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Edited Transcript of URGN.OQ earnings conference call or presentation 12-Nov-19 1:30pm GMT

Q3 2019 Urogen Pharma Ltd Earnings Call

RA'ANANA Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Urogen Pharma Ltd earnings conference call or presentation Tuesday, November 12, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Catherine Bechtold

UroGen Pharma Ltd. - Director of Corporate Communications & IR

* Elizabeth A. Barrett

UroGen Pharma Ltd. - President, CEO & Director

* Jeffrey Bova

UroGen Pharma Ltd. - SVP of Commercial

* Mark P. Schoenberg

UroGen Pharma Ltd. - Chief Medical Officer

* Peter P. Pfreundschuh

UroGen Pharma Ltd. - CFO & Secretary

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Conference Call Participants

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* Benjamin Shipman Porter

Stifel, Nicolaus & Company, Incorporated, Research Division - Associate

* Boris Peaker

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* Leland James Gershell

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Raghuram Selvaraju

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Syed A. Kareem

Jefferies LLC, Research Division - Equity Associate

* Turner Andrew Kufe

JP Morgan Chase & Co, Research Division - Research Analyst

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen. Thank you for standing by, and welcome to UroGen Pharma's Third Quarter 2019 Financial Results and Business Update Conference Call.

It is now my pleasure to turn the call over to Kate Bechtold, Senior Director of Investor Relations for UroGen Pharma. Please go ahead.

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Catherine Bechtold, UroGen Pharma Ltd. - Director of Corporate Communications & IR [2]

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Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's Third Quarter 2019 Financial Results and Business Update Conference Call. This morning, we issued a press release providing an overview of our recent corporate highlights and financial results for the quarter ended September 30, 2019. The press release can be accessed on the Investors portion of our website at investors.urogen.com.

Joining me on the call today are Liz Barrett, President and Chief Executive Officer; Dr. Mark Schoenberg, Chief Medical Officer; and Peter Pfreundschuh, Chief Financial Officer. Joining us for the Q&A portion of this call will be Stephen Mullennix, Chief Operating Officer; and Jeff Bova, Senior Vice President of Commercial.

Liz will provide a summary of our recent corporate developments, and Mark will share clinical development and regulatory updates. Peter will then provide an overview of our financial highlights for the third quarter of 2019, before we open up the call for questions.

As a reminder, during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of UroGen Pharma's quarterly report on Form 10-Q filed with the SEC this morning and other filings that UroGen makes with the SEC from time to time.

We encourage all investors to read the company's quarterly report on Form 10-Q and the company's other SEC filings. These documents are available under the SEC Filings section of the Investors page of UroGen's website at investors.urogen.com.

In addition, all information we provide on this conference call represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise.

I will now turn the call over to Liz.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [3]

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Thank you, Kate. Good morning, everyone, and thank you for joining our call this morning.

I'd just like to start by acknowledging the announcement that came out yesterday on our licensing agreement with Agenus, and I'll comment about that in a moment. But I want to open today's call with a news that we have completed the submission of our rolling New Drug Application, or NDA, to the FDA for our lead product candidate, UGN-101, for the treatment of low-grade upper tract urothelial cancer, or low-grade UTUC.

The FDA has a 60-day filing review period to determine whether the NDA submission is complete. And the company will communicate the FDA's decision by year-end. UGN-101 is eligible for priority review, and we anticipate a 6-month review and PDUFA date.

To that end, commercial preparations are on track to support a planned approval and launch in the first half of 2020. If approved, UGN-101 will be the first drug for the treatment of low-grade UTUC and represents a significant advance for the approximately 6,000 patients who may be eligible for the treatment with UGN-101. We are working closely with the FDA and have a high level of engagement thus far.

UroGen recently presented data from a final analysis of the primary endpoint from our pivotal Phase III OLYMPUS clinical trial, and Mark will discuss in more detail in a few minutes. We remain very excited by the complete response rate, and more importantly, by the strong 6- and 12-month durability. We are assembling an experienced commercial team and developed a strong branding and plan to ensure rapid uptake and adoption.

