AUPH 10-K & 10-Q changes, risk factors and insider trading

The success of our business is substantially dependent on our ability to successfully commercialize LUPKYNIS, our sole approved product. The Company markets LUPKYNIS in the U.S. directly through its own commercial organization. The market for effective pharmaceutical sales and marketing professionals is competitive, and maintaining these capabilities is expensive and challenging. If we are unable to maintain an effective sales and marketing organization, LUPKYNIS sales could be adversely affected, and our business may suffer. LUPKYNIS’s competition as a treatment in LN patients includes BENLYSTA and GAZYVA and physicians continuing to treat LN with an off-label combination of MMF and corticosteroids alone or in combination with first generation calcineurin inhibitorsCNIs such as tacrolimus. If we are unable to further change treatment practices, further growth of LUPKYNIS net product sales will be limited, and our business may suffer. We may also be subject to additional competition from future products.

Patients suffering from LN may become gravely ill. The most commonly reported adverse reactions occurring in our≥3% of patients treated with LUPKYNIS 23.7 mg twice a day and ≥2% higher than placebo in AURORA 1 and AURORA 2 clinical studies (≥3%)AURA-LV were: glomerular filtration rate decreased, hypertension, diarrhea, headache, anemia, cough, urinary tract infection, abdominal pain upper, dyspepsia, alopecia, renal impairment, abdominal pain, mouth ulceration, fatigue, tremor, acute kidney injury,injury and decreased appetite. Some patients who are treated with LUPKYNIS may die due to their underlying illness or suffer adverse events (which may or may not be drug relateddrug-related).

The commercial success of LUPKYNIS in certain ex-U.S. territories is dependent on the fulfillment of contractual obligations under our out-licensecollaboration and licensing agreement and commercial supply agreement.

In December 2020, we entered into a collaboration and licensing agreement with Otsuka to develop and commercialize oral voclosporin in Japan, the E.U., 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.

In the U.S. and markets in other countries, patients generally rely on third-party reimbursement for all or part of the costs associated with their treatment. AdequateIn the U.S., adequate coverage and reimbursement from governmental healthcare programs, such as Medicaid and Medicare, and commercial payors is critical to market acceptance of our products. Government authorities and other third-party payors, such as private health insurers and healthpharmacy maintenancebenefit organizations,managers, decide which medication they will pay for and establish reimbursement levels.

Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular pharmaceutical products. Increasingly, third-party payors are requiring that drug manufacturers provide them with predetermined discounts from list prices and are challenging the prices charged for products. Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors. Private third-party payors often rely on Medicare coverage policy and payment limitations in setting their own reimbursement policies.

We participate in the Medicaid Drug Rebate Program, administered by Centers for Medicare and Medicaid Services,CMS, and other federal and state government pricing programs in the U.S., and we may in the future participate in additional government pricing programs. These programs generally require us to pay rebates or otherwise provide discounts to government payors in connection with LUPKYNIS, which is dispensed to beneficiaries of these programs. In some cases, such as with the Medicaid Drug Rebate Program, the rebates are based on pricing and rebate calculations, which are complex.

The Office of Inspector General assesses our compliance with reporting requirements under the Medicaid Drug Rebate Program. We are liable for errors associated with our submission of pricing data and for any overcharging of government payors, which could result in a civil monetary penalty. Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the U.S. False Claims Act (“FCA”) and other laws and regulations. Any required refunds to the U.S. government or responding to a government investigation or enforcement action would be expensive and time consuming and could have a material adverse effect on our business, results of operations and financial condition. If Centers for Medicare and Medicaid ServicesCMS were to terminate our rebate agreement, no federal payments would be available under Medicaid or Medicare for LUPKYNIS, which could harm our business.

We have filed and plan to file additional patent applications that, if issued, would provide further protection for LUPKYNIS. Although we believe the bases for our patents and patent applications are sound, they are untested, and there is no assurance that they will not be successfully challenged. There can be no assurance that any issued patent or any patent currently in process will protect LUPKYNIS from generic competition. If our intellectual property does not protect LUPKYNIS from generic competition, LUPKYNISLUPKYNIS’ net product sales may decline, and/or we may incur additional costs for patent protection, including patent infringement litigation costs arising out of ANDA submissions by generic companies to manufacture and sell generic products or arising out of 505(b)(2) submissions, which could have a material adverse effect on our business, results of operations and financial condition, and our business may suffer.

