Aurinia Pharmaceuticals Inc. (AUPH)
SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2834 Pharmaceutical Preparations
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1600620. Latest filing source: 0001600620-26-000017.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Net income | 287,202,000 | USD | 2025 | 2026-02-26 |
| Assets | 751,587,000 | USD | 2025 | 2026-02-26 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001600620.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|
| Net income | -53,079,000 | -88,385,000 | -102,680,000 | -180,966,000 | -108,180,000 | -78,020,000 | 5,752,000 | 287,202,000 | |
| Operating income | -55,240,000 | -90,943,000 | -104,290,000 | -180,735,000 | -111,470,000 | -91,691,000 | -4,687,000 | 104,914,000 | |
| Diluted EPS | -0.95 | -0.87 | -1.40 | -0.76 | -0.54 | 0.04 | 2.07 | ||
| Operating cash flow | -51,611,000 | -63,585,000 | -69,858,000 | -157,692,000 | -79,529,000 | -33,461,000 | 44,388,000 | 135,658,000 | |
| Share buybacks | 0.00 | 0.00 | 40,239,000 | 98,156,000 | |||||
| Assets | 324,301,000 | 463,661,000 | 543,367,000 | 470,860,000 | 548,062,000 | 550,645,000 | 751,587,000 | ||
| Liabilities | 25,701,000 | 55,911,000 | 64,276,000 | 65,425,000 | 170,108,000 | 173,167,000 | 170,256,000 | ||
| Stockholders' equity | 177,922,000 | 135,717,000 | 298,600,000 | 407,750,000 | 479,091,000 | 405,435,000 | 377,954,000 | 377,478,000 | 581,331,000 |
| Cash and cash equivalents | 306,019,000 | 272,350,000 | 231,643,000 | 94,088,000 | 48,755,000 | 83,396,000 | 80,160,000 |
Ratios
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|
| Return on equity | -39.11% | -29.60% | -25.18% | -37.77% | -26.68% | -20.64% | 1.52% | 49.40% | |
| Return on assets | -27.25% | -22.15% | -33.30% | -22.97% | -14.24% | 1.04% | 38.21% | ||
| Liabilities / equity | 0.09 | 0.14 | 0.13 | 0.16 | 0.45 | 0.46 | 0.29 | ||
| Current ratio | 27.90 | 13.11 | 12.63 | 9.60 | 5.50 | 4.57 | 5.25 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001600620.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | -0.25 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | -0.06 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.18 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 41,494,000 | -11,492,000 | -0.08 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 54,515,000 | -13,447,000 | -0.09 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 45,095,000 | -26,875,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 50,303,000 | -10,749,000 | -0.07 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 57,192,000 | 722,000 | 0.01 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 67,771,000 | 14,350,000 | 0.10 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 59,867,000 | 1,429,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 62,465,000 | 23,344,000 | 0.16 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 23,344,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 70,008,000 | 0.16 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | 21,513,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 73,468,000 | 0.23 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 77,114,000 | 210,794,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 77,705,000 | 34,355,000 | 0.25 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001600620-26-000049.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and our audited financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission on February 26, 2026 (the “Form 10-K”) and with applicable Canadian securities regulatory authorities. This Quarterly Report contains “forward-looking statements” within the meaning of U.S. federal securities laws and “forward-looking information” within the meaning of Canadian securities laws, and such statements may involve substantial risks and uncertainties. All statements, other than statements of historical facts included in this Quarterly Report, including statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, future expenses, business trends and other information referred to under this section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan,” “anticipate,” “target,” “forecast” or the negative of these terms and similar expressions intended to identify forward-looking statements. Forward-looking statements are not historical facts and reflect our current views with respect to future events. Forward-looking statements are also based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We discuss a number of risks, uncertainties and other factors in greater detail under the heading “Risk Factors” in Part I, Item 1A of the Form 10-K as well as in Part II, Item 1A of this Quarterly Report. 