What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-11 · 249 added, 166 removed, 966 unchanged (30% of the section changed)

25 unchanged sentences

Marketable securities

10,165  

Other non-current assets

25 unchanged sentences

Shareholders' Deficit:

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at March 31, 2023 and December 31, 2022;

23,440,521 and 23,129,953 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at June 30, 2023 and December 31, 2022;

23,498,617 and 23,129,953 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

14 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

$ 21,139  

$ 16,604  

$ 38,331  

$ 30,168  

Cost of revenue

1 unchanged sentence

14,758  

33,623  

26,797  

Operating expenses:

2 unchanged sentences

12,640  

24,082  

25,336  

Selling, general and administrative expenses

1 unchanged sentence

20,833  

46,968  

42,133  

Operating loss

( 15,382 )  

( 18,715 )  

( 37,427 )  

Financing on prepaid forward obligation

( 5,344 )  

( 5,833 )  

( 10,568 )  

Interest expense on long-term debt

( 3,761 )  

( 2,239 )  

( 7,314 )  

Interest and other income (expense), net

1 unchanged sentence

( 24,082 )  

( 26,659 )  

( 54,274 )  

Income tax expense

1 unchanged sentence

( 32 )  

( 75 )  

$ ( 24,136 )  

$ ( 26,691 )  

$ ( 54,349 )  

Statements of Comprehensive Loss

$ ( 24,136 )  

$ ( 26,691 )  

$ ( 54,349 )  

Other comprehensive loss

Unrealized gain (loss) on investments

( 109 )  

( 47 )  

Comprehensive Loss

$ ( 24,245 )  

$ ( 26,678 )  

$ ( 54,396 )  

Net loss per ordinary share - basic and diluted

$ ( 1.03 )  

( 1.18 )  

$ ( 2.33 )  

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

1 unchanged sentence

22,703,572  

23,371,878  

22,667,825  

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

1 unchanged sentence

Condensed Consolidated Statements of Shareholders ’

 Equity (Deficit)

 Deficit

in thousands, except share amounts)

1 unchanged sentence

Additional paid-in

Other comprehensive

income (loss)

Balance as of January 1, 2023

23,129,953  

$ 487,787  

$ (577,104 )  

$ (107 )  

Changes During the Three Months Ended March 31, 2023

Accumulated other comprehensive

Balance as of April 1, 2023

Changes During the Three Months Ended June 30, 2023

Exercise of options into ordinary shares

310,568  

Share-based compensation

Other comprehensive loss

Balance as of June 30, 2023

Balance as of April 1, 2022

Changes During the Three Months Ended June 30, 2022

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive income

(30,213 )  

Balance as of March 31, 2023

23,440,521  

$ 490,744  

( 607,317 )  

$ ( 45 )  

$ ( 116,554 )

Balance as of June 30, 2022

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

UroGen Pharma Ltd.

Condensed Consolidated Statements of Shareholders ’

 Deficit

in thousands, except share amounts)

Ordinary Shares

Additional paid-in

Accumulated other comprehensive

Balance as of January 1, 2023

22,462,995  

$ 475,698  

$ (467,321 )  

( 25 )  

$ 8,413  

Changes During the Three Months Ended March 31, 2022

Changes During the Six Months Ended June 30, 2023

Exercise of options into ordinary shares

219,226  

Share-based compensation

Other comprehensive loss

( 44 )  

( 28,392 )  

Balance as of March 31, 2022

22,682,221  

$ 478,646  

$ ( 495,713 )  

$ ( 69 )  

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

Balance as of June 30, 2023

Balance as of January 1, 2022

Changes During the Six Months Ended June 30, 2022

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive loss

Balance as of June 30, 2022

UroGen Pharma Ltd.

