compound, Bulk Product and Semi-Finished Product (if such Compound, Bulk Product and Semi-Finished Product can be used by both Aurinia and Otsuka for their respective territories, even if previously been segregated under this Agreement, or otherwise); and

(b) capacity for the Manufacture of Compound, Encapsulation of Bulk Product or Blistering of Semi-Finished Product at the applicable CMO(s) so that Otsuka, on the one hand, and Aurinia and Other Aurinia Licensees, on the other hand, receive such product(s) based on the ratio between:

(i) the quantity of Finished Product produced for Otsuka; and

(ii) the quantity of Finished Product and Aurinia Domain Product produced for Aurinia and Other Aurinia Licensees;

in each case during the [redacted] preceding the commencement of such period of short supply, provided that each Party shall be entitled to elect, on notice to the other Party, to receive an allocation of a minimum of [redacted] of the quantity of such product(s) available during such period of short supply.

3.8.2 In furtherance of the foregoing allocations, Aurinia shall use Commercially Reasonable Efforts to cause the applicable CMO(s) to produce Product in the validated batch sizes set out in Section 4.2 so as to allocate Product in quantities as near as reasonably practicable to the foregoing allocations.

3.8.3 The Parties shall have no obligation to split any batch of Product between Aurinia and Otsuka.

Article 4 Purchase Orders and Acceptance

4.1 Purchase Orders

4.1.1 On or before the first day of each Calendar Month, to the extent not already the subject of a Purchase Order placed by Otsuka with Aurinia, Otsuka shall place binding, non-cancellable Purchase Orders for the Binding Period for Bulk Product and Semi-Finished Product for each SKU in minimum order quantities as described in Section 4.2 to be Manufactured and the proposed delivery date(s) (each a “Purchase Order”).

4.1.2 Upon receipt of a Purchase Order, Aurinia will submit a corresponding Purchase Order (alone or in combination with other orders) to the applicable CMO and use Commercially Reasonable Efforts to have the applicable CMO accept such Purchase Order. Where Aurinia is obligated to accept terms from the applicable CMO other than as set out in Otsuka’s Purchase Order, or where a CMO and Aurinia are obligated to agree on

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

alternative delivery dates, Otsuka and Aurinia shall consult and cooperate with each other in order to allow Aurinia and such CMO to agree on reasonable alternative delivery date(s).

4.1.3 Provided that a Purchase Order is consistent with the quantities set out in the applicable Binding Period and other terms and conditions of this Agreement, within [redacted] following receipt of a Purchase Order:

.1 in respect of Purchase Orders for Bulk Product, Aurinia may issue a written acknowledgement to Otsuka that it accepts or rejects such Purchase Order with the proposed delivery date(s) or reasonable alternative delivery date(s);

.2 in respect of Purchase Orders for Semi-Finished Product, Aurinia may issue a written acknowledgement to Otsuka that it accepts such Purchase Order with the proposed delivery date(s) or reasonable alternative delivery date(s), in which event the Parties shall Promptly reach mutual agreement on acceptable delivery date(s).

4.1.4 Subject to Section 4.1.5, Aurinia will accept the Purchase Orders on the same terms as such Purchase Orders are accepted by the applicable CMO, after the application of any rights of the CMO to reject, vary, reschedule or condition any such Purchase Orders.

4.1.5 Aurinia may reject Purchase Orders:

.1 for quantities other than the batch sizes set out in Section 4.2; provided that, Aurinia’s option, in the event such a Purchase Order is received, Aurinia shall be permitted to adjust the order size to conform to the corresponding permitted batch size, and Aurinia shall notify Otsuka of any such adjustment in its order acceptance;

.2 if the Purchase Order exceeds in the aggregate (together with other Purchase Orders from Otsuka) the applicable Binding Forecast;

.3 if the Purchase Order contains terms other than the quantities of Bulk Product or Semi-Finished Product and requested delivery date(s) and any terms agreed in this Agreement;

.4 if the Purchased Order otherwise fails to comply with the terms of this Agreement; or

.5 if in the aggregate the binding orders from Aurinia, Otsuka, and Other Aurinia Licensees for Product and Third Parties for other products containing the Compound exceeds the production capacity of the applicable CMO(s).

4.1.6 Notwithstanding the rest of this Section 4.1, on request from Otsuka, Aurinia shall use Commercially Reasonable Efforts to cause the applicable CMO(s) to Manufacture and supply Bulk Product and Semi-Finished Product in quantities in excess of the quantities specified for the Binding Period, subject to Aurinia’s and such CMO’s other supply commitments and Manufacturing and equipment capacity; provided, that Aurinia’s failure to supply Bulk Product and Semi-Finished Product in quantities in excess of the quantities specified for the Binding Period shall not constitute a breach of this Agreement by Aurinia.

4.1.7 If Otsuka fails to place a Purchase Order in accordance with this Section for sufficient Bulk Product and Semi-Finished Product for each SKU to meet the forecasts for same for the Binding Period, Aurinia may issue an invoice to Otsuka for Product which Aurinia has ordered to CMO(s) in accordance with the binding part of the latest rolling forecasts under such Purchase Order setting out the date for payment as if Otsuka had placed the

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Purchase Order, and Otsuka shall pay to Aurinia the Pricing for the Product in accordance with such invoice.

4.2 Purchase Order Sizes

Otsuka may select any validated batch size agreed-to between the Parties and set out in an update to Exhibit 4.2 or multiples thereof as the order size in any Purchase Order.

4.3 Aurinia’s Cancellation of Purchase Orders

Notwithstanding Section 4.1, Aurinia reserves the right to cancel all, or any part of, a Purchase Order upon written notice to Otsuka, and Aurinia shall have no further obligations or liability with respect to such Purchase Order, if Otsuka refuses or fails to provide any support or perform any obligation under this Agreement or the applicable CMO Agreement necessary for the performance of such Purchase Order, including making any payment therefore in accordance with this Agreement and performing Otsuka’s obligations to support Manufacture set out in Section 2.5. Any such cancellation of Purchase Orders shall not constitute a breach of this Agreement by Aurinia nor shall it absolve Otsuka of its obligations in respect of the Binding Period.

4.4 Otsuka’s Modification or Cancellation of Purchase Orders

4.4.1 Otsuka may modify a delivery date to a later date or quantity of Bulk Product to be Packaged into Semi-Finished Product in a Purchase Order only by submitting a written change order to Aurinia at least [redacted] in advance of the original delivery date covered by such change order. Such change order shall be effective and binding against Aurinia only upon the written approval of Aurinia, and notwithstanding the foregoing, Otsuka shall remain responsible for satisfaction of the purchase of Product forecasted for the Binding Period in accordance with the forecasts. In no event shall Aurinia be required to incur any costs or suffer any losses in connection with such change order or its efforts to accommodate such a change. Any such costs or losses incurred by Aurinia shall be paid for by Otsuka within [redacted] of receipt of Aurinia’s invoice for same.

4.4.2 Aurinia will provide written approval of such change order to Otsuka to the extent that the applicable CMO provides written approval of such change order to Aurinia.

