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Aurinia Pharmaceuticals Inc (NASDAQ:AUPH)
Q3 2021 Earnings Call
Nov 3, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Aurinia Pharmaceuticals' Third Quarter 2021 Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host Dana Lynch, Aurinia's Investor Relations and Corporate Communications. Thank you. You may begin.

Dana Lynch -- Director, Corporate Communications

Thank you, Latonya, and thank you to those joining today's call to discuss Aurinia's third quarter financial results. Leading the call this morning are Peter Greenleaf, President and CEO; and Joe Miller, Chief Financial Officer. Other members of the Aurinia executive team, Max Colao, Chief Commercial Officer,Neil Solomons, Chief Medical Officer and Robert Huizinga, Executive Vice President of Research, are also on the call and available for the Q&A portion of the agenda.

Today, Peter will begin with an update on our progress with LUPKYNIS commercialization, review recent and anticipated clinical and regulatory milestones for voclosporin, as well as provide an update on the Aurinia pipeline. Then Joe will discuss our financial performance in more detail. At this closing remarks, participating executive team members are available for your questions. Today's press release announcing our financial results and recent operational highlights, accessible from our website at www.auriniapharma.com and has been filed on a Form 8-K with the U.S. Securities and Exchange Commission.

This afternoon, we plan on filing our financial statements and accompanying management discussion and analysis in the quarterly report on Form 10-Q. During this call, we may make forward-looking statements based on our current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially.

For a discussion of factors that could affect our future financial results and business, please refer to the disclosures in our press release and our quarterly report on Form 10-Q once filed, along with our recent filings with the U.S. Securities and Exchange Commission and Canadian Securities authorities. Please note that all of the statements made during today's call are current as of today, November 3, 2021 unless otherwise noted, and are based upon information currently available to us at this time. Except as required by law, we assume no obligation to update any such statements, as of this date.

Let me now turn the call over to Aurinia's President and CEO, Peter Greenleaf. Peter?

Peter S. Greenleaf -- Chief Executive Officer

So thanks, Dana, and I want to thank everyone for joining us today. We're now well into the launch in the U.S., and I'm happy to report strong results for the third quarter. We continue to execute on our commercial strategy and increase access to and adoption of LUPKYNIS for the treatment of adults with active lupus nephritis. This morning, I'll take you through our performance results, as well as provide you with some LUPKYNIS clinical and regulatory updates. I'll also provide you with an overview of two exciting pipeline assets we've recently acquired.

Finally, we will report our financial position and answer any questions that you may have. So let's start with our business performance-related to the launch, starting first with the quarter. In Q3, we generated $14.7 million in net sales, which exceeded analysts' expectations and represents 122% increase over the prior quarter. Since the launch in late January, our total recognized revenue is $22.2 million. Based on our current metrics and anticipated year-end results, we maintain our guidance in the range of $40 million to $50 million for 2021. In the third quarter, we added 412 patients, new patient start forms.

While COVID-19 challenges with the Delta variant and Southern states impacted PSF prescribing early in the summer, it should be noted that we saw a steady increase in prescribing rates throughout September and continuing into October. As of this week, we have now logged a total of more than 1,265 patient start forms year-to-date and remain optimistic that this upward momentum will continue. We also continue to see improvements in movement from patient start forms to patients on therapy, with a conversion rate in excess of 68% currently. This is up from approximately 50% in Q2.

In addition, our time to convert is shrinking, both 30 and 60-day conversion rates have continued to improve each month. On the payer coverage front, we continue to make progress, especially with regional and local plans. As of early October, we have conferred LUPKYNIS coverage through published payer policies for 65% of total lives in the market. Through patients gaining access to LUPKYNIS, we have now confirmed coverage and plans covering 87% of total lives.

While our goal is to ensure there are specific policies in place, healthcare professionals and patients are gaining access to LUPKYNIS through medical justifications and working in conjunction with Aurinia's personalized patient support resources. We continue to work to make the access process as seamless as possible for providers and patients so that patients can quickly gain access and start our treatment. Just over nine months post launch, we're not slowing down.

Our team continues to work tirelessly to educate professional and both professional and patient audience about Lucina and the urgent need to diagnose and treat lupus nephritis patients as quickly as possible. The most recent healthcare provider market research shows that LUPKYNIS awareness has increased significantly with both rheumatologists and nephrologists and is on par with the competition, which, by the way, this competition has been on the market for over 10 years. LUPKYNIS' remarkable clinical results continue to differentiate our product and bolster this awareness and confidence in prescribing. This week, Aurinia has five presentations at two key medical meetings. The American College of Rheumatology and the American Society of Nephrology.

