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

Good afternoon, welcome to the UroGen Pharma Conference Call. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the UroGen website following the conclusion of the event. I'd now like to turn the call over to Vincent Perrone, Senior Director of Investor Relations at UroGen Pharma. Please go ahead, Vincent.

Good afternoon, and thank you for joining us today. We are excited to discuss UroGen's acquisition of ICVB-1042 and to share our vision for long-term growth. At UroGen, we are committed to advancing our mission to transform cancer care and delivering meaningful impact for patients and stakeholders. To walk us through our vision and strategic priorities, I'd like to introduce members of our leadership team. Joining us today are Liz Barrett, President and Chief Executive Officer; Dr. Mark Schoenberg, Chief Medical Officer; Chris Degnan, Chief Financial Officer; and Caretha Creasy, PhD and Vice President of Early Development, who will share their insights into how we are positioning the company for sustained success. With that, I'll turn it over to Liz.

Thanks, Vincent. Before getting into the specifics -- if you could just go to the next slide, sorry. Before getting to the specifics around the product acquisition, I want to take a moment to talk about our broader strategy and the initiatives that we are advancing to become a leader in urothelial and specialty cancers. Obviously, the most important thing we have to do is to win with our current portfolio. Our #1 priority remains securing the approval of UGN-102 and executing a comprehensive launch plan. We are on track for an ODAC in May and PDUFA on June 13. UGN-102, if approved, has the potential to redefine the way patients with low-grade intermediate-risk, non-muscle invasive bladder cancer are treated and we project over $1 billion in peak revenue. Our next-generation formulations, UGN-103 and UGN-104 are also on track to ensure a timely approval and switch with the potential to extend the franchise until the end of 2041. We will have data to share on UGN-103 next year and expect to move it into high-grade non-muscle invasive bladder cancer as quickly as feasible. Lastly, within our current pipeline, Mark will share additional color but we will have data to determine a go, no-go decision by the end of this year for UGN-301. As we look to expand our leadership and leverage our unique technology, over the past few months, we have entered 3 strategic research partnerships with the goal of studying our innovative gel in combination with other products in development for urothelial cancers. We will not be providing additional detail on those at this time until we had meaningful data to share. But suffice it to say, it's a key part of our strategy going forward. One of those early partnerships is what led us to our announcement today. Through a thorough landscape evaluation, ICVB-1042 was identified by experts in the field of bladder cancer as the most promising and exciting asset acquisition opportunity. We initially forged a research collaboration and circumstances led to a unique opportunity to acquire the asset. This acquisition provides UroGen with a next-generation oncolytic virus for bladder and other cancers. We were very fortunate to be in the position to add to our portfolio in a meaningful and cost-efficient manner. With minimal upfront through equity and cash milestones only payable after revenue, the financials are very favorable to UroGen. Lastly, early data generated by IconOVir supports the use of the therapy across multiple solid tumors, and we will evaluate those in the future. I'll now turn it over to Mark to share more about the science and rationale of the product. Mark?