1 unchanged sentence

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities

$ ( 30,213 )  

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

Depreciation and amortization

Inventory Obsolescence

Accrued financing on prepaid forward obligation

Amortization (accretion) on marketable securities

( 354 )  

Share-based compensation

2 unchanged sentences

Changes in operating assets and liabilities:

( 1,140 )  

Accounts receivable

Prepaid expenses and other current assets

( 1,045 )  

Other non-current assets

( 421 )  

Accounts payable and accrued expenses

Employee related accrued expenses

( 3,338 )  

Other current liabilities

Lease liabilities

( 252 )  

Net cash used in operating activities

( 25,807 )  

Cash Flows From Investing Activities

Purchases of marketable securities

( 24,176 )  

Maturities of marketable securities

30,469  

13,621  

Purchases of property and equipment

( 23 )  

Net cash provided by investing activities

13,596  

Cash Flows From Financing Activities

1 unchanged sentence

Proceeds from issuance of long-term debt

70,831  

Issuance cost related to at-the-market issuances

Net cash provided by financing activities

70,742  

Increase (Decrease) in Cash and Cash Equivalents

( 18,866 )  

60,342  

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

56,220  

45,587  

Cash, Cash Equivalents and Restricted Cash at End of Period

$ 37,354  

$ 105,929  

Supplemental Disclosures of Non-Cash Activities

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.

34 unchanged sentences

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 631.5  

million and $ 577.1  million as of March 31, 2023 and December 

million and $ 577.1  million as of June 30, 2023 and December 

31, 2022, respectively.

4 unchanged sentences

The Company’s ability to continue as a going concern is expected to be impacted by its ability to raise additional capital to fund its operations, produce cash inflows from Jelmyto product sales and develop UGN- 102.

The Company believes that absent sufficient proceeds received from equity, financing, or business development transactions, the Company will not have sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these financial statements.

Accordingly, the Company will, over the next 12  months, require significant additional financing to continue its operations.

In addition, there can be no assurances that the Company will be able to secure such additional financing if at all, on terms that are satisfactory to the Company, and in amounts sufficient to meet its needs.

These factors raise substantial doubt about the ability of the Company to continue as a going concern. Failure to successfully receive additional financing will require the Company to delay, limit or reduce product development and commercialization efforts.

On July 

26, 2023, the Company entered into a private placement transaction with certain institutional and other accredited investors pursuant to which the Company agreed to sell its ordinary shares and pre-funded warrants to purchase ordinary shares to the investors, for aggregate gross proceeds of $ 120.0 million. 

See Note 19 for further discussion regarding the private placement transaction.

Based on the Company's cash, cash equivalents and marketable securities as of June 30, 2023, together with management’s cash flow projections and the net proceeds to the Company from its private placement transaction in July 2023, the Company believes that it has sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these financial statements.

The Company 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.

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.

Note 3 –

17 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 $ 75.2  million as of March 31, 2023 .

Cash and cash equivalents and marketable securities totaled $ 55.3  million as of June 30, 2023 .

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 —

50 unchanged sentences

The net proceeds received under the RTW Transaction were recognized as a long-term liability.

The Company recognizes the current cash payable amounts under the arrangement within other current liabilities on the condensed consolidated balance sheets.

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

23 unchanged sentences

All product sales of Jelmyto are recognized through the Company's arrangement with a single customer, a third -party national specialty distributor.

Net revenue recognized includes gross revenue and 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, the Company’s copay assistance program, and Medicare refund for discarded drug, which are estimated based on the Company’s historical experience.

Net revenue recognized includes gross revenue and 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 and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refund for discarded drug, which are estimated based on the Company’s historical experience.

Research and Development Expenses

23 unchanged sentences

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of March 31, 2023 and December 31, 2022  (in thousands):

Accounts payable and accrued expenses consisted of the following as of June 30, 2023 and December 31, 2022  (in thousands):

Accounts payable

10 unchanged sentences

Interest and Other Income (Expense), Net

Interest and other income (expense), net consisted of the following as of March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

Interest and other income (expense), net consisted of the following as of June 30, 2023 and 2022 (in thousands):

Six Months Ended June 30,

Interest income

Other expense, net

$ 1,080  

Other income (expense), net

( 45 )  

Total interest and other income (expense), net

$ 1,035  

Note 5 –

Inventories consisted of the following as of 

March 31, 2023 and December 31, 2022 (in thousands):

June 30, 2023 and December 31, 2022 (in thousands):

Raw materials (1)

5 unchanged sentences

$ 6,695  

( 1 )  $ 2.8  million and $ 2.4  million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at March 

( 1 )  $ 2.4  million and $ 2.4  million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at June 

30, 2023  and December 31, 2022, respectively.

