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

Good morning, everyone. We'll continue with the next session. My name is Paul Choi, and I cover the small and I cover small and mid-cap biotechnology sector here at Goldman Sachs. It's my pleasure to welcome UroGen to the conference here. Joining us from management here on stage to my immediate left is Dr. Mark Schoenberg, CMO, and to my far left, Jeff Bova, Head of Commercial. Also in the audience here, we have Dong Kim, CFO. What we'll do is continue with the usual format. Maybe I'll turn it over to Mark maybe to make some high-level comments on the company, and then we'll go into Q&A. If anyone in the audience has questions along the way, please feel free to raise your hand. Also, if you have -- for those who are listening on the webcast, feel free to e-mail us questions and I'll be happy to read them anonymously. So either to Mark or Jeff, maybe if you want to maybe start with some high-level comments on what maybe the outlook is for this year, and then we'll get into Q&A.

Sure. Well, first of all, thanks for having us, and it's a pleasure to be here. From a medical perspective, this is a very exciting year for UroGen. We have a number of Phase III programs that are coming due, and we expect data to be announced this summer. Very interesting for our bladder program. We also are advancing our Phase I program for an immuno-oncology asset. So interesting research and development. And then, of course, and Jeff, may want to comment on this as well, real progress in the commercial area.

Sure. So from a JELMYTO standpoint and how the launch has been going, we recently had some significant data come out. The real-world evidence data was presented at AUA. It really is how physicians how urologists use JELMYTO, where they are trying to preserve the kidney, they endoscopically were stacked. They bring in successes JELMYTO. The operational lift while we've talked about this has always been a challenge with JELMYTO approved greater that in times of COVID, but starting to see some real momentum getting through the operational. If physicians are using and then more importantly, looking to find other patients that can benefit JELMYTO. AUA was a great success as well from a guideline standpoint. The AUA had never had UTUC, upper tract guidelines. They now have published those, and they do -- they've reiterated what we've said for 4 years, but it's one thing for us to say it's another thing for the colleagues to say it, is that you should do everything possible to spare the kidney in low-grade disease, which means some sort of ablation, whether that's endoscopic ablation or chemoablation with JELMYTO.

Okay. Great. A lot to unpack there. So maybe just continuing with the commercial dynamics, Jeff. Can you, I guess, you talked about sort of a tale of two cities, COVID and sort of post-COVID as well as sort of the changes that have gone since AUA. Can you maybe provide us sort of a high-level update on recent commercial dynamics and sort of maybe starting with the breakdown of doctors who are using JELMYTO to date? And maybe I have some follow-ups after that.

Sure. So I think what we're starting to see is time to identify first patient to actual treat is shrinking. So trying to identify, to treat when they're operationally set up, they've been trained, they've had it on formulary. We see that now in 2 to 3 weeks, where that was significantly longer a year ago, certainly 2 years ago. The other thing is that we're starting to see is with the real-world evidence, we're starting now to have evidence that sells our entire indication. So whereas a physician may have only used us for recurrent, unresectable. The real-world evidence is it's another data piece that allows the representatives to go in and speak to new data that are how they treat right now, and so we certainly get a little momentum there. So now what I see is more consistency. You've heard me mention past patient enrollment forms, more consistency on growth week-over-week. And then when we do have a down weak, it's not significant. So we're starting to see some of that higher level adoption that we would have expected in a non-COVID environment, we're starting to see that now.

Okay. Great. In terms of like where JELMYTO is being used, can you provide us maybe some context and background on where it was used initially and how that adoption has maybe shifted between, let's say, academic practices versus large group practices and community setting and so forth.

Sure. So I would say, it does follow the label and then it's being used everywhere in the label where it's predominantly being used is urologists go in, get what they can see and then come back with 6 doses of JELMYTO. And what we saw in the real-world evidence is that increased your CR over what we saw in OLYMPUS. Remember in OLYMPUS, you had to lead tumor behind, so you could prove that JELMYTO was having the effect. In real practice, urologists don't leave tumor behind. And so they're going in, getting everything that they can see. They come back with what we call from a marketing perspective, a multimodal therapy, so do everything you can to preserve that kidney. They go in, they get what they can see. They come in with JELMYTO 6 doses to get what they can't see and that produced a bigger CR. That is predominantly over 50% of how JELMYTO is being utilized. Having said that, it's being utilized and newly diagnosed, it's being utilized as monotherapy, unresectable patients, that kind of makes up the rest of the utilization predominantly.

