UroGen Pharma Q2 2023 Earnings Call Transcript

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August 10, 2023

There are 10 speakers on the call.

Operator

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the UroGen Pharma's Second Quarter 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 Perron, Head of Investor Relations. You may begin.

Speaker 1

Thank you. Good morning, everyone, and welcome to UroGen Pharma's 2nd 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 preliminary financial results for the quarter ended June 30, 2023. The press release can be accessed on the Investors portion of our website at investors. Eurogen.com.

Speaker 1

Joining me today are Liz Barrett, President and Chief Executive Officer Doctor. Mark Schoenberg, Chief Medical Officer Jeff Boba, 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 gel myto, our ongoing and planned clinical trials, commercial and clinical milestones, market and revenue opportunities, our commercialization strategy and expectations as well as potential future commercialization activities for UGN-one hundred and two if approved, anticipated data, regulatory filings and decisions including UGN-one hundred and two potentially receiving priority review. UGN-one hundred and two being the primary growth driver for UroGen if approved, future research and development efforts, our corporate goals and 2023 financial guidance among other things.

Speaker 1

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 EuroGen disclaims any obligation to update these statements. I'll now turn the call over to Liz. Liz?

Speaker 2

Thank you, Vincent, and thank you to everyone joining us today. I'm excited to speak to you during what I can only describe as a transformative time for UroGen. UroGen is committed to revolutionizing patient care by developing and commercializing novel therapies targeting urothelial and specialty cancers for patients that deserve better. We recently announced unprecedented results from 2 Phase 3 clinical trials investigating the use of UGN-one hundred and two to treat patients with low grade intermediate risk non muscle invasive bladder cancer. Both the ATLAS and ENVISION trials met their primary endpoints, demonstrating meaningful and consistent results overall and relative to TURBT.

Speaker 2

In the ATLAS trial, UGM-one hundred and two met its primary endpoint of disease free survival, reducing risk of recurrence, progression or death by 55%. Disease free survival 15 months after randomization was estimated to be 72% for patients in the UGN plus or minus TURBT arm compared to 50% for patients in the TURBT arm by Kaplan Meier analysis. UGN-one hundred and two also showed a 65% complete response rate at 3 months for patients who only received UGN-one hundred and two compared to a 64% complete response rate at 3 months for patients who only received a TURBT. The ENVISION trial also met its primary endpoint by demonstrating that patients treated with UGM-one hundred and two had a 79.2% rate of complete response at 3 months, following the initiation of treatment. UGN-one hundred and two has now demonstrated a consistent and what we believe compelling therapeutic and safety profile across multiple clinical trials, while showcasing the limitations of TURBT in this patient population.

Speaker 2

Looking ahead, data evaluating the secondary endpoint of duration of response is expected in the first half of twenty twenty four. Assuming positive findings, we anticipate submitting an NDA to the FDA in 2024. The goal would be to receive priority review, which if granted may potentially result in approval as early as the end of 2024 or early 2025. If approved, we anticipate UGM-one hundred and two to be the primary growth driver for UroGen as the first ever non surgical treatment option for disease afflicting approximately 82,000 new patients in the U. S.

Speaker 2

Each year, with an annual total market opportunity of more than $3,000,000,000 The shift away from traditional surgical care has the potential to improve the quality of life of tens of thousands of individuals battling this highly recurrent disease. This patient centric focus underscores UroGen's dedication to having a meaningful impact on patient care. Turning to JALMIDO, 2nd quarter net revenues were a record $21,100,000 a 27% increase from the same quarter 1 year prior. We're pleased to see the continued and consistent growth in adoption as additional recent real world data strengthens the case for JALMIDO's therapeutic value and safety across different practice patterns. We will leverage JALMIDO's recent success as we shape UGM-one hundred and two's prospective precursor commercialization strategy.

Speaker 2

In parallel, strategic steps were taken to strengthen our financial position. The recent $120,000,000 private placement of ordinary shares provides us with the resources to support our business, including our anticipated pre commercialization and launch strategy for UGM-one hundred and two. We are proud to partner with a group of high quality biotech investors who believe in the opportunity of UroGen's portfolio to address significant unmet needs in urothelial and specialty cancers. I am thrilled for the progress we've made in 2023 and for the road ahead as we plan for an FDA submission of UGM-one hundred and two next year. We believe UGM-one hundred and two and JALMIDO together represent over $1,000,000,000 revenue opportunity.

Speaker 2

UroGen is positioned to pioneer a new era in urologic and specialty cancer care, while creating significant value for our patients and shareholders. With that, I'll pass the call over to Mark. Mark?

