UroGen Pharma Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. And welcome to EuroGen Pharma's fourth quarter and full year 2021 financial results and business update conference call. It is now my pleasure to turn the call over to Vincent Perrone, Senior Director of Investor Relations for EuroGen Pharma. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Eurogen Pharma's fourth quarter and full year 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 financial results for the quarter and year ended December 31st, 2021. The press release is available on the investors portion 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, Jeffrey 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 2022 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 on our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements, and NeuroGen disclaims any obligation to update these statements. I'll now turn the call over to Liz. Liz?

Thank you, Vincent, and thank you to everyone joining us today. We remain focused on developing novel solutions for urothelial and specialty cancers with the goal of fundamentally transforming the treatment paradigm for what is largely an underserved patient population. In this pursuit, I am proud of the progress we've made throughout 2021 and in early 2022 further solidifying Gelmito's place in the market as the only FDA-approved non-surgical treatment for low-grade UTUC, and setting the stage for several important commercial and clinical milestones in the year ahead. Despite challenges on our commercial efforts stemming from the global COVID-19 pandemic, we continue to help new patients gain access to Gelmito, which is a testament to the resilience and perseverance of our commercial team. Growing patient access and awareness continued to drive adoption of Gemido as we set new records for revenue, new patient enrollment, and site activations in the fourth quarter, setting us up for strong growth in 2022. Jeff will provide more detail on our commercialization efforts, but at a high level, our commercial team did an excellent job adapting to added challenges placed on the healthcare system. by rising cases of the Omicron variant as well as staff shortages in Q4. This led to an all-time quarterly high in new product revenue of $16.2 million in Q4, a 42% increase over Q3. Total net product revenue for 2021, our first full year of product sales of Gelmido, was $48 million, which was in line with guidance. Molly will review our financial results and provide guidance for 2022 shortly. However, we remain confident in the outlook for the business as we expect continuing and accelerating adoption of Gemido in our second full year post-launch. Late last year, we announced the launch of a pilot named Patient Supply Program for Gemido, which included five European countries, France, Germany, Switzerland, Austria, and the U.K., During the fourth quarter of 2021, we continued to expand this program with the addition of Australia to the pilot. The NPS program, in partnership with Neoform in Israel, saw the identification of the first four patients with product for two of those patients delivered to Neoform in Q4. I'm pleased to report that as a result of these efforts, two of these Israeli patients received gel mito, representing the first time patients outside of the U.S. have been treated with gel mito in a commercial setting. Beyond gel mitre, we made important progress in the clinic, advancing our lead development program, UGM-102, and positioning UGN-301, our immuno-oncology program for human trials. Turning first to UGM-102, which is in development to treat low-grade intermediate-risk non-muscle-based bladder cancer, an indication impacting approximately 80,000 underserved patients in the United States annually. Last month, we initiated the Phase III Envision trial, a single-arm, open-label, pivotal trial, which replaced the previously announced Phase III Atlas trial. Envision is similar in design to the Phase II Optima II trial, and as a result, we believe care is a very high probability of success. I'm pleased to report that earlier in the first quarter, we completed the shift to Envision, opening the first clinical site and recently dosing the first patient. We expect Envision to complete enrollment by the end of 2022, and assuming positive findings, we anticipate submitting an NDA in 2024. Importantly, UGN-102, if approved, would share a prescriber base with Gemido, which would ensure an efficient and expedient product launch. We continue to believe Gemido and UGN-102 together represent well over a billion-dollar revenue opportunity for Urigin, And the start of the Envision trial moves us closer to realizing the full potential of these two high-promising innovative therapies. For UGN 301, we announced results from a toxicology study, which formed the foundation of an IND application we submitted to the FDA last month, putting our first RT-gel-based immuno-oncology candidate on track to initiate a first in human study in the first half of 2022. Mark will discuss plans for our multi-arm combination study that represents a unique approach to treating high-grade bladder cancer. We recently closed an up to $100 million senior secured term loan facility with funds managed by Pharmacon advisors. This non-dilutive capital gives us the financial flexibility to continue expanding our commercial and development efforts. And based upon our current financial projections, provides us with what we believe to be the necessary runway to reach cash flow break-even by 2025. Formicon Advisors have been great partners, and this facility demonstrates their belief in the impact our company can have on patients, and I want to thank them for their partnership. Finally, I want to address a disclosure made earlier today announcing a transition in our financial leadership team, as Molly has decided to leave her role as CFO of Urgent, to assume a broader role with another company. Molly led our efforts and successfully strengthened our balance sheet, leaving us well-positioned to continue advancing our strategic vision. While Molly will be missed, it is a good time to transition her finance responsibilities to her successor, Don Kim, currently Vice President of Finance, who will assume the CFO role effective March 25th. Don is a seasoned financial professional with extensive Bioforma industry experience. Prior to joining Urogen, Don held leadership position with Zoetis, Sun Pharma, and most recently with Strides Pharma, where he served as head of finance and as a member of the board of directors. Lastly, given the critical role investor relations continues to play in our success, this function will now report directly to me. At Urogen, one of our primary goals is to give patients better options by continuing to shift the treatment paradigms in neuro and specialty oncology away from repeated surgeries and disease management to minimally invasive therapeutic ablation of tumors and locally administered immunotherapy approaches. We expect 2022 to be a pivotal year for URGEN as we expect a more normal environment for gel miters launch. To fully enroll our pivotal study for UGN-102, which represents a major advancement in care for patients, and a billion-dollar revenue potential for our company, and to expand our development efforts into immunotherapy with a unique combinatorial approach for high-grade disease. I'm extremely proud of the progress we continue to make toward our goal of bringing novel solutions to patients that deserve better. With that, I'll turn the call over to Mark to discuss our recent clinical and development updates. Mark?