2019 has been a busy year for this team as they've gathered intelligence and built programs to ensure the seamless integration into the urology practice. As a reminder, we are planning for a nimble sales force of approximately 50 representatives to cover 90% of the patient potential, and we believe that this force will be able to swiftly and effectively reach our target urology practices. The management team is on board, and we eagerly anticipate the start of the complete team in January.

In addition to the sales reps, we will have a small team of nurse educators to provide training and support around instillation as well as field reimbursement managers to ensure access and reimbursement.

Earlier in 2019, we hired a team of MSLs who have appropriately engaged with physicians, interested in learning more about UroGen and our technology. Additionally, we launched an educational campaign to establish the unmet need in low-grade UTUC, filling a void among all stakeholders, including clinicians and patients. Based on recent market research, we have learned that 88% of urologists desire a new and differentiated treatment option for their patients. And current awareness of UGN-101 is 70%, up from 13% a year ago.

As we navigate the world of access and reimbursement, we are pleased with the recent progress at CMS to move to a quarterly review for permanent J-codes and are hopeful that this will be enacted prior to our approval. Regardless, we have developed access programs to support offices and patients and ensure that any patient in need of our medicine will be able to access it. We will be prepared for a successful launch by January, and our team is looking forward to bringing UGN-101 to patients and physicians.

Beyond our lead product therapy, we're accelerating development of our next potentially transformative candidate, UGN-102, for the treatment of patients with intermediate risk low-grade non-muscle invasive bladder cancer. We were pleased to recently share positive complete response data on over half of the patients from the Phase IIb OPTIMA study. In the interim analysis, we observed a complete response rate of 63%, with 20 of 32 patients achieving a CR.

We completed enrollment of the Phase IIb OPTIMA II trial ahead of schedule and will continue to follow the patients with an intent to report durability data at appropriate intervals. Mark will talk more about the significance of this data to this large patient population of approximately 80,000 patients. But it's important to note that patients with intermediate risk low-grade non-muscle invasive bladder cancer, have no treatment options aside from repetitive surgical resection via a transurethral resection of bladder tumor, or TURBT. Following the interim look at the data, we are requesting a meeting with the agency in the first quarter of 2020 to discuss our registrational path for UGN-102.

Based on previous discussions with the FDA, we are preparing a protocol for a head-to-head study of UGN-102 versus TURBT with a recurrent free time as their primary endpoint. As a leader in the low-grade space, we are focused on delivering UGN-101 and UGN-102 to patients who are in need of innovative nonsurgical options. We believe that the peak revenue potential of these products alone could be greater than $1 billion, providing a strong foundation to build a long-term sustainable growth business.

As a natural progression of our pipeline, we are very excited to announce the exclusive worldwide license agreement with Agenus to develop and commercialize zalifrelimab, AGEN1884, an anti-CDLA 4 antibody in combination with UGN-201 for the treatment of urinary tract cancers via intravesical delivery. Zalifrelimab is currently being evaluated by Agenus as a monotherapy in PD-1 refractory patients. The initial indication for development will be high-grade non-muscle invasive bladder cancer supported by the encouraging preclinical data we recently shared. This agreement with Agenus builds upon our leadership in uro-oncology and leverages the expertise and capabilities we have built with UGN-101 and UGN 102. We are preparing for success and are in a position of strength today as a result of extensive planning and diligent efforts across our nimble company. With completion of the NDA submission, recent data updates and the license agreement, we have taken a major step forward in our mission to bring patients unique solutions that overcome barriers to treat specialty cancers and neurologic diseases.

I'd now like to turn the call over to Mark, who will discuss our clinical development programs in more detail. Mark?

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [4]

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Thank you, Liz. Starting with UGN 101, a final analysis of the primary endpoint for our pivotal Phase III OLYMPUS trial demonstrated a 59% complete response rate in patients with low-grade UTUC, which was consistent with our previously presented results.

Durability of response was estimated by Kaplan-Meier to be 89% at 6 months and 84% at 12 months after primary disease evaluation. The estimated median time to recurrence was 13 months. And 34 of the 71 patients treated in this study were initially characterized by the treating physician as having endoscopically unresectable tumor. These are the patients who, according to the standard of care, would be candidates for immediate kidney removal. There are 41 patients who have entered follow-up, which is still ongoing.