Speaker 3

Thank you, Liz, and hello, everyone. As Liz has now gone through and described the details and strength of our recently announced Phase 3 ATLAS and ENVISION top line data, I would like to spend some time putting this information in the context of actual clinical practice and patient care. To do so, I'll draw from information shared by UroGen and key stakeholders from the presentation and panel discussion at our recent New Horizons data event, which I hope you were able to attend. If not, I would encourage you to access the replay available on our website. In addition, the Journal of Urology earlier this week published a peer reviewed article highlighting results from the Phase 3 ATLAS study.

Speaker 3

We continue to encounter a surprise when people learn that bladder cancer is actually one of the most prevalent cancers with over 700,000 patients in the U. S. Alone. Of the 82,000 patients subset with low grade intermediate risk NMIBC, recurrence is high with 68% of those having 2 or more recurrences and 23% with 5 or more recurrences. When we examine UGN 102 for the treatment of low grade intermediate risk NMIBC, we often draw parallels to gel tract urothelial carcinoma.

Speaker 3

It is well characterized that the genetic and molecular makeup of tumors are similar in both. And while the medicines are different drugs, they leverage the same RTGel technology and active with similar dosing schedules. Interestingly, while the similarities between gel Mito and UGN-one hundred and two work to our advantage, the differences are significant. For 1, the patient population for UGN-one hundred and two as mentioned is an order of magnitude larger than gel Mito. And because the bladder is easier to access than the upper urinary tract, UGN-one hundred and two can be administered in a clinic setting by a nurse or advanced practice provider using a standard urethral catheter.

Speaker 3

TURBT remains the standard of care for this patient population and is one of the most common procedures performed in urologic oncology. The TURBT is not without risk and 33% of patients encountered adverse events within 90 days of surgery based on data from the published literature. Others have shown that patients who undergo 2 to 4 TURBTs have a significantly increased risk of mortality. If approved, UGN-one hundred and two stands to offer an efficacious treatment alternative, while also allowing this patient population to avoid the risks associated with repetitive surgery. And with that, I'll turn the call over to Jeff for a commercial update.

Speaker 3

Jeff?

Speaker 4

Thanks, Mark. The Q2 represented our strongest quarter performance ever for Jelmido. During the Q2, we saw further strengthening of the Jelmido ramp and an increase in uptake in several developing territories. Growing awareness and adoption of JALMIDO remains attributable to several key factors. First, the benefits of our revised sales strategy continue to deliver consistency and growth in the developing territories.

Speaker 4

2nd, the extension of the stability period of the JALMIDO admixture from 8 to 96 hours has limited needed several operational and logistical challenges, including allowing for day prior delivery, enabling HCP preferred early morning installation. Currently more than 50% of doses consist of day prior delivery, facilitating expansion of the geographic coverage of our mixing partner and optimizing our territory business managers time in the field. And finally, the growing body of outcomes from real world evidence data continues to strengthen and reinforce gel my dose efficacy and safety profile, supporting its multimodal use across various practice patterns. GelMaito's traction and adoption patterns. Gelmaito's traction and adoption appears to be accelerating as the product becomes increasingly proven in a real world setting, easier to administer and incorporate across multiple practice patterns.

Speaker 4

Reimbursement remains at approximately 96% across all payer types. This reinforces our optimism and lays the foundation for the potentially much larger opportunity with UGN-one hundred and two in low grade intermediate risk non muscle invasive bladder cancer. On the heels of the positive ATLAS and ENVISION data, we've begun executing our pre commercialization plan in preparation for a prospective UGN-one hundred and two NDA. With 95% overlap in our prescriber base and well established practice patterns, we expect a seamless integration of UGN-one hundred and two into our commercial organization if approved. With that, I'll turn the call over to Don to discuss our financials.

Speaker 4

Don?

Speaker 5

Thank you, Jeff, and thank you to everyone for joining today's call. I'm pleased to review our financial results for the Q2 ended June 30, 2023. For the Q2 of 2023, we reported Germytone net product revenues of $21,100,000 in line with consensus estimates and an increase of 27% compared to $16,600,000 in the same period last year. For the Q2 of 2023, research and development expenses were $11,600,000 as compared to $12,600,000 for the same period in 2022. The decrease is primarily due to lower expenses related to the conclusion of the ATLAS trial and lower cost of ENVISION trial for UGN-one hundred and two, offset by higher R and D expense related to the Phase 1 study for UGN-three zero one.