These include data from our pivotal AURORA one study showing LUPKYNIS efficacy in newly diagnosed patients and patients with severe lupus nephritis. An oral presentation at ACR will also feature in updated analysis of the AURORA two continuation study, assessing the safety and tolerability of LUPKYNIS at 30 months. As a reminder, we expect to announce results from this continuation study, looking at the final data from two additional years of LUPKYNIS treatment or three years in total by the end of this year. This will represent the longest lupus nephritis treatment duration in recent studies. Lupus nephritis is a lifelong condition, and this long-term data will provide necessary support for HCPS, patients and payers to safely continue LUPKYNIS treatment beyond one year.

So let's now shift to a look at the ongoing work to establish voclosporin as a global therapy. The EMA marketing authorization application, which, as you recall, was filed in June with our licensing partner at Otsuka, remains on track for review. We continue to expect the CHMP opinion around mid-2022 and a final EMA decision sometime in the third quarter of 2022. As part of this submission, on October one of this year, Otsuka filed an MAA with the Swiss Agency for Therapeutic Products or Swissmedic, seeking approval for the use of voclosporin in the treatment of adult patients living with active lupus nephritis.

Additionally, Otsuka continues to work toward finalizing the timeline for the Japanese NDA regulatory filing with the PMDA to seek approval for voclosporin in the treatment of LN in Japan. We continue to be pleased with this progress, and look forward to supporting Otsuka and launching our therapy in these markets. And as we said before, reaching these milestones will provide us with opportunities to continue to strengthen our company's financial position, as we work to globalize LUPKYNIS. Moving now to R&D updates.

On August 17 of this year, we announced the acquisition of two exciting and innovative additions to our pipeline. The first of these compounds is AUR200, which is an Fc protein targeting BAFF or B-cell Activating Factor and APRIL or A Proliferation-inducing Ligand. As you may know, both BAFF and APRIL play a key role in B-cell-mediated autoimmune disease. And while this mechanism of action has been widely studied and we have proof of concept, we believe, this compound has differentiated properties compared to those in development, and we're eager to establish those preclinically and then, of course, advance into clinical development.

The IND for AUR200 is expected to be filed in late 2022. The second compound that we acquired is AUR300. AUR300 is a novel peptide therapeutic that modulates M2 macrophages, which is a type of white blood cell via the CD206 receptor. While there's less research with this mechanism of action, it has been established a disregulation of M2 macrophages causes fibrosis and with AUR300, the goal will be to reduce M2 dysregulation early and decrease fibrosis and inflammation.

The IND filing for this compound is targeted for the first half of 2023. These transactions allow us to leverage our existing R&D capabilities in growing commercial experience. We strive to further diversify and grow our pipeline, which is a key strategic imperative for us and our goal to provide stakeholders with long-term value.

In summary, we're making significant progress, as we work to expand adoption of LUPKYNIS in the U.S. as well as other parts of the world. At the same time, in parallel, our R&D teams are committed to advancing our new pipeline assets and addressing autoimmune diseases beyond lupus nephritis. I'll be back to close out the call. But for now, let me ask Joe Miller to get into more specifics regarding our financial position. Joe?

Joseph M. Miller -- Chief Financial Officer

Thank you, Peter, and good morning, everyone. As of September 30, 2021, Aurinia had cash and cash equivalents and investments of $286.4 million compared to $422.7 million at December 31, 2020. The decrease was primarily related to the commercial infrastructure spend to support the launch of LUPKYNIS, an upfront payment made as part of a collaborative agreement with Lonza to build a dedicated manufacturing capability and an upfront license payment related to our recently acquired developmental programs.

Net cash used in operating activities was $131.8 million for the nine months ended September 30, 2021, compared to $73.1 million for the nine months ended September 30, 2020. The increase was primarily due to the commercial infrastructure spend to support the launch of LUPKYNIS, payments for inventory and a onetime payment to a related party upon achievement of specified milestones, partially offset by an increase in cash receipts.

As a reminder, in the prior year, the company was still in the development phase of LUPKYNIS and was only in the beginning phase of building out its commercial and back office infrastructures. The company believes that it has sufficient financial resources to fund its current plans, which include funding commercial activities, including FDA-related post-approval commitments, manufacturing and packaging of commercial drug supply, funding or supporting corporate infrastructure, conducting planned research and development programs and investing in our pipeline into at least 2023.

Total revenue was $14.7 million and $29,000 for the quarters ended September 30, 2021 and September 30, 2020, respectively. Total revenue was $22.2 million and $88,000 for the nine months ended September 30, 2021 and September 30, 2020. Our revenues primarily consisted of LUPKYNIS product revenue net of adjustments following FDA approval in January of 2021.

Cost of sales was $254,000 and 0 for the quarters ended September 30, 2021 and September 30, 2020, respectively. Cost of sales were $610,000 and 0 for the nine months ended September 30, 2021 and September 30, 2020. The increase for both periods was primarily the result of commercial sales of LUPKYNIS. Gross margins for the three and nine months ended September 30, 2021, was approximately 98% and 97%, respectively.