OnIn February 25,and March 2025, we received a paragraph IV noticenotices of certification (the “Notice LetterLetters”) related to a submissionsubmissions of an ANDAANDAs to the FDA seeking authorization to manufacture, use or sell a generic version of LUPKYNIS in the U.S., prior to the expiry of U.S. Patent Nos. 10,286,036 and 11,622,991 in December 2037 (the “2037 Patents”), which are listed in the FDA's Orange Book. The Notice LetterLetters allegesallege that the 2037 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in the ANDA.ANDAs. AlthoughWe wehave intendfiled complaints alleging patent infringement against each of the senders of the Notice Letters. We expect to vigorouslyincur defendsignificant patent litigation costs to protect our intellectual property rights protectingrelating to LUPKYNIS, we may incur significant patent litigation costs, and, if any entity that may file an ANDA is successful in the introduction of the generic product described in its ANDA, then LUPKYNIS net product sales may decline, which could have a material adverse effect on our business, results of operations and financial condition.

Our competitors or others may have patent rights that they choose to assert against us, licensees, suppliers, customers or potential marketing partners. Moreover, we may not know about patents or patent applications that our products or product candidates could infringe. Because patent applications do not publish for at least 18 months, if at all, and can take many years to issue, there may be currently pending applications unknown to us that may later result in issued patents that our products or product candidates could infringe. In addition, if third parties file patent applications or obtain patents claiming inventions also claimed by us in issued patents or pending applications, we may have to participate in interference proceedings in the U.S. Patent and Trademark Office (“USPTO”) to determine priority of invention. If third parties file oppositions in foreign countries, we may also have to participate in opposition proceedings in foreign tribunals to defend the patentability of claims in our foreign patent applications. If a third party claims that we infringe its proprietary rights, any of the following may occur:

Our overall financial performance, including but not limited to, net product sales and net cash providedflows by or used forfrom operating activities, including any milestone, royalty and other payments resulting from our collaboration and licenselicensing agreement and commercial supply agreement with Otsuka, is difficult to predict and may fluctuate from quarter to quarter and year to year. Historical performance may not be indicative of future performance. For example, our net product sales may be below expectations, and our costs to operate our business, including cost of product sales, research and development expenses and selling, general and administrative expenses, could exceed our estimates. If our overall performance does not meet our expectations, our business may suffer.

Under the provisions of the applicable tax legislation, our net operating loss and tax credit carryforwards are subject to review and possible adjustment by applicable tax regulatory authorities. In addition, proposed or actual changes to applicable tax legislation may significantly impact our ability to utilize our net operating losses and tax credit carryforwards to offset taxable income in the future. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of a company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. We may not be able to use some or all of our net operating loss and tax credit carryforwards. Additionally, should an event occur that causes or is deemed to cause a change in the residency of Aurinia from Canada to the U.S., for example, we may be subject to certain tax rules that could cause a deemed disposition of our assets for tax purposes. Should that occur, we may be subject to a material amount of tax owing, without corresponding revenue from any actual disposition of our assets, which would have a material adverse effect on our business and financial condition.

Drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies of aritinercept may not be predictive of future study results.

Clinical testing is expensive, can take many years to complete and its outcome is inherently uncertain. Failure can occur at any time during the clinical study process. The results of nonclinical studies and early clinical studies of AUR200aritinercept may not be predictive of the results of later-stage clinical studies. Promising results shown in early-stage clinical studies may still suffer significant setbacks in subsequent clinical studies. There is a high failure rate for pharmaceutical product candidates proceeding through clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy, despite having progressed through nonclinical studies and initial clinical studies.

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical studies due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies. Moreover, nonclinical and clinical data often are susceptible to varying interpretations and analyses. We do not know whether any clinical studies we may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain regulatory approvalapproval, toincluding marketfor AUR200.aritinercept.

Results from studies of AUR200aritinercept may not be sufficient to obtain regulatory approvals to market our product candidateit on a timely basis, if at all.

