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

All right. Good afternoon, everyone. Thanks for joining us. I'm Tara Bancroft, one of the senior analysts here at TD Cowen. And so thank you for coming and joining us at TD Cowen's 45th Annual Health Care Conference. And so for this next session, we have UroGen here. And we're doing a fireside chat. Liz and Mark, it's really great to have you. Thank you for joining us. It's our pleasure to host you. So before I get started, I do want to say to the audience, please feel free to chime in with any questions that you have. I'm happy to take them. Raise your hand or give a shout, whatever you want.

So I guess to get started, Liz, can you give us a general overview and update of where you're at today?

That's a loaded question. Where are we today? Just to take a step back, I joined the company about 6 years ago. We were -- we have this unique technology called RTGel. It's a reverse thermal gel technology that allows medicines to dwell longer in the cavity. And so we launched our first product, which was really for a rare disease called upper tract urothelial carcinoma. And so that's been on the market. We launched right into COVID. And now where we are as a company is really -- this will be, I would say, the most transformational year for our company. We've been -- this is what we've been waiting for. When I joined the company, we had JELMYTO. And for the upper tract, it was always, okay, that's a small opportunity, but the opportunity is really in bladder cancer. And so we're going after a very unique space -- I know I'm echoing, but going after a very unique space called low-grade intermediate risk non-muscle invasive bladder cancer. And the bladder cancer space has been very busy recently. But when I joined, it wasn't. There was very few companies that were in the space. And the standard of care is really transurethral resection of the bladder tumor, repetitive surgeries, which Mark knows a lot of because he does a lot of those. So we were really trying to change the paradigm. And now we're finally in a situation where we're at the -- the FDA is reviewing our application. And we have a PDUFA date of June 13 of this year. And we're going from a company with one small product for rare disease to an opportunity where we have multiple products in the same space, luckily, in the same, call it, universe. So a bit to leverage the company, but really move it to a company in which we have an opportunity to build a long-term sustainable growth business. So this indication, this product will help us and be the foundation for us to actually be able to grow this company into a long-term sustainable growth company. So we're very excited and like I said, the most pivotal time, I think, in our company.

Yes, agreed. Okay. So June 13 PDUFA. You filed based on the Phase III ENVISION data. Can you give us the key highlights of that data and what you think will be the most strong in supporting a potential approval?

Yes.

Sure. Thanks. So just to remind those of you who have not been following our story closely, UGN-102, which is the product for which the NDA was filed, is mitomycin in our reverse thermal gel platform. And it is given as a primary therapy for the treatment of intermediate risk non-muscle invasive bladder cancer. That's in contrast to the standard of care today, which is surgery. That's usually done under anesthesia by a surgeon with a scope and it's a removal of the visible tumor. So that's the standard of care. This instead is an office-based procedure that can actually be done by a nurse. It's given once a week for 6 weeks. And the ENVISION trial, which is the pivotal trial and basis for the NDA, was a study in 240 patients of how that 6 weekly treatments produced a complete response rate and then a durable response in patients with intermediate risk disease. So the numbers to keep in mind are that in the study, the complete response rate was 80%. So at 3 months, about 6 weeks after the last dose of medication, 80% of patients didn't have tumor after treatment. And then following those patients out by Kaplan-Meier analysis, 12 months after that 3-month initial evaluation, more than 80% of those patients were still free of disease. It is hard for me to tell you how remarkable those things are in urology, if you have -- if you're not a urologist. Those are remarkable numbers. We don't see them with any of the typical therapies we offer these people. And remember, this is an office-based procedure. This is not an operation, which is what these people are typically used to. So really outstanding numbers and very importantly, incredible durability of that response as well. So those, I think, are the things to keep in mind. And finally, as just a sort of coda to this experience, we asked patients, as part of patient-centered outcomes research done independently by the University of North Carolina, how they felt about this therapy compared to surgery, which all of them had, had in their past treatment experience. And the vast majority of patients preferred the UGN-102 therapy to surgery, not surprisingly. So a well-accepted, very well-tolerated, safe and apparently highly effective therapy for this disease.

Great. Thanks for that overview. So you guys submitted the -- you finished submitting the rolling submission back in September. Have you had the mid-cycle review yet? And I mean, I guess, any kind of color you can give us on any interactions that you've had with regulators? And then we'll get into maybe the potential for an ODAC.