16 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 March 31, 2023 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 June 30, 2023 are as follows (in thousands):

Fair Value Measurements Using

34 unchanged sentences

The Company’s investments in U.S.

government bonds and money market funds are measured based on publicly available quoted market prices for identical securities as of March 31, 2023 and December 31, 2022.

government bonds and money market funds are measured based on publicly available quoted market prices for identical securities as of June 

30, 2023 and December 31, 2022.

The Company's investments in corporate bonds, commercial paper and certificates of deposits are measured based on quotes from market makers for similar items in active markets.

1 unchanged sentence

 Investments

The following table summarizes the Company’s investments as of March 31, 2023 (in thousands):

The following table summarizes the Company’s investments as of June 30, 2023 (in thousands):

Cash equivalents

7 unchanged sentences

Commercial paper

( 11 )  

Certificates of deposit

9 unchanged sentences

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

As of March 31, 2023 , the amortized cost of investments included an immaterial amount of accrued interest.

As of March 31, 2023 , 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, 2023 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 22.2 million which consisted of 

As of June 30, 2023 , the amortized cost of investments included an immaterial amount of accrued interest.

As of June 30, 2023 , 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, 2023 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 33.9 million which consisted of 

38 securities. The unrealized loss was primarily driven by rising interest rates.

2 unchanged sentences

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

March 31, 2023 , the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no allowance for credit losses were recognized in the period.

The Company’s investments as of March 31, 2023 mature at various dates through January 2026.

June 30, 2023 , the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no allowance for credit losses were recognized in the period.

The Company’s investments as of June 30, 2023 mature at various dates through January 2026.

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

3 unchanged sentences

Maturities after one year through three years

10,165  

Total investments

3 unchanged sentences

Property and Equipment

Property and equipment, consists of the following as of March 31, 2023 and December 31, 2022 (in thousands):

Property and equipment, consists of the following as of June 30, 2023 and December 31, 2022 (in thousands):

Laboratory equipment

6 unchanged sentences

$ 1,297  

Depreciation and amortization expense was $ 0.2  million for the 

three months ended March 31, 2023 and $ 0.2  million for the three months ended March 31, 2022 .

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

three and six months ended June 30, 2023 and $ 0.2  million and $ 0.4 million for the three and six months ended June 30, 2022 .

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, 2023 

for annual net sales up to $ 200 million was 13.0 %.

The rate in effect for the six  months ended June 

30, 2023  for annual net 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:

7 unchanged sentences

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 for the year ended December 31, 2022 and for the three  months ended March 31, 2023, in thousands:

The following table shows the activity with respect to the carrying value of the prepaid forward liability for the year ended December 31, 2022 and for the six  months ended June 

30, 2023, in thousands:

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

6 unchanged sentences

Financing on prepaid forward obligation

10,568  

Amounts paid and payable (1)

Carrying value of prepaid forward obligation as of March 31, 2023

Carrying value of prepaid forward obligation as of June 30, 2023

$ 104,507  

( 1 ) $ 2.2  million and $ 2.3  million of the Amounts paid and payable are included as current portion of the prepaid forward obligation within other current liabilities on the condensed consolidated balance sheets as of March 

( 1 ) $ 2.7  million and $ 2.3  million of the Amounts paid and payable are included as current portion of the prepaid forward obligation within other current liabilities on the condensed consolidated balance sheets as of June 

30, 2023  and December 31, 2022, respectively.

12 unchanged sentences

1.25 % floor) plus 

Upon 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 June 29, 2023, the loan agreement with Pharmakon was amended to replace the benchmark governing the interest rate with a rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York. 

Effective July 2023, the loan will accrue interest using a benchmark rate of 3 -month SOFR plus a 

0.26161 % adjustment.

