What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-15 · 323 added, 480 removed, 676 unchanged (54% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

September 30,

Current assets:

7 unchanged sentences

Accounts receivable

11,717  

Prepaid expense and other current assets

23 unchanged sentences

89,782  

85,713  

Long-term debt

70,797  

Long-term lease liability

6 unchanged sentences

Ordinary shares, NIS 0.01 par value;

100,000,000 shares authorized at September 30, 2021 and December 31, 2020;

22,404,845 and 22,167,791 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

100,000,000 shares authorized at March 31, 2022 and December 31, 2021;

22,682,221 and 22,462,995 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

3 unchanged sentences

( 495,713 )  

Accumulated other comprehensive income

Total Shareholders' Equity

Accumulated other comprehensive income (loss)

( 69 )  

Total Shareholders' Equity (Deficit)

( 17,074 )  

Total Liabilities and Shareholders' Equity

Total Liabilities and Shareholders' Equity (Deficit)

$ 165,715  

4 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

$ 11,351  

$ 3,461  

$ 31,868  

$ 3,833  

For the Three Months Ended March 31,

Cost of revenue

10,107  

28,300  

Operating expense:

Research and development expense

11,923  

10,211  

34,560  

34,905  

Selling, general and administrative expense

21,624  

22,065  

66,117  

68,056  

Operating loss

( 23,440 )  

( 29,124 )  

( 72,377 )  

Financing on prepaid forward obligation

( 6,828 )  

( 9,948 )  

Interest and other income, net

Interest expense on long-term debt

Other income (expense)

Loss before income taxes

( 30,211 )  

( 28,816 )  

( 82,056 )  

Income tax expense

$ ( 30,211 )  

$ ( 28,816 )  

$ ( 82,368 )  

Statements of Comprehensive Loss

$ ( 30,211 )  

$ ( 28,816 )  

$ ( 82,368 )  

Other comprehensive income

Unrealized (loss) gain on marketable securities

( 41 )  

( 268 )  

( 267 )  

Comprehensive Loss

$ ( 30,252 )  

$ ( 29,084 )  

$ ( 82,635 )  

Net loss per ordinary share basic and diluted

$ ( 1.35 )  

$ ( 1.31 )  

$ ( 3.69 )  

Weighted average number of shares outstanding used in computation of basic and diluted loss per ordinary share

22,380,598  

22,058,343  

22,318,589  

21,657,712  

The accompanying notes are an integral part of these condensed consolidated financial statements.

6 unchanged sentences

income (loss)

Balance as of July, 1 2021

22,354,533  

$ 464,823  

$ ( 408,658 )  

$ 56,271  

Changes During the Three Months Ended September 30, 2021

Exercise of options into ordinary shares

50,312  

Share-based compensation

Other comprehensive loss

( 41 )  

( 30,211 )  

Balance as of September 30, 2021

22,404,845  

$ 470,341  

$ ( 438,869 )  

$ 31,537  

Balance as of July, 1 2020

22,001,296  

$ 438,999  

$ ( 297,159 )  

$ 142,660  

Changes During the Three Months Ended September 30, 2020

Exercise of options into ordinary shares

70,136  

Share-based compensation

Other comprehensive loss

( 268 )  

( 28,816 )  

Balance as of September 30, 2020

22,071,432  

$ 445,950  

$ ( 325,975 )  

$ 120,527  

The accompanying notes are an integral part of these condensed consolidated financial statements.

Ordinary Shares

Additional paid-in

Other comprehensive

income (loss)

Balance as of January 1, 2022

22,167,791  

$ 452,525  

$ ( 356,501 )  

$ 96,355  

Changes During the Nine Months Ended September 30, 2021

Changes During the Three Months Ended March 31, 2022

Exercise of options into ordinary shares

237,054  

Share-based compensation

17,756  

Other comprehensive income

( 267 )  

( 82,368 )  

Balance as of September 30, 2021

22,404,845  

$ 470,341  

$ ( 438,869 )  

$ 31,537  

Balance as of March 31, 2022

Balance as of January 1, 2021

21,026,184  

$ 407,986  

$ ( 228,017 )  

$ 180,302  

Changes During the Nine Months Ended September 30, 2020

Changes During the Three Months Ended March 31, 2021

Exercise of options into ordinary shares

345,248  

Share-based compensation

21,499  

Issuance of ordinary shares in public offering, net of issuance expense

700,000  

15,775  

15,777  

Other comprehensive income

( 97,958 )  

Balance as of September 30, 2020

22,071,432  

$ 445,950  

$ ( 325,975 )  

$ 120,527  

Balance as of March 31, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows From Operating Activities

$ ( 82,368 )  

Adjustment to reconcile net loss to net cash from operating activities:

3 unchanged sentences

Share-based compensation

17,756  

21,499  

Interest expense on long-term debt

Amortization of right of use asset

Lease liability

( 914 )  

Changes in operating assets and liabilities:

( 1,844 )  

Accounts receivable

( 737 )  

Prepaid expense and other current assets

( 2,749 )  

Other non-current assets

( 1,573 )  

Accounts payable and accrued expense

Employee related accrued expense

( 3,078 )  

Other current liabilities

( 595 )  

Net cash used in operating activities

( 64,822 )  

Cash Flows From Investing Activities

Purchases of marketable securities

( 51,594 )  

Sales of marketable securities

Maturities of marketable securities

44,625  

74,503  

Purchases of property and equipment

( 550 )  

Net cash (used in) provided by investing activities

( 5,056 )  

43,773  

Cash Flows From Financing Activities

Proceeds from prepaid forward arrangement

72,417  

Proceeds from exercise of options into ordinary shares

Issuances of ordinary shares, net of issuance expense

15,853  

Proceeds from issuance of long-term debt

Issuance cost related to at-the-market issuances

( 127 )  

Net cash provided by financing activities

72,351  

16,449  

Increase (Decrease) in Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

54,090  

50,211  

Cash, Cash Equivalents and Restricted Cash at End of Period

$ 56,563  

$ 25,789  

Supplemental Disclosures of Non-Cash Activities

Non-cash new lease liabilities

$ ( 36 )  

Non-cash issuance cost

Exercise of options

The accompanying notes are an integral part of these condensed consolidated financial statements.

5 unchanged sentences

UroGen Pharma Ltd.

is an Israeli company incorporated in April 2004 ( “UPL”).

UroGen Pharma Inc., a wholly owned subsidiary of UPL, was incorporated in Delaware in October 2015 and began operating in February 2016 ( “UPI”).

UPL and UPI (together the “Company”) is a biopharmaceutical company focused on building and commercializing novel solutions that treat specialty cancers and urologic diseases.

Since commencing operations, the Company has devoted substantially all of its efforts to securing intellectual property rights, performing research and development activities, including conducting clinical trials and manufacturing activities, hiring personnel, launching the Company’s first commercial product, Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN- 101 and raising capital to support and expand these activities.

On April 15, 2020, the U.S.

Food and Drug Administration (“FDA”) granted expedited approval for Jelmyto , a first -in-class treatment indicated for adults with low-grade upper tract urothelial cancer (“low grade-UTUC”).

Jelmyto consists of mitomycin, an established chemotherapy, and sterile hydrogel, using our proprietary sustained release RTGel technology.

is an Israeli company incorporated in 

April 2004 ( “UPL”).

UroGen Pharma Inc., a wholly owned subsidiary of UPL, was incorporated in Delaware in 

October 2015 

and began operating in 

February 2016 ( “UPI”).

UPL and UPI (together the “Company”) is a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial and specialty cancers.

first  commercial product, 

Jelmyto  (mitomycin) for pyelocalyceal solution, formerly known as UGN- 101,  clinical development of UGN- 102,  and raising capital to support and expand these activities.

April 15, 2020, 

Food and Drug Administration (“FDA”) granted expedited approval for 

Jelmyto , a 

first -in-class treatment indicated for adults with low-grade upper tract urothelial cancer (“low-grade UTUC”). 

Jelmyto  consists of mitomycin, an established chemotherapy, and sterile hydrogel, using our proprietary sustained release RTGel technology.

It has been designed to enable longer exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non-surgical means.

9 unchanged sentences

31, 2021, as filed with the Securities and Exchange Commission (“SEC”) on March 21, 2022.

The consolidated financial statements include the accounts of UPL and its wholly owned subsidiary UPI.

Intercompany balances and transactions have been eliminated during consolidation.

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 438.9  

million and $ 356.5 million as of September 30, 2021 and December 

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 495.7  million and $ 467.3 million as of March 31, 2022 and December 

31, 2021, respectively.

25 unchanged sentences

Cash and cash equivalents consist primarily of money market funds and bank money market accounts and are stated at cost, which approximates fair value.

Cash and cash equivalents and marketable securities totaled $ 110.3 million as of September 30, 2021 .