4.5 Unplanned Delay or Cancellations

Aurinia shall use Commercially Reasonable Efforts to meet the Purchase Orders, subject to the terms and conditions of this Agreement. Aurinia shall provide Prompt notice to Otsuka if Aurinia determines or receives notice from one or more of its CMOs that any Manufacturing of Compound, Encapsulation or Blistering will be delayed or cancelled for any reason.

4.6 Extended Delays

In respect of the supply of Semi-Finished Product, Aurinia shall provide at least [redacted] notice to Otsuka of any planned shutdowns respecting packaging. In the event that Aurinia is unable to package and deliver Semi-Finished Product ordered by Otsuka, and such inability shall continue or is projected to persist for a period of [redacted], Aurinia shall inform Otsuka of expected duration and keep Otsuka informed on a timely basis of developments during any such period of time.

Article 5 Manufacture

5.1 Timing of Product Delivery

Aurinia agrees to use Commercially Reasonable Efforts to obtain on-time delivery of Product in accordance with the applicable Purchase Orders by its CMOs.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

5.2 Changes to Manufacturing

Subject to Section 8.7, the process for changes to Specifications or the Manufacturing process shall be as set out in the applicable Quality Agreement.

5.3 Recordkeeping

Each Party will use Commercially Reasonable Efforts to cause its CMOs to comply with the applicable CMO Agreements(s) regarding recordkeeping.

5.4 Audit and Inspections

Aurinia will use Commercially Reasonable Efforts to allow representatives of Otsuka (including its Affiliates, designated qualified person and authorized representatives) to participate in Aurinia’s audits, observations and inspections of the applicable CMO(s). Otsuka shall and shall cause its representatives to comply with all requirements of the applicable CMO Agreements(s) regarding such audits, observations and inspections. Otsuka shall indemnify and hold harmless Aurinia and the applicable CMO(s) for any losses resulting from an action, omission or other activity of Otsuka representatives while on CMO premises. Additional details, including relating to findings and responses to critical issues from such inspections or audits, will be discussed by the Parties and set forth in the Quality Agreement(s).

5.5 Inspections by a Governmental Authority

If any Governmental Authority carries out or gives notice to either Party of its intention to carry out any inspection or audit of Aurinia or any of its Affiliates or CMOs or Third Party laboratories in relation to Manufacture or testing of Compound or Product for the Otsuka Territory, the applicable Party shall Promptly notify the other Party thereof and if the notifying Party has the right to have its licensors or licensees as applicable present at any such inspection or audit, the notifying Party shall use Commercially Reasonable Efforts to enforce such right so that the other Party may be present at any such inspection or audit to the extent related to the Manufacture or testing of Compound or Product for the Otsuka Territory. Additional details, including relating to findings and responses to critical issues from such inspections or audits, will be discussed by the Parties and set forth in the Quality Agreement(s).

5.6 Remaining Shelf Life

Aurinia shall use Commercially Reasonable Efforts to manage the timing of Manufacture and inventories with the CMOs and to cause the CMOs to deliver Bulk Product and Semi-Finished Product to maximize shelf life so that, with respect to shelf life, in the aggregate, Otsuka, Aurinia and Other Aurinia Licensees and Third Parties for other products containing the Compound will all receive similar treatment.

5.7 Material Failure to Supply

In the event of a Material Failure to Supply, Otsuka may exercise any or all of the following:

5.7.1 by notice to Aurinia, Otsuka may cancel the portion of any Purchase Orders that are subject to the Material Failure to Supply to the extent not delivered to Otsuka prior to such notice of cancellation;

5.7.2 at Otsuka’s request, such request to be made within [redacted] of the Material Failure to Supply, Aurinia shall use Best Efforts to one or more of the following, as requested by Otsuka:

.1 cause the applicable CMO(s) to supply the applicable Product under the CMO Agreements (including in respect of any New Capital Project where the Parties entered into a written agreement as contemplated by Section 8.5) from the applicable facility(ies) that was the subject of a Material Failure to Supply;

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

.2 if Aurinia has: (i) CMOs with other facilities or capacity not used to supply Product for Otsuka hereunder at the time of such Material Failure to Supply, or (ii) other contract manufacturers for Product who are not supplying Otsuka hereunder at the time of such Material Failure to Supply; cause such other contract manufacturers or CMOs (using such other facilities, capacity or capital assets) to supply the shortfall in Product to Otsuka, including obtaining necessary regulatory approvals for such Product supply, provided that, Aurinia shall have no obligation under this Section 5.7.2.2 in respect of any other contract manufacturers, facilities, capacity or capital assets where such other contract manufacturers, facilities, capacity or capital assets is a New Capital Project in respect of which the Parties failed to enter into a written agreement as contemplated in Section 8.5.1, unless the Parties enter into an agreement in writing respecting such New Capital Project pursuant to which agreement Otsuka will share, Allocated Reasonably or as otherwise agreed between the Parties, an appropriate proportion of the capital investment to procure the New Capital Project;

.3 where necessary, qualify and use other Third Parties to supply the shortfall in Product to Otsuka;

with the costs of such efforts (except as set out in any agreement referred to in 5.7.2.2) to be borne in accordance with Section 8.8;

5.7.3 if Otsuka does not make the request in Section 5.7.2, then on notice to Aurinia, such notice to be given within [redacted] of the Material Failure to Supply, Otsuka may terminate both (and only both) the Collaboration Agreement in its entirety (with the effect as if Otsuka terminated the Collaboration Agreement in its entirety pursuant to Section 14.2 (where Aurinia is the Breaching Party)) and this Agreement.

5.8 Instructions to Dispose and Settle

If a CMO requests in writing from Aurinia direction with respect to the storage or disposal of any inventories of Product, Client-supplied Materials, equipment, samples or other items belonging to Aurinia for the benefit of Otsuka under any CMO Agreement, including Section 18.13 of the Encapsulation Supply Agreement, and Aurinia unable to obtain a response from Otsuka within the period set out in the applicable CMO Agreement after making reasonable efforts to do so, or if Otsuka fails to take any action on behalf of Aurinia that Otsuka is authorized to do by Aurinia in respect of any CMO Agreement, including taking delivery of Product at the time for doing so in accordance with the applicable CMO Agreement, Otsuka shall bear the cost to Aurinia of any action taken by the CMO as permitted under the applicable CMO Agreement.

Article 6 Testing, Samples and Release

6.1 Acceptance/Rejection

The conditions for Acceptance/Rejection may differ by CMO, territory, or between Bulk Product and Semi-Finished Product. The specific conditions for acceptance/rejection and other elements unique to a particular CMO Agreement are set forth in the applicable CMO Agreement. Subject to the terms of the applicable CMO Agreements:

6.1.1 Otsuka may inspect the Bulk Product together with the technical documents specified in the applicable Quality Agreement available from the CMO for Otsuka to assess acceptability of such Bulk Product (and reject it in case of non-conformance in accordance with the terms of the applicable CMO Agreement) within a period that is [redacted] the inspection period that Aurinia has for such Bulk Product in the applicable CMO Agreement. Aurinia shall notify Otsuka when Aurinia has received notice from its CMO that the CMO has released the Bulk Product (following completion of analytical release testing).