Speaker 5

Selling, general and administrative expenses for the Q2 of 2023 were $22,500,000 This compares to $20,800,000 for the same period in 2022. Increase to SG and A is primarily due to higher marketing, commercial operations, professional services and trainings, offset by lower market research related expenses. EuroGen reported a non cash financing expense related to the prepaid forward obligation to RTW Investment of $5,300,000 for the Q2 of 2023. EuroGen reported a net loss of $24,100,000 or basic and diluted net loss per ordinary share of $1.03 for the Q2 2023 as compared to $26,700,000 or a basic and diluted net loss per ordinary share of $1.18 for the same period in 2022. Turning to forward guidance.

Speaker 5

We reiterate anticipated full year 2023 net product revenues from Germ Vital to be in the range of $76,000,000 to $86,000,000 We reiterate the full year 2023 operating expenses to be in the range of $135,000,000 to $145,000,000 including non cash share based compensation expense of $6,000,000 to $11,000,000 subject to market conditions. The company reiterates anticipated full year 2023 non cash financing expense related to the prepaid forward obligation to RTW Investment in the range of $21,000,000 to $26,000,000 Of this amount, approximately $9,900,000 to $11,200,000 is expected to be in cash. We ended the 2nd quarter with $55,300,000 in cash and cash equivalents and marketable securities, not including the proceeds of the $120,000,000 private placement financing announced on July 27, 2023. With that, I'd like to turn the call over to operator for questions. Operator?

Operator

Thank you. We will now conduct the question and answer session. Our first question comes from Rogerio Silvaraju of H. C. Wainwright.

Speaker 6

Thanks very much for taking my questions and congratulations on a very well executed quarter. I wanted to first of all focus on JALMAYDO. If you could give us a sense of what the key underlying trends are that you're seeing in the marketplace right now that are driving uptake? To what extent, for example, the use of Entera grade installation is driving adoption? That would be very helpful and much appreciated.

Speaker 6

And also if you could clarify whether you expect to continue to revise guidance or issue revisions to guidance as necessary as we get through as we go further into 2023? Thank you.

Speaker 2

Thanks, Rob. It's Liz. Yes, I think for now we will not be changing guidance. I think we're comfortable with the guidance and where we are. As everyone knows, Q3 is the summer months.

Speaker 2

And so I think we want to wait and see how things go in Q3 before we try to narrow the guidance maybe at our next call. So with that, I'll turn it over to Jeff and he can answer your other questions. So Jeff?

Speaker 4

Yes. Thanks, Ram. So we continue to have a lot of momentum from AUA, where as you know, they put out guidelines when mentioned in those guidelines in ablative option. They reinforce the fact that you shouldn't be pulling or if at all costs, you shouldn't be pulling kidneys and low grade disease. We had 2 presentations there.

Speaker 4

We had an industry theater. We continue to talk about the real world evidence, which partners us with urologists. So they go in, they endoscopically resect and then they bring in 6 doses of gel mito. So I think it was a positive AUA from us. We've seen a lot of data come out this year that answered a lot of unanswered questions from Olympus and the field has been able to get that access.

Speaker 4

We also see a convenience standpoint when the 8 to 90 6 hour administer or stability time increased physicians are happy that they can get the product the day before, they can do the procedure in the morning. So just a lot of good momentum, a lot of good things that are opening doors and allowing the territory business managers to really talk about all of the latest data. You mentioned anterograde, somewhere it's 60%, 65% are anterograde administrations. I never really see I'll see that continue to go up. But there are some physicians institutions that still prefer retrograde, some patients actually prefer retrograde.

Speaker 4

But all of the data that we published from Doctor. Rose to Doctor. Jacob at the AOA shows a lower stenosis rate. So I do see ANTAGRADE continuing to increase, probably a little bit of a slower rate, but that's as I said, that's mainly due to just physician preference or patient preference.

Speaker 6

And then just with respect to 102, can you comment on whether you expect the real world data analyses that are currently being reported at a steady pace for JELMIDO to be a useful model for us to think about in the context of a putative UGN-one hundred and two approval? Would you be collecting that same kind of data on UGN-one hundred and two real world use once if and when the product comes?

Speaker 2

Yes, absolutely. We will definitely continue with the registry and expand the registry with UGM-one hundred and two, not only by adding 102, but adding more sites as well when 102 gets approved. So it's, as Jeff mentioned, we're starting really to see a lot of real world data out there. I think that's been a big driver. And we know just from recent questions around how can you use UGN-one hundred and two.

Speaker 2

We've seen many different uses of the optimal way of treating their patients. So absolutely.

Speaker 6

Thank you.

Operator

All right. Thank you. One moment for our next question. Our next question comes from the line of Boris Peaker of TD Cowen.