Pharmaceutical product candidates are subject to extensive government regulations related to development, clinical studies, manufacturing and commercialization. In order to sell any product that is under development, we must first receive regulatory approval. To obtain regulatory approval, we must conduct nonclinical and clinical studies that demonstrate that AUR200aritinercept is safe and effective. The process of obtaining FDA, European Commission (“EC”) and other regulatory authority approvals is costly, time-consuming, uncertain and subject to unanticipated delays.

The FDA, EC and other regulatory authorities have substantial discretion in the approval process and may not agree that we have demonstrated that AUR200aritinercept is safe and effective. If AUR200aritinercept is not found to be safe and effective, we would be unable to obtain regulatory approval to manufacture, market and sell AUR200.aritinercept. We can provide no assurances that the FDA, EC or other regulatory authorities will approve AUR200aritinercept or, if approved, what the scope of the approved indication might be.

Our development of AUR200aritinercept may be delayed or halted.

Our development of AUR200aritinercept may be delayed or halted for various reasons, including:

•ineffectiveness of AUR200aritinercept;

•failure to conduct studies in accordance with required good clinical practices;

•political unrest effectingaffecting clinical sites;

•a shutdown of the U.S. government, including the FDA; or

If the development of AUR200aritinercept is delayed or halted, we may incur significant additional expenses, and the potential approval of AUR200aritinercept may be delayed or could be made impossible to obtain, which would have a material adverse effect on our business and financial condition, and our business may suffer.

The commercial success of LUPKYNIS and the clinical success of AUR200aritinercept will depend on our ability to obtain an uninterrupted supply from our contract manufacturers.

We rely on sole-source contract manufacturers to produce LUPKYNIS and clinical drug supply and expect to continue to do so to meet our commercial and development needs. In all of our manufacturing agreements, we require that contract manufacturers produce active pharmaceutical ingredients (“APIs”) and drug products in accordance with cGMP and all other applicable laws and regulations. The long-term commercial success of LUPKYNIS and clinical success of AUR200aritinercept will depend in part on the ability of our contract manufacturers to supply cGMP-compliant API and drug product without interruption. If there is an interruption in the supply from our contract manufacturers, our business may suffer.

We rely on third parties to provide certain services relating to our commercial distribution, clinical studies and other activities. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200,aritinercept, or the commercialization of LUPKYNIS.

In the U.S., weWe rely on two specialty pharmacies and a specialty distributor in the U.S. to distribute LUPKYNIS to patients. If they provide us with improper information to properly estimate our inventory management, conduct themselves in a manner that violates applicable law, or cease to comply with our agreements with them, it may result in lower net product sales of LUPKYNIS, which would harm our results of operations and business.

We rely on clinical sites to comply with study protocols and regulations applicable to clinical study conduct. We and these clinical sites are required to comply with current Good Clinical Practices (“cGCPGCP”), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities forgoverning productsthe inconduct of clinical development.investigations. Regulatory authorities enforce cGCPsGCPs through periodic inspections of study sponsors, principal investigators and clinical sites. If we, the investigators or the clinical sites fail to comply with applicable cGCPs,GCPs, the clinical data generated in our clinical studies may be deemed unreliable and the regulatory authorities may require us to perform additional clinical studies before approving our marketing applications, which would delay or compromise the regulatory approval process.

We rely on clinical sites to enroll patients in our clinical studies. The rate of enrollment of patients into our clinical studies at these clinical sites is dependent on a number of factors, including the number of eligible patients and the interest level of investigators, study staff and patients in our clinical studies relative to other enrolling studies. If the clinical sites participating in our clinical studies do not enroll patients in a timely manner, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200.aritinercept.

We have agreements with contract research organizations and other third parties to provide services relating to our clinical programs. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the work they perform is compromised due to the failure to adhere to regulatory requirements or for other reasons, we may face delays in the studies, regulatory submissions, regulatory approval or commercialization of AUR200.aritinercept.

•U.S. false claims and civil monetary penalties laws, including the FCA, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent. Although we may not submit claims directly to payors, manufacturers can be held liable under these laws in a variety of ways. These include: providing inaccurate billing or coding information to customers; improperly promoting a product’s off-label use; violating the AKS; or misreporting pricing information to government programs.

•The U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”),HIPAA, which prohibits, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services.

