UroGen Pharma Ltd. (NASDAQ:URGN) Q1 2023 Earnings Call Transcript

UroGen Pharma Ltd. (NASDAQ:URGN) Q1 2023 Earnings Call Transcript May 11, 2023

UroGen Pharma Ltd. beats earnings expectations. Reported EPS is $-1.3, expectations were $-1.33.

Operator: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the UroGen Pharma Q1 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 Investor Relations. You may begin.

Vincent Perrone: Thank you, operator. Good morning, everyone and welcome to UroGen Pharma’s First Quarter 2023 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 March 31, 2023. 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; 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, anticipated seasonality for JELMYTO in 2023, our ongoing and planned clinical trials, commercial and clinical milestones in the year ahead, the potential of UroGen’s products and product candidates to transform the treatment paradigm of urothelial and specialty cancers, market opportunities, potential future commercialization activities for UGN-102, if approved, data presentations, regulatory filings, future R&D development efforts, our corporate goals, our optimism regarding multiple avenues available to us to further strengthen our balance sheet 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 will now turn the call over to Liz. Liz?

Elizabeth Barrett: Thank you, Vincent, and thank you to everyone joining us today. UroGen remains focused on developing novel therapies for urothelial and specialty cancers with the goal of fundamentally transforming the treatment paradigm for what we believe is a largely underserved patient population. With the launch of JELMYTO, we took an important first step in bringing to market an innovative nonsurgical therapy designed to improve the standard of care for treating low-grade upper tract urothelial cancer. In achieving this goal, we have demonstrated the viability of intravascular delivery of chemotherapy and our proprietary RTGel to treat urinary cancer, setting the stage for our lead development program, UGN-102, which aims to address a major unmet need in low-grade intermediate risk non-muscle invasive bladder cancer, an indication impacting approximately 80,000 patients in the United States each year.

Turning to the quarter. I’m pleased to announce that first quarter JELMYTO net revenues were $17.2 million, our second best quarter ever since launch and a 27% increase from the same quarter 1 year prior. While continued growth in JELMYTO adoption is encouraging, we are further assured to see our guidance model consistent with actual results, indicating that the seasonality we’ve previously observed may be reliably predictable. As the utility and benefits of JELMYTO are increasingly recognized in the rural world, it has also come to be acknowledged by the urology community as we recently saw at the 2023 American Urology Association Meeting in April. Mark and Jeff will provide highlights from the conference. But at a high level, 2 additional studies reinforcing the utility and efficacy of JELMYTO were presented further strengthening the growing body of real-world outcomes data supporting its broad use.

Meanwhile, as we look ahead, the focus of our development strategy is very much on UGN-102 and at several near-term catalysts. Specifically, we remain on track to provide top line data from our Phase III studies of UGN-102 this summer. For ENVISION, we anticipate providing the primary endpoint of complete response rate of approximately 240 patients who completed the study. While for ATLAS, the predecessor to ENVISION, we will provide complete response, durability and safety data from approximately 280 patients that completed the study. Assuming positive results, the ENVISION trial will form the basis of our FDA submission once durability can be appropriately measured. In anticipation of prospective favorable results, we expect to submit an NDA with the FDA in 2024.

The goal would be to target priority review, which if granted, may potentially result in approval at the end of 2024 or early 2025. Our optimism in the potential outcome of ENVISION stems from a similarity to the Phase II OPTIMA II trial of UGN-102 which demonstrated a 65% complete response rate and duration of response at 12 months of 72.5% using Kaplan-Meier analysis. We believe UGN-102 can be a transformational product and represent a significant opportunity to address a much larger patient population. Unlike JELMYTO, administration is much simpler without the need fluoroscopy. Therefore, if approved, we anticipate UGN-102 will be a significant driver of future growth as it will be the only primary nonsurgical therapy addressing the nearly 80,000 new patients in the U.S. alone, who will undergo repetitive endoscopic resection and a burden with the risk of surgery and anesthesia as the only recourse for disease control.

Before turning the call over to my colleagues, I would like to quickly address our balance sheet. We continue to emphasize rigorous fiscal prudence and prioritize our cash spend on advancing our core value drivers: JELMYTO and UGN-102 development. Given what we believe is a significant market potential for UGN-102, we are optimistic that we can take advantage of a number of potential viable opportunities to further strengthen our balance sheet when appropriate. With that, I’ll pass the call over to Mark. Mark?

Photo by National Cancer Institute on Unsplash

Mark Schoenberg: Thank you, Liz, and hello, everyone. I’d like to begin by commenting on 2 recent JELMYTO real-world outcomes studies which were accepted for podium presentations at the 2023 AUA Meeting held in Chicago at the end of April. The first of these studies was conducted by Dr. Joseph Jacob and colleagues and highlighted results from a sub-analysis of the first and largest post commercial utilization review of JELMYTO in treating ureteral tumors. In this analysis, 47 patients had UTUC tumors involving the ureter. With 12 cases of ureteral tumor only in 35 cases of ureteral plus renal pelvic tumors. Data from this study demonstrated no difference in JELMYTO outcomes at first endoscopic evaluation based on tumor location.

