UroGen Pharma Ltd.

Good morning, ladies and gentlemen. Thank you for standing by and welcome to EuroGen Pharma's third quarter 2022 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 third quarter 2022 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-ended September 30th, 2022. The press release can be accessed 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, Jeff Bova, Chief Commercial Officer, and Don Kim, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These may include statements regarding our ongoing commercialization activities relating to gel mito, the expected benefits of the FDA's expansion of the in-use period for gel mito, our ongoing and planned clinical trials, commercial and clinical milestones in the year ahead, the growth potential for gel mito, the design potential benefits, and commercial potential for UGN-102 if approved, the design, potential benefits, and commercial potential of UGN 301, potential future commercialization activities for UGN 102 if approved, data presentations, expected regulatory filings and timing thereof, future research and development efforts, and our financial and other corporate goals, 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 and latest SEC disclosure documents including under the risk factors heading of our quarterly report on Form 10-Q for the quarter ended September 30th, 2022, filed today. There are caution not to place undue reliance on these forward-looking statements, and your agenda claims any obligation to update these statements. I will now turn the call over to Liz. Liz?

Thank you, Vincent, and thank you, everyone, for joining us today. Looking back on this last quarter, and just as importantly, looking at the quarters ahead, there is much to be encouraged and excited about. Although sales were slightly lower on a sequential quarter basis, year-over-year revenue grew 41% during the third quarter compared to the same period last year. We've come to believe this is reflective of a type of summer seasonality, which in 2021 we associated with the rise of COVID-19 cases. Last year, pest conversions were protracted in July before bouncing back in August. During the third quarter of 2022, Timing of conversions from patient enrollment forms to new patient starts remained longer through August before returning to baseline after Labor Day. Importantly, the rate of decline in revenue was only 3% compared to a more significant decline in same period 2021, reflecting more consistent revenue versus prior year. Jeff will provide more on this shortly, but we expect a return to growth in quarter four. The introduction of gel mitre requires a bold shift in the treatment paradigm, and rate of adoption varies territory to territory. One of the most important proof points of a significant opportunity in low-grade UTUC is the breakout results in certain parts of the country, especially in the northeast and mid-Atlantic regions. These regions show what is possible when urologists have strong clinical conviction and serve as a model for expansion in other parts of the country. Early adopters appear to be embracing gel mito and our RT gel technology. We believe that experience and familiarity is expected to spread, which would positively impact gel mito performance and, importantly, create a more receptive environment for the introduction of UGN-102. We've also learned that in the field, gel mito more closely resembles a medical device cell. Accordingly, we've made several strategic and purposeful changes to our commercial approach based on this and other key learnings, which Jeff will elaborate on shortly. Moving to UGM-102, it's been well established that both types of low-grade malignancies respond well to mitomycin delivery in a gel. I'm pleased to announce that we anticipate full enrollment of Envision, a pivotal Phase III trial with UGM-102 in patients with low-grade intermediate risk non-muscle invasive bladder cancer, as early as the end of this month. We believe the success of this program to be partially de-risk, given the similarities of the diseases, a shared API in mitomycin, which has shown efficacy activity in both forms of low-grade malignancies, and the common RT-gel technology. We therefore believe efficacy activity due to prolonged exposure to mitomycin with gel mito in the upper tract may translate to the bladder. Assuming positive results from Envision, we anticipate filing an NDA with the FDA in 2024, targeting priority review, which, if granted, may potentially result in approval before the end of 2024. If approved, UGM-102 will be the first non-surgical primary therapeutic to treat low-grade intermediate-risk non-muscle-invasive bladder cancer patients, and this is where our experience and foundation with Gemido will prove invaluable. After establishing the use of mitomycin and RT gel with urologists, UGM-102 is expected to have a stronger starting point than gel mito. Delivery of UGM-102 is expected to be much easier for urologists, given it does not require the use of specialized equipment, scheduling of OR time, and is designed to be administered by a doctor or support staff in clinic as an outpatient procedure. Installation of UGM-102 is perceived as a routine procedure. in the urologist's office, similar to other products administered on a regular basis. With a simplified administration and addressable patient population, roughly tenfold that of low-grade UTUC, we expect UGM-102 to have strong and rapid adoption, and it's positioned as its primary driver of value generation for urogen's business over the long term. While geopolitical and macroeconomic forces continue to call for financial prudence we remain confident in our ability to end the year with around $100 million in cash. We continue to focus on capital preservation and investment in our core assets, specifically Delmido sales growth and UGM 102 development, while carefully scrutinizing capital investments elsewhere. Finally, and before handing the call over to my colleagues, I'd like to welcome two prestigious individuals to our board of directors, Mr. Dan Wildman and Dr. Lena Wings. Lena is an emergency medicine physician and has served as a professor of health policy and management at the George Washington University School of Public Health since 2019. She also serves on the boards of several other organizations, including Glockos Corporation, the Bipartisan Policy Center, the Baltimore Community Foundation, and the National Committee on U.S.-China Relations. Dan is a seasoned executive with more than 40 years in the medical device industry. He is currently chairman of Progenitives Medical, and he also serves as a strategic advisor for several medical device and pharmaceutical companies. With Johnson & Johnson, Dan led the Digital Surgery Strategy Initiative, tasked with developing an integrated strategy for robotic surgery, leading to the 2019 acquisition of RS Health. Your gym will benefit greatly from their insight and guidance. With that, I'll pass the call over to Mark to update you on our clinical development programs. Mark?

