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

Ladies and gentlemen, thank you for standing by, and welcome to the UroGen Pharma conference call. It is now my pleasure to turn the call over to Kate Bechtold, Senior Director of Investor Relations for UroGen Pharma. Please go ahead.

Thank you, operator, and welcome to the UroGen Pharma conference call to discuss the FDA approval of UroGen's lead product, UGN-101. Yesterday, we issued a press release highlighting this event. The press release can be accessed on the investors portion of our website at investors.urogen.com. Joining me on the call today are Liz Barrett, President and Chief Executive Officer; Dr. Mark Schoenberg, Chief Medical Officer; and Jeff Bova, Chief Commercial Officer. Joining us for the Q&A portion of this call will be Peter Pfreundschuh, Chief Financial Officer. As a reminder, during today's call, we will be making certain forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of UroGen Pharma's annual report on Form 10-K filed with the SEC in March and other filings that UroGen Pharma makes with the SEC from time to time as well as any negative effects on UroGen's business as well as commercialization and product development plans caused by or associated with the COVID-19 pandemic to the extent not disclosed previously. We encourage all investors to read the company's annual report on Form 10-K and the company's other SEC filings. These documents are available under the SEC Filings section of the Investors page of UroGen's website at investors.urogen.com. In addition, all information we provide on this conference call represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise. I will now turn the call over to Liz.

Thanks, Kate, and good morning, everyone. Thank you for joining us today. I'm sure like you are sort of stuck in my office, I had locked myself in my office, but I cannot guarantee you won't hear a dog or kids screaming in the background at some point. So I hope you all are well. As Kate said, today is a historic moment for UroGen as urologic community as we received the FDA approval for Jelmyto, formerly known as UGN-101, for the treatment of patients of low-grade upper tract urothelial cancer. Our team is excited to bring the first-and-only approved nonsurgical chemoablative treatment for patients with this rare and difficult-to-treat cancer. Let me first take a moment to express my gratitude to those with whom this outcome would not have been possible. This announcement reflects the courage of our patients to enroll in clinical trial, the unwavering commitment of all of our OLYMPUS study investigators, including our lead principal investigator, Dr. Seth Lerner at Baylor College of Medicine and the flawless execution of the UroGen team. Despite external pressures and challenges, I am in all of the relentless perseverance of our colleagues at UroGen. This outstanding team has remained focused on bringing this truly transformational treatment to patients who deserve better options. It's a result of our bold, inventive and connected culture at UroGen. Without this team's efforts and support, we wouldn't be where we are today. I'd also like to thank our investors who have shown confidence in our company and understood the long game to build a valuable growth business. And last but definitely not least, our thanks to the FDA for their engagement and support to bring this breakthrough therapy to patients and offer them a novel and effective kidney-sparing treatment option. They recognized early on the high unmet need and have been a great partner in expediting this medicine to patients. The approval of Jelmyto is more than just an approval for one new medicine in our company. It's also a validation that our proprietary technology enables an innovative approach to solving current challenges and supports the potential across multiple therapeutic areas, including our leading pipeline of uro-oncology product candidate. UGN-102, for intravascular solution, is a medicine for patients with low-grade intermediate risk non-muscle invasive bladder cancer. The pivotal data from which we received approval for Jelmyto, coupled with the literature detailing similarities between UTUC and non-muscle invasive bladder cancer from a clinical and molecular perspective, gives us insight into the programs like UGN-102. The recently reported positive interim data from UGN-102 Phase IIb study has demonstrated similar complete response and durability results to the OLYMPUS trial and further supports advancement into pivotal Phase III study later this year. Our success with Jelmyto allows us to design future development programs based upon the OLYMPUS experience and build a long-term sustainable growth company, bringing novel solutions to patients that deserve better options. While we continue to advance our programs, we cannot fully predict the potential impact to our business and time lines based on the current COVID-19 pandemic. What I can say with absolute certainty is that our team is dedicated to the physicians and patients we serve, and we're prepared to do whatever is necessary, both in the short and long term to keep our communities, employees and our company strong and moving forward. In a moment, Jeff Bova will discuss our commercial launch strategy for Jelmyto. In the last year, these teams have been hard at work, developing a comprehensive launch plan. None of us could have anticipated that we would be executing a launch in the midst of a pandemic. But Jeff and his team have demonstrated amazing creativity and adaptability to quickly shift to a virtual launch to maximize engagement with our health care professionals and key stakeholders in this current environment. We believe the innovative solutions that they have developed will help ensure we have an effective launch -- I'm sorry, I got a call coming in. We believe that the innovative solutions they have developed will help ensure we have an effective launch and are able to deliver this product to patients and physicians who have been waiting. I'll now turn the call over to Mark to review the final data of the primary endpoint of the OLYMPUS study that was included in our filing to the FDA as well as the label and development program for Jelmyto. Mark?