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 Background Aurinia is a biopharmaceutical company focused on delivering therapies to people living with autoimmune diseases with high unmet medical needs. In January 2021, the Company introduced LUPKYNIS® (voclosporin), the first FDA-approved oral therapy for the treatment of adult patients with active lupus nephritis. Aurinia is also developing aritinercept, a dual inhibitor of B cell-activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases. Net Product Sales For the three months ended March 31, 2026, net product sales of LUPKYNIS were $73.6 million, up 23%, from $60.0 million, in the same period of 2025. Cash Flows from Operating Activities For the three months ended March 31, 2026, cash flows from operating activities were $32.6 million, up 2408% from $1.3 million in the same period of 2025. Cash Position As of March 31, 2026, Aurinia had cash, cash equivalents, restricted cash and investments of $378.8 million, compared to $398.0 million at December 31, 2025. For the three months ended March 31, 2026, cash outflows from financing activities were $53.7 million, which included the repurchase of 2.5 million of the Company’s common shares for $36.2 million and tax withholding payments related to net settlements of equity awards of $14.6 million. 12 Results of Operations Comparison of the Three Months ended March 31, 2026 and 2025 The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Change Revenue Net product sales $ 73,563 $ 59,971 $ 13,592 License, collaboration and royalty revenue 4,142 2,494 1,648 Total revenue 77,705 62,465 15,240 Operating expenses Cost of revenue 6,505 8,574 (2,069) Selling, general and administrative 22,029 20,339 1,690 Research and development 7,470 5,743 1,727 Restructuring — 1,533 (1,533) Other expense, net 279 4,429 (4,150) Total operating expenses 36,283 40,618 (4,335) Income from operations 41,422 21,847 19,575 Interest income 3,515 3,569 (54) Interest expense (1,012) (1,067) 55 Net income before income taxes 43,925 24,349 19,576 Income tax expense 9,570 1,005 8,565 Net income $ 34,355 $ 23,344 $ 11,011 Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the United States (the “U.S.”), and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd. (“Otsuka”), for the European and Japanese market. The two specialty pharmacies, specialty distributor and Otsuka are considered our customers for accounting purposes. For the three months ended March 31, 2026, net product sales of LUPKYNIS were $73.6 million, up 23% from $60.0 million in the same period of 2025. The increase is primarily due to an increase in the number of LUPKYNIS cartons sold to specialty pharmacies, driven by further lupus nephritis market penetration. License, Collaboration and Royalty Revenue License, collaboration and royalty revenue consists of revenue from a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in voclosporin in Japan, the European Union (the “E.U.”), the United Kingdom (the “U.K.”), Switzerland, Russia, Norway, Belarus, Iceland, Liechtenstein and Ukraine (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. License, collaboration and royalty revenue also consists of revenue from a commercial supply agreement with Otsuka to provide manufacturing and other services, including sharing the capacity of a dedicated manufacturing facility at Lonza Ltd. (the “Monoplant”), Aurinia’s contract manufacturing partner for voclosporin. For the three months ended March 31, 2026, license, collaboration, and royalty revenue was $4.1 million, up 64% from $2.5 million in the same period of 2025. The increase is primarily due to manufacturing services provided to Otsuka for sharing the capacity of the Monoplant. 13 Cost of Revenue Cost of revenue consists primarily of expense associated with: (i) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant; (ii) manufacturing; and (iii) shipping, storage and distribution. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza Ltd. for the construction of the Monoplant. The construction of the Monoplant began in January 2021 and manufacturing of voclosporin began in late June 2023. The Monoplant is equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacturing of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand. Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs for the exclusive right to use the Monoplant through March 31, 2030. For the three months ended March 31, 2026, cost of revenue was $6.5 million, down 24% from $8.6 million in the same period of 2025. The decrease is primarily due to a decrease in sales of LUPKYNIS inventory to Otsuka, which has a low gross margin. For the three months ended March 31, 2026, gross margin was 92%, compared to 86% in the same period of 2025. Selling, General and Administrative Expense Selling, general and administrative (“SG&A”) expense consists of personnel and non-personnel expenses to support growing net product sales of LUPKYNIS. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in sales, finance and administrative functions. Non-personnel-related expense includes: (i) selling, patient services, pharmacovigilance, marketing, advertising, travel, sponsorships and trade shows; and (ii) other general and administrative costs, including consulting, legal, patent, insurance, accounting, information technology and facilities. The following table summarizes our SG&A expense for the three months ended March 31, 2026 and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Change Personnel expense: Salaries, incentive pay and benefits $ 13,426 $ 12,140 $ 1,286 Share-based compensation (1,203) (3,513) 2,310 Total personnel expense 12,223 8,627 3,596 Non-personnel expense: Professional fees and services 5,426 7,288 (1,862) Travel, sponsorship and trade shows 1,579 844 735 Marketing and advertising 327 970 (643) Other 2,474 2,610 (136) Total non-personnel expense 9,806 11,712 (1,906) Total SG&A expense $ 22,029 $ 20,339 $ 1,690 For the three months ended March 31, 2026, the increase in SG&A personnel expense was primarily due to: (i) one-time expense for severance and health care benefits, related to the departure of certain former Company officers in March 2026; (ii) a decrease in non-cash, share-based compensation expense in connection with the vesting of equity awards; and (iii) a decrease in the amount of non-cash, share-based compensation expense that was reversed due to forfeited, unvested equity awards. For the three months ended March 31, 2026, the decrease in SG&A non-personnel expense was primarily due to lower professional fees and services resulting from our strategic restructuring efforts in late 2024. We continue to expect our SG&A expense in 2026 to remain substantially consistent with 2025. 14 Research and Development Expense Research and development (“R&D”) expense consists of personnel and non-personnel expenses. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in research and development functions. Non-personnel-related expense includes contract research organizations, contract manufacturing organizations and materials used for R&D activities, including development, clinical trials, clinical supply and distribution, and other professional services. The following table summarizes our R&D expense for the three months ended March 31, 2026 and 2025 (in thousands): Three months ended March 31, 2026 2025 Change Personnel expense: Salaries, incentive pay and benefits $ 3,450 $ 1,308 $ 2,142 Share-based compensation 111 93 18 Total personnel expense 3,561 1,401 2,160 Non-personnel expense: Clinical supply and distribution 2,599 1,865 734 Contract research organizations and developmental expenses 1,190 2,349 (1,159) Other 120 128 (8) Total non-personnel expense 3,909 4,342 (43 [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the notes thereto and other financial information included in this Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” set forth in this Annual Report for a discussion of important factors that could cause our actual results to differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis. The following generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of 2023 and year-to-year comparisons between 2024 and 2023 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025. Overview Aurinia is a biopharmaceutical company focused on delivering therapies to people living with autoimmune diseases with high unmet medical needs. In January 2021, the Company introduced LUPKYNIS® (voclosporin), the first FDA-approved oral therapy for the treatment of adult patients with active lupus nephritis (“LN”). Aurinia is also developing aritinercept, a dual inhibitor of B cell-activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases. Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth our results of operations for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Revenue Net product sales $ 271,345 $ 216,186 $ 55,159 License, collaboration and royalty revenue 11,710 18,947 (7,237) Total revenue 283,055 235,133 47,922 Operating expenses Cost of revenue 32,665 28,248 4,417 Selling, general and administrative 101,794 172,028 (70,234) Research and development 32,505 20,785 11,720 Restructuring 1,647 23,106 (21,459) Other expense (income), net 9,530 (4,347) 13,877 Total operating expenses 178,141 239,820 (61,679) Income (loss) from operations 104,914 (4,687) 109,601 Interest income 13,573 16,970 (3,397) Interest expense (4,330) (4,835) 505 Net income before income taxes 114,157 7,448 106,709 Income tax (benefit) expense (173,045) 1,696 (174,741) Net income $ 287,202 $ 5,752 $ 281,450 Net Product Sales Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the United States (the “U.S.”), and Aurinia sells LUPKYNIS inventory to its collaboration partner, Otsuka Pharmaceutical Co., Ltd. (“Otsuka”), for the European and Japanese market. The two specialty pharmacies, specialty distributor and Otsuka are considered our customers for accounting purposes. 