Thank you, Liz. Before providing an update on our recent progress in advancing our clinical development programs, UGM-102 and UGM-301, I'd like to comment on a recently published retrospective analysis in the Journal of Urology, which reported real-world experience utilizing anti-grade administration of gel mito. The study was conducted by Dr. Katie Murray of the University of Missouri School of Medicine and provided a stepwise treatment approach to anti-grade administration of gel mito. Dr. Murray and colleagues showed that antigrade installation provided a well-tolerated, effective method to administer gel mito, which did not negatively impact patient comfort. Importantly, Dr. Murray's analysis suggested antigrade administration, which minimizes manipulation of the ureter during installation, may help protect against stricture formation that had been reported following repetitive instrumentation of the upper urinary tract. As previously stated, gel mito is approved for both retrograde and anagrade administration, and both methods can be performed as an outpatient procedure in the clinic. However, installation via retrograde administration requires administration by a physician via a ureterol catheter utilizing fluoroscopic guidance, whereas anagrade administration may be performed by a trained nursing professional and does not require fluoroscopy prior to gel mito installation once nephrostomy 2 position is confirmed. Dr. Murray and her colleagues offer practical guidance for integrated administration of gel mito, which may simplify gel mito administration for both patients and physicians. Switching to UGN 102, I'm pleased to report that since our last update, we have completed the transition from the ATLAS study to the recently initiated Phase III Envision Pivotal Trial. Envision is designed as a single-arm, multinational, multicenter study evaluating the efficacy and safety of UGN-102 as primary chemoablative therapy in patients with low-grade intermediate risk and MIBC. Importantly, we believe Envision carries a higher probability of success given it does not require a control arm comparing UGN-102 to surgery. In addition, the design of Envision is similar to our Phase 2b Optima 2 study of UGN102, which showed a complete response rate of 65% and durability at 12 months of 72.5%. As Liz noted, we recently began dosing patients in revision. The study, which is being conducted at over 90 sites, is expected to enroll approximately 220 patients who will receive six once-weekly intravesical installations of UGM-102. In terms of the evaluable patient population, Envision will enroll patients with low-grade recurrent intermediate-risk NMIBC. The primary endpoint will evaluate the complete response rate three months after the first installation. And the key secondary endpoint will evaluate durability over time in patients who achieve a complete response at the three-month assessment. Based on our estimations, which include feedback from the FDA, we expect full enrollment by the end of 2022, and assuming positive findings, we anticipate submitting a new drug application in 2024. In addition to the Envision study, we are conducting a single-arm at-home installation study of UGN-102 with the goal of demonstrating the feasibility of home installation We believe offering an at-home solution for low-grade intermediate risk non-muscle invasive bladder cancer patients is an important step in solving access to care and quality of life issues that many elderly patients may face with the current standard of care, transurethral resection of the bladder tumor, or TURBT. We expect to enroll up to 10 patients in the next six months. Low-grade intermediate-risk NMIBC remains a significant unmet need affecting an estimated 80,000 patients in the United States. There are no FDA-approved therapies for this disease, leaving repeated TURBT as the current standard of care. We believe UGN-102 has the potential to transform how we treat these patients, in particular those at risk for recurrence and those that are unwilling or unable to undergo surgery or general anesthesia by becoming the first viable non-surgical alternative for low-grade intermediate risk disease. I'm also pleased to provide an update on our progress in our immunotherapy program, which includes the development of an anti-CTLA-4 antibody that we are developing to treat high-grade non-muscle-based bladder cancer. UGM-301 is our in-licensed anti-CTLA-4 antibody, that we are advancing alongside our clinical development partners at MD Anderson Hospital. UGM 301 is in development for the use as monotherapy and in combination with immunomodulators and chemotherapies to treat high-grade non-muscle invasive bladder cancer. CTLA-4 has long been considered a good target for overcoming immune suppression produced by tumor cells. Unfortunately, the systemic administration of checkpoint inhibitor antibodies to this molecule is associated with