Thank you, Liz. And first, I'd like to reiterate Liz's comments about our team here at UroGen and how fortunate I have been to work with such a professional and dedicated group of individuals. We are incredibly proud to be able to provide patients with the first-in-class nonsurgical chemoablative therapy for the treatment of low-grade UTUC. And as a practicing urologist, I truly believe that Jelmyto has the potential to be a practice-changing breakthrough for the field of uro-oncology. There has been little progress for decades in the treatment of low-grade UTUC, and today's approval supports the potential of our new medicine to transform the management of patients currently treated by either repetitive endoscopic surgery or kidney removal and to provide them with a nonsurgical option. This novel minimally invasive kidney-sparing option will also help this elderly patient population, avoid the long-term complications associated with multiple surgeries under general anesthesia and radical nephroureterectomy. The FDA approval is based on the positive results from the Phase III OLYMPUS study, which demonstrated that Jelmyto achieved clinically significant disease eradication in adults with low-grade UTUC. As many of you know, OLYMPUS was designed as a pivotal, open-label, single-arm Phase III clinical trial of Jelmyto to evaluate the safety, tolerability and tumor ablative effect in patients with low-grade UTUC. The trial enrolled 71 patients at clinical sites across the United States and Israel. Study participants were treated with 6 weekly installations of Jelmyto administered via standard catheter. 4 to 6 weeks following the last installation, patients underwent a primary disease evaluation to determine response, the primary endpoint of the study. Primary disease evaluation involved the ureteroscopy and wash cytology, which is a standard microscopic test of cells obtained from the urine to detect cancer. Patients who achieved a complete response were then followed for up to 12 months to determine the durability of disease control with Jelmyto. A final analysis of the primary endpoint of our pivotal Phase III OLYMPUS trial demonstrated a 58% complete response rate in patients with low-grade UTUC. Durability response in those patients with a CR was evaluated at 3, 6, 9 and 12 months following the primary disease evaluation. Seven patients had documented recurrences and 19 patients remained in CR at 12 months. The median response duration has not been reached in this ongoing study. Durability response was estimated by Kaplan-Meier to be 89% at 6 months and 84% at 12 months after primary disease evaluation. The final durability data will be available by June, and we will submit as soon as possible to have the label updated to reflect all patients at the 12-month follow-up. We believe the longer-term data will remain consistent with the results year-to-date. And critical to the unmet need for patients, 48% of patients had tumors located in regions not amenable to endoscopic resection. These are patients who, according to the current standard of care, would have been candidates for immediate kidney removal. The commonly reported adverse events, those occurring in greater than 20%, were ureteric obstruction, flank pain, urinary tract infection, hematuria, renal dysfunction, fatigue, nausea, abdominal pain, dysuria and vomiting. Most adverse events were mild to moderate and manageable, using well-established treatments. No treatment-related deaths occurred. And with that, I'd like to turn the call over to Jeff, who will discuss our plan to reach Jelmyto to patients.