And then just in terms of physician breakdown in terms of setting -- sorry, to by -- going back to my earlier question, is it more academic or is it more like large group practices?

Yes. Great question. And this last quarter, we saw a shift. So typically, we've seen between 50% and 60% of the administration are given in the hospital. For the first time in a quarter, we've seen that less than 50%. And I've seen the clinic. So now they're given nephrostomy tube in the clinic to start to peak up -- to move up to around 30%. So the hospital has come down, the clinic and the ASC has gone up. I expected this probably a little sooner than where we are now, but if you're starting to see that, I think that trend will continue.

That's great. Maybe just continuing on the commercial piece with you, Jeff. You've targeted in terms of your launch a set group of high-volume prescribers and sort of the ideal physician practices. Where are you with perhaps targeting physicians who are not using JELMYTO yet? And how has that progressed to date in terms of expanding into a sort of a larger prescribing population?

Sure. Now -- and you had asked one of the questions like how many call points do I need on a physician to change behavior? For that physician who's looking to preserve the kidney, it doesn't take a lot of calls. It takes anywhere between 5 and 10 calls. More importantly, it takes that operational lift that we talked about. There are still what I believe, 20% to 30% of patients that are having their kidneys removed. That's a longer call point. That's what I've got to hear. And the nice thing is I've got to hear about more data, so we've got that. I've got to see my colleagues using it in the office. So we're starting to get that. And you're starting to see the number of RNUs continually go down, which is what we want. And then we want to be a partner with endoscopic resection. So that adoption curve is slower because there are physicians that are used to or wanting to pull out the kidney. In fairness, there are patients who choose to have their kidney removed. But those adoption curves are smaller. They've been picked up a little bit more because we've increased our marketing efforts to use a little bit more provocative language and it helps to have more data. For the longest time, we've had OLYMPUS, which has been good. But just in the last 6 months, we've now got the rose paper that talks about integrate. You've got the real-world evidence that talks about how they are currently using it. And so yes, the slow adopters, my hope is it picks up a little, but those that have adopted really are doing an aggressive find for those patients just because it is a small orphan drug.

Okay. Great. You also spoke to something that maybe is not appreciated as well, which has got finally guideline changes after -- and this is something that's come a couple of years post approval and post launch, and maybe you could just sort of frame for us, has that been a measurable impact, I guess, to this point? I know it's been relatively recent, but do you sense a tailwind coming from medical societies and having guidelines recommending JELMYTO now ?

Yes. I would say it can only help. For the physician -- some urologists look at the guidelines, others don't. But it's a talking point that allows the territory business managers to go in and say we're on guideline and talk about those guidelines. Well, the biggest thing for me is they've basically been saying what we've been saying, Paul, I mean, we even our unmet need campaign prior to approval, we've been saying don't pull low grade kidneys, the AUA help reiterate that. So for me, it's more of a door opener and then the rep takes it from there versus it's well on guidelines. I mean the AUA would slower to come out with the guidelines. But the fact that they have the guidelines now and we're in the guidelines, it's certainly a door opener and an avenue for the representative to go in and talk about it.

Okay. Maybe one more for you, Jeff, before we pivot to some of the clinical stuff with Mark, which is can you maybe describe how you've changed the process and made it somewhat easier for physicians to use JELMYTO, how is your process and interaction changed over time? And then secondly, after a doctor initially tries it, what does it sort of take for them to become more of a regular user and repeat prescriber?

Sure. So great. First question was the one thing that we've done is we have a team now of operational managers that do -- when they find a patient, it's a lift to get everything in place for operations. And then that list takes time away from the representative to go drive additional demand. Now we hand that off to a team of operational managers that works with our wholesaler that works with the distributor that works with the nurses to get everything set up for training. So now you remove that lift, and the TBM, the territory business manager, now can go out and do what we need them to do is drive further demand. The second part of your question is where we see rapid growth is sort of the first couple of patients come in, they're reimbursed accurately and timely, obviously, important for a physician. They hopefully see the efficacy and success, and then what we see is sort of doors open to finding and mining for more patients. They know they have the patients. And it's really about the relationship with the nurse, the nurse navigator in each practice to help us say you think about 3 to 5 of these patients, but when you go in and sit down and run specific codes and the nurse comes back, say, we actually have closer to 10 to 12 of these patients then you get physicians looking for them more actively. And that's where we've had the biggest success is letting us show you, help you realize that you have a lot more patients than you think you have.