dose-limiting toxicity. We believe that intravascular delivery via RT-gel may permit us to leverage the power of our highly potent anti-CKLA-4 monoclonal antibody, UGN301, while avoiding the toxicity associated with systemic administration. Last month, we announced the completion of an IMD-enabling toxicology program, which formed the foundation of an IMD-submission program. supporting the initiation of a multi-armed Phase I clinical study of UGN301, which we expect to begin during the first half of this year. The objective of this study is to establish safety and dose ranges for UGN301 as monotherapy and in combination with other agents, including UGN201, our TLR7 agonist, which has demonstrated single-agent activity in high-risk non-musculoskeletal bladder cancer patients. The first arm of the Phase I study will evaluate UGM301 as monotherapy and will take approximately 12 months to complete. We view UGM301 as a fundamental checkpoint inhibitor and the cornerstone of a variety of potential combination therapies targeting high-grade cancers. We are excited to begin evaluating its potential in the clinic this year and look forward to updating you on our progress. Lastly, we plan to continue research efforts to identify additional medicines that may work with our proprietary technology to advance care across urothelial and other specialty cancers. We are in the process of prioritizing the most promising targets and hope to share more about our plans later this year. And with that, I would 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 Gelmito. As Liz mentioned, we achieved a quarterly record of $16.2 million in net product sales in the fourth quarter, representing a 42% increase from quarter three. Revenue for 2021, our first full year on the market, was $48 million. And despite volatility in certain regions throughout the year, which corresponded with the rise of COVID-19 cases, Kelmito full-year revenue trends were favorable in 2021. I'm pleased to report that the momentum, which we ended the third quarter, continued through to Q4 and into 2022. With our field force primarily back to engaging with physicians in person, we've observed a more consistent ramp-up in new patient starts and patient enrollment forms on a week-to-week basis thus far in 2022, compared to some of the variability we saw in the same period last year. We're hopeful this is suggestive of a more normalized launch trajectory for gel mito in 2022. As we look ahead, we anticipate similarities to last year with respect to sequential quarterly variance heading into Q1, which is attributable for the most part to deductible resets typically seen in the first quarter. However, we expect strong year-over-year revenue growth, despite seasonality which is expected with a buy-and-bill product such as gel mito. I'm particularly pleased with the growing enthusiasm and adoption for gel mito we are seeing from physicians, as our data suggests steady growth in both new and repeat prescribers. The number of activated sites as of March 1st was 832, up from 706 on November 1st of 2021, and representing an increase of 17%. Importantly, the number of repeat accounts, or sites that have treated more than one patient, increased to 106, from 86 on November 1st of 2021. This represented an increase of 23%. As the number of repeat accounts has grown, we've seen a significant improvement in conversion times from new patient enrollment forms to the patient being treated from 40 days down to 20 days, which is expected as accounts identify more patients and have an established treatment protocol in place. Steady growth in both of these critical areas gives us confidence we will continue to see rising adoption of gelmito and suggest a positive treatment experience from the perspective of both physicians and patients. We are pleased to announce that the VA has created a criteria for use for gelmito. The CFU establishes a streamlined pathway by which HCPs can access gelmito to treat low-grade UTUC within the VA system. representing a significant milestone and another opportunity to continue to drive penetration within the VA. I remain highly encouraged by what we're seeing in adoption and engagement and remain optimistic that we'll continue to see favorable trends during the remainder of 2022. Lastly, we continue to make progress with the U-TRACT patient registry. At this time, we are finalizing the build with feedback from the urology community and onboarding of initial sites with an expected phase launch before the end of Q1. Data collected in this study is expected to evaluate real-world outcomes of UTUC patients treated with gel mito, provide insight into the long-term treatment benefits, and evaluate its use in clinical practice in the U.S. We look forward to providing additional updates on this program, including select findings later this year. With that, I'd like to turn the call over to Molly for a review of the financials. Molly?