Sure. There won't be an ODAC. So there's not a potential for one. We have not had our mid-cycle review meeting, but it is upcoming. So we'll have that shortly. But the interactions with the FDA, and then I'll turn it over to Mark to sort of talk about how we've been planning and preparing, they've really -- I mean, the good news is they've had audits of clinical sites. We've had inspection at the office. It's your typical IRs that have been coming in, your information request. The good news on the CMC part of it that everybody gets worried about is it's the same CMC that we have for JELMYTO. So we actually don't get a lot of questions around CMC. Initially, the FDA was really focused on progression and safety. And we don't really get any questions around that either anymore, I think, because they've recognized given the data that we've shared. So today, it's really about efficacy and do you have substantial evidence to demonstrate that. But maybe Mark can just talk a little bit about kind of the feedback we've gotten from the FDA, all along, very consistent feedback about what they are going to be looking for and what they're going to be asking at the ODAC.

Yes. One thing that is nice, I guess, about this program is it's been going on for a while. And so we have gotten to know the FDA and their sensitivities and concerns about this particular approach to treating bladder cancer. And remember, what we're providing now is an opportunity to treat people primarily with a drug-based therapy rather than surgery. And that is a bit of a paradigm shift in the context of this particular patient population. So we know, as Liz pointed out, that they will be very focused on the benefit-risk analysis of the data from the ENVISION trial, the pivotal trial. And do we satisfy that requirement, that there is, in fact, an overwhelming benefit compared to the risk, and we certainly believe that the data support that. In addition, because we ran another Phase III trial, which some of you may be familiar with, and the results of these were published in the Journal of Urology last year called the ATLAS trial, we also have randomized data against the standard of care, which is, again, transurethral resection. So we do have a wealth of information about how this drug compares to the standard of care. The agency will be interested to know how do those data support our contentions about the value of 102 in the context of the ENVISION data. And then finally, how clearly do we articulate the unmet medical need, which we think is quite clear in this population. It's a matter of providing a better opportunity for recurrence-free life in this patient population, and our data support that as well. We think those will be the focuses of the conversation.

So in the submission package -- so you had the ATLAS data in there. And one question that I have received from several investors is because of the inclusion in that data -- and I know the study did not go to completion, which you're free to talk about, if you'd like. Is there any potential that they could see the benefit in like newly diagnosed patients, like less recurrent patients and that, that could potentially be included in a label?

So we are -- when we put in our submission, we did put in the broad label to treat patients with low-grade intermediate risk non-muscle invasive bladder cancer because, like you say, in ATLAS and in OPTIMA Phase II had both newly diagnosed and recurrent. It's important to note that almost all patients, when they're newly diagnosed, will get a TURBT for diagnostic purposes so that they can grade to make sure that it's a low-grade tumor. So we always knew that over 90% of our revenue would come from the recurrent patient. But if you talk to doctors and patients, there are -- Mark talked about the fact that it's an elderly patient, have comorbidities, they're taking other meds. There are a handful of patients that just should not go under general anesthesia, should not go to surgery. So you want to have that available for patients. So it's not anything from a financial standpoint as a company, but it is if you want to do the right thing for patients, if you want to give physicians the option, you want to have it available. And so that's what we are asking for. Is there an opportunity that the FDA will come back and say, well, the pivotal study was just recurrent, so you'll only get recurrent? Sure. And we're okay with that, but again -- because, again, it doesn't impact us financially. But it's more of a, do you want to make it easy for physicians to use it rather than having to jump through hoops if they -- if it's considered to be off-label. So we will be asking for the broad label, and we'll have to see what the FDA says about that. But I'm sure that's going to be one of the questions at the ODAC, right, if we get approval -- if they say, will you get it for the broad label or for a more limited label. And it doesn't impact our company, but it's -- to me, it's more of a pride thing, right? You want doctors -- you want to make it easy for doctors to be able to use it.

Yes, that makes sense. So I guess ahead of the ODAC, which -- have you set a time line?

All we know is May. There's not a published date yet. They said they'll give us, I think, a day notice before it goes public, right? And so as soon as they do that, we'll make sure everybody is aware.

Okay. Yes. All right. So about roughly a month or maybe even less from the PDUFA date. So one of the things that people will be paying very close attention to will be the briefing docs. And outlined in those are usually some kind of debate questions of what people are going to be focusing on. So I'm just curious how you guys are approaching -- without knowing that information that's going to be in those documents or what the discussion is actually going to entail, what kinds of things are you preparing for ahead of time or really that you'd like investors to start setting expectations to hear about?