Selling, general and administrative expenses or SG&A, were 44.1 and $30.7 million for the quarters ended September 30, 2021, to September 30, 2020, respectively. For the nine months ended September 30, 2021, SG&A expenses were 127.2 and $57.2 million for the comparable period in prior year. The increase for both periods was due to employee-related costs associated with the expansion of the commercial and administrative functions to support the launch of LUPKYNIS, which ramped up during the third quarter of 2020.

Also contributing was an increase in professional fees for activities such as patient assistant programs, consulting, recruiting, legal, market research and marketing-related activities. Non-cash SG&A share-based compensation for the three and nine months ended was six and $19.2 million compared to 3.8 and $9.2 million in the same period in 2020. Research and development expense were 20.1 and $12.2 million for the quarters ended September 30, 2021 and September 30, 2020, respectively. For the nine months ended September 30, 2021 and September 30, 2020, R&D expenses were 40 and $37.2 million.

The primary driver for the increase for the three months ended September 30, 2021, as compared to the same period in prior year was the upfront license and accrued milestone expense related to our recently acquired developmental programs. In accordance with U.S. GAAP, these transactions did not meet the definition of a business combination and therefore, were recorded as asset acquisitions. The company expensed the cost of the assets as R&D-related expense at the acquisition date.

The increase was partially offset by a decrease in clinical supply and distribution cost due to our new drug application and voclosporin-related clinical trial expenditures in 2020, not recurring in 2021. Also contributing was a decrease in employee-related expenses. The primary drivers for the increase for the nine months ended September 30, 2021, as compared to the same period in prior year were due to the upfront license and accrued milestone related to our recently acquired developmental programs and higher CRO costs related to our new clinical programs, offset by a decrease in clinical supply and distribution costs following the approval of LUPKYNIS, including a reduction in NDA preparation costs and termination of the dry eye trial during the fourth quarter of 2020.

Non-cash R&D share-based compensation expense for the three and nine months ended September 30, 2021, was one and $3.2 million, respectively, compared to $800,000 and $3.1 million in the same period in 2020. For the quarters ended September 30, 2020, Aurinia recorded a net loss of $50.3 million or $0.39 per common share as compared to a net loss of $42.1 million or $0.34 per common share for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, Aurinia recorded a net loss of $147.6 million or $1.15 per common share as compared to a net loss of $94.6 million or $0.82 per common share for the previous period.

With that, I would like to hand the call back to Peter, for some closing remarks. Peter?

Peter S. Greenleaf -- Chief Executive Officer

Well, thanks, Joe, and I want to thank everyone again for joining us today. Let me close by saying that I'm proud of the work we've done so far this year under the backdrop of a challenging and unprecedented global pandemic, we continue to see strong and significant progress in our efforts to drive adoption LUPKYNIS in the U.S. Our clinical and regulatory teams are working hard to advance and achieve important milestones for voclosporin, including the completion of the AURORA two continuation study.

And we're pleased with the work achieved so far this year with our partner Otsuka to ensure regulatory approval of voclosporin outside of the U.S. And then finally, we're excited to have two new pipeline assets that will help us further our mission in changing the course of rare and autoimmune diseases. We look forward to providing additional updates in the months and quarters to come.

And I'd now like to open up the line for questions. So with that, operator, please feel free to open it up to the Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Alethia Young with Cantor Fitzgerald. Please proceed.

Alethia Young -- Cantor Fitzgerald -- Analyst`

Hey, guys. Thanks for taking my questions and congrats on all the progress as far with this launch. One question is just on between the rooms and the nephrologists who you speak to? Are they -- are there kind of different concerns? Or is one population more concerned about maybe what to do after a year versus the other? Just trying to get to find your points of what the dynamics are between those two prescribing groups. And then I know we haven't experienced those yet, at least with LUPKYNIS, but can you talk a little bit how you're thinking about maybe potential seasonality at the head to the end of the year? And how we should think about kind of working through that in the model?

Peter S. Greenleaf -- Chief Executive Officer

Thanks, Alethia. Let me start out, and Max can build on what I might miss on. Obviously, rheumatologists and nephrologists are different in the specialty and how they think about the disease. I think the treatment goals are aligned. But obviously, the lupus patient starts first at a rheumatologist office. If you look at our market research, though, in terms of both awareness and intent to treat, they're pretty close to overlapped in terms of awareness of the drug one and intend to treat moving forward. But in terms of our day-to-day, our messaging, et cetera, we still call on high targets, high targets both in nephrology and rheumatology. And right now, both from our impact scores in terms of the market research we track we're right on target with both nephrologists and with -- in rheumatologists. Max, what would you add there? Anything?

Massimiliano Colao -- Chief Commercial Officer

Yes. Said that our prescribing have actually pretty much split down the middle with half being nephrologists and half rheumatologists. So it kind of reflects again what Peter just highlighted, which is the intent-to-treat pretty much overlapped as what we see in our research.

Peter S. Greenleaf -- Chief Executive Officer

And Alethia, can you just ask the second question again? I missed it.

