UroGen Pharma Ltd.

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to Eurogen Pharma's third quarter 2021 financial results and business update conference call. It is now my pleasure to turn the call over to Lee Roth, investor relations for Eurogen Pharma. Please go ahead.

Thank you, Jonathan. Good morning, everyone, and once again, welcome to the Eurogen Pharma third quarter 2021 financial results and business update conference call. Earlier this morning, we issued a press release providing an overview of our recent corporate highlights and the financial results for the quarter ended September 30th, 2021. A copy of this press release can be accessed on the investor section of our website at investors.eurogen.com. Joining me on the call today are Liz Barrett, President and Chief Executive Officer, Dr. Mark Schoenberg, Chief Medical Officer, Jeff Bova, Chief Commercial Officer, and Molly Henderson, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These may include statements regarding the success and timing of our ongoing commercialization of gel mito, planned clinical trials, data presentations, regulatory filings, future research and development efforts, manufacturing capabilities, and 2021 financial guidance, among other things. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change. A description of potential risks can be found in our earnings press release as well as our latest SEC disclosure documents. Your cautions must place under reliance on these forward-looking statements, and Urigin disclaims any obligation to update such statements. With that, it's now my pleasure to turn the call over to Urigin's President and CEO, Liz Barrett. Liz?

Thank you, Lee, and thank you to everyone joining us today. Many of you joined us for our spotlight day last week, and we're pleased you're here with us today where we'll discuss our third quarter earnings and highlight recent development. During the third quarter, we made further progress in both the commercial and clinical development areas of our business. Our commercial team continued to execute on the rollout of Gemido in the face of ongoing impacts of the pandemic in the third quarter, especially in certain regions in the U.S., and our development and regulatory teams have made significant progress and our discussions with the FDA regarding UGN-102 as highlighted at last week's event. Jeff will provide more detail on the Jelmida commercialization, but at a high level, as the Delta variant increased to new COVID cases, patient visits and access declined, causing Q3 patient starts to also decline, which is reflected in the revenue results. As previously reported, we had a strong Q2 that included a small bullish from delayed patients in Q1. Even given the revenue results, we saw a quarter-over-quarter increase in patient enrollment forms in Q3 versus Q2. Importantly, we have experienced accelerated momentum in September and October, marking our two highest-ever months for both new patient starts and patient enrollment forms. Although the $11.4 million in revenue we achieved for the third quarter was shy of our initial expectations, we remained confident in our ability to finish the year strong. In addition to making progress on driving awareness of gelmito in the U.S., we also made progress internationally. We recently launched a named patient program for gelmito in five European countries, France, Germany, Switzerland, Austria, and the U.K., This is a pilot program with the potential to be expanded into other European countries and will provide physicians access to and experience with gel mito as an initial step to determine commercial feasibility in Europe. The program will be managed by Tanner GAP Inc., a division of Tanner Pharma Group, which is a global provider of specialty access solutions. Turning to UGN-102, we were excited to announce last week that after several rounds of discussions with the FDA, we will be initiating a new phase three study of UGN-102 and low-grade intermediate risk non-muscle invasive bladder cancer. This new trial will be a multinational single-arm study and replace the current phase three ATLAS trial. We believe the new study design is more appropriate for demonstrating safety and efficacy for UGN-102 and patients with low-grade non-muscle invasive bladder cancer who are at intermediate risk for recurrence. We also believe the new design increases the probability of success, and Mark will provide more details. In addition to these important updates, we and AbbVie recently made the decision to terminate our collaboration agreement. As we announced last year, a Phase II trial of RT gel in combination with Botox for intravascular installation for overactive bladder and urinary incontinence did not meet its primary endpoint, and we believe this was due to the inability of Botox to effectively permeate the urothelium. As we evaluated the potential to leverage RT-gel with the AbbVie portfolio, there was nothing compelling to continue our agreement, and therefore we believed terminating this relationship was the most prudent path forward to allow for maximum flexibility for our RT-gel intellectual property. Turning lastly to UGN301, Mark will share our progress in advancing UGN 301 for high-grade non-Muslim-based bladder cancer into patients. We hope you were able to watch our spotlight event last week and hear from notable key opinion leaders on the opportunity for Urogen to provide patients with new treatments in this high unmet need disease. At Urogen, one of our primary goals is to transform the treatment paradigm in uro and specialty oncology away from repeated surgical procedures and to non-invasive therapeutic ablation of tumors, as well as locally administered immunotherapy approaches. I'm extremely proud of the progress we continue to make toward this goal. With that, I'll turn the call over to Mark to discuss our recent clinical and development update. Mark?