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

6.1.2 Otsuka may inspect Semi-Finished Product together with the technical documents specified in the applicable Quality Agreement available from the CMO for Otsuka to assess acceptability of such Semi-Finished Product (and reject it in case of non-conformance in accordance with the terms of the applicable CMO Agreement) within a period that is [redacted] the inspection period that Aurinia has for such Semi-Finished Product in the applicable CMO Agreement after release by the CMO and Aurinia.

6.1.3 If Otsuka first discovers that the Compound contained in any Product that fails to conform with the Specifications therefor, and such failure would not have been readily discoverable from a reasonable testing or review of the Product, as applicable, (collectively, “Latent Defects”), Otsuka shall have the right to reject such Product, provided it notifies Aurinia of the Latent Defect within [redacted] after the discovery of the Latent Defect, but no later than [redacted] after delivery of the Lonza Final Product by Lonza.

6.2 Disputes

Subject to the terms of the applicable CMO Agreements:

6.2.1 In case of disagreement regarding non-conformance and not resolved within [redacted] of the receipt of the deficiency notice at Aurinia and the applicable CMO, a mutually agreed independent third party shall give a final and binding judgment regarding non-conformance and the cause of any nonconformance.

6.2.2 Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by Aurinia in the case of non-conformance attributable to the negligence or willful misconduct of Aurinia, or by the CMO if so provided in the applicable CMO Agreement, and by Otsuka in all other circumstances. If Otsuka incurs any such costs where the CMO is responsible for same, Aurinia will use Commercially Reasonable Efforts to recover such costs from the CMO.

6.2.3 The dispute process will be consistent with the process set out in the applicable CMO Agreement, including reducing any notice period available so that Aurinia can provide any applicable notices to Otsuka and/or the applicable CMO.

6.3 Remedies for Non-Conformance

Subject to the terms of the applicable CMO Agreements:

6.3.1 In the case of non-conformance attributable to the CMO, Aurinia will use Commercially Reasonable Efforts to cause the applicable CMO(s) to:

.1 in the event of non-conforming Bulk Product, at Otsuka’s option, either replace the Bulk Product at the CMO’s cost using Client-supplied Materials (including Compound) provided at Otsuka’s cost; or credit (for the benefit of Otsuka) any payments made by Aurinia for such non-conforming Bulk Product; and

.2 in the event of non-conforming Semi-Finished Product, replace the Semi-Finished Product at the CMO’s cost using Client-supplied Materials (including Bulk Product) provided at Otsuka’s cost; or credit (for the benefit of Otsuka) any payments made by Aurinia for such non-conforming Semi-Finished Product.

6.3.2 In the case of non-conformance of Product (as specified in the applicable CMO Agreement) attributable to the negligence or willful misconduct of Aurinia (and not attributable to a CMO), Aurinia shall, at Otsuka’s option, either replace the non-conforming Product at Aurinia’s cost (including bearing the cost of any Compound or Bulk Product, as applicable), or credit Otsuka any payments made by Otsuka for such non-conforming Product.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

6.3.3 Notwithstanding anything to the contrary set forth in this Agreement, to the extent a Product is Manufactured by one or more CMO(s), in whole or in part, and such CMO(s) provide(s) an acceptance/rejection process for Product, in whole or in part, Aurinia shall not provide Otsuka any different acceptance/rejection process for such Products Manufactured by a CMO(s) (or any applicable part(s) thereof) other than the warranty(ies) offered by such CMO(s) in the CMO Agreement(s) and subject to the applicable limitations set out therein.

6.4 Limited Remedies

6.4.1 THE PARTIES ACKNOWLEDGE THAT THE FOREGOING OBLIGATIONS OF AURINIA AND THE CMOS ARE AURINIA’S AND OTSUKA’S SOLE AND EXCLUSIVE REMEDIES UNDER THE CMO AGREEMENTS AND THIS AGREEMENT FOR NON-CONFORMING PRODUCT AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

6.4.2 Except as expressly set out in Section 6.3.2, Aurinia shall have no greater liability to Otsuka under this Article 6 than the applicable CMO has to Aurinia pursuant to the applicable CMO Agreement.

Article 7 Delivery

7.1 Delivery

As soon as reasonably possible after delivery of any Product by a CMO, Aurinia shall give Otsuka notice of same and shall deliver such Product FCA the CMO’s Manufacturing site (Incoterms 2020).

7.2 Title

Title to Product passes to Otsuka on delivery by Aurinia. Otsuka shall transport and store the Product. Aurinia shall not be responsible for Product in transit, including any cost of insurance or other transport fees for Product, or any risks associated with transit, customs fees or clearance delays, storage and handling. Otsuka shall be solely responsible for transportation and obtaining all required import licenses available to the Product prior to such import.

7.3 Storage Fees

If Otsuka fails to take delivery of any Product on any scheduled delivery date, and the applicable CMO stores such Product, Otsuka will bear the cost to Aurinia of such storage.

Article 8 Cooperation and Consultation

8.1 Project Managers

8.1.1 Promptly after the Effective Date, Aurinia and Otsuka shall each identify a project manager who will be exclusively responsible for the day-to-day communications between the Parties concerning the Manufacture and supply of Bulk Product and Semi-Finished Product to Otsuka for the Otsuka Territory hereunder (the “Project Manager”).

8.1.2 Aurinia’s Project Manager will be responsible for keeping the Manufacturing and Supply Subcommittee and Otsuka’s Project Manager informed as to the status of the Facility construction and any New Capital Projects agreed to by the Parties as contemplated by Section 8.5.1.

8.1.3 Each Project Manager shall be available on at least once every Calendar Month for consultation (i.e. face-to-face meetings (if required), telephone-conferences and/or videoconferences) at times prearranged by the Parties during the term of this Agreement. Each Party shall appoint a substitute or replacement Project Manager in the absence of its

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

original Project Manager by notifying the other Party in writing of such substitution or replacement.

8.2 Manufacturing and Supply Subcommittee

The Manufacturing and Supply Subcommittee shall hold periodic meetings at least once a month and shall review and discuss matters limited to the Manufacture and supply of Compound, Bulk Product and Semi-Finished Product to Otsuka for the Otsuka Territory, subject to confidentiality obligations to Third Parties and Aurinia’s rights of access to such information from CMOs, including:

8.2.1 manufacturing and supply strategy;

8.2.2 supply performance and Cost of Goods;

8.2.3 the treatment of Otsuka’s supply requirements relative to the aggregate of those of Aurinia [redacted] for other products containing the Compound, where relevant to Sections 3.8 or 5.6;

8.2.4 the capital investments or the amendment, renewal or restatement of the CMO Agreements referred to in Section 8.4;

8.2.5 forecasts of demand for Product including the Rolling Forecast and the Long Term Production Forecast;

8.2.6 production plans for Otsuka Rolling Forecasts and orders and record of production of each CMO;

8.2.7 manufacturing schedule of each CMO for Product for Otsuka;

8.2.8 Manufacturing records of each CMO for supply of Product for the Otsuka Territory as specified in the Quality Agreement(s);

8.2.9 issues on product quality and/or troubles in the process of manufacture or delivery of Product to Otsuka;

8.2.10 trend of Cost of Goods, e.g., contractually relevant pricing indices, prices of raw materials, and/or manufacturing costs for each CMO including the Lonza Monoplant, including, increases or decreases of [redacted] or less over the Cost of Goods in the preceding Calendar Year;

8.2.11 inventory of Product for Otsuka at each CMO;

8.2.12 invoicing & payment status;

8.2.13 allocation of Manufacturing costs;

8.2.14 other related items for manufacturing and supply of Products as agreed to between the Parties, acting reasonably; and

8.2.15 changes to the Manufacturing services requiring notice or agreement of the Parties under Section 5.2.