Alethia Young -- Cantor Fitzgerald -- Analyst`

No worries. It was just on like season -- how to think about maybe seasonality from like things have been in the Christmas, do you think that you'll kind of see a slowdown? Or just kind of talking about the dynamics that we may see over the fourth quarter. I know it seems like COVID is waning, and scripts are picking up, but then you kind of have the holidays, but I know you haven't gone through the holidays yet with this drug yet.

Massimiliano Colao -- Chief Commercial Officer

Yes. I think it's still a little early to understand whether there is sort of a summer seasonality to this or not because the Delta variant sort of hit right at the front end of the summer, and we couldn't discern between the two. A matter of fact, I could probably almost pose the question back to you since you talk to a lot of specialty companies out there in the space. And what they saw that they thought was pandemic related or more summer seasonal, but we're watching it very closely. I want to make sure that people are really clear in the message that we communicated, though, where we were in the quarter in terms of PSS than where we've trended to as we moved into September and October. We've had north of 1,265 PSFs year-to-date. And if you just do the backwards math on that in the month of October alone, it's approximately 160 new patient start forms in the month of October alone. So I don't want anyone to take away that we've seen a slowing down of this business. We saw impact in -- specifically in the southeast, as it was related to the Delta variant that was off-target with what we've seen since the start of this launch. We still feel very confident in our prescription start form performance, as it pertains to year-to-date. And we don't know yet if the summer was something that's going to be a predictable seasonality. Sorry for the long-winded answer.

Alethia Young -- Cantor Fitzgerald -- Analyst`

I appreciate the color.

Joseph M. Miller -- Chief Financial Officer

And I would add to that, that we did see a slowdown specifically from Texas to Florida and to Peter's point, and that has rebounded as we've gotten into September and October.

Alethia Young -- Cantor Fitzgerald -- Analyst`

Great. Thank you.

Operator

Our next question comes from Ed Ars with at HC Wainwright and company. Please proceed.

Ed Ars -- HC Wainwright and company -- Analyst

Hi. Good morning, everyone. Thanks for taking my questions and let me add my congrats on a strong quarter. First question is -- sure. Just thinking about the drivers of clinical adoption here. I know you just went over some of the variance early in the summer and what drove that. But given that you're seeing some real acceleration more recently, just thinking about what we should be focused on in terms of the drivers, as you increase your PSFs? And in particular, perhaps discuss the impact on prescribing from more recent data. I know we just got 30 months from AURORA two and 36 months to come very soon. Maybe talk about the impact of that, as you go out there in the field. Thanks.

Peter S. Greenleaf -- Chief Executive Officer

Well, to answer your first question, Ed, I think we report the meaningful numbers that we want people to be focused on. And really, that's at the top end of the funnel, it's new prescriptions or patient start forms. And then as we report, it's the conversion of those percentage of those patients to getting on therapy. And you can see whether it's patient start forms from the time point of the launch to year-to-date, we continue to see strong growth there. On the conversion front, we've moved from an early stage at the front end of the launch in or around 30% to 40% to today, just below 70% conversion. So obviously, that's a critical one. And then lastly, I would say, over the course of really this year and into next year, it's going to be tracking compliance or persistency, whatever the right word is you want to use there, how long patients stay on therapy? And obviously, our expectations aren't that 100% of patients are going to stay on therapy that patients will fall off over time, either for their own reasons or for physicians deciding how long they want to use the therapy. And I'd say the reason we haven't reported more on that to date is because it's just too early. If you think about the max number of doses a patient could have seen if they were approved for the drug in January, it would be in and around nine months' worth of dose is up to this point. So I just don't have enough to really point to a trend there. Max, anything you'd add?

Massimiliano Colao -- Chief Commercial Officer

Yes. I would say, the only thing I would add is that repeat prescribing is now becoming a bigger part of our PFS. And I think that reflects really just the overall increase in confidence with prescribers, both from just understanding our data better, as well as gaining experience in treating patients.

Ed Ars -- HC Wainwright and company -- Analyst

Okay, great. That is helpful. And then a couple more just on the finances for Joe. One is around the R and D expense in the quarter. I know you mentioned the upfront license of the new assets, and that being booked as an asset acquisition and that impacted the quarter. But wondering, what levels of trajectory in R and D expense we can expect over the coming quarters? And then also with gross margin, still staying really high, 98%, 97%. Just thinking about when that will normalize and at what level? Thanks so much.