Thank you, Liz. Before I jump into our clinical update, I want to share results from a recent retrospective analysis published in the British Journal of Urology International. The study was conducted by Dr. Kyle Rose and colleagues and evaluated 32 patients who received at least one dose of gel mito via nephrostomy tube. The study found that 17, or 59%, of patients had no evidence of disease at primary disease evaluation, and did not recur at a median follow-up of 13 months post-induction. Importantly, ureteral stenosis occurred in just 9% of patient study. This multi-institutional retrospective analysis concluded that an integrated administration of gel mito demonstrated a favorable safety profile, including a low rate of ureteral stenosis, and can be administered without general anesthesia. Additional reports of real-world data are anticipated later this year and are expected to support the use of gel mito to treat low-grade UTUC. As Liz mentioned, both our Phase III Envision trial with UGN-102 and our Phase I trial, UGN-301, are ongoing. Envision is our single-arm international multicenter study evaluating the efficacy and safety of UGN-102 as primary chemoablative therapy in patients with recurrent low-grade intermediate risk, NMIBC. There are no approved primary non-surgical therapies for a malignancy that affects approximately 80,000 new patients each year in the U.S. alone. It is also worth restating that for these patients, the current standard of care remains transurethral resection of bladder tumors, or PRBT, a surgical procedure performed by resectoscope through the urethra that requires anesthesia, lifelong surveillance, and is associated with risks of complications and frequent recurrent treatment. Up to 61% of TURBT patients typically experience recurrence after one year, and 78% experience recurrence after five years. 34% to 76% of patients show evidence of tumor on repeat TURBT at two to six weeks. Given a high recurrence rate of low-grade intermediate risk NMIBC, there remains a high unmet medical need for alternative therapies that decrease procedure-related risk and the need for repetitive intervention. We believe that UGN-102, if approved, has the potential to offer a convenient intravesical therapeutic option administered in an outpatient non-surgical setting. We expect the Envision trial to enroll approximately 220 patients across 90 clinical sites who will receive six once-weekly intravesical installations of UGN-102. The primary endpoint will evaluate the complete response rate at three months after first installation And the key secondary endpoint will evaluate durability over time in patients who achieve a complete response at the three-month assessment. We remain confident about the design of the envisioned trial and the clinical potential of UGN-102 based on its similar design to our previously completed Phase 2b Optima 2 study, which included new and recurrent low-grade intermediate risk patients. I'm pleased to announce we anticipate the trial to be fully enrolled as soon as the end of this month with an NDA submission plan in 2024, assuming positive results. In parallel, we continue to advance a single-arm at-home installation feasibility study for UGN-102. In 2023, we intend to share a data readout from the ATLAS trial, which will be included in our planned NDA submission, including complete response, duration of response, and safety data of patients who completed treatment with UGN102. To further build on what Liz commented about in her opening remarks, we are likewise optimistic about the clinical potential of UGN102 because of its similarities to gel mito. Both products utilize mitomycin as their key pharmaceutical ingredient, albeit in a different ratio, and both allow for local delivery and sustained exposure to mitomycin for up to six hours. Importantly, Both low-grade NMIBC and low-grade UTUC show many biological and clinical similarities. We are optimistic that the clinical results demonstrated by gel mito in the kidney could translate similarly to the bladder. Where UGN-102 sets itself apart from gel mito is that it is designed to be instilled into the bladder via urethral catheter in an outpatient setting. We believe that if successful, it may offer a simpler, minimally invasive and non-surgical alternative to TURBT that can be administered in clinic by a urologist or a member of the support staff. Clinicians and KOLs we've engaged have already shown a receptiveness to this potential new treatment option with 96% indicating they are likely to use UGN-102 within two years of approval. Meanwhile, our Phase I trial of UGN301, our in-licensed anti-CTLA-4 antibody for intravascular administration in ArchiGel, continues to enroll. UGN301 is in development for the use in combination with other immunomodulators, including UGN201, our proprietary TLR7 agonist, and other potential chemotherapy and immunotherapies to treat high-grade NMIBCs. This study is aimed at identifying the suitable dose for a subsequent phase two trial. We view UGM301 as a cornerstone checkpoint inhibitor for a variety of potential combination therapies targeting NMIVC and continue to see broad applicability of intravascular administration immunotherapies with RT-gel as a compelling opportunity to explore novel immunomodulatory drug combinations for advancing care in a broad range of clinical indications. in neurologic and specialty cancers. I'll now hand the call over to Jeff to provide a commercial update.

