What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-11 · 192 added, 279 removed, 1010 unchanged (32% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

(unaudited)  

September 30,

Current assets:

8 unchanged sentences

11,717  

Prepaid expenses and other current assets

34 unchanged sentences

Shareholders' Equity (Deficit):

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at June 30, 2022 and December 31, 2021;

22,727,891 and 22,462,995 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at September 30, 2022 and December 31, 2021;

23,011,324 and 22,462,995 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

14 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

$ 16,097  

40 unchanged sentences

$ ( 80,914 )  

$ (55,083 )  

Statements of Comprehensive Loss

2 unchanged sentences

$ ( 80,914 )  

Other comprehensive income (loss)

Unrealized gain (loss) on investments

Other comprehensive (loss)

Unrealized (loss) on investments

( 99 )  

( 41 )  

( 130 )  

Comprehensive Loss

20 unchanged sentences

income (loss)

Balance as of April 1, 2022

Balance as of July 1, 2022

22,727,891  

2 unchanged sentences

$ (56 )  

Changes During the Three Months Ended June 30, 2022

Changes During the Three Months Ended September 30, 2022

Exercise of options into ordinary shares

3 unchanged sentences

(25,831 )  

Balance as of June 30, 2022

Balance as of September 30, 2022

23,011,324  

2 unchanged sentences

$ ( 155 )  

Balance as of April 1, 2021

Balance as of July 1, 2021

22,354,533  

2 unchanged sentences

$ 56,271  

Changes During the Three Months Ended June 30, 2021

Changes During the Three Months Ended September 30, 2021

Exercise of options into ordinary shares

4 unchanged sentences

( 30,211 )  

Balance as of June 30, 2021

Balance as of September 30, 2021

22,404,845  

17 unchanged sentences

$ 8,413  

Changes During the Six Months Ended June 30, 2022

Changes During the Nine Months Ended September 30, 2022

Exercise of options into ordinary shares

4 unchanged sentences

(80,914 )  

Balance as of June 30, 2022

Balance as of September 30, 2022

23,011,324  

7 unchanged sentences

$ 96,355  

Changes During the Six Months Ended June 30, 2021

Changes During the Nine Months Ended September 30, 2021

Exercise of options into ordinary shares

6 unchanged sentences

(82,368 )  

Balance as of June 30, 2021

Balance as of September 30, 2021

22,404,845  

6 unchanged sentences

in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows From Operating Activities

$ ( 55,083 )  

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

2 unchanged sentences

Accrued financing on prepaid forward obligation

Amortization on marketable securities

Amortization (accretion) on marketable securities

Share-based compensation

12,241  

Interest expense on long-term debt

Amortization of discount on long-term debt

Amortization of right of use assets

Changes in operating assets and liabilities:

( 480 )  

Accounts receivable

Prepaid expenses and other current assets

( 2,958 )  

Other non-current assets

( 444 )  

Accounts payable and accrued expenses

( 3,454 )  

Employee related accrued expenses

( 520 )  

Other current liabilities

( 704 )  

Lease liabilities

( 574 )  

Net cash used in operating activities

( 48,195 )  

Cash Flows From Investing Activities

Purchases of marketable securities

Sales of marketable securities

Maturities of marketable securities

13,533  

26,295  

Purchases of property and equipment

( 88 )  

Net cash (used in) provided by investing activities

13,445  

Cash Flows From Financing Activities

Proceeds from prepaid forward arrangement

72,472  

Proceeds from exercise of options into ordinary shares

Proceeds from issuance of long-term debt

70,793  

Issuance cost related to at-the-market issuances

( 144 )  

Net cash provided by financing activities

70,665  

72,519  

Increase in Cash and Cash Equivalents

35,915  

10,457  

Increase (Decrease) in Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

45,586  

54,090  

Cash, Cash Equivalents and Restricted Cash at End of Period

$ 81,501  

$ 64,547  

Supplemental Disclosures of Non-Cash Activities

Non-cash new lease liabilities

$ 1,419  

Right of use assets obtained in exchange for new operating lease liabilities

Non-cash issuance cost

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

32 unchanged sentences

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 548.2  

million and $ 467.3  million as of June 30, 2022 and December 

million and $ 467.3  million as of September 30, 2022 and December 

31, 2021, respectively.

2 unchanged sentences

Based on management’s cash flow projections the Company believes that its cash and cash equivalents and marketable securities are sufficient to fund the Company’s planned operations for at least the next 12 months.

The Company anticipates that it will need to raise additional capital in the future.