Thank you, Mark. We have been diligently preparing for the approval of Jelmyto. And in these unprecedented times, this calls for a nimble and flexible approach to ensure we have an effective launch. We've been closely monitoring the COVID-19 pandemic and developing solution-oriented mitigation strategies to keep us moving forward. While the situation continues to evolve, based on the information we have to date, we are planning the official launch of Jelmyto on June 1. Our team is certainly no stranger to overcoming barriers developing innovative solutions, as we progress this paradigm-shifting treatment through approval. Under Liz's leadership, 2019 was spent identifying key elements of commercial success and creating unique programs to support a strong and effective launch. The critical components needed to launch Jelmyto are in place. Recent events have brought about new opportunities to think creatively about how and when we go to market. The commercial team is fully staffed, trained and prepared for adaptive [ approach to launch. ] As you may recall, our filed force of 48 reps has deep experience in both urology and oncology. Since starting in January, they hit the ground running, meeting customers and discussing the unmet need. This team will be able to reach 90% of the patient potential. The sales reps will be led by 7 regional business managers. Each region is supported with the clinical nurse educators to provide training and support around the installation as well as the field reimbursement manager to ensure access and reimbursement. In the last year, we hired a team of 7 medical science liaisons, who have appropriately engaged with the physicians interested in learning more about UroGen and our technology, including through virtual meeting. Many physicians have already embraced virtual technology to increase office efficiency, so this approach is embedded in their offices, and we believe it will allow us to continue momentum through launch. Both unaided and aided awareness of our products and the unmet need has grown significantly over the last year as a direct result of our educational efforts and disease awareness campaigns. In addition, our market research has indicated urologists are increasingly dissatisfied with current treatment options for low-grade UTUC, and 88% desire new and differentiated treatment option for their patients. When I joined the company in 2017, the question I often heard was, who is UroGen, and what is UGN-101. Today, the question I receive around Jelmyto is when will it be available? We look forward to filling this unmet need in the urologic community with an effective kidney-sparing treatment option. Patient identification in efficient and accurate reimbursement as well as service reliability and ease of use will drive our success. Low-grade UTUC is an orphan indication with approximately 6,000 to 7,000 patients, and we'll be working closely with nurse navigators and the physician practices to identify patients upon diagnosis. Our veteran field team has developed relationships with these nurse navigator to enable rapid identification of [ these patients. ] Jelmyto is a buy-and-bill drug, and as we understand the physicians want to know they'll be reimbursed before widely adopting. Our field reimbursement managers will be available to physician offices to assist their efforts to complete forms correctly the first time. We have developed a support hub comprised of a combination of people, systems and processes that holistically support a positive health care provider and patient caregiver experience with Jelmyto. This hub will assist offices with reimbursement questions and address any potential speed bump that may prohibit the patient from accessing Jelmyto. UroGen is committed to helping patients access Jelmyto. Our market access teams have been laying the foundation for coverage and reimbursement, meeting multiple times with payers. These meetings have been consistently positive and productive. We have priced Jelmyto at $21,376 per dose and reflect -- this reflects the value of Jelmyto to transform the treatment paradigm for low-grade UTUC to potentially delay or avoid the downstream sequelae associated with kidney removal and to improve the quality of life for patients affected with this disease. We are confident in the payer coverage of Jelmyto. I'm pleased to also announce that we're actively in the process of submitting the C-code and J-code applications to CMS. We continue to expect that they will have C-code secured by October and J-code by the end of the year if there is no disruption in timings during the COVID-19 pandemic. In addition to the reimbursement and access, we have intensely focused on ensuring teams integration into physician practices. We have implemented processes to help Jelmyto separation and administration safe and seamless for the practitioners and the patients. Since Jelmyto need to be reconstituted with our gel prior to installation, we've entered into an agreement with a major national pharmacy under which the pharmacy, following receipt of a patient prescription, will be able to prepare and dispense the Jelmyto admixture on our behalf. The pharmacy arrangement is part of our effort to ensure that Jelmyto is prepared under the appropriate UST conditions in accordance with the exacting standards of the Jelmyto label because at UroGen, the patient safety comes first. At this time, we do not anticipate any disruption to our supply chain as a result of the COVID-19 pandemic. In light of the cancellation of the live AUA meeting, the American Urological Association annual meeting in May, we have developed a virtual educational experience in partnership with AUA to maximize the engagement with health care professionals and key stakeholders in the coming weeks. As is our central to our core values, we will continue to be bold and inventive to fulfill our commitment of bringing this innovative therapy to patients as quickly as possible despite the external circumstances. No matter what challenges we face externally, we are ready to begin bringing Jelmyto to patients. I'm incredibly proud of what UroGen has accomplished thus far, and I have the utmost confidence in our team as we enter the next chapter of our journey as a commercial stage company. With that, operator, I would like to turn the call over to questions.

[Operator Instructions] I show our first question comes from Derek Archila from Stifel.

Liz and team, congratulations on the news and the approval. So maybe the first questions I have, I guess, are for Mark and Jeff. Mark, on the label, talking in the dosing section, you talked about 11 additional doses once the patient is in CR. So was this something that you guys kind of expected to get on the label? Or was this more of a positive surprise? And then, Jeff, in the context of that additional dosing, how do you think that changes or maybe not changes the commercial opportunity in your view?

Yes. So I mean I'm just going to -- it's Liz. I'll make a comment and ask Mark to comment as well as Jeff. But we knew, because it was part of the protocol that it would likely be in the label. And we -- as we've talked before, our view is that the benefit of the therapy is really within the 6. And there was not consistency of the use of the -- of maintenance. And so we're not really in a position to be able to discuss with physicians that "best way to use maintenance". And so I'll stop there and kind of turn it over to Mark, so if he can talk from a clinician perspective about the maintenance and then Jeff, from a commercial perspective.

Derek, thanks for the question. Not a lot to add to what Liz said. Maintenance is in the context of chemotherapy for urothelial cancer, when you're applying topical therapy, very much a physician-driven decision. And as Liz points out, our study primarily focuses on the benefit of the induction phase. So I think that's where the physicians will be paying the most attention. And I think guidance on the value of maintenance is probably going to have to depend on additional studies.

Jeff?

Yes. So the promotional effort will be in and around that induction phase, the 6 doses that led to complete response. If the physicians choose to deliver maintenance, obviously it will be at their discretion, but the promotional effort will be in and around the 6 doses in the industry.

Got it. And then just another question on kind of launch timing. You talked about June 1. So was that date selected as you're thinking that some of these COVID-related restrictions will be eased? And any kind of color on the number of these practices that you'll be targeting that are currently open and seeing patients, would be helpful.

Yes. So again -- no, go ahead, Jeff.

Yes. So we will be -- and everyone knows this, if any [indiscernible] live in the country, we will be reactive from a perspective if the physician has patients that they've identified like that UGN-101, we will certainly provide them with the clinical presentation. We believe that June 1, that's a fluid date. We hope to go out with the full promotional launch at that time. But we'll certainly be able to answer questions and be reactive to physicians and have patients identified right now.