Jeff? Thank you, Mark. As Liz noted, the third quarter saw a slight decline in gel mito sales compared to last quarter. However, on a year-to-date basis, gel mito sales have grown 45% compared to 2021. We remain confident in the long-term success of gel mito and its ability to address a significant unmet need in an underserved patient population. Last year, we attributed third quarter softness to what we believe corresponded to a rise in COVID-19 cases. We now believe that the slowdown is more likely a result of seasonality resulting from a wider conversion rate of patient enrollment forms to new patient starts. Specifically, in 2021, PEP conversions slowed down in July before returning to baseline in August. This year, however, the slowdown continued through August and snapped back September right after the Labor Day holiday. While this pattern was not expected, we do feel better about the consistency we're beginning to see quarter to quarter and expect a return to growth in Q4 based on the number of pests converted in October. Key metrics, learnings from the field, and recent real-world outcomes data continue to give us confidence in the low-grade UTUC opportunities. Adoption metrics continue to support encouraging trends and positive long-term thesis. Activated sites on November 1st were 930 compared to 893 on August 1st. And repeat accounts were 177 compared to 144 for the same period. Additional metrics demonstrate a steady addition of new prescribers each quarter and steady expansion of repeat users as well. Reimbursement remains at approximately 99% across all coverage types. Importantly, several larger academic and referral institutions are coming online, including NYU and LSU, which has taken longer than expected to onboard. From a field operations perspective, several territories and sales reps continue to outperform others. We dug deeper to better understand what's driving their success and came away with several important findings. First, We found that while patient identification remains a key driver, early adopters in these regions tend to be comfortable using Gelmito for all appropriate patients. We also learned that in the field, Gelmito closely resembles a medical device cell within a therapeutic. In response, we have proactively made changes to several underperforming territories and regions to better align with this type of relevant experience. As Liz mentioned, Dan Wildman, who led J&J's med device business, is a recent addition to our board of directors, and we expect his extensive device experience to have a positive impact on our commercial organization. We also continue to look for opportunities to facilitate additional logistical efficiencies and minimize operational complexities for doctors and patients. During the third quarter, we announced the FDA authorization of an extension of the in-use period of gel mito admixture from 8 to 96 hours. We believe this update simplifies treating gel mito and will positively impact adoption moving forward. We're already seeing its positive impact helping to solve several logistical challenges, including allowing for delivery of the admixture the day before the installation and enabling early morning installation. which based on the feedback from the field is preferred by nearly all of our HCPs. Feedback is overwhelmingly positive, and day before delivery has provided confidence in on-time procedures for both patients and doctors. Looking ahead to next year, we anticipate all doses will be delivered at least one day before scheduled installation and for 90% of procedures to take place before 9 a.m., allowing Gelmito to fit in nicely with the HDP schedules. Not only does this benefit current adopters, but it also allows us to reengage with prospective customers who were reluctant or unable to adopt Jalmido as the previous in-use period of eight hours was viewed as too restrictive. This reinforces our optimism for the future of gel mito to enhance treatment of low-grade UTUC and lay the foundation for the potentially much larger opportunity with UGN102 and low-grade intermediate-risk non-muscle-invasive . As Mark mentioned, the publication of outcomes from real-world data most recently in the form of retrospective analysis evaluating administration of gel mito via nephrostomy tube continues to support the use of gel mito in low-grade UTUC. Growing adoption of administration via nephrostomy tube, which represents more than 50% of gel mito installations, continues to offer operational efficiency and benefits to patients as well. HCPs generally recognize the benefits of antegrade administration, which avoids the need of an OR and offers more flexibility with scheduling and installation since it can be performed by a trained nurse and does not require fluoroscopy after placement of the nephrostomy tube. During the third quarter, we continue to implement our phase launch of our U-TRAC registry, which is expected to provide additional insight into the real-world outcomes of UTUC patients treated with gel mito and evaluate its use in clinical practice in the U.S. With that, I'm happy to pass the call over to Don to discuss our financials. Don?

