- Assets expand immunology portfolio to include B-cell therapy (BAFF/APRIL) and macrophage modulation -

- IND-enabling studies are ongoing and will support the transition of these assets to clinical development in 2022/2023 -

Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the Company) today announced the addition of two novel assets that will expand the Company’s rare autoimmune and kidney-related disease pipeline.

“Over the past year, in anticipation of building out and diversifying our development pipeline, we have brought on additional large and small molecule expertise that uniquely aligns with Aurinia’s focus on immunology and nephrology,” said Peter Greenleaf, President and Chief Executive Officer of Aurinia. “These transactions are transformational for Aurinia as they allow us to leverage our existing R&D capabilities and commercial experience to support a balanced pipeline and advance innovative therapeutic solutions to help people living with rare autoimmune diseases.”

AUR200: Recombinant Fc Protein Targeting BAFF/APRIL

The first program, AUR200, was acquired by way of Aurinia purchasing all of the common stock of Thunderbolt Pharma, Inc. (Thunderbolt), a private company. AUR200 is a recombinant Fc fusion protein designed to specifically block B-cell Activating Factor, known as BAFF, and A Proliferation-Inducing Ligand, known as APRIL. BAFF and APRIL promote B cell survival and differentiation and have been shown to play a prominent role in the pathogenesis of certain autoimmune and nephrology conditions.

For the acquisition, Aurinia made an aggregate upfront payment of $750,000 USD to the shareholders of Thunderbolt and will be responsible for future regulatory milestones upon investigational new drug (IND) acceptance by the United States’ Food and Drug Administration (FDA) or any equivalent authority. Additionally, Thunderbolt shareholders will receive low single digit royalties on any future net sales. AUR200 is currently undergoing pre-clinical development with projected submission of an IND to the FDA by the end of 2022.

“BAFF/APRIL inhibition has been extensively studied and established as an important approach to managing immunologic response,” said Neil Solomons, MD, Chief Medical Officer, Aurinia. “We are encouraged by AUR200’s unique profile and best-in-class potential and look forward to sharing further data and updates on this exciting program.”

AUR300: M2 macrophage modulation via CD206 binding

The second program, AUR300, was secured through a global licensing and research agreement with Riptide Bioscience Inc. (Riptide), a private company. AUR300 is a novel peptide therapeutic that modulates M2 macrophages (a type of white blood cells) via the macrophage mannose receptor CD206. Dysregulation of M2 macrophages drives fibrosis. AUR300 acts to reduce M2 dysregulation and decrease inflammatory cytokines, and therefore may have significant clinical applications for autoimmune and fibrotic diseases.

Riptide has longstanding expertise in interpreting the etiology of fibrosis, including the discovery of lysyl oxidase and procollagen. As part of the agreement, Aurinia paid Riptide an upfront fee of $6 million USD. Additional milestone 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 the first half of 2023.

“Both of these programs are rooted in strong science and at the leading edge of approaches for the treatment of autoimmune, fibrotic, and kidney diseases,” said Rob Huizinga, PhD, RN, CNeph(C), Executive Vice President of Research, Aurinia. “Significant research has been done to date in both BAFF/APRIL inhibition and macrophage modulation and we are confident both of these approaches offer high potential across multiple autoimmune diseases as we advance them into the clinic.”

About Aurinia

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. The Company recently introduced the first FDA-approved oral therapy indicated for the treatment of adult patients with active lupus nephritis (LN). Aurinia’s head office is in Victoria, British Columbia; its U.S. commercial hub is in Rockville, Maryland; and the Company focuses development efforts globally.

Forward-Looking Statements

Certain statements made in this press release may constitute forward-looking information within the meaning of applicable Canadian securities law and forward-looking statements within the meaning of applicable United States securities law. These forward-looking statements or information include but are not limited to statements or information with respect to: the timing of transitioning AUR200 and AUR300 into clinical development; that the acquisitions of AUR200 and AUR300 are transformational for Aurinia; Aurinia’s belief that the mechanism of action of the AUR300 peptide may have significant clinical applications for autoimmune or fibrotic diseases; the timing for filing an IND for AUR200 and AUR300; Aurinia’s belief that AUR200 has the potential to be a unique and best in class BAFF/APRIL inhibitor; Aurinia’s belief that AUR200 and AUR300 are at the leading edge of approaches for the treatment of autoimmune, fibrotic and kidney diseases; and Aurinia’s belief that macrophage modulation and BAFF/APRIL inhibition offer high potential across multiple autoimmune diseases. It is possible that such results or conclusions may change. Words such as “anticipate”, “will”, “believe”, “estimate”, “expect”, “intend”, “target”, “plan”, “goals”, “objectives”, “may” and other similar words and expressions, identify forward-looking statements. We have made numerous assumptions about the forward-looking statements and information contained herein, including among other things, assumptions about: assumptions relating to the burn rate of Aurinia’s cash for operations; and that Aurinia’s third party service providers will comply with their contractual obligations. Even though the management of Aurinia 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.

Forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of Aurinia to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Such risks, uncertainties and other factors include, among others, the following: Aurinia’s actual future financial and operational results may differ from its expectations; Aurinia may have to pay unanticipated expenses; unknown impact and difficulties imposed by the COVID-19 pandemic on Aurinia’s business operations including nonclinical, clinical, regulatory and commercial activities; the future prospects for AUR200 and AUR300 may not be as Aurinia has anticipated, or Aurinia may not be able to fully capitalize on the opportunities presented by AUR200 and AUR300; Aurinia’s third party service providers may not, or may not be able to, comply with their obligations under their agreements with Aurinia; and Aurinia’s assets or business activities may be subject to disputes that may result in litigation or other legal claims. Although Aurinia has attempted to identify factors that would cause actual actions, events, or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actual results, performances, achievements, or events to not be as anticipated, estimated or intended. Also, many of the factors are beyond Aurinia’s control. There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on forward-looking statements or information.

All forward-looking information contained in this press release is qualified by this cautionary statement. Additional information related to Aurinia, including a detailed list of the risks and uncertainties affecting Aurinia and its business, can be found in Aurinia’s most recent Annual Report on Form 10-K available by accessing the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com or the U.S. Securities and Exchange Commission’s Electronic Document Gathering and Retrieval System (EDGAR) website at www.sec.gov/edgar, or on Aurinia’s website at www.auriniapharma.com.

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