8.3 Manufacturing Discussions Not Subject to Dispute Resolution

The reviews and discussions pertaining to the Manufacture and supply of Bulk Product and Semi-Finished Product for the Otsuka Territory before the Manufacturing and Supply Subcommittee, the Quality Subcommittee or the JCC or any other subcommittee, including those referred to in Sections 8.2, 8.3, 8.4, 8.5 and 8.6 (except as expressly set out therein), shall not be subject to the decision-making or

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

dispute resolution mechanisms specified in the Collaboration Agreement, and any agreement pertaining to such reviews and discussions shall be based on a written agreement executed by authorized signatories of the Parties.

8.4 Submission of Certain Projects to Manufacturing & Supply Subcommittee

In the event that Aurinia:

8.4.1 is contemplating capital investment to procure equipment or other assets to:

.1 materially expand aggregate manufacturing capacity for any Compound, Encapsulation, or Blistering, as applicable, for product to be delivered to Otsuka);

.2 establish backup and/or alternative manufacturing facilities (for any bulk Compound, Encapsulation, or Blistering, as applicable, for Product to be delivered to Otsuka), or

.3 establish and/or construct of any facilities and/or capital assets needed to support production of any alternative presentations of the (oral) product such as a tablet form to be delivered to Otsuka;

each of the foregoing, a (“New Capital Project”); or

8.4.2 determines that capital investment is required to procure equipment or other capital assets in order to continue to support ongoing product manufacturing for the Otsuka Territory, and/or maintain or obtain regulatory approvals in one or more countries in the Otsuka Territory and if such investment is expected to result in a material increase in costs (more than [redacted] above projected costs to Otsuka absent such investment),

Aurinia shall submit the plan of investment and the applicable CMO Agreement (and any and conditions then available) to the Manufacturing & Supply Subcommittee reasonably in advance, with a good faith estimate of financial investment required and projected impact on production costs and product pricing, and the Parties shall discuss the plan and cost allocation.

8.5 Outcomes in Respect of Certain Submissions

Notwithstanding the submission of any of the foregoing to the Manufacturing & Supply Subcommittee:

8.5.1 With respect to any New Capital Project:

.1 neither party shall have any obligation to the other in respect of any New Capital Project except pursuant to a written agreement executed by an authorized representative of each Party; and

.2 if the Parties fail to enter into such a written agreement with respect to any New Capital Project: Otsuka shall have no obligation to bear any of the costs of such New Capital Project; and Aurinia shall have no obligation to supply Product to Otsuka from the resulting New Capital Project, including any resulting facility(ies) or capacity or to favor the supply of Product to Otsuka over the supply of Product of Aurinia or Other Aurinia Licensees for Product or Third Parties for other products containing the Compound supplied from other facilities.

8.5.2 Any disputes regarding the plan and cost allocation referred to in Section 8.4.2 shall be finally escalated to the JCC if requested by Otsuka; and Aurinia shall consider in good faith such feedback as Otsuka may provide at either the Subcommittee or JCC level;

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

provided that Aurinia shall have the final decision-making authority with respect to Manufacture (excluding Packaging by Otsuka) of Products for the Otsuka Territory.

8.6 New and Amended CMO Agreements

8.6.1 Prior to entering into: (i) any new CMO Agreement; or (ii) any amendment, supplement, renewal or restatement to a CMO Agreement after the Effective Date (each a “New CMO Agreement”), Aurinia shall: consult with Otsuka on the selection of and discussions with prospective CMOs; take Otsuka’s comments into consideration in good faith; and use Commercially Reasonable Efforts to obtain rights to allow Otsuka to participate in Aurinia’s audits under such CMO Agreement. Aurinia retains the exclusive right to negotiate with such prospective CMO and, no Otsuka consent to such CMO Agreement is required where such New CMO Agreement does not have a material impact on the supply of Product to Otsuka under this Agreement. Otsuka will provide any comments on such New CMO Agreements Promptly. If Otsuka does not provide such comments Promptly, Aurinia will not be obligated to take such comments into account.

8.6.2 Aurinia shall use Commercially Reasonable Efforts to amend certain quality related terms of CMO agreements (i.e. latent defect clause and period of time for inspection) as requested by Otsuka, acting reasonably, before the first commercial sale of Product in Japan.

8.7 Parties Bound by Changes to CMO Agreements

Provided that Aurinia complies with Section 8.6 in respect of any New CMO Agreement, Otsuka and Aurinia hereby agree to be bound by the terms of such New CMO Agreement mutatis mutandis as between Aurinia (as supplier) and Otsuka (as customer) and such terms of the New CMO Agreement shall prevail over the terms of this Agreement to the extent of such inconsistency.

8.8 Commercially Reasonable Efforts or Best Efforts to Obtain an Outcome

8.8.1 Throughout this Agreement, where Aurinia has an obligation to use Commercially Reasonable Efforts or Best Efforts to achieve any outcome in respect of or through a CMO, Aurinia shall use Commercially Reasonable Efforts or Best Efforts, as applicable (without a requirement to make additional payment or commence or pursue any litigation or arbitration) and be in close communication with Otsuka regarding the status of such efforts and the success or lack of success thereof.

8.8.2 At Otsuka’s request, as part of such Commercially Reasonable Efforts or Best Efforts, Aurinia will make payments or commence or pursue any litigation or arbitration against the applicable CMO (or in respect of Section 5.7.2 CMO(s), other contract manufacturers or Third Parties), and subject to Section 8.8.3, Otsuka shall bear the costs and expenses (plus an additional [redacted] of such costs and expenses) of such payments, litigation or arbitration.

8.8.3 Notwithstanding Section 8.8.2, in respect of Best Efforts cure a Material Failure to Supply pursuant to Section 5.7.2, if the Material Failure to Supply is attributable to the negligence or willful misconduct of Aurinia (and not attributable to a CMO), then the out-of-pocket costs incurred with such CMO(s), other contract manufacturers or Third Parties referred to in Section 5.7.2 will be borne by Aurinia.

Article 9 Price

9.1 Supply Price

Aurinia shall Manufacture and supply to Otsuka all Bulk Product and Semi-Finished Product in accordance with this Agreement and Quality Agreement(s) at a supply price equal to the Cost of Goods for such Product plus, solely with respect to Product Manufactured by CMOs, a [redacted] markup on the

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Cost of Goods (and, for clarity, there will be no markup on Cost of Goods if Aurinia or its Affiliate Manufactures Product).