•Thethe U.S. Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act,ACA, which require manufacturers of certain drugs and biologics to track and report to U.S. Centers for Medicare & Medicaid Services payments and other transfers of value they make to U.S. physicians and teaching hospitals as well as physician ownership and investment interests in the manufacturer.

•Variousvarious federal, state and foreign data privacy and security laws and regulations. These include provisions of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information in the U.S. and the General Data Protection Regulation (“GDPR”) in the European Union.E.U. We may not be directly subject to certain of these laws and regulations, such as privacy and security requirements under HIPAA; however, we may be subject to criminal penalties for knowingly, aiding and embeddingabetting these violations.

The volume and trading price of our common shares may fluctuate significantly, and you may lose all or part of your investment.significantly. These fluctuations could be based on various factors, including factors described elsewhere in this Annual Report and below:

In addition, shareholder activists have become involved in numerous public companies. In the past two years, we have faced “withhold” campaigns against nominees for director from some of our shareholders and such actions could continue in the future. Responding to actions by shareholder activists may disrupt our business andbusiness, divert the attention of management and employees,employees and can have an impact on the price of our common shares.

We 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.shares.

We have never paid a dividend on our common shares. Even if we decide to pay dividends, the timing, amount and form of future dividends will depend on future results of operations, financial condition, contractual restrictions and other factors. You should not rely on dividend income from your investment, and should rely on price appreciation of our common shares for a return, if any, on your investment.

As of December 31, 2024,2025, we had cash, cash equivalents, restricted cash and investments of $358.5$398.0 million. LUPKYNIS is our only approved product and our only source of net product sales. Prior to the year ended December 31, 2024, we had negative cash flows from operating cash flowactivities for multiple years. The amount and timing of future funding requirements, if any, will depend on many factors, including the success of our commercialization efforts for LUPKYNIS and our ability to control expenses and our decisions on how to deploy capital. If necessary, we will 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. If we issue additional equity securities or securities convertible into equity securities, you may suffer dilution to your investment, and such issuance may adversely affect the trading price of our common shares. Any new debt financing we enter into may involve covenants that restrict our operations, which may include limitations on borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens or pay dividends. If we need to raise additional capital and are unable to do so, we may be forced to curtail or cease our operations.

Our Board has the authority to authorize share repurchase programs. In February 2024, the Board approved a share repurchase program of up to $150 million of our common shares (the “Share Repurchase Plan”). On July 31, 2025, the Company announced that the Board had approved an increase to the previously announced Share Repurchase Plan of an additional $150 million of our common shares. The timing and amount of repurchase transactions will be determined by managementthe Company based on its evaluation of market conditions, share price, legal requirements, including applicable blackout period restrictions, and other factors. A reduction in repurchases under, or the completion of, our share repurchase programs could have a negative effect on the market price of our common shares. Additionally, the recentlyCanada enactedIncome IRATax Act includes an excise tax on share repurchases, which will increase the cost of share repurchases. We can provide no assurance that we will repurchase common shares at favorable prices, if at all.

We are exposed to the risk of employee,misconduct by employees, consultants, contract manufacturing organizations, principal investigators, and clinical research organizations misconduct,organizations, which could include intentional failures to comply with regulatory standards and requirements, such as FDA regulations, federal and state healthcare fraud and abuse laws and regulations, or similar laws and regulations established and enforced by comparable foreign regulatory authorities. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commissions, customer incentive programs and other business arrangements. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in protecting us from governmental actions or lawsuits. If any such actions are instituted against us, and we are not successful in defending ourselves, those actions, including the imposition of significant fines or other sanctions, could have a material adverse effect on our business and results of operations.

You may be unable to enforce actions against us, or certain of our directors and officers under U.S. laws.

We are an Alberta, Canada corporation, and some of our directors and officers reside outside of the U.S. Because all or a substantial portion of the assets of these persons are located outside of the U.S., it may not be possible to effect service of process upon those persons. Furthermore, it may not be possible for investors to enforce judgments obtained in U.S. courts based upon the civil liability provisions U.S. laws against any of those persons. There is doubt as to the enforceability, in original actions in Canadian courts, of liabilities based upon U.S. federal securities laws and as to the enforceability in Canadian courts of judgments of U.S. courts obtained in actions based upon the civil liability provisions of U.S. laws.