Thank you, Liz. This is an exciting time for UroGen because with the acquisition of 1042, we add significantly to our company's stable of innovative assets. 1042 augments UroGen's portfolio, adding an ingeniously designed oncolytic virus. As many of you are aware, oncolytic viruses have been studied as potential cancer medicines for many years. The challenges with application of these novel biologics to the treatment of human malignancy abound, off-target toxicity and variable replication represent obstacles to therapeutic efficacy. 1042 has been precisely engineered to facilitate robust cell entry, a high degree of cancer cell selectivity and rapid viral replication, which leads to tumor cell death and induction of a tumor-specific immune response. A number of these specific characteristics are worth mentioning briefly today. A challenge with the use of adenoviruses as oncolytic viruses has been that they replicate in both normal and cancer cells. 1042 has been engineered such that it enters a broad range of cells but replicates almost exclusively in cancer cells. You can see this for yourselves in this slide, which illustrates how a normal adenovirus and an alternative oncolytic virus replicated in both normal and cancer cells. Notice by comparison what selective replication looks like at the 2 panels on the far right of the slide. This is 1042 with no appreciable replication in normal cells and robust replication in cancer cells. Once a virus enters in a normal human cell, it typically hijacks the cellular genetic replication machinery to manufacture viral genetic material. To minimize the chance that 1042 replicates in normal human cells producing off-target toxicity, specific mutations have been introduced into the drug's viral genome that inhibit the use of normal cells replication functions, but exploit dysregulated pathways present in rapidly dividing cancer cells. Other oncolytic viruses exploit this unique character -- cancer cell property but at the expense of viral replication rate. Once taken up by the cancer cell, 1042 replicates more rapidly compared to a normal adenovirus and other oncolytic viruses as you can see in this short movie, which captures viral replication in a breast cancer cell line. Preferential viral genome replication rapidly leads to cancer cell lysis and death with release not only of new infective 1042 particles capable of attacking cancer cells but also cancer cell antigens that the presence of which stimulates a cellular antitumor immune response. Our development plan for 1042 includes the initiation of IND-enabling studies this year. We plan to test multiple modes of administration, including direct installation, injection and administering -- administration using our proprietary RTGel platform. After advancing in bladder cancer, we expect to explore the use of this novel medicine in the treatment of cancers beyond the genitourinary tract. I'm happy also to report that we've made real progress with our immuno-oncology program for high-grade NMIBC. As those of you who have followed our story know, we've performed a Phase I study of intravesical therapy using UGN-301, our in-licensed anti-CTLA-4 antibody delivered in RTGel. We reported our dose escalation data at the SUO at the end of 2024 and have identified a recommended Phase II dose. UGN-301 appears safe and well tolerated as a monotherapy and in combination with other agents. In addition, we've noted responses in both our monotherapy as well as our combination arms of this study. Recall that we've combined UGN-301 with UGN-201, our TLR7 agonist as well as with gemcitabine. We are currently following patients in the combination arms to better understand the durability of these responses, and we look forward to sharing those data with you later in the year. At that time, we will make a go, no-go decision to advance UGN-301 into Phase II. And with that, I'll pass the mic back to Liz for closing comments.

Yes. Next slide, please. So in summary, first of all, thanks, Mark. I appreciate that and I hope this provides additional insight into why we are very excited to expand our portfolio with this particular asset. We believe it is differentiated and provides the opportunity to advance our mission. This acquisition, along with the research collaborations highlighted and our current portfolio position our company to lead in urothelial cancers, while providing a platform to expand into other specialty cancers on our own and through partnerships. We appreciate you being here today. And with that, we'd happy to take a few questions. So Vincent, I'll turn it back over to you.

We'll now enter the Q&A portion of the call. Tara, can you please call on the first question?

[Operator Instructions] So our first question comes from Tara Bancroft at Cowen.

And congrats on the great new progress. So I'm wondering if maybe you could compare and contrast a little bit this product with other oncolytic viruses, especially in the high-grade NMIBC space? And any idea of what the dosing schedule could potentially look like, especially compared to BCGs, which has anywhere upwards of 15 doses a year. Just wondering if you might have some ideas there.

Yes, we have obviously limited information there, but we will -- I'll let Mark and Caretha comment on the potential. So Mark -- and thanks, Tara, by the way.

Yes, Tara, thanks for the interesting question. So obviously, we were very intrigued by this space in general and the potential applicability of this very unique virus to that particular problem. As Liz is pointing out, it's premature for us to talk about the dosing schedule. But I do want to ask my colleague, Caretha Creasy, who has done a deep dive into this virus and its biology to comment a little bit on aspects of the virus that might be useful in understanding how it is differentiated from what's currently on the market or being explored by other companies.