Thank you, Jeff, and thank you to everyone for joining today's call. Before reviewing our fourth quarter and year-end 2021 financial results, I'd like to touch upon the up to $100 million non-dilutive term loan financing we recently announced with funds managed by Pharmacon Advisors. We are pleased to partner with Pharmacon, an experienced specialist investor with a strong track record of supporting innovative life science companies. In Pharmacon, we have a partner who believes in the opportunity of Jomido and its ability to positively impact the treatment landscape of low-grade UTUC, as well as the broader potential for our pipeline of innovative therapies to address significant unmet needs in urothelial and specialty cancers. The up to 100 million senior secured term loan facility significantly strengthens our financial position and supports our operating needs with what we believe will be sufficient runway to achieve cash flow break-evens by 2025 based on our current revenue projections and financial models. The first tranche of $75 million was received last week and will immediately begin to support our continued commercialization efforts of Gilmaito and our ongoing Phase III single-arm and vision trial of UGN-102. At our discretion, we may draw upon an additional $25 million before the end of the year. The loan will mature in five years from initial funding and we reserve the right to prepay the loan in its entirety at any time. subject to certain prepayment premiums and make whole amounts. In return, we will make quarterly interest-only payments to Pharmacon for the first 48 months of the repayment period, followed by principal and interest payments, with interest accruing using three-month LIBOR with 125 basis point floor plus 8.25%. Once again, we're excited to partner with Pharmacon, an experienced industry leader committed to supporting innovative biotech companies. I'll now review our financial results for the fourth quarter and full year ended, December 31st, 2021. As Liz and Jeff mentioned, URGEN reported net product sales of Jomido for the fourth quarter of 2021 of approximately $16.2 million, aggregating to $48 million for the full year 2021. This compares to $8 million and $11.8 million, respectively, in the same period of 2020, the increase driven by the launch of Jomido in June of 2020. As Jeff mentioned, we are anticipating somewhat lighter revenues in the first quarter of 2022 than as compared to Q4 of 2021 due to the potential seasonality and deductible resets. In saying that, we are anticipating Q1 2022 revenues to be stronger than Q1 2021 by at least 50% and in line with our expectations and forecasting. Cost of revenues for the fourth quarter of 2021 were approximately $1.6 million, resulting in gross margin of 90% compared to gross margin of 92% in the fourth quarter of 2020. Full-year 2021 cost of revenues were $5.2 million, resulting in full-year gross margin of 89% compared to 91% for 2020. Research and development expense for the fourth quarter and full-year ended December 31, 2021, were $13.1 million and $47.6 million compared to $12.4 million and $47.3 million, respectively, for the same periods in 2020. Research and development expense includes $900,004 million in non-cash share-based compensation expense for the fourth quarter and year-ended December 31, 2021, as compared to $1.4 million and $6.4 million respectively for the same periods in 2020. The increase in R&D expense in 2021 is related to the Phase III ATLAS trial for UGN-102, which was initiated at the end of 2020. Selling general administrative expense for the fourth quarter and year-ended December 31, 2021, were $21.4 million, and $87.5 million, respectively, compared to $22.2 million and $90.2 million, respectively, for the same periods in 2020. Selling general administrative expense includes $4.5 million and $19.1 million of non-cash share-based compensation expense for the fourth quarter and year-end in December 31, 2021, compared to $5.1 million and $21.6 million for the same periods in 2020. Before moving on, I'd like to take a moment to comment on our operating expenses. Since the beginning of 2021, we tripled net product revenues while at the same time exercised effective cost management and fiscal responsibility to allow us to invest in areas of the business that support patients gaining access to our important therapies. As a result, we were able to reduce SG&A in 2021 without adversely impacting our commercial and clinical activities. As we look to the remainder of 2022, we expect consistency in SG&A and higher spend in R&D related to ongoing Phase III and vision trials and anticipated UGN 301 Phase I studies. For the fourth quarter ended December 31, 2021, the reported financing expense related to the prepaid board obligation of RTW's investments was $7.3 million and $17.3 million for the full year. As the transaction closed in May of 2021, there were no similar expense in 2020. The total cash payments that will be made to RTW for 2021 are approximately $4 million. Lastly, as it relates to RTW, the rate on which our payments will be made to them in 2022 will increase from 9.5% to 13% based on the global net product sales of Jomido in 2021. For the fourth quarter year ended December 31st, 2021, we reported a loss of $28.5 million or $1.27 per share. and $110.8 million and $4.96 per share, respectively. This compares to net losses of approximately $30.5 million, or $1.38 per share, and $128.5 million, or $5.90 per share, for the same periods in 2020. The net loss for the fourth quarter and year ended December 31, 2021, includes $5.4 million and $23.1 million, respectively, a non-cash share-based compensation expense. compared to $6.5 million and $28 million for the same period in 2020. We closed the year with $89.8 million in cash, cash equivalents, and marketable securities. This does not include the first tranche of $75 million we received on the term loan facility with Pharmacon. Turning to our financial guidance for 2022, we anticipate full-year 2022 net product revenues from Genlido to be in the range of $70 to $80 million. representing a 46% to 67% increase over 2021 revenues. We anticipate our full year 2022 operating expenses to be in the range of $140 to $160 million, including non-cash share-based compensation expense of $10 to $16 million, subject to market conditions. Lastly, we anticipate full year 2022 financing expense related to the prepaid obligation to RTW investments in the range of $22 to $26 million, of which an estimated $9.1 to $10.4 million will be in cash. Lastly, I'd like to take a moment and address Liz's earlier comments. I'm proud to have played a role in bringing Gemido to market in the development of UGN-102. Both programs have the potential to transform the treatment paradigm of low-grade U2C and low-grade intermediate risk NMIBCs. With a newly strengthened balance sheet and an exceptional team in place, I remain confident in the team's ability to continue executing Urogen's strategic vision. I'd like to thank Liz and the board of directors of the company. I'm excited to transition the CFO position to Don Kim, a very capable and experienced leader who has demonstrated the highest level of professional competence. With that, I'd like to turn the call over to questions. Operator? Operator?

Ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touch-tone telephone. If your question has been answered and you wish to move yourself from the queue, please press the pound key. Our first question comes from Boris Peeker with Cowan.

Good morning, and thank you for taking my question. My first question may be on the Envision studies. Can you comment what it is you need to show ultimately for approval and if there is any kind of meaningful value for partial responders?

Mark, do you want to take that and all that, any commentary?

Yes, sure. Boris, thanks for the question. Well, as I think you know, the current study is almost identical to our Phase II in design and in terms of the target population. So we are lucky to be able to rely on what we saw in Phase II to guide us as to what we might expect in the Phase III. And just to remind all the listeners, In the phase two, the complete response rate was 65% with the durability by Kaplan-Meier at a year of approximately 72%. So, you know, we think that's a good guide to what we might see in this trial. Obviously, we have to do the trial, but we think those are compelling data and helpful in terms of thinking about what to expect from this trial, and I suspect Liz may want to comment as well.

Yeah, I mean, I think, look, we have said all along before we ever saw the results of our first study, our phase two study was, you know, we felt like somewhere around a 50% and 50% durability would be meaningful. The FDA hasn't given us guidance to say specifically you have to hit this number. What they've said is it's got to be clinically meaningful. So what they will do and, you know, we will do, you know, as well is they'll be in contact with key opinion leaders in the urology field to say, do you believe that this is meaningful? And as we've talked about before, likely go to an ODAC, which we feel very good about because we have physicians who've said if it works for any patient, you know, to have the option, you know, we'd like to have the option. So while we can't comment, we actually don't have a specific number for we feel confident that even if we're anywhere in this 50% range and 50% range, that that would be clinically meaningful.

And the second part of my question, is there any kind of clinical meaningfulness in the partial responders? Yeah, sorry about that. Yeah, practically.

Yeah, sorry I didn't. I'm sorry I didn't. And Mark may want to comment as well. But, yes, we believe there is. And actually some of what we're capturing is, is in this study, which we had not captured much before, but we actually went back and looked at some data. And, you know, the ability to get a partial response actually, you know, also allows you to avoid a TRBT and can be managed more conservatively when you've gotten a partial response. That's what we've seen so far in the data. But, you know, we also believe that both for Gemido and UGM-102, that that's an area we need to study. So if they get a partial response, what if you gave you know, two more installations, you know, would that make a difference? So we plan to study that. But to your point, yes, we see a benefit even in the partial responders. Mark, was there anything else to add?

No, I thought that's it. Thanks.

Great. Thank you very much for taking my question.

Thanks, Mark. Our next question comes from Chris Howerton with Jefferies.