Restricted cash is related primarily to cash held to secure corporate credit cards;

restricted deposits are related to cash held to secure leases.

Cash and cash equivalents and marketable securities totaled $ 137.1 million as of March 31, 2022 .

The Company classifies its marketable securities as available-for-sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 320, “Investments —

28 unchanged sentences

Under this methodology, the amount of benefit recorded represents the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with a taxing authority that has full knowledge of all relevant information.

See Note 15 for further discussion related to income taxes.

See Note 16  for further discussion related to income taxes.

The Company capitalizes inventory costs related to products to be sold in the ordinary course of business.

11 unchanged sentences

Manufacturing equipment

2 - 10  

Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms.

5 unchanged sentences

See Note 9 for further discussion related to the prepaid forward obligation.

Long-Term Debt

The Company is party to a loan agreement with funds managed by Pharmakon Advisors, L.P.

(“Pharmakon”).

The Company recognizes interest expense in current earnings, and accrued interest within other current liabilities on the condensed consolidated balance sheet.

The Company recognizes capitalized financing expenses as a direct offset to the long-term debt on the Company's condensed consolidated balance sheet, and amortizes them over the term of the debt using the effective interest method.

See Note 10 for further discussion related to long-term debt.

The Company is a lessee in several noncancelable operating leases, primarily for office space, office equipment and vehicles.

21 unchanged sentences

The Company adjusts its accrual as actual costs become known.

Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when the milestone results are achieved.

Selling General and Administrative Expense

17 unchanged sentences

Accounts Payable and Accrued Expense

Accounts payable and accrued expense consists of the following as of September 30, 2021 and December 

31, 2020 (in thousands):

September 30,

Accounts payable and accrued expense consists of the following as of March 31, 2022 and December 

31, 2021  (in thousands):

Accounts payable

$ 4,060  

$ 3,271  

Accrued sales reserves

4 unchanged sentences

Total accounts payable and accrued expense

$ 11,062  

$ 10,023  

Interest and Other Income (Expense), Net

Interest and other income (expense) consisted of the following as of September 30, 2021 and 2020 (in thousands):

Nine Months Ended September 30,

Interest and other income (expense) consisted of the following as of March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

Interest income

$ 1,719  

Other finance (expense), net

( 76 )  

Total interest and other income, net

$ 1,527  

Total other income (expense)

Note 5 –

Inventories consist of the following as of 

September 30, 2021 and December 

31, 2020 (in thousands):

September 30,

March 31, 2022 and December 31, 2021 (in thousands):

Raw materials (1)

$ 4,106  

$ 1,051  

Finished goods

Total inventories

$ 5,381  

$ 1,964  

$ 1.6  million of raw materials at September 30, 2021 are included within other non-current assets on the condensed consolidated balance sheets.

( 1 )  $ 1.3  million and $ 1.0 million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively .

Note 6 –

8 unchanged sentences

Unobservable inputs that reflect the reporting entity’s own assumptions.

The carrying amounts of the Company’s other current assets, accounts payable and accrued liabilities are generally considered to be representative of their fair value because of the short-term nature of these instruments.

The carrying amounts of the Company’s cash and cash equivalents, restricted cash, other current assets, accounts payable and accrued liabilities are generally considered to be representative of their fair value because of the short-term nature of these instruments.

The carrying value of the prepaid forward obligation (See Note 9 - Prepaid Forward Obligation) approximates its fair value as the effective interest rate approximates the market rate for loans with similar terms and risk characteristics.

Likewise, the carrying value of long-term debt on the Company’s balance sheet (see Note 10  –

Long-Term Debt), approximates its fair value as the interest rate approximates the market rate for loans with similar terms and risk characteristics.

No transfers between levels have occurred during the periods presented.

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2021 are as follows (in thousands):

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of March 31, 2022 are as follows (in thousands):

Fair Value Measurements Using

1 unchanged sentence

Balance as of

September 30,

Identical Assets

1 unchanged sentence

US government

$ 19,401  

Corporate bonds

12,349  

Commercial paper

15,989  

Money market funds (1)

35,924  

Certificates of deposit

Total marketable securities

$ 90,867  

$ 55,325  

$ 35,542  

Included within cash and cash equivalents on the condensed consolidated balance sheets.

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 

31, 2020 are as follows (in thousands):

Additionally, as of March 31, 2022 there were approximately $ 75.0 million of money market funds included within cash and cash equivalents on the condensed consolidated balance sheet that are measured at fair value based on Level 1 fair value measurement criteria.

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2021 are as follows (in thousands):

Fair Value Measurements Using

4 unchanged sentences

US government

$ 29,186  

Corporate bonds

21,861  

Money market funds (1)

39,744  

Commercial paper

Certificates of deposit

Total marketable securities

$ 90,791  

$ 68,930  

$ 21,861  

Included within cash and cash equivalents on the condensed consolidated balance sheets.

The Company’s in money market funds are valued based on publicly available quoted market prices for identical securities as of September 30, 2021 and December 

Additionally, as of December 31, 2021 

there were approximately $ 21.4 million of money market funds included within cash and cash equivalents on the condensed consolidated balance sheet that are measured at fair value based on Level 1 fair value measurement criteria.

Note 7 –

Marketable Securities

The following table summarizes the Company’s marketable securities as of September 30, 2021 (in thousands):

The following table summarizes the Company’s marketable securities (excluding cash and cash equivalents) as of March 31, 2022 (in thousands):

Marketable securities:

US government

$ 19,399  

$ 19,401  

Corporate bonds

12,348  

12,349  

Commercial paper

15,988  

15,989  

Money market funds (1)

35,924  

Certificates of deposit

Total marketable securities

$ 90,863  

$ 90,867  

Included within cash and cash equivalents on the condensed consolidated balance sheets

The Company classifies its marketable securities as available-for-sale and they consist of all debt securities.

The amortized cost basis as of September 30, 2021 includes $ 0.1  million of accrued interest receivable.

As of September 30, 2021 marketable securities were in a net unrealized gain position. Unrealized gains and losses on available-for-sale debt securities are included as a component of comprehensive loss. 

September 30, 2021 , the aggregate fair value of marketable securities held by the Company in an unrealized loss position was $ 11.9  million which consisted of 

13 securities. The unrealized loss was primarily driven by minor fluctuations in the fair value of corporate bonds.

The amortized cost basis as of March 31, 2022 includes $ 0.1  million of accrued interest receivable.

As of March 31, 2022 marketable securities were in a net unrealized loss position. Unrealized gains and losses on available-for-sale debt securities are included as a component of comprehensive loss. 

March 31, 2022 , the aggregate fair value of marketable securities held by the Company in an unrealized loss position was $ 31.7 million which consisted of 

17  securities. The unrealized loss was primarily driven by minor fluctuations in the fair value of corporate bonds driven by changes in market interest rates.

The Company does not expect to settle the debentures at a price less than the amortized cost basis of the investment;

1 unchanged sentence

In accordance with the Company’s general investment strategy, the Company does not intend to sell the investments before maturity.

September 30, 2021 , the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no credit impairments were recognized in the period.

The Company’s marketable securities as of September 30, 2021 mature at various dates through February 2022.

March 31, 2022 , the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no credit losses were recognized in the period.

The Company’s marketable securities as of March 31, 2022 mature at various dates through July 2023.

The fair values of marketable securities by contractual maturity consist of the following (in thousands):

September 30,

Maturities within one year

$ 86,797  

$ 88,898  

Maturities after one year through three years

Total marketable securities

$ 90,867  

$ 90,791  

Note 8 –

Property and Equipment

Property and equipment, consists of the following as of September 30, 2021 and December 

31, 2020 (in thousands):

September 30,

Property and equipment, consists of the following as of March 31, 2022 and December 31, 2021 (in thousands):

Laboratory equipment

3 unchanged sentences

accumulated depreciation and amortization

( 2,013 )  

Property and equipment, net

$ 1,978  

$ 2,046  

Depreciation and amortization expense was $ 0.2 million and 

$ 0.6  million for the 

three and nine months ended September 30, 2021 and $ 0.1 million and $ 0.3  million for the three and nine months ended September 30, 2020 .

Depreciation and amortization expense was $ 0.2 million for the 

three months ended March 31, 2022 and $ 0.2  million for the three months ended March 31, 2021 .

Note 9 –

5 unchanged sentences

If certain revenue thresholds for Jelmyto aggregate worldwide annual net sales are not met, the future cash payments to RTW with respect to Jelmyto annual net sales up to $200 million will increase by 3.5 %, and may decrease back to 9.5% dependent on the Company meeting certain subsequent Jelmyto aggregate worldwide annual net sales thresholds.

The rate in effect for the three months ended March 31, 2022 for annual sales up to $ 200 million was 13.0 %.