Thank you, Jeff, and thank you, everyone, for joining today's call. I'm pleased to be with you today to review our financial results of the third quarter ended September 30, 2022. Eurogen reported net product revenue of Jelmairo for the third quarter of 2022 of $16.1 million compared to $11.4 million in the third quarter of 2021, representing a 41% increase from the same period last year. Cost of revenue for the third quarter of 2022 was approximately $2 million, resulting in a gross margin of 87% compared to gross margin of 89%, in the third quarter of 2021. Research and development expenses for the third quarter of 2022 were $13.1 million, including non-cash share-based compensation expense of $600,000, as compared to $11.9 million, including non-cash share-based compensation expense of $1 million for the same period in 2021. The overall increase of $1.2 million primarily attributable to the Phase 3 InVision study for UGN-102, research into ingredient scale-up, and production efficiency for gel Miro, partially offset by lower stock-based compensation expense since 2022. Selling, general, and administrative expenses for the third quarter of 2022 were $19.1 million, including non-cash share-based compensation expense over $1.8 million. This compares to $21.6 million, including non-cash share-based compensation expense of $4.5 million for the same period in 2021. The reduction in SG&A resulted primarily from lower stock-based compensation expenses in 2022. For third quarter ended September 30, 2022, we reported financing expense related to the prepaid forward obligation to RTW investment of $4.8 million compared to $6.8 million for the same period in 2021. Interest expense related to the up to $100 million term loan facility with the funds made by Pharmacon advisors was $2.7 million for the third quarter of 2022 As the transaction closed in March of 2022, there was no such expense in the third quarter of 2021. For the third quarter ended September 30th, 2022, we reported a net loss of $25.8 million or $1.13 per share. This compares to net loss of $30.2 million or $1.35 per share in the third quarter of 2021. The net loss for the third quarter of 2022 includes $2.4 million in non-cash share-based compensation expense compared to $5.5 million in non-cash share-based compensation expense in the third quarter of 2021. We closed quarter with $95.9 million in cash, cash equivalents, and marketable securities. During the third quarter, we continue to prioritize our balance sheet in support of our commercial and clinical development activities. We remain cognizant of the challenging capital market environment and maintain a keen eye on capital preservation. Emphasis on prudent and responsible management of our operating capital continues to ensure investment in our core assets, specifically Jeremiah commercial sales growth, and clinical development of UGM-102 as priorities. While we acknowledged the contraction in Jel-Miro net sales, we were able to offset this shortfall by deferring or suspending non-core activities, ending the quarter with $32.2 million in operating expenses, $4.7 million below consensus. Our efforts to manage our cash flow gave us confidence in our ability to end the year with approximately $100 million in cash, which assumes the receipt of the $25 million second trench under our $100 million term loan facility with the Pharmacon Advisors, which is expected to fund on December 16, 2022, subject to customary conditions and deliverables. Looking ahead, we will watch revenue and expenses carefully while also acknowledging the ample avenues of capital potentially available to us. should the need to opportunistically strengthen our balance sheet arise. With that, I would like to turn the call back to Liz for closing remarks.

Thank you, Don. As we look ahead, we are very enthusiastic about the learnings uncovered in several overperforming territories that will allow us to capitalize on a significant market opportunity to increase adoption for Delmito. We're even more bullish on the potential of low-grade intermediate risk on Muslim-based bladder cancer with UGM-102, and look forward to sharing data in 2023 and leveraging our experience to prepare for its potential approval and launch in the not-so-distant future. We thank you for your continued support as we advance both programs in parallel. I'll now turn the call over to the operator for a Q&A session. Operator?

Thank you. If you'd like to ask a question, please press star 11.

Our first question comes from Dipesh Patel with HC Wainwright.

Your line is open.

Hi, thank you for the update. This is Dipesh Patel standing in for Ram Selvaraju. I have a few questions with regards to gel mito and then a few others with regards to the other assets. So beginning with gel mito, what percentage of potential target physicians remains likely to switch to using gel mito with the new installation method?

It's hard to measure. I can tell you that that new installation method has increased since last week spoke from around 40, 45% to now over 50%. And that was without the data from Dr. Rose. We had only nine patients, and now we're looking at 32 patients, which is obviously much more robust. It's certainly that it will help. It will grow. It will make things more convenient for both the physician and the patient. But as far as an exact number, we do believe it's going to help grow Delmido sales overall. But it's a matter of obviously understanding the clinical benefits first, and this will certainly help from a convenience standpoint.

Great. Thanks. And has the utilizing physician population remarked at all upon the enhanced ease of use with the in-use period extension for gel mitral admixture? And how impactful is this?