Joseph M. Miller -- Chief Financial Officer

Thanks, Ed. Yes, in regards to the R and D expenses, I think if you kind of trend them out and you take out the onetime payments associated with the two recent acquisitions. And as I mentioned in the script, we also had an accrual of a milestone that we had to fair value as well. So our R and D-related op expenses for the quarter were about, just, call it, $20 million, just a touch above $20 million. If you look in the prior quarter, that number was around $10 million or so. So you take out those onetime upfront payments, coupled with the accrual of a onetime milestone. And your run rates pretty consistently around $10 million or so. And as we spoke previously, I think those numbers will continue consistently quarter-over-quarter. The nature of the expense will obviously change moving away from some of the post-approval obligations for voclosporin, LUPKYNIS into more of our new early stage programs. But looking out into the outer years and outer quarters, I think R and D burden remain fairly consistent

Peter S. Greenleaf -- Chief Executive Officer

N regards to your second question, Ed, I think on gross margin, it will fluctuate going forward. Obviously, I mentioned we have a monoplant operating manufacturing facility coming online, likely in 2023. Once we're kind of have exclusive manufacturing associated with that plant, the margins will move around slightly, but it will remain very healthy. They may move within a percentage or two one way or the other, but they should remain fairly consistent. So this product has a very nice margin associated with it.

Ed Ars -- HC Wainwright and company -- Analyst

Great, thanks so much.

Operator

Our next question comes from Maury Raycroft with Jefferies. Please proceed.

Farzin Haque -- Jefferies -- Analyst

Hi. Good morning, everyone. This is Farzin on for Maury. Can you provide a breakdown of the dose reductions and the compliance you have seen in real-world patients so far? And if your assumptions to get to the $65,000 net pricing is in line or better than what you've initially envisioned?

Peter S. Greenleaf -- Chief Executive Officer

So last question answered first, Maury, on the average net price, we're still in the range to support in or above the range to support the assumption that we put out. At this stage, we've not gone deeper on that, primarily because it's still early in the launch. And as a result, we're still getting an understanding of how doctors are prescribing LUPKYNIS, and the number and time to discontinuation, persistence, patient and payer mix all of which really impact the actual net realizable revenue per patient per year going forward. So looking at the results we have to-date, which is about nine months post launch we're currently on or above the guidance we've given previously on average net. Now in terms of what we understand about dose reductions that we see out there, again, I'd say it's early, but it's getting long enough in the launch to understand it more. And as we get a little bit more data, we'll start to report on it. I would say, at this stage, we're probably close end or hopefully, trending slightly above where the trials were. And if you remember, both in the Phase two and the Phase three trials, we were somewhere in the 25% to, call it, 30% of patients that saw a dose reduction. So I'd say that we're consistent with that, but we want to see a little bit more data, as patients get more experienced with the drug. In terms of compliance, it's all wrapped up in what I just said, Maury. We got to see a year's worth of data at least to really understand what the average patient persistency looks like on this drug, with only nine months under our belt, it's really hard to say what's going to be realizable or projectable forward.

Farzin Haque -- Jefferies -- Analyst

Got it. One question is, as you know, there have been rumors circulating on several companies approaching you about a potential takeover. So can you provide -- like can you confirm whether any deals are in works? And what are you looking for from an idea or perspective?

Peter S. Greenleaf -- Chief Executive Officer

Well, we obviously can't comment or speculate on the source of the rumor recent report. So I'll just leave it at that.

Farzin Haque -- Jefferies -- Analyst

Thank you.

Peter S. Greenleaf -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Ken Cacciatore from Cowen & Company. Please proceed.

Ken Cacciatore -- Cowen & Company -- Analyst

Hey, Peter, I'm going to follow-up on that question, even though you're not going to comment on it, try to just elicit something from you. Obviously, you've been massively in the news and the stock prices clearly pulling forward what we believe to be eventually wonderful performance on LUPKYNIS, but maybe get you to talk a little bit about how you think about stand-alone versus thinking of or engaging with others. I mean, is it a matter of folks just viewing the opportunity the same as you kind of coming into an agreement around size of opportunity? Is it what you see in front of you in terms of how you can leverage your own sales force? Obviously, a lot of infrastructure build for a single product and you're starting the process of building it out. But can you just help frame out for us a little bit, given kind of the breadth and depth of the rumors that we're all hearing about? Just how you think, generally speaking, about either putting your hand up or willingness to speak to others. Thanks so much.

Peter S. Greenleaf -- Chief Executive Officer

Thanks for the question, Ken. And I'll repeat what I already said. I mean, we really can't comment or speculate on the source of any of these rumors or recent reports that are circulating in the market. But I think the second part of your question, which is fair, to understand where management and our Board's mindset would be, as it pertains to continuing to create shareholder value, drive shareholder value. And I guess what I would answer -- how I would answer that question is, to reinforce what we've said in many calls before this time. We have a business plan and we have a mission as a company. And that business plan is to get this drug to as many patients suffering from autoimmune disease and lupus nephritis is humanly possible. And we remain committed to doing that in a way that drives the most shareholder value. And we remain committed to exploring any and all avenues to complete that mission and do it in a way that is best for driving shareholder value. So I realize that, that's a wide open answer. But I think if you read between the lines, no one here at Aurinia has a boxed in way of thinking about how we both create value and expand access to this product more broadly. Either in our hands or in someone else's or in partnership with someone, we remain open to all potential avenues.