In addition, subject to FDA approval of UGN- 102, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of UGN- 102 in an amount equal to:

1 unchanged sentence

If the Company does not receive FDA approval for UGN- 102 by a specified date, the future cash payments to RTW with respect to aggregate worldwide annual net sales of Jelmyto across all Jelmyto annual net sales tiers will increase by 1.5 %.

The rate in effect for 2022 for sales up to $ 200 million is 13 %. 

In accordance with the prepaid forward agreement, the Company will be required to make payments of amounts owed to RTW each calendar quarter, through and until the quarter in which the aggregate cash payments received by RTW are equal to or greater than $300 million.

As security for the payment and fulfilment of these amounts throughout the arrangement, the Company has granted RTW a first priority security interest in Jelmyto and UGN- 102, including the regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable related to these products.

In May 2021, following the receipt of necessary regulatory approvals, the Company received the $ 75.0 million prepaid forward payment ($ 72.4  million net of transaction costs) from RTW and recognized an associated prepaid forward obligation liability.

The subsequent measurement for the liability follows the accounting principles as defined in ASC 835 - 30, “Imputation of Interest”;

each period the Company makes a payment to RTW, and recognizes expense related to financing on the prepaid forward obligation based on an imputed rate derived from the expected future payments.

The Company uses a prospective approach for reassessing the effective rate in which a new rate is computed each period based on the current carrying value of the obligation and the revised estimated future payments.

Changes in future payments from previous estimates are included in the future financing expense on a prospective basis.

The Company does not expect to make any principal payments in the next 12 months.

May 2021 ,  following the receipt of necessary regulatory approvals, the Company received the $ 75.0  million prepaid forward payment ($ 72.4  million net of transaction costs) from RTW and recognized an associated prepaid forward obligation liability.

Each period the Company makes a payment to RTW, an expense is recognized related to financing on the prepaid forward obligation based on an imputed rate derived from the expected future payments.

Management reassesses the effective rate each period based on the current carrying value of the obligation and the revised estimated future payments.

Changes in future payments from previous estimates are included in current and future financing expense. The Company does not expect to make any principal payments in the next 12 months.

The following table shows the activity with respect to the carrying value of the prepaid forward liability, in thousands:

Prepaid forward obligation at closing of RTW Transaction

$ 75,000  

Capitalized closing costs

1 unchanged sentence

Amounts paid and payable

Carrying value of prepaid forward obligation as of September 30, 2021

$ 79,927  

Carrying value of prepaid forward obligation as of December 31, 2021

Financing on prepaid forward obligation

Amounts paid and payable

Carrying value of prepaid forward obligation as of March 31, 2022

Note 10 –

Long-Term Debt

March 7, 

2022,  the Company entered into a loan agreement with Pharmakon for a senior secured term loan of up to $ 100  million in 

two  tranches.

first  tranche of $ 75  million was funded in 

March 2022. 

At its option, the Company 

draw up to an additional $ 25  million before 

December 31, 2022, 

subject to customary bring down conditions and deliverables.

The facility will mature 

five  years from initial funding and can be prepaid in whole at the Company's discretion, at any time, subject to prepayment premiums and makewhole amounts. The loan will require interest-only payments for the 

48  months followed by principal and interest payments with interest accruing using 

3 -month London Inter-Bank Offered Rate (“LIBOR”) (with a 

1.25 % floor) plus 

8.25 %. In the event of the cessation of LIBOR, the benchmark governing the interest rate will be replaced with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York.

The Company is not required to maintain any financial covenants.

The Company incurred financing expenses of $ 4.2 million which are recognized as a direct offset to the long-term debt on the Company's condensed consolidated balance sheet.

These debt issuance costs are 

amortized over the term of the debt using the effective interest method, and are recorded in the condensed consolidated statements of operations as “Interest expense".

The following table shows the activity with respect to the carrying value of the long-term debt, in thousands:

Long-term debt at closing of Pharmakon loan

Capitalized costs and discounts

Interest expense

Amounts paid and payable

Carrying value of Pharmakon loan as of March 31, 2022

Note 11  

Operating Leases

7 unchanged sentences

The landlord provided a tenant allowance for leasehold improvements of $ 0.2 million that was accounted for as a lease incentive.

The Company’s remaining contractual obligation under this lease is approximately $ 0.7  million as of September 30, 2021 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.6  million as of March 31, 2022 .

In November 2019, UPI entered into a sublease for this office space, with a lease commencement date of 

1 unchanged sentence

The subtenants exercised their early access clause and moved into the premises at the end of November 2019. 

The remaining rental payments to be received over the lease term is approximately $ 0.5  million as of September 30, 2021 .

The remaining rental payments to be received over the lease term is approximately $ 0.5  million as of March 31, 2022 .

The Company accounts for the sublease as on operating lease in accordance with ASC 842 - 10 - 25 - 2 and ASC 842 - 10 - 25 - 3.

2 unchanged sentences

The lease commencement date was November 29, 2019 and the lease term is 38 months.

The Company’s remaining contractual obligation under this lease is approximately $ 0.7  million as of September 30, 2021 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.5  million as of March 31, 2022 .

In addition, the Company has other operating office equipment and vehicle leases.

1 unchanged sentence

The Company’s leases do not contain any residual value guarantees or material restrictive covenants.

The Company’s leases expire at various dates from 2021 through 2023, with varying renewal and termination options.

The components of lease cost for the three and nine months ended September 30, 2021 were as follows (in thousands):

The Company’s leases expire at various dates from 2022  through 2024, with varying renewal and termination options.

The components of lease cost for the three months ended March 31, 2022  

and 2021 were as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost

$ 1,282  

Sublease income

( 56 )  

( 168 )  

Variable lease cost

$ 1,228  

The amounts recognized as of September 30, 2021 and December 31, 2020 were as follows (in thousands):

September 30,

The amounts recognized as of March 31, 2022 and 

December 31, 2021 were as follows (in thousands):

Right of use asset

$ 1,180  

$ 2,158  

Long-term lease liabilities

Other current liabilities

As of September 30, 2021 , no impairment losses have been recognized to date.

Supplemental information related to leases for the nine months ended September 30, 2021 is as follows (in thousands):

As of March 31, 2022 , no impairment losses have been recognized to date.

Supplemental information related to leases for the three months ended March 31, 2022  and 2021 is as follows (in thousands):

Three Months Ended  

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Weighted-average discount rate of operating leases

As of September 30, 2021 , undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

5.78 %  

As of March 31, 2022, maturities of lease liabilities were as follows (in thousands):

Years ending December 31,

Remainder of 2022

2026 and thereafter

Total future minimum lease payments

Present value of lease liabilities

As of March 31, 2022 , undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

Operating Leases

3 unchanged sentences

Sublease income is recognized net within operating expense.

Sublease income for the three and nine months ended September 30, 2021 was as follows (in thousands):

Sublease income for the three months ended March 31, 2022 and 2021 was as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Sublease income from fixed lease payments

Note 11 –

Note 12  

Revenue From Product Sales

Net product sales consist of the following for the three and nine months ended September 30, 2021 (in thousands):

Net product sales consist of the following for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended

Nine Months Ended

September 30,

$ 11,351  

$ 3,461  

$ 31,868  

$ 3,833  

Note 12 –

Net revenue recognized includes management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to 

340b  drug pricing programs, Medicaid drug rebate programs, and the Company’s copay assistance program, which are estimated based on industry benchmarking studies as well as the Company’s historical experience.

Reserves related to items that are contractually able to be net settled are recognized as contra accounts receivables. The following table shows the activity with respect to sales reserves for period ended March 31, 2022 ( in thousands):

Reserves related to government sponsored programs

Other reserves

Total accrued sales reserves

Balance as of December 31, 2021

Changes during Q1 22

Balance as of March 31, 2022

Note 13  

License and Collaboration Agreements

Allergan/AbbVie Agreement

In October 2016, the Company entered into a license agreement with Allergan (the "Allergan/AbbVie Agreement") and granted Allergan (now part of AbbVie) an exclusive worldwide license to research, develop, manufacture and commercialize pharmaceutical products that contain RTGel and clostridial toxins (including BOTOX®), alone or in combination with certain other active ingredients, referred to as the Licensed Products, which are approved for the treatment of adults with overactive bladder who cannot use or do not adequately respond to anticholinergics.

In October 2017, Allergan commenced a Phase 2 clinical trial of BOTOX/ RTGel for the treatment of OAB, with the potential to evolve from multiple injections of BOTOX into the bladder to a single instillation of the novel formulation.

In August 2020, the Company announced that the Phase 2 APOLLO trial did not meet the primary endpoint. The data suggested that this result may have been due to BOTOX not effectively permeating the urothelium.