9.2 Price Adjustments

9.2.1 If, in any Calendar Year after the Effective Date, the Cost of Goods, whether for Product manufactured by Aurinia or its affiliate or for Product Manufactured by CMOs, will increase or decrease by [redacted] or more over the Cost of Goods in the preceding Calendar Year, Aurinia shall provide Prompt written notice to Otsuka of such increase or decrease, including a reasonably detailed description of the reason for such increase or decrease, and the Parties shall discuss options for addressing such increase or decrease and managing the supply price for Product, as applicable.

9.2.2 However, there shall be no need for such discussion outside the activities of the Manufacturing & Supply Subcommittee, if the magnitude of the change in Cost of Goods would be less than [redacted], ignoring the effect from changes in the volume of units on the per unit cost due to the non-volume related costs, including those referred to in Sections 9.3, 9.4, 9.5, 9.6, 9.7 and 9.8, including the Capital Program Fee and Fixed Facility Fee.

9.3 Other Manufacturing Costs

9.3.1 To the extent Bulk Product or Semi-Finished Product is Manufactured by a CMO and Aurinia is required to pay to such CMO any charges that are directly attributable or allocated to Manufacture of such Bulk Product or Semi-Finished Product, as opposed to any other product, and except as expressly allocated elsewhere in this Agreement, the Parties shall share such charges, to the extent not included in Cost of Goods, Allocated Reasonably:

.1 fixed facility fees and idle plant capacity charges;

.2 start-up or scale-up costs, including the costs of engineering studies, technology transfer, operational validation, and manufacturing trial costs (including process qualification, confirmatory batches and process validation batches);

.3 costs of research and development (including process development, analytical method transfer and validation costs);

.4 capital expenditures for equipment or for constructing, expanding or improving any manufacturing facility, including capital program fees, and costs of validating and qualifying any manufacturing facility;

.5 charges for ancillary services, such as regulatory support and services; and

.6 charges for rejected batch, at risk, excess, obsolete or short-dated inventory.

9.3.2 To the extent Bulk Product or Semi-Finished Product is Manufactured by Aurinia or its Affiliates directly (rather than through a CMO), the Parties shall share the following costs, to the extent directly attributable or allocated to Manufacture of such Bulk Product or Semi-Finished Product, as opposed to any other product, and not included in Cost of Goods, Allocated Reasonably: (1) scale-up and manufacturing trial costs, (2) costs of research and development (including process development and validation costs), (3) capital expenditures for equipment or for constructing, expanding or improving any manufacturing facility, or costs of validating and qualifying any manufacturing facility, and (4) charges for rejected batch, at risk, excess, obsolete or short-dated inventory.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

9.4 Other Product Costs

9.4.1 At Otsuka’s request and, if applicable, as required by any Regulatory Authority in the Otsuka Territory, or if Aurinia is otherwise required by any Regulatory Authority to conduct any activities to supply Product to Otsuka for the Otsuka Territory or ensure that the Product supplied for the Otsuka Territory can be sold in the Otsuka Territory, for example, validation, stability testing and any other specific testing of Bulk Product and Semi-Finished Product Manufactured and supplied by or on behalf of Aurinia hereunder and under each Supply Agreement, Aurinia shall, through a CMO or Third Party Representative, conduct such activities, and to the extent not included in Cost of Goods, Otsuka will reimburse Aurinia for the actual out-of-pocket costs paid by Aurinia to the CMO for such activities plus a [redacted] markup within [redacted] of receipt from Aurinia of an invoice. Aurinia shall provide Otsuka with agreed supporting documentation and any other supporting documentation reasonably requested by Otsuka, which agreed supporting documentation shall include copies of Third Party contracts (if not previously provided) and invoices reflecting the out-of-pocket costs paid by Aurinia. If such activities are applicable to both the Otsuka Territory and the Aurinia Territory, the foregoing charges shall be Allocated Reasonably.

9.4.2 Otsuka will reimburse Aurinia for the actual out-of-pocket costs paid by Aurinia for storage, quality assurance and quality control activities (if performed by a Third Party), and CMO charges for inspections or audits of a CMO (if the CMO charges separately for inspections or audits), in each case for Product for the Otsuka Territory plus a [redacted] markup within [redacted] of receipt from Aurinia of an invoice. Aurinia shall provide Otsuka with agreed supporting documentation and any other supporting documentation reasonably requested by Otsuka, which agreed supporting documentation shall include copies of Third Party contracts (if not previously provided) and invoices reflecting the out-of-pocket costs paid by Aurinia. If such activities are applicable to both the Otsuka Territory and the Aurinia Territory, the foregoing charges shall be Allocated Reasonably.

9.4.3 In furtherance of the Packaging by Otsuka contemplated in Section 2.6, at Otsuka’s request and expense, to the extent of Aurinia’s legal right to do so, and subject to the terms of any applicable CMO Agreement, Aurinia will use Commercially Reasonable Efforts to provide one or more technology transfer(s) to Otsuka or its designee of information necessary or reasonably useful to support Otsuka’s Packaging activities, including information relating to packaging processes and analytical methods and stability testing of the Products in furtherance of Packaging, and including providing reasonable assistance to Otsuka or its designee in connection therewith upon Otsuka’s request. Otsuka shall bear the out-of-pocket expenses incurred by Aurinia in providing all such assistance, including the reasonable out-of-pocket costs incurred with Aurinia’s CMOs, in each case, plus [redacted]. In the event that Otsuka requests a second or subsequent technology transfer to support Otsuka’s Packaging activities, in addition to bearing the foregoing costs, Aurinia shall have the option of invoicing Otsuka for such assistance at the FTE Rate.

9.4.4 Except as otherwise expressly set out in this Agreement, Otsuka shall pay all payments under this Article 9 within [redacted] of the receipt from Aurinia of an invoice and agreed supporting documentation.

9.4.5 If requested by Otsuka or if reasonably necessary or useful to perform Aurinia’s obligations under this Section or Section 9.4.3, Aurinia incurs travel expenses, Otsuka will reimburse Aurinia for Aurinia’s reasonable travel expenses within [redacted] of receipt from Aurinia of an invoice and agreed supporting documentation. If such activities are applicable to both the Otsuka Territory and the Aurinia Territory, the foregoing charges shall be Allocated Reasonably.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

9.5 Certain Costs to be Allocated Reasonably

Except as set out in this Article or otherwise expressly agreed between the Parties in a document executed by the authorized signatories of each Party, any Aurinia costs to be shared between the Parties (other than costs to be allocated pursuant to Section 2.8(j) of the Collaboration Agreement), shall be Allocated Reasonably between the Otsuka Territory and the Aurinia Territory (and, if such costs apply to Aurinia Domain Products, between Products and Aurinia Domain Products). For the Capital Program Fee and the Quarterly Fixed Facility Fee under the Monoplant Agreement, such cost sharing and allocation shall be as set out in Sections 9.6 and 9.7.