Hi, good morning. Thank you so much for taking the questions. A couple from me this morning. First of all, I wanted to know maybe from a commercialization perspective on gel mito. I know a lot of the efforts that you've made, Jeff, in the past has been focusing on clinics and physicians and kind of creating an opportunity for them to prescribe gel mito when and if a UTUC patient becomes available. But I guess I'm curious if you've made any efforts on the patient demand side, if you could make any comments on that. Secondarily, I'd also like to know if you've been able to observe any meaningful changes in practice procedures with relation to either surgical ablations or radical nephrostomy or nephrectomies, excuse me. And then, if I may, the last question, perhaps a parting question for Molly. Just curious if you could give us a little more color as to, with respect to the cash flow break-even thinking in 2025. Thank you.

Daph, you want to take first, and then Molly can chime in.

Sure. Thanks, Chris. Yes, so we are increasing our level of patient marketing for 22 and the end of 21 because, yes, as you pointed out, if patients could be aware of gel mito as an option, that's ultimately what we want to see more of. So we do have more in regards to social media, activation, patient awareness, as much as we can do while being responsible from a resource perspective. Obviously we want everyone to know about this, but given the patient population, We're certainly doing a lot to activate the patients. I do know we have some various things in the offices where patients will go in in the waiting room. They'll be able to scan a QR code, learn more about gel mito. And then we do a lot through both the website as well as recognition, getting them to go to the website for gel mito, and UTUC.com, which is an unbranded site that really does, not just our patients but our physicians, use that as a resource to talk to their patients about their disease. So we are doing more and we'll continue to do more in 22. Regarding your second question, yes, obviously the good thing here is RNUs, what we've seen in market research, are going down. We continue to want to partner with endoscopic resection. So physicians, you know, will use gel mito in different ways. with endoscopic resection in place of. But the good thing that we've seen in the past two, two, three years is radical nephro-urectomies are coming down for patients with low-grade, which is obviously what we set out to do. So hopefully I answered. Molly, do you want to take the second question?

Sure. So as it relates to the cash flow break-even projection by 2025, Obviously, Chris, that's contingent upon our current models for revenues and expenses, but based upon where we currently see the demand for Jomito, we believe that with our current infrastructure and the support that we have from the commercial team that we can get to cash flow break-even by 2025. That does obviously factor in a little bit from UGN 102 in the event we're successful with getting approval by the end of 2024. But as we've always said, we do believe that we can be a standalone business on Gelmido alone. So we feel comfortable that, again, with the funding that we have from Pharmacon and the cash we have on hand, that we have a path to get there.

Okay. Awesome. Well, thank you very much. And, Jeff, yes, that did address my question. So thanks again.

Thanks, Chris. Our next question comes from Paul Choi with Goldman Sachs.

Good morning, everyone. This is Charlie on for Paul. Thank you so much for taking our questions. First question from me is just looking for a little bit more color maybe on the 2022 revenue guidance and wondering what are the pushes and pulls that dictate the upper and lower bounds of that guidance? And then my second question was just regarding the future UGN301 combinations and whether we should be expecting UGN201 to kind of be the priority combination partner there, or maybe we should be expecting some other potential partners coming in in the near future. And then related to the combination trial with UGN301, should we be expecting that any combination arm wouldn't be started until completion of the monotherapy arm with that monotherapy data in hand? Thank you.

So, Jeff, why don't you take the first one, and I'll add any commentary, and then we turn it over, and Mark can take the second question.

Sure. Thanks, Charlie. Yeah, so with regards to the guidance for this year, I mean, obviously one big factor is always COVID-related issues. You know, as I stated, we're starting to get back to a little bit of normal with face-to-face interaction with physicians. That is key for COVID. any drug in this launch phase, but certainly for rare disease. And so anything there that could impact elective surgeries is certainly going to have an impact on the number. That's probably the biggest factor. I think we're going to start to see some additional data from the registry that I mentioned. Hopefully, obviously, that data, once we have that, we'll go out and discuss it. And depending on what it shows, that could certainly give us an opportunity there. And then continuing on that, more data that we have on the Frostamy administration, that continues to grow in as far as the main route of administering versus retrograde. And as we start to generate data there and publish that and get that out there, you could see that grow even further in 22, probably maybe even faster than expected. So those are sort of the highs and lows. But Liz, did you want to comment?

Well, I guess my only thing, Jeff, and you talk about it quite often, is really the depth and breadth of accounts, right? So we have to continue to do both of those. We have to continue to get new accounts on board that, you know, I've said they're going to use. But, you know, the other thing about what Jeff said is not only, you know, from a standpoint of having the rep go in, but it's, you know, it's an installation. So, It's a very high-touch cell, so them being able to go in there and work the account is important. They kind of have to hold their hand, you know, until they're used to the account. So doing both from an adoption perspective, both breadth and depth, which Jeff talks about often. Mark, do you want to just talk about the combination study?