Over the past year, the Company has been in discussions with AbbVie to determine whether other products in their portfolio would be complementary with RTGel. Based on this review, the Company determined that there was limited interest to pursue combinatorial products, and therefore, have terminated the relationship in order to allow for maximum flexibility for the RTGel intellectual property.

Agenus Agreement

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MD Anderson Agreement

In January 2021, the Company announced that it entered into a three -year strategic research collaboration agreement with MD Anderson focusing on UGN- 302 as an investigational treatment for high-grade NMIBC.

In January 2021, the Company announced that it entered into a three -year strategic research collaboration agreement with MD Anderson focusing on the sequential use of UGN- 201 and UGN- 301  as an investigational treatment for high-grade NMIBC.

Under the agreement, MD Anderson and the Company will collaborate on the design and conduct of non-clinical and clinical studies with oversight from a joint steering committee.

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Pursuant to the agreement, the Company makes bi-annual payments to MD Anderson to fund the collaboration.

As of September 30, 2021 , the Company has made payments to MD Anderson of $ 500,000 recognized evenly over the associated period through research and development expense.

Note 13 –

As of March 31, 2022 , the Company has made payments to MD Anderson of $ 1,000,000  recognized evenly over the associated period through research and development expense.

Note 14  

Shareholders ’

The Company had 100.0 million ordinary shares authorized for issuance as of September 30, 2021 and December 

The Company had 22.4 million and 22.2 million ordinary shares issued and outstanding as of September 30, 2021 and December 

The Company had 100.0 million ordinary shares authorized for issuance as of March 31, 2022 and December 31, 2021 .

The Company had 22.7  million and 22.5  million ordinary shares issued and outstanding as of March 31, 2022 and December 

31, 2021, respectively.

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Since its inception, the Board has not declared any dividends.

Note 14 –

Note 15  

Share-Based Compensation

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is a nonstatutory stock option, RSU or other right to receive ordinary shares pursuant to the Inducement Plan.

As of September 30, 2021 , 3,587,774 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 1,362,156 ordinary shares remain available for future awards.

In December 2021, the Board approved a 300,000 increase in the share reserve of the Inducement Plan. 

As of March 31, 2022 , 3,949,544 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 722,810 ordinary shares remain available for future awards.

The following table illustrates the effect of share-based compensation on the condensed consolidated statements of operations (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Research and development expense

$ 1,519  

$ 3,119  

$ 5,032  

Selling, general and administrative expense

14,637  

16,467  

$ 5,515  

$ 6,763  

$ 17,756  

$ 21,499  

The total unrecognized compensation cost of options and RSUs at September 30, 2021 is $ 22.9  million with a weighted average recognition period of 1.76  years.

Note 15 –

The total unrecognized compensation cost of options and RSUs at March 31, 2022 is $ 17.5 million with a weighted average recognition period of 1.96 years.

Note 16  

UroGen Pharma Ltd.

is taxed under Israeli tax laws.

As of September 30, 2021 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of March 31, 2022 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

In evaluating the need for a valuation allowance, the Company considers all sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, forecasts of future taxable income, and tax planning strategies.

The Company has cumulative global pretax losses for the years ended 2020, 2019 and 2018, and for the nine months ended September 30, 2021 .

The Company has cumulative global pretax losses for the years ended 2021, 2020 and 

2019, and for the three months ended March 31, 2022 .

The Company will continue to assess the extent to which its deferred tax assets may be realized in the future and will adjust the valuation allowance as needed.

The Company has a liability for uncertain tax positions of $ 2.7 million as of September 30, 2021 , for tax positions relating to transfer pricing between affiliated entities.

The Company has a liability for uncertain tax positions of $ 2.8  million as of March 31, 2022 , for tax positions relating to transfer pricing between affiliated entities.

The Company recognizes interest accrued and penalties related to uncertain tax positions as a component of income tax expense.

As of September 30, 2021 , the Company’s liability for uncertain tax positions includes $ 0.7 million of interest and penalties accrued during 2020.

As of March 31, 2022 , the Company’s liability for uncertain tax positions includes $ 0.9  million of accrued interest and penalties.

The Company operates on a global basis and is subject to tax laws and regulations in the U.S.

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Based upon the information currently available, the Company does not reasonably expect changes in its existing uncertain tax positions in the next 12 months and has recorded the gross uncertain tax positions as a long-term liability.

Note 16 –

Note 17  

Related Parties

There were no related party transactions for the 

nine months ended September 30, 2021 or 2020.

Note 17 –

three months ended March 31, 2022 or 2021 .

Note 18  

Commitments and Contingencies

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Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities.

The Company’s maximum exposure under these arrangements is unknown as of September 30, 2021 and December 

The Company’s maximum exposure under these arrangements is unknown as of March 31, 2022 and December 31, 2021 .

The Company does not anticipate recognizing any significant losses relating to these arrangements.

Grants from the Israeli Innovation Authority in Israel ( “

The Company has received grants from the IIA for research and development funding.

Up until 2007, the IIA participation in the funding of the Company’s operations was by grants provided to Granot Ventures, a government supported technology incubator, as part of the Israeli Ministry of Industry and Commerce Director General Directive 8.2.

Since 2008, the funding was provided directly to the Company.

On January 12, 2020, the IIA approved the Company's request to unwind its obligation to the IIA regarding grants that were loaned to the Company between January 2004 and September 2016.

The total payment under the IIA approval, net of the royalties already paid, $ 6.6 million, was fully paid during the first quarter of 2020 and recognized as research and development expense.

Based on this payment, the Company will have full freedom to transfer IIA-funded technology or manufacture products developed with IIA-funded technology outside of the State of Israel.

Other than the commitment to continue at least 75 % of its based R&D jobs in Israel (at the time of settlement) for a period of at least three years, all other obligations with the IIA ceased to exist as per the agreement.

See Note 10 for further discussion regarding lease commitments.

Note 18 –

See Note 11  for further discussion regarding lease commitments.

Note 19  

Subsequent Events

See Note 12 for discussion related to the Allergan/AbbVie Agreement.

The Company has evaluated and determined there were no subsequent events through May 10, 2022.

Management ’

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The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.

We are a biopharmaceutical company dedicated to building and commercializing novel solutions that treat specialty cancers and urologic diseases.

We have developed RTGel ™

reverse-thermal hydrogel, a proprietary sustained release, hydrogel-based technology that has the potential to improve therapeutic profiles of existing drugs.

Our technology is designed to enable longer exposure of the urinary tract tissue to medications, making local therapy a potentially effective treatment option.

Our approved product Jelmyto (mitomycin) for pyelocalyceal solution, and our investigational candidate UGN-102 (mitomycin) for intravesical solution, are designed to ablate tumors by non-surgical means and to treat several forms of non-muscle invasive urothelial cancer, including low-grade upper tract urothelial cancer (“low-grade UTUC”) and low-grade intermediate risk non-muscle invasive bladder cancer (“low-grade intermediate risk NMIBC”), respectively.

We are a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial and specialty cancers.

We have developed 

RTGel ™

reverse-thermal hydrogel, a proprietary sustained release, hydrogel-based technology that has the potential to improve therapeutic profiles of existing drugs.

Our technology is designed to enable longer exposure of the urinary tract tissue to medications, making local therapy a potentially more effective treatment option.

Our approved product 

Jelmyto ®

(mitomycin) for pyelocalyceal solution, and our investigational candidate, UGN-102 (mitomycin) for intravesical solution, are designed to ablate tumors by non-surgical means and to treat several forms of non-muscle invasive urothelial cancer, including low-grade upper tract urothelial cancer (“low-grade UTUC”) and low-grade intermediate risk non-muscle invasive bladder cancer (“low-grade intermediate risk NMIBC”), respectively.

In addition, our immuno-uro-oncology pipeline includes UGN-301 (zalifrelimab), an anti-CTLA-4 antibody, which we intend to study as a combination therapy with multiple potential agents.

We estimate that the annual treatable patient population of low-grade UTUC in the United States is approximately 6,000 to 7,000;

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RTGel leverages the physiologic flow of urine to provide a natural exit from the body.

We believe that RTGel , when formulated with an active drug, may allow for the improved efficacy of treatment of various types of specialty cancers and urologic diseases without compromising the safety of the patient or interfering with the natural flow of fluids in the urinary tract.

We believe that RTGel , when formulated with an active drug, may allow for the improved efficacy of treatment of various types of urothelial and specialty cancers and urologic diseases without compromising the safety of the patient or interfering with the natural flow of fluids in the urinary tract.

RTGel achieves this by:

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It has been designed to prolong exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non-surgical means.

New product exclusivity for Jelmyto exists through April 15, 2023, Orphan Drug exclusivity through April 15, 2027, as well as a composition of matter patent through 2031.