The Company is not required to maintain any financial covenants.

9 unchanged sentences

Interest expense

Carrying value of Pharmakon loan as of March 31, 2023

Carrying value of Pharmakon loan as of June 30, 2023

$ 98,296  

1 unchanged sentence

Operating Leases

The Company had the following office and laboratory facility leases as of March 31, 2023 :

The Company had the following office and laboratory facility leases as of June 30, 2023 :

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 for an additional three years until August 2022.

2 unchanged sentences

September 2025.  

The Company's remaining contractual obligation under this lease is approximately $ 0.7  million as of March 31, 2023. 

The Company's remaining contractual obligation under this lease is approximately $ 0.6  million as of June 

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

1 unchanged sentence

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 $ 0.3  million as of March 31, 2023 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.2  million as of June 30, 2023 .

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 $ 0.2  million as of March 31, 2023 .

The remaining rental payments to be received over the lease term is approximately $ 0.2  million as of June 30, 2023 .

The Company accounts for the sublease as an operating lease in accordance with ASC 842.

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 $ 1.6  million as of March 31, 2023 .

The Company’s remaining contractual obligation under this lease is approximately $ 1.5  million as of June 30, 2023 .

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

2 unchanged sentences

The Company’s leases expire at various dates from 2023  through 2026, with varying renewal and termination options.

The components of lease cost for the three months ended March 31, 2023  and 2022  were as follows (in thousands):

The components of lease cost for the three and six months ended June 30, 2023  and 2022  were as follows (in thousands):

Three Months Ended

Six Months Ended

Operating lease cost

1 unchanged sentence

( 56 )  

( 112 )  

Variable lease cost

The amounts recognized as of March 31, 2023 and 

The amounts recognized as of June 30, 2023 and 

December 31, 2022 were as follows (in thousands):

4 unchanged sentences

Other current liabilities

As of March 31, 2023 , no impairment losses have been recognized.

Supplemental information related to leases for the three months ended 

March 31, 2023 and 2022 is as follows (in thousands, except for lease terms and discount rate amounts):

Three Months Ended  

As of June 30, 2023 , no impairment losses have been recognized.

Supplemental information related to leases for the six months ended 

June 30, 2023 and 2022 is as follows (in thousands, except for lease terms and discount rate amounts):

Six Months Ended  

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

4 unchanged sentences

10.16 %  

As of March 31, 2023 , maturities of lease liabilities were as follows (in thousands):

As of June 30, 2023 , maturities of lease liabilities were as follows (in thousands):

Years ending December 31,

5 unchanged sentences

$ 2,119  

As of March 31, 2023 , undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

As of June 30, 2023 , undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

Operating Leases

4 unchanged sentences

Revenue From Product Sales

Net product sales consist of the following for the three months ended March 31, 2023 and 2022 (in thousands):

Net product sales consist of the following for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

Six Months Ended

$ 21,139  

$ 16,604  

$ 38,331  

$ 30,168  

340b  drug pricing programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refund for discarded drug, which are estimated based on the Company’s historical experience.

Reserves related to items that are contractually able to be net settled are recognized as contra accounts receivable while other remaining reserves are recognized within other current liabilities on the condensed consolidated balance sheets. The following table shows the activity with respect to sales reserves for period ended of March 31, 2023  (in thousands):

340b  drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refund for discarded drug, which are estimated based on the Company’s historical experience.

Reserves related to government sponsored programs

5 unchanged sentences

( 5,182 )  

Balance as of March 31, 2023

( 3,756 )  

Balance as of June 30, 2023

$ 3,143  

$ 3,943  

Note 13  

7 unchanged sentences

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 in 2023, although the Company will be responsible for costs related to existing joint projects that exceed the payments already made to MD Anderson.  

As a result of this notification, the Company is not responsible for any further fixed bi-annual funding payments in 2023, although the Company will be responsible for costs related to existing joint projects to the extent they exceed the payments already made to MD Anderson.  

