UroGen Pharma Ltd. (NASDAQ:URGN) Q3 2023 Earnings Call Transcript
UroGen Pharma Ltd. (NASDAQ:URGN) Q3 2023 Earnings Call Transcript November 14, 2023
Operator: Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the UroGen Pharma Q3 2023 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Vincent Perrone, Head of Investor Relations. You may begin.
Vincent Perrone: Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's Third Quarter 2023 Financial Results and Business Update Con Call. Earlier this morning, we issued our third quarter press release and filed our 10-Q where you can find details for our financial and operating results. Both documents can be accessed on the Investors portion of our site at investors.urogen.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 related to JELMYTO, our ongoing and planned clinical trials; commercial and clinical milestones; market and revenue opportunities; our commercial strategy and expectation as well as potential future commercialization activities for UGN-102, if approved; anticipated data; regulatory filings and decisions including UGN-102, potentially receiving priority review.
UGN-102 being the growth driver for UroGen, if approved; future research and development efforts; our corporate goals and 2023 financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of potential risks can be found in our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements, and UroGen disclaims any obligation to update these statements. I'll now turn the call over to Liz. Liz?
Elizabeth Barrett: Thank you, Vincent, and welcome to everyone joining us today. Before we remark on the quarter, I must mention the October 7 attack in Israel and its impact on our Israeli colleagues, partners and investors. The safety of our employees is and will continue to be top of mind. With regard to any potential impact to our business operations, I want to assure our shareholders that while we have a portion of our workforce based in Israel, we have robust contingency plans and international partnerships in place to sure the continued smooth operation of our business. As a result, we do not anticipate any significant impact on our business or operation. Finally, we hope and pray for Peace to return to the region as soon as possible.
I'll now turn to the quarter. Q3 2023 was one of the most important quarters in UroGen's history. During the third quarter, we shared extraordinary top line results from our Phase III clinical trials evaluating the use of UGN-102 to treat patients with low-grade intermediate-risk nonmuscle-invasive bladder cancer. Both the ATLAS and ENVISION trials met their primary end points, demonstrating meaningful and compelling results overall and compared to the current standard of care, TURBT. This is particularly notable because UGN-102 is being developed as the first nonsurgical therapy for this type of bladder cancer. Mark will talk more about this, but it's important to delineate the various types of bladder cancer and understand that our products are being studied in patient segments that are not being studied by other medicines.
Following this announcement, we held a pre-NDA meeting with the FDA to align on the regulatory path forward for UGN-102. As expected, the FDA confirmed that the current clinical development plan for UGN-102, which includes evaluation of duration of response at 12 months following a CR at 3 months, in the pivotal ENVISION trial, will support submission of an NDA. The FDA also agreed that our NDA can utilize a review, allowing for early submission of CMC sections of the NDA, which is planned for January 2024. Looking ahead, we anticipate sharing data from the duration of response endpoint in the second quarter of 2024. Pending favorable results, we expect to submit the NDA to the FDA a few months later. If granted priority review, we anticipate approval and launch in early 2025.
If approved, we believe that UGN-102 would represent a groundbreaking nonsurgical option for approximately 82,000 annual patients suffering from low-grade intermediate-risk nonmuscle-invasive bladder cancer, who currently face frequent recurrences, necessitating the need for multiple surgeries. This potential milestone stands to become a major growth driver for UroGen, with a substantial market in the U.S. exceeding $3 billion. Q3 2023 was also the second strongest revenue quarter for JELMYTO and low-grade upper tract urothelial carcinoma. We're pleased with the pace of growth for JELMYTO, especially when considering this is a rare disease treated in both community and academic centers. We will continue to drive growth and meaningful adoption through increasing sites of care and leveraging the growing body of real-world data, highlighting JELMYTO's meaningful value, and as part of a multimodal kidney-sparing approach to disease management.
For the third quarter, we reported $20.9 million in JELMYTO net revenues, an increase of 30% year-over-year. We believe there remains significant growth opportunity for JELMYTO as the first medicine ever approved for low-grade UTUC, bringing a differentiated chemoablative approach to patients. The closing of our $120 million private placement during the third quarter was an important milestone that significantly strengthened our balance sheet. Given our fortified financial position, we are committed to deploying capital that maximize shareholder value and plan to utilize proceeds from the raise to develop and execute a comprehensive pre-commercialization and launch strategy for UGN-102, while continuing to grow JELMYTO sales. Importantly, and based on our latest financial forecast, we believe our current cash position will support our commercial organization through the prospective launch of UGN-102.