New product exclusivity for Jelmyto exists through April 15, 2023, Orphan Drug exclusivity through April 15, 2027, as well as a composition of matter patent through 2031. The main patents that protect Jelmyto in the United States are set to expire on January 20, 2031.

These patents were listed in the FDA's Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations).

Low-grade UTUC is a rare cancer that develops in the lining of the upper urinary tract, ureters and kidneys.

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In June 2020, we initiated our commercial launch of Jelmyto in the United States.

Currently, we have a commercial team comprising a field force of approximately 46 territory business managers with deep experience in both urology and oncology.

The territory business managers are led by seven regional business managers.

Each region is supported by a Clinical Nurse Educator to provide education around instillation, as well as a Field Reimbursement Manager to help ensure access and reimbursement for appropriate patients.

In addition, our organization includes seven medical science liaisons who appropriately engage, both in person and virtually, with physicians interested in learning more about UroGen, Jelmyto and our technology.

We have staffed, trained and prepared a customer-facing team comprising territory business managers with deep experience in both urology and oncology.

These territory business managers are led by seven regional business managers.

Each region is additionally supported by one to two clinical nurse educators to provide education and training around instillation, as well as a Field Reimbursement manager to help ensure access and reimbursement for appropriate patients.

In addition, our organization includes seven medical science liaisons who appropriately engage with physicians interested in learning more about UroGen, 

Jelmyto  and our technology, both in person and virtually.

In total, our customer-facing team comprises approximately 80 representatives

We are committed to helping patients access Jelmyto .

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In addition to reimbursement and access, we have also been focused on ensuring seamless integration into physician practices.

We have implemented processes to help make Jelmyto preparation and administration safe and seamless for practitioners and patients, including entering into an agreement with a major national pharmacy under which the pharmacy, following receipt of a patient prescription, prepares and dispenses the Jelmyto admixture on our behalf.

We have implemented processes to help make Jelmyto preparation and administration safe and seamless for practitioners and patients, including entering into an agreement with a major national specialty pharmacy under which the pharmacy, following receipt of a patient prescription, prepares the Jelmyto admixture on our behalf.

In October 2020, a Medicare C-Code was issued for Jelmyto .

Centers for Medicare & Medicaid Services established a permanent and product-specific J-code for Jelmyto that took effect on January 1, 2021, and replaced the C-Code.

We are evaluating the safety and efficacy of UGN-102, our novel sustained-release intravesical formulation of mitomycin, for the treatment of low-grade intermediate risk NMIBC.

We have shared final topline data from the Phase 2b OPTIMA II trial for our lead product candidate, UGN-102, in patients with low-grade intermediate risk NMIBC, defined as those with one or two of the following criteria:

multifocal disease, large tumors and rapid rates of recurrence.

The single-arm, open label trial completed enrollment of 63 patients at clinical sites across the United States and Israel in September 2019.

The Centers for Medicare & Medicaid Services established a permanent and product-specific J-code for Jelmyto that took effect on January 1, 2021, and replaced the C-Code. We are also launching a registry to capture data and evaluate real world outcomes in patients with UTUC that have been or will be treated with Jelmyto.

The purpose of the registry is to study the use of Jelmyto in clinical practice in the United States and address specific clinical questions.

UGN-102 is our sustained-release formulation of mitomycin that we are developing for the treatment of low-grade intermediate risk NMIBC.

In October 2021, we reported final data from the Phase 2b OPTIMA II trial. The single-arm, open label trial completed enrollment of 63 patients at clinical sites across the United States and Israel in September 2019.

Patients were treated with six weekly instillations of UGN-102 and underwent assessment of CR (the primary endpoint) four to six weeks following the last instillation.

The interim data were also published as a supplement to the April 2020 issue of The Journal of Urology.

The final topline data were published online in The Journal of Urology in October 2021 and will also be included in the January 2022 print edition.

In October 2021, we reported final topline data consistent with our previous reports showing that 65%, or 41 out of 63 patients, treated with UGN-102 achieved a complete response three months after the start of therapy.

In this subset of patients, 39 (95%), 30 (73%), and 25 (61%) remained disease-free at 6, 9, and 12 months after treatment initiation, respectively.

Consistent with our previous reports showing that 65%, or 41 out of 63 patients, treated with UGN-102 achieved a complete response three months after the start of therapy.

In this subset of patients, 39 (95%), 30 (73%), and 25 (61%) remained disease-free at six, nine, and 12 months after treatment initiation, respectively.

The probability of durable response nine months after CR (12 months after treatment initiation) was estimated to be 72.5% by Kaplan-Meier analysis. T hirteen patients had documented recurrences.

57 of 63 (90%) patients completed all six instillations of UGN-102 according to study protocol.

Fifty-seven of 63 (90%) patients completed all six instillations of UGN-102 according to study protocol.

Median duration of response was not reached.

The most common adverse events, greater than 10%, were most often reported as mild to moderate in severity and include dysuria, hematuria, urinary frequency, fatigue, urgency and urinary tract infection. The final data was published online in The Journal of Urology in October 2021 and was included in the January 2022 print edition.

Urothelial cancer, which is comprised of bladder cancer and UTUC, affects a large, and what we believe to be, an underserved patient population.

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In addition, by removing the need for surgery, patients may avoid potential complications associated with surgery.

We initiated the Phase 3 ATLAS trial in December 2020 and unil recently had been enrolling patients in this trial assessing UGN-102 with or without TURBT compared to standard of care.

In parallel, we have continued to engage in discussions with the FDA and, based on this dialogue, have designed an alternative trial in order to demonstrate the efficacy and safety of UGN-102.

This new streamlined Phase 3 trial will be a single-arm, multinational, multicenter study evaluating the efficacy and safety of UGN-102 as primary chemoablative therapy in patients with low-grade intermediate risk NMIBC.

The design for this new trial will be similar to our Phase 2 OPTIMA II trial in that the patient population will have the same clinical characteristics, receive the same treatment regimen and undergo the same efficacy and safety assessments and qualitative follow-up. This study will also require fewer patients than the ATLAS study.

As a result of this new study, we have stopped enrollment in the Phase 3 ATLAS study, however, we have allowed all consented patients to complete screening and, if eligible, to be randomized, and will continue to follow all randomized patients for the duration of the trial in order to gather data and insights in our evaluation of UGN-102 as a primary therapy in the treatment of low-grade intermediate risk NMIBC.

We anticipate enrollment for the new Phase 3 trial to begin the first quarter of 2022.

Our immuno-uro-oncology pipeline includes UGN-301 (zalifrelimab), an anti-CTLA-4 antibody, which we intend to study as a combination therapy with multiple potential agents.

UGN-301, an immune checkpoint inhibitor, is delivered using our proprietary RTGel platform to increase dwell time, which has been shown to significantly improve the effectiveness of intravesical therapy.

Our initial non-clinical studies involve the sequential use of UGN-201 (imiquimod), a toll-like receptor-7 ("TL R 7") ag onist, and UGN-301, as an investigational treatment for high-grade non-muscle invasive bladder cancer (high-grade NMIBC).

UGN-201 is a proprietary novel, liquid formulation of imiquimod, a generic TLR 7 agonist, which has been evaluated for the treatment of high-grade NMIBC, which may include carcinoma in situ ("CIS").

Toll-like receptor agonists play a key role in initiating the innate immune response system.

We believe that the combination of UGN-201 with UGN-301 could represent a valid alternative to the current standard of care for the post-TURBT adjuvant treatment of high-grade NMIBC.

We initiated the Phase 3 ATLAS trial in December 2020 and until November 2021, were enrolling patients in this trial assessing UGN-102 with or without TURBT compared to standard of care.

In parallel, we continued to engage in discussions with the FDA and, based on this dialogue, we designed a trial in order to demonstrate the efficacy and safety of UGN-102.

This new Phase 3 ENVISION trial is a single-arm, multinational, multicenter study evaluating the efficacy and safety of UGN-102 as primary chemoablative therapy in patients with low-grade intermediate risk NMIBC.

The design for the Phase 3 ENVISION trial is similar to our Phase 2 OPTIMA II trial in that the patient population will have similar clinical characteristics, receive the same treatment regimen and undergo the same efficacy and safety assessments and qualitative follow-up.

Study participants will receive six once-weekly intravesical instillations of UGN-102.

The planned primary endpoint will evaluate the complete response rate at three months after the first instillation, and the key secondary endpoint will evaluate durability over time in patients who achieve complete response at the three-month assessment.

In February 2022, we announced the initiation of the Phase 3 ENVISION trial, which is expected to enroll approximately 220 patients across 90 sites, with completion of enrollment expected by the end of 2022. Assuming positive findings, we anticipate submitting an NDA for UGN-102 in 2024.