Sure, thanks. So, yes, we will be starting with 301. It's a phase one dose escalation study, and we need to acquire some information from first in human use from that experience. However, our team has developed a very elegant overlapping combination protocol that will permit us to start combinations before the complete conclusion of the phase one with 301. So we will start that before the completion of And as to whether or not we would use 201 first as opposed to another agent, the answer is we are actively exploring that. We do plan to use 201 currently, and we are doing some preliminary in-human work to verify that that's the best thing for us to do. But we are also actively looking at other potential combination partners for 301. So there's going to be more to tell about that within the next year or so. And Liz may want to comment as well.

Yeah, I was just going to say we'll follow the science. So whether 201 will be the primary will depend on the work, you know, the work that we do. But the intention is to have several. So the intention is not just to do a combination with UGN 201, but potentially chemotherapy and other targeted agents, both targeted agents as well as other immuno-oncology agents. So, you know, we think that's what the team is working through now, and the work that we're doing at MD Anderson will, you know, combinations are best appropriate. And, again, the idea is to test quite a few of them so we can see what works best and then move forward with those combinations.

Great. That's very helpful. Thank you all very much.

All right. Thanks. Thank you.

Our next question comes from Ram Salvaraju with HC Wainwright.

Thanks very much for taking my questions. A couple of quick financial ones first. I was wondering if you could comment on the specific revenue level that you expect to be commensurate with achievement of cash flow breakeven in 2025, and if you expect this revenue level to necessarily be above $200 million. Secondly, I also wanted to confirm whether that guidance effectively assumes that you would be able to discharge your debt repayment obligations to Pharmacon, even as a standalone business solely focused on Jelmido. You know, if that's hypothetically a scenario that would also be possible.

Sure. I'll take those, Ram. So first question on the revenue level. So what we've always said is that we believe we can achieve peak market share of around 25 to 35% for Gemido. And if you assume that based upon what we believe and what we've always indicated as a total potential opportunity of about 700 million, you can get to where we see that peak opportunity to be, which is probably right around the range that you're referring to in that 2025 year. And then as it relates to the Pharmacon prepayment, we do believe that the success of 102 would be important for us to be able to make sure that we can make that payoff at that five-year mark. And saying that, you know, Pharmacon is obviously a great partner, and if we feel like we need a little bit more extension, I'm sure we can have a discussion with them at the time. But right now we feel very comfortable that we can achieve that payment in five years. But to your point, we do need to have some movement from the 102 side. in order to make sure we can fully pay that back and stay within the cash flow break-even.

Got it. And then just on 301, I was wondering if you could comment on – well, actually, before I ask the 301 question, I forgot one other thing. Can you comment on potential ex-U.S. opportunities for Gelmido, not necessarily in Europe, which I know is a subject that you've touched upon before, but in other countries simply based on You know, now the knowledge base has been gathered in the United States. It appears to be a more and more accepted product. You know, what could we potentially realistically expect from an ex-U.S. perspective, you know, from a partnership, from a distribution standpoint for the product, you know, in the coming quarters and years?

Yeah, Rob and Liz, I think the priority for us is going to be Japan because we know two things about Japan. One, we know exactly what needs to be done, and we know that we can get good reimbursement. So that will be our priority. I mean, to be honest with you, we've had a lot of interest in, you know, China and, you know, some other smaller, you know, the Middle East. And, frankly, we have to balance, you know, sort of the price, you know, the the revenue we can get, the price that we can get in those markets, you know, with the effort. And, you know, we're still working through that. But we don't – you know, we haven't found yet a good analog that gives us the opportunity to be able to get a decent reimbursement. So we really focus – and which is the reason for the Named Patient Program, right? We did that because what happens is in these markets, and I've experienced this in my past, is – you need champions. You need the physicians and patients to be going to the payers and saying, we want access to this medicine. Then they'll consider, you know, giving you a more innovative price. So we'll continue to work through that. I would say the priority is Japan. Obviously, you know, if we find an opportunity that we, you know, we think it's worth it, we'll absolutely partner. But, you know, most markets around the world we have to be careful about because they're still comparing to a generic. So I think we need to have a little bit more under our belt in the U.S. and get some experience in some of these named patient countries. And then I think we'll go for it in those areas. And we've been talking to a lot of partners, and I think everybody sort of agrees we're on the right track.