Ken Cacciatore -- Cowen & Company -- Analyst

Okay. Thank you. That is helpful. Appreciate it.

Operator

Our next question comes from Joseph Schwartz with SVB Leerink. Please proceed.

Joseph Schwartz -- SVB Leerink -- Analyst

Thanks very much. In terms of long-term data that you've generated already and the longer-term data that you'll have in late fourth quarter, I was wondering, if there's any way that you can quantify for us how important this is in the marketplace? Are there segments of the market that you think are reluctant to use LUPKYNIS until they see such data? And how large are these segments? Is there any way that you can provide us with any parameters to help us appreciate the importance of this data?

Peter S. Greenleaf -- Chief Executive Officer

Yes, Joe, I think it's a great question. And I think the two biggest, in my mind, the two biggest swing factors that are hard to quantify for me today around the launch and the business. One has been the impact of COVID on our first year to launch to quantify that for you, would be difficult. I would say it definitely has, but to say whether it's 20% or 30%, we just don't know. The second -- and by the way COVID decreasing and seeing lower virus rates, et cetera we know it will have a positive impact on our business, both with the physician access, patient access, access to care, patients staying on drug. We know that. The other thing we know that's hard to quantify is that, obviously having three years' worth of data, both safety, tolerability data out to three years is better than having just one. And we know that it's going to help our business in lots of ways. one, we're one of the only products that has data out this long in this patient population. So that's an important thing to note. And with our drug in the class of CNIs, obviously, we want to -- while we're a new and differentiated new drug we want to continue to reinforce it utilizing this drug over longer periods of time, doesn't compromise in any way the patient's kidney function, which we're hopeful that in three years we'll actually show that. We know that's going to have meaningful impact on both prescribing behavior and probably even more importantly how payers react to reimbursing the drug over longer periods of time when, as you know, our label today says safety and efficacy beyond one year has not been established. So hopefully, that -- it's not a quant answer for you, and I apologize to that, but we think it's going to be really meaningful to both our patients, physicians and our efforts in getting the drug off the ground. And we will launch this data to the market in terms of what the outcomes are, as if it were an extension of a pivotal trial, which it is.

Joseph Schwartz -- SVB Leerink -- Analyst

So you'll be filing an SNDA for that? Or what is the actual process in order to be able to promote that data?

Peter S. Greenleaf -- Chief Executive Officer

It's a really good question. And no, this is not a supplemental for us. We do owe this data to the agency. They didn't ask for it, but we said we were going to do it, and it is part of our application. But I want to be really clear. Technically, it's not a -- we're not putting this in as a supplemental application. We will discuss with the agency how meaningful the data is, what it tells us and see if we can get to an aligned approach as to how that may or may not be added to the label. Because, I mean, as you know, a supplemental package opens up the entire label for review. And I personally have seen many times where you go into get something like this added to the label on end of change in three or four other areas. So I think we need to be smart and strategic and talk to the agency. We think it's very meaningful, and there should be merit to adding it to some area of the label, but not at this stage as a supplemental package.

Joseph Schwartz -- SVB Leerink -- Analyst

Okay. Thank you. And then we noticed that the guidance remains unchanged at $40 million to $50 million LUPKYNIS sales for this year. Is there -- can you provide us with any color commentary on how ambitious you think it might be to achieve the high-end versus the low-end? And what the biggest swing factors that you're focused on are? Is it patient start forms, which you've noted are accelerating or the conversion rate, which is already quite healthy? Like what do you think will determine where you end up for the year? And how ambitious do you think the range is?

Peter S. Greenleaf -- Chief Executive Officer

Well, I think what we've said when we put off any sort of guidance in the first year of the launch was that we weren't trying to softball anything. In a global pandemic situation, first year of a drug launch, we gave a $10 million range. And what I said when we put it out there was we're not -- obviously, we want to be a meet and beat kind of company, but at the same stage, first nine, 10, 12 months of a launch, these are not lay-up numbers for sure. And -- but we remain confident that we can be in this range. And I think to me, the biggest swing factor here, yes, we want new patient start forms in the quarter. That's critical, right? But a new patient started in the quarter doesn't drive a lot of revenue for us. So it comes down to continuing to work, convert and keep compliant those patients that have seen the drug in quarters before. That's going to be the single biggest driver of our performance in the queue ending out the year. And the biggest driver of what we'll continue to build that base into first quarter of next year, will be those patients start forms. So it comes down to compliance and conversion.

Joseph Schwartz -- SVB Leerink -- Analyst

Thanks very much.

Operator

Our next question comes from Justin Kim with Oppenheimer & Company. Please proceed.