Yes. I only just want to -- what I was going to say at the beginning, though, is it actually even if we weren't in the situation with COVID, it would -- we have always been messaging that it would take us a few weeks. Because of printing of labeling, needing to get the drug into the U.S. from the EU and going through customs and then setting up the distribution network, we knew it would always be a few weeks. So reality of it is, is that even though we sort of put a line in the sand on June 1, regardless of whether we're "back to business or not", we will be launching on June 1. So it will be a potentially different type of launch, which I think we're very prepared to do. But I think even if we weren't in there, it would be 4 to -- a minimum of 4 weeks anyway before we would be really prepared to bring the therapy to patients -- physicians and patients.

Okay. I guess and then the last one, I might have missed this, but did you guys talk about pricing for the therapy and how your -- what the pricing model would be for Jelmyto?

Yes. Jeff, you can share that again?

Yes, sure. The pricing is $21,376 per dose, reflecting the [indiscernible] of the product, essentially the delaying a radical surgery of an RNU. So yes, $21,376.

Got it. Great, and congratulations.

Thanks, Derek. A nice job on the report, by the way.

Our next question comes from Eric Joseph from JPMorgan.

Congrats on the approval. I guess with the benefit of a little more data in the label. I'm wondering if you can speak to, at this point, how achieving CR duration relates to sort of the number of installations the patients received, whether it's any of the benefit you anticipate comes from patients receiving either maintenance doses or the ability to complete a full induction course. Secondly, in terms of the pricing model, just picking up on your comments about how your main focus is on the induction regimen. Do you anticipate coverage for the use of Jelmyto as maintenance therapy? And then I'll pause there.

Eric, it's Liz. The -- from a perspective of the study, patients were not evaluating until after the 6 installations, so -- the initial 6 installations. So there's not really a way to talk about at what point in time prior to that 6 installations. As I commented before, unfortunately, there was not consistency in the usage of maintenance, and there weren't enough patients to be able to talk about whether there was a benefit, as Mark mentioned earlier, but you really have to do more studies. And we really believe that 6 installations is what is needed. Having said that, to your point, absolutely, we believe that it will be covered by insurance because it's in our label, right, and physicians used it. And so we believe that it will get covered. We just think we really want to be patient-centric, and we don't want to give patients medicine that they don't need. And so we think it's really important that we focus on them getting the full 6 installations, and we believe they need those full 6 installations. And if a physician feels better about either monthly or we also know that some physicians, when you talk, it says up to 11 because some gave 1. I mean it was all over the place. So you do have some physicians who think quarterly maintenance may makes sense. So I'm not suggesting that no one will use it, but our focus will really be on ensuring that everyone gets the 6 installations. And then the maintenance after that would be at a physician's discretion, but we do expect that it would get covered.

Got it. And that's very helpful. And maybe just one follow-up on the discontinuation rate in the study. I guess, primarily, discontinuations were due to ureteric obstruction. Is that a function of the patient, the administrator? Or is there a way to kind of manage through that to kind of, I guess, maybe bring that rate down with time? I guess, how to think about sort of managing through ureteric obstruction?

Yes. Mark, can you talk about that and also talk about the fact that the FDA sort of put a lot of things together to get to that -- to get to sort of talking about it from that percentage, but it would be helpful for you to give your perspective on that.

Sure. So it will not surprise you, and it certainly comes as no surprise to urologists that when you manipulate the upper urinary tract, particularly with the type of drug that Jelmyto employs, there is swelling edema and some transient effects, all of which were lumped together by the FDA in order to convey sort of an aggregate sense of what the therapy could transiently do during treatment. And urologists very frequently will use ureteral stents to temporarily manage swelling of the upper urinary tract, et cetera. This, unfortunately, gets combined in this sort of description with ureteric stenosis, which is scar tissue formation. So to try to sort of unpack the question, I think what urologists do very frequently is use temporary stents to ameliorate any effects of swelling or edema that occur proximate to therapy, and then manage with structures, which today is -- severe strictures, which is thankfully very uncommon in this study as sort of a separate medical intervention that requires some endoscopic tricks that urologists are very familiar with. But the management of this problem was, I think, a combination of physician and patient preference as to when therapy, particularly with respect to maintenance, was discontinued. And I think urologists, who participated in the study, became very familiar with the management of this problem. And luckily, as we pointed out, most of the effects were mild, moderate and transient. So for the most part, the stents could be removed and patients, through a renal function, was preserved, which was obviously the ultimate goal of the therapy to eradicate the cancer and preserve the kidney. I hope that's responsive to your question.

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

Again, congratulations on the approval. I wanted to know if you could maybe make some updated comments regarding your expectations around gross-to-net discounting, first, in the early stages of the launch and then what you expect to be sort of a steady state reached over time?

Yes. So Peter, you want to answer that?

Yes. Thanks, Liz. Thanks, Ram. We have not, again, provided to the Street guidance with regards to revenue or gross-to-net assumptions relative to the product. I think as we've spoken to all of you guys in the past, try to stay away from providing guidance. I know we've had a lot of discussions with regards to what this might look like in the long term. But for the short term, for 2020, I think we've tried to stay away from those conversations. I think you can presume that the models that you have in place right now are relatively reasonable. But that being said, I don't think we're going to get into specifics around those ranges.