As a result of the FDA's acceptance of a single arm approach, we have stopped enrollment of the Phase 3 ATLAS study. However, at the time enrollment was stopped, any patients who had signed an informed consent were able to complete screening, and if eligible were randomized into the trial.

Patients continue to be followed in the Phase 3 ATLAS study, and clinical results from these patients are expected to generate additional safety data and other insights in our evaluation of UGN-102 as a primary therapy in the treatment of low-grade intermediate risk NMIBC.

We have also initiated a Phase 3b study with the objective of demonstrating whether UGN-102 can be administered at home by a qualified home health professional, avoiding the need for repeated visits to a healthcare setting for instillation. Patients in the ongoing Phase 3b study will receive six once-weekly intravesical instillations of UGN-102.

The Phase 3b study aims to enroll up to 10 patients across four centers.

The initial treatment visit will occur at the investigative site and instillation will be performed by a qualified physician.

Treatment visits two to six will take place at the patient's home and instillation will be performed by a properly trained and qualified home health professional.

The primary endpoint of the study is the incidence of treatment-emergent adverse events ("TEAEs"), serious TEAEs, TEAEs of special interest, discontinuations from at home study treatment, and clinically significant abnormalities in laboratory tests (hematology, serum chemistry, and urinalysis).

We believe the ease and convenience of home instillation has the potential to transform care and facilitate alternative access to treatment.

Our immuno-uro-oncology pipeline includes UGN-301, an anti-CTLA-4 antibody, which we intend to study as a combination therapy with multiple potential agents.

The completion of non-human primate toxicity studies support the initiation of a multi-arm Phase 1 study of UGN-301 in combination with other agents.

We believe that this approach leverages our unique drug delivery technology and provides an opportunity to evaluate intravesical delivery of UGN-301 in combination with other immuno-modulators, chemotherapies, gene therapy and innate immune stimulators.

High-grade NMIBC is a highly aggressive form of bladder cancer.

TURBT followed by adjuvant intravesical immunotherapy with Bacillus of Calmette and Guerin ("BCG") is the current standard of care therapy for high-grade NMIBC. However, the high rates of recurrence and significant risk of progression to muscle-invasive tumors are particularly dangerous.

Radical cystectomy, or bladder removal is strongly advocated in patients with BCG-unresponsive NMIBC (i.e.

patients with BCG-refractory and BCG-relapsing tumors in whom further BCG therapy is not recommended) or for patients who cannot tolerate BCG.

Drugs such as Keytruda have been recently approved for the BCG refractory population.

The first combination we are seeking to investigate clinically involves the sequential use of UGN-201 (imiquimod), a toll-like receptor-7 ("TLR 7") agonist, and UGN-301 in high-grade NMIBC ("high-grade NMIBC").

UGN-201 is a liquid formulation of imiquimod for intravesical administration that has been optimized for delivery in the urinary tract.

We believe that UGN-201 may elicit an adaptive immune response in the presence of released bladder cancer antigens, which may translate into a long lasting acquired immune response.

We believe the combination of UGN-301 and UGN-201 could further increase the adaptive immune response and potentially represent a valid post-TURBT adjuvant treatment of high-grade NMIBC. UGN-301 is delivered using our proprietary 

RTGel  technology, which has been designed to significantly improve the effectiveness of certain intravesical therapy.

In November 2019, we entered into a worldwide license agreement with Agenus Inc.

to develop and commercialize zalifrelimab, an anti-CTLA-4 antibody, via intravesical delivery in combination with UGN-201 for the treatment of urinary tract cancers, initially in high-grade NMIBC.

to develop and commercialize zalifrelimab via intravesical delivery in combination with UGN-201 for the treatment of urinary tract cancers, initially in high-grade NMIBC.

We believe that the combination treatment makes local therapy a potentially more effective treatment option while minimizing systemic exposure and potential side effects.

In March 2022, we announced FDA clearance of our Investigational New Drug application ("IND") to begin a novel Phase 1 clinical study of UGN-301 in patients with recurrent NMIBC. The novel study design will utilize a Master Protocol that we believe is a more efficient and streamlined approach to development.

It will provide more flexibility to add study arms as the trial progresses and is expected to increase efficiency and potentially reduce costs.

We expect the Master Protocol will allow the Company to more quickly evaluate safety, tolerability and dosing of UGN-301 in combination with additional immunomodulators and chemotherapies, with the goal of developing optimized treatment regimens for patients. The multi-arm Phase 1 study was initiated in April 2022 and is expected support the development of UGN-301 in high-grade NMIBC.

Our Research and Development and License Agreements

Allergan/AbbVie Agreement

In October 2016, we entered into the Allergan/AbbVie Agreement and granted Allergan an exclusive worldwide license to research, develop, manufacture and commercialize pharmaceutical products that contain RTGel and clostridial toxins including BOTOX.

The license grants the exclusivity for the RTGel and clostridial toxins including BOTOX alone or in combination with certain other active ingredients, referred to as the Licensed Products, which are approved for the treatment of adults with overactive bladder ("OAB") who cannot use or do not adequately respond to anticholinergics.

In August 2020, we announced that the Phase 2 APOLLO trial did not meet the primary endpoint. The data suggested that this result may have been due to BOTOX not effectively permeating the urothelium. Over the past year, we have been in discussions with AbbVie to determine whether other products in their portfolio would be complementary with RTGel. Based on this review, we determined that there was limited interest to pursue combinatorial products, and therefore, have terminated the relationship in order to allow for maximum flexibility for the RTGel intellectual property.

Agenus Agreement

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Based on nonclinical studies conducted by us, UGN-201 in combination with anti-CTLA-4 antagonists have shown encouraging results for the potential treatment of high-grade NMIBC.

In January 2021, we announced that we entered into a three-year strategic research collaboration agreement with MD Anderson focusing on UGN-302 as an investigational treatment for high-grade NMIBC.

Under the agreement, MD Anderson and UroGen will collaborate on the design and conduct of non-clinical and clinical studies with oversight from a joint steering committee.

UroGen will provide funding, developmental candidates, and other support.

For additional information regarding our research and development and license agreements, see Note 12 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

In January 2021, we announced that we entered into a three-year strategic research collaboration agreement with MD Anderson focusing on the sequential use of UGN-201 and UGN-301 as an investigational treatment for high-grade NMIBC.

Under the agreement, we will collaborate with MD Anderson on the design and conduct of non-clinical and clinical studies with oversight from a joint steering committee.

We will provide funding, developmental candidates, and other support.

For additional information regarding our research and development and license agreements, see Note 13 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

Impact of COVID-19 Pandemic

In the event of a prolonged disruption related to COVID-19, there could be detrimental impact to our ongoing and future clinical trials, our ongoing commercial launch and future commercialization activities for Jelmyto , and our ability to access capital markets.

During the first quarter 2021, the staged vaccination rollout in the U.S.

prioritized health-care workers, certain other essential workers and high-risk populations, which generally included individuals in their 60s and 70s, and individuals with certain underlying medical conditions.

According to the Centers for Disease Control and Prevention, as of the end of October 2021, approximately 85% of people over age 65 in the U.S.

have been fully vaccinated to protect against COVID-19.

However, as circu mstances evolve, in particular related to the emergence of variants, it will be important to understand potential impacts to patients and the hospital system, and the ability for patients to access Jelmyto.

 Through the third quarter of 2021, we have experienced reduced or limited access to surgery centers and clinics, particularly in regions of the U.S.

that have continued to be heavily impacted by COVID-19. While it is difficult to predict the impact of the ongoing COVID-19 pandemic, including associated variants, on our business and the healthcare industry, we continue to monitor the evolving COVID-19 situation, and the potential further impacts that the pandemic and related government response may have on our business throughout the remainder of 2021 and beyond.

According to the Centers for Disease Control and Prevention, as of April 2022, over 75% of the U.S.

population has had at least one dose of the COVID-19 vaccine, and over 65% are fully vaccinated.

However, as circumstances evolve, in particular related to the emergence of variants, it will be important to understand potential impacts to patients and the hospital system, and the ability for patients to access 

Jelmyto. 

While it is difficult to predict the impact of the ongoing COVID-19 pandemic, including associated variants, on our business and the healthcare industry, we continue to monitor the evolving COVID-19 situation, and the potential further impacts that the pandemic and related government response may have on our business.

Components of Operating Results

During the three and nine months ended September 30, 2021 we recognized $11.4 million and $31.9 million of revenue, respectively from sales of our product, Jelmyto .

During the three months ended March 31, 2022 and 2021 we recognized $13.6 million and $7.5 million of revenue, respectively from sales of our product, Jelmyto .

Cost of Revenue

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We adjust our accrual as actual costs become known.

Where at risk contingent milestone payments are due to third parties under research and development and collaboration agreements, the milestone payment obligations are expensed when the milestone results are achieved.

