What happened

Shares of clinical-stage drug developer Aurinia Pharmaceuticals (NASDAQ:AUPH) rose over 15% today after the company announced fourth-quarter and full-year 2016 earnings. Today's move marks the second time this week that the stock has risen by double digits. The first came on Tuesday, after Aurinia announced that it would present data from a recently completed phase 2b trial for its lead drug, voclosporin, at the upcoming National Kidney Foundation 2017 Spring Clinical Meetings next month.

So what

There really wasn't much to report, but management took the time to remind investors of the company's bright prospects. Voclosporin breezed through its phase 2b trial -- becoming the first drug to show a clear benefit in treating lupus nephritis -- and will begin a crucial phase 3 trial sometime in the second quarter of this year. It is intended to be used as a complement to standard care treatment, which should help it to be adopted quickly if it gains marketing approval.

A bar chart showing growth

Image source: Getty Images.

Approval seems likely eventually. Here's how the drug candidate stacked up against standard care alone, in complete-remission and partial-remission rates at 24 weeks and 48 weeks:

Checkpoint Results

Low Dose

High Dose

Control Arm

24 weeks, CR rate




24 weeks, PR rate




48 weeks, CR rate




48 weeks, PR rate




CR= complete remission; PR = partial remission. Source: Aurinia Pharmaceuticals.

Aurinia Pharmaceuticals is definitely thinking along those lines. In late 2016 it announced a long-term manufacturing agreement with Lonza Group AG for the active pharmaceutical ingredient.

Specifically regarding financial performance, Aurinia Pharmaceuticals kept costs relatively low, recording an adjusted net loss of just $25 million for the full year. The company finished 2016 with just under $40 million in cash, so investors should expect a cash raise that will provide funding for late-stage trials and commercialization activities -- all worth it to get its lone drug on the market.

Now what

There are a handful of catalysts for investors to look forward to in 2017, but it will be a relatively quiet year with progress occurring behind the scenes, or more precisely, in the clinic. Catalysts include a decision from the European Medicines Agency regarding how the company can proceed on the Continent, and data from additional studies -- and, of course, the initiation of a phase 3 trial. At this point, investors should stay the course and remain committed to the long-term vision.

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