Great. Mark, you referenced earlier that we're going to be in sort of a data-rich period coming up here in the near term in the low-grade non-muscle invasive space. Can you maybe update us on -- or refresh us on how these patients are currently treated, what sort of the available options are and sort of what are sort of the gaps based on the current treatment paradigm?

Sure. Thank you. So this program, our non-muscle invasive bladder cancer program is predominantly focused on patients who have low-grade recurrent disease. And the standard of care for the management of this patient group is transurethral resection, which is an endoscopic surgical procedure performed under anesthesia. Remember also, this is an elderly population, average age of diagnosis is 74. So these are people who are not ideal candidates for repetitive surgical intervention. But unfortunately, because of the nature of the disease, that is exactly what they get. And because there has been relatively lackluster adoption of adjuvant chemotherapy in this population by U.S. urologists. These patients typically cycle through a series of surgical procedures throughout their lives, don't die of the disease but do enjoy very intensive bladder cancer surveillance and intervention when recurrence occurs. So the unmet need, as we understand it, and I think urologists generally have understood this for a long time, and certainly, the urologists on our board understand this, is the problem of managing a disease that is not life-threatening, but is expensive and requires a lot of care. And our current therapies are associated with some real morbidities that are undesirable and particularly undesirable in an elderly population. So nonsurgical alternative would be very welcome for this group of patients.

Right. Certainly, a potentially expansive wide space for UroGen to play in here.

Indeed. Yes.

In terms of the population, you gave some characteristics of a typical patient. You said it's in the mid-70s. But just in terms of like the market sizing and the market opportunity, what is sort of the U.S. prevalent population or incident population? And how do you think about how should you suggest investors slides up that opportunity?

Sure. This is an area that always surprises me because the numbers are sort of astronomical. The prevalence of bladder cancer in the United States is about 800,000 patients. And for the particular population we're dealing with, namely those with low-grade recurrent disease, we estimate that there are probably around 400,000 people in the United States in any given year who are being treated at various phases of this disease. There are also probably 30,000 new cases annually of low-grade recurrent cancer. So as you can see, there is a robust population of patients who need additional therapeutic options.

Yes. Maybe just putting your clinical hat on, you mentioned there hasn't been much enthusiasm or approaches for adjuvant chemotherapy here. Clearly, just as always a question that's fascinated, why hasn't the been sort of more systematic development. Just from your perspective, you've been both in the academic and a corporate setting here. So I'm just curious why urologists haven't thought about this approach more?

Yes. I think urologists have thought a lot about it, particularly academic urologist, I think and Jeff is probably going to want to comment as well on this. There are a series of barriers. Some of them are academic and some of them are practical to the adoption of intravesical therapy. And I'll give you an anecdotal experience at our hospital that I think crystallizes why adjuvant therapy is somewhat problematic and underutilized. The incremental benefit of adjuvant therapy is relatively modest. It's probably a 10% decrease in recurrence rate when used appropriately according to guidelines. However, there is cost, Jeff is probably going to want to talk about the way cost is managed with respect to purchasing the drug, and how it's viewed within the context of the procedure. And then secondarily, there is the concern of actual incrementally increased morbidity in using these drugs after surgical procedures where leakage of the drug outside of the bladder could, in fact, cause very untoward side effects that are long-lasting and difficult to manage. Do you want to talk about the bundling though?

So from a community standpoint, when the physician goes to the hospital to deliver a TURBT, they're already -- that's not from a financial standpoint, extremely lucrative. And so if you were to give mitomycin in an adjuvant setting, oftentimes, it's bundled into that current payment. So it takes away from anything that they would be receiving. More importantly, I've asked, well, what about waiting for the bladder to heal and bringing them back to the clinic and delivering it in that setting. And they've said what Mark just said that the 10% is really not worth the incremental benefit and their surgeons and they'll just do surgery again in 6 to 9 months if it recurs.