We have received grants under the Israeli Law for the Encouragement of Industrial Research, Development and Technological Innovation, 5754-1984 (the “R&D Law”), from the Israel Innovation Authority in Israel (the “IIA”), an independent and impartial public entity, for some of our development programs.

Through September 30, 2021, we had received grants in the aggregate amount of $2.1 million.

On January 12, 2020, the IIA approved the Company’s request to unwind its obligation to the IIA regarding grants that were loaned to the Company between January 2004 and September 2016.

The total payment under the IIA approval, net of the royalties already paid, amounts to $6.6 million, which was fully paid during the first quarter of 2020.

See Note 17 to the condensed consolidated financial statements included in this Quarterly Report for additional information.

We are currently focused on advancing our product candidates, and our future research and development expense will depend on their clinical success.

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Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements.

License fees and development milestone payments related to in-licensed products and technology are expensed as incurred if it is determined at that point that they have no established alternative future use.

License fees and development milestone payments related to in-licensed products and technology are expensed as incurred or when achieved, in the case of milestones, if it is determined at that point that they have no established alternative future use.

Selling and Marketing Expense

To date, selling and marketing expense consists primarily of commercial personnel costs (including share-based compensation) along with pre-commercialization and initial commercialization activities related to Jelmyto , formerly known as UGN-101.

We anticipate that our selling and marketing expense

remain relatively consistent for the remainder of 2021, and increase going forward as we increase headcount in relation to the 

continued commercialization of Jelmyto .

To date, selling and marketing expense consists primarily of commercial personnel costs (including share-based compensation) along with pre-commercialization and commercialization activities related to Jelmyto , formerly known as UGN-101.

We anticipate that our selling and marketing expense remain relatively consistent for the remainder of 2022 .

General and Administrative Expense

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Other significant costs include medical affairs services, external professional service costs, facility costs, accounting and audit services, legal services, and other consulting fees.

We anticipate that our general and administrative expense will increase  for the remainder of 2021 as a result of compensation related costs, and may also increase in the future to support the potential approval and commercialization of our product candidates and our continued research and development programs. 

We anticipate that our general and administrative expense will remain relatively consistent for  the remainder of 2022, and may increase in the future to support the potential approval and commercialization of our product candidates and our continued research and development programs. 

Financing on prepaid forward obligation

Financing on prepaid forward obligation is comprised of financing expense related to the RTW Transaction (as defined in Note 3 to our condensed consolidated financial statements included in this Quarterly Report).

Interest expense

Interest expense is comprised of interest related to our long-term debt with Pharmakon (see Note 10 to our condensed consolidated financial statements included in this Quarterly Report).

Interest and Other Income, Net

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Income tax expense also consists of our estimate of uncertain tax positions, and related interest and penalties.

See Note 15 to the Consolidated Financial Statements for further information.

Critical Accounting Policies and Significant Judgments and Estimates

See Note 16 to the condensed consolidated financial statements for further information.

Critical Accounting Policies and Estimates

The preparation of our unaudited condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the revenue and expense incurred during the reported periods.

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Results of Operations

Comparison of the three months ended September 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended September 30, 2021 and 2020.

Three Months Ended September 30,

Comparison of the three months ended March 31, 2022 and 2021

The following table sets forth our results of operations for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31,

(in thousands)

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Financing on prepaid forward obligation

Interest expense

Interest and other income, net

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Income tax expense

Revenue was $11.4 

million and $3.5 

million for the three months ended September 30, 2021 and 2020, respectively.

The increase in revenue of $7.9 million reflects the increased volume of sales of our product Jelmyto following its approval by the FDA in April 2020.

Revenue was $13.6 million and $7.5 million for the three months ended March 31, 2022 and 2021, respectively.

The increase in revenue of $6.1 million reflects the increased volume of sales of our product Jelmyto .

Cost of Revenue

Cost of revenue was $1.2 million and $ 0.3  million for the three months ended September 30, 2021 and 2020, respectively.

Cost of revenue was $1.5 million and $ 0.9  million for the three months ended March 31, 2022 and 2021, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expense.

We expect this to continue to impact cost of revenue through the second quarter of 2023 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval.

Gross margin would have been approximately 88.3% versus 89.0 % for the three months ended September 30, 2021, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

We expect this to continue to impact cost of revenue through the first quarter of 2023 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval.

Gross margin would have been approximately 88.2% versus 88.7 % for the three months ended March 31, 2022, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expense

Research and development (R&D) expense was $11.9 million and $10.2 million for the three months ended September 30, 2021 and 2020, respectively.

The overall increase of $1.7 million is primarily attributable to the launch of our Phase 3 ATLAS study for UGN-102 at the end of 2020, and development cost of UGN-301 partially offset by a decrease in R&D expense related to Jelmyto .  

Research and development (R&D) expense was $12.7 million and $10.5 million for the three months ended March 31, 2022 and 2021, respectively.

The overall increase of $2.2 million is primarily attributable to the Phase 3 ENVISION study for UGN-102, and commencement of Phase 1 study for UGN-301.

Selling and Marketing Expense

Selling and marketing expense was $12.5 milli on and $11.0 million for the three months ended September 30, 2021 and 2020 , respectively.

The increase in selling and marketing expense of $1.5 million is primarily attributable to higher brand marketing expense related to 

Jelmyto in 2021, including costs relating to advertising, development of marketing materials and promotional speaking programs and conferences.

Selling and marketing expense was $13.4 milli on and $11.4 million for the three months ended March 31, 2022 and 2021 , respectively.

The increase in selling and marketing expense of $2.0 million is primarily attributable to expenses related to our annual sales meeting held in March 2022 which did not occur during the first quarter of 2021.

General and Administrative Expense

General and administrative expense was $9.2 million and $11.1 million for the three months ended September 30, 2021 and 2020 , respectively.

The decrease in general and administrative expense of $1.9 million resulted primarily from a decrease in compensation expenses in 2021.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $6.8 million and $0 for the three months ended September 30, 2021 and 2020, respectively.

The cost in 2021 relates to the financing cost of the RTW Transaction which closed in May 2021.

Interest and Other Income, Net

Interest and other income, net was $0.1 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively.

The decrease in interest and other income, net of $0.2 million was primarily due to lower interest earned on cash and marketable securities.

Comparison of the nine months ended September 30, 2021 and 2020

The following table sets forth our results of operations for the nine months ended September 30, 2021 and 2020.

Nine Months Ended September 30,

(in thousands)

Cost of revenue

Operating expense:

Research and development

Selling and marketing

General and administrative

Total operating expense

Operating loss

General and administrative expense was $7.9 million and $10.8 million for the three months ended March 31, 2022 and 2021 , respectively.

The decrease in general and administrative expense of $2.9 million resulted primarily from a decrease in compensation expenses in 2022.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $5.8 million and $0 for the three months ended March 31, 2022 and 2021, respectively.

The cost in 2022 relates to the financing cost of the RTW Transaction which closed in May 2021.

Interest Expense

Interest expense was $0.3 million and $0.0 for the three months ended March 31, 2022 and 2021, respectively.

The cost in 2022 relates to the Pharmakon loan which closed in March 2022.

Interest and Other Income, Net

Loss before income taxes

Income tax expense

Revenue was $31.9 million and $3.8 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase in revenue of $28.1 million reflects the increased volume of sales of our product Jelmyto following its approval by the FDA in April 2020.

Cost of Revenue

Cost of revenue was $3.6 million and $0.4 million for the nine months ended September 30, 2021 and 2020, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expense.

We expect this to continue to impact cost of revenue through the second quarter of 2023 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval.

Gross margin would have been approximately 87.4% versus 88.8 % for the nine months ended September 30, 2021 if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expense

R&D expense was $34.6 million and $34.9 million for the nine months ended September 30, 2021 and 2020, respectively.

The decrease of $0.3 million is primarily attributable to the one-time payment in the prior year of $6.6 million to unwind our obligation to the IIA and a decrease in compensation attributa ble to R&D employees, partially offset by higher R&D expense in 2021 related to the Phase 3 ATLAS study for UGN-102 which was initiated at the end of 2020 .

Selling and Marketing Expense

Selling and marketing expense was $35.4 million and $34.4 million for the nine months ended September 30, 2021 and 2020, respectively.

The increase in selling and marketing expense of $1.0 million is primarily attributable to higher field sales force expenses related to Jelmyto .

General and Administrative Expense

General and administrative expense was $30.7 million and $33.7 million for the nine months ended September 30, 2021 and 2020, respectively.

The decrease in general and administrative expense of $3.0 million resulted primarily from 

a decrease in compensation expenses in 2021 .

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $9.9 million and $0 for the nine months ended September 30, 2021 and 2020, respectively.

The cost in 2021 relates to the financing cost of the RTW Transaction which closed in May 2021.