Speaker 7

Good morning. And let me add my congratulations on commercial and clinical side of IMHANCE. First question is on the ATLAS study. Obviously, we saw very impressive data there. I'm curious if you've had any interactions with the FDA to discuss whether or not that could be the basis of a pivotal study potentially allowing you to file earlier than waiting out for Envision?

Speaker 2

We have not as of yet had conversations with the FDA. We will be requesting a meeting with them and how long the FDA takes. So it takes them 60 days to award us a meeting. And so as soon as we can talk to them, we will talk to them. I think the base case and what I think we should expect from the FDA based on the conversations we had with them is that they're going to want to see durability and Envision.

Speaker 2

We feel very confident given the not only the OPTIMA data, but the durability in ATLAS. We feel very confident about the durability. But the FDA has been very clear all along that durability is very important. So we will talk to them about to see if there's any wiggle room from a timing standpoint. But at this point in time, I think it's fair to say that we're sticking with our current timeline as far as the FDA is concerned.

Speaker 7

Great. My second question is, can you just outline what exactly is the formulation difference between JALMIDO and 102? And I guess the purpose of the question is just to get a sense of of can 102 once approved be used in place of gelmido?

Speaker 2

Yes. Mark, can you talk about that and why that's it can't be interchanged, but the differences in them?

Speaker 3

Yes, sure. Boris, thanks for the question. So there are some very specific differences. The first of which is 102 is a much larger volume with a lower concentration of mitomycin per cc compared to gel Mito. So I think it's important to understand that while both are efficacious, different doses of medication are actually delivered by the different medications.

Speaker 3

They are not interchangeable and 102 would not be an acceptable agent for use in the upper urinary tract based on our published data.

Speaker 7

Great. Thanks for taking my questions.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Leland Grishol of Oppenheimer.

Speaker 8

Hey, good morning. Thank you for taking my questions. A couple for me. First, I know it's a little bit early, but would you expect that the data section of the 102 label therefore to feature both the full complement of the ATLAS and ENVISION data? And secondly, as we think about operating expense for the company going forward, clearly lots of overlap here with the existing commercial infrastructure.

Speaker 8

You mentioned 95% overlap in prescriber base. What should we contemplate for modeling purposes as we think about what additional expense UroGen may need to incur as the company expands its scope to be a selling 102? Thank you.

Speaker 2

Thanks, Leland. I think we don't know, but we would expect all of the data to be in the label just obviously in the clinical trial section of the label if nowhere else, but we obviously will have those discussions with the FDA. To your point, it's early, but I don't see any reason why that data would not be included. I'm just going to ask, Jeff to comment on standpoint of launching UGM-one hundred and two and the leverage ability of across with JALMIDO. So Jeff?

Speaker 4

Sure. Thanks. So yes, obviously with the 95% overlap, you could also say 100% overlap with wherever we would be conference wise for JALMADA, we will be there for 102. Obviously, we'll build in launch expenses, but the synergies for meetings, for conferences, for other events, for the overlap in the target, I don't see a significant expansion in the field, because of the overlap in the targets. We will adequately prepare for a strong launch with 102.

Speaker 4

But yes, there are significant synergies that we can take from, gel myto.

Speaker 2

Yes. I think having said that, we do expect that there will be an increase in the field. It's just much smaller than you might expect obviously for a big opportunity like UGM-one hundred and two. But we would add some territories just from a physical geographical geographical perspective. And as Jeff mentioned, a lot of the other leverages that we can do, we absolutely will do.

Speaker 2

But there'll be incremental expenses for launching UGM-one hundred and two.

Speaker 8

And actually, another quick question that comes to mind there is, with respect to the premixing task for many community urologists, that's something that's done by 3rd parties. I know you have a number of kind of agreements or you've established that facility for various practices. How should we think about the need for increased coverage across the urological practice base for pre mixing needs? And would that have any impact on your spend? Thank you.

Speaker 4

Jeff? Sure. Yes. No, like Jelmida, we have a mixed option for those community accounts that don't prefer to mix. We will do the same.

Speaker 4

We are looking at either a JALMIDO like model or all mix, so everyone would receive the product mix. Obviously, yes, there are incurred expenses, but there's also operational efficiency. There's not training that's needed to mix. The stability we believe will be long enough that we can deliver the product on Monday. They can keep it and administered anytime during that week.

Speaker 4

And we're evaluating that decision now. What we won't do is require folks to mix everyone to mix this. It'll either be very similar to gel Mito or a 100% deliberate mix.

Speaker 8

Great. Thanks very much.

Speaker 5

Thank you, Liam.

Operator

Thank you, Liam. One moment for our next question. Our next question comes from the line of Matt Kaplan of Ladenburg Thalmann.