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 mayto differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis.

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 AUR200,aritinercept, a dual inhibitor of B cell activatingcell-activating factor (“BAFF”) and a proliferation inducingproliferation-inducing ligand (“APRIL”) for the potential treatment of autoimmune diseases.

Aurinia sells LUPKYNIS to two specialty pharmacies and a specialty distributor in the U.S.,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 year ended December 31, 2024,2025, net product sales were $216.2$271.3 million, up 36%25% fromcompared $158.5to $216.2 million in 2023.2024. The increase is primarily due to an increase in the number of LUPKYNIS cartons sold to specialty pharmacies, driven by further LN market penetration.

Cost of revenue consists primarily of expense associated with: (iii) 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 (approximately $4.0 million) for the exclusive right to use the Monoplant through March 31, 2030.

For the year ended December 31, 2024,2025, cost of revenue was $28.2$32.7 million, compared to $14.1$28.2 million in 2023.2024. The increase is primarily due to an increase in: (i) amortization of the finance lease right-of-use asset recognized in connection with the Monoplant, which was placed into service in late June 2023; (ii) Aurinia’s net sales of LUPKYNIS inventory to Otsuka; and (iii) Aurinia’s netproduct sales of LUPKYNIS in the U.S.; and (ii) Aurinia’s net product sales of LUPKYNIS inventory to Otsuka.

For the yearyears ended December 31, 2025 and 2024, gross margin was 88%, compared to 92% in 2023.88%.

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 decrease in SG&A personnel-expensepersonnel and non-personnel expense werewas primarily adue result ofto lower employee-related general and administrative costs, including share-based compensation, and lower marketing, professional fees and services and other overhead costs resulting from our strategic restructuring efforts in 2024.

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 subcontractorscontract research organizations, contract manufacturing organizations and materials used for R&D activities, including development, clinical trials, clinical supply and distribution, and other professional services.

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. OnIn February 15, 2024, we announced a strategic restructuring that reduced headcount by approximately 25% and discontinued Aurinia’s AUR300 development program. OnIn November 7, 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 rapid development of AUR200.aritinercept.

For the year ended December 31, 2024,2025, restructuring expense was $23.1$1.6 million, compared to nil$23.1 million in 2023.2024.

Other Expense (Income) Expense,, Net

For the year ended December 31, 2024,2025, other expense (income) expense,, net was $(4.3)$9.5 million, compared to $8.4$(4.3) million in 2023.2024. 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 commenced in late June 2023 and is denominated in Swiss Francs; and (ii) changes in the fair value assumptions related to our deferred compensation liability; and (iii) a one-time expense in 2023 related to shareholder matters.liability.

As of December 31, 2024,2025, Aurinia had cash, cash equivalents, restricted cash and investments of $358.5$398.0 million, compared to $350.7$358.5 million at December 31, 2023.2024. For the year ended December 31, 2024,2025, 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 6.112.2 million of its common shares for $41.0$98.2 million. For the year ended December 31, 2024, cash flow provided by (used in) operating activities was $44.4 million, compared to $(33.5) million in 2023.

Based on our current operating plans and projections, the Company expects to fund future operations with existing cash or cash generatedflows from operations.operating activities.

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 prompt-paycustomer 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).

AsFor ofthe year ended December 31, 2024,2025, we did not have any material adjustments to variable consideration estimates based on actual results.

For the three and six months ended MarchJune 31,30, 2026, net product sales of LUPKYNIS were $73.6$79.4 million and $153.0 million, up 23%,19% and 21%, respectively, from $60.0$66.6 million and $126.5 million, respectively, in the same periodperiods of 2025.

For the threesix months ended MarchJune 31,30, 2026, cash flows from operating activities were $32.6$85.1 million, up 2408%87% from $1.3$45.5 million in the same period of 2025.

As of MarchJune 31,30, 2026, Aurinia had cash, cash equivalents, restricted cash and investments of $378.8$443.1 million, compared to $398.0 million at December 31, 2025. For the threesix months ended MarchJune 31,30, 2026, cash outflows from financing activities were $53.7$48.9 million, which included the repurchase of 2.55.0 million of the Company’s common shares for $36.2$74.9 million andpartially offset by proceeds from issuance of common shares for equity awards, net of tax withholding payments related to net settlementspayments, of equity awards of $14.6$32.7 million.