Thank you, Liz. The majority of my comments today will focus on the recent change to our clinical trial design for UGN-102, which we were excited to announce at last week's spotlight event and our path ahead for UGN301. As we mentioned at the event, after substantive conversations with the FDA, we have begun the process of initiating the new study of UGN102, which has a more streamlined single-arm design, similar to our Phase IIb Optima study and our pivotal trial for gel mito. The new Phase III study will be a multinational, multicenter study enrolling approximately 220 patients. It will evaluate the safety and efficacy of UGN-102 as a primary chemo-ovulative therapy in patients with low-grade, intermediate-risk, non-muscle-invasive bladder cancer. The design for this new trial will be similar to the Optima trial in that the patient population will have the same clinical characteristics, receive the same treatment regimen, undergo the same efficacy and safety assessments, and qualitative follow-up. Patients will receive six once-weekly intravesical installations of UGN-102 with a primary endpoint of complete response rate at three months after the first installation, and the key secondary endpoint of durability of response in patients who achieve a CR at the three-month assessment. In addition to the design that we believe carries a high probability of success, one of the most significant benefits of this new study design is that we will no longer need to have a comparator-armed surgery. The new design is based on time to recurrence, and this should provide greater clarity regarding the duration of the study. We expect to enroll the first patient in this new study in early 2022. And as mentioned, we aim to enroll 220 patients across an estimated 90 sites and anticipate enrollment in less than a year and an FDA submission in 2024. In light of these developments, we have stopped enrollment in the Phase III Atlas study, but will continue to treat and follow patients currently enrolled. We believe the data generated from the Atlas patients will be important as we continue to expand our knowledge around the role that UGN102 can play in the treatment of low-grade intermediate risk disease. In addition to the new UGN102 study, we have begun a small study that will evaluate the feasibility of at-home administration of UGN102 by a qualified home health professional. We believe offering an at-home solution for low-grade intermediate risk non-muscle invasive bladder cancer patients will be the first of its kind And in moving what is traditionally an in-office treatment into the home setting, we will address access to care issues that many elderly patients face. We are working with several U.S.-based centers and aim to enroll up to 10 patients and plan to enroll the study for the next six to nine months. In addition to the exciting developments around UGN-102, we continue to make progress with our earlier stage pipeline candidates, most notably UGN301, our anti-CTLA-4 monoclonal antibody in RT gel. We believe that by delivering the anti-CTLA-4 intravesically, we will be able to achieve the necessary level of immune checkpoint inhibition without systemic toxicity commonly associated with IV administration of this antibody. We currently have a non-human primate toxicity study underway and anticipate initiating a Phase I clinical trial of UGN301 in the first half of 2022. The goal of this planned phase one study is to establish the safety of and dose range for UGN301 and to serve as a gateway for combining 301 with other agents and subsequent arms of the study. The first such arm will combine UGN301 with UGN201, our TLR7 agonist, which has demonstrated single agent activity in high risk non-muscle invasive bladder cancer patients. We view UGN301 as a fundamental checkpoint inhibitor and the cornerstone of a variety of potential combination therapy approaches, both in neurologic oncology, the intravascular administration, and other specialty cancers. We are excited to evaluate its potential in the clinic next year and look forward to sharing details of our progress. And with that, I'd like to turn the call over to Jeff to provide a commercial update.

Jeff?