The most common treatment-emergent adverse events included ureteral stenosis, urinary tract infection, hematuria, flank pain, nausea, dysuria, renal impairment and vomiting. The majority of these were characterized as mild to moderate in severity and transient. These adverse events are familiar to urologists given the disease being treated and the instruments utilized.

We have been frequently asked about the potential to re-treat patients with UGN-101. To that end, we have initiated a retreatment protocol as an extension to the OLYMPUS trial, and the study is ongoing.

Looking at UGN-102, we are very encouraged by the initial CR data from the Phase IIb OPTIMA II trial in patients with intermediate risk low-grade non-muscle invasive bladder cancer. In this cohort of 32 patients, 63% or 20 patients achieved a complete response. In the interim analysis, the most common treatment-emergent adverse events observed were dysuria, frequency of urination, fatigue, hematuria and urinary tract infection. The majority were mild or moderate and transient. It's important to highlight that intermediate risk low-grade non-muscle invasive bladder cancer is emerging as a specific clinical entity characterized by frequent recurrence that is difficult to control using standard of care interventions.

Intermediate risk disease has a number of distinguishing features, including multifocality or tumors greater than 3 centimeters and rapid rates of recurrence. The contemporary standard of care for these patients is repetitive TURBT. A few patients in the U.S. receive adjuvant intravesical chemotherapy. The end result is a population of patients, perhaps, as many as 80,000 annually who are consigned to chronic surgical intervention to manage their bladder cancer. Based on the data observed in the interim analysis, we believe UGN-102 has the potential to have an immediate impact and provide these patients with a first-line, nonsurgical option for the treatment of chronic relapse.

We plan to review trial design options for a pivotal Phase III trial of UGN-102 with the FDA in the near future. As you read in the release, and Liz mentioned, we are excited to add an anti-CTLA-4 antibody through our portfolio to study in combination with UGN-201, our TLR 7/8 agonist in high-grade non-muscle invasive bladder cancer, based on encouraging preclinical data we shared in September. We are currently designing Phase I clinical trials for patients with high-grade non-muscle invasive bladder cancer, and we'll provide further details on this program at a later date.

As a practicing urologist who has spent his career treating patients with urinary tract cancers, it is exciting to be part of a program bringing novel therapies to patients who have seen little innovation in the past 20 years.

Our portfolio of UGN-101, UGN-102 and the combination of UGN-201 with zalifrelimab establishes UroGen as a leader in neurologic cancers.

And with that, I would like to turn the call over to Peter, who will discuss the financials.

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Peter P. Pfreundschuh, UroGen Pharma Ltd. - CFO & Secretary [5]

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Thank you, Mark, and good morning to everyone on today's call. UroGen is well capitalized to advance our clinical development programs as well as our commercial planning efforts in preparation for a potential U.S. approval and launch of UGN-101 in 2020. We closed the third quarter of 2019 with $221.7 million in cash, cash equivalents and marketable securities.

For the third quarter and the 9 months ended September 30, 2019, we reported a net loss of $22.3 million or $1.06 per share and $66.2 million or $3.25 per share, respectively. This compares to net losses of approximately $20.5 million or $1.28 per share, and $51.9 million or $3.30 per share for the same period in 2018. The net losses for the third quarter and the 9 months ended September 30, 2019, include $7.2 million and $21.9 million, respectively, in noncash stock-based compensation expense.

Research and development expenses for the third quarter and the 9 months ended September 30, 2019, were $9.5 million and $29.2 million, respectively, compared to $9.6 million and $25.5 million for the same periods ended September 30, 2018, and included $6.4 million and $9.1 million in noncash stock-based compensation expense, respectively. Excluding stock-based compensation expense, the year-on-year increase from 2018 to 2019 was attributable mainly to costs associated with UGN-101 Phase III clinical trial, increased clinical activity for UGN-102 Phase IIb clinical trial and an increase of head count and the related costs supporting increased clinical trial activities.