Comparison of the Three and Six Months ended MarchJune 31,30, 2026 and 2025

The following table sets forth our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

For the three and six months ended MarchJune 31,30, 2026, net product sales of LUPKYNIS were $73.6$79.4 million and $153.0 million, up 23%19% and 21%, respectively, from $60.0$66.6 million inand $126.5 million, respectively, for the same periodperiods ofin 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.

For the three and six months ended MarchJune 31,30, 2026, license, collaboration, and royalty revenue was $4.1$3.8 million and $8.0 million, up 64%12% and 36%, respectively from $2.5$3.4 million inand $5.9 million for the same periodperiods ofin 2025. The increase is primarily due to manufacturing services provided to Otsuka for sharing the capacity of the Monoplant.

For the three and six months ended MarchJune 31,30, 2026, cost of revenue was $6.5$6.6 million and $13.1 million, respectively, down 24%7% and 17%, respectively from $8.6$7.1 million inand $15.7 million, respectively, for the same periodperiods ofin 2025. The decrease is primarily due to a decrease in sales of LUPKYNIS inventory to Otsuka, which has a low gross margin.

For each of the three and six months ended MarchJune 31,30, 2026, gross margin was 92%, compared to 86%90% inand 88%, respectively, for the same periodperiods ofin 2025.

The following table summarizes our SG&A expense for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

For the three months ended MarchJune 31,30, 2026, the increasedecrease in SG&A personnel expense was primarily due to: (i) one-timea decrease in the amount of non-cash share-based compensation expense for severance and health care benefits, related to the departuredepartures of certain former Company officers in March 2026; and (ii) aan decrease in non-cash, share-based compensation expense in connection with the vesting of equity awards; and (iii) a decreaseincrease in the amount of non-cash,non-cash share-based compensation expense that was reversed due to forfeited, unvested equity awards.awards during the three months ended June 30, 2026.

For the three months ended MarchJune 31,30, 2026, the decreaseincrease in SG&A non-personnel expense was primarily due to loweran increase in professional fees and servicesservices, resultingpartially fromoffset ourby strategica restructuringdecrease effortsto intravel-related late 2024.expenses.

The following table summarizes our R&D expense for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

For the three and six months ended MarchJune 31,30, 2026, the increase in R&D personnel-expense was primarily due to: (i) one-time expense for severance and health care benefits, related to the departure of a former Company officer in March 2026; and (ii) an increase in employee-related costs to support development activities.

For the three and six months ended MarchJune 31,30, 2026, the decreaseincrease in R&D non-personnel expense was primarily as a result of aan decreaseincrease in clinical supply and distribution, partially offset by lower contract research organization and developmental expenses relateddue to the timing of development activities, partially offset by higher clinical supply and distributionsupport costs to supportof our development activities.

Other (Income) Expense, Net

For the three and six months ended MarchJune 31,30, 2026, other (income) expense, net was $0.3$(6.2) million and $(6.0) million, respectively, compared to $4.4$9.2 million inand $13.7 million, respectively, for the same periodperiods ofin 2025. The change is primarily due to: (i) favorable 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) changesreduction in other liabilities from the fairone-time valuepayment assumptionsto fully settle all future obligations under one arrangement; and (iii) reduction of an accrual related to ourshareholder deferred compensation liability.matters.

As of MarchJune 31,30, 2026, Aurinia had cash, cash equivalents, restricted cash and investments of $378.8$443.1 million, compared to $398.0 million at December 31, 2025. For the threesix months ended MarchJune 31,30, 2026, cash flows from operating activities were $32.6$85.1 million, comparedup to87% $1.3from $45.5 million in the same period of 2025. For the threesix months ended MarchJune 31,30, 2026, cash outflows from financing activities were $53.7$48.9 million, which included the repurchase of 2.55.0 million of the Company’s common shares for $36.2$74.9 million andpartially offset by proceeds from issuance of common shares for equity awards, net of tax withholding payments related to net settlementspayments, of equity awards of $14.6$32.7 million.