Greetings and welcome to the Aurinia Fourth Quarter and Full Year 2018 Financial Results and Operational Highlights Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Dr. Glenn Schulman. Thank you, please begin.

Thanks, Rydia, and good afternoon, everyone. Welcome to Aurinia’s Q4year-end 2018 earnings call and general business update. Joining me on the call today from Aurinia are Dr. Richard Glickman, Chief Executive Officer; Dennis Bourgeault, Chief Financial Officer; Dr. Neil Solomons, our Chief Medical Officer; Mr. Michael Martin, Chief Operating Officer. This afternoon we issued a press release detailing fourth quarter year-end 2018 financial results and our corporate update for the year. The press release and associated financial statement package is available on our website at www.auriniapharma.com and on 40-F and 6-K was filed with the EDGAR and SEDAR. I’d like to remind you that today’s call is being webcast live on Aurinia’s Investor Relations website, and a replay will also be available approximately two hours after the today's call complete. The content of today’s call is Aurinia’s property. It cannot be reproduced or transcribed without prior written consent. During the course of this call, we also 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 disclosure in today’s press release, our most recent filings with Canadian Securities Authorities and reports that we file on Form 40-F with the US Securities and Exchange Commission. All of our statements are made as of today March 19, 2019 based on information currently available to us. Except as required by law, we assume no obligation to update any such statements. Now with all that, let me turn the call over to Dr. Richard Glickman. Rich?

Well, thank you, Glenn. And thank you all for joining us today as we review our fourth quarter and year-end 2018 financial results and provide a general business update. This past year has truly been extraordinary year for the team here at Aurinia with significant progress made on a number of fronts. As the quick level-set, I think it's important to bring everyone up to speed on the progress made and what we are looking forward to during the year to come. Aurinia has three programs ongoing in parallel that highlight the potential of our pipeline and a drug for our lead candidate voclosporin. First and foremost, we are evaluating voclosporin in a Phase 3 trial for lupus nephritis. In addition, oral voclosporin is being tested in FSGS or focal segmental glomerulosclerosis. And lastly, VOS, our ophthalmic solution being tested in the treatment of dry eye syndrome. Reflecting on this past year, our most significant milestone was in September where we announced the early completion of enrollment in the AURORA Phase 3 clinical trial for the treatment of lupus nephritis. The target enrolment of 324 patients was surpassed due to the high patient demand with 358 lupus nephritis patients randomized at sites across 27 countries. We would like to thank all our trial patients, the physicians, our CROs, the advocacy group and especially the team at Aurinia for their extraordinary efforts, which led to this result. We are related by the significant interest in this trial and it reinforces the need for new treatment options for patients living with lupus nephritis. I continue to be impressed by the level of dedication exhibited by our team to execute this trial with great diligence and expediency but without compromising quality. As you’ll recall, the AURORA clinical trial is a global double-blinded placebo-controlled…

Thanks Richard. The consolidated financial results have been preparing the according to the IFRS as issued by the International Accounting Standards Board. The consolidated financial statements represented in US dollars which is the company's functional and presentation currency. As of December 31, 2018, we had cash, cash equivalents and short-term investments of $125.9 million compared to $173.5 million at the end of 2017. Net cash used in operating activities was $51.6 million for the year ended December 31, 2018 compared to $41.2 million for the year ended December 31, 2017. On November 30, 2018, we entered into an open market sale agreement with Jefferies LLC pursuant to which we could from time-to-time sell, through ATM offerings, common shares that would have an aggregate offering amount of up to $30 million. Subsequent to year-end, we further strengthened our balance sheet as the ATM was fully utilized during the first quarter of 2019. We received gross proceeds of $30 million, and issued 4.6 million common shares. We incurred share issue costs of $1.2 million comprised of a 3% commission and professional and filing fees related to the ATM offering. We believe it’s in our current plans that we have sufficient financial resources to fund our existing LN program, including the AURORA trial and the AURORA 2 extension trial, complete the NDA submission to the FDA, conduct the ongoing Phase 2 study for FSGS, commence additional dry eye studies and fund operations into mid-2020. For the fourth quarter of 2018, we reported a consolidated net loss of $14.6 million or $0.17 per common share as compared to a consolidated net loss of $3.3 million or $0.04 per common share for the fourth quarter ended December 31, 2017. The loss for the fourth quarter ended December 31, 2018, reflects an increase of $593,000 in…

Thank you, Dennis. So once again, I want to thank the team for the tremendous progress we've achieved over the past year. The work completed provides a foundation for the data and program advances anticipated through 2019. We continue to diligently and efficiently execute our clinical programs and are looking forward to a very exciting 2019 with top-line data from our AURORA study before the end of the year along with updates on dry eye and FSGS. As a company we have a drug candidate that is successful and Phase 3 has a potential to be the first approved therapy for the treatment lupus nephritis. We believe the efficacy and safety data supporting this drug to be substantial. We have a clear regulatory path forward to approval and we believe the market opportunity for this drug to be very significant. So with great confidence as we continue to advance voclosporin and its development programs. Thank you all for taking the time this afternoon. And with that, I'd like to turn the call over to the operator and open the line for Q&A. Operator?