Note 14  

Shareholders ’

The Company had 100.0 million ordinary shares authorized for issuance as of March 31, 2023 and December 31, 2022 .

The Company had 23.4  million and 23.1  million ordinary shares issued and outstanding as of March 31, 2023 and December 31, 2022 , respectively.

The Company had 100.0 million ordinary shares authorized for issuance as of June 30, 2023 and December 31, 2022 .

The Company had 23.5  million and 23.1  million ordinary shares issued and outstanding as of June 30, 2023 and December 31, 2022 , respectively.

Each ordinary share is entitled to one vote.

38 unchanged sentences

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

As of March 31, 2023 , 3,545,519  

As of June 30, 2023 , 3,493,724  

ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 941,759  ordinary shares remain available for future awards.

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development expenses

$ 1,021  

$ 1,398  

Selling, general and administrative expenses

2 unchanged sentences

$ 2,823  

The total unrecognized compensation cost of options and RSUs at March 31, 2023 is $ 14.2  million with a weighted average recognition period of 2.1  years.

$ 4,508  

$ 5,772  

The total unrecognized compensation cost of options and RSUs at June 30, 2023 is $ 12.6  million with a weighted average recognition period of 2.0  years.

Note 16  

1 unchanged sentence

is taxed under Israeli tax laws.

As of March 31, 2023 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of June 30, 2023 , 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 2022, 2021  and 

2020, and for the three months ended March 31, 2023 .

2020, and for the six months ended June 30, 2023 .

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 $ 3.0  million as of March 31, 2023 , for tax positions relating to transfer pricing between affiliated entities.

The Company has a liability for uncertain tax positions of $ 3.0  million as of June 30, 2023 , 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 March 31, 2023 , the Company’s liability for uncertain tax positions includes $ 1.1  million of accrued interest and penalties.

As of June 30, 2023 , the Company’s liability for uncertain tax positions includes $ 1.1  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 

three months ended March 31, 2023 or 2022 .

six months ended June 30, 2023 or 2022 .

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 March 31, 2023 and December 31, 2022 .

The Company’s maximum exposure under these arrangements is unknown as of June 30, 2023 and December 31, 2022 .

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

2 unchanged sentences

Subsequent Events

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

On July 

26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers 12,579,156 ordinary shares of the Company (“Shares”) (or in lieu of Shares, pre-funded warrants to purchase ordinary shares of the Company) at a purchase price of $ 9.54 per Share (or $ 9.539 for each ordinary share underlying a pre-funded warrant), in a private placement transaction (the “Private Placement”) for aggregate gross proceeds of $ 120.0 million, before deducting fees to placement agents and financial advisors and before other expenses payable by the Company.

Each pre-funded warrant has an exercise price of $ 0.001 per ordinary share, subject to customary adjustments, became exercisable upon original issuance and will not expire until exercised in full.

The pre-funded warrants may not be exercised if the aggregate number of ordinary shares beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation.

The aggregate fee payable by the Company to placement agents and financial advisors is $ 3.6 million, plus the reimbursement of certain expenses.

Monograph Capital Partners I, L.P.

(“Monograph”), a life sciences venture firm that is affiliated with Fred Cohen, M.D., a director of the Company, purchased 1,572,327 of the Shares in the Private Placement, for an aggregate purchase price of $ 15.0  million.

Dr. Cohen is the Chair and Chief Investment Officer of Monograph.

Management ’

112 unchanged sentences

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.

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

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

4 unchanged sentences

UGN-102 is administered locally using the standard practice of intravesical instillation directly into the bladder via a catheter.

The instillation into the bladder is expected to take place in a physician’s office as a non-operative same-day treatment, in comparison with TURBT or similar surgical procedures, which are operations conducted under general anesthesia and may require an overnight stay.

The instillation into the bladder is expected to take place in a physician’s office as a non-operative same-day treatment, in comparison with trans-urethral resection of bladder tumor ("TURBT") or similar surgical procedures, which are operations conducted under general anesthesia and may require an overnight stay.

Surgical tumor removal often has limited success due to the inability to properly identify, reach and resect all tumors.

