Aurinia Pharmaceuticals Inc.AUPH
Aurinia Pharmaceuticals Inc. Commitments Disclosure
Commitments and Contingencies
Lease Commitments
Finance Lease
Monoplant
In December 2020, the Company entered into a manufacturing services agreement with Lonza 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. The Company completed a capital expenditure payment program for the Monoplant totaling $23.7 million, which included: (i) a $11.8 million payment in February 2021, which was treated as an upfront lease payment and recorded under other noncurrent assets on the consolidated balance sheets; and (ii) a $11.9 million payment when the facility fulfilled the required operational qualifications, which occurred in late June 2023. The Company has the exclusive right to use the Monoplant through March 31, 2030 by paying a quarterly fixed facility fee of 3.6 million Swiss Francs.
The Monoplant arrangement was determined to be an embedded lease and is accounted for as a finance lease under ASC 842. The lease term is based on the non-cancellable period for which a lessee has the right to use an underlying asset (the “Monoplant Lease”). The Company determined that the Monoplant Lease commencement occurred at the point when the FDA manufacturing validation process began, which occurred on June 26, 2023.
At lease inception, the Company recorded a finance right-of-use (“ROU”) lease asset and a corresponding lease liability. As of December 31, 2025, the Monoplant Lease finance ROU lease asset and corresponding lease liability balance were $73.9 million and $68.8 million, respectively.
Operating Leases
Rockville, Maryland
In March 2020, the Company entered into a lease agreement for 30,531 square feet of office space in Rockville, Maryland (the “Rockville Lease”). The Rockville Lease commenced on March 12, 2020 and expires on August 31, 2031. The Company has the option to extend the Rockville Lease for two 5-year periods at the end of the initial 11-year term and has the option to terminate after 7 years; however, such options were not recognized as part of the Company’s lease liabilities and corresponding ROU lease assets. The Rockville Lease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises (“Lease Operating Costs”); however, such costs are not material to the Company’s financial position.
Future minimum lease payments, excluding Lease Operating Costs, as of December 31, 2025 consisted of the following (in thousands):
Finance Lease Payments | Operating Lease Payments | |||||||||||||
| 2026 | $ | 18,275 | $ | 1,169 | ||||||||||
| 2027 | 18,275 | 1,197 | ||||||||||||
| 2028 | 18,275 | 1,227 | ||||||||||||
| 2029 | 18,275 | 1,223 | ||||||||||||
| 2030 | 4,570 | 1,240 | ||||||||||||
| Thereafter | — | 839 | ||||||||||||
| Total lease payments | 77,670 | 6,895 | ||||||||||||
| Less: imputed interest | (8,825) | (928) | ||||||||||||
| Total | $ | 68,845 | $ | 5,967 | ||||||||||
For the years ended December 31, 2025, 2024, and 2023, finance lease expense related to the amortization of finance ROU lease assets was $17.4 million, $17.4 million and $8.9 million, respectively. For the years ended December 31, 2025, 2024, and 2023, finance lease expense related to the interest on finance lease liabilities was $4.3 million, $4.8 million and $2.8 million, respectively. For the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included in the measurement of finance lease liabilities classified in cash flows from financing activities was $13.1 million, $12.0 million and $10.0 million, respectively. For the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included in the measurement of finance lease liabilities classified in cash flows from operating activities was $4.5 million, $4.6 million and $2.3 million, respectively. As of December 31, 2025 and 2024, the weighted-average remaining lease term for the Company’s finance leases was 4.3 and 5.3 years respectively. As of December 31, 2025 and 2024, the weighted-average discount rate for the Company’s finance leases was 6.19%.
For each of the years ended December 31, 2025, 2024, and 2023, operating lease expense was $0.8 million. For each of the years ended December 31, 2025, 2024, and 2023, cash paid for amounts included in the measurement of operating lease liabilities was $1.1 million. As of December 31, 2025 and 2024, the weighted-average remaining lease term for the Company’s operating leases was 5.6 and 6.6 years, respectively. As of December 31, 2025 and 2024, the weighted-average discount rate for the Company’s operating leases was 5.27%.
Contingencies
From time to time, the Company may be involved in various claims and legal proceedings relating to claims arising out of its operations. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
On November 2, 2025, Aurinia and its wholly owned subsidiary, Aurinia Pharma U.S., Inc., filed a complaint alleging defamation and injurious falsehood against Dr. George Tidmarsh in the U.S. District Court for the District of Maryland. The complaint alleges that Dr. Tidmarsh personally made false statements regarding voclosporin. The Company is seeking monetary damages, punitive damages, court costs, and any other relief the court deems appropriate.
In February and March 2025, the Company received a Notice Letter from each of Hikma Pharmaceuticals USA Inc., Lotus Pharmaceutical Co. Ltd., Galenicum Health S.L.U., Zydus Pharmaceuticals (USA) Inc., Teva Pharmaceuticals, Inc., Dr. Reddy's Laboratories, Inc., DifGen Pharmaceuticals LLC and Sandoz Inc. advising that each company had submitted an ANDA to the FDA seeking authorization to manufacture, use or sell a generic version of LUPKYNIS in the U.S., prior to the expiry of the 2037 Patents, which are listed in the FDA's Orange Book. Each Notice Letter alleges 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.
Aurinia filed complaints for patent infringement against each of Hikma Pharmaceuticals USA Inc. (filed April 10, 2025); Lotus Pharmaceutical Co. Ltd. (filed April 11, 2025); Galenicum Health S.L.U. (filed April 17, 2025); Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Ltd. (filed April 21, 2025); Teva Pharmaceuticals, Inc. and Teva Pharmaceutical Industries, Ltd. (filed April 25, 2025); Dr. Reddy's Laboratories, Inc. (filed May 1, 2025); DifGen Pharmaceuticals LLC (filed April 30, 2025); and Sandoz Inc. (filed May 8, 2025) in the U.S. District Court for the District of New Jersey.
In accordance with the Hatch-Waxman Act, because LUPKYNIS is a New Chemical Entity and Aurinia filed a complaint for patent infringement within 45 days of the receipt of each Notice Letter, the FDA cannot approve the ANDAs for these applications any earlier than 7.5 years from the approval of the LUPKYNIS new drug application unless a District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed.
The Company intends to vigorously enforce its intellectual property rights relating to LUPKYNIS.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 24, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.