Thank you. [Operator Instructions]. And thank you. Our first question comes from line of Ed Arce with H. C. Wainwright. Please proceed.

Hi, First on FSGS. It's been about nine months now since you initiated enrollment. Just wondering -- I know you said that there are a few extra sites that you're planning or have recently added to improve enrollment. So just wondering when you see that coming in, at least qualitatively and could you consider -- I know it's a very small study, but could you consider decreasing the number of patients to complete that? And then just turning quickly to the VOS program, obviously some pretty strong data? What are the considerations, the next steps, and including, is there something that's gating in regards to discussions with partners?

Okay. Very good. First question on the FSGS in terms of enrollment, we're dealing with treatment naïve patients as I mentioned, and what we found in the study is that while KOLs anticipated be able to access patients fairly quickly given patients generally don’t want steroids. The issues been as the physicians present themselves and immediately put on steroids by the time they get into our clinical program deal with KOLs, they're no longer eligible to actually be in the study. And we recognize that the KOLs are just aren't able to deliver the patients at the rate that we anticipated. Now there are countries in which we worked in before which are very close and have very good healthcare systems that actually apparently have a much greater population that we can access to us prior to therapy. So first of those major countries that are coming online that really matter should be online, my expectation is in May. And after that I think we can have a pretty good idea of what our patient flow will look like and we will provide an update at that time. Alternatively we could do which doesn't really alter our study in tremendous amount would be probably looking at amend the protocol, allow patients receivable or simply do other studies as you would in a clinical practice and then win most of that and then continue them on your therapy. So we're looking at all options to actually move forward. Patients are out there. I think that at this point in time FSGS has become even more important to us given the intellectual properties change that occurred in the company. The opportunity around FSGS has actually grown and considerably important to us. So we're going to put more resources behind this program now…

That's very helpful. Thanks, Richard. And then a couple more if I may. Actually the segway is good. The next question is around the patent. I know you're doing the whole team are quite excited about the potential to the value of the whole program. And I think rightly so. I -- wondering if you could talk a bit about the importance of that patent being viewed as critical in particular as a safety issue by the agency and the implications of that on the protection of it? And also the breadth of the coverage given that it’s for nephrotic diseases, so LN in FSGS, obviously, but what others potentially could be covered in there? And then one final just a housekeeping question. What is your current share count now after the recent changes? Thanks.

Okay, you gave me so many questions I am not sure I could track them all. Let's speak to the patent for a moment. All right. Several years ago when we started writing a number of patents, this is one of several that were written by the company. They are one of the ones that we’re most excited about because basically it's based on the fact that we included in our protocols a dose reduction strategy that was based originally around the safety parameter. And what surprising was that we actually ended up discovering that in fact as we see patients certainly and as we dose, we actually saw it has the efficacy, there was unanticipated. And as a consequence, when we saw that we had an interesting opportunity to go in front of the patent office with what is basically kind of a personalized approach to treating these patients based on understanding how the glomerular filtration rate is responding to the drug very easy to test for, it doesn't require very complex therapeutic drug monitoring. And what it essentially does is -- and I guess your question what you're really asking, which is, the key question is, what is the probability the actual claims in the patent that form the dose reduction protocol land at the start of the actual label for the drug and the probability is extremely, extremely high because it really is a critical safety protocol, how we treat patients and so it's very likely. There's always a risk but it was very unlikely risk that wouldn't be inclusive. We believe that the patent itself that covers the dose reduction strategy will be included as part of the safety component that you would have in any label where dose reductions are regularly conducted. In terms of what it covers for us, it gives us till 2038 or 2037 -- December 2017 and that means anyone wishing to practice or treat proteinuric kidney diseases using our protocol would actually have to either license from us in order to be able to practice their art even if they file a generic. Now as long as we only get approvals for drugs that require voclosporin and indications require the dose reduction strategy, then we're in good shape because it'll provide I think very, very strong protection for us on that. Now that means that we have a number of opportunities within that space FSGS being obvious but there are other ones, I don't know Neil if you want to jump in from a clinical perspective what other potential proteinuric kidney diseases we could potentially cover with voclosporin as well. Neil, are you on mute?

Sorry, we will attend number of them, and I was on mute, such as [indiscernible] nephrotic syndrome and relatively we kind of discounted them for exactly the reasons that, that we may now consider them because of the improved patent, the length of time it would take to curating these diseases, now makes them potentially more premium. We then are certainly going to go back and have a look at these other proteinuria kidney diseases. There are lots and lots and lot of our connections in lupus nephritis in FSGS space have been very keen on us looking at this drug in these diseases. So we're certainly going to go back and just have discussions on these now.

Thanks Neil. And Dennis do you happen to have handy your share count number?

Yes. At the March 15th, which is the date of our audit report we have 91.6 million shares outstanding.

I'm sorry. Say that again, I am sorry I didn’t get that.

91.6 million common shares outstanding.

Thank you. Our next question comes from one of Joseph Schwartz with SEB Leerink. Please proceed.

Thanks very much and congratulations as well and all the progress. I was wondering since you all have been involved in advancing the lupus nephritis fields since developing CellCept, how have you seen market evolve till the current time now that you're so close to the finish line for voclosporin? And how is your program taking that into account in order to -- and then how is your strategy to penetrate the market meaningfully incorporating these types of learnings?

Okay we got to say that's our first commercial question we’ve had during conference call. So thank you for doing that, Joe. Okay, we have been actually for quite some time the team has been involved in. It's kind of interesting to watch when you look back at what evolves with CellCept. But people don't understand with CellCept that’s how quickly it was taken up. That market was so desperate. Back at those days was using drugs like cyclophosphamide to treat -- cyclophosphamide that they were using to treat patients mostly, of course, that was extremely toxic, so having other agent available was just phenomenal. I remember watching -- I need to go back historically, and take a look at the growth of CellCept and Roche's documentation through their transplant experience and opening up into autoimmune and primarily LN. So we saw was extremely rapid uptake. And I would say that given the response we had to the Phase 2 data when it was announced that we saw immediately, the percentage over 100,000 hits the first week alone of that data. So number one, I think the market is absolutely primed for a drug. But it's not just about using the drug, it's about value proposition that you want to build around the actual drug. And so we spent a lot of time and a lot of money and this is where our pre-commercial activities have been is understanding the reimbursement landscape and understanding the value proposition for our patients. What it means -- what it costs to the patient, what it means to treat them with this drug and what it means in terms of their life? And there's some things that are intangibles. And then others are actually quite tangible in terms of financial impact of a drug…

That’s extremely helpful. Thank you, Richard. And if you were to have to -- which hopefully you will in the not too distant future have to quantify the pharmacoeconomic benefit of remission and then put it into context with your drug and how it achieves your target product profile. How would you go about formulating the equation of what the value of -- or what the pharmacoeconomic equation would look like for voclosporin and I don't want to ask you to give us where you're going to price it? But just help us parameterize the price, maybe pharmacoeconomic equation. What would the value of a remission be and I'm sure you've done a lot of work on that front?

We have, but actually, next time we’re going to have this call, we are going to bring a commercial expert on the call with us too, not just clinical. Because your questions are actually very good. I don't have a precise equation to give you and happy you didn’t ask for one. I think one looks at the space and takes a look at what your value proposition is. This drug, we tend to see works within sort of eight weeks of being delivered to a patient. If you take a look at the only other approved drug in the lupus space at all and you take a look at even their clinical program in lupus nephritis where they're looking at 104 weeks sort of endpoint in their study. If you look at where that drug is priced and it's readily available out there right now, I think you can build against that. If a drug that were worth much quicker, it could be synergistic and I think it forms a really good basis where you'd likely price this drug. I think in terms of the other parameters that come into play here in the long run, I have often mentioned from a commercial perspective this will be most exciting to me actually and having been involved with CellCept would be the idea that this new drug voclosporin could be used in such a way that, that essentially if you look at the patient population, it's 85% female, it's child bearing age women. And one of the things that you find that happens is people feel better right away when on these medications are, it doesn't take very long and they recover. They often want to have families and as a consequence I think that there is promise for this drug where you take away something like CellCept which is transgenic and contraindicated and when you take away the most of which is currently contraindicated in pregnancy as well. We know the CNI has been used in pregnancy for long time. We know there has been never birth on this drug as well. And I think that with the proper registry I think we could actually change the value creation too in a very, very significant way. I think it’s really excellent and important go to drug for these patients for a variety of these reasons. So the next call we're I will give you a really, really crisp equation sort of. But I think that sort of gives you a sense of how we see the value of this molecule and the role we see it's going to play in the community and socially as well for patients.

Thank you. [Operator Instructions]. Thank you. We've reached the end of our question-and-answer session. Allow me to hand the floor back over for closing remarks.

Excuse me if I gave really, really long answers to those questions. I get it now. And I thank you all for being on the call today and thank you too for your questions. I am really excited about what's in horizon this year at Aurinia. I'm excited about the potential news flow we're going to have especially towards the end of the year. And I'm particularly excited about getting a chance to see the top-line Phase 3 results from our program with lupus nephritis. I also am pretty excited about the new intellectual property, because I think it really provides the company with the really different value proposition. We have opportunity to look at additional indications, plus we get so much more runway into the lupus nephritis program. So I think that this is a very pivotal year for us. And I think 2019 is actually poised to be a real standout year for us as well. Thank you very much for being on the call today. And have a great evening. Bye now.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.