Adding to the growing body of real-world evidence supporting broad use of JELMYTO in treating low-grade UTUC patients with multifocal disease. In addition to similar efficacy and safety results at first endoscopic evaluation, there was also no difference in recurrence rate or progression based on tumor location. 14 patients with ureteral tumor had significant ureteral stenosis at first post-treatment evaluation. However, only 5.4% of patients developed new clinically significant stenosis when excluding patients with preexisting hydronephrosis, which is the buildup of excess fluid in the kidney due to a backup of urine. The second study was conducted by Dr. Craig Labbate and colleagues. And highlighted results of a sub analysis from the same post-commercialization review of JELMYTO.

The study aims to evaluate efficacy and safety of JELMYTO when administered following complete endoscopic resection. Results from this study were also published in the May issue of the Journal of Urology. In the publication, the authors noted that UTUC patients in this retrospective study who received JELMYTO following complete endoscopic ablation achieved a 69% complete response rate in first endoscopic evaluation. Whereas in the OLYMPUS study, patients achieved a 58% complete response rate at first endoscopic evaluation. The rate of ureteral stenosis, for those in this study who underwent complete endoscopic ablation followed by JELMYTO treatment was 23% compared to 44% observed in the OLYMPUS study. The authors also note that UTUC disease recurrence is often detected at the first ureteroscopic evaluation after endoscopic ablation only.

Early failure is a drawback for endoscopic ablation, which occurs in 40% to 50% of UTUC patients by 6 months. It’s noted in the study that this may be due to incomplete resection or ablation of the primary tumor for which post ablation therapy is intended to treat. We are pleased to see the growing body of real-world outcome data, providing compelling evidence supporting the use of JELMYTO in a diverse low-grade UTUC population. The acceptance for presentation of these studies at the AUA underscores the attention and recognition that these important data warrant. To further explore the full potential of JELMYTO for the treatment of patients with UTUC, investigators are in the process of enrolling the prospective and retrospective uTRACT registry to capture data in a large-scale, standardized manner to report further on patient outcomes following JELMYTO treatment, including longitudinal follow-up.

I’d like to turn now to UGN-102, which we view as a potentially transformative therapeutic advance that I believe will be welcomed by my colleagues and patients alike. As Liz noted, we are excited to report data from the ENVISION and ATLAS clinical trials by the end of this summer. Our optimism about potential outcomes from both trials stems from their similarity to the Phase II OPTIMA II trial of UGN-102 which demonstrated a 65% complete response rate and duration of response of 12 months is 72.5% using a Kaplan-Meier analysis. UGN-102 also has key similarities with JELMYTO. Both products utilized mitomycin allow for local delivery and sustained exposure to mitomycin for up to 6 hours. And importantly, both low-grade NMIBC and low-grade UTUC share many biological and clinical similarities, which leads to common clinical features, including the responsiveness to chemotherapy.

UGN-102, however, has several unique advantages over JELMYTO, which we believe will have a direct impact on its use. It does not require special equipment for procedures and is designed to be instilled into the bladder via urethral catheter in an outpatient setting, a common and routine procedure in most urology practices. This advantage will be critical as low-grade intermediate risk NMIBC is 8 to 10x more common and a condition that is routinely managed by 80% to 90% of urologists. Inferring a significantly larger addressable patient population. Meanwhile, our Phase I trial with UGN-301, our in-licensed anti-CTLA-4 antibody for intravesical administration using RTGel technology continues to enroll. UGN-301 is in development for use in combination with other immunomodulators, including UGN-201, our proprietary TLR7 agonist and other potential chemotherapy and any other therapies to treat high-grade NMIBC.

This study is aimed at identifying the suitable dose for a subsequent Phase II trial. The first arm of this study evaluating dose ranges of UGN-301, as monotherapy is expected to be completed later this year. Results from this arm will inform the appropriate dose of UGN-301, for our first combination arm, which could potentially begin before the end of the year. We view UGN-301 as a cornerstone checkpoint inhibitor for a variety of potential combination therapies targeting high-grade NMIBC. And with that, I’ll turn the call over to Jeff for a commercial update. Jeff?

Jeffrey Bova: Thanks, Mark. I’m pleased to see momentum in patient uptake activated sites and repeat prescribers from the end of last year carry into 2023 as Q1 represented our second strongest quarter for JELMYTO since launch. Adoption metrics in the first quarter continue to demonstrate encouraging trends in the new and repeat accounts. Activated sites on May 1, 2023, were 1,009 compared to 983 on March 1, 2023. And repeat accounts were 235 compared to 214 for the same period. Reimbursement remains at approximately 99% across all coverage types. During the first quarter, we held our national sales meeting in San Diego, and I’d like to take a moment to share several key takeaways. First, we recognize our top territory performers who have demonstrated sustainable growth in their accounts.