Okay. Understood. A couple of questions regarding the safety profile and the safety commentary in the label so far. Could you maybe comment on what you expect to be the attitude of the target prescriber population regarding the ureteric obstruction? Do you think that their viewpoint is that this is manageable or that this is likely to deter uptake or adoption meaningfully? Or do you think that there's going to be a subgroup of physicians, who may not necessarily utilize the product specifically because of this? And then secondly, I wondered if you could comment on the glomerular filtration rate recommendation, particularly within the context of the cutoff that's mentioned? And whether or not this was in line with your original expectations or whether you see it was less stringent or more stringent than you were originally expecting?

Mark?

Sure. Ram, thanks very much for the questions. With respect to the description of ureteric obstruction, stenosis, my response is sort of best encapsulated by a response we heard from a physician who's familiar with this product. He said, "Look, the alternative is taking out the kidney." So urologists know that when you manipulate the upper urinary tract, there can be edema, there can be damage when you put a ureteroscope up into the upper urinary tract. So the target population that we'll be prescribing this is very familiar with the potential morbidities associated with manipulating the ureter and kidney to treat cancer, which is what we're doing here. So I don't, frankly, think, based on what we see in the label, what we've released vis-à-vis data in public discussions, both in scholarly forms and to investors that will represent a significant deterrent to anybody who's trying to save somebody's kidney. So I actually don't see that as a big barrier to uptake. And as Jeff pointed out in his remarks, what we now hear from physicians and what I hear from physicians is, when can we start using this, when will this be available? So -- and with respect to the comment about GFR, I guess, sort of generally speaking, I think if I understand your question, the -- this is kind of in line with what, I think, we were expecting. But if that's not responsive to your question, please come be more specific, and I'll try to answer you.

No, that was basically the gist of what I was asking. And then the last question that I had was kind of looking ahead to more of a longer-term future. Do you expect this sales force as it is currently constructed to be sufficient to handle the commercialization of UGN-102 as and when that product gets to the market as well? Or in what ways do you anticipate the sales force might need to be expanded or in other ways tweaked, so to speak, to allow you to effectively commercialize that product in the wake of the launch of Jelmyto?

Yes. Eric, it's Liz. I -- we -- I mean at this point in time, we haven't done the full analysis on what exactly will take with 102. But what I can tell you is that it's very much the same patient -- I mean the same physician population. The likelihood is that we would expand, but it would not be linearly, right? So you wouldn't need -- so you might add 20%, 30% additional sales force mainly because you'll be covering -- just because of geographies and covering multiple products, but we haven't done that analysis right now. But for the most part, everybody who's working on 101 would be working on 102. And then the question -- and we'll learn a lot over the next couple of years with our success from a commercial standpoint and make those decisions as we get closer. But we would not expect it to be a meaningful -- meaningfully more extensive than where we have today. You'd obviously need more support, but it wouldn't be that much more.

Great. And congratulations, again, on the approval.

Thanks, Eric. Appreciate it.

Our next question comes from Boris Peaker from Cowen.

I'd like to add my congratulations on the approval and also just comment, I really like the name Jelmyto. Just really goes right to the point of what this is. So my first question is maybe you could help explain -- in the press release, you mentioned that the 12-month durability is 84%, how do we get to that number? Because if we just look at the CR rates and the relapses before 12 months, that doesn't get you to 84%, assume that all the 9 patients become CRs?

Yes, I'm going to turn it over to Mark to explain the difference in -- the differences and the different way we look at it. So Mark, do you want to just talk about Kaplan-Meier curve?

Sure. And Boris, thanks for the shout out about the name. The -- as I'm sure everybody on this call appreciates Kaplan-Meier is the preferred method for evaluating and representing clinical trial data because the data evaluate as continuous variables because this is an ongoing trial, and that's where that number comes from. The -- because this is an ongoing trial, as we pointed out and because additional data will be available for an update soon, the FDA felt that a point estimate was a temporary expedient for representing the results currently. But in fact, we believe, and I think the scientific community believes that the Kaplan-Meier model is actually the appropriate model in the long-term to view -- through which to evaluate and the prism through which to view these data, which is where that number comes from. I hope that answers your question.

Sorry, I just want to probe a little further in this just because if you had 58% CR rate, which is 41 patients out of 71, and you mentioned that 17, I believe, already progressed before 12 months. I still want to understand, what's the denominator for that 84%? And what's the numerator, I guess, at the 12-month durability?