32 For the year ended December 31, 2025, net product sales were $271.3 million, up 25% compared to $216.2 million in 2024. The increase is primarily due to an increase in the number of LUPKYNIS cartons sold to specialty pharmacies, driven by further LN market penetration. License, Collaboration and Royalty Revenue License, collaboration and royalty revenue consists of revenue from a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in Japan, the European Union (the “E.U.”), the United Kingdom (the “U.K.”), Switzerland, Russia, Norway, Belarus, Iceland, Liechtenstein and Ukraine (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. License, collaboration and royalty revenue also consists of revenue from a commercial supply agreement with Otsuka to provide manufacturing and other services, including sharing the capacity of a dedicated manufacturing facility at Lonza Ltd. (“Lonza”), Aurinia’s contract manufacturing partner for voclosporin. For the year ended December 31, 2025, license, collaboration and royalty revenue was $11.7 million, down 38% compared to $18.9 million in 2024. The year ended December 31, 2024 included a milestone payment of $10.0 million associated with LUPKYNIS regulatory approval in Japan. Cost of Revenue Cost of revenue consists primarily of expense associated with: (i) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant; (ii) manufacturing; and (iii) shipping, storage and distribution. In December 2020, Aurinia entered into a manufacturing services agreement with Lonza for the construction of a dedicated manufacturing facility for voclosporin (the “Monoplant”). The construction of the Monoplant began in January 2021 and manufacturing of voclosporin began in late June 2023. The Monoplant is equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacturing of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand. Aurinia pays a quarterly fixed facility fee of 3.6 million Swiss Francs for the exclusive right to use the Monoplant through March 31, 2030. For the year ended December 31, 2025, cost of revenue was $32.7 million, compared to $28.2 million in 2024. The increase is primarily due to an increase in: (i) Aurinia’s net product sales of LUPKYNIS in the U.S.; and (ii) Aurinia’s net product sales of LUPKYNIS inventory to Otsuka. For the years ended December 31, 2025 and 2024, gross margin was 88%. Selling, General and Administrative Expense Selling, general and administrative (“SG&A”) expense consists of personnel and non-personnel expenses to support growing net product sales of LUPKYNIS. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in sales, finance and administrative functions. Non-personnel-related expense includes: (i) selling, patient services, pharmacovigilance, marketing, advertising, travel, sponsorships and trade shows; and (ii) other general and administrative costs, including consulting, legal, patent, insurance, accounting, information technology and facilities. 33 The following table summarizes our SG&A expense for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Personnel expense: Salaries, incentive pay and benefits $ 44,563 $ 73,231 $ (28,668) Share-based compensation 12,724 31,641 (18,917) Total personnel expense 57,287 104,872 (47,585) Non-personnel expense: Professional fees and services 26,600 33,809 (7,209) Marketing and advertising 3,208 14,094 (10,886) Travel, sponsorships and trade shows 4,897 8,605 (3,708) Other 9,802 10,648 (846) Total non-personnel expense 44,507 67,156 (22,649) Total SG&A expense $ 101,794 $ 172,028 $ (70,234) The decrease in SG&A personnel and non-personnel expense was primarily due to lower employee-related costs, including share-based compensation, and lower marketing, professional fees and services and other overhead resulting from our strategic restructuring efforts in 2024. We expect our SG&A expense in 2026 to remain substantially consistent with 2025. Research and Development Expense Research and development (“R&D”) expense consists of personnel and non-personnel expenses. Personnel-related expense includes salaries, incentive pay, benefits and share-based compensation for personnel engaged in research and development functions. Non-personnel-related expense includes contract research organizations, contract manufacturing organizations and materials used for R&D activities, including development, clinical trials, clinical supply and distribution, and other professional services. The following table summarizes our R&D expense for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Personnel expense: Salaries, incentive pay and benefits $ 8,016 $ 6,461 $ 1,555 Share-based compensation 1,295 (1,329) 2,624 Total personnel expense 9,311 5,132 4,179 Non-personnel expense: Contract research organizations and developmental expenses 12,344 12,526 (182) Clinical supply and distribution 10,466 2,530 7,936 Other 384 597 (213) Total non-personnel expense 23,194 15,653 7,541 Total R&D expense $ 32,505 $ 20,785 $ 11,720 The increase in R&D personnel and non-personnel expense was primarily due to an increase in employee-related costs, including share-based compensation, and higher clinical supply and distribution costs to support our development activities. We expect our R&D expense to continue to increase as we progress our development activities. 