Well, so as you can imagine, since the agency, as Liz pointed out, has been signaling to us for a long time that we would likely go to an ODAC, we started preparing a while ago. So we've been very busy doing what are called mock advisory meetings with experts, particularly medical oncologists and urologists, but also importantly, statisticians who have given us the opportunity to not only present our case, but also who have been candid -- both enroll and then subsequently telling us where the deficiencies are, what explanations we're providing are not clear. So we've had a number of those. We have a number more planned before our May meeting with the agency. So we are very busy preparing for exactly the types of questions we've been talking about this afternoon, namely the risk-benefit analysis of the ENVISION data, the very specific statistical questions around how to understand how ATLAS, though terminated earlier than originally planned, does significantly contribute to our understanding of the complete response rate provided by UGN-102 compared to surgery, how do the durability of response rates in those 2 different arms really bolster our argument, strengthened by the ENVISION data with respect to how 102 performs in this population. So those are the types of things we've been working on. We have had some very specific learnings, particularly because we know that the agency will have on the committee a number of medical oncologists who are not experts in urology and who may have very little familiarity with the disease space. So we are concentrating heavily on creating a presentation that is both educational and fulsome in terms of its description of UGN-102's benefits.

So the other thing we've done is we are inviting as many -- the more negative you are, we want you there to do exactly what you're talking about because we want to be challenged. We want to make sure we don't miss anything. Is there anything that we're missing so that all of that -- we prepare ourselves to answer any question or any challenge that may come up in the ODAC. I mean the FDA doesn't go to an ODAC and send out something that says, oh, isn't this wonderful, right? They are going to challenge you and we will be prepared for all of that. But we want to make sure that we're not caught off guard. So the team has been working extremely hard in making sure that we're covering all of our bases.

Yes. I mean good for you for doing that. So I know we don't know the voting question yet. So this is one of those impossible questions to ask that I'm going to ask anyways. But if you had to peg a percent likelihood that you believe the ODAC would have a positive outcome for you, what percentage would you say that is?

So we would say that it's over 90%.

Great. Okay. So then I guess we can turn to -- I know the team is probably very busy with ODAC preparations, but also launch preparations. So where do you stand on that? What has been done? What still has yet to be done?

Yes. And we actually have our Chief Commercial Officer here with us today. So David joined us June of last year, and that's really been his main focus. But it really is on gaining insights to physicians, how are they thinking about -- a lot of what we would hear from investors or other people is, well, surgeons want to do surgery. And actually, that's not as true as everybody thinks it is. They want alternatives, but they also recognize that if they can do this procedure in their office, it's very beneficial to the practice, it's very beneficial to the patient, that that's a good thing. So we've been working on messaging. Mark talked earlier about durability. The duration of response and being able to have longer recurrence-free and longer intervals between treatments is very compelling, both for physicians and for patients. So we will take our commercial force, sales force -- we had 42 last year when it was just JELMYTO, to 83. So we'll almost double that organization. We have field reimbursement managers. We have nurse educators. We also have operations managers. So we really have a full group, a comprehensive group of people to impact because what we have to do is make it as easy as possible for the doctor. We've got to make it easy. It's got to fit seamlessly into their practice, and that's really what we're focused on. But when you compare it to JELMYTO, JELMYTO, because you're manipulating the upper tract, you have to have special equipment. It can only be done by a physician or you use a nephrostomy tube, but still the tube has to be placed in the body versus this, you walk in, a nurse can give it. It's done in the office with a catheter. So it's a much simpler procedure, but you still have to have the operational pieces put together. And we're doing everything we can to ensure that, that's very simple and very easy for the doctor. We mix the product -- because you have to take the gel and the product. So we offer -- we'll mix it for you and send it to you ready to go. So anything we can do to make their life easier. But importantly, in the beginning, particularly making sure that we're targeting appropriately. And so we're excited about building the group and excited about the messaging. And the feedback we're getting from physicians, they're very excited about it. One of the things -- when we talk to some of our investors, we have investors that sometimes come to us because they were out talking about another product in bladder cancer, and the doctor is bringing up UGN-102. So that's actually a good way for us -- for people to hear about us and who we are.

Well, now that it sounds like awareness is growing, gaining a lot of momentum with demand and interest, have your thoughts changed at all since -- I know you hosted that KOL call with the data and you had those 5 KOLs that talked about which buckets of patients would be treated. And I'm just curious how that has evolved over time, if at all. And where do you stand now on the types of patients that would be treated like right away versus a year later? Like which ones are more difficult versus easy to treat?