Interest and Other Income,   

Interest and other income, net was an $0.3 million and $1.5 million for the nine months ended September 30, 2021 and 2020, respectively.

Interest and other income, net was $0.0 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively.

The decrease in interest and other income, net of $0.2 million was primarily due to lower interest earned on cash and marketable securities.

Liquidity and Capital Resources

As of September 30, 2021, we had $110.3 million in cash and cash equivalents and marketable securities.

As of March 31, 2022, we had $137.1 million in cash and cash equivalents and marketable securities.

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation, and is held primarily in U.S.

Based on our cash flow projections, we believe that our current cash and cash equivalents and marketable securities are sufficient to fund our planned operations for at least the next 12 months.

Through September 30, 2021, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangement with RTW Investments (“RTW”).

Based on our cash flow projections, we believe that our current cash and cash equivalents and marketable securities are sufficient to fund our planned operations beyond the next 12 months.

Through March 31, 2022, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangement with RTW Investments (“RTW”).

In December 2019, we entered into a sales agreement (the “ATM Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which we may from time to time offer and sell our ordinary shares having an aggregate offering price of up to $100.0 million.

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In May 2021, following the receipt of necessary regulatory approvals, we received the $75.0 million prepaid forward payment ($ 72.4  million net of transaction costs) from RTW.

We have incurred losses since our inception and negative cash flows from our operations, and as of September 30, 2021 we had an accumulated deficit of $438.9 million.

On March 7, 2022, we entered into a loan agreement ("Loan Agreement") with Pharmakon for a senior secured term loan of up to $100 million in two tranches.

The first tranche of $75 million ($72.6 million net of transaction costs) was funded in March 2022. At our option, we may draw up to an additional $25 million before December 31, 2022, subject to customary bring down conditions and deliverables.

The Pharmakon loan will mature five years from initial funding and can be prepaid in whole at our discretion, at any time, subject to prepayment premiums and makewhole amounts. The Pharmakon loan will require interest-only payments for the first 48 months followed by principal and interest payments with interest accruing using 3-month LIBOR (with a 1.25% floor) plus 8.25%. In the event of the cessation of LIBOR, the benchmark governing the interest rate will be replaced with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York.

We have incurred losses since our inception and negative cash flows from our operations, and as of March 31, 2022 we had an accumulated deficit of $495.7 million.

We anticipate that we will continue to incur losses for the reasonably foreseeable future.

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Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements.

There can be no assurances that the Company will be able to secure such additional financing if at all, or on terms that are satisfactory to the Company, and that it will be sufficient to meet its needs.

In the event the Company is not successful in obtaining sufficient funding, this could force us to delay, limit, or reduce our product development, commercialization efforts or other operations.

There can be no assurances that we will be able to secure such additional financing if at all, or on terms that are satisfactory to us, and that it will be sufficient to meet its needs.

In the event we is not successful in obtaining sufficient funding, this could force us to delay, limit, or reduce our product development, commercialization efforts or other operations.

Funding and Material Cash Requirements

Our present and future funding and cash requirements will depend on many factors, including, among other things:

the progress, timing and completion of clinical trials for UGN-102;

nonclinical studies and clinical trials for UGN-301 or any of our other product candidates;

the costs related to obtaining regulatory approval UGN-102 and UGN-301 and any of our other product candidates, and any delays we may encounter as a result of regulatory requirements or adverse clinical trial results with respect to any of these product candidates;

selling, marketing and patent-related activities undertaken in connection with the commercialization of Jelmyto and UGN-102 and any of our other product candidates, and costs involved in the continued development of an effective sales and marketing organization;

the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties or other amounts we may be required to pay to obtain rights to third party intellectual property rights;

potential new product candidates we identify and attempt to develop;

revenues we may derive either directly or in the form of royalty payments from future sales of Jelmyto, UGN-102, UGN-301, RTGel reverse thermal hydrogel and any other product candidates;

the repayment of outstanding debt.

Accordingly, we will need to obtain additional funding in connection with our continuing operations.

If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We may finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of any additional securities may include liquidation or other preferences that adversely affect your rights as a shareholder.

Debt financing, if available, may involve agreements that include covenants that further limit or restrict our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

In addition, the terms of the Forward Contract and Loan Agreement limit our ability to take certain actions, including incurring additional indebtedness.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

For more information as to the risks associated with our future funding needs, see Part II, Item 1A –

Risk Factors.

We will require additional financing to achieve our goals, and a failure to obtain this capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization efforts or other operations.

Contractual Obligations and Commitments

In April 2016, we signed an addendum to our November 2014 lease agreement for our executive offices located in Israel, in order to increase the office space rented and to extend the rent period until 2019.

In March 2019, we utilized the agreement extension option and extended the rent period for an additional three years until August 2022.

In April 2018, we entered into a new lease agreement for an office in Los Angeles, CA.

The lease commencement date was July 10, 2018 and terminates in March 2024. In November 2019, we subleased our offices in Los Angeles, CA.

The lease commencement date was January 1, 2020 and terminates in March 2024.

The subtenants exercised their early access clause and moved into the premises at the end of November 2019.

Also, in November 2019, we entered into a new lease agreement, dated effective October 31, 2019, for an office in Princeton, NJ.

The lease commencement date was November 29, 2019 and the lease term is 38 months.

The total obligation for future minimum lease payments under our operating leases is $1.6 million as of December 31, 2021.

See Note 11 to the Consolidated Financial Statements for further information.

In March 2022, UroGen Pharma Ltd., the Borrower and the Guarantors party thereto from time to time entered into the Loan Agreement with the Lenders and Collateral Agent pursuant to which the Lenders agreed to make the Term Loans to the Borrower in an aggregate principal amount of up to $100 million to be funded in two tranches:

(i) the Tranche A Loan of $75 million was advanced in March, 2022 and (ii) the Tranche B Loan of $25 million will be advanced at Borrowers election, subject to certain conditions, subject to the customary bring down conditions and deliverables, and in no event later than December 31, 2022.

The Term Loans will mature on the fifth-year anniversary of the Tranche A Closing Date (the “Maturity Date”).

The Term Loans bear interest at 8.25% plus three-month LIBOR per annum with a LIBOR floor of 1.25%.

In the event of the cessation of LIBOR, the benchmark governing the interest rate will be replaced with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York as described in the Loan Agreement.

Interest is payable quarterly in arrears.

Repayment of outstanding principal of the Term Loans will be made in four equal quarterly payments of principal commencing after the 17th-quarter anniversary of the Tranche A Closing Date.

The obligations of the Borrower under the Loan Agreement are guaranteed on a full and unconditional basis by UroGen Pharma Ltd.

and the other Guarantor and are secured by substantially all of the respective Credit Parties’

tangible and intangible assets and property, including intellectual property, subject to certain exceptions.

The following table sets forth the significant sources and uses of cash for the periods set forth below: 

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

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Operating Activities

Net cash used in operating activities was $64.8 million during the nine months ended September 30, 2021, compared to $84.6 million during the nine months ended September 30, 2020.

The $19.8 million decrease was attributable primarily to the decrease of $15.6 million in the net loss driven by revenue from sales of our product Jelmyto during the nine months ended September 30, 2021, as well as lower personnel related costs and the payment to the IIA during the nine months ended September 30, 2020.

Net cash used in operating activities was $24.0million during the three months ended March 31, 2022, compared to $27.4 million during the three months ended March 31, 2021.

The $3.4 million decrease was attributable primarily to financing payments related to the prepaid forward obligation and timing of certain accruals, partially offset by increased collections of accounts receivables.

Investing Activities

Net cash used in investing activities was $5.1 million during the nine months ended September 30, 2021, compared to $43.8 million provided by investing activities during the nine months ended September 30, 2020.

The net decrease of $48.9 million is primarily related to a decrease in maturities of marketable securities, in addition to an increase in purchases of marketable securities as compared to the prior year.

Net cash used in investing activities was $13.6 million during the three months ended March 31, 2022, compared to $15.0 million provided by investing activities during the three months ended March 31, 2021.

The net decrease of $1.4 million is primarily related to a decrease in maturities of marketable securities, as compared to the prior year.

Financing Activities

Net cash provided by financing activities was $72.4 million during the nine months ended September 30, 2021, compared to $16.4 million during the nine months ended September 30, 2020.

The increase of $55.9 million is related to the receipt of $72.4 mil lion of net proceeds from the RTW Transaction in the current year, as compared to net proceeds received from sales under the ATM Sales Agreement in 2020.

Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any off‑balance sheet arrangements as defined under SEC rules.

Net cash provided by financing activities was $70.7 million during the three months ended March 31, 2022, compared to $0.0 million during the three months ended March 31, 2021.

The increase is related to the proceeds from the Pharmakon loan in the current year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements