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

Good morning, and thank you for joining JPMorgan's Annual Healthcare Conference. My name is Ting Jiang, I'm a health care banker here at JPMorgan. Before I begin, just want to quickly remind our audience, so please feel free to submit your questions using the blue button on your screen. We will address them during Q&A. With that, I'm pleased to introduce the session's presenter, Ms. Liz Barrett, President and CEO of UroGen Pharma. Without further ado, I'll let Liz take it away.

Thank you, and thank you, JPMorgan for having us here. This conference, as always, very special to me because 3 years ago, I think it was day 6 of me being in this role that I presented at JPMorgan. And so while I do wish, as I think many of you do, we couldn't be in person, just happy to be here with you. I know that you'll be following along with the presentation. I have it in front of me. So I'll try to remember to tell you which slide I'm on. And I'm again happy to be here. Apologize upfront about my voice, just getting -- the current standard of care is really invasive in radical surgery. And that's really because there hasn't been medicines that have been able to actually dwell long enough in the cavity to be effective. And so because of the anatomical barriers and associated with the normal voiding out of -- in the urothelial, there hasn't been, again, an ability to actually treat with medicine. So because of that, even for low-grade diseases, which we are going to talk about this morning, you really have to go through invasive and radical surgery. So we've been -- so we actually -- our company came to be because of this. It was actually a challenge that was given to a chemist in Israel. Our company started in Israel and developed, on Page 4, the RTGel proprietary reverse thermal hydrogel technology. That's why it's called RTGel, it's reverse thermal. The reason it's called reverse thermal is because it's actually liquid when it's cold and it turns into a gel. And as it hits the warm temperature of the body, increasing the dwell time and allowing exposure over time of medicines to treat cancers in the urothelium. And because of that, we believe, has the potential to improve the therapeutic effects. And it actually also then disintegrates and uses the natural voiding to exit the body. So our company is really built around, next slide, the organ-sparing, nonsurgical treatment approach. And we are really fundamentally changing the way that these patients are treated. And our mission is we build novel solutions in urothelial and specialty cancers because patients deserve better. And as we're thinking about, again, the standard of care and the invasiveness and repetitive surgeries and loss of organs that these patients face our ability to develop this technology, this unique technology and bring it to patients, we really believe is changing the way patients are treated. On Page 7, as I said, I look back and think about -- I can't believe that it's actually been 3 years that I've been in this role as CEO, and a lot has happened. And we've had a lot of challenges. And as many of you have with COVID, but we're really, really proud of the company and the advance that we've made. So we had our FDA approval right in 2020 when COVID started. We really are thrilled with our UGN-102, our Phase III study execution. We had a head-to-head study that we've now stopped and I'm going to talk more about our streamlined study going forward. That's a pivotal study to get our second approval, hopefully, with UGN-102. We've advanced our immuno-oncology pipeline. We have a pipeline of 2 products, a CTLA-4 for local delivery as well as a TLR7, I'll talk about that in a moment as well. We've done some nice research collaborations with different institutions and really pleased with our ability to utilize and leverage the uniqueness of our technology to be able to deliver and hopefully deliver more and more treatments to patients in many different areas. We licensed our medicine to Neopharm in Israel and really happy about that because I said the company was actually founded in Israel based off of the physicians' need that was identified there, so we're really pleased to be able to offer patients, hopefully soon, the access to our medicine. And we launched a named patient program in 5 European countries to be able to, again, allow for access for patients. On the next slide, Page 8, really talks about our pipeline and why we believe our pipeline is a strong pipeline that will ensure the long-term sustainable growth of UroGen. We've talked earlier about $1 billion plus by the end of 2026. And we do know that this market is a $3 billion-plus market. I'm going to talk about this market, what I'm really talking about is urothelial cancers. We also are focused on other specialty cancers. But right now, our portfolio is focused on urothelial cancers, our first medicine with Jelmyto, about 7,000 to 9,000 addressable patient populations. The only medicine ever approved for this -- for low-grade UTUC epitracturothelial cancer. And that's a small orphan drug, and we're really pleased because a lot of these patients end up losing their kidney. Our second medicine, as I talked about earlier, UGN-102. Right now, there's no FDA-approved medicines and these patients also go through these repetitive TURBTs, that's in Phase II. I'll talk more about that. Again, for low-grade intermediate risk non-muscle invasive bladder cancer. And then lastly, our immuno-oncology pipeline, and that area has about 15,000 to 25,000 patients, and this is in high-grade disease. And again, our TLR7 and as well as UGN-301, which is a CTLA-4, I'll talk again in a moment in about those. But the important thing is that just these 3 products along 1 still very high unmet need, very little happening in this space. And three, the ability with just this pipeline that we have today, we're continuing to look for others to add to our pipeline but just this alone can give us a long-term sustainable growth business. As we move into Jelmyto and changing the treatment paradigm and how things are going. As I said, we were approved in April of 2020. We launched in June of that year. We obviously shifted from an in-person launch to a virtual launch. I'm pleased to say that we continue to make progress in this despite the challenges. Our total revenues, and this is as of the end of September, about $44 million and about $32 million through the first 9 months of 2021. We've also guided for the year that we expect to be between $47 million and $51 million, and that's still our expectation. The great news, though, for patients is that with Jelmyto, there was a 58% complete response. I've been in oncology for a long time and to get a response efficacy like a 58%, is really meaningful. As we move into the -- talking about the opportunity for Jelmyto, again, we talk about the population. About half of the population is newly diagnosed and about half of the population is this recurrent patient population. Because what happens is these patients either, at presentation, either get endoscopically resected or currently, if they can't get to the tumor, they actually go straight to RNU, which is basically to remove the kidney. And in a patient with low-grade disease, that's really an area of opportunity for these patients because they have low-grade disease, which basically means you're managing the recurrence. They're not going to die from their disease. So that having to lose a kidney for a patient in this population, particularly as an elderly patient population, and so this really is a big deal. So our ability to bring an alternative to these patients which we really believe is a better treatment for them. Before we launched Jelmyto, we developed 3 pillars that we consider to be what are the keys to success: patient identification, reimbursement and seamless integration into practices. And I'm pleased to say, on the next slide, Slide #13, that we are making progress on all 3 of those. And actually, I guess the good news is 18 months later, that's still the key success factors for us. Because, as I said, the patients are -- it's an orphan disease, there are a lot of practices. So sometimes physicians only see 1 or 2 of these patients a year. We have larger groups that actually see more of them and we're pleased that over 700 practices or hospitals have been activated. What does activated means? It means they've either identified a patient, they've treated a patient or they're ready with all of the logistics to treat a patient once they identify. And 80% of physicians have expressed interest in utilizing Jelmyto prescribing it over the next 12 months. The second pillar around reimbursement. This is really key, and I think most of you understand, it's a buy-and-bill drug. So physician offices and practices have trepidation about making sure that they are going to get reimbursed. The great news is we have very, very, very strong reimbursement. So we really -- what we're really working with is the perception and making sure that physicians understand that they are going to get reimbursed. We have obviously a hotline that helps them with that. We work with the patient and with their insurer to ensure that they get reimbursed. But to date, I'm pleased to say that we have over 99% reimbursement and even the less than 1% that when I say hasn't -- it just hasn't happened yet, we're just still in the process of making that happen. But we're very -- we feel very good about it. And again, it's more giving the confidence to the practice in the office that they will get reimbursed. And so that's a big driver for us. And then lastly, because this is not a pill, it's not an infusion, it's actually an installation that has to happen, the drug has to get mixed with the gel. So the complexity of the logistics are a little bit more than you would expect and which is why it's really important for our sales reps and our nurse educators and our medical team to be able to go into the office and work with the office. But we're really pleased to say that 86 accounts have treated more than 1 patient. And what that tells us is, one, they're happy with the treatment and that the logistics are working. So as I said, not a pill, not an infusion, what happens is there's -- it's instilled into the patient and either through a catheter or through a nephrostomy tube. And a nephrostomy tube is a very interesting area for us because even though we had it in the clinical study, it actually didn't get used in the clinical study. And what we are finding is that in practice, actually, and I think COVID -- because of COVID actually makes this even more compelling for physician offices is they're actually able to deliver it through nephrostomy tube, which makes it an easier installation and can be done in the office. And so we really are gaining a lot of experience and Dr. Murray is looking to publish on her experience in this area. And I think as more physicians get experience, I think you'll see things potentially move toward it because it's an easier installation in the office. I do want to talk a minute about our results because we have had some quarter-over-quarter volatility. But I think the good news is that the trend is on the right track. The trend is upward. And even though, again, there's been some quarter-over-quarter volatility really driven by some of the COVID-19 limitations with inconsistent access, I talked about the logistics and why it's important for our reps to be able to get there. And as I mentioned, we've guided for our Q4, and our Q4 will be our biggest revenue quarter since launch. And so we're excited about that, and we will be sharing our results in the next few weeks. Patient -- so okay, so you're seeing some volatility. We've got COVID-19. Why are we confident in Jelmyto? And confident that Jelmyto will become the standard of care? We have what we call patient enrollment forms, and this is on Page 16, and it's an early indicator for us of the demand. And we've seen steady quarter-over-quarter growth in patient enrollment forms. And then once you have a form, that means you actually have a patient, so then it takes time. Sometimes the patient may not be the appropriate patient, but the conversion has been very strong. And then, of course, sometimes there may be a delay in actually getting the patient treated. But we do know by these patient enrollment forms that we continue to see momentum in our adoption. The other reason was we believe, on the next slide, is around the satisfaction and the research that we've done. And if we go out and talk to physicians and they really are satisfied with the product and satisfied. And then lastly, we have testimonials from both patients and physicians. And you can read these yourselves, so I won't read them to you. But these patients understand. They say, "I'm going to lose my kidney." That's a really big deal. What happens if something happens to my other kidney and then in some cases, some people only have 1 kidney. So it's a really big deal for these patients. And so they are seeking other options. And you can see again by some of these quotes, what they've said and how they see it. And the same in thing with physicians. They realized this is a paradigm shift for them. It's what we need to do. We need these alternatives, and it's a better management for patients. So the next, I'm going to move to UGN-102. We're very excited about the shift with our pivotal study in UGN-102. But before I do, I'll take a step back, and I mentioned this earlier, and talked about low-grade versus high-grade disease. And this is really important because we often get asked about BCG and other products that are in this space or being studied in this space. But most of the products that are being studied in this space are actually being studied in the high-grade area, which I'm going to talk about in a moment. BCG is actually not used in low-grade disease. And again, very similar to low-grade UTUC low-grade nonmuscle-invasive bladder cancer is about repetitive surgery. So this patient population on the next slide talks about the success that we've had with this patient population tends to recur. And so they go in for these transurethral resection of the bladder tumor. And again, a really big deal for a patient population that's an elderly patient population and they typically have comorbidities. So being able to have an opportunity for them to have a new treatment option that provides them a better outcome is something we're really looking forward to. And very -- other thing to understand is the molecular profiling between low-grade UTUC and low-grade nonmuscle-invasive bladder cancer are very similar at a genetic mutational driver level. Because of that, we saw very similar results between our gel -- between Jelmyto and UGN-102. And we're pleased with our Phase II study that we've announced 65% complete response and over 70% duration of response. And on the next slide, this is a much bigger patient population. We talked about the 7,000 to 9,000 patients, around 7,000 patients for low-grade UTUC. Here, there's about 80,000 patients. This market is over a $3 billion market depending on the pricing, which we haven't finalized yet. But you've got your newly diagnosed. And then again, your recurrent patient population, which goes through these repetitive surgeries. And these are patients that typically have -- they either recur, they have a high burden of disease and multifactorial. And what we've learned in the research that we've done is that 68% of patients who have a recurrence would typically have 2 or more recurrences. And actually 23% of patients have 5 or more recurrences and that the repetitive TURBT is associated independently with an increase in mortality. Just the surgery is an independent risk factor for mortality. Our research physicians will say, off the top of their head, 25% of patients should just not be going through TURBT. Having nothing to do with their disease or just saying they're not in a situation where they should be going through this type of surgery. They have to go under general anesthesia. It's not a benign surgery. And almost half of the patients told us without really knowing anything about UGN-102 and the research that we did that they would choose an intravascular delivery over TURBT. And we've got some research that we're going to be sharing this year that talks about the preference for UGN-102 over TURBT by patients. And so we're really pleased that we've been working with the FDA. It took us a long time to actually get them to understand the high unmet need in this area and have an alternative approach to demonstrating versus a head-to-head study. Medicines have not typically had to go and demonstrate superiority versus a surgery. And so we worked very closely with them to really educate the FDA. And I will say they've been great to work with, and we're really pleased that now we have a new single arm Phase III study to assess the safety, efficacy and clinical value of UGN-102, which is called ENVISION. And we're in the process of initiating that study. The good news is, is we're going to take our ATLAS study sites and really shift them. So our ability to start this study really quickly, and we hope to be sharing over the next few weeks, the kickoff and the actual formal start. We're in the process of doing all the things that we need to do. The good news is, is that the design on the next slide is very, very similar to the OPTIMA II study patients. It's a 220-patient study. They all get their 6 installations and then there'll be a follow-up period. And our expectations that we'll have both a planned and an approval in 2024, assuming we get priority review, which we are hoping and expecting to do. And the good news about UGN-102, when you think about the bladder versus the upper tract, there's actually a significant operational advantages for UGN-102. It's much easier to deliver. As a matter of fact, the physician doesn't even have to be there to deliver this. And then we've talked about our in-home study. We've actually already dosed a few patients in our in-home study. And this is really just to show that the ease of being able to administer this medicine and how it can be administered by someone other than a physician. So if we do continue to be in challenging situations and these patients need to be treated at home that actually they'll be able to. And there's not the special equipment, the ureteroscopy that you need like you do with the upper tract. So we're looking very much forward to UGN-102 and bringing this paradigm shifting change because we do believe it's -- if you talk to physicians, on the next slide, they'll tell you, most cited in what they need is a more effective intravascular therapy for these patients. And the good news is, is that 96% of physicians and urologists say that they would use UGN-102 within the first 2 years of approval. So again, we believe that this is a better treatment for patients. We're excited about this investigational medicine. And we hope that if approved, this will again advance the standard of care for these patients. And then next, I'm going to talk about UGN-301, as we move into our immuno-oncology pipeline and looking at both monotherapy and combination. This is in high-grade disease. So this is the patient population that you hear most about when you hear about nonmuscle-invasive bladder cancer. There is a high mortality rate for patients with high-grade disease. And so we believe we have a differentiated approach in this area. This patient population is about 25,000 patients newly diagnosed and about 15,000 that are considered to be BCG refractory. Obviously, we'll focus on that patient population first, but then plan to move into the newly diagnosed. Why are we in this area? We're in this area because our TLR7, when we did some preclinical work, it demonstrated that if you combine our TLR7 with a checkpoint inhibitor and specifically CTLA-4 that you actually saw a benefit in survival. So we're excited about the preclinical work that we've done and the clinical work we've done on our TLR and moving into the clinic shortly with our -- with UGN-301. So we're excited about that. We expect to take our CTLA-4 and actually combine it with other immunomodulators as well as potential other chemotherapies because we think that that's a differentiated approach what others are doing in this area. So as we look ahead to 2022, a lot of priorities, a lot of things that we're excited about. We do believe that 2022 is going to be the most pivotal year for our company. We will continue to accelerate Jelmyto in what we call the new normal. So regardless of COVID or not, we know that we've got to make sure that these patients are able to get treated. We will be fully enrolled in the new single-arm Phase III study of UGN-102 this year, and then we'll continue to follow those patients. As I just mentioned, we'll be moving into first human studies with UGN-301, and launch into a combination study with 301 and other combinations in the high-grade disease. And we want to continue to look for business development opportunities that fit within our company and leverage the opportunity and ensure a strong financial balance sheet. I think, as everybody knows, it's been a challenging year for our sector and for UroGen, but we're really confident that 2022 will demonstrate the benefit of our medicines and the value that our medicines bring. So as we look at areas, again, uro-oncology, we're all in. Also looking at other areas in specialty cancers that are adjacent to urology like GYN cancers, head and neck cancers, GI cancers. And so those are the areas that we are looking at. And obviously, also, we have other partners that have been interested in our technology and how they may be able to use the RTGel technology in areas outside of uro-oncology and specialty oncology. So we'll continue to prosecute that and to work with the others that are interested in our technology to leverage the technology to be able to advance care in many areas. We have an experienced management team. I think we have all of the bases covered. We've got people. Our head of development, a lot of experience, and she's done a great job of leading a team to be able to see that we have developed. I think most of you know Dr. Schoenberg, who's still a treating urologist, so the things that we talk about every day, he experiences. And Jeff, with the experience that he has in the commercial, particularly in the urology space. And I'm really pleased to have the rest of the team here that we have, the management team. I feel very fortunate to have attracted and retained such a great management team. And then lastly, the finances, we talked about the end of September, no debt. We have -- had about $110 million in cash. And we, again, have guided our revenue for the year of being $47 million to $51 million. We look forward to sharing those with you soon. And so with that, I'm going to stop and turn it over for Q&A.