They definitely have reacted well. Again, it provides an opportunity for those physicians that are used to doing surgeries in the morning. Because we may not have been able to get them a mixed dose until the afternoon, they've had to shift a lot of things around. The territory business managers have done a phenomenal job managing that. In some cases, you know, multiple physicians would give a dose to the same patient just because of scheduling. This will allow flexibility. So, to confirm that the dose is there the day before, it'll allow the representative, if they're in there supporting, to do that in the morning. And then once they support the installation in the morning, they're able to go out and sell and bring gel mito to more patients. And so the response has been immediate. We've already had, I think the number is higher now, five accounts that have gotten the product the day before and administered in the morning when this wasn't possible just a month ago.

Great. That's helpful. Thank you. And then, have there been any new developments with respect to optimizing the value of gel mito in XUS territories?

No. What we've continued to do is a named patient program, but we have not done any work on XUS, mainly, as we've talked about before, because of reimbursement. So, the idea is to sort of get an understanding and appreciation for the value of gel mito. in ex-U.S. territories, and then at that point in time, be able to go to payers and, you know, work with them on being able to get a valuable and feasible, frankly, price for bringing gel mito, you know, into the market. I can just tell you that yesterday I received an article that was done in Australia that talked about a patient that got dosed through the NAME patient program and how compelling it was for her personally. And hopefully those types of stories will start to get out, and then the payers and the governments will be more interested in working with us on being able to provide a price that's reasonable for us to be able to market the products outside the U.S.

Great. Thank you. And then just a couple of questions on some of the other assets. Since you now expect possible completion of enrollment in the UGN 102 Phase 3 Envision trial by the end of this month, when might we see top-line data, and how quickly after that might you be able to file for regulatory approval of the drug in the U.S.?

Yeah, so as we've mentioned before, and just so that everybody understands, the good news is we've actually already recruited already to date recruited the number of patients we need to hit our enrollment target. So it's just a matter of, you know, the shifting from the recruitment to enrollment. And that's why we feel very confident in our ability to do that very shortly here. So that's great news for us and for patients. Remember that these patients, we all have to have, we need 12 months, minimum of a 12-month follow-up post-CR for all patients. before we can go to the FDA. So that obviously won't happen until after the end of 23. And then it's just a matter of the timing on, you know, the database close and stuff. So as we've talked about before, our intention is to work with the FDA and submit in 2024 and then hopefully be able to get priority review and be able to have a six-month review period. So that's the goal at this point. That's what we're working towards. But it's important that when we do go to the FDA, it's more important to ensure that we have all of the appropriate data that will allow them to quickly review and provide approval than it is for us to, you know, try to do it earlier. So, again, that's the time. And we need all of 23 to get us to, you know, to get us to follow all of the patients, which would all have 12 months. And obviously, a lot of patients would have more than 12 months follow-up at that point in time.

Great. I appreciate the added color on that. And then last question, what are the next steps likely to be in the development of UGN 301, assuming positive phase one results?

Yeah, so, you know, what we will continue to do with UGN 301 is, is the study that we have in place, and I apologize, I really should turn this over to Mark to answer, but the intention is really to combine with multiple different chemotherapies and other targeted agents. And so we will cycle through whatever we believe and we see in the data are the most compelling combinations, and those are the ones that we would move forward with. So you know, we continue our enrollment and the, you know, the monotherapy, and then we obviously have to get data on monotherapy before we can start the combinations, which should happen in 2023. Great.

Thank you so much for the update. Our next question comes from Boris Peeker with Cohen.

Your line is open.

Great. I have a couple questions as well. Maybe first let's start on gelmito. How should we be thinking about the expectations for 4Q sales? And also, do you anticipate to issue an annual guidance in early 23?

I'm sorry, what was the last question?

Do you anticipate to issue annual sales guidance in the beginning of 23, maybe JP Morgan or on your 4Q results call?

Yeah, so I think where we are right now, obviously given the Q3 results, we do expect that Q4 will return to growth in Q4. Having said that, I'm not confident in being able to say that we would hit guidance this year. So I think that it's too early to speculate on what we will do as far as guidance for 2023. So I think Q4 is an important quarter for us. The good news is that we've seen a real bounce back, as Jeff talked about, in September and October and November to date. But, again, too early to speculate. And given the variability, I think we, at this point in time, that's all we're going to say about guidance.

Got it. And lastly, when it comes to gel mito administration with nephrostomin, you mentioned it's an increasing proportion of patients. Can you talk about the economics to the physician for traditional administration versus using a nephrostomy tube?

Sure. So in a nephrostomy tube, if they were to go to the surgery center or the hospital, the surgery center or hospital buy and bill for the drug. This gives the clinician the opportunity to go to administer it in their clinic where they would buy and bill for the drug. So From a professional fee, they're probably similar. There's always a little bit more because they're encouraged to give it in the clinic. I don't know how meaningful that is, but it's really the buy and build portion that allows physicians to buy the product in their clinic, administer it in their clinic, versus retrograde. They often go to the ASC where the surgery center would buy the product or the hospital where the hospital would buy and bill for the product.

