Aurinia's Growth Cools Even as Profit and Cash Pile Up
Aurinia Pharmaceuticals posted 19% revenue growth in the second quarter, its slowest pace in a year, while staying silent for a second straight release on the status of its pending Kezar Life Sciences acquisition.
Aurinia Pharmaceuticals (AUPH) reported second-quarter revenue of $83.2 million, up 19% from a year earlier. The lupus-drug maker's top line grew at its slowest year-over-year clip in at least four quarters, decelerating from 24% growth in the first quarter and 29% in the fourth quarter of 2024.
The deceleration was driven by LUPKYNIS, Aurinia's oral therapy for lupus nephritis, which generated $79.4 million in net product sales, also up 19% year-over-year and down from growth rates of 23%, 29% and 27% in the three preceding quarters. Measured sequentially, however, the drug's momentum improved: net sales rose from $73.6 million in the first quarter to $79.4 million in the second, an acceleration in dollar terms after sales had been roughly flat between the fourth quarter of 2024 and the first quarter of 2025. License, collaboration and royalty revenue also picked back up, growing 12% year-over-year to $3.8 million after a distorted 64% growth figure in the first quarter that reflected a small comparison base.
Net income reached $37.4 million, up 74% from a year earlier, building on 48% growth in the first quarter. Neither quarter included the one-time $175.1 million deferred-tax valuation-allowance release that had pushed fourth-quarter 2024 net income to $210.8 million. Diluted earnings per share were $0.28, up 75% year-over-year, following $0.25 in the first quarter. Income tax expense rose to $11.4 million for the quarter and $20.9 million for the first six months, up from a near-zero $0.6 million a year earlier, reflecting the normalized tax rate that took effect after the fourth-quarter valuation-allowance release.
Operating margin improved to 55.7% of revenue, with operating income of $46.3 million on the $83.2 million top line. Research and development spending nearly doubled year-over-year to $13.1 million from $7.4 million, while selling, general and administrative expense declined to $23.5 million from $26.0 million. Results also benefited from a $6.2 million net benefit in other income and expense, compared with a $9.2 million expense a year earlier, a swing that contributed to the improved operating income.
Operating cash flow was $52.5 million for the quarter, up 19% year-over-year, and $85.1 million for the first six months, up 87%. Cash, equivalents, restricted cash and investments rose to $443.1 million at June 30 from $378.8 million at the end of March, an increase of roughly $64 million that reversed a sequential decline in the first quarter. Share repurchases slowed alongside the cash build: Aurinia bought back roughly 2.5 million shares for about $38.7 million in the second quarter, compared with 2.5 million shares for $36.2 million in the first quarter, against a full-year 2024 pace of 12.2 million shares for $98.2 million.
Aurinia reiterated 2025 guidance of $315 million to $325 million in total revenue and $305 million to $315 million in net product sales, unchanged since the fourth-quarter 2024 release. The company had raised its 2024 guidance mid-year, lifting the total-revenue range to $275 million to $280 million from $260 million to $270 million as of the third-quarter 2024 release, a contrast to this year's steady outlook.
On the pipeline, the aritinercept program now spans four potential indications, up from three as of the first-quarter release, and the company initiated a Phase 4 combination study for LUPKYNIS, called PRESERVE, enrolling roughly 150 patients across about 50 U.S. sites.
The earnings release made no mention of the pending acquisition of Kezar Life Sciences, a $6.955-a-share cash-plus-contingent-value-rights deal announced March 30 and expected to close in the second quarter. The transaction was similarly absent from the first-quarter release, leaving no public update from Aurinia on the deal's status through two full quarterly reporting cycles.