Great. And then lastly, on 301, just wondering if you could comment on – let's assume that the Phase I study reads out positively – What implications might this have for future broader utilization of RT gel, not just with a molecule like valifrelimab, but with potential other monoclonal antibodies? And if there's any possible read-through that you could get from this context to not only the utilization of RT gel with molecules beyond valifrelimab in the context of the genitourinary context, but also in potentially other areas of the body where RT gel's unique characteristics might be advantageous.

Yep, you absolutely couldn't say it better myself, but you're right. The work that we do in UGN 301 and combinations will be, you know, a testament to the ability of to give local delivery, right, of medicines. And I think that, you know, we do have many companies sort of watching to see what happens here. You know, urologists treat locally. And particularly these cancers, we're learning more about it. I'd like for Mark to sort of comment about some of the recent, you know, work that we've sort of uncovered that, you know, local delivery, especially, you know, in the bladder area, you know, is, you know, definitely available. I mean, you know, there's definitely benefits to doing that. And so we believe, to your point, specifically in urologic cancers, but even beyond that, and as you know, we've announced some work, you know, with some of the academia in other areas like head and neck and, you know, colorectal cancer. So we do believe esophageal cancer, there are many other areas of the body in which our RT gel works. you know, technology could work very nicely. But, Mark, do you just want to comment on what we're sort of finding out about local delivery, particularly in reotherapy?

Yeah, thanks, Liz. And, Ron, this is a very interesting question and a hot topic for us. Look, I'll just say that we have lately appreciated through our own work and also understanding the work of some others in the area that there may well be an accessible treatment local immune system at the level of the epithelium, which would be very generalizable when you think about locally applied immunotherapy, which, of course, would be absolutely accessible to our platform in a way that could be clinically exceedingly meaningful for a variety of epithelial neoplasms. And, you know, not to gild the lily here, but everybody I'm sure appreciates that cancer is an epithelial disease for the most part. So the ability to interact with the immune system at the level of the epithelium in the context of cancer may be profound, and we are very interested in this topic and working on it hard right now. Thank you very much.

Our next question comes from Matt Kaplan with Leidenberg Thelman.

Hi, good morning, and thanks for taking the questions. Just wanted to follow up on the question. nephosphony tube administration, anti-grade administration of gel mito. Currently, I guess, can you give us a sense in terms of what percentage of procedures use that? And then help us think about the adoption of that route administration and how that impacts potential growth of gel mito going forward.

Sure. Yeah, no, we haven't really commented on the number, but I will say this, that it's higher than we expected given that, yes, it's in the label, but we really didn't have until Katie Murray's paper, we didn't have a lot of good data. As we continue to get more data and go out and able to talk about that, publish it, the reps are equipped with – resources that guide practices that are interested in this. And I would just say that as more and more questions come in, more and more folks are administering the first dose retrograde and then the following five in the clinic through a nephrostomy tube. So I do, as I said in the past, I expect this to continue to grow, and it will grow even faster as we can get out there with more technology. But there is a significant interest. Even physicians who said, you know, at launch two years ago, a year and a half ago, that they wouldn't consider this route of administration have sort of changed their mind, changed their tunes, and they're open to it. So the more discussions that are going on, and the real advantage is to the patient, the convenience of the patient, and the practice. They can do this in their clinic. They don't have to schedule a lot of time. So, yeah, there's certainly a lot of buzz and a lot of interest, and it's our goal to get more data out there, and I do see that growing significantly in 22 as we do that.

Okay, that's helpful. Thank you. And then I guess a question for Mark. Can you talk a little bit about the differences between Envision and the Optima 2 study that you think increases probability of success with?

Thanks, Matt. The studies are really the same. We're targeting a relapsing low-grade intermediate risk population, which is exactly what we did in the Phase II trial. So I think, as I said earlier, I think that because the trials are, except for the size, essentially, and the number of sites involved, essentially identical, I think the Phase II does give very good preliminary guidance as to what we might expect in the Envision trial. It is the same group of people being treated, the same type of patient being treated in an identical manner. So I think we'll have to see what the results look like, obviously, but we are optimistic that the Phase 2 does give us a sense of what we would expect in Phase 3.

All right. All right. Thank you for the other call.

And I'm not showing any further questions at this time. I'd like to turn the call back to Urogen's president and CEO Liz Barrett for any closing remarks.

Great. Thank you. As always, we appreciate your interest in Urogen, and we're building a very unique company. We're really proud of the progress that we've made. So 22 promises to be yet another eventful year, and we look forward to partnering with all of you to bring these patients better options. So, operator, we can disconnect. Thanks again, everybody.

Ladies and gentlemen, we may now disconnect and have a wonderful day.