Q3 2023 was a transformative quarter for UroGen following strong top line data from ATLAS and ENVISION and our pre-NDA Meeting with the FDA, we have a clear path forward towards an approval for UGN-102 in low-grade intermediate-risk nonmuscle-invasive bladder cancer. Now JELMYTO continues to grow its footprint in low-grade UTUC. I'm very proud of the dedication and commitment across our organization as we remain focused on pioneering a new era in urologic and specialty cancer care. UroGen is at its strongest and most encouraging point in the company's history. I'll now pass the call to Mark, who will provide a clinical update. Mark?
Mark Schoenberg: Thank you, Liz, and hello, everyone. I'd like to take a moment to briefly summarize top line results from the ATLAS and ENVISION trials before commenting on our recent pre-NDA meeting with the FDA. As a reminder, ATLAS was an open-label randomized controlled Phase III study designed to evaluate UGN-102 with or without TURBT versus TURBT alone. The trial enrolled 282 new and low-grade intermediate risk NMIBC patients. ATLAS met its primary endpoint of disease-free survival of UGN-102 demonstrating superiority to TURBT with a 55% reduction of risk for recurrence, progression or death in patients who received UGN-102. UGN-102 also showed a 65% complete response rate at 3 months for patients who only received UGN-102 compared to a 64% complete response rate at 3 months for patients who only received TURBT.
When we evaluate the subgroup of patients in ATLAS with recurrent disease, and a history of at least one prior TURBT, the observed duration of response in the UGN-102 treatment group was a resounding 66.3%, 12 months after achieving a complete response or 15 months post randomization. This is in comparison to 40% duration of response observed in TURBT arm at the same time point. These results offer compelling insight in the effect of UGN-102 in recurrent patients, which is the population studied in our pivotal trial, ENVISION. During our recent pre-NDA meeting, FDA reaffirmed that ENVISION will serve as the pivotal trial for UGN-102, NDA. ENVISION, which is a single-arm study of UGN-102 enrolled 242 recurrent low-grade intermediate risk NMIBC patients with a history of at least one prior TURBT.
The study met its primary endpoint, demonstrating that patients treated with UGN-102 experienced an 79% complete response rate at 3 months, following initiation of treatment. When looking at the totality of clinical data thus far, UGN-102 has demonstrated consistency in the 3-month complete response endpoints across all 3 trials. A consistency and durability of response endpoints in ATLAS and OPTIMA, demonstrating a compelling therapeutic and safety profile throughout. For ENVISION, we maintain our view that a rate of duration of response and 50% of include meaningful outcome in this patient population. Given the consistency and the durability endpoints from ATLAS and OPTIMA, we anticipate potential similar outcomes for ENVISION, which we believe works with [indiscernible] for approval in low-grade intermediate risk NMIBC.
Before turning the call over to Jeff for a commercial update, I'd like to briefly comment on the recently reported clinical data in bladder cancer from several of our peers. As a company, UroGen's mission is to build novel solutions to treat urothelial and specialty cancers because patients deserve better. We recognize the need for innovation and the development of new therapies in our space. Thus, we are encouraged that there are programs in development that may offer patients potentially better options than the current standard of care. However, as we near the final stages of clinical development for UGN-102 and with the prospect of commercialization on the horizon, we are discovering how the significant distinctions between low-grade and high-grade NMIBC and even metastatic bladder cancer may not be widely recognized.
Low-grade NMIBC, high-grade NMIBC and metastatic bladder cancer are distinct types of bladder cancer with significant differences. Low-grade NMIBC is characterized by less aggressive tumors limited to the lining of the bladder and typically carries a better prognosis. High-grade disease, on the other hand, consists of more aggressive cancer cells within the bladder lining, which may have a higher risk of recurrence and progression. In contrast, metastatic bladder cancer represents the most advanced stage where cancer has spread to distant organs, carrying a prognosis and necessitating systemic treatments. The key distinctions lie in tumor aggressiveness, location, treatment approaches, prognosis and the stage of disease. It's important to understand that UGN-102 is focused on low-grade intermediate risk NMIBC where the competitive landscape is much less densely pocketed than in high-grade disease for metastatic disease.
Therefore, recent data releases do not impact our current development nor commercial plans nor are expected to encroach on what we believe is a significant market opportunity for this program. We are hopeful that UGN-102 may potentially serve as the first nonsurgical therapy for this indication which then [indiscernible] a sizable portion of bladder cancer cases each year and is also characterized by a high rate of recurrence. If approved, UGN-102 has the potential to shift the standard of care away from repetitive surgical care and may improve the quality of life for tens of thousands of individuals battling this highly recurrent disease. With that, I'd like to turn the call over to Jeff for a commercial update. Jeff?