General and administrative expenses for the third quarter and 9 months ended September 30, 2019, were $14 million and $40.5 million, respectively as compared to $10.7 million and $27 million for the same period in 2018 and includes $15.5 million and $12.7 million in noncash stock-based compensation expenses, respectively. The increase from 2018 to 2019 was attributable mainly to increase in personnel and related costs to support our growing business, an increase in commercialization infrastructure and services and an increase in consulting and other outside fees as well as an increase in stock-based compensation expense.

As of September 30, 2019, we had approximately 20.9 million ordinary shares outstanding. Including the recently announced Agenus deal, the company is still on track to end the year with a net loss for the year in a range of $100 million to $110 million, which is expected to include noncash stock-based compensation expense in a range of $28 million to $30 million, subject to market conditions.

Based on our current plans, we still project our cash balance to carry us through a successful launch of UGN-101 and well into 2021.

With that, operator, I would like to turn the call over for questions.

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Questions and Answers

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Operator [1]

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[Operators Instructions) And our first question comes from Eric Joseph from JPMorgan.

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Turner Andrew Kufe, JP Morgan Chase & Co, Research Division - Research Analyst [2]

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This is Turner on for Eric. Just heading into the FDA meeting in 1Q '20 to discuss the pivotal Phase III 102 study. I'm just hoping you can elaborate on the choice of recurrence-free time as the primary endpoint instead of 6- or 12-month CR rates, and whether you test for both noninferiority or superiority to TURBT. And then additionally, would you plan to enroll patients who are treatment-naive? Or would you also include patients who have relapsed post TURBT?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [3]

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So great questions. As you know, we share the data from 102 as soon as we actually had the data available. So right now, we are in the process of putting together our report that we need to send down to the agency prior to requesting a meeting. So that's happening right now. And we expect that in the next week to be able to send our request down to the agency. I think it's important to note a couple of things. One, we actually met with the agency over a year ago before we started UGN-102. And the agency -- the direction from the agency has been around that we can do a head-to-head study versus TURBT. To your point, it will be recurrent-free interval.

So it is about time. It's not about CR rate. That was always a discussion with the agency. And I know -- I think there's been some misunderstanding about that, but it would be recurrence-free time frame. So time to recurrence. So we believe, given that in the high recurrence rate of the patients who have this intermediate risk that we have a very high probability of success of a superiority study, but we also will make sure that the study is -- becomes both a superiority and a non-inferiority that allow us 2 shots on goal to get an approval from the FDA. So to answer your questions, yes, we expect to go down. It depends on when the agency gives us the meeting, but we expect it to be the first half of the first quarter. We are already -- the protocol is close to being finalized. When we send the briefing documents down to the FDA, we'll have our proposed protocol, which will be a head-to-head study against TURBT with the endpoint being recurrence-free endpoint. So we will enroll both -- we will allow enrollment of both naive and recurrent patients. Just for your information, about 80% of the patients in the 102 study were recurrent patients, but we did have about 20% patients naive. So we would allow that as well. So I think that captured all of your questions, but if it didn't, please let me know.

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Operator [4]

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Our next question comes from Derek Archila from Stifel.

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Benjamin Shipman Porter, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [5]

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This is Ben on for Derek. Just wondering if you can share some thoughts on what stood out to you about 1884. And then was anything else looked at?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [6]

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I didn't catch the first part. What about 1884? I heard that second part was, anything else considered, but what was the first question?