Thank you, Mark. I'm pleased to provide you with an update on our ongoing commercial rollout of gel mito. Our revenue for the third quarter was $11.4 million. While our field force is now primarily engaging with physicians in person, as Liz mentioned, during the months of July and August, we experienced a tightening of restrictions in several parts of the country due to the Delta variant. Our third quarter softness was confined to these regions, corresponding with those hardest hit by the COVID surge. We have already seen a rebounding in these areas in September and October, and our sales reps are now mostly back to in-person meetings. In order to get a sense of the continuing impact of COVID and the ultimate timing of the rebound, we recently conducted a survey of 56 urologists, with approximately 75% of our respondents indicating that they believe COVID was the basis for patients delaying treatment for low-grade UTUC. with such delays lasting an average of approximately four months. Overall, physicians remain enthusiastic on the use of gel mito, as evidenced by the increases in both the number of activated sites, 706 as of November 1st, up from 407 on August 1st, and the number of repeat accounts, or sites treating more than one patient, which increased from 63 on August 1st to 86 on November 1st, an increase of 37%. Both of these numbers gives us confidence in continued adoption of gelmito and the physician's positive experience in administering it to their patients. Although we have had a quarter-over-quarter decline in revenues from Q2 to Q3, we believe we are largely past the latest COVID wave and are hopeful that much of the volatility we experienced this year will begin to subside and we will experience a more normal launch trajectory for gelmito in 2022. Notwithstanding the final revenue number, we ended the quarter strong, and as Liz mentioned, September and October were our highest months ever for both new patient starts and patient enrollment forms. As a reminder, patient enrollment forms are the initial step to getting a patient treated and our best leading indicator of future patient starts. We closely track the challenges many companies are experiencing as it relates to supply chain, and we will work diligently with hospitals and sites of care to ensure product availability and delivery for all patients. I remain excited by what we're seeing in adoption and physician engagement, and very optimistic that we've set a strong foundation for a solid 2022. Lastly, over the past few months, we have made progress on initiating our registry for gel mito. We are in the process of setting up the first 10 sites to enroll and collect important data on the long-term benefits of gel mito. and evaluate real-world outcomes of UTUC patients treated with gel mito and to study its use in clinical practice in the United States. Patient data will be captured following gel mito treatment with specific clinical questions being asked of participants. We expect to have initial information from this study in 2022. With that, I'd like to turn the call over to Mollie for a review of the financials. Mollie?

Thank you, Jeff, and thank you to everyone for joining today's call. Urgent recorded net product sales of Jelmido for the third quarter ended September 30th, 2021, of approximately 11.4 million, aggregating to 31.9 million for the first nine months of 2021. This compares to 3.5 million and 3.8 million, respectively, in the same period of 2020. The year-over-year increase was driven by the launch of Jelmido in June of 2020. Cost of revenues for the third quarter of 2021 were approximately $1.2 million, resulting in a gross margin of 89% compared to gross margin of 91% in the third quarter of 2020. Cost of revenues for the first nine months of 2021 were $3.6 million, resulting in a gross margin of 89% compared to a gross margin of 91% for the comparable period in 2020. Research and development expenses for the third quarter ended September 30, 2021, were $11.9 million compared to $10.2 million for the same period in 2020. Research and development expense includes $1 million in non-cash share-based compensation expense for the third quarter ended September 30, 2021, as compared to $1.5 million for the same period in 2020. The overall increase in R&D expense in 2021 compared to 2020 relates to the initiation of a Phase III Atlas study at the end of 2020. Selling general administrative expenses for the third quarter ended September 30, 2021 for $21.6 million as compared to $22.1 million for the same period in 2020. Selling general administrative expenses includes $4.5 million non-cash share-based compensation expense for the third quarter ended September 30, 2021 as compared to $5.2 million for the same period in 2020. Total SG&A expenses are down slightly in 2021 due to the higher launch-related commercial spend in 2020. The third quarter ended September 30, 2021. Reported financing expense related to the prepaid forward obligation with IRTW investments was $6.8 million, and we reported a net loss of $30.2 million, or $1.35 per share. This compares to a net loss of approximately $29.1 million, or $1.31 per share, for the same period in 2020. The net loss for the third quarter ended September 30, 2021, and 2020 includes $5.5 million and $6.8 million, respectively, in non-cash share-based compensation expense. Turning to our financial guidance for 2021, we are currently reducing our operating expense guidance from the previous $155 to $165 million to $137 to $142 million. The reduction in our operating expense guidance is a result of lower anticipated costs in the fourth quarter associated with commercial and clinical activities. Note that this operating expense guidance includes estimated non-cash share-based compensation expense of $22 to $25 million. Additionally, as we near the end of 2021, we have visibility into our expected full-year 2020 revenues. As a result, we are providing our estimate for full-year 2021 revenues to be in the range of $47 to $51 million. Lastly, we close the third quarter with $110.3 million in cash, cash equivalents, and marketable securities. We believe our current cash position will take us into 2023. We continue to explore opportunities to strengthen our balance sheet with non-dilutive capital in order to ensure we have sufficient resources to execute on our strategy. With that, operator, I'd like to turn the call over for questions.