The Company anticipates that it will need to raise additional capital in the future.

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.

20 unchanged sentences

Cash and cash equivalents generally consist 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 $ 112.4  million as of June 30, 2022 .

Cash and cash equivalents and marketable securities totaled $ 95.9  million as of September 30, 2022 .

The Company accounts for its investments, which include cash equivalents and marketable securities, as available-for-sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 320, “Investments —

101 unchanged sentences

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of June 30, 2022 and December 

Accounts payable and accrued expenses consisted of the following as of September 30, 2022 and December 

31, 2021  (in thousands):

September 30,

Accounts payable

$ 2,457  

$ 5,786  

Accrued sales reserves

4 unchanged sentences

Total accounts payable and accrued expenses

$ 8,647  

$ 12,102  

Interest and Other Income, Net

Interest and other income, net consisted of the following as of June 30, 2022 and 2021 (in thousands):

Six Months Ended June 30,

Interest and other income, net consisted of the following as of September 30, 2022 and 2021 (in thousands):

Nine Months Ended September 30,

Interest income

3 unchanged sentences

Inventories consisted of the following as of 

June 30, 2022 and December 31, 2021 (in thousands):

September 30, 2022 and December 31, 2021 (in thousands):

September 30,

Raw materials (1)

$ 4,543  

$ 3,894  

Finished goods

Total inventories

$ 6,577  

$ 5,852  

( 1 )  $ 1.5  million and $ 1.0  million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at June 30, 2022 and December 31, 2021, respectively.

( 1 )  $ 2.1  million and $ 1.0  million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively.

Note 6 –

15 unchanged sentences

No transfers between levels have occurred during the periods presented.

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of June 30, 2022 are as follows (in thousands):

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2022 are as follows (in thousands):

Fair Value Measurements Using

1 unchanged sentence

Balance as of

September 30,

Identical Assets

Cash equivalents

US government

$ 29,357  

Commercial paper

23,042  

Total cash equivalents

52,399  

29,357  

23,042  

Marketable securities

US government

25,023  

Corporate bonds

Commercial paper

Certificates of deposit

Total marketable securities

31,721  

25,023  

Total assets at fair value

$ 84,120  

$ 54,380  

$ 29,740  

Assets 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):

5 unchanged sentences

Money market funds

$ 21,402  

Marketable securities

US government

19,307  

Corporate bonds

Commercial paper

14,492  

Certificates of deposit

Total marketable securities

45,454  

19,307  

26,147  

Total assets at fair value

$ 66,856  

$ 40,709  

$ 26,147  

Note 7 –

 Investments

The following table summarizes the Company’s investments as of June 30, 2022 (in thousands):

Cash equivalents:

US government

$ 29,356  

$ 29,357  

Commercial paper

23,045  

23,042  

Total cash equivalents

$ 52,401  

$ ( 3 )  

$ 52,399  

The following table summarizes the Company’s investments as of September 30, 2022 (in thousands):

Marketable securities:

US government

$ 25,072  

$ ( 49 )  

$ 25,023  

Corporate bonds

Commercial paper

Certificates of deposit

Total marketable securities

$ 31,775  

$ ( 54 )  

$ 31,721  

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

As of June 30, 2022 , the amortized cost of investments included an immaterial amount of accrued interest.

As of June 30, 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. 

June 30, 2022 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 43.6 million which consisted of 

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

As of September 30, 2022 , the amortized cost of investments included an immaterial amount of accrued interest.

As of September 30, 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. 

September 30, 2022 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 64.9 million which consisted of 

28 securities. The unrealized loss was primarily driven by rising 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.

June 30, 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 investments as of June 30, 2022 mature at various dates through July 2023.

September 30, 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 investments as of September 30, 2022 mature at various dates through August 2023.

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

September 30,

Maturities within one year

$ 83,447  

$ 44,779  

Maturities after one year through three years

Total investments

$ 84,120  

$ 45,454  

Note 8 –

Property and Equipment

Property and equipment, consists of the following as of June 30, 2022 and December 31, 2021 (in thousands):

Property and equipment, consists of the following as of September 30, 2022 and December 31, 2021 (in thousands):

September 30,

Laboratory equipment

3 unchanged sentences

accumulated depreciation and amortization

( 2,675 )  

Property and equipment, net

$ 1,605  

$ 1,967  

Depreciation and amortization expense was $ 0.2 million and $ 0.4  million for the 

three and six months ended June 30, 2022 and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2021 .

Depreciation and amortization expense was $ 0.2  million and $ 0.7  million for the 

three and nine months ended September 30, 2022 and $ 0.2  million and $ 0.6  million for the three and nine months ended September 30, 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 six months ended June 30, 2022 for annual sales up to $ 200 million was 13.0 %.

The rate in effect for the nine  months ended September 

30, 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:

6 unchanged sentences

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.

Changes in future payments from previous estimates are included in 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

Financing on prepaid forward obligation

17,291  

Amounts paid and payable

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

85,713  

Financing on prepaid forward obligation

11,659  

Amounts paid and payable

Carrying value of prepaid forward obligation as of June 30, 2022

$ 93,461  

Carrying value of prepaid forward obligation as of September 30, 2022

Note 10 –

20 unchanged sentences

Long-term debt at closing of Pharmakon loan

$ 75,000  

Capitalized costs and discounts

1 unchanged sentence

Amounts paid and payable

Carrying value of Pharmakon loan as of June 30, 2022

$ 71,196  

Carrying value of Pharmakon loan as of September 30, 2022

Note 11  

Operating Leases

The Company had the following office and laboratory facility leases as of June 30, 2022 :

The Company had the following office and laboratory facility leases as of September 30, 2022 :

In April 2016, UPL signed an addendum to its November 2014 lease agreement for the Company’s offices located in Israel, in order to increase the office space rented and to extend the rent period until 2019.

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

July 2022, 

the Company signed a lease extension agreement for the Company’s offices located in Israel, extending the term of the lease through 

September 2025.  

The Company's remaining contractual obligation under this lease is approximately $ 0.9  million as of September 30, 2022. 

In September 2017, UPI entered into a new lease agreement for its office space in New York, which the Company previously used as its headquarters.

3 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 $ 0.5  million as of June 30, 2022 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.4  million as of September 30, 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 $ 0.4  million as of June 30, 2022 .

The remaining rental payments to be received over the lease term is approximately $ 0.4  million as of September 30, 2022 .

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

4 unchanged sentences

2022, the Company signed a lease extension for the Princeton office, extending the term of the lease through January 31, 2026. 

The Company’s remaining contractual obligation under this lease is approximately $ 2.1  million as of June 30, 2022 .

The Company’s remaining contractual obligation under this lease is approximately $ 1.9  million as of September 30, 2022 .

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

2 unchanged sentences

The Company’s leases expire at various dates from 2022  through 2026, with varying renewal and termination options.

The components of lease cost for the three and six months ended June 30, 2022  and 2021 were as follows (in thousands):

The components of lease cost for the three and nine months ended September 30, 2022  and 2021 were as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating lease cost

Sublease income

( 56 )  

( 112 )  

Variable lease cost

The amounts recognized as of June 30, 2022 and 

The amounts recognized as of September 30, 2022 and 

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

September 30,

Right of use assets

$ 2,116  

$ 1,180  

Long-term lease liabilities

Other current liabilities

As of June 30, 2022 , no impairment losses have been recognized to date.

Supplemental information related to leases for the six months ended 

June 30, 2022 and 2021 is as follows (in thousands):

Six Months Ended  

As of September 30, 2022 , no impairment losses have been recognized to date.

Supplemental information related to leases for the nine months ended 

September 30, 2022 and 2021 is as follows (in thousands):

Nine Months Ended

September 30,

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

3 unchanged sentences

Weighted-average discount rate of operating leases

9.93 %  

As of June 30, 2022 , maturities of lease liabilities were as follows (in thousands):

As of September 30, 2022 , maturities of lease liabilities were as follows (in thousands):

Years ending December 31,

2 unchanged sentences

Total future minimum lease payments

$ 2,680  

Present value of lease liabilities

$ 2,332  

As of June 30, 2022 , undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

As of September 30, 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 expenses.

Sublease income for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):

Sublease income for the three and nine months ended September 30, 2022 and 2021 was as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Sublease income from fixed lease payments

1 unchanged sentence

Revenue From Product Sales

Net product sales consist of the following for the three and six months ended June 30, 2022 and 2021 (in thousands):

Net product sales consist of the following for the three and nine months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended

Six Months Ended

$ 16,604  

$ 13,032  

$ 30,168  

$ 20,517  

Nine Months Ended

September 30,

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 of June 30, 2022  (in thousands):

Reserves related to government sponsored programs

2 unchanged sentences

Balance as of December 31, 2021

$ 1,335  

$ 1,708  

( 2,593 )  

( 2,956 )  

Balance as of June 30, 2022

$ 1,396  

$ 1,935  

Balance as of September 30, 2022

Note 13  

17 unchanged sentences

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

As of June 30, 2022 , the Company has made payments to MD Anderson totaling $ 2.0 million recognized evenly over the associated period through research and development expenses.

As of September 30, 2022 , the Company has made payments to MD Anderson totaling $ 2.0 million recognized evenly over the associated period through research and development expenses.

In July 2022, the Company determined that it had achieved the objectives that it established when the agreement was initiated, and notified MD Anderson that it was exercising its right to conclude the collaboration in 2022 as the Company did not foresee initiating further development activities as part of the collaboration, although the Company will continue to collaborate on existing joint projects.

As a result of this notification, the Company is not responsible for any further fixed bi-annual funding payments.

As a result of this notification, the Company is not responsible for any further fixed bi-annual funding payments, although the Company will be responsible for costs related to existing joint projects that exceed the payments already made to MD Anderson.  

Note 14  

Shareholders ’

The Company had 100.0 million ordinary shares authorized for issuance as of June 30, 2022 and December 31, 2021 .

The Company had 22.7  million and 22.5  million ordinary shares issued and outstanding as of June 30, 2022 and December 

The Company had 100.0 million ordinary shares authorized for issuance as of September 30, 2022 and December 31, 2021 .

The Company had 23.0 million and 22.5  million ordinary shares issued and outstanding as of September 30, 2022 and December 

31, 2021, respectively.

39 unchanged sentences

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

As of June 30, 2022 , 3,916,311 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 1,010,573 ordinary shares remain available for future awards.

As of September 30, 2022 , 3,442,209  

ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 1,601,242  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

Six Months Ended

Nine Months Ended

September 30,

Research and development expenses

$ 1,041  

$ 1,398  

$ 2,148  

Selling, general and administrative expenses

10,093  

$ 2,823  

$ 6,046  

$ 5,772  

$ 12,241  

The total unrecognized compensation cost of options and RSUs at June 30, 2022 is $ 14.9 million with a weighted average recognition period of 1.81  years.

The total unrecognized compensation cost of options and RSUs at September 30, 2022 is $ 12.2  million with a weighted average recognition period of 1.67  years.

Note 16  

1 unchanged sentence

is taxed under Israeli tax laws.

As of June 30, 2022 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of September 30, 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 2021, 2020 and 

2019, and for the six months ended June 30, 2022 .

2019, and for the nine months ended September 30, 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 $ 2.8  million as of June 30, 2022 , 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 September 30, 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 June 30, 2022 , the Company’s liability for uncertain tax positions includes $ 0.9  million of accrued interest and penalties.

As of September 30, 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 United States and Israel.

6 unchanged sentences

There were no related party transactions for the 

six months ended June 30, 2022 or 2021 .

nine months ended September 30, 2022 or 2021 .

Note 18  

2 unchanged sentences

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 June 30, 2022 and December 31, 2021 .

The Company’s maximum exposure under these arrangements is unknown as of September 30, 2022 and December 31, 2021 .

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

2 unchanged sentences

Subsequent Events

In July 2022, the Company signed a lease extension agreement for the Company’s offices located in Israel, extending the term of the lease through September 2025. 

The Company's total contractual base rent obligation for the three -year extension is approximately $ 0.9  million.  

On October 21, 2022, the Company requested the advance of the second tranche (the "Tranche B Loan") under the Pharmakon loan agreement in the amount of $ 25.0 million. The funding of the Tranche B Loan is expected to occur on December 16, 2022, subject to customary bring down conditions and deliverables. The proceeds of the Tranche B Loan will be used to fund the Company's general corporate and working capital requirements.

The Company has evaluated and determined there were no further subsequent events.

10 unchanged sentences

Securities Act ”

), and Section 21E of the Securities Exchange Act of 1934, as amended, ( “

), and Section 21E of the Securities Exchange Act of 1934, as amended ( “

Exchange Act ”

2 unchanged sentences

created by those sections.

These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management.

These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, trends, seasonality, projected costs, prospects and plans and objectives of management.

The words “

15 unchanged sentences

in this Quarterly Report.

In addition, statements that “

we believe ”

and similar statements reflect our beliefs and opinions on the relevant subject.

These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. 

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.

1 unchanged sentence

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.

11 unchanged sentences

increasing the exposure of active drugs in the bladder and upper urinary tract by significantly extending the dwell time of the active drug while conforming to the anatomy of the bladder and the upper urinary tract, which allows for enhanced drug tissue coverage.

For example, the average dwell time of the standard mitomycin water formulation, currently used as adjuvant treatment, in the upper urinary tract is approximately five minutes, compared to approximately six hours when mitomycin is formulated with RTGel ;

For example, the average dwell time of the standard mitomycin water formulation, currently used as adjuvant treatment, in the upper urinary tract is approximately five minutes, compared to up to six hours when mitomycin is formulated with RTGel ;

administering higher doses of an active drug than would otherwise be possible using standard water-based formulations.

27 unchanged sentences

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

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.

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

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

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.

1 unchanged sentence

Jelmyto  and our technology, both in person and virtually.

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

In total, our customer-facing team comprises approximately 80 colleagues. 

We are committed to helping patients access Jelmyto .

Our market access teams have laid the foundation for coverage and reimbursement, meeting multiple times with payors.

Over 95% of large commercial plans, as well as Medicare, have policies in place, covering over 150 million lives.

All Medicare patients are covered and the vast majority of commercial plans have policies in place, in whole covering over 150 million lives.

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 specialty pharmacy under which the pharmacy, following receipt of a patient prescription, prepares the Jelmyto admixture on our behalf.

In September 2022, the FDA authorized an extension of the in-use period for Jelmyto admixture from eight hours to 96 hours (four days) following reconstitution of the product, adding convenience and flexibility in managing patient care.

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

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 have also launched a registry to capture data and evaluate real world outcomes in patients with UTUC that have been or will be treated with Jelmyto .

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 have also launched a registry to capture data and evaluate real world outcomes in patients with low-grade 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.

In the first two full fiscal years following the initiation of our commercial launch of Jelmyto in June 2020, we have experienced a moderate decline in revenue during the third quarter from the preceding quarter.

We believe this result is primarily attributable to the nature of low-grade disease, which does not require immediate treatment and therefore we believe there is an impact in the summer months.

However, it is too early to say with confidence whether this seasonality trend will continue in future periods.

Moreover, our future Jelmyto revenue will be impacted by various factors and we expect our Jelmyto revenue to fluctuate quarter-to-quarter for the foreseeable future.

UGN-102 

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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 until November 2021, were enrolling patients in this trial assessing UGN-102 with or without TURBT compared to standard of care, TURBT.

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

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.

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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.

In November 2021, as a result of the FDA's acceptance of a single arm approach (the ENVISION Trial), we 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.

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

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

Non-human primate toxicity studies supported 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.

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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, which is expected to support the development of UGN-301 in high-grade NMIBC, was initiated in April 2022 and is actively enrolling and on track for first-arm completion within approximately 12-months.

Our Research and Development and License Agreements

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In November 2019, we entered into a license agreement with Agenus Inc., pursuant to which Agenus granted us an exclusive, worldwide (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela and their respective territories and possessions), royalty-bearing, sublicensable license under Agenus’s intellectual property rights to develop, make, use, sell, import, and otherwise commercialize products incorporating a proprietary monoclonal antibody of Agenus known as AGEN1884 (zalifrelimab), an anti-CTLA-4 antagonist, for the treatment of cancers of the urinary tract via intravesical delivery.

UGN-301 is a formulation of zalifrelimab administered using RTGel technology that is in early-stage development for high-grade NMIBC.

UGN-301 is a formulation of zalifrelimab administered using RTGel technology that is in Phase 1 clinical development for high-grade NMIBC.

MD Anderson Agreement

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In July 2022, we determined that we had achieved the objectives that we established when the agreement was initiated, and notified MD Anderson that we were exercising our right to conclude the collaboration in 2022 as we did not foresee initiating further development activities as part of the collaboration, although we will continue to collaborate on existing joint projects.

As a result of this notification, we are not responsible for any further fixed bi-annual funding payments.

As a result of this notification, we are not responsible for any further fixed bi-annual funding payments, although we will be responsible for costs related to existing join projects that exceed the payments already made to MD Anderson.  

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.

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COVID-19 could have a detrimental impact on our ongoing and future clinical trials, our ongoing commercial launch and future commercialization activities for Jelmyto , and our ability to access capital markets.

According to the Centers for Disease Control and Prevention, as of July 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 and subvariants, it will be important to understand potential impacts to patients and the hospital system, and the ability for patients to access 

According to the Centers for Disease Control and Prevention, as of October 2022, over 68% of the U.S.

population has completed their primary series of vaccination. However, as circumstances evolve, in particular related to the emergence of variants and subvariants, 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 ultimate impact of the ongoing COVID-19 pandemic 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.

While it is difficult to predict the ultimate impact of the ongoing COVID-19 pandemic 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 the related government response may have on our business.

Components of Operating Results

During the three and six months ended June 30, 2022 we recognized $16.6 million and $30.2 million of revenue, respectively from sales of our product, Jelmyto .

During the three and nine months ended September 30, 2022 we recognized $16.1 million and $46.3 million of revenue, respectively from sales of our product, Jelmyto .

Cost of Revenue

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Other than Jelmyto , which was approved by the FDA in April 2020, we have not received approval of any of our product candidates.

UGN-102 is still in clinical development and our other product candidates are in nonclinical development, and the outcome of these efforts is uncertain.

UGN-102 and UGN-301 are still in clinical development, and the outcome of these efforts is uncertain.

As such, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates or whether, or when, we may achieve profitability.

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Selling and Marketing Expenses

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

For the remainder of 2022, we anticipate that our selling and marketing expenses  will remain relatively consistent with the first half of the year .

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

General and Administrative Expenses

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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.

For the remainder of 2022, we anticipate that our general and administrative expenses 

will remain relatively consistent with the first half of the year , and may 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 expenses 

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

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Results of Operations

Comparison of the three months ended June 30, 2022 and 2021

The following table sets forth our results of operations for the three months ended June 30, 2022 and 2021.

Three Months Ended June 30,

Comparison of the three months ended September 30, 2022 and 2021

The following table sets forth our results of operations for the three months ended September 30, 2022 and 2021.

Three Months Ended September 30,

(in thousands)

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Income tax expense

Revenue was $16.6 million and $13.0 million for the three months ended June 30, 2022 and 2021, respectively.

Revenue was $16.1 million and $11.4 million for the three months ended September 30, 2022 and 2021, respectively.

The increase in revenue of $4.7 million reflects the increased volume of sales of our product Jelmyto .

Cost of Revenue

Cost of revenue was $1.8 million and $1.4 million for the three months ended June 30, 2022 and 2021, respectively.

Cost of revenue was $2.0 million and $1.2 million for the three months ended September 30, 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 expenses.

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 88.3% versus 88 .9 % for the three months ended June 30, 2022, 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 approximately 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 86.9% versus 87.5% for the three months ended September 30, 2022, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expenses

Research and development expenses were $12.6 million and $12.1 million for the three months ended June 30, 2022 and 2021, respectively.

The overall increase of $0.5 million is primarily attributable to the Phase 3 ENVISION study for UGN-102, partially offset by lower expenses for the Phase 1 study for UGN-301 as compared to pre-clinical work in the prior year.

Research and development expenses were $13.1 million and $11.9 million for the three months ended September 30, 2022 and 2021, respectively.

The overall increase of $1.2 million is primarily attributable to the Phase 3 ENVISION study for UGN-102, research into ingredient scale-up and production efficiency for Jelmyto , partially offset by lower stock-based 

compensation expenses in 2022.

Selling and Marketing Expenses

Selling and marketing expenses were $12.8 milli on and $11.8 million for the three months ended June 30, 2022 and 2021 , respectively.

The increase in selling and marketing expenses of $1.0 million is primarily attributable to expenses related to participation in the American Urological Association's annual meeting.

Selling and marketing expenses were $11.9 milli on and $12.5 million for the three months ended September 30, 2022 and 2021 , respectively.

The decrease in selling and marketing expenses of $0.6 million is primarily attributable to lower stock-based compensation expenses in 2022 .

General and Administrative Expenses

General and administrative expenses were $8.0 million and $10.5 million for the three months ended June 30, 2022 and 2021 , respectively.

General and administrative expenses were $7.2 million and $9.2 million for the three months ended September 30, 2022 and 2021 , respectively.

The decrease in general and administrative expenses of $2.0 million resulted primarily from a decrease in stock-based compensation expenses in 2022.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $5.8 million and $3.1 million for the three months ended June 30, 2022 and 2021, respectively.

The measurement of financing on prepaid forward obligation is an accounting estimate under the "imputed interest method" of accounting (see Note 3 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report). Under this measurement attribute, the cost of financing on prepaid forward obligation will vary over the life of the obligation.  The increase in financing on prepaid forward obligation of $2.7 million resulted primarily from a full three months of financing cost in 2022 for the RTW, which closed in May 2021, as well as fluctuations in the accounting measurement of the cost.

Financing on prepaid forward obligation was $4.8 million and $6.8 million for the three months ended September 30, 2022 and 2021, respectively.

The decrease in financing on prepaid forward obligation of $2.0 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense on Long-term Debt

Interest expense was $2.2 million and zero for the three months ended June 30, 2022 and 2021, respectively.

Interest expense was $2.7 million and zero for the three months ended September 30, 2022 and 2021, respectively.

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

Interest and Other Income, Net

Interest and other income, net was $0.1 million and $33,000 for the three months ended June 30, 2022 and 2021, respectively.

Interest and other income, net was $0.5 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively.

The increase in interest and other income, net was primarily due to minor fluctuations in interest earned on investments and foreign exchange.

Comparison of the six months ended June 30, 2022 and 2021

The following table sets forth our results of operations for the six months ended June 30, 2022 and 2021.

Six Months Ended June 30,

Comparison of the nine months ended September 30, 2022 and 2021

The following table sets forth our results of operations for the nine months ended September 30, 2022 and 2021.

Nine Months Ended September 30,

(in thousands)

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Income tax expense

Revenue was $30.2 million and $20.5 million for the six months ended June 30, 2022 and 2021, respectively.

Revenue was $46.3 million and $31.9 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in revenue of $14.4 million reflects the increased volume of sales of our product Jelmyto .

Cost of Revenue

Cost of revenue was $3.4 million and $2.3 million for the six months ended June 30, 2022 and 2021, respectively.

Cost of revenue was $5.4 million and $3.6 million for the nine months ended September 30, 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 expenses.

Gross margin would have been approximately 88.3% versus 88.8 % for the six months ended June 30, 2022, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Gross margin would have been approximately 87.8% versus 88.3 % for the nine months ended September 30, 2022, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expenses

Research and development expenses were $25.3 million and $22.6 million for the six months ended June 30, 2022 and 2021, respectively.

The overall increase of $2.7 million is primarily attributable to the Phase 3 ENVISION study for UGN-102 as well as research into ingredient scale-up and production efficiency for Jelmyto .

Research and development expenses were $38.4 million and $34.6 million for the nine months ended September 30, 2022 and 2021, respectively.

The overall increase of $3.8 million is primarily attributable to the Phase 3 ENVISION study for UGN-102, research into ingredient scale-up and production efficiency for Jelmyto , partially offset by lower stock-based 

compensation expenses in 2022.

Selling and Marketing Expenses

Selling and marketing expenses were $26.2 milli on and $22.9 million for the six months ended June 30, 2022 and 2021 , respectively.

The increase in selling and marketing expenses of $3.3 million is primarily attributable to increased brand marketing expenditures and expenses related to our participation in the American Urological Association's annual meeting, as well as our 

annual sales meeting held in March 2022, which did not occur during the first half of 2021.

Selling and marketing expenses were $38.1 milli on and $35.4 million for the nine months ended September 30, 2022 and 2021 , respectively.

The increase in selling and marketing expenses of $2.7 million is primarily attributable to increased market access and brand marketing expenditures, and other expenses related to our participation in the American Urological Association's annual meeting, as well as our annual sales meeting, which did not occur in 2021, partially offset by lower stock-based compensation expenses in 2022.

General and Administrative Expense

General and administrative expense was $15.9 million and $21.5 million for the six months ended June 30, 2022 and 2021 , respectively.

General and administrative expense was $23.1 million and $30.7 million for the nine months ended September 30, 2022 and 2021 , respectively.

The decrease in general and administrative expense of $7.6 million resulted primarily from a decrease in stock-based compensation expenses in 2022.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $11.7 million and $3.1 million for the six months ended June 30, 2022 and 2021, respectively.

The increase in financing on prepaid forward obligation of $8.6 million resulted primarily from a full six months of financing cost in 2022 for the RTW, which closed in May 2021, as well as fluctuations in the accounting measurement of the cost.

Financing on prepaid forward obligation was $16.5 million and $9.9 million for the nine months ended September 30, 2022 and 2021, respectively. 

The increase in financing on prepaid forward obligation of $6.6 million was driven primarily from a full nine months of financing cost in 2022 for the RTW Transaction, which closed in May 2021, partially offset by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense

Interest expense was $2.5 million and zero for the six months ended June 30, 2022 and 2021, respectively.

Interest expense was $5.2 million and zero for the nine months ended September 30, 2022 and 2021, respectively.

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

Interest and Other Income, Net

Interest and other income, net was $0.1 million and $0.2 million for the six months ended June 30, 2022 and 2021, respectively.

The decrease in interest and other income, net of $0.1 million was primarily due to lower interest earned on cash, cash equivalents and marketable securities.

Interest and other income, net was $0.6 million and $0.3 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in interest and other income, net of $0.3 million was primarily due to higher interest earned on cash, cash equivalents and marketable securities.

Liquidity and Capital Resources

As of June 30, 2022, we had $112.4 million in cash and cash equivalents and marketable securities.

As of September 30, 2022, we had $95.9 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 beyond the next 12 months.

Through June 30, 2022, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangement with RTW Investments (“RTW”).

Through September 30, 2022, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangements with RTW and Pharmakon.

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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The first tranche of $75.0 million ($72.6 million of proceeds were received, $70.8 million net of additional transaction costs) was funded in March 2022. At our option, we may draw up to an additional $25.0 million before December 31, 2022, subject to customary bring down conditions and deliverables.

We have incurred losses since our inception and negative cash flows from our operations, and as of June 30, 2022 we had an accumulated deficit of $522.4 million.

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 make-whole 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. On October 21, 2022, we requested the advance of the second tranche (the "Tranche B Loan") under the Loan Agreement in the amount of $25.0 million. The funding of the Tranche B Loan is expected to occur on December 16, 2022, subject to customary bring down conditions and deliverables.

We have incurred losses since our inception and negative cash flows from our operations, and as of September 30, 2022 we had an accumulated deficit of $548.2 million.

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

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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 progress, timing and completion of clinical trials for UGN-102 and UGN-301;

nonclinical studies and clinical trials for 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;

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the repayment of outstanding debt.

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

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.

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

In July 2022, we signed a lease extension agreement extending the term of the lease through September 2025.

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

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The lease commencement date was November 29, 2019 and the lease term is 38 months. In June 2022, the Company signed an amendment to its November 2019 lease agreement to extend the term for an additional three years through January 31, 2026. 

The total obligation for future minimum lease payments under our operating leases is $2.7 million as of June 30, 2022. See Note 11 to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report for further information.

The total obligation for future minimum lease payments under our operating leases is $2.8 million as of September 30, 2022. See Note 11 to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report for further information.

In March 2022, UroGen Pharma Ltd., Urogen Pharma, Inc., as the borrower ("Borrower"), and certain direct and indirect subsidiaries of the Company party thereto from time to time, as guarantors ("Guarantors" and, collectively with UroGen Pharma Ltd.

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(i) the Tranche A Loan of $75.0 million was advanced in March, 2022 and (ii) the Tranche B Loan of $25.0 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.

On October 21, 2022, we requested the advance of the Tranche B Loan under the Loan Agreement in the amount of $25.0 million. The funding of the Tranche B Loan is expected to occur on December 16, 2022, subject to customary bring down conditions and deliverables.

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

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $48.2 million during the six months ended June 30, 2022, compared to $46.3 million during the six months ended June 30, 2021.

The $1.9 million increase was attributable primarily to financing payments related to the prepaid forward obligation and timing of certain accruals.

Net cash used in operating activities was $65.8 million during the nine months ended September 30, 2022, compared to $64.8 million during the nine months ended September 30, 2021.

The $1.0 million increase was attributable primarily to financing costs related to the prepaid forward obligation and Pharmakon loan, as well as timing of certain accruals.

Investing Activities

Net cash provided by investing activities was $13.4 million during the six months ended June 30, 2022, compared to $15.7 million used in investing activities during the six months ended June 30, 2021.

The net change of $29.1 million is primarily related to reinvestment in securities with original maturity of less than 90 days which are classified as cash equivalents in the current period, as compared to investments in longer term marketable securities in the prior year.

Net cash used in investing activities was $22.0 million during the nine months ended September 30, 2022, compared to $5.0 million during the nine months ended September 30, 2021.

The net change of $17.0 million is primarily related to reinvestment in securities.

Financing Activities

Net cash provided by financing activities was $70.7 million during the six months ended June 30, 2022, compared to $72.5 million during the six months ended June 30, 2021.

The decrease is related to proceeds from the Pharmakon loan in the current year as compared to proceeds from the prepaid forward arrangement with RTW in the prior year.

Net cash provided by financing activities was $71.8 million during the nine months ended September 30, 2022, compared to $72.4 million during the nine months ended September 30, 2021.

The decrease of $0.6 million is related to proceeds from the Pharmakon loan in the current year as compared to proceeds from the prepaid forward arrangement with RTW in the prior 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