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Benjamin Shipman Porter, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [7]

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Yes. Just what -- if you can share some thoughts about what stood out to you about 1884.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [8]

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Yes. I think we spent a lot of time, and we did look at many options and different types of partnership arrangements and different access, but we felt like the Agenus 1884 compound allowed us to own the CTLA-4 within our portfolio. And that was something that we were very interested in. So being able to manage and lead both the development and commercialization actually own it in the space of local delivery and uro-oncology, we thought, was really important. A lot of due diligence as you can imagine with the molecule. And we feel very comfortable in -- between our own internal team and external advisers. We believe the molecule is a great molecule. We believe -- have long experience. I think everybody does at CTLA-4. And I think we all understand that CTLA-4 is a great medicine for patients, but systemic delivery of it also has some side effects that has -- unfortunately caused either dose-limiting toxicities. So patients are -- patients not able to take the medicine. So we feel like in -- again, our advisers that a local delivery of a CTLA-4 in this context is a great option for patients. And we believe we can get a good effect dosed with CTLA-4 without some of the systemic side effects that you typically see with CTLA-4. So sure, we did diligence around -- across the board on everything that was out there and came to the conclusion that it was a great fit for us. And I just want to comment that the Agenus team has been great to work with. We see them also as a good partner, and we're excited to bring this into our pipeline and into development for patients.

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Operator [9]

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Our next question comes from Ram Selvaraju from H.C. Wainwright.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [10]

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So I just wanted to clarify when you think you might get potential additional certification from CMS once UGN-101 has been approved? In other words, the timing of the assignation, for example, of the J-code.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [11]

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So typically, what happens, as you know, with CMS, they used to do it just once a year. And they've moved -- they actually are officially trying to formalize quarterly review. Although we know that they have already actually done quarterly reviews on some medicines that have been approved. So typically, they would look at that once a quarter. So we would expect 6 months to be on the conservative side, frankly, that we should be able to get a permanent J-code within 6 months. Having said that, I think it's also really important to note -- and Jeff's also on the line if you have any further questions about this, but that because of these procedures are done in the institution or in the surgery center, they are also eligible for a C-code. And we will be able to get a permanent C-code within the first 3 to 6 months. So we're basically conservatively saying that within 6 months, we would be able to have a permanent C-code and/or J-code for UGN-101.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [12]

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So this is -- just to clarify, within 3 to 6 months of approval?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [13]

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Yes. Correct.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [14]

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Okay. And then with respect to the broader OLYMPUS study data set, have you received any additional feedback from potential utilizing physicians regarding specifically the safety profile of UGN-101?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [15]

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Mark, do you want to comment on that?

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [16]

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No -- Yes, actually, what we received is more of positive feedback that, in fact, the AEs that were reported are expected in the context of treating this disease with contemporary technology. So what we've heard from doctors is that, in fact, this is exactly what they would expect. And none of the adverse events reported would represent a barrier to utilization.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [17]

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Okay. Great. And then with respect to the Agenus molecule and how you plan to deploy it going forward, I just wondered if you could give us some additional granularity on how you are thinking about deploying this checkpoint inhibitor in the context of urothelial cancer beyond potentially combination with UGN-201. And also if you could comment on the relative positioning of your forays into immuno-oncology relative to the systemic administration of checkpoint inhibitors, like, for example, the NIVO+ IPI combinations in urogenital cancers.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [18]

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Yes. Sure. Mark, do you just want to talk about what our plans are initially with AGEN1884, and then we can talk more broadly about your question?

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [19]

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Sure. The first approach, obviously -- and I think this is pretty well-known from things that Liz has already announced is to deal with the problem of high-grade non-muscle invasive disease, where it represents a real conundrum for physicians, particularly those patients who recur or demonstrate refractory behavior in the presence of BCG, which is the standard of care for this group. So our first approach is to deal with that unmet medical need. And so we will be working on the combination we reported on at our recent Investor Day because we have very strong reproducible preclinical information that suggests that the combination of 102 -- excuse me, 201 with 1884 like molecules in a murine setting are very potent and actually prolong survival in the model system. So that's our first attempt to advance this program.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [20]

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Yes. And I think beyond that, we actually don't have concrete plans about where we will take it. But we thought it was important to have the ability to -- given the data with UGN-201 or TLR 7/8 agonist in combination with the CTLA-4, we think that there's potential applicability beyond high-grade non-muscle invasive bladder cancer. And to your question around the competitive landscape, this is a very different approach to anything that's out there today, right? There are a lot of systemic PD-1 checkpoint inhibitor studies happening in this space, but we are the only ones that will be looking at this delivery mechanism for both TLR 7/8 in combination with CTLA-4. And just to be a little bit more finer on the point, our plan is that we would use our RTGel proprietary technology with CTLA-4, and then the TLR 7/8 would be just an instillation. So we have the ability to utilize our technology that no one else actually has access to. So we think that this is a unique approach for the high-grade non-muscle invasive bladder cancer, and that we will have the R&D team looking beyond that. But that's where we have our data today, and we'll look to see if there are other applications outside of that.