Justin Kim -- Oppenheimer & Company -- Analyst

Hi. Good morning, Peter and team and let me add my congrats on the commercial progress during what's been a certainly challenging environment. Maybe just to probe a little bit more on that point with respect to patient start forms. As you think about the guidance range, is an acceleration in those sort of scripts, something that we would need to see to enter the higher end of guidance? That's just sort of what we're sort of getting up based on our talking envelope model?

Peter S. Greenleaf -- Chief Executive Officer

No, I think the way you want to look at patient start forms because it was -- this is a clear example of it in the quarter, is as a general health and growth of our business, we need to continue to be pushing new patients into the system to effectively work any patients that are going to fall out of the system. If we had 100% compliance, we could -- we probably wouldn't worry about this as much. But as we continue to see compliance over time, we want to continue to drive patient start forms. The conversion now, we could even if patients start forms were lower like we saw in not lower, but sort of flat quarter-on-quarter that we saw due to the Delta variant in Q3, you can still achieve a financial metric, as long as your patients convert and stay on drug. But I think you always got to be looking at that patient start form number because it is a general health of business and sort of future growth to business metric for us.

Justin Kim -- Oppenheimer & Company -- Analyst

Okay, got it. And then maybe just to talk a little bit about AURORA two. Does the team have insight on how physicians have been implementing dosing of voclosporin in those outer years? And how representative that may be of real-world practice at sort of more meaningful patients transition from having high proteinuric disease going into 2022?

Peter S. Greenleaf -- Chief Executive Officer

Yes. As we've said, it's early. So it's really hard to deduce what the trend will be going forward. We are watching both physician behavior here and patient behavior. Remember, we have -- this patient population is a difficult one and can be pretty notoriously uncompliant. So we are looking very closely, not only at physician prescribing behavior, but at persistency as it pertains to the patient in staying compliant and staying on drug. And I just think we're not trying to in any way walk away from this question. I just think you need more than six to nine months' worth of data to say you know anything about the persistency of your drug. But over time, this is going to be one that we can't not speak about when you have a year's worth of data that's out there or more. And we -- as we've said on previous calls, have every belief that we'll do that. So, so far, things have looked good, but I don't want a false report that what compliance will be until I have a project -- what I believe will be a projectable number and that's time.

Justin Kim -- Oppenheimer & Company -- Analyst

Understood. And maybe just a final question. In terms of that insight on persistency, does that complicate or make it more challenging to provide guidance for 2022? And when might we'd be able to have that sort of viewpoint and color?

Peter S. Greenleaf -- Chief Executive Officer

Yes. We haven't given any feel on what -- and if we're going to guide for 2022, much like the first launch of first year of launch, there are factors we just got to take into case like patient reups, how the AURORA two extension study and what that readout will mean for us. There are a lot of factors that are going to be playing on 2022. And I think we need to just be careful and really know, see what we do know as we roll into Q4 and how we can project that out for the year. I'm not saying we won't give guidance, but at the same time, I'm not conclusively saying we will. I think we got to look at all the factors. If anything, I think investors should feel very comfortable that we've been extremely transparent, maybe even more than we should about the early launch metrics and how they bled into this year. And I wouldn't see anything changing for us in terms of our desire to be transparent, very transparent with investors about our performance at how our brand is performing.

Justin Kim -- Oppenheimer & Company -- Analyst

Agreed. Thanks so much and congrats on the quarter.

Peter S. Greenleaf -- Chief Executive Officer

Thanks, Justin.

Operator

Our next question comes from David Martin with Bloom Burton & Co. Please proceed.

David Martin -- Bloom Burton & Co -- Analyst

Yes. Good morning. First question, if a patient is coming in with newly diagnosed lupus nephritis, are the physicians first treating them with MMF and steroids, and then adding LUPKYNIS if they don't respond to that combination? Or are they starting with the three drugs?

Peter S. Greenleaf -- Chief Executive Officer

I think the majority of patients today, David, are being treated in the way you're laying it out. But there are a minority of patients. And of course, our aspiration, which will be to totally change the treatment paradigm and start with the triple therapy upfront. I think the thought leader basin where people are challenging each other right now at that level is on thinking about therapy in the future in that way. But the reality of our systems today, how payers work, et cetera, the majority of patients that are being treated today are ones who are seeing breakthrough after seeing in MMF and steroid regimen. That's not where we aspirationally position the drug, which is where we position it right upfront with where our data is, which could be a newly diagnosed patient or could be a patient who's seen a course of a therapy or multiple therapies.

David Martin -- Bloom Burton & Co -- Analyst

Okay, great. Next question. Are there any thoughts of doing a trial in combination with cyclophosphamide? Or is that becoming less and less used in treating lupus nephritis?

Operator

It's not a discussion we have at this stage.

Joseph M. Miller -- Chief Financial Officer

Other combo trial, yes, but not with cyclophosphamide. I think if anything, and we're not -- my comment here is not a commitment to do anything, but an area where we get questions is combination therapy with B-cell therapies as they move forward.