Certainly. Ladies and gentlemen, if you have a question at this time, please press star then one on your touchstone telephone. If your question has been answered and you'd like to remove yourself from the queue, please press the pound key. Our first question comes to the line of Chris Howardson from Jefferies. Your question, please.

Great. Thank you so much for taking the questions. I think two for me. First, with respect to kind of the commercial activities and the progress there, I appreciate, obviously, Jeff, that you were mentioning that some of the COVID-19 restrictions and the access to providers was one of the key headwinds. Curious if you could speculate on other factors that may or may not be going on to ensure that there will be continued growth once COVID-19 does hopefully clear up. And then the second question I would have is with respect to kind of the R&D expenditures that we can expect for the Phase 3-102 programs, just curious if you could give us some initial thoughts in terms of either the relative cost to ATLAS or some of the other trials out there that we can estimate, you know, the cost of capital or the cost for the new trial. Thank you.

So Jeff, why don't you take the first question and then Molly can answer the second question.

Sure, thanks. Hi, Chris. Yeah, where I'm looking at September and October being record months just tells me, I mean, July and August were patients weren't coming in, as I mentioned, as much as they would be in without COVID. And then when you saw kind of the summer months go by, you saw the rebound, you know, so what Like, we're just seeing a similar rebound, but strong September, strong October. Things are continuing. And so, yeah, as I've always said to you, we hope that this is getting back to normal. Just got back from a recent conference, the first live larger group conference in Chicago. They also, the urologist there told me their patients are coming back in greater amounts and have a lot of positive things to say about gel mito. So you're seeing accounts coming on board either for the first time or accounts that have been on board for a period of time, and they're finding additional patients that can benefit from gel mito.

Okay. Cool.

Thanks, Jeff. Yeah, Chris, to answer your question on R&D expenses. So at this point, we're still working with the CRO to determine what synergies exist between the two studies. But at this point, we feel comfortable that the cash balance will get us into 2023, which is consistent with the guidance we provided before as it relates to our spend and cash balance. But I will say, I think we feel pretty good, like I said, that there's a lot of synergies between the two studies. So we're really working hard to minimize any incremental costs associated with this switch.

Yeah, and Chris, I'll just make a couple more comments on the commercial and why we're bullish for the rest of the year and into 2022. There were a couple things right at play. One, we talked about the fact that, you know, Q2 had some bolus from Q1 patients not coming in. The other thing we saw in the summer months as the Delta variant took, you know, increase, as Jeff said, you know, there was another lockdown as far as our access, but also fewer patients coming into the office. And we've done an analysis that shows, you know, our – patient enrollment forms and new patient starts are, you know, directly correlated to the increases and decreases in COVID cases. And then, you know, what we also saw was an increase of vacations happening in the summertime. I think sort of a pent-up demand, you know, where some people, you know, took time off that hadn't, you know, hadn't done so. And I think when you put all of those things together and look at kind of what we've seen in you know, as Jeff mentioned, coming into September and October, gives us a lot of confidence that, you know, maybe we're getting over that hump and hoping that it doesn't happen again. But we definitely see the reduction in patients and then the increase in patients. So it's really clear that patients aren't, you know, visiting the doctor's office and then you see kind of a bolus, like I said. And as Jeff mentioned, the conference we were just at this past weekend was You know, that's what you're hearing back from physicians now is that they are seeing a more normal, you know, kind of back to normal patient flow. So, you know, we have patient enrollment forms that kind of give us an early indicator. And we have seen actually every quarter, despite the fact that Q3 revenue was less than Q2 revenue, we actually had an increase in patient enrollment forms. And it's the transition of those patient enrollment forms from, you know, from, you know, identifying a patient to actually getting a patient started. So those are a couple of things that we looked at that, you know, give us confidence as we see kind of the rebound of new patient starts, but then the continued quarter-over-quarter increase in our patient enrollment form. So, and, you know, Molly, for the first time, you know, we're providing guidance, which, you know, just shows you with a 47 to 51 rate. range that, you know, we already know that the Q4 is going to be a significant, you know, increase over Q3. So hopefully that helps.