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Raghuram Selvaraju, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [21]

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And then just as a clarificatory point, based on what you were just saying, Liz, to what extent do you have a privileged intellectual property position with respect to the principle of localized delivery of an anti-CTLA-4 or checkpoint inhibitor as it were, whether in combination with a drug like UGN-201 or just directly?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [22]

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Yes. So our patent family is within our RTGel's technology. So clearly, the CTLA-4 in combination with our technology is something that we'll continue to protect from a patent standpoint, and where we're able to continue to broaden that, we will. But today, our patent protection is really on our Gel, and so it's 2031 to 2033. So we have a nice ability to protect that going forward.

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Operator [23]

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Our next question comes from Boris Peaker from Cowen.

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [24]

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My first question is on the planned Phase III study of 102. I'm just curious if we assume that we'll be using TURBT as a control, which is kind of the current base case assumption. What do you anticipate the CR rate to be in that control arm?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [25]

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Mark, would you like to talk about that?

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [26]

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Sure. As we've talked about before, this is a group of people who have a very high rate of recurrence in a year. And so we would expect, based on published literature and also our internal experience, then in the control group, the recurrence rate of the year would be somewhere between 50% and as high as 80%. So it's a group of people whom we would largely expect to recur given their treatment with the standard of care.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [27]

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But I think you're -- the question was really around -- is that your question, Boris? Or was it really around an initial CR?

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [28]

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Well, that's I was going to say. There's an initial CR and then there's 12 months durability. So kind of -- I want both.

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [29]

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Sorry. Okay. Well, so as you -- as Liz mentioned earlier, the focus of that trial will be on durability. But with respect to CR, I think it's important to step back and think about one other piece of information that doesn't get widely discussed in these conversations, which is that although transurethral resection is considered the gold standard for the primary treatment of this, the CR rate is, in fact, not 100%. So we would expect, based on published literature with, for example, augmented transurethral resection technology, that the CRA would probably be somewhere in the order of 80% because we know that there is a stable recurrence rate when white light cystoscopy is used during transurethral resection for the control group. So I think you need to think about that when you think about what the results would look like for the "experimental" or clinical trial group.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [30]

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Yes. It's also -- I just want to note the focus on CR is not the focus, right? It's not with -- I mean it's important, the initial CR. But even with UGN-101, UGN-102, if you can't get the durability of response. So if you go in with a TURBT, even if it's 100%, which we know it's not, we know it's closer to 80%, if their patient is back in 3 months, the initial CR is not very helpful, right? And so the reason that this patient population has such a high unmet need is because, unfortunately, they recur very quickly and very often. And we know from -- again, as Mark said, from the literature as well as the physicians that we've spoken to that everyone has those patients. And this is an elderly patient. And then at some point, you're just -- you're doing more harm than good by continuing to have these repetitive TURBT. So the good news is that, that both the EAUA (sic) [EAU] and the AUA have come up with very specific guidelines as to who these patients are. So you can identify them upfront that they're likely to recur. But then again, as I mentioned before, the majority of our patients in our study were recurrent patients. So a patient comes in, they recur 3 to 6 months later, and that is likely to be the majority of our patients which, frankly, is the biggest patient population because that's more of the prevalent pool than the incident pool of this patient population.