Thanks, Mark. Well, one of the things that really intrigued us about this virus was that the way that it was engineered. And it was selected to enter cells broadly but retaining the potency that's achieved with adenoviruses, which often other oncolytic viruses have to take a hit on. It has very high replication rate. This leads to intense cell destruction and immune activation.

Does that answer your question, Tara?

Yes. Yes.

Yes. Obviously, we have limited but we have been and they have studied it in references you saw from what Mark presented compared to other potential viruses. And that's why we believe this one is differentiated. And obviously, only through clinical studies, will we be able to prove whether it's that differentiation is meaningful in the clinic.

So our next question comes from Brittany Stopa at Guggenheim.

Congratulations on this positive update. We had a couple of questions. So the IconOVir has had previously initiated a Phase I trial in advanced solid tumors back in 2023. And it doesn't look like those results were publicly shared yet but I was wondering if you could provide any color on the clinical learnings from that trial, how that may have impacted your decision to purchase this particular asset?

Yes. Thanks, Brittany. Mark, Caretha?

So IconOVir has completed enrollment of their Phase I trial, looking at it delivered intravenously. The trial has provided valuable information to inform our approach for local delivery of 1042.

Yes. I think it's important to note that, as Caretha said, that what they were delivering was through intravenous. So IV systemic delivery. And what we'll be doing is local delivery. And so I think some of the learnings that may come out from that study that they've done will help everyone to understand why what we're doing makes much more sense and we think will be the way to approach this virus.

Absolutely exciting. And one more question if you don't mind. It sounds like this is a pretty positive move relative to the financial burden that it might impose. And so just wondering if you could help us understand any short-term impacts of this move and how it will impact your operating expenses going forward?

Yes, I'll ask Chris to comment on that.

Thanks, Brittany. Yes. So this is obviously an early-stage asset. So we anticipate modest incremental R&D investment in 2025 to support the pre-IND work and then with a step up in spend in 2026 for the planned initiation of clinical work. Accounting for these additional costs, we continue to believe that our current cash position gets us to profitability based on our operational plan.

Yes. I mean it's as Chris said, it's very early. So the early studies, as you know, our Phase I studies are minimal when it comes to operating expenses and we had already built into our assumptions that there would be some step up and as we knew we were looking at not just our own pipeline and portfolio, but also potentially doing other things. So we had a placeholder for that in our estimates for getting to profitability.

So our next question comes from Ram Selvaraju at H.C. Wainwright.

Firstly, I was wondering, in reference to the slide, Mark, that you previously presented, demonstrating the replication specificity of the IconOVir asset against an investigational oncolytic virus. Can you tell us anything more about that investigational OV against which the IconOVir asset was being benchmarked. And if you've also looked at the data demonstrating replication and specificity for commercially available OVs and how the IconOVir asset stacks up against those?

So I'll try to give you an answer, and then I'm going to lean on my colleague again, who's spent a lot of time thinking about this as well, Ram, but thanks for the question. So for starters, what I can tell you is that the -- the other asset in that slide was created by IconOVir as a test of -- sort of a comparator test. So we don't exactly know what it was. However, it was an altered adenovirus. And I think probably that's the most we should say about that. With respect to comparison to other commercially available oncolytic virus, I don't know, Caretha, do you want to comment on that?

I don't feel that we have enough information to say definitively have that data at this time.

It might be premature but thanks for the question. Sorry.

No, it's just, Ram, look, at the end of the day, we don't want to share information that's not proprietary to us. And so we're being a little bit conservative about what we're sharing. But suffice it to say that IconOVir did work reverse engineering, other oncolytic viruses for comparative purposes.

Okay. And then just very quickly, one question regarding the potential of deployment of the IconOVir asset within the context of NMIBC alongside UGN-102. If there were ultimately to be a patient in whom both of these agents could be deployed, how would that work? What would be potentially the sequence of events that occur across the treatment continuum? And what else can you say about the profile of such a patient and the nature of their patient journey?

Yes. I would say at this time, we are not looking at combining the oncolytic virus with UGN-102 or UGN-301. We don't see that as being probably the best opportunity. We do expect to be exploring those separately. And we think that as we've said many times, there's lots of opportunity in this space for new treatments as the current treatments still have some things that we'd like to benefit, we would like to see advance from there. And these patients have multiple lines of therapy. And so if our ability to have multiple shots on goal, which with our UGN-103 moving forward into high grade as well as 301 as well as this oncolytic virus, we think we have an opportunity. And we'll look at different things, right, in different combinations. But as the question came earlier, you've got to look at dosing convenience and what is the benefit and the incremental benefit of multiple combination therapy. So all of that, it's just early. As Chris commented, this is an early-stage asset, right? And so first thing we'll be doing is moving it into Phase I. And we do know that IconOVir did a great job of some of the -- a lot of the preclinical work they did and the clinical work they did. So we're not starting from 0. That's the good news. We have a lot of opportunity to look at where -- how we bring this forward from a dosing perspective as well as combination. But at this point in time, we're not expecting it to be a combination of their therapy.

Just to clarify, I think it's more along the lines of, can you potentially deploy these 2 assets the same patient at different points during the patient journey. And does the presence of the IconOVir asset in your pipeline effectively allow you to capture more of the treatment continuum within NMIBC.

Sorry. Yes, Mark, you want to comment on that?

No. So I think you're anticipating something that we would certainly be interested in exploring. And obviously, we know and you know that this is being studied in high-grade disease, whereas we've been focused on low-grade intermediate-risk disease for the 102 program. So we are very interested in high-grade disease as well. Our 301 program sort of tells that story. So we see this as yet another opportunity to address a broader range of the bladder cancer continuum. But as Liz's pointing out, it is early in the development, and there's a lot we need to learn before we are more specific about where this would fit into that continuum.

Our next question comes from Leland Gershell at Oppenheimer.

Congrats. Great to see UroGen broadening the strategy. A couple of questions from us. First, just as 1042 is a viral agent, I know maybe a little bit early but down the road, should we expect kind of similar logistics and requirements of other viral bladder cancer agents such as the cold chain and [indiscernible] time and infection protection and so forth? And then I have a follow-up.

Yes. We -- thanks, Leland. We do think that there will be relevant storage and delivery hurdles to jump over just as others have encountered as well. But we do actually have plans for studying what we consider to be improved methods of delivery of this asset, and we already have plans to do that. This particularly relates to pre-washing, the bladder, et cetera. So we've already been exploring a variety of opportunities to improve the delivery. And I don't know, Caretha, if you want to comment further on that.

No.

No. Okay. But we are looking into improving the delivery of this asset in the context of what's already known about OVs in this disease space.

And then just with regard to the scope here, it seems from looking around the 1042 may have fairly broad potential in later-stage disease, invasive and potentially metastatic disease, presumably, those might require IV administration and presumably, that would shift to kind of the medical oncologist realm versus the urologist. Is it fair to say that UroGen, at least for the foreseeable future, is going to kind of stick within the urological realm with respect to development in NMIBC and intravesical administration?

I think it's fair to say that that's where our priority is but we would look to come -- go outside of bladder once we have more information, and we see this in the clinic. And you're right, that would shift our company not just to urologists, but to medical oncologists but we are talking about down the road from that perspective. And I think the question actually remains as to whether it would have to be IV or are there other ways to administer even in other tumors. And there is work that has been done from IconOVir that shows the opportunity to be able to actually deliver intratumorally. We'll have to take a look at that and see how feasible that is. But there's definitely data that suggests that, that could work across multiple tumor types. So whether we bring that forward or we do that through some partnerships, all of that is sort of yet to be determined. Our priority, obviously, right now is in bladder cancer but we do see this as an opportunity and a platform to allow us to grow our company beyond urothelial cancers.