9.6 Lonza Fixed Fees

For the Capital Program Fee (estimated at [redacted], but based on the actual costs of the Facility) and Quarterly Fixed Facility Fee ([redacted]) (each as defined in the Monoplant Agreement and collectively “Fixed Fees”) under the Monoplant Agreement:

9.6.1 Prior to the Effective Date, Aurinia has paid to Lonza [redacted] ([redacted]) of the Capital Program Fee, and anticipates that the remainder will be paid by Aurinia to Lonza in [redacted] upon Operational Qualification of the Facility. The Capital Program Fee secures the Facility for a term of [redacted], or [redacted] Calendar Quarters.

9.6.2 Upon Operational Qualification of the Facility, Aurinia will commence paying the Quarterly Fixed Fee to Lonza.

9.6.3 Upon Operational Qualification of the Facility, and for the next [redacted] Calendar Quarters, in respect of each Calendar Quarter or pro-rata portion thereof, Aurinia will invoice Otsuka and Otsuka shall pay: Otsuka’s allocation of [redacted] of the Capital Program Fee, allocated as set out in Section 9.7.

9.6.4 Upon Operational Qualification of the Facility, and for the remainder of the term of the Lonza Agreement and any renewal thereof, in respect of each Calendar Quarter or pro-rata portion thereof, Aurinia will invoice Otsuka and Otsuka shall pay: Otsuka’s allocation of the Quarterly Fixed Facility Fee, allocated as set out in Section 9.7.

9.7 Allocation Method for Certain Lonza Costs

9.7.1 The charges referred to in Sections 9.6.3 and 9.6.4 for each Calendar Quarter shall be allocated between Aurinia and Otsuka based on:

.1 if Compound is Manufactured in the Facility in a Calendar Year, the proportion of Compound (including accounting for any Lonza Intermediate) Manufactured in the Facility for the benefit of each Party in the Calendar Year in which such Calendar Quarter occurs; and

.2 if no Compound is Manufactured in the Facility in a Calendar Year, the proportion of Compound (including accounting for any Lonza Intermediate) Manufactured in the Facility for the benefit of each Party in the [redacted] Calendar Years following the Calendar Year in which no Compound is Manufactured in the Facility.

9.7.2 In advance in respect of each Calendar Year, the Parties shall share information from the applicable Rolling Forecast and Compound Production Schedule (and the Long Term Production Forecast, as appropriate) necessary for the Parties to forecast the proportion of Compound to be Manufactured in the Facility for the benefit of each Party:

.1 in such Calendar Year;

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

.2 (or, if the Parties anticipate that no Compound will be Manufactured in the Facility in such Calendar Year, in the five Calendar Years following such Calendar Year;

and shall discuss the allocation of Fixed Fees for such Calendar Year in the meetings of the Manufacturing and Supply Subcommittee referred to in Section 8.2.

9.7.3 The Parties shall agree, acting reasonably, to the initial allocation of Fixed Fees for the purposes of the payments in Section 9.6.3 and 9.6.4.

9.7.4 If Compound was Manufactured in the Facility in a Calendar Year, at the end of January following such Calendar Year, the Parties shall reconcile such initial allocation and charges for the Fixed Fees for such Calendar Year based on the difference between the anticipated proportion of Compound Manufactured for the benefit of each Party in the Facility in such Calendar Year and the actual proportion of Compound Manufactured for the benefit of each Party in the Facility in such Calendar Year.

9.7.5 If no Compound was Manufactured in the Facility in a Calendar Year, at the end of January following each of the [redacted] and [redacted] Calendar Years following the Calendar Year in which no Compound is Manufactured in the Facility, the Parties shall reconcile such initial allocation and charges for the Fixed Fees for such Calendar Year based on the difference between: (i) the anticipated proportion of Compound Manufactured for the benefit of each Party in the Facility over the period commencing at the end Calendar Year in which no Compound is Manufactured in the Facility until the date of reconciliation; and (ii) the actual proportion of Compound Manufactured for the benefit of each Party in the Facility in such period; and, at the [redacted] reconciliation, taking into account any payments made arising from the three year reconciliation.

9.7.6 If a Party has overpaid its allocation of Fixed Fees for a particular Calendar Year, such overpayment shall be credited against Fixed Fee payments for the Calendar Year following the reconciliation, or, if there will be no further Fixed Fee payments allocated to such Party, the overpaying Party may invoice the other Party for the overpayment, and the other Party shall pay such overpayment within [redacted] of receipt of such invoice.

9.8 Pass Through of Other Manufacturing Costs

Other charges incurred under the CMO Agreements (e.g., costs billed under the separate scope(s) of work by Lonza or maintenance and storage fees from Catalent) will be allocated by the Parties, acting reasonably, based on the proportion of Compound and/or Bulk Product or Semi-Finished Product, as applicable, for the benefit of each Party incurring such charges. If requested by either Party, the Parties will estimate such allocation and share the costs based on the estimate, with such allocation to be reconciled after the fact.

9.9 US GAAP

All of the foregoing shall be determined in accordance with U.S. Generally Accepted Accounting Principles consistently applied in Aurinia financial statements.

Article 10 Payment Terms

10.1 Payment Timing

Notwithstanding anything else in this Agreement, the Parties will act reasonably to ensure that the payments by Aurinia to CMOs under this Agreement will be structured so that Aurinia will not be out of pocket with respect to orders for the supply of Compound or Product or other payments made for the benefit of or on behalf of Otsuka under each applicable CMO Agreement.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

10.2 Payment Terms for Existing Compound

For Compound for which Aurinia has existing supply of bulk Compound on hand as of the Effective Date:

10.2.1 Aurinia will invoice Otsuka for [redacted] of the Cost of Goods incurred by Aurinia for the Compound (plus the [redacted] markup) for the Binding Period, at the time of receipt of such forecast (to the extent any such Compound has not already been invoiced and paid for by Otsuka in prior periods). Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

10.2.2 Aurinia will invoice Otsuka for the balance of the Cost of Goods incurred by Aurinia for such Compound (plus the [redacted] markup) upon commencement of Encapsulation of such Compound. Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

10.3 Payment Terms for New Compound

For Compound for which Aurinia does not or may not have sufficient bulk Compound inventory on hand as of the Effective Date to supply such order:

10.3.1 Aurinia will invoice Otsuka for [redacted] of the Lonza production fee (plus the [redacted] markup) for Compound for the Binding Period (to the extent any such production fee has not already been invoiced and paid for by Otsuka in prior periods). Such invoice shall be payable by Otsuka no later than [redacted] prior to the commencement date of production of such Compound. Aurinia will invoice Otsuka for the balance of the Cost of Goods (plus the [redacted] markup) incurred by Aurinia for such Compound upon release by Lonza. Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

10.3.2 If the bulk Compound production plan provides that any Compound be satisfied by the Manufacture of Lonza Intermediate, Aurinia will invoice Otsuka for [redacted] of the Lonza production fee (plus the [redacted] markup) for such Lonza Intermediate. Such invoice shall be payable by Otsuka no later than [redacted] prior to the commencement date of production of such Lonza Intermediate. Aurinia will invoice Otsuka for the balance of the Cost of Goods (plus the [redacted] markup) incurred by Aurinia for Lonza Intermediate upon release by Lonza. Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

10.3.3 If the bulk Compound production plan provides that any Otsuka demand for Compound be satisfied by the Manufacture of Compound from Lonza Intermediate, Aurinia will invoice Otsuka the Cost of Goods (plus the [redacted] markup) for Stage 3 Intermediate conversion to Lonza Final Product upon release by Lonza of the Lonza Final Product. Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

10.4 Payment Terms for Bulk Product and Semi-Finished Product

10.4.1 Aurinia will invoice Otsuka for the Cost of Goods incurred by Aurinia for the Encapsulation run upon delivery of the Bulk Product. Such invoice shall be payable by Otsuka within [redacted] of receipt of same;

10.4.2 Aurinia will invoice Otsuka for the Cost of Goods incurred by Aurinia for the Blistering run upon delivery of the Semi-Finished Product. Such invoice shall be payable by Otsuka within [redacted] of receipt of same.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

10.5 Exchange Rate; Manner and Place of Payment

All payments hereunder shall be payable in U.S. Dollars and all references to Dollars and “$” herein shall refer to U.S. Dollars. When Aurinia converts any payment made by Aurinia (all or part of which may be passed through to Otsuka pursuant to the terms of this Agreement) from any currency other than U.S. Dollars, the conversion shall be calculated as of the day the payment is made by Aurinia using a standard conversion method consistent with GAAP using a widely accepted source of published exchange such as published by OANDA.com or any substitute agreed-to between the Parties. All payments owed under this Agreement shall be made by wire transfer in immediately available funds to a bank and account designated in writing by Aurinia, unless otherwise specified in writing by Aurinia.

Article 11 Representations and Warranties

11.1 Aurinia Representations and Warranties

Aurinia represents and warrants to Otsuka that, to Aurinia’s Knowledge, except with respect to special batch circumstances mutually agreed to by the Parties, the manufacture of Product shall be performed in accordance with cGMP and the applicable CMO quality agreement(s) and will meet the Specifications in compliance with all Applicable Laws at the date of delivery.

11.2 Pass-Through

Notwithstanding anything to the contrary set forth in this Agreement, to the extent a Product is Manufactured by one or more CMO(s), in whole or in part, and such CMO(s) provide(s) a warranty on the Product, in whole or in part, Aurinia shall not provide Otsuka any warranty on any such Products Manufactured by a CMO(s) (or any applicable part(s) thereof) other than the warranty(ies) offered by such CMO(s) in the CMO Agreement(s) and subject to the applicable limitations and warranties by Otsuka set out therein.

11.3 Otsuka Representations and Warranties

Otsuka represents and warrants to Aurinia that the artwork and labeling supplied by Otsuka shall have been produced in accordance with and not violate Applicable Laws or infringe the rights of any Third Party and shall comply with all applicable specifications.

11.4 Limited Warranties

THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS Article 11 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER PARTY, AND NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER UNDER THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

Article 12 Limitations of Liability

12.1 No Additional Risk

If a Product is Manufactured by one or more CMO(s), in whole or in part, it is the intention of the Parties that, given the limited return to Aurinia for undertaking its supply and other obligations hereunder, Aurinia not take on any greater risk under this Agreement than the CMOs take on under the applicable CMO Agreements. For clarity, the forgoing does not relieve Aurinia of liability to Otsuka attributable to the negligence or willful misconduct of Aurinia (and not attributable to a CMO), but limits the liability and remedies of Otsuka hereunder in the same manner as the liability and remedies of Aurinia (as customer) are limited in the applicable CMO Agreements.

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

12.2 Pass Through of Liabilities and Remedies

12.2.1 Notwithstanding anything to the contrary set forth in this Agreement, if a Product is Manufactured by one or more CMO(s), in whole or in part, to the extent that the performance or failure to perform of any CMO under the applicable CMO Agreement gives rise to liability on the part of Aurinia to Otsuka hereunder, Aurinia’s liability to Otsuka and Otsuka’s remedies against Aurinia shall be limited to the same liability and remedies that Aurinia may avail itself of and recovers from such CMO. Aurinia shall use Commercially Reasonable Efforts to recover such liabilities or obtain such remedies and pass same through to Otsuka. For clarity, the forgoing does not relieve Aurinia of liability to Otsuka attributable to the negligence or willful misconduct of Aurinia (and not attributable to a CMO), but limits the liability and remedies of Otsuka hereunder in the same manner as the liability and remedies of Aurinia (as customer) are limited in the applicable CMO Agreements.

12.2.2 Without limiting the generality of the foregoing:

.1 any limits to liability set out in the applicable CMO Agreement shall apply to Aurinia’s liability hereunder and constitute part of this Agreement for the benefit of Aurinia as if set forth herein.

.2 where a CMO owes an obligation to Aurinia under a CMO Agreement, and Aurinia owes a similar obligation to Otsuka hereunder, or visa-versa, in the event of any conflict between this Agreement and a CMO Agreement, the terms of the CMO Agreement shall apply mutatis mutandis as between Aurinia (as supplier) and Otsuka (as customer) and such terms of the CMO Agreement shall prevail to the extent of such inconsistency.

Article 13 Term and Termination

13.1 Term

This Agreement shall commence on the Effective Date and shall continue in full force and effect, unless otherwise terminated pursuant to this Article 13, until the expiry or earlier termination of the Collaboration Agreement (the “Term”).

13.2 Termination by Otsuka

Otsuka may, at its option, immediately terminate this Agreement by giving notice to Aurinia if there is any Material Failure to Supply and Otsuka elects to terminate both this Agreement and the Collaboration Agreement in accordance with Section 5.7.3.

13.3 Termination by Aurinia

Upon transfer of Manufacturing to Otsuka in accordance with Section 7.7 of the Collaboration Agreement, Aurinia may, at its option, immediately terminate this Agreement by giving notice to Otsuka.

Article 14 Effects of Termination

14.1 Consequences in any Event

In addition to Otsuka’s obligations in respect of any liability that accrued hereunder prior to the effective date of expiration or termination in accordance with Section 14.3.3, Otsuka shall remain liable for its allocation of any costs for activities or commitments made by Aurinia pursuant to this Agreement and any related Quality Agreement(s) prior to the effective date of termination of this Agreement and Otsuka’s allocation of costs referred to in Section 9.3 (including the Capital Program Fee and any Quarterly Fixed Facility Fees, such fees shall be calculated after the effective date of expiration or termination of this Agreement on a per diem basis until the completion of the foregoing activities and discharge of the

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

forgoing commitments), excluding charges for ancillary services arising after the effective date of termination and referred to in Section 9.3.1.5 and charges for rejected batch, at risk, excess, obsolete or short-dated inventory arising after the effective date of termination and referred to in Section 9.3.1.6.

14.2 Consequences on Early Termination of Collaboration Agreement

In the event of any early termination of the Collaboration Agreement, the consequences of termination set out in Section 14.6 of the Collaboration Agreement shall apply and, subject to the supply of Product for Otsuka’s Transition Activities contemplated under the Collaboration Agreement:

14.2.1 at Aurinia’s option: Aurinia may on notice to Otsuka terminate Aurinia’s obligation to deliver Product under any Purchase Order issued prior to the effective date of termination of this Agreement and reject any Purchase Orders issued thereafter; and Aurinia may cause Otsuka to transfer and assign any agreement of Otsuka for the Packaging of Product contemplated by Section 2.6 to Aurinia or its designee as if such agreement were listed in Section 14.6(g) of the Collaboration Agreement; and

14.2.2 if the termination of the Collaboration Agreement is only with respect to a particular Terminated Country(ies), Aurinia shall have the option on notice to Otsuka to make a reasonable adjustment to the Rolling Forecast and Purchase Orders outstanding and made thereafter in accordance with this Agreement to reflect the reduction in Otsuka’s demand for Product to reflect the deletion of the Terminated Country(ies) from the Otsuka Territory.

14.3 Survival; Accrued Rights

The obligations and rights of the Parties under the following provisions of this Agreement shall survive expiration or termination of this Agreement:

14.3.1 from this Agreement:

.1 Article 1 (Interpretation) (to the extent applicable to other surviving provisions), and Article 14 (Effects of Termination);

.2 to the extent applicable to other surviving provisions, including the surviving purchase, supply and payment obligations set out in Section 14.2, Section 2.6 (Otsuka Commitment to Package), Article 4 (Purchase Orders and Acceptance), Article 5 (Manufacture), Article 6 (Testing, Samples and Release) Article 7 (Delivery), Article 10 (Payment Terms);

.3 if the Collaboration Agreement survives termination of this Agreement: Section 2.6 (Otsuka Commitment to Package);

14.3.2 from the Collaboration Agreement and incorporated herein pursuant to Section 1.5: Article 9 (Payment, Records and Audit) (to the extent applicable to a payment that accrued prior to expiration or termination or to a payment obligation that survives the expiration or termination in accordance with the terms of this Agreement), Section 11.5 (Disclaimer), Article 12 (Indemnification), Article 13 (Confidentiality), Section 14.7 (Confidential Information), Article 15 (Dispute Resolution), and Article 16 (General); and

14.3.3 in any event, expiration or termination of this Agreement will not relieve the Parties of any liability that accrued hereunder prior to the effective date of such expiration or termination nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement, nor prejudice either Party’s right to obtain performance of any obligation that accrued hereunder prior to the effective date of such expiration or termination (including the

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

rights to receive reimbursement for costs incurred prior to the effective date of such termination and payments accrued or due prior to the effective date of such termination).

Article 15 Dispute Resolution

15.1 Incorporation of Dispute Resolution Terms

Pursuant to Section 1.5, the terms of the Collaboration Agreement relating to Article 15 (Dispute Resolution), constitute part of this Agreement as if set forth herein.

15.2 Disputes involving the Parties and CMO(s)

Notwithstanding anything else in this Agreement, in the event that Otsuka and Aurinia are engaged in the process set out for resolution of any Disputed Matter and Aurinia and a CMO(s) are engaged in substantially the same dispute, the Parties will cooperate and act reasonably and seek the cooperation of such CMO(s) so that such disputes can be heard together relying in the same information, evidence, arbitral or other bodies, all with a view to ensuring that the disputes are resolved on the same terms.

15.3 Exclusions from Dispute Resolution

Article 15, Dispute Resolution, of the Collaboration Agreement excludes pursuant to Section 3.4(b)(i) Manufacture (excluding Packaging by Otsuka) of Products for the Otsuka Territory, provided that Aurinia’s final decision-making authority with respect to any such Manufacturing decision shall be subject to and limited by the terms of this Agreement and the Quality Agreement(s). Except as expressly set out in this Agreement, nothing in this Agreement limits Aurinia’s final decision-making authority with respect to any Manufacturing decision.

15.4 Tolling

For clarity, except as otherwise set out herein, during the pendency of the process set out for resolution of any Disputed Matter, the applicable cure period will be tolled, all the terms of this Agreement will remain in effect, and the Parties will continue to perform all of their respective obligations hereunder.

[Signature page follows]

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Aurinia Pharmaceuticals Inc.<br><br><br><br>By: _/s/ Stephen Robertson_________________<br><br>Name: Stephen Robertson<br>Title: Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Officer	Otsuka Pharmaceutical Co., Ltd.<br><br>By:_/s/ Kiyoshi Taniguchi_______________<br>Name: Kiyoshi Taniguchi<br>Title: Executive Director(Board Member)<br>Production, Supply Chain & CMC

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 1.4.35: Specifications as of the Effective Date

EU: proposed in the MAA filing, and subject to final EC approval of LUPKYNIS

Japan: to be determined, and submitted as part of JNDA filing

UK (GB): based on proposed EU specifications – to be approved by MHRA

Switzerland: based on proposed EU specifications – to be approved by Swiss Medic

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Exhibit 4.2: Validated Batch Sizes

EU: [redacted] capsule scale submitted in MAA, and subject to final EC approval of LUPKYNIS. Submission planned post-approval to include [redacted] capsule scale

Japan: to be determined, and submitted as part of JNDA filing

UK (GB): based on proposed EU batch size – to be approved by MHRA. Submission planned post-approval to include [redacted] capsule scale

Switzerland: based on proposed EU batch size – to be approved by Swiss Medic. Submission planned post-approval to include [redacted] capsule scale

Certain identified information has been excluded from this exhibit because it both (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Document

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter Greenleaf, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Aurinia Pharmaceuticals Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 3, 2022	By:	/s/ Peter Greenleaf
			Peter Greenleaf
			Chief Executive Officer
			(Principal Executive Officer)

Document

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph Miller, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Aurinia Pharmaceuticals Inc..;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 3, 2022	By:	/s/ Joseph Miller
			Joseph Miller
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aurinia Pharmaceuticals Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter Greenleaf, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	August 3, 2022	By:	/s/ Peter Greenleaf
			Peter Greenleaf
			Chief Executive Officer
			(Principal Executive Officer)

Document

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aurinia Pharmaceuticals Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph Miller, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:	August 3, 2022	By:	/s/ Joseph Miller
			Joseph Miller
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

For the quarterly period ended June 30, 2022

For the transition period from_____________ to ________________

Commission file number: 001-36421

Aurinia Pharmaceuticals Inc.

(250) 708-4272

Registrant’s telephone number, including area code

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Item 1. Financial Statements

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these condensed consolidated financial statements.

AURINIA PHARMACEUTICALS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation

Significant Accounting Policies

Recently adopted accounting pronouncements

Victoria, British Columbia

Rockville, Maryland

Edmonton, Alberta

Otsuka Contract

Riptide License

Inducements

Stock Options

Performance Awards and Restricted Stock Units

Compensation Expense

Uncertain Tax Positions

Other Funding Commitments

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Three and Six Months ended June 30, 2022 compared to Three and Six Months ended June 30, 2021

Revenues

Cost of Sales

Selling, General and Administrative Expenses

Research and Development Expenses

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Interest Rate Risk

Foreign Currency Risk

Inflation Risk

Credit Risk

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control over Financial Reporting

Item 1. Legal Proceedings.

Item 1A. Risk Factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3. Defaults Upon Senior Securities.

Item 4. Mine Safety Disclosures.

Item 5. Other Information.

Item 6. Exhibits.

SIGNATURES

For the transition period from_ to ____