Jeffrey Bova: Thanks, Mark. Q3 was another strong quarter for JELMYTO. We had the second strongest quarter in our history with continued momentum in our underlying business. We saw a small decrease from the prior quarter due to typical summer seasonality and continue to see strong double-digit year-over-year growth in JELMYTO sales and what is our third full year of commercialization. JELMYTO net sales for the third quarter were $20.9 million, which represents 30% growth from the same period last year. This growth in our top line reinforces our long-term belief in the low-grade UTUC opportunity. During the third quarter, further strengthening of the JELMYTO ramp and expansion of the JELMYTO user base was the result of several key factors, including continued commercial execution.
JELMYTO offers clinical utility alone or following endoscopic management as part of a kidney-sparing treatment regime. The meaningful differentiated treatment profile of JELMYTO and its unique feature of being the only FDA-approved nonsurgical treatment indicated for low-grade UTUC continues to resonate with both patients and physicians. In addition, the growing body of data from real-world evidence studies continues to strengthen and reinforce JELMYTO's value proposition, supporting its multimodal use across various practice patterns and diverse presentations. Our experience JELMYTO has given us a foundation with [indiscernible] by establishing the use of mitomycin and RTGel. Consistent growth and adoption for this product reinforces our optimism for the significant opportunity in low-grade intermediate-risk nonmuscle-invasive bladder cancer with UGN-102.
However, UGN-102 offers several distinct advantages over JELMYTO, including simpler administration and a much lighter operational lift. Delivery of UGN-102, if approved, is expected to be easier for urologists given that it does not require the use of specialized equipment, scheduling time in the OR, will be delivered pre-mixed with an anticipated 1-week shelf life and can be given by a doctor or support staff in clinic as an outpatient procedure. Importantly, we believe that the reimbursement economics for UGN-102, relative to TURBT, will not be a barrier to adoption. Following the positive ATLAS and ENVISION data. We began executing our pre-commercialization plan in preparation for a prospective UGN-102 launch. With approximately 95% overlap in prescriber base and well-established practice patterns, we expect the seamless integration of UGN-102 into our commercial organization and an expedient launch upon approval.
If approved, we anticipate that UGN-102 will be the first ever nonsurgical treatment option for a disease afflicting approximately 82,000 patients in the U.S. each year with a total market of more than $3 billion in the U.S. With that, I'll turn the call over to Don to discuss our financials. Don?
Dong Kim: Thank you, Jeff, and thank you to everyone for joining today's call. I'm pleased to review our financial results for the third quarter ended September 30, 2023. We are pleased towards another strong quarter of year-over-year revenue growth. For the third quarter of 2023, reported JELMYTO net product revenues of $20.9 million, an increase of approximately 30% compared to $16.1 million in the same period last year. For the third quarter of 2023, research and development expenses were $10.2 million as compared to $13.1 million for the same period in 2022. The overall decrease is primarily due to lower expenses related to the conclusion of the ATLAS trial and lower cost of ENVISION trial for UGN-102, offset by higher R&D expenses related to Phase I study for UGN-301, and ingredient scale-up and production for UGN-102.
Selling, general and administrative expenses for the third quarter of 2023 were $21.8 million compared to $19.1 million for the same period in 2022. Increase in SG&A is primarily due to higher marketing, commercial operations, professional services and training, offset by lower commercial back office services and support expenses. UroGen reported our noncash financing expense related to the prepaid forward obligation to RTW Investments of $5.5 million for the third quarter of 2023 compared to $4.8 million for the same period in 2022. Interest expense related to the $100 million term loan facility, with the funds managed by Pharmakon Advisors, was $3.8 million for the third quarter of 2023 compared to $2.7 million for the same period last year.
UroGen reported a net loss of $21.9 million or a basic and diluted net loss per ordinary share of $0.68 for the third quarter of 2023, as compared to $25.8 million or a basic and diluted net loss per ordinary shares of $1.13 for the same period in 2022. Turning to forward guidance. We reiterate anticipated full year 2023 net product revenues from JELMYTO to be in the range of $76 million to $86 million. We reiterate the full year 2023 operating expenses to be in the range of $135 million to $145 million. The company [indiscernible] anticipated a full year 2023 noncash financing expense related to prepaid forward obligation to RTW Investments in the range of $21 million to $26 million. Of this amount, approximately $9.9 million to $11.2 million is expected to be in cash.
We ended the third quarter with $153.9 million in cash and cash equivalents and marketable securities, which includes proceeds from the $120 million private placement, which closed during the third quarter. With that, I'd like to turn the call over to the operator for questions. Operator?
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