They have shown that the opportunity for meaningful adoption in low-grade UTUC exists once physicians embrace JELMYTO. We’ve previously discussed our revised sales strategy designed to emulate the success observed in overperforming territories, which I’m pleased to say is improving penetration in developing territories. At the meeting, we also rolled out enhanced messaging and sales resources from the growing body of real-world evidence data that has demonstrated the viability of JELMYTO across various practice patterns. We expect these new resources to improve our team’s ability to effectively engage with new and existing accounts in the field to further drive appropriate adoption and patient penetration. UroGen again, had a major presence at this year’s AUA Meeting.

Building on Mark and Liz’s comments, we are very pleased to see specific mention of JELMYTO in the AUA and SUO first-ever low-grade UTUC treatment guidelines. The guideline states clearly that tumor ablation should be the initial management option for patients with low-risk UTUC for which JELMYTO can be a treatment option as a part of a kidney-sparing approach to disease management. With the use of JELMYTO in a multimodal regimen, patients with UTUC can achieve a durable complete response. This is an important advancement in the treatment of UTUC. And we are proud to offer a treatment that is backed up by the latest AUA guidelines. We view the guideline as an important milestone for low-grade UTUC patients and broad recognition by AUA and SUO of the positive impact, new and innovative therapies such as JELMYTO can have in treating low-grade tumors.

Our booth featured demonstrations on how our innovative RTGel technology is advancing care in uro-oncology and allowed the team to meet with physicians. It also included a product theater featuring KOLs Jennifer Linehan and Sandip Prasad, which focused on the JELMYTO data including recently published real-world outcomes data and actual patient case studies. Overall, we are very pleased to see acknowledgment of our clinical progress and real-world impact filtering through to clinician communities and society, and we look forward to continuing to work with the AUA and SUO as we further develop and expand JELMYTO and prospectively introduce UGN-102. 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 be with you today to review our financial results for the first quarter ended March 31, 2023. For the first quarter of 2023, we reported JELMYTO net product revenues of $17.2 million, in line with consensus estimates and an increase of 27% compared to $13.6 million in the same period last year. For the first quarter of 2023, research and development expenses were $12.5 million as compared to $12.7 million for the same period in 2022. The decrease is primarily due to lower expenses related to the ENVISION trial, manufacturing and clinical compensation offset by higher R&D expense related to the Phase I study for UGN-301. Selling, general and administrative expenses for the first quarter 2023 were $24.5 million.

This compares to $21.3 million for the same period in 2022. Increase to SG&A is primarily due to higher marketing, commercial, information technology, and advisory expenses, offset by lower market access, medical affairs and stock-based compensation expenses. UroGen reported a noncash financing expense related to the prepaid forward obligation to RTW investments of $5.2 million for the first quarter 2023. UroGen reported a net loss of $30.2 million or a basic and diluted net loss per ordinary share of $1.30 for the first quarter 2023, as compared to $28.4 million or a basic and diluted net loss per ordinary share of $1.25 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, including noncash share-based compensation expense of $6 million to $11 million, subject to market conditions. The company reiterates anticipated full year 2023 noncash financing expense related to the prepaid board 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 first quarter with $75.2 million in cash and cash equivalents and marketable securities, which is expected to finance its operations into 2024. To echo Liz, we are committed to diligently and proactively managing our balance sheet in support of our commercial and clinical development activities.

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

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Q&A Session

Operator: [Operator Instructions]. Our first question comes from the line of Ram Selvaraju of H.C. Wainwright & Co.

Operator: Our next question comes from the line of Paul Choi of Goldman Sachs.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Matt Kaplan of Ladenburg Thalmann.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Rohan Mathur from Oppenheimer.

Operator: Our next question comes from the line of Boris Peaker from Cowen.

Operator: Thank you. At this time, I see no more questions in the queue. I would like to now turn it back to Liz Barrett for closing remarks.

Elizabeth Barrett: Thanks, and thanks, everybody. I mean, as you can see, it’s an exciting time for us in 2023. I think I say every year, it’s a pivotal year for us, but we’ve got a lot of catalysts this year. We need to continue. We will continue to execute on JELMYTO. We feel like we have a lot of incremental data associated with JELMYTO and really showing how it’s used. And so we expect to continue to see adoption. I will comment that so far in Q2, I know we talked about Q1, but we feel good about Q2 as well. Things are — continue to advance for JELMYTO. In addition to that, I think everybody is excited, and we hear a lot about UGN-102 and excited to see the data. Catalyst is coming up. So we look forward to staying in touch, and please let us know if you have any additional questions. But as always, thanks for your support and interest in our company. You can disconnect now, operator.

Operator: Thank you for your participation in today’s conference. This concludes the program. You may disconnect.