Yeah, it does. Thank you, Liz. I appreciate it. And I'll hop back in the queue. Thanks all.

Thank you. Our next question comes to the line of Paul Choi from Goldman Sachs. Your question, please.

Hi, thank you. Good morning, and thanks for taking our questions. Maybe one for Jeff to continue on the commercial piece. Jeff, I was wondering if you could maybe just comment on, you know, whether you saw the majority of the new patient enrollment forms tied to the activation of the additional centers. Is that where the primary growth is going? Or can you maybe, you know, qualitatively comment on, you know, is the majority of this new patient growth coming at existing centers? And then we should expect a delayed, you know, sort of start for these newly activated sites.

Sure. Thanks for the question. And it's a combination of both. What I hear from accounts is, you know, typically they obviously start out with one patient. They want to see how things go logistically. They want to make sure that they're getting reimbursed. The JCODE, now I'm hearing 28 days they're getting accurately reimbursed. And then what they'll do is they actively, you know, start to look for patients. They talk to their colleagues. So it is a combination of both. As you saw, we have a number of activated sites up significantly since the last time we reported. You know, that's a lot of things as well, you know, whether that was a formulary update, a new patient that came on recently. And, you know, we'll continue to grow that number in accounts. And, you know, Again, you know, the variant, the vaccine earlier in the year all sort of affected how quickly accounts get up and running. And I'm not surprised to see that the latest number as accounts get up and running, you start to see the number of activated accounts go up. But it's a combination of both. I'd say probably a little bit more accounts have treated a patient, and now they're looking for other patients to benefit from Jelmido.

Okay, great. Thanks for that call, Eric. Jeff, maybe two more for me. The first is for Molly. Molly, thanks for providing the fourth quarter guidance here for the remaining weeks here. I guess as you look to next year to 22, could you maybe just sort of comment on, you know, how you think about the directional slope of the revenue growth for Joe Maddo here as we get past the COVID-19 headwinds? And then just one from Marfitt as well, which is just in terms of the patients who are enrolled with regard to ATLAS, can you maybe just comment on what the regulatory feedback has been with regard to follow-up requirements for that population and just, you know, what is required potentially from a filing perspective? Thank you very much for taking our questions.

Sure. Hi, Paul. So to spread some color on 22, so we are just, as we said, getting guidance on 21. So we're working hard to determine what the best range for 22 is yet. So at this point, we're not providing any additional color. But as we look into the beginning of next year, we'll certainly look at the options for providing some guidance, not just on the revenue, but also on the OPEX number.

Paul, thanks. We are going to continue to follow the ATLAS patient's because as you can imagine, we're very interested in the safety information that we'll obtain by following these patients. So even though the study will be closed, the patients will continue to be followed, and we will incorporate those important pieces of information in a subsequent filing.

Thank you very much.

Thank you. As a reminder, ladies and gentlemen, if you have a question at this time, please press star, then one. Our next question comes in the line. I'm Matt Kaplan from Latterberg-Thauvin. Your question, please.

Hi. Thanks for taking the question. Just a follow-up on Paul's question in terms of maybe Mark. The data that you hope to generate from ATLAS as the study winds down now that you have transitioned and pivoted to the new single-arm study, can you give us a sense in terms of even if you can get some efficacy data from that as well, given the status of the study, where you are in it, and your expectation in terms of the number of patients that you'll be able to generate safety data from.

Matt, thank you. And I don't think we've disclosed yet the number of patients. Liz may correct me on this. But we think that the primary value of this population at this point is going to be to provide safety. We have been very fortunate. in terms of the enrollment in the trial. As we have previously announced, we were even a little bit ahead of schedule in terms of enrollment. So we think there will be lots of important safety information. I think it's probably premature, unless Liz wants to comment on this, to talk at all about what kind of efficacy information could be gleaned from the experience analysis.