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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 comparing UGN-102 with or without TURBT to standard of care, TURBT.

We initiated our 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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Study participants receive six once-weekly intravesical instillations of UGN-102.

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

The primary endpoint is complete response rate at three months after the first instillation, and the key secondary endpoint is durability of response in patients who achieve complete response at the three-month assessment.

In February 2022, we announced the initiation of the Phase 3 ENVISION trial, targeting enrollment of 220 patients across 90 sites.

In December 2022, we completed our target enrollment of the Phase 3 ENVISION trial. Assuming positive findings, we anticipate submitting an NDA for UGN-102 in 2024, subject to FDA agreement on the proposed submission.

As a result of the FDA's acceptance of a single arm approach, 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.

Clinical results from these patients are expected to generate additional safety and efficacy data and other insights in our evaluation of UGN-102 as a primary therapy in the treatment of low-grade intermediate risk NMIBC.

In December 2022, we completed our target enrollment of the Phase 3 ENVISION trial.

As a result of the FDA's acceptance of a single arm approach, we stopped enrollment of the Phase 3 ATLAS trial. 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. 

On July 27, 2023, we announced topline data from our Phase 3 trials, ATLAS and ENVISION.

In the ATLAS trial, UGN-102 met its primary endpoint of disease-free survival, reducing risk of recurrence, progression, or death by 55%. UGN-102 also showed a 64.8% complete response rate at three months for patients who only received UGN-102, compared to a 63.6% complete response rate at three months for patients who only received a TURBT.

The ENVISION trial met its primary endpoint by demonstrating that patients treated with UGN-102 had a 79.2% rate of complete response at 3-months following the initial treatment.

Additional data evaluating the secondary endpoint of duration of response from ENVISION is anticipated in 2024.

In both trials, UGN-102 was generally well-tolerated, with a side effect profile similar to that of previous clinical trials of UGN-102.

We 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.

As per the study design, patients in this study received six once-weekly intravesical instillations of UGN-102 with the initial treatment visit occurring at the investigative site and instillation performed by a qualified physician.

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

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

The primary endpoints of the study include safety and tolerability, discontinuations from at home study treatment and feedback from patients, home health professionals and investigators via standardized questionnaires.

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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 in 2023, although we will be responsible for costs related to existing joint projects that exceed the payments already made to MD Anderson.  

As a result of this notification, we are not responsible for any further fixed bi-annual funding payments in 2023, although we will be responsible for costs related to existing joint projects to the extent they 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.

Components of Operating Results

During the three months ended March 31, 2023 and March 31, 2022, we recognized $17.2 million and $13.6 million of revenue, respectively from sales of our product, Jelmyto .

During the three and six months ended June 30, 2023, we recognized $21.1 million and $38.3 million of revenue, respectively from sales of our product, Jelmyto .

Cost of Revenue

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Results of Operations

Comparison of the three months ended March 31, 2023 and 2022

The following table sets forth our results of operations for the three months ended March 31, 2023 and 2022.

Three Months Ended March 31,

Comparison of the three months ended June 30, 2023 and 2022

The following table sets forth our results of operations for the three months ended June 30, 2023 and 2022.

Three Months Ended June 30,

(in thousands)

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Income tax expense

Revenue was $17.2 million and $13.6 million for the three months ended March 31, 2023 and 2022, respectively.

The increase in revenue of $3.6 million reflects the increased volume of sales of our product Jelmyto .

Revenue was $21.1 million and $16.6 million for the three months ended June 30, 2023 and 2022, respectively.

The increase in revenue of $4.5 million primarily reflects the increased volume of sales of Jelmyto .

Cost of Revenue

Cost of revenue was $2.3 million and $1.5 million for the three months ended March 31, 2023 and 2022, 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. The overall increase of $0.8 million is primarily attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval and increased volume of sales of our product Jelmyto . 

Cost of revenue was $2.4 million and $1.8 million for the three months ended June 30, 2023 and 2022, 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. The overall increase of $0.6 million is primarily attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval and increased volume of sales of our product Jelmyto . 