These's a final consideration that's logistical. These are medicines that have to be mixed in special environments and not everyone has access to those special environments. That, in fact, is actually the major barrier to our hospital using this medication.

Okay. Very good. As you think about UGN-102, Mark, I guess, and the features that you've developed and the clinical programs that you developed, what makes you most excited about this, I guess, as you think about it both you're obviously thinking about it both from the corporate perspective, but you are also a practitioner. So I guess what makes you most excited here?

So thanks for asking that because it's actually very exciting. And I think there are 2 parts to the answer. The first is the practical availability of an alternative to a surgical procedure that is really the only alternative for patients currently. But there's a bigger idea here that I think we've talked about on a number of occasions. And I sort of view UGN-102 as the robot for bladder cancer. This is a new way of thinking about this disease. We know and in fact, I was talking to our deliverer and our chair about this recently, they're -- we've grown for a long time that bladder cancer, this formal bladder cancer is a chronically recurring disease that we treat in an inadequate fashion. And we do that and have accepted that only because we had no alternative. But in fact, there is emerging evidence for molecular biology experiments as well as cumulative clinical experience that really supports the idea that a complete urothelial therapy like UGN-102 is, in fact, likely to be the game-changing and in fact, paradigm shifting intervention that we've been waiting for, for this group of patients. So I think it's exciting because it represents a big idea, consonant with the movement in urology toward organ preservation, less invasive therapy, less morbidity. And I do think, and I feel like we're on the cusp of being able to realize a real step forward for this patient population.

Okay. Great. Maybe reviewing your clinical programs. Can you review for us how the clinical program has evolved over time between ATLAS and ENVISION, what are the differences between the studies, and what was the particular rationale from pivoting from ATLAS to ENVISION here?

Sure. Just to sort of set the stage, we had a very positive Phase II experience that was called OPTIMA, and that was a single-arm open-label trial in patients with new and recurrent intermediate risk disease, this chronically recurring problem and 65% complete response rate, durability by Kaplan-Meier at a year being 72%, and when we went through the agency for a discussion of a Phase III program, they felt insistent that a randomized trial against surgery would be the appropriate step forward. Although we had reservations about that approach, we actually initiated that trial and enrolled hundreds of patients in it, although we continue to talk to the agency about the statistical complexity, the cost to us, but most importantly, the statistical complexity and the lack of a predicate requiring that we compare a drug to a surgical procedure for superiority. So after years of discussion and actually after enrolling hundreds of patients in the ATLAS trial, comparing UGN-102 to surgery. We finally were able to convince the agency that a single-arm open-label trial would, in fact, support approval. We closed the moment of ATLAS, but continue to follow the patients because it's a very valuable data set and open the ENVISION trial. ATLAS is a trial that examines both patients with new and recurrent disease. ENVISION is focused on patients with recurrent disease. In aggregate, we will have hundreds of patients treated with both new and recurrent disease that we will then incorporate into our NDA submission in '24 with a very robust data set and hopefully, we will be able to obtain approval for the drug.

Yes. You bring up an important point with regard to ATLAS, where you did obviously make substantial progress in the enrollment for both the 1 or 2 arm as well as the surgical comparator arm. And from a data perspective, what does that provide you in terms of like a safety database, even as you mentioned, that the statistical complexities make somewhat of an analysis challenging here.

Yes. No, it's a great observation on your part. And quite honestly, we're very excited about the fact that we are going to be able to at least descriptively evaluate how surgery compares prospectively to UGN-102. So we'll have a robust safety data set as well as efficacy data sets to evaluate. And although we will not be able to based on our original statistical analysis plan directly compare the arms, we'll certainly have lots of data that I think will be helpful directionally in evaluating the results of the ENVISION trial.

Right. Even a descriptive would be useful here...

I believe sure, yes.

Maybe just with regard to -- since the data is in the near future, how do you and the team think about what you'll disclose with the ENVISION and the sort of ATLAS update and the top line results? And secondly, just in terms of maybe refining time lines, when can we potentially expect this update here?