Thank you, Liz, for an excellent presentation. I will now turn to some of the questions. Just to remind our audience, again, please feel free to submit your questions using the blue button on your screen. So first of all, for Jelmyto, maybe I know you touched on this, but maybe dial a little deeper on the impact of COVID on revenue? And why management still maintains confidence?

Yes, sure. No, it's a great question. Look, what has COVID meant to us, and it's been different regionally, it's changed and accounting has changed over time as everybody knows. And -- but what's important for Jelmyto, because I talked about the complexity of meeting, it's an installation. So you really need someone in the office to help the logistics and ensure that, that happens. So this isn't a one-on-one talk to the physician, they write a prescription and then you go home. The rep really needs to be there and be engaged in helping and ensuring that, that happens. So there, because of COVID, there's been sometimes limited access, again, sometimes it's great, and then you'll start to see limited access again. So because of that, we've seen some of that. The other thing that we've seen is a delay by patients, frankly, not wanting to go in into the office, and then some short staffing that's happened in urologists' office, where they've had a delay are the hospitals have been full, and so they've stopped all elective surgery. We've seen that in different again. So every week is a different week and every week things change, but we are -- we remain confident because we know: one, all the physicians that we've talked to that have used our product are happy -- the anecdotal information that we get, that we have seen. We know we talk to physicians that they're excited about using it in the future. And hopefully, things will continue to open up, but regardless, physicians and their offices are willing to talk to us and work with us. So patients can delay, but they can't delay forever. And so we know that these patients eventually have to come in. And so we know that whether it's now or again, maybe it's a little delayed. But what we've seen and how we've seen the adoption really increased over time and gives us confidence that this will become standard of care.