Got it. Thank you. Thanks for taking my question.

Thanks, Boris.

Our next question comes from Matt Kaplan with Leidenberg. Your line is open.

Hi. Thanks for taking the questions, and good morning. Just can you talk a little bit about how you can translate your success regionally, I guess, in the Northeast to more broadly in across the country and what your strategy is to do that now for Jelmido?

Sure. So, the challenge with Jelmido is that each region, each territory is a bit unique. The Northeast is not like the Midwest. They may have more academic centers. The Midwest may have more larger community accounts. And so, what we've found is very important to look at each region, look at each territory, and decipher the background of the business manager that's really going to be successful. We share, it's a great question, Matt, we share best practices every day. And many of them are implemented in the accounts that are similar to those that are successful. But what business managers will tell you is that each account is unique and they do things differently. And it's important for them to problem solve, to work through the operational logistics, to work through formulary. But, yes, certainly we're sharing best practices. And where they are applicable across the nation, we're implementing those. It is a challenge because not every territory is similar. And so we have to make sure that we get the right person in there and we have to adapt accordingly.

And you mentioned something about thinking about gel mito in certain regions as a device type sale or a drug device combo sale. Have you implemented that aspect of it yet, or do you think that should have an impact going forward?

We have, and I believe it will. You know, in the last year, we've provided more, you know, hospital training. We certainly look at the territories. and try to get the perfect fit for that territory. It does resemble a device, but that doesn't necessarily mean that we have successful territories that have device. It's a mix. It's certainly a mix. What's consistent is hiring folks that can work and navigate through the issues, and more importantly, are motivated by the challenge, quite frankly. As we talked to the business managers, this is hard work. It's a lot of work, but it's very gratifying once they become successful in getting these accounts on board and getting patients treated with Delmito. So, yes, Matt, we recognize this and have implemented some changes, as well as I talked to, you know, making sure that we have the right person in the territory.

Okay, great. That's helpful. Thank you. And then just a follow-up to Boris's question. I guess previously you had given guidance for 70 to 89 revenues for this year. I guess now with more than, was it 46 million in the first nine months? Liz, what are you seeing now in terms of ability to meet that prior guidance?

Yeah, I know as I stated before, you know, when Boris asked the question, you know, I would say that we do not think that we will be able to hit guidance for this year. You know, having said that, I think we feel very good about where we are in Q4 and where we're going. Just to give you some perspective, right, if you had looked at the growth rate from last year, second half over first half, we would have, you know, if that had translated, we would have hit the guidance this year as well and even through, you know, through where we are. But we had a really, really strong Q4 over Q3 last year. I think the good news is what we actually are seeing is more consistency. So while there was a slight decline in Q3, it was nowhere near the magnitude that we saw in, you know, in 2021, which gives us, you know, a lot of confidence in the fact that, you know, we're getting to a more consistent, you know, quarter over quarter experience. And so I think that's important. Also, just to note, you know, part of what Jeff was talking about, I think the other thing that we're very enthusiastic about is how successful some of our territories have been. What that tells us is that the opportunity is there, right? So it's not a situation where we feel like the opportunity isn't what we expected. We actually see and they have proven that it is there. And we know that if we have the lower territories anywhere near the average of the better territories, that this is a significant product, as we've talked about many times. All of those things combined with the changes that Jeff has talked about, you know, really gives us a lot of confidence in the future. It's just a slower, to be really honest about it, it's just a slower growth than we expected it to be. So the inflection point, and, you know, we were in the middle of COVID, and now we're seeing that, yeah, it continues to grow. We continue to get very positive. We continue to see new accounts come on. You know, we continue to see new doctors prescribed. And most importantly, the doctors that are using it, we actually see them adopt this as their standard of care. So they are using this in most of their patients. So all of those elements, you know, again, give us great confidence that the peak where we expect to be has not been unchanged. It's just the growth rate to get there.

Okay. Okay. That's very helpful. Thank you. And then maybe a question for Mark on the UGN 301 Phase 1 study. Can you talk about a little bit of what you're looking for and what would designate a positive result in that phase one study as a monotherapy before you go into the combination arms of that study?

Matt, thanks for the question. So, remember, this study is designed in order to help us identify an appropriate dose for intrafessical administration of this antibody. which, of course, is a very novel thing to be doing in this disease state. So what we're looking for is safety and tolerability in the identification of the dose. We would obviously be interested if we saw an efficacy signal, but that's really not the point of the study currently. It's to help us identify a dose which we can then carry into the next phase of the development program, which would be combinations, as Liz mentioned earlier, with other agents such as our TLR7 agonist or other potential combinations with chemo or immunomodulators. Okay.

Okay. Thank you.

Thanks. Thanks, guys. Thank you, Matt. Our next question comes from Chris Howerton with Jefferies.

Your line is open.

Great. Thank you so much. I think Probably most of the questions at this point have been answered. I was curious what the status of 201 was. And Mark, I guess I'm always kind of bugging you about this one, but what about doing a combination study with BCG in high grade? I can appreciate the fact that there are supply issues, but BCG is already approved and would have a similar mechanism to other TLR agonisms. So maybe I'll just And with a bit of a combative question to you, Mike. Thank you.

Thank you very much, Chris. Liz may want to comment as well. I'll just give you my impression. You know, one of the interesting things about BCG is that although, if you read about it, there are a lot of hypotheses about how it works, it is still an area of active investigation, and it is a bit of a mystery how it does what it does. And as you also know, many people who receive BCG ultimately relapse. So between the issues related to supply, as you noted, because BCG is in short supply and manufacturing is challenged currently, having a real impact on clinical practice, I think personally it would be great, and I'm glad that we're doing this, to identify other novel immunomodulatory combinations which would move us away from a BCG-dependent strategy for this particular population. So while I can agree with you, on a theoretical level that it would be interesting to do. I think practically and from a clinical perspective, it will be very important for us to pursue lines of investigation like we are doing in urogen, namely to seek other important immunomodulatory and potentially other types of therapeutic combinations to address the unmet need in this patient population, which is acute. And as you know, these patients do face some difficult choices when BCG does not work.

Okay, that's fair. All right, that's fair. And so what about for 201 then?

Well, as you know, and as we've previously discussed, we have very interesting non-clinical data suggesting that there is sort of a synergistic interaction between 201 and 301, and that forms the basis for our current development program for the 301 molecule. So one of the combinations we are contemplating and it was tentatively planned is the combination of 201 with 301 once the phase one dose escalation study has provided us with safety and dose information about 301. So, we are still actively developing that as a combination that we'd like to carry forward once we have the phase one data on the antibody.

Okay. Awesome. Thank you very, very much. Appreciate all the answers and look forward to the 102 data from Atlas soon.

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

Your line is open.

Thank you and good morning. My first question is for Jeff. And Jeff, I was wondering if you maybe just help us understand the market, maybe segmenting a little more as to which proportion of potential prescribers are thinking about gel mitre more as a device-based approach is maybe relative to medical oncologists who think about it more from a therapeutic treatment perspective and just help us understand, you know, which additional portion of the prescriber base you might be additionally able to target here?

I think what we've seen is, you know, when device reps are sort of part of the OR team, they're in there, they're assisting whether it's the C&E or nursing team, or they're assisting with the installation. And so I think it's more of a mentality as a company and I think as a business manager. Even if the business manager has a lot of buy and build experience, it's adapting to the institution, the academic institution, or maybe where they're familiar, the clinic or the larger urology group. And so it's more of just a yes, we look at that certainly when we're hiring. But it's also, we look at it with the additional training that we give. I do think the physicians, the accounts that we have that are looking at Gelmito for every patient really appreciate our support. They appreciate the business manager. They appreciate the nurse. They appreciate the field reimbursement manager. All of the support that we provide them is just a little bit more device-oriented. And it's where you see early success, and then you see consistent success. There's a constant effort to try to find patients that will benefit from gel mito. So we're doing that. You've heard me say in the past, we do need to go deeper into accounts. That still holds true. But we need to continue to set accounts up. You heard me mention on the call, NYU has come on board, LSU as well. There are still plenty of accounts large like those. that need to come on board, and we need to provide them the support. And in behaving more like a device, which is we have so many similarities. This is a procedure. This is sometimes in the OR. There are many things that are similar. We're starting to see receptiveness. We're starting to see doors open. And it's just, you know, it's a different type of cell than it's just a pill where you write a prescription that goes through specialty pharmacy. And it's just a different mentality. And when we do that, the accounts, the physicians, really, they notice the difference. But more importantly, we notice the difference because we have more success.

And just for a commentary, Paul, to ask, medical oncologists don't treat these cancers. These are really treated by urologists. So to Jeff's point, you know, you have your large urology group practices. And then you have your institutions. And what we have found to Jeff's point is really when you go into the institutions where you can have some great success, and the large group practices tend to use more than nephrostomy tube administration. And so that's where we're seeing some delineation. But just to be clear and answer your question, it's not really with medical oncologists. It's really with urologists.

Great. Okay. Thanks for that. My second question for you, Liz, or maybe Mark, is just your commentary on thinking about getting priority review for 102 next year. Obviously, you had success with your 101 filing. Can you maybe just comment on what feedback or commentary from the regulators you've received is underpinning that feedback? your view that you could possibly get priority review next year when you do submit the file, I'm sorry, in 24 when you do submit the filing?

Yeah, it's really just based off of the fact that, to your point, we were able to get it for, you know, for UGM-102. We do believe when the agency, you know, agreed with us on the high unmet need in the, you know, with this patient population, and we moved to a single arm study, I think that that shows that they recognize that there's a high unmet need. So when you take those things into consideration, I mean, I think that's why we feel like we have an opportunity to get priority review. Again, using a lot of the same data when you think about it and approach as we did with UGN 101, which is now Joe Maito, so.

Okay, great. Thanks for that clarification. And last one for me is a financial. maybe for Hadan, which is, you know, I think you commented your cash assumptions for this year factor in the second tranche, access to the second tranche for your loan. But can you provide an update on, you know, after that second tranche, what your assumed cash runway is going forward?

Yeah, sure. So we already gave the notice to Pharmacom, which was accepted. So we are going to get funded December 16 this year before the year end. And with that money, we are going to achieve approximately $100 million at the end of the year.

And how long is that $100 million assumed to last you through?

So the $100 million will at least cover 2023, and it's all depending on our JMI revenue and also how we invest and spend the money, right? So we can pretty much, you know, cut a lot of stuff except for our core business, you know, depending on, again, J-minus age and financial market condition goals. And, you know, but we are not going to touch anything about the J-minus age growth and using 102, the R&D and investment.

Okay. Okay. Thank you very much. Thanks for taking our questions. Sure. Our next question comes from Leland Gershell with Oppenheimer.

Your line is open.

Yeah, thanks. My apologies. I joined a bit late, so I missed the prepared remarks. And I was wondering, did you touch on the use of the nephrostomy tube delivery method, how that's been trending? And I think on your last quarterly call, you mentioned that was a favorable aspect with respect to physician uptake and convenience and so forth. Has that been playing out? It seems like with the sales in Q3, maybe that has not been as supportive as you've expected. Could you provide some more color? Thank you.

Sure. So, hi, Leland. Yes, we are now over 50%. I think the last time we reported, we were around 40% to 45%. That over 50% is still without data that Mark just talked about from Dr. Rose. 32 additional patients that we will be able to go out there and discuss with physicians. And I think you're going to see that that'll start in Q4. So, the effects of that will be Q4 moving onward. But it still slowly was going up, even with just a small amount of patients that we had had to reference from Dr. Murray. So, Good that we'll have additional. I think those physicians that were a little reluctant with just nine patients were probably still doing retrograde. I do think with this additional data, you'll see a big increase in nephrostomy tube administration.

Okay. And just to drill a bit further, Nina, it seems like, you know, there are other hurdles to growth and uptake of gelmito. You know, could you put into perspective kind of the role that that the nephrostomy tube, the move to the nephrostomy tube, you know, is offset by other hurdles that still exist, whether it's reimbursement, whether it's other logistical issues, as we think about kind of how Gelmito is doing here, you know, two plus years into the launch.

Thanks. Sure. And I'll couple that with the additional eight-hour stability to 96-hour, how that's going to, eliminate a hurdle that was in place a month ago. So, nephrostomy tube administration allows convenience for the physician and the patient. Let's start with the physician. If we didn't have a nephrostomy tube as an opportunity, the physicians would have to go to the OR, to go to the surgery center. They'd have to schedule time. They may or may not have to have another physician trained to give the dose to the same patient just because it doesn't work out from a timing standpoint. We know that patients would prefer to come to the clinic more than they would the surgery center or the hospital. So, it's just an overall convenience that we now have more robust data to talk about with those doctors who, to your point, saw it as a hurdle. Maybe not a hurdle that they could overcome, but certainly was a hurdle. They're excited about the 8 to 96 hours. And, in fact, just since I answered Dipesh's first question, I know that 15 accounts have now gotten the product before the day before and have administered in the morning. By the end of the week, by today, we're going to hit, or by tomorrow, we'll have up to 20 accounts that are doing that. So, that's probably just as much excitement. is getting that stability increase to allow for flexibility. So if they want to administer in the OR, if they want to administer in the surgery center, they can now do it on their schedule because of this flexibility. So these two operational hurdles that existed really no longer exist moving forward.

Okay, thank you. Thank you, Lance.

That concludes our question and answer session. I'll turn the call over to Liz Barrett for any closing remarks.

Thank you. As always, we appreciate your support and interest in urogen. You know, we continue to forge new ground in the treatment of urothelial cancers as we change some very long embedded standards. So we have much to look forward to over the next 24 months. We'll keep our open dialogue as key initiatives play out. So I hope you guys all have a nice day. And operator, you can now disconnect. Thank you.

This concludes the program. You may now disconnect. Goodbye.