UroGen Pharma Ltd. (URGN) Earnings Call Transcript & Summary

Good afternoon. My name is Turner Kufe. I'm a biotech analyst here at JPMorgan. Our next presenting company is UroGen Pharma. And speaking on behalf of the company is CEO, Liz Barrett, and we'll have the breakout session in the Olympic Room afterwards for some Q&A. Thank you.

Great. Thanks, Turner, and thanks, JPMorgan, for having us here. I'm really pleased to be here. I will say, a lot happens in a year. For those of you who know or may not know, one year ago when I presented at JPMorgan, I was day 6 on the job. And -- but I did get through the presentation which was good, and sounding like maybe I knew a little bit about what I was talking about. So I'm really thrilled to be here today. I want to take an opportunity to share with you what an eventful year it has been for UroGen in 2019, but also what another eventful year it will be for us in 2020. I want to take an opportunity to recognize my executive team that's here as well as some members of our Board because I can tell you that we would not have accomplished what we had if it were not both for the team at UroGen as well as our very supportive Board. So thank you very much for being here. Our requisite forward-looking statements. As I said, 2019 was a very busy and pivotal year for us. The good news is that the time that we were here a year ago, we had just started our rolling submission to the FDA with a commitment to finalize our submission by the end of 2019. I'm very pleased to say that we were able to have our final module into the FDA in October, and we received our acceptance notification from the FDA with a PDUFA date of April 18. I think one of the really important things, and this was the number one thing we needed to do as a company. We talk over the slide about 2019 delivering upon our commitments, and that's been a real goal of the management team from everything, from our financials to advancing our pipeline and really, again, the number one thing to do was to put our submission into the FDA. So I'll talk a little bit more about each of these things in a moment. The good news is, is that we are a company with a pipeline. We have UGN-101, which is what we just submitted to the FDA for low-grade upper tract urothelial cancer. We had UGN-102, which I'm going to talk more about as well, and which we'll be going into a pivotal study for low-grade non-muscle invasive bladder cancer, intermediate risk patient population. We have our TLR 7/8 agonist in our pipeline that we've done some preclinical work. And because of the preclinical work that we've done with our TLR 7/8 agonist, we were able to acquire a license from the Agenus' CTLA-4 to use in combination because we believe, based on the work that we have done, that the best thing for patients is to be able to use both the TLR 7/8 agonist along with a CTLA-4 molecule, and I'll talk briefly about that, about what our next steps are. As I said, we are building a uro-oncology company and really beyond that via unlocking the potential of uro-oncology. We had a lot of investor meetings when we were here, and we had a lot of questions about, well, who are the leaders in urology. And what they -- what we hear often time is there's really not companies who are leading in urology. And we believe that we will be that company to lead in uro-oncology because we are addressing areas of high unmet need in both low-grade UTUC as well as low-grade non-muscle invasive bladder cancer. The good news is, this is -- these are 2 medicines that along can build a strong foundation to build a long-term sustainable company. We believe that peak revenue from just these 2 medicines will be well over $1 billion in peak revenue, and we're excited to take that opportunity and foundation and to continue to build a company beyond. To talk a little bit more about UGN-101. UGN-101, as I've mentioned before, is for low-grade UTUC, so upper tract urothelial carcinoma. Why is this important? Why is there such an unmet need in this patient population? It's because these patients -- for low-grade patients are not at risk for mortality, but these patients are really about managing their recurrence. So what happens in these patients is they present -- usually through blood in the urine, but they present to the physician, and they get scoped and biopsied to determine whether they're low-grade disease. Unfortunately, about 45% of the patients at presentation, their tumors cannot be removed so a scope cannot get in where the tumor is. So these patients typically go straight to a kidney removal surgery. And on the other hand, you have some that they feel like, okay, they can get most of it, but these patients have an average recurrence of 6 months. So the patients end up with repetitive endoscopic ablation until the point where the physician throws up their hands and says, "okay, can't do this anymore. " And 70% to 80% of the time, these patients get their kidney removed. So in discussions with the FDA, when you talk about that we actually have a medicine and a therapy that can delay or prevent patients from having a kidney removed then that's a very compelling proposition. It's a very compelling proposition on many -- for many reasons, but think about the patient. This is an elderly patient who average age of 74. So they're -- even with just aging or reducing their kidney function. So losing even one kidney at that point is, obviously, causes comorbidities in this patient population. The patient population that we look at as being our addressable patient population, is about 6,000 to 7,000 patients. Where do we get that patient population? About half of it is in the incident newly diagnosed patient population. So for -- if you look over at all, UTUC, all upper tract urothelial cancers, it's about 7,000 to 8,000, and about 40% of those patients have low-grade disease. And so those patients are obviously eligible for immediate treatment with UGN-101. In addition to that, as I mentioned before, you have a large group of patients living with low-grade UTUC, who are coming back to the physician because they're having recurrence. In that patient population, there is about 15,000 to 18,000 patients that are in that scenario, and about 20% of those every year will recur. And that's where we get between the incident and the prevalent population, about 6,000 to 7,000 patients eligible for us to have the first, what we call, chemoablative therapy for these patients and give them the opportunity not to have their kidney removed. So the -- we are very pleased with the data. It was actually much better than even we expected as when we started this study, 59% of these patients have a complete response, very importantly, and as we were here last year, we only had limited data on durability, but I'm pleased to say that the durability for these patients has really held up. So this just really -- it demonstrates the idea with our therapy, you're actually getting to the entire field. So instead of going in for a physician and ablating the tumors that they can see, this actually allows for delivering medication across the whole field. So it's -- physicians will often say, it's not what I can see, it's what I can't see. And we know because of the rapid recurrence in this patient that there's definitely still tumor that they have not been able to ablate. And so not only the 6-month durability at 89%, but 12-month durability to 84% shows a really strong, durable response in these patients. The other key thing to note here is that, as I mentioned before, about 45% of patients actually present with unresectable disease. So these are tumors that the physician, the scope just can't get to. And so no matter whether a patient had resectable disease or unresectable disease, the efficacy was the same. And so we're really thrilled, and this is one of the things that was very compelling for physicians when they saw the data in the endoscopically unresectable patient population. The most commonly treatment -- treatment-emergent adverse events was really stenosis, which happens in a lot of cases. Any time you put a scope into the ureter, you'll see that urinary tract infection. And again, the typical types of AEs that you see with these types of procedures and with the application of mitomycin. The good news is that majority of these were mild to moderate with only a small percentage of them being serious AEs. As I mentioned before, our PDUFA date is April 18. We've been -- the team has been on track. I think it's really -- I would really like to note the idea that we -- the fact that we got breakthrough designation has been a real positive for us because what it has allowed for us is to have an ongoing engagement with the FDA. They believe and have noted for us that they -- that this is a very high unmet need. And they have worked with us, and we're actually having an ongoing dialogue. So instead of being in a situation where you typically put your submission in then you hear from them much later, it's been a nice ongoing dialogue. The other thing I'd like to note is that we don't expect that we'll have an ODAC. We obviously can't say definitively. But at this point in time, we would have usually known by now if they expect it. Having said that, we definitely are prepared if we want -- if we need to go to an advisory committee, but all of the information we've gotten so far leads us to believe that that's unlikely to happen, and we'll know more by the end of the month. So as you can imagine, and Jeff Bova is here with us and has been participating in JPMorgan this year as our Head of Commercial. So it's been the last year and even before 2019 in preparation for commercialization. I will also tell you a little bit about Jeff's background. He came to us from Bayer, where he launched Xofigo from a sales and a marketing perspective. There are a lot of parallels from a logistical standpoint of delivering our medicine and the work that he's done there. The team has also been able to attract a very strong team. They've experienced professionals that have experience in both urology and oncology, and most of them in uro-oncology, specifically. The good news is, is that actually Monday of this week, Jeff and I presented and spoke to the entire commercial team. So with it, they are hired and ready to go and started on Monday. And so we're very pleased to already be in prelaunch mode. They'll be going through training, obviously, and be out in the field, meeting customers and talking about the high unmet need before we seek approval. The thing that we've learned is that there are 3 things that are important for the launch to be successful. One is patient identification. As I mentioned, this is a small disease, 6,000 patients. So what we really need to do is be in there with the nurse navigators and know when a patient has been identified as having low-grade UTUC. The second thing is around reimbursement. This is a buy-and-bill drug. And physicians before they will use it on many patients, they want to know that they will get reimbursed. So the other thing that the team has been doing is putting in place programs that will improve reimbursement and the rate of reimbursement. In addition to that, we have field reimbursement managers that will be out there with the practices, helping them to make sure that they do it right the first time. And then lastly, I'd like to note on the reimbursement in the J-code and C-code, CMS has moved from an annual notification of J-codes to quarterly. That is significant because a company could be 12 to 24 months before they would actually get their J-code, and we are confident that we will actually have our J-code before the end of the year. In addition to that, physicians can use a C-code that will also -- we will have by the October timeframe because most of these procedures will be done in the surgical center or the hospital. So they don't actually have to have a J-code, but they have to have a C-code, but this is something that's really important. So in addition to the fact that we'll be able to accelerate our permanent codes that will allow for reimbursement, we also have a full program -- comprehensive program to help physician practices get reimbursement. And then the last piece is make it easy. They say that make it easy that we want the seamless integration of our therapy into the physician office. And we do that by -- we are going to announce in the next couple of week a national partner for a mixing pharmacy. So this way that we have the drug, and we have the gel. They need to be mixed before a surgery. And so instead of the -- the office can do it themselves. And obviously, the hospitals, if it goes to a hospital, they tend to want to do that themselves. But for most of the practices, they would like to have it ready to go. So we have, again, entering into an agreement where 90% of the patients can be covered by a mixing pharmacy. So they'll take care of all that, we'll deliver it to the doctor's office, ready for them to go for the surgery. So that's just one example of all of the things that we have done to make it easy for physicians and to really address any barrier that there may be for adoption. We've done quite a bit of research, as you can imagine, and the results of that have shown us that this will be a typical adoption curve and use across the treatment continuum. I talked earlier about newly diagnosed patients and recurrent patients. I talked about resectable and unresectable patients. And across the board, physicians say, they will use this product. The one thing that we noted is that usually if you have a drug, you do research, physicians will say, "yes, well I have a population that I will use it in." But some say, "no, maybe I don't see a place for it in my practice." But in -- with the research that we have done, every single physician has a place for UGN-101 in their practice. So whether they'll use it initially in the unresectable patients, some say, I'll use it on everybody, and I'll try it first before I do anything else, but all physicians across the board have a room for this in their practice. The team has been really building awareness of not only UTUC, but of UroGen. And the good news for us is, actually, there was no real company out there focused on UTUC so we have become the company and the resource for patients and physicians to go to for the treatment of upper tract urothelial cancer. About 18 months ago, research was done, and there was about 30% of physicians that were even aware of UroGen and UGN-101. And as of May of this past year, it was up to 70%, and we expect by launch to be even greater as well. I talked earlier about the practices. It's important to note that the majority of the patients are seen in a few of the accounts. So you can see 33% of the accounts actually account for 90% of the patient population. In urology, they have, what they call, large group practices. It could be anywhere from 6 to 7 physicians. There are upwards of 100 urologists in some of the large practices. Most of these practices actually also have an affiliation with a surgery center. So they own it or they're strongly affiliated. This is important because this is where they make their money. This is how the bread and butter of the urology practice. And so that's where these patients are going. We have relationships in those accounts, and that's where we'll be focused at launch. And I'm pleased to say that we're able to commercialize this product with a very efficient team. So we have 48 sales representatives, 7 reimbursement managers, 7 clinical nurse educators, 7 MSLs to be able to support the physicians in those offices. So it gives you an idea of kind of what we've been doing on UGN-101 in preparation. We feel we're very confident that we're ready for launch and excited about our PDUFA date and then impending launch a few weeks later. Moving to UGN-102, there's been a lot of interest in UGN-102. I first want to take a step back and talk about the patient population for UGN-102. First of all, it's low grade, non-muscle invasive bladder cancer because we often hear things about other products in this space, but there are no other products in this space. So in the low-grade non-muscle invasive bladder cancer, we're the only therapy that's being studied for this low-grade disease. In addition to that, it's also the intermediate risk patient population. We picked this patient population because they have a high unmet need. This is a patient population that physicians will consider to be surgical failures because the TURBT is currently today's standard of care. But unfortunately, in this patient with intermediate risk who meets some of these factors, multifocal disease, they have large tumors, they have a high rate of recurrence, the TURBT just doesn't work. And so physicians often call them frequent flyers. They come in 1, 2, 3 times every year. And because they have a recurrence and have to have repetitive TURBT surgeries. And again, if you don't know, this is not a benign surgery. So they have to go into general anesthesia, again, an elderly patient population. So there is comorbidities associated with doing this surgery. And a frustration by the physicians of having to continue to bring this patient back because what they're doing is really just not working. So we presented very encouraging data on UGN-102 recently in September and our complete response rate, 63%. So very similar to our complete response rate in UTUC at 59%. And this was based on about half of the patients, and we will be showing more updated durability data in the coming months. The good news is, is the bladder is actually easier to reach than the upper tract is. And so the AEs associated with this treatment is even fewer and far between, and there were no serious adverse events in this study. And we do believe that the UGN-102 has the potential to change the standard of care and again, be the first chemoablative opportunity for these physicians that can be done either in their clinic are in their surgery center. One thing that we think is very important is to understand there's emerging data that's showing that the molecular profile and genetic makeup of the upper tract and the lower tract are very similar. And that's why we -- given the data that we've seen with CR rates very similar this, again, gives us confidence that the bladder cancer program will likely result very similarly than our UTUC program. And because of that, we are moving forward very quickly into a pivotal study, and I'll talk more about that in a moment. Now the UGN, the bladder market is much bigger than the UTUC market. UTUC, as I said, 6,000 to 7,000 patients. This eligible intermediate risk low-grade is about 80,000 patients. Now the majority of those, about 80% of those are actually, again, recurrent patients. I talked about these patients, this intermediate risk patient that continue to recur. And so most of the patients in this population are, what we call, the prevalent pool of recurrent patients. And then about 20% of them are all the newly diagnosed but intermediate risk patient population. And so we're, again, thrilled to be able to move into a market that's obviously a much bigger market and provide patients an alternative and physicians an alternative to their current treatment. What we have seen is that if you talk to physicians and ask them about TURBT, that is the gold standard today, right? They like TURBT. It works. And it's only when you start to ask them about these patients that come in that have to -- that recur often and you're doing multiple TURBTs. And what you hear from them is, yes, that's very frustrating, and they can tell you who those patients are. I saw Mrs. Smith last week and, yes, she's been in here 3 times. And they're just really frustrated with how to treat them. So there's a real difference between -- and they think that TURBT to them, pretty benign. But when you talk to patients, you realize a TURBT procedure is not, and it takes a lot out of a patient and have an alternative, and there was -- as you can see, the quote here, it was very interesting from a female patient that said, when I go and get an exam, and he tells me, I'm okay, I'm on top of the world. But then I start to get very nervous when I know I'm about to go back in because these patients have to go in every 3 months because I don't know what's going to happen. And they are dreading the idea that they're going to have to have another TURBT procedure. So we know that there is a lot of work that we can do around educating around the high unmet need and the sequelae associated with this continuous TURBT for patients. So our next steps for UGN-101, we actually already have a meeting with the FDA scheduled, and we expect that by the end of Q1, we will have an agreement with the FDA on what exactly that looks like. We have a proposal. We've talked a little bit about that, but we will do a head-to-head study versus TURBT in this patient population. And the endpoint will be time to recurrence. It's a time to event, again, and an end point. So it will be a randomized head-to-head study. We'll be able, again, to share more about exactly what that study looks like. But we already know because we've spoken to the agency many times about this that we know that if we are able to deliver a durable response in this patient population versus TURBT, whether it's equal to or superior to either way that, that will be enough for approval in this patient population. So we're looking forward to providing more information on that. And then lastly, as we move into earlier in our pipeline, I talked about our TLR 7/8 agonist and the work that we've done preclinically that shows that it's obviously an immune modulator. It's an agonist in the sense that if you use an agonist in combination with an antagonist like CTLA-4, we have shown in our mirroring models and our preclinical models that what you get is you do get an improvement in survival. And so because of that work, we were able to gain access and exclusive license for local delivery of Agenus' CTLA-4. We're very excited about the opportunity to bring that. We'll be doing preclinical work where you deliver the CTLA-4 in our gel. So you take the RTGel, you use it, you deliver it into the gel, and what that allows you to do is the local delivery of a CTLA-4 allows you to dose appropriately for efficacy and then also avoid some of the systemic side effects that you would normally see. And so with that, I'm going to bring it to a close. I know I'm kind of running out of time here. Just want to say that beyond, there are other areas that we're interested in looking at for both local delivery and novel medicines that are adjacent to our uro-oncology space. And I would like to end with a video that talks about helps you with the patient -- hear from patients. [Presentation]

Thank you, everybody. Thank for your time. Appreciate it.

Good afternoon, everyone. I'm Liz Barrett and I'm the CEO of UroGen Pharma. Happy to be here with you today. Sorry we're a little bit late. The presentation before us went late, so you know how that goes. Jeff?

Sure. Hi, everyone. I'm Jeff Bova. I'm Head of Commercial here at UroGen.

Mark Schoenberg, Chief Medical Officer.

Okay. So we can go to Q&A. I guess there is a microphone here, so I'm assuming if someone has a question you'd like for them to step up to them.

Sure. Thanks, Liz, and thanks for that presentation. Obviously, it's an exciting year for you guys, right, with an approval decision coming up and a launch shortly thereafter. Maybe just to help level set expectations for the launch of UGN-101. How should we be talking about -- how should we be thinking about rather, I guess, the demand curve, I guess, and the early innings of the UGN-101 launch, and commercial metrics that will be communicated with investors as the launch gets underway?

Sure. So I'll just talk a little bit about that and if Jeff wants to add anything, he can. I think, one, we're still working on exactly what commercial metrics we'll start to share with investors as we get more closer to the launch, and we'll definitely have some measure. We will not be giving revenue guidance as I think you would expect. I -- the way that we look at it and all the research that we've done, it says that this will be a typical curve. A typical uptake, a typical adoption curve probably once you pass that Q1 and Q2. And the -- and I say, Q1 and Q2, I mean the first and second quarters of launch, mainly because it's an installation, it is a procedure. So we will -- we want to make sure, and Jeff often talks about this, that the first experience has to be the best experience. So we want to make sure that the physician knows how to do the procedure that we have the appropriate support in place and that they've -- we have clinical nurse educators as well as MSLs, and that logistically, everything is tied down. So I think from that perspective, and I think the other thing is you've heard a lot about reimbursement, and we also expect that by the end of the year, we will have both a C-code and a J-code. So with those 2 sort of factors in mind, I think at -- once we get beyond sort of the first and second quarter of launch, you would see a typical adoption curve that you would. I also showed the slide that said, physicians across the continuum, and it's pretty typical. You've got your early adopters with a new therapy. You have those that say, I'm going to try it on my unresectable patient first. And we've heard that same response from physicians, and we've spoken to them. I don't know if you want to...

Sure. I think what you heard just talk about the reps being brought on board here this past Monday, they're going to spend a lot of time doing that account prep work. They're going to spend a lot of time -- first of all, most of them already know who the reimbursement specialist is in the actual practice. If they don't, they'll identify those folks. Most of them already know the key targets and where the key targets go to perform surgery whether that's at their surgery center or hospital. But not all of them will be 100% account profiled. So that's why when Liz talks about a little bit of a period to where we're getting all of them profiled, we know where the mixing pharmacy is that's closest to them. We know where they like to -- where they're going to perform the installation. All those things will take a bit of -- a little bit of time. And then after that, you'll see a normal trajectory of uptake.

So thanks, Eric.

In the presentation, you made a comment about ongoing discussions with regulators, with FDA as part of the idea review process. Can you just elaborate on sort of the nature of those discussions? And to what extent your durability data from the Phase III study is part of those?

You're talking about for 102? Just to...

101.

For 101. We are providing updated durability data to the agency. But as you know, the data we presented back in September is our final data analysis for our submission. But the agency is interested in, and we are providing the 120-day update with them on the durability data. So they will have that. We have not gotten into the discussion on what will be included in the label or not included in the label because we haven't gotten into label negotiations with them. But it is our hope, obviously, that as much durability data that can be included will be included.

Coming back to commercial readiness and building of the commercial infrastructure, just on the point of collaborating with mixing pharmacies, is there kind of a formal partnership that need to be put in place with those pharmacies? Can you talk about how that relationship works?

Sure. And we were prepared to do a formal partnership with sort of a lot of different regional pharmacies if we needed to. But the good news is, and you heard Liz mention it. So the next couple of weeks, we've chosen a national partner. So for the most part, for 90% of the population that national partner has that coverage. In some areas, they don't. And in that instance, we will use a regional partner. So those larger areas where they may not have a presence, we'll partner with the regional mixing pharmacy. So...

So can you offer a little bit in terms of how that partnering might impact, I guess, economics or just COGS associated with gross margins for 101.

It will be included. The cost of that will be included in our cost of goods, but it's not going to be meaningful to our cost of goods.

And just on procedural codes, can you talked a little bit about C-codes transitioning to J-codes and probably benefiting from a faster review cycle. Just -- maybe just a little more clarity on why, I guess, getting to a J-code in a reasonable time frame is important for adoption? [indiscernible]

Sure. So J-code is automated. The biggest difference between a J-code and a miscellaneous code is a miscellaneous code is a manual process and admittedly causes undue anxiety, but it does cause anxiety for a period where there is miscellaneous code. The J-code is -- it's automated. It's a specific code to UGN-101, payment is guaranteed -- payment in 30 days from Medicare. So certainly, it helps with regards to reimbursement confidence. But during the time of a miscellaneous code, which every part B drug has at launch, we will instill -- our reimbursement managers, there are 7 of them, there are also 2 key account directors who have great relationships within the larger groups with the CEOs in the larger groups, we will instill reimbursement confidence with that miscellaneous code as we're waiting for a permanent J-code.

I think the other thing, can you just talk a little bit, Jeff, about the other programs they've put in place to ensure or at least address the anxiety that physicians have around reimbursement?

Sure. One of the big ones is, I don't know when I'm going to get paid. I get -- a miscellaneous code pays me in 60 days, it pays me in 90 days. We're going to give 4 month -- we'll give 120-day dating. So they will take that off of the objections you'll have. You'll be getting paid, and you'll be able to then turn around and pay for the drug. The other -- and this is a rarity that it happens, but the other thing that we'll do is that if they're denied, if they use the drug within its indication, right, and they are denied and they appeal, and they appeal the denial and they're denied, again, we will credit the account. If they're -- this was -- been used in the past. It rarely is needed, but it is a security blanket in the sense that they feel a little bit more confident that if for some reason my manual miscellaneous code is denied after appeal, I'll still be given credit for the drug.

Are you helping in facilitating those appeal processes or those, I guess, feedback from payers in the instances where there might be discrepancies in numbers?

Yes, we are and then our HUB will. So we've chosen a HUB TrialCard. They will -- so the hope is that they will utilize our FRMs to help fill out the form correctly. So we're not going to make them, but the hope is they'll do that because that will ensure that the descriptor code, the forms are filled out correctly. The reality is, they won't do that 100% of the time. They'll do it on their own because they've done it in the past. At times, it's incorrect, and that's usually what drives either a incorrect payment or a full-up denial. So...

And then just on pricing, have you finalized your pricing in the reimbursement market at this point?

No. I think we are still where we were in the last conversation we've had, and we've said oncology like pricing, and we've sort of narrowed it down to $100,000 to $150,000 on a gross perspective. And obviously, we'll have some reduction for net cost, but I think that, that's about as far as we're going to go right now when we're talking about price.

I guess, clinically, do you anticipate presenting follow-up data from the OLYMPUS trial regardless of what actually ends up in the label. Is that important for, I guess, getting -- being better formed on durability. Is that something that physicians are interested in seeing?

Do you want to talk about that, Mark? Just where we...

Sure. We're in the process of finalizing a publication on the trial, and we will, undoubtedly, provide additional long-term follow-up data. We have the option to follow these patients for up to 3 years, and that will be very interesting for physicians.

Retreatment is also a question that comes up frequently, right? The potential to do that with the label that you're anticipating or what other life cycle management work you're doing through clinical trials in order to just kind of bring that optionality...

We've launched a retreatment trial actually. Unfortunately, we haven't had any patients. We've had to retreat yet, but the option is available and the trial is open.

But to your question about will retreatment be in the label. Retreatment won't be spelled out, obviously, and the label because there's no retreatment data. But we do think we've talked to physicians that they expect, I mean, with the median time to recurrence at 13 months with the Kaplan–Meier curve that we shared a few months ago that we actually believe that they'll retreat, and they've said they'll retreat. And they don't really need to have retreatment in the label because if you've gone 13 months, and it's been successful, they'll be able to retreat, and unlikely that there would be any pushback from a payer perspective. But we do want to gather the data. We want to generate the data on retreatment. It's just a matter of getting enough patients to the point of where they've recurred and can be eligible for retreatment.

Can you just go through the comments in having J-code by year-end because I think the prior to timeline would put it potentially into 2021...

Yes, that is correct. So we will submit it at approval. They will take a full quarter. So if we get approved, early second quarter or late second quarter regardless, they're going to take third quarter for review. And depending on when they review the submission, we believe we'll have it by the end of the year. So if they truly -- they have commented that they are doing this quarterly. So we will be ready to go. In fact, we've got the paperwork ready to go upon approval. That's the one change that they did make is you have to have approval before you could submit.

So one of the things, just for perspective, when we say by the end of the year, the reality of it is this approvals in April. So we'll be in the Q3 cycle. So we actually should be able to get a J-code by October. But just to be on the conservative side, if something stops there because they have a date. You have to get it in by this date. And as long as you get in by that day, there'll be a review. So at the latest, we're saying the end of the year. We tried not to complicate things too much, but it's really also important to know that a J-code is not as important in this situation as it is in other situations because the procedure gets done in the surgery center or the hospital. And there, they'll use a C-code, which all the time gets done on a quarterly basis, and we believe we'll have by October. So don't want to complicate things, but we think by October, or at latest the end of the year, we'll have both a C-code and a J-code.

Maybe just a couple of questions on UGN-102. The -- so you presented preliminary efficacy data from the OPTIMA II study last -- at your Analyst Day in the fall. We saw complete response rates in 3 months, but -- and how that compares to TURBT. But do you have a sense at this point or confidence that those CR rates will remain durable to the extent that those will be durable 6, 12 months out.

Do you want to talk about that?

Sure. So we obviously haven't disclosed the durability data yet. But it's interesting to remind you that the molecular data that are emerging from an analysis of upper tract, low-grade tumors and non-muscle invasive bladder cancer with similar histology are actually very similar, leading one to conclude that the diseases are very similar in terms of their clinical behavior and likely to be similar in terms of their responses to medical intervention. So by analogy, you know what our long-term follow up is beginning to look like in the upper track study, and we're hopeful that our experience in the bladder would recapitulate that to some extent. It's obviously premature to announce that, but we're following with patients closely and would announce that later this year, likely.

Also just want to kind of get back and note what we think is clinically meaningful because the results that we've shown so far is significantly better than what we would consider to be clinically meaningful. I think that's important. It's very compelling data that we have. We've all been talked about 50% CR and 50% of those are still in CR at 12 months. Why is that important? So you end up getting about a 25% overall CR at 12 months because this intermediate risk patient population that we've talked about is a patient population that we know is more likely to recur within 12 months. So we expect that the majority of those patients would recur. And so given that, if you think about the data and the 63% CR rate where we are, assuming that continues, we have a pretty wide band of where of the durability number that we need to actually still be clinically meaningful. Having said that, I think that we do have confidence given the emerging data and the data that we've seen and how consistent it is and similar it is that we'll be able to be significantly better than that.

On your timeline of anticipated events for first half, you're saying updated durability probably later in the first half of '20? Can you give more [indiscernible] is that going to include 6-month durability data? I'm trying to get a sense of that.

We'll have as much as we can share at that point in time. We're hoping, again, by midyear, maybe at AUA, but we haven't -- we have to obviously get their acceptance of any data that we present. But we need to get enough of a cohort of patients that have, but yes, any 6, 9 or 12-month data, we have would like to share by midyear. We just don't have enough right now to share.

What aspects of the proposed Phase III study from 102 are still in flex or in negotiation with FDA leading into?

We haven't presented any of it to the FDA. So we have a meeting. We've sent them our documents, obviously, but we need to sit down. What I will tell you is that we had, at the end of Phase II, a meeting went down before we did our Phase IIb study. And so they were very clear then that a head-to-head against TURBT with a time-to-event end point was what they wanted to do. So we think we're pretty confident that the design that we have will -- with minimal maybe revisions would be acceptable to them. But we need to have a formal discussion with them in a formal agreement.

You've -- you're testing for both noninferiority and superiority in the Phase III study. To what extent does superiority matter? I guess the physicians really given just the base of have a TURBT.

You want to talk about that?

Sure. Yes. No, I mean, it's a great point actually. And in fact, noninferiority would be clinically meaningful because the comparator requires general anesthesia and carries with it surgical risk. What we're proposing is a primary chemoablative therapy that can be delivered in a doctor's office. And our experience to date suggests that it is very well tolerated, and that actually the therapy can be delivered by extended staff rather physician him or herself. So it fits nicely into urologic practice.

There are no further questions. Thanks, Liz.

Great. Thank you. Appreciate it.