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Boris Peaker, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [31]

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Great. And my last question is, you've mentioned in the past a potential path forward with a single-arm study design for bladder cancer, is that still a possibility? Could you just comment on that?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [32]

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Well, I think that's the conversation we want to have with the agency, right? And frankly, I think I probably did not do a good enough job, having everybody understand that we know from the agency already in our discussions, that we can do a head-to-head versus TURBT. We can do that. We're writing the protocol. We're on -- protocol's almost finalized. Again, we're requesting the meeting with the FDA. We feel very strongly there won't be any issues with that. The question that we had is given the results are much stronger than we expected them to be, and we'll see how that plays out over the next few months, if they maintain -- if we have a good durability then we would want to talk to the agency to see if there's a faster path to making this available to patients, whether it's a single-arm study with a control real-world evidence study or whatever it might be, but we would want to do that. But we're not going to delay the start of our head-to-head study. But we do want to have that conversation with the agency. You never know. We think that the likelihood, based on the conversation we've had with them in the past, they want to see a head-to-head study. I think that they also don't really understand. We need to educate them around this intermediate risk patient, which is a patient that has a high probability of recurrence and likely recurs within a few months. So we want to have that conversation with them. So is there an opportunity? Sure, there is. But what do we know that we can do is a head-to-head study with TURBT, and that's what we're moving forward with.

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Operator [33]

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Our next question comes from Leland Gershell from Oppenheimer.

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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [34]

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Also have a couple of questions on -- 1 or 2, I guess, for Mark. If you could tell us what you may think the required sample size might be for the head-to-head study in terms of number of patients need to be adequately powered for that endpoint? And also, if you may have any further clarity on when we might see the next reveal on the current OPTIMA study? And then I have a follow-up.

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Mark P. Schoenberg, UroGen Pharma Ltd. - Chief Medical Officer [35]

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So I think the answer to the first question is, we're still working on it. And I think Liz has really emphasized the fact that we're coming down the final stretch of working on that protocol, obviously, trying to balance non-inferiority and superiority trial designs as they impact power. So we know that this is going to be a trial that is going to involve hundreds of patients. The question is specifically how many, and we're working on that now, and I think we'll have more clarity on that once we've had our opportunity to finalize the design and then talk to the agency. That's probably about as much as I can say.

And then in terms of the additional information about OPTIMA II. I think I have to defer to Liz on timing, but we are advancing that program, and we know that we're going to have a lot more data on the durability of that cohort in the first half of 2020.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [36]

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Yes. I mean I think what we'll do is we'll see how the data plays out. And when we feel like we have enough data that is meaningful, we'll share that data. So we won't be shy about sharing it. But we want to make sure that when we do, we have enough to make it relevant.

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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [37]

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Okay. And then one question on 101, as we look toward commercial next year in addition to modeling expense for selling in terms of sales force infrastructure. I also wanted to hear any commentary you may have about other expenses that may relate to logistics, given the nature of the product, mixing requirements and so forth.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [38]

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Yes. I'll just answer it. I know Jeff's on the line, but since you're really specifically asking about expenses, and then Peter can comment if you have any other questions. We do have, obviously, expenses within our supply chain, right? So as we've talked about before, a very key strategy for us is ensuring the ease of use, which means that it will -- our supply chain will require us to go to a specialty distributor and then to a mixing partner, which is fairly typical for these types of products. And so all of those would be included in our cost of goods. And so we are looking to have that. So it's a big part of our strategy. I wouldn't say it's like overly expensive. It's very reasonably priced to be able to do it. It makes a lot of sense because, again, we think that key to early adoption and quick adoption will be us making it as easy as possible on the physicians.

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Operator [39]

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Our next question comes from Chris Howerton from Jefferies.

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Syed A. Kareem, Jefferies LLC, Research Division - Equity Associate [40]

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This is Syed in here for Chris. The first question that I had was really a clarifying one on your comments for the 102 pivotal. Did you say that you were trying to make it both a non-inferior and superiority study? And if so, could you please comment on how that would work? I'll start there.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [41]