Yes. So I think -- and I think Elyse has said this publicly on a number of occasions. We're going to update everyone about the ATLAS trial and also some initial data from the ENVISION trial this summer. We don't have a precise date, but there'll be plenty of notice about when that's going to happen. And with respect to what's going to be released, the top line data will include for the ATLAS trial, the primary endpoint, which is disease-free survival as well as secondary endpoints such as complete response rate and durability of that response for both arms, which will be very important in terms of, as you point out, descriptively understanding how the 2 therapies might compare. And simultaneously, we will also have the complete response rate, which is the primary endpoint for the ENVISION trial. We'll have a big safety data set for ATLAS. We will only have complete response for ENVISION because we will need to follow those patients until we have at least 12-month follow-up on each individual. But again, I think the similarities to our Phase II and the robustness of the ATLAS data set ought to directionally inform us about what to expect from ENVISION and also, frankly, be reassuring with regard to the outcome of the program overall.

Just for our clarification, this is not a 12-month data that you're presenting with ENVISION. It's just the initial complete response right at the 3-month data.

Correct. We will not -- we do not yet and we'll not at that time this summer have the follow-up data, but we, of course, will need that before the submission to the FDA.

Okay. Great. As you thought of patient enrollment and sort of patient criteria, you did refine it to the recurrent population, as you mentioned here. Is there anything in terms of trial execution or trial design relative to your Phase II OPTIMA program, that suggests there could be incremental improvement on what you showed previously? Or how should we think about that potentially with your upcoming in ENVISION data?

Yes. I think we have perhaps conservatively believe that most Phase III programs experienced some decrement in efficacy. And so we will not be overly disappointed if there is some movement away from the 65% complete response rate observed in the OPTIMA program, just because this is a larger Phase III trial, obviously conducted internationally that might be expected. So I don't think we're expecting it to be better, but we are expecting it to be very similar. And again, we are performing this study in patients that are very similar to our OPTIMA program. With the same drug, a very familiar drug, the mechanism of action, which we understand, particularly in the context of this disease. So we're cautiously optimistic that we're going to see very similar results in these programs as well.

Okay. Great. You spoke to one more other point, which is just the long-term 12-month follow-up that will be part of the study design. As part of your thinking down the road for a filing for UGN-102, what other sort of data points are needed beyond that follow-up? Could you maybe just elaborate on that and just how that figures in your filing strategy?

So I think it's going to require a conversation with the agency, and we are planning on having that conversation to determine what their level of comfort is with what amount of follow-up will be adequate for filing. We certainly believe the 12-month follow-up on all patients will be very important for the ENVISION trial, whether the agency requires or is interested in a greater percentage of patients having more follow-up as a matter of discussion. And we don't know the answer to that yet.

Okay. Great. Maybe continuing with sort of a forward-looking view. As you think about the target product profile of 102, maybe both for your or for Jeff, can you maybe highlight or contrast what are some of the features of 102 that you think are different from JELMYTO here and what down the road in terms of a product profile could help foster faster adoption in a non-pandemic environment for 102 commercially?

Let me ask Jeff to comment on that.

Sure. Just the sheer can be, you see a smile on my face because the convenience of 102 from a couple of perspectives. One, physicians don't need fluoroscopy, they don't need a C-arm. So that means they don't need to actually see where the catheter is. With JELMYTO, you need to know where you are in the kidney, which is why a lot of that we just talked Paul, a lot of that business was in the hospital. Antegrade helps that for JELMYTO. With 102, I envision 90% of the administration being given in the clinic, Therefore, I don't need formulary review. I also don't have to worry about mixing. We're more than likely because we have stability to go out with a mixed only product. If you remember with JELMYTO, Mark just alluded to this, community urologist don't like the mix, don't want to mix. They can't mix mitomycin in these chemotherapies. We're more than likely going to be able because of our stability, ship them a mixed product in their clinic. They'll have a couple of days that they'll set it up. So from my perspective, everything that we've tried hard to make sure we minimalize the operational lift it will be much more convenient with 102. The other thing about 102, we just completed a home installation study to show how convenient it can be given. It can be given by a nurse or an extender. And so not only will it come into -- the patient will come into the clinic where they're very comfortable going, it will more than likely after probably the first dose to be given by a nurse or extender that then frees up the urologist time. So assuming the data and everything looks good. This is a much different look from an adoption standpoint just because of the sheer things that we don't have to worry about review mixing, who's going to mix, mixing training, all those things that we overcame with JELMYTO, we don't have those challenges with 102.