Yeah, I mean, I think I will add that we absolutely will share the data, including efficacy data, from the ATLAS study. So we'll have complete response rates. We haven't yet decided how long we will follow those patients, so obviously durability, you know, but absolutely we'll have complete response numbers. And, you know, we will be following both the treatment arm as well as the TRBT arm, so we'll You know, we hope to be able to gather some information, you know, from that arm as well. Again, a lot around the safety. But, you know, we won't be able to do comparison because obviously we won't have the numbers that we've talked about. It won't, you know, won't be powered at that point. But anything that we can get from there, we expect to, one, include that in our filings. And two, we'll absolutely share it. So regardless of what it is, we just won't be doing comparisons. But our ability to share complete response rate, and we'll share the durability as it plays out, you know, because as these patients. And we'll share, obviously, more in 2022 around the number of patients as we actually still have some patients that are in screening. So, you know, once those patients are through. So, you know, we'll make sure that it will be robust, right? We'll have, you know, we'll have... you know, some patients, you know, quite a few patients, and we'll be able to share even in 2022 data from the ATLAS study because obviously now it's, you know, no longer be a study where we have to keep it blinded. So we'll be able to share that in 2022 as we enroll our new study. So hopefully that helps, but we will share all of the information that we can, and we'll start to share that as quickly as we, you know, as we have robust data to share.

Okay. That sounds great. And then just a question on UGN 301 and the plan phase one study that you have going to start in the first half of the year. What's your sense in terms of how that study could progress and when you expect to see some initial safety and dose-ranging data from that?

So we expect to, as we talked about before, to go first in man with our CTLA-4, UGN-301. And then the idea is to shift to the combination with the TLR-7 and then also to shift to a multi-arm study with other combinations. So there's a lot that we've got planned in using 301 as a backbone of combination therapy for high-grade disease. And so I think that by the end of 22, we'll at least be able to share the initial data that we have. You know, obviously, you know, you don't look at phase one, you know, for efficacy, but we'll, you know, there'll be some, potentially some efficacy to share. But, you know, the purpose of the phase one is to, one, ensure safety and then move to the appropriate optimal combination. So we'll be able to share some of that, at least the initial data on the CTLA-4 in 2022 as well.

Thank you. Our next question comes from the line of from Oppenheimer. Your question, please.

Hey, good morning. Thanks for taking my question. Just wanted to clarify, so the data from ATLAS that we eventually will see and will be included as part of the submission, that will not have any role in terms of supporting the efficacy for registrational purposes. The FDA can rely entirely, presumably, on the new phase three trial. Just wanted to clarify that, Mark.

Thank you. That's correct. Absolutely. That's correct.

Great. And the same as that before, but is there any expectation that when we might see the initial cuts from ATLAS, could that be sometime in 2022?

Yes, we'll absolutely be able to share CR rates because we'll have all of the patients, you know, through at least the three-month mark. So we'll be able to share at least complete response data in 2022.

All right, terrific. Thanks for taking the questions.

Thank you.

Thank you, ladies and gentlemen. This does conclude the question and answer session of today's program. I'd now like to hand the program back to Liz Barrett for any further remarks.

Thank you. Thanks, Lee, and thanks, everybody, for the questions. You know, I hope that you see that what we see and the potential of where we're headed with URGEN. We're excited about, you know, 2022 getting over the hump. You know, we're very bullish on the rest of the remainder of 2021. And having that great momentum going into 2022, we continue to get very positive feedback, you know, working through the logistics. And, you know, hopefully with the pandemic behind us, we can see, you know, the continued momentum. And, you know, not only from a commercial standpoint, but, you know, as you've heard, the simplification of the one-arm study for UGN-102, you know, being able to, you know, talk to the FDA and work directly, you know, closely with the FDA to gain agreement on that, be able to share the data as we continue to generate data for ATLAS and then, you know, 102, and then launch our, you know, first in-man study with the combination in 2022 as well. So an exciting time for us as we continue to make progress both from a commercial standpoint and also from a clinical development standpoint. So appreciate all of your support and time, and we'll talk to you guys soon. Thanks. Take care. Bye.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.