Yes. I think you still have your low-hanging fruit, right? You still have those patients who have had multiple recurrences. You still have those patients who have early recurred, recurred very quickly. So I think that's still -- and I think actually, Dr. Linehan, at the meeting, she said it, she then used to think about, who was I going to use UGN-102 in? What patient population? Now I think about who am I not going to use. And it's really a smaller group of patients that she does not use it in. And so that's the type of things we're hearing, right? And so it's been good because I think physicians, and particularly after they get reimbursed -- reimbursement is always a big thing. These are buy-and-bill drugs, and they're more comfortable with that. I think that -- I think it opens it up for their patient population.

Which patients would they not use it in? Small percentage, but who are they?

Mark, who would you not use it in?

So I think we anticipate a label that is going to specify low-grade disease. So I think it would be unwise for physicians to use this in patients with high-grade disease, absent data to support that. So that's number one. I think there are patients who have tiny tumors that can be successfully ablated in the office without any other intervention, people with what's really called bona fide low-risk disease. Those are patients who probably don't need this. But as Liz points out, there's a whole swath of patients as apropos what Dr. Linehan was alluding to originally, who would benefit from this, whom we have traditionally operated on somewhat unthinkingly. So there's a large group of people who will benefit from this. And I think it remains to be seen how the community uses it.

Yes. And so community versus academic, it got me thinking -- so the types of centers that you'll be targeting. So who do you think will be the earliest adopters versus later? And what's the difference between them? And how are you going to target them?

So ultimately, most of the revenue and most of the patients will be in the community. But in the beginning -- it's a great question because in the beginning, it's going to be in the institutions for a lot of reasons. One, we know that they adopt new therapies quicker. But two, we also know that they don't worry about reimbursement because they're not -- it's not -- they're not worried that it's coming out of their pocket in their community practice, but the hospital takes the burden of that. So in the beginning, we expect that it will be in the institutions. But it will -- and JELMYTO was like that. But for other reasons as well, 80% -- now it's about 50-50. So I think it probably won't be that dramatic in the beginning, but ultimately, you'll see the majority of it in the community practice. But in the beginning, it definitely will be institutions. And we already know our big users of JELMYTO, your academic centers that use -- that are very comfortable. They also are the ones who are ready to use 102 as soon as it gets approved.

Yes. And based on the work that you're doing, you said for the ODAC preparations, you want to choose the ones even that are super, super negative that never want to give up their surgery. Do you know -- I mean, I know that there's always a chance that they still could adopt it over time. But do you know what -- if you had to ascribe a percent to it, that would potentially be like never-adopters that just love surgery so much.

I don't think it's because they love surgery so much, but I think there's probably about 20%. It really is sort of your 80-20 rule. And they're more like -- no offense, Mark. I'm such a great surgeon. I get it 100% of the time, never a problem for me. So it's those. And so I'm always apologizing to Mark.

None taken.

I'm always like, because I'm sure Mark thinks he gets it 100% of the time.

Of course.

Because Mark still practices, so he still does these operations. But I think it's -- I think about 20% of physicians that have that -- again, more likely, though, it's kind of interesting because some of them, we talk to them today and even they'll come to some of our ad boards, will be very negative in the beginning, right? But by the end, they're talking about what patients they're going to use in, right?

Yes. No, I think that's really interesting. So let's see. Otherwise, for commercial stuff, have you spoken yet about what your pricing assumptions are going to be?

Yes. We have publicly talked about $18,000 to $19,000 per dose. That was actually data from research that we did before we saw the durability. So we're relooking at pricing right now. You can see that, that's significantly less than what the others have had in high-grade. But we do think that low-grade -- we want to -- we're going to price for the value, right? So you think about from a low-grade perspective versus high-grade, we probably have an opportunity to go a little bit higher than that. But it's not going to be the same as what you would see in high-grade disease. And I think that's the right decision. I do think that urologists are actually more price sensitive than oncologists are. And they're going to weigh that as part of their decision. So we will make sure that our pricing doesn't put us in a situation where anybody will limit the use of our product because of the price. But at the same time, 80% -- as Mark said, 80% durability, 80% CR, most of the patients, I think you -- we have the opportunity to price it with the value that we bring to patients, to physicians and frankly, to the health care system.

And how about reimbursement? Like could you get a permanent J-code in that January 1 time line? I think you'd have to submit by July, right? So that would be right after approval. Is that something that you...