Thank you, Liz. The other question we have is, I know the company just announced a new study design for UGN-102. Could you provide a little bit more information on that, including logistically at site setup?

No, it's a great question. Well, the good news is, is that it's a global study. We actually had over 100 sites already set up, and we're enrolling in the ATLAS study. And so we're able to actually take advantage of the fact that we've already have the logistics setup with these sites and just shifting. So now it's really a matter of just going through IRBs and getting those set up, which the team is doing as we speak. Of course, also, we have the COVID situation where some hospitals and institutions may be a little bit slower in setting up, but we aren't concerned about our ability to eventually get because we were on a really good track with enrolling patients in ATLAS. And physicians are excited about the fact that they believe this study is a better study. And we are, again, just shifting those sites that were already set up to be set up for ENVISION. So again, we will be able to enroll those 220 patients in this year, in 2022, and then we'll be up in follow-up mode from there.

Thank you. It's great to see the company is diversifying into oncology. What are some of the partnership business development strategies or plans you have for the year?

Yes, it's great. The -- as I've mentioned before, the good news is a lot of what we're doing is research collaborations with academic institutions that have differently, Johns Hopkins University, that they've identified different areas where they believe our technology can advance medicines in advanced areas like GBM, like head and neck cancer that have been historically difficult to treat and effective treatments have been unfortunately remised in these areas. And so the belief is that our technology, the ability for that -- for them to combine that with different chemotherapies different IO agents, put them into these tumors directly and be able to either reduce radiation or become more effective because of it, so that's 1 area. Another area is, we also have had other companies that have been interested in utilizing the technology in areas outside of oncology and can't get into the details at the moment, but we've seen that as well. We've also seen a university interested in using it more as a device in the surgical procedure. So there's a lot of different avenues that we believe it takes. So the business development group headed by Polly Murphy, whom I've worked with for many years, and she's the 1 person that's heading that, and she's in touch with all of these academic institutions and other companies that are interested in leveraging our technology.

Thank you. Let me just touch on a little bit on the finance part. What do you think of the runway supporting the global trials? And the ongoing product commercial?

Yes. Look, it's a great question. And we constantly, Molly Henderson is our Chief Financial Officer, she thinks about this day and night. And what we've guided to before is that our current cash position will take us into 2023. And so she's looking at ways to ensure that we have it remain a strong balance sheet. Obviously, equity is tough right now because of the stock price. We've had a lot of pressure on our stock over the last few months, but we really believe that there are alternate ways to finance the company, and we feel very confident in that, and we expect to be doing something over the next year.

Cool. So can you provide some additional detail on the home installation study for UGN-102 that you announced last month?

Yes, sure. The purpose of the home installation, and I have to give a shout out to our Chairman of the Board, Arie Belldegrun, who's also a urologist by the way, because this was his idea. And it was during COVID and he was like, "You can give this at home. We need to do a study that demonstrating that you can do this at home." And so that's exactly what we did. And so the patient comes into the office for the first installation, obviously, so the physician can see the patient. They can make sure that everything is okay. They give the first installation, make sure there's no issues. And then we move to the home, and a home health company actually goes to the patient's home and gives it. And I spoke to our chief development officer yesterday, and anecdotally she's gotten some very positive feedback from the patients who have actually had this delivered to them in their homes. So again, you need a home health person to come in to their home. But being able to do it at home gives us several things. One, it does tell us that if we are in a situation where you can't get to the doctor's office or you can't, then you can do it at home. But it also just also reflects the ease of use of UGN-102. We're not able to do that with Jelmyto because it's in the upper tract, so you need to be either in an office that has the right equipment. But for UGN-102, you can actually easily give it in the home.

Thank you very much. We'll stop there, and thanks, Liz, again, for a great presentation and discussion, and thanks.

Thank you. Thanks for having us. Take care.