David Martin -- Bloom Burton & Co -- Analyst

Okay. And then last question. I know there was a sub-study with pre and post biopsies. Any idea when that data is going to be published or presented?

Joseph M. Miller -- Chief Financial Officer

No. Because of the complexity to the study, the central reader shift, the fact that there are a lot of complexities around how that study can be executed or how that subset can be executed. We've not committed to a time line on that. First step, of course, we'll be getting the extension data. And as we've said, we have that by year-end, but no definitive time line yet.

David Martin -- Bloom Burton & Co -- Analyst

Okay. Sorry, I do have one other quick question. With the two and three year data, is there a chance you think you could get the nephrotoxicity warning off the label if everything comes up clean?

Peter S. Greenleaf -- Chief Executive Officer

Neil is on the call, too, and I think he'd have an opinion here. I think it is a -- it's a reach. There's a class of growth that came before us that have decades of experience in transplant where this is prominent in their label. And I think we should be very happy with how our label came out, as it pertains to class labeling. And I would not see a world where three years worth of safety and tolerability data is going to get us at. Neal, would you have a different view?

Neil Solomons -- Chief Medical Officer

No, I would agree completely. This is class labeling, David, that's based on the decades of experience with the other calcineurin inhibitors. And you would have to positively disprove in all areas that we cause any of that? And this study was not designed to do that.

David Martin -- Bloom Burton & Co -- Analyst

Got it. Okay. Thank you.

Operator

Our next question comes from Doug Miehm with RBC Capital Markets. Please proceed.

Doug Miehm -- RBC Capital Markets -- Analyst

Good morning, Peter just a quick question in terms of a follow-up with respect to compliance. Can you tell me what the company is specifically doing to aid in ensuring that compliance stays, as high as possible?

Peter S. Greenleaf -- Chief Executive Officer

Yes. I'll kick that one to Max Colao since we tactically and medically have a lot of things we're doing. Max?

Massimiliano Colao -- Chief Commercial Officer

Yes, sure. So about 90% of our patients are consented through Aurinia Alliance. And so they -- through that -- through Aurinia Alliance, we provide case management support, regular case management support to all the patients. The patients have dedicated nurses that reach out to them, again, consistently to -- for education and support. So that's probably the most impactful part of how we support compliance. And then beyond that, we also make sure that the communication is really clear between the patient, the physician, the office staff through -- again, through Aurinia Alliance. So I would say that's really -- again, we developed Aurinia Alliance to really to support patients considering the fact that this is a rare disease and a disadvantaged patient population. And we are -- and we absolutely hear and see the benefit of the support that we provide.

Doug Miehm -- RBC Capital Markets -- Analyst

Okay, great. And the second question, Peter, and maybe I misheard you, and you can correct me. But in speaking about the drug, you said, obviously, it's indicated for LN, but more broadly, autoimmune disease. Has there been any evidence that you're seeing or could see off-label use of this drug based on any doctor conversations that you've had?

Peter S. Greenleaf -- Chief Executive Officer

Well, let me be crystal clear, what I said is our mission as a company is to get this drug to as many LN patients and to continue to move our pipeline forward in other autoimmune diseases. And obviously, we don't do anything in the market to drive off-label promotion of any kind. Physicians are free to prescribe the drug where they want to as long as they get their payers aligned to do it, but we surely are not promoting to that. Your broader question about where will we take the drug or could we see the drug going in different areas in terms of a regulatory filing approach. What I've said historically is we've looked at this as a team. And at least at this stage, we don't see other areas that would warrant full development programs, but we get tested on that pretty often from physicians out there who have curiosity about where they might use the drug. So right now, that's centered to our clinical and our medical affairs organization and if anything becomes bigger than a conversation or something that's looked at from as from an individual investigator basis, we'll be sure to reach out to you and to you in light.

Doug Miehm -- RBC Capital Markets -- Analyst

Okay. Thanks very much.

Operator

Ladies and gentlemen we have reached the end of the question and answer session. I would like to turn the call back over to management for closing comments.

Peter S. Greenleaf -- Chief Executive Officer

No further closing comments here. I want to thank everybody for their time and look forward to updating you in the quarters and months to -- months and quarters to come. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 53 minutes

Call participants:

Dana Lynch -- Director, Corporate Communications

Peter S. Greenleaf -- Chief Executive Officer

Joseph M. Miller -- Chief Financial Officer

Massimiliano Colao -- Chief Commercial Officer

Neil Solomons -- Chief Medical Officer

Alethia Young -- Cantor Fitzgerald -- Analyst`

Ed Ars -- HC Wainwright and company -- Analyst

Farzin Haque -- Jefferies -- Analyst

Ken Cacciatore -- Cowen & Company -- Analyst

Joseph Schwartz -- SVB Leerink -- Analyst

Justin Kim -- Oppenheimer & Company -- Analyst

David Martin -- Bloom Burton & Co -- Analyst

Doug Miehm -- RBC Capital Markets -- Analyst

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