Let me just make a comment here because we -- so it's -- what Mark is trying to -- given on the lay person like most of you guys are, is -- again, the Kaplan -- the way that we have used and the way that it was in our statistical model and accepted everywhere is through Kaplan-Meier analysis, right, which is done as a continuous analysis. So it's not a point in time. What you're trying to do right now is look at it as a point in time. That would be a rate, right, versus a Kaplan-Meier analysis. So it's -- that's we look at 12 months and exactly at 12 -- it's like a [indiscernible] not versus what's typically done is the Kaplan-Meier analysis. So we can't -- I'm never going to be able to give you an 84% Kaplan-Meier based off this numerator and this denominator. You'll never get there. That's not -- it's just a statistical model. So having said that, if you could -- you can do the math yourself, right? You can get to a certain "rate of number" of patients that have gotten there. When we worked with the agent -- the FDA on the label because the study -- because that was an interim analysis because we didn't have all patients at 12 months, that's why it wasn't included in the label, but we obviously talk about it because we have the data and the analysis to support that. So what we will be doing is updating our label over the -- we expect to be -- have all patients at 12 months by the end of May and be able to have the complete analysis done and then submitted to the FDA in the June time frame and get an updated label. And at that point in time, when the Kaplan-Meier analysis would be final and be able to be included. But you're never going to be able to do the math that gets you to what a Kaplan-Meier analysis is if you start to try to take a numerator and denominator, it's not going to -- it doesn't work that way.

Okay. Got you. We won't belabor this point anymore. Maybe just one more question. The label recommends blood count monitoring, and maybe for Mark, is this something that's normally done in UTUC patients? Or does that introduce a novel treatment variable?

So when we talk about UTUC patients, remember, there is no established topical medical therapy, analogous to what we're -- what Jelmyto represents, available currently. And so what this would reflect is an abundance of caution related to the use of mitomycin in this setting because theoretically, mitomycin, if absorbed, could cause bone marrow suppression. So this is simply, I think, a reflection of an abundance of caution related to that particular aspect of the mechanism of action of this medication. Thankfully, that was not an important feature of the morbidity that we saw in patients treated with Jelmyto during the trial.

But how frequently would they have to go to get their blood counts measure?

As a practical matter, this was done frequently during the trial to assess whether or not bone marrow suppression was going to be an important morbidity associated with this therapy, and thankfully, it was not. So from the perspective of a practicing physician, who initially would establish for the patient as normal bone marrow function, I don't think a continuous or frequent monitoring actually would be necessary.

Our next question comes from Paul Choi from Goldman Sachs.

Let me offer my congratulations as well to you, Liz and the team. I guess my first question is for either for Jeff or Mark. Could you maybe provide any color you've heard prior to the approval with regard to how clinicians are thinking about the complete response rate, which in the population was fairly high. And then just the durability of the results, which metric are they looking for or -- more closely, perhaps, and given this is somewhat of an elderly population? And then I have a follow-up question.

Jeff, why don't you talk about the...

Liz, can you hear me now a little more clear?

Yes, I can. Thank you. It's better.

Okay. So the -- I appreciate the question. So we've actually raised the expectation over the past year, 1.5 years. When we conducted research, the expectation was around a 40% CR rate would be acceptable. But because we've done a lot of education, and obviously, we've had a lot of data come out in the last year, 1.5 years, it's aligned -- the CR rate is aligned with what they would expect in the 58%. And the same goes for durability. The expectation is certainly greater than 6-month durability, and a significant number are still at 12-month durability. So from a -- what the physicians expect this data coincides with the research that we've conducted. So hopefully, I answered your question.

Okay. And then for my follow-up question is just with regard to your earlier comments on the arrangement with the specialty pharmacy. Could you maybe just provide any sort of high-level financial details or metrics on how we should think about costing there, if any, at all, to you and just impact on the margins there? And then I had 1 follow-up question after that.

Go ahead, Jeff, you can answer.

Okay. Yes. No, so we haven't obviously provided the specific numbers. But what we looked at was the -- I think the mixing process is not a strenuous one. So from a cost perspective, it's more than worth the value that we have from 2 things: one, safely preparing the product, and then the second is bringing it to the urologists in the admixture form. So we take the time that would have been instilled with their process. They may not even have the necessary equipment to mix. So we're kind of -- the mixing partner is integral to making this solutions oriented, just integrate into the practice. And from a mixing perspective, the national partner are very experienced with this. They have the necessary equipment. It's not a difficult one at all. And so the value there is certainly needed to increase the uptake.

Yes. And I would say that the cost -- the additional cost is not meaningful in the context of our gross to net our price. So I think we feel very comfortable and that this is an integral part, as Jeff pointed out, to our product and that we need to -- we need an -- very important for us to really make it easy on physicians. What we've done is we've talked many times. A key driving factor of our success will be us making it really easy for doctors to integrate this into their practice.

Liz, if I can add one additional kind of comment on that, too. So initially, actually, as we move forward, the mixing costs will be part of our cost of goods sold. That's actually where it will be captured. And as we roll out our product initially because we prebuilt a lot of inventory, our actual cost of goods won't be representative of our cost of goods for a period of time until we actually utilize basically all of the prebuilt inventory that we have on hand right now. So when you actually look at COGS originally out of the gate for the first couple of quarters, you're going to see that the COGS number is representative of kind of those additional costs related to the mixing elements. So although we're not providing that to you guys now that might give you some indication as we roll out for the first couple of quarters.

Great. That color is helpful, Peter. And the last one for me, Liz, is just you've established a pretty attractive oncology pricing here for Jelmyto. But if we look downstream to its sibling 102, which is going to Phase III, it's targeting a much larger patient population. And should we think about this as a good proxy for 102 pricing down the road? Or just -- how should we think about the dynamics here, given it's a similar or a related compound targeting a much larger market?

Yes. It's a great question, Paul. We haven't -- as we talked about, we have not started the analysis around pricing on 102. I think it's fair to say that -- I mean you really should not develop pricing based off of patient populations. It's really the value that you're bringing. We believe the value in non-muscle invasive bladder cancer particularly for that patient population is extensive because they actually today have no real options. These patients are patients that continuously failed the current TURBT. Having said that, obviously, that we would take into consideration the impact -- budget impact and how that would impact usage and uptake. But at this point in time, we really have no -- we have not done any work in relation to that. We consistently think about it, but we haven't done work around that. So I don't think -- I think it's fair to say it would not be the same. This is an ultra-rare disease at the moment in UTUC. But I think that it would still -- we would still price by the value that we believe we bring. And we'll wait to see how the rest of the data plays out and the unmet need in the market at that point in time.

Great, and congratulations again.

Thanks, Paul. Appreciate it.

Our next question comes from Leland Gershell from Oppenheimer.

Adding my congratulations to the team as well on the approval. First question, with the label agnostic to kind of the line of therapy or what patients may have previously had. I wanted to ask about feedback from the physician community in terms of their -- any difference in their interest in using Jelmyto in patients who are newly diagnosed versus those who may have had an endoscopic resection and now have recurrence of disease, I guess for Mark?

Leland, thanks for the question. And I think Jeff may also want to comment on this as well. The disease, whether new or recurring, is the same biologically. And I think that the community understands that because the characteristic of the clinical behavior is driven by the histology as we currently understand it. So I have not personally, and Jeff may want to comment as well, heard that physicians feel more interested in treating one or another of these 2 different populations with the drug. I think, frankly, they'll probably want to treat both groups because it's applicable to the management of both populations of people. And as I know you're well aware, we had a mix of newly diagnosed and recurrent patients in the trial. And patients who had -- were endoscopically -- deemed endoscopically resectable and unresectable tumors. And there doesn't seem to be any difference in terms of how these tumors behaved with respect to the response to therapy as best we can tell. So from a clinical perspective, it appears that all of these patients would be appropriate for therapy. But I don't know, Jeff, do you have any additional comment on this?

Yes. So it's actually -- it's a good question. And from a research perspective and what we hear from urologists, it's both. They're certainly interested in the new patient where they may or may not be able to resect the tumor, depending on its location. And obviously, if they -- even when they do 80% of the urologist cells, they don't feel comfortable that they got all of the tumor. And so that's the new patient, where Mark and I will get calls recently, are those patients from a recurrent standpoint. They've got an ureteroscopy 1 or 2 times, it's again -- the disease is recurring again. And so there's sort of this immediate thought that we want to try another option. So both populations are relevant and both are almost equal from an interest standpoint from urologists.

And an extension of that question, and I know we don't have -- at least we haven't seen recurrence data yet from Jelmyto used in those who've, perhaps, progressed -- recurred after successful Jelmyto treatment than may have recurrence of tumor. Do we have -- in your discussions with payers, do we have any support at this point for use in the retreatment setting? Or is that something which we just simply don't have any visibility on at this point prior to having data?

Yes. It's Liz. I -- we haven't discussed retreatment with payers directly. Our view on retreatment, I think we've talked before, is very similar to other oncology or other therapies. If you have a successful treatment, the patient does well, the likelihood of retreatment, and physicians have told us this, is very high. I don't think that we will have a problem in getting it reimbursed. I mean I think if we went back in after -- if it didn't work well, the recurrence was quicker. But if you see the type of recurrence that we're seeing, which is frankly one of the reasons that we don't have any retreatment data to share is -- if you see that, I think we will not have any issue -- we don't believe we'll have issues with reimbursement because after a year, we would really be seeing very similar to what is in our label, as you saw, we have a very broad label. So I don't think there'd be any issues in being getting reimbursed for retreatment.

Okay. That's very helpful. And then my last question is a COVID-19-related question, which is, given the situation, there may be some patients who are deemed to be more important to treat earlier versus those who could be kind of put into a watchful waiting category. I'm just wondering if you sense any stratification that may be forced to happen because of the various priorities and shift in focus in the medical community for the next at least few months, if not year with regard to patients with LG UTUC.

Yes. Look, it's a great question and one we've discussed internally quite a bit. And actually, even Jeff has had meeting and Mark both have had conversations with physicians. And I will tell you that you've got -- it's a very disparate reaction to that. So obviously, you have -- and it depends geographically where you are, and it depends on what type of practice you're in. And -- so yes, in some hospitals, they're likely to do -- to wait, right? I mean it's -- and this would not be considered something that was life-threatening for the most part. We also have though other practices, particularly community practices that have the adjacent surgery center, which we've talked a lot about the fact that, that's actually where the majority of the patients are seen. So Jeff and the team are doing a lot of work around ensuring referral patterns. If there are physicians who would typically treat in the hospital and can't, for some reason, that those patients could be referred to a community practice that has a surgery center. So you have -- and then you had the other part that you have is some patients that maybe haven't been treated where you may end up -- we've always talked about the fact that it wouldn't really be a bolus of patients, but you may end up after a few months of patients not being able to be seen in one place and then being able to be seen, where you have a really small group of patients that had not been treated that will get treated. And so you have, I would say, pluses and minuses, if that makes sense, where some patients may hold off, and then you'll have some patients may shift from what would typically be where they would get their procedure to where they can get it now. And then the last comment that I'll make on that is, if you think about our treatment where you don't need general anesthesia, and it can be done in the physician office, either the office or the surgery center versus the other alternatives, which actually have to be done in general anesthesia. So we actually think that there'll be a benefit and a positive to using our therapy versus the current alternatives that are being used during -- in this situation. So I think alternatives to general anesthesia and the types of surgery, like the endoscopic ablation are in use, this is a much more friendly procedure than what they are currently going through. So we actually have talked a lot about the -- again, physicians that will differ versus geographically and then the type in place where the physician is practicing.

Our next question comes from Chris Howerton from Jefferies.

I will also offer my congratulations. Really happy to see the approval. I think most of the questions have been asked. I think, maybe just for me, Mark, there's been some discussion with respect to maintenance dosing and retreatment. So within that context, what are the plans for any post-marketing studies?

I think it will be interesting to see -- have a community response to this because I think as you and I previously discussed, maintenance therapy, as we understand with mitomycin in the context of treating bladder cancer, is a very physician-dependent activity. And as Liz has pointed out and Jeff mentioned, the study really shows that the apparent bang for the buck in this area comes from the induction course of medication. And as Liz pointed out, maintenance was rather half-hazard when employed. It's hard to figure out exactly what the benefit is. So I think it's probably a little bit premature until we see what experience clinically looks like over the next period of time to talk about what a study might look like or whether a study would be necessary because we may find that, indeed, induction therapy is completely adequate in the primary treatment setting. So I guess I'd have to say maybe we'll have to wait to answer that one until we have a little more information from clinical use.

Okay. I think, well, that's fair. Like I said, I think most have been asked. So congratulations.

Thank you. Appreciate it.

Our next question comes from Matt Kaplan from Ladenburg Thalmann.

Congrats. Just a follow-up on Leland's question a little bit more, I guess, a question for Mark. In terms of how will Jelmyto really be incorporated into the treatment paradigm for LG UTUC? Do you think it will initially be used, I guess, in patients who are not candidates for a surgical resection? And then if it is used in candidates who are -- who can be surgically resected, will it be used in the same kind of context of that procedure they'll also have an installation of Jelmyto along that course of that therapy?

Yes, thanks. It's a great question. And I think as we have discussed previously, I think there are a lot of opportunities to use this medication in the context of treating both newly diagnosed and recurrent patients. And I think urologists are pretty creative in terms of how they mix and match therapies. So for example, I think there are patients who have to sort of work backwards recurrent disease that hasn't responded to endoscopic resection, there's only alternative would be to have kidney removal who are obvious treatment candidates for this therapy. They are then patients who present de novo with tumors that, for one reason or another, are difficult to endoscopically ablate, multifocality, location, tumor size, who are going to be good candidates. And I think in aggregate, based on what I've heard, and Jeff may want to comment as well because he's talked to a lot of docs about this. I think you'll see this use across the spectrum, both as a primary therapy as well as in combination with some ablative techniques. So I think the use is going to be broad and both applicable to newly diagnosed and recurrent patients, both as a primary therapy and also in some combinations, we haven't even considered yet because we have to see how it's used by practicing physicians in the community. But I think there is an opportunity for broad application. I don't know, Jeff, do you want to expand on that?

Sure. Thanks, Mark. That's correct. When we talk to physicians, physicians tell us the patients that they have in mind for Jelmyto and what was unprecedented from my standpoint is that every physician responded regardless of where they think about it that they would -- they have a positive outlook and would use it. The goal from a promotional standpoint is obviously to drive it earlier for those physicians that are perhaps going to wait for an unresectable tumor. But they've told us across the board that they would use it in unresectable, and then there are some that have told us they will use it primary therapy. And then as Mark alluded, they'll use in combination. They'll get what they can and what they can't, they'll ablate with Jelmyto.

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

Hi, everybody, again, and thank you. Thank you, operator. In closing, look, I just want to say that we could not be more excited to be bringing this new medicine to patients and to build our company on the vision and strategies that we've set forth over the last few months. It's a landmark approval for us, supporting data demonstrate that we're on the right path for an effective kidney-sparing option for patients with this rare and difficult disease. Our team at UroGen is dedicated to pioneering new treatments to improve patient care and specialty cancers and urologic diseases. And for us, this is just the beginning. We're hoping to build UroGen into a long-term growth company that has a major impact on all of our key stakeholders, but especially on patients. We look forward to speaking with all of you and seeing many of you virtually in the coming weeks, and we really do appreciate all of your time and your continued support over the last few months. So thanks again. Everybody, stay well and healthy. And operator, you can now disconnect. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.