34 Restructuring Expense Restructuring expense consists primarily of one-time termination benefits to affected employees, including severance and health care benefits, contract terminations and other costs related to our strategic restructuring efforts in 2024. In February 2024, we announced a strategic restructuring that reduced headcount by approximately 25% and discontinued Aurinia’s AUR300 development program. In November 2024, we announced another strategic restructuring that further reduced headcount by approximately 45% to sharpen the Company's focus on continued LUPKYNIS growth and the development of aritinercept. For the year ended December 31, 2025, restructuring expense was $1.6 million, compared to $23.1 million in 2024. Other Expense (Income), Net For the year ended December 31, 2025, other expense (income), net was $9.5 million, compared to $(4.3) million in 2024. The change is primarily due to: (i) changes in the foreign exchange remeasurement of the finance lease liability recognized in connection with the Monoplant, which is denominated in Swiss Francs; and (ii) changes in the fair value assumptions related to our deferred compensation liability. Income Tax (Benefit) Expense For the year ended December 31, 2025, income tax (benefit) expense was $(173.0) million, compared to $1.7 million in 2024. The change is primarily due to the release of the Company’s valuation allowance on deferred tax assets that the Company now expects to realize. Liquidity and Capital Resources As of December 31, 2025, Aurinia had cash, cash equivalents, restricted cash and investments of $398.0 million, compared to $358.5 million at December 31, 2024. For the year ended December 31, 2025, cash flows from operating activities were $135.7 million, compared to $44.4 million in 2024. For the year ended December 31, 2025, the Company repurchased 12.2 million of its common shares for $98.2 million. Based on our current operating plans and projections, the Company expects to fund future operations with existing cash or cash flows from operating activities. The amount and timing of additional future funding needs, if any, will depend on many factors, including the success of our commercialization efforts for LUPKYNIS and our ability to control expenses. If necessary, we intend to raise additional capital through equity or debt financings. We can provide no assurance that additional financing will be available to us on favorable terms, or at all. Refer to the Notes to Consolidated Financial Statements, including Note 5 of Item 15 of this Annual Report for Aurinia’s material cash requirements from known contractual and other obligations as of December 31, 2025. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our audited consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these audited consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Critical accounting estimates are those estimates made in accordance with U.S. GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. While our significant accounting policies are more fully described in the notes to our consolidated financial statements in Item 15 of this Annual Report, we believe that the following critical accounting policy and underlying estimates are most critical to understanding our reported financial results. 35 Net Product Sales Revenue from product sales is recognized when the customer obtains control of our product, which typically occurs on delivery. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of customer discounts, customer fees, government rebates, co-payment assistance, payor rebates and administration fees for which reserves are established. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Significant judgment is required in estimating variable consideration. In making these estimates, we consider historical data, including patient mix and inventory sold to our customers that has not yet been dispensed. We use a data aggregator and historical claims to estimate variable consideration for inventory sold to our customers that has not yet been dispensed. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we adjust these estimates, which will affect net product sales and earnings in the period such estimates are adjusted. For the year ended December 31, 2025, we did not have any material adjustments to variable consideration estimates based on actual results. Income taxes Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is applied against any deferred tax asset if, based on available evidence, it is “more likely than not” that some or all of the deferred tax assets will not be realized. Impact of Recently Issued Accounting Pronouncements We describe the impact of recently issued accounting pronouncements that apply to us in Note 2 of Item 15 of this Annual Report.