Okay. Great. You're obviously thinking on the forward here of making the user experience more convenient, easier and avoiding some of the barriers that you've mentioned with JELMYTO here. Just in terms of like follow-up and product development, are there any things you would highlight that differ versus the clinical-grade product, I guess? Or are they largely similar?

Do you want to comment on the similarities...

I'm sorry, the UGN as is being used in the clinical study versus the tweaks you've been thinking about to make it for more easier for us?

Yes. I think what's being used currently in these studies is what will be sold. And correct me if I'm wrong. But I mean -- so I think what we're studying is what we're going to give people to use.

Okay. Great. Looking forward to that update coming up here. In terms of -- you've spoken, Jeff, on the commercial considerations of making it easier. But you also have other drugs in the pipeline besides 102, Mark at the beginning, you referenced a CTLA-4, that's in development. Can you maybe provide us an update on what's been going on there in your immuno-oncology efforts.

Sure. Our programs to date have been focused on low-grade disease, but high-grade disease, which is a smaller population of patients is a very interesting subgroup of the bladder cancer population where we're very interested in as well. This is an area that has received a lot of attention because, of course, this is the group of patients treated with BCG and BCG is in short supply. So there's a rush to try to find alternatives for this group of individuals who alternatively would have their bladder removed if conservative measures are not successful. So our preclinical data showed empirically that a combination of a TLR7 agonist and an anti-CTLA-4 antibody delivered intravesically in our gel platform produced a survival advantage in a urine model. And so we've moved that to Phase I, and we are now in the final stages of dose escalation define our monotherapy dose for the anti-CTLA-4 antibody, we had licensed from Agnes, a company in Boston. And we'll be prepared to move into combinations in the very near future. We'll probably have some data later this year about the monotherapy experience and probably could expect to talk about combinations, which could either be with our own TLR7 agonist or other agents even considering potential UGN-102 or others and probably in the coming year. So an exciting program and really unique because as far as we are aware, there are -- there is great interest in, but relatively little activity in delivering antibodies directly to the urothelium. And so we are out in front on that conversation.

Okay. Great. One of the historical challenges, of course, with CTLA-4 has been the immune response to it. Maybe can you give us a little bit more background on the asset that you licensed in from Agnes, what makes it different from some of the known CTLA-4 assets that are out there?

So this is, I think, probably actually, if administered systemically, not unlike other anti-CTLA-4s that -- which everyone is familiar commercially. What is new about it is the way we're delivering it. It is being delivered in our gel platform. We've had conversations even with Jim Allison, the describer of and discoverer of anti-CTLA-4.

I think we've heard about it before.

Yes. And it is interesting to note that the Jim was, in fact intrigued by our program because this is not -- this would not invoke a typical mechanism as we understand the activity of anti-CTLA-4. Nonetheless, it is our intention to deliver it this way, particularly because it's side steps, the systemic side effects of this very effective antibody, which can be rather severe and difficult to manage. So we think this is a very novel program, and we're looking forward to reporting our data.

Okay. Great. We do have Dong Kim in the audience, CFO as well with us and maybe a quick question for him since we're coming up on time, which is maybe how do you and the team think about, I guess, prioritizing capital allocation right now? And you have obviously a major pipeline readout coming up here. But also, maybe can you comment on what your thoughts are on potential business development and/or partnering here?

Sure. Thanks for the question. So basically, we are talking -- I mean, every day, this is one of our top priorities, especially my job. And we are also talking about the OpEx savings and also, we are looking at the [ shared amount of sales ] at this point. And also our stock price change every day, and we are thinking about all the equity debt and the royalty and also we have active [ ATMs ] as well. So short answer, we don't know yet. We are really opportunistically looking at the prior trend and priority at this point, but we probably could also disclose our current cash go into -- run into the first half of next year. So before that, we are going to raise some form and we are thinking -- considering the best option for us right now.

Okay. Great. And then on business development and partnering for potential, let's say, commercial expansion into other geographies? And any thoughts there?

Right now, that's not our top priority at this point. With this limited resources, we just want to focus more on JELMYTO sales and wanted to approver, but we are already open to any opportunities.

Okay. Great. Okay. We're coming up on time here. So my thanks to UroGen for joining us today, and we'll end it on that note. Thank you very much.

Thank you very much, Paul. Appreciate it.