They will be ready to go, and it will go in before the end of June. So we can get the J-code by January 1, right? So that's the expectation. Our expectation is that it will take 6 months, and we'll have that permanent J-code by January. You will still have some physicians that will use it in the first 6 months. But definitely, they'll be much more comfortable after that. And we have programs in place. We'll bring extended dating. So they don't have to pay us for more -- give them more time in the beginning to pay us because it takes them longer to get reimbursed. So we have a lot of programs that really surround our launch to make sure that physicians don't feel like they're taking too much risk.

Okay. And then I guess, long-term risk, we can talk about -- if you envision any competitive risk or into the 2030s, generic risk.

Great question. From a competitive -- so I always say I think I'm weird in a sense that I love competition, not in the sense that because I want to compete against them. But we have to remember, you're treating cancer, and you're not curing cancer. And because we're not curing cancer, these patients need more treatments. So I'm all for other companies coming in and providing more treatments. I'm all for us providing more treatments. As we talk about our pipeline, we want -- because these patients will cycle through medicines. I also think that multiple companies out there talking to surgeons about using these pharmacologic interventions instead will grow the market. We talk often about -- I say the low-grade market is about $5 billion. That's being very conservative. And so there's room for competitors. So I'm actually very happy to have others. Generic, we're -- the situation that we're in is we have our patent protection until 2031. And then we also have a next-generation formulation that we have -- that has some benefits from manufacturing and solubility, so a preparation benefit. And we're doing the studies on that right now. And we expect to launch those prior to our patent expiry. And those patents actually go to 2041. So we think we have right now in our current portfolio a long life cycle. And then we've been adding -- we want to continue to add to our portfolio so that we have -- we can build a long-term sustainable growth business.

Okay. One more follow-up on that because I know we are starting to get limited on time. If there were a therapy that was, sometime down the line, approved in like the adjuvant setting, like used with or at the time of surgery, how would that change the market for UGN-102, if at all?

Mark, [indiscernible] you, as a physician.

Yes. I think one of the things you have to remember about this market, in particular, is these are people who -- most of whom, as Liz has said, have already had a TURBT. They've had surgery and they've recurred. So they've effectively failed primary therapy as we understand the standard of care. So the attraction of having more surgery is diminished in this population, and we know because we've asked these people how they feel about it. So I think in terms of our impact on the market, our opportunity, a primary nonsurgical therapy is going to be very appealing to a lot of people. I also think, as Liz pointed out, that having more people concentrating on this conversation and bringing medicines to various phases of care only increase our opportunity to take better care of these patients, which is an opportunity in and of itself.

Okay. And I know we're closing in on time here. And we didn't get to all of the other programs. I know you touched on the life cycle ones that you are working on. But can you talk about the newest addition to the pipeline first and then...

Sure. No, Mark loves to talk about that.

We're excited to expand our horizons. And as some of you may know, we have a program currently in immuno-oncology, delivering an anti-CTLA-4 antibody to the bladder directly, which is unique in our platform technology. And last week, we announced the purchase of an asset from IconOVir called 1042, which is an oncolytic virus with some very specific characteristics, which make it very attractive in the near term for application to the urinary tract. It's very selective replication once incorporated into the tumor cell and sparing of normal urothelial cells, so high specificity, high potency. We will be doing IND-enabling studies this year and look forward to bringing that into the clinic after that. It's early days for this program, but we are excited about expanding our efforts in high-grade disease, which is another area of interest. This asset interestingly also offers opportunity to expand beyond the urinary tract, and we'll be exploring those at later dates as well.

Okay. Thank you. I guess one more question is what do you believe is the most underappreciated aspect of UroGen by investors?

I would like to say everything. But if you look at, unfortunately, our market cap today, we're not getting credit for UGN-102. And I think it doesn't take a lot on the back of the envelope for 102 to be $1 billion drug. I mean you would have to have less than a 20% penetration in the recurring-only patient population to get to over $1 billion. And I think anybody who talks to physicians in this space are excited about this opportunity. I do think that the overhang of the ODAC and the upcoming submission is there. So we're not getting credit for UGN-102 and the opportunity today and then the opportunity for -- to have this for a long time. So I think it has to be the fact that we're on the cusp of getting that approval. So I think that's the biggest underappreciation.

Do you have anything to add, Mark?

No.

So everything is your answer, too? No, that's great. I mean we're a little bit over on time. So we will close it out there. But thank you to both of you, the rest of the UroGen team who is here. And everyone here who is listening, I appreciate you.

Thanks, Tara. Thank you.

Thank you. Thank you.