Our next question comes from Khalil Fenina at Goldman Sachs.

This is Khalil calling in for Paul. A couple of quick ones from us. I guess one, recognizing that it's still early, and this might be a IconOVir question. But someone mentioned Phase I data that IconOVir has not yet shared. I was wondering if that's something you would plan on sharing in the future. And then secondly, you just talked about like doing local delivery instead of systematic delivery. Are there any other like obvious changes that you are planning already? And then I have a quick follow-up after that.

Sure. Yes. I think it's not our place, I think, to comment on their data. So I think that when the appropriate time for that data get published, that would be done from IconOVir and not from us. Our -- the license clearly separates the work that they've done with the work that we plan to do so that to ensure that those are separated. So I think that, that's -- I think it's fair to say that. And I'm sorry, I forgot the second question.

Yes. I guess the second question was just like if you had any obvious changes apart from the local delivery versus systematic?

I got it. Yes. I wouldn't say any obvious ones. We think that we'll take all the learning that they've gotten from a dosing perspective and the work that they've done. So I wouldn't say that there's sort of anything else beyond the mode of administration, mode of delivery at this point.

Got it. And sorry, one more question from us. Just you talked about UGN-301, and go or no-go decision later this year. And then also the potential for this newly acquired asset to potentially be used in other solid tumors. Just given some of the language in the deal about like a 10th anniversary of making reasonable efforts to commercialize this, how should we think about prioritization, if it came to perhaps like this asset being used outside of urology and making a go decision on your UGN-301. I mean, it's a nice problem to have, to have a broad pipeline but I was just curious what your thoughts were there.

Yes. I think, look, we will -- we -- I feel like we've been great stewards of our resources to date in this company. We've been able to do a lot very efficiently. We will look to continue to -- we'll be looking at the landscape. We continuously -- it's a changing landscape in bladder cancer. And one of the things that the Caretha and team will tell you, I continuously challenge them on is how does this fit into the competition. And so we -- the bar is very different than the bar was. I mean, I think we've sort of set the bar in a lot of cases, and particularly around our space. So all of those decisions will be made by looking at it in totality. So when you think about 301 combination, we -- again, the bar has changed and the bar is different, not just for us but from an FDA perspective. So we will not move forward with Phase II studies and larger studies unless we believe that we have a drug and a medicine of therapy that is differentiated and can win in the marketplace. So that will be, as we look at -- to your point, as we look at this one and we look at that and we look at our own UGN-103 as we move into the high-grade space, we will move forward with those clinical studies that we feel will give us a benefit and expand our leadership. We will not be looking to -- unless we actually believe that we can be differentiated. So -- but it's a great question. Like you said, a great problem to have, 3 shots on goal and high grade. But the -- I think there are challenges with all of the therapies that are out there today in high-grade disease. So you can go one by one and talk about the challenges of each of them, whether it's from an administrative perspective, our durability. And one of the things that Mark mentioned, I think it's very important is UGN-301, I mean the great news is we have seen responses even in the Phase I study, even though it was a study -- a study for safety and dosing, we've seen responses. But we will only look at that again in the context of how does it compare from a durability perspective to those to the market that's out there, right, in the landscape. And I think if you look at everyone who's talked about their therapies today, they're changing their dosing schedules, they are adding in new inductions, continuous dosing. So I think there's an opportunity potentially to improve upon that. So it just shows that there's still opportunity in this space and where we can differentiate from both complete response but also a durability and how much burden are you putting on the patient from a therapy perspective. So if you've got to be in therapy on an ongoing basis, that's very different than something like our UGN-102 and low grade where you have 6 weeks and you're done until you recur. And with the expectation that there'll be a long period of durability. So I hope that helps but that's how we sort of thinking about it. But great question.

Great. Thank you for the question, Khalil. So this concludes our Q&A session for today. Thank you for joining us. You may now disconnect.