Aurinia Pharmaceuticals (AUPH) risk factors, FY2024 10-K

RISKS RELATED TO COMMERCIALIZATION

1. 01We are substantially dependent on the commercial success of LUPKYNIS
2. 02Product liability or other lawsuits against us could cause us to incur substantial liabilities and reduce LUPKYNIS sales
3. 03The commercial success of LUPKYNIS in certain ex-U.S. territories is dependent on the fulfillment of contractual obligations under our out-license agreement and commercial supply agreement
4. 04(collectively, the “Otsuka Territories”) in exchange for: (i) a $50 million upfront cash payment; (ii) regulatory and commercial milestone payments; and (iii) royalties ranging from 10% to 20% on net sales in the Otsuka Territories
5. 05The commercial success of LUPKYNIS is dependent on pricing regulations and/or third-party coverage and reimbursement policies
6. 06If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the U.S., we could be subject to additional reimbursement requirements, penalties, sanctions and fines
7. 07We have reported on various commercial metrics relating to LUPKYNIS, and no single metric is indicative of, or directly correlated to, our current or future financial performance

RISKS RELATED TO PATENTS AND PROPRIETARY TECHNOLOGY

1. 08LUPKYNIS’s market exclusivity periods will depend on the validity and enforceability of issued and pending patents covering LUPKYNIS
2. 09If our products or our product candidates infringe the rights of others, we could be subject to expensive litigation, become liable for substantial damages, be required to obtain licenses from others or be prohibited from selling our products or product candidates altogether
3. 10Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents
4. 11We may not be able to protect the confidentiality of our trade secrets

RISKS RELATED TO FINANCIAL POSITION

1. 12Our overall financial performance may not meet our expectations
2. 13Our restructuring efforts and associated organizational changes may not adequately reduce our operating costs, may lead to additional workforce attrition and may cause operational disruptions
3. 14Our ability to use our net operating loss carryforwards and tax credit carryforwards to offset future taxable income may be subject to certain limitations. We may also be subject to other potential tax consequences

RISKS RELATED TO DRUG DEVELOPMENT AND REGULATORY APPROVAL

1. 15Drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies may not be predictive of future study results
2. 16Results from studies of AUR200 may not be sufficient to obtain regulatory approvals to market our product candidate on a timely basis, if at all
3. 17Our development of AUR200 may be delayed or halted
4. 18Compliance with ongoing post-marketing obligations for LUPKYNIS may uncover new safety information that could give rise to a product recall, updated warnings or other regulatory actions
5. 19Failure to obtain regulatory approval in international jurisdictions would prevent our products, our product candidates or any other products we or our current or future out-licensees may develop from being marketed abroad

RISKS RELATED TO OUR RELIANCE ON THIRD PARTIES

1. 20The commercial success of LUPKYNIS and the clinical success of AUR200 will depend on our ability to obtain an uninterrupted supply from our contract manufacturers

RISKS RELATED TO GOVERNMENT REGULATION

1. 21We are subject to various federal, state and foreign laws and regulations governing the health care industry that could result in substantial penalties for noncompliance
2. 22any customer of the manufacturer, with certain exceptions for government programs, and pay prescription rebates to state Medicaid programs based on a statutory formula derived from reported pricing information
3. 23Drugs approved by the FDA, EC and/or other regulatory agencies are subject to ongoing regulation

RISKS RELATED TO OWNERSHIP OF OUR COMMON SHARES

1. 24The volume and trading price of our common shares may fluctuate significantly, and you may lose all or part of your investment
2. 25We have never paid a dividend on our common shares, and you should rely on price appreciation of our common shares for return on your investment
3. 26There can be no assurance that we will continue to repurchase Common Shares or that we will repurchase Common Shares at favorable prices
4. 27Our employees, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations may engage in misconduct, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business
5. 28Business interruptions resulting from geopolitical actions, natural disasters, public health crises or other catastrophic events could have an adverse impact on our business
6. 29You may be unable to enforce actions against us, or certain of our directors and officers under U.S. laws
7. 30Our business and operations may be materially adversely affected in the event of computer system failures or security breaches
8. 31Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
9. 32Disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met
10. 33Use of hazardous materials might expose us to risk in the form of damages