Speaker 9

Hi, good morning guys and thanks for taking the questions. I guess just going back a little bit, based on the comments at the recent KOL Day by some of the panel members, how do you think, given the strength of the 102 data and their enthusiasm for it, how do you think it will be utilized in the treatment of an MIBC, especially given the ongoing BCG shortage?

Speaker 2

Yes. Mark comment on that?

Speaker 3

Yes, sure. Hi, Matt. Thanks. So I think, obviously, our data have focused on patients with intermediate risk, low grade pathology. So my expectation would be after approval that the indication would be in patients who have new and recurrent intermediate risk disease.

Speaker 3

Having said that, obviously, we've seen and the gel Mito experience, I think, exemplifies this, that once decisions have a new tool available to them, they can be creative in their management of patients. Obviously, that would in the setting of patients who were appropriate for treatment with BCG entail off label use in high grade histology, which we obviously could not and would not promote. But my expectation is that the lion's share of use would be for the indication, namely for low grade intermediate risk disease, either de novo disease or recurrent disease. And Liz may want to comment on this as well.

Speaker 2

Yes. I guess I'll just add to Mark's point. We obviously in no way would promote for high grade disease. I think the ongoing shortage of the BCG just underlines the need for more treatments. And I think one of the things that we're considering is now with the data being so strong, do we study UGM-one hundred and two in high grade disease?

Speaker 2

Where else do we study UGM-one hundred and two. I think we have a lot of opportunity and a lot of ideas on where we can take it next. Just still again a high unmet need in this space. So but I think from Mark's perspective, I think you'll see it really in the intermediate risk patient population in which we studied.

Speaker 9

Okay. Thanks. That's helpful. And just one quick question for Jeff perhaps. I guess the learnings from the Gel Myto commercialization, which you think can be applied to UGN-one hundred and two once approved to help facilitate the ramp of that uptake?

Speaker 4

Yes. No, great question. So the convenience that 102 offers, you just don't have as big of an operational lift. As I said earlier, if we deliver product mix, I believe most of this will be given in the clinic. It can be given by an extender.

Speaker 4

So you don't have to worry about setting up all our time getting this product through formulary at the hospital institution. So I think we've learned that having a mixed product delivered is something that we definitely need for the community accounts. And that level of aggressiveness with regards to being partners with the urologists, they're surgeons, they do surgery. So making sure that our messaging and positioning are strong to partner with them and not be reserved for someone who had 6 or 7 TURBTs. The other thing that will caveat is that certainly from a business standpoint, the convenience for the urologists from that as well.

Speaker 4

This will be another buy and build drug that they can be given in the clinic. So a lot of learnings are a lot of learnings will be overcome just by the sheer convenience of 102, but then certainly how we message, how we partner with urologists that's going to significantly help with the launch curve of 102.

Speaker 9

All right. Thanks. Thanks, guys.

Operator

Okay. Thank you. I'm showing no further questions at this time. So I would now like turn the conference back to Liz Barrett for closing remarks.

Speaker 2

Great. Thank you, operator. As always, we appreciate you taking the time to join us today. As I mentioned earlier, it's an unprecedented time, not only for our company, but for patients with urothelial cancers. I'm inspired every day by the commitment of our colleagues that have remained steadfast in their belief and our ability to advance care for patients in need.

Speaker 2

So we look forward to the next few months and to continue dialogue with you. Thanks again for your interest in UroGen and for joining us today. So operator, you can disconnect now. Thank you.

Operator

This concludes today's conference call. Thank you for participating. Everyone, you may disconnect.

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Key Takeaways

  • ATLAS and ENVISION Phase 3 trials of UGN-102 met primary endpoints, showing a 55% reduction in risk of recurrence, progression, or death and 65%–79% complete response rates at 3 months versus TURBT.
  • UroGen delivered a record $21.1 million in Q2 JALMIDO revenues, up 27% year-over-year, driven by real-world data support and extended admixture stability that eased logistics and boosted uptake.
  • The company raised $120 million in a private placement to support UGN-102 pre-commercialization, plans an NDA submission in 2024, and targets potential approval under priority review by late 2024/early 2025.
  • If approved, UGN-102 would become the first non-surgical treatment option for ~82,000 new U.S. patients annually with intermediate-risk NMIBC, tapping a >$3 billion market and avoiding risks of repetitive TURBT.
  • UroGen reiterated full-year 2023 guidance: JALMIDO net product revenues of $76 million–$86 million, operating expenses of $135 million–$145 million, and $55.3 million in cash at June 30 (pre-$120 million financing).
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