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So yes, what I -- I did say that. I did say that we would want the ability to be able to have both a superiority and a non-inferiority standpoint. If you -- endpoint, I'm sorry. If you -- and this has happened many times in the past, but it's basically when you look at it. And when you do a review of the data. And if the data is -- this is a time bound as we've talked a lot about. So the longer that you follow these patients, the more likely we are to be superior in our case. And -- but you can get to a point where if you want to look at a similar recurrence-free rate, you could potentially have a claim of non-inferiority. So it's easy to design a study. They've been done many times where you have both a superiority and then are able to follow for a non-inferiority. So likely you would have a "non-inferiority" earlier and then superiority later. But we just -- we want to make sure, again, that we cover all of our bases. Having said that, we feel pretty strongly that we're going to get to have a superiority, right? We've seen the data, we shared with you the data, the durability looks good. And if that holds up, then we think that is a very high likelihood that we'll have a superiority study. Again, I guess, another point, just to add on that is if you have a non-inferiority, from an efficacy standpoint, clearly, AE management and the sequela associated without actually having multiple TURBTs is another area in which we believe that we will have a benefit versus current standard of care. So I hope that's helpful.

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Syed A. Kareem, Jefferies LLC, Research Division - Equity Associate [42]

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Yes, that's very helpful. But the one remaining question I have as it relates to that is that if you are open to the possibility of both, does that mean that you are trying to enroll for the non-inferiority. So I guess what I'm saying is are you trying to enroll the larger patient population versus what you would need to for superiority trial?

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [43]

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We haven't seen the data -- the numbers yet. So we'll have to make that decision. The -- as I said, the team is finalizing the protocol. We're working with a couple of external statisticians that will make sure that we understand exactly what we need. So that will be dependent on the number of patients, to your point.

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Syed A. Kareem, Jefferies LLC, Research Division - Equity Associate [44]

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Got it. And the last question that I had was on the 101 commercialization. Thanks for providing all the color earlier, but I kind of wanted to know what were the remaining steps to get prepared for this commercial launch? You said you're going to be prepared by very early next year. So I'm curious to know what the last remaining steps are.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [45]

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Sure. Absolutely. And we have Jeff Bova. He's on the line. He's our Head of Commercial. So Jeff, can you take that question, please?

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Jeffrey Bova, UroGen Pharma Ltd. - SVP of Commercial [46]

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Sure. So as Liz alluded to earlier, we will have the field force hired by early mid-January. So that's a step. Once we bring them on board, they'll go through training, background on the disease. Once we have a label, there will be a final training with regards to the label. While they're -- when they brought on, they'll also do some account profiling. So they'll call on the various accounts, understand the logistics, how things work. So we're able to, if approved, immediately begin to promote the product into the practice as another option for patients. We also -- as right now, from a marketing standpoint, we're finalizing our messaging campaign. We're getting pieces ready for journal ads that, if approved, we'll say, now approved, everything will be in place. From a market access standpoint, we've already chosen the hub. Our hub will be how the customer or provider order the product. So the hub is already chosen as well as our 3PL and our specialty distributor. So those are all in place now. And once -- as we move closer to launch, we'll be able to accept -- like I said, if and when approved, we'll be able to take an order through the hub and get it into -- or get it to the provider's office.

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Operator [47]

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I am showing no further questions at this time. I will now turn the call back over to UroGen's President and CEO, Liz Barrett, for closing remarks.

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Elizabeth A. Barrett, UroGen Pharma Ltd. - President, CEO & Director [48]

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So thank you, operator, and thanks to everybody for the questions. I think it's a very exciting time. As you've heard this morning and in our announcement yesterday, I think with the addition of the CTLA-4, Agenus 1884 to our pipeline, you can see that we're really covering the gamut of uro-oncology. We've got UGN-101. Now we have filed. Expectation is to launch midyear next year, UGN-102, which will go into a pivotal study next year. And then now with the addition will be -- it will begin to advance UGN-201 or TLR 7/8 agonist in combination with the local delivery of CTLA-4 in high-grade disease. So an exciting time for us and a nice complementary pipeline to move forward.

So again, we couldn't be more excited as we grow our position as a leader in uro-oncology and build value for both our shareholders and importantly, bring new innovative unique treatments to -- options to these patients in areas of high unmet needs. So we'll continue to update you as milestones come through for the remainder of this year and into next year, and we thank you for joining our call and your continued interest in UroGen. You can disconnect now, operator. Thanks to everyone.

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Operator [49]

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Thank you, ladies and gentlemen. You may now disconnect.