Research and Development Expenses

Research and development expenses were $12.5 million and $12.7 million for the three months ended March 31, 2023 and 2022, respectively.

The overall decrease of $0.2 million is primarily attributable to lower research and development expenses related to the Phase 3 ENVISION study for UGN-102, research into ingredient scale-up and production efficiency for Jelmyto , reduced clinical compensation expenses and the ending of our collaboration with MD Anderson, partially offset by higher research and development expenses related to our Phase 1 study for UGN-301.

Research and development expenses were $11.6 million and $12.6 million for the three months ended June 30, 2023 and 2022, respectively.

The overall decrease of $1.0 million is primarily attributable to lower research and development expenses due to the conclusion of the ATLAS trial and lower cost related to the Phase 3 ENVISION trial for UGN-102, partially offset by higher research and development expenses related to our Phase 1 study for UGN-301. 

Additionally, research and development expenses decreased due to the ending of our collaboration with MD Anderson, lower cost incurred related to research into ingredient scale-up and production efficiency for Jelmyto and lower clinical compensation expenses.

Selling and Marketing Expenses

Selling and marketing expenses were $14.1 milli on and $13.4 million for the three months ended March 31, 2023 and 2022 , respectively.

Selling and marketing expenses were $13.9 milli on and $12.8 million for the three months ended June 30, 2023 and 2022 , respectively.

The increase in selling and marketing expenses of $1.1 million is primarily attributable to 

brand marketing related expenses and commercial operation trainings, partially offset by lower market access related expenses and stock-based compensation expenses.

brand marketing related expenses and commercial operation advertisement, data management and trainings, partially offset by lower market research related expenses.

General and Administrative Expenses

General and administrative expenses were $10.3 million and $7.9 million for the three months ended March 31, 2023 and 2022 , respectively.

The increase in general and administrative expenses of $2.4 million resulted primarily from third-party advisory providers, compensation expenses, and ongoing managed services for information technology, partially offset by lower medical affair advisory services and recruiting fees.

General and administrative expenses were $8.6 million and $8.0 million for the three months ended June 30, 2023 and 2022 , respectively.

The increase in general and administrative expenses of $0.6 million resulted primarily from professional services and ongoing managed services.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $5.2 million and $5.8 million for the three months ended March 31, 2023 and 2022, respectively.

Financing on prepaid forward obligation was $5.3 million and $5.8 million for the three months ended June 30, 2023 and 2022, 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) which is affected by estimated future payments to RTW, which are based on a percentage of revenues.

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Interest Expense on Long-term Debt

Interest expense was $3.6 million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively.

The cost in 2023 relates to interest expense on the Pharmakon loan for the full quarter versus the prior year given the loan closed in March 2022.

Interest expense was $3.8 million and $2.2 million for the three months ended June 30, 2023 and 2022, respectively.

The increase was primarily driven by increase in interest rates related to the Pharmakon loan and the funding of the second tranche of the Pharmakon loan in December 2022.

Interest and Other Income (Expense), Net

Interest and other income (expense), net was $0.6 million and $0.0 million for the three months ended March 31, 2023 and 2022, respectively.

Interest and other income (expense), net was $0.4 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively.

The increase in interest and other income (expense), net was primarily due to interest earned on investments due to changes in the overall interest rate environment.

Comparison of the six months ended June 30, 2023 and 2022

The following table sets forth our results of operations for the six months ended June 30, 2023 and 2022.

Six Months Ended June 30,

(in thousands)

Cost of revenue

Operating expenses:

Research and development

Selling and marketing

General and administrative

Total operating expenses

Operating loss

Financing on prepaid forward obligation

Interest expense on long-term debt

Interest and other income (expense), net

Loss before income taxes

Income tax expense

Revenue was $38.3 million and $30.2 million for the six months ended June 30, 2023 and 2022, respectively.

The increase in revenue of $8.1 million primarily reflects the increased volume of sales of Jelmyto .

Cost of Revenue

Cost of revenue was $4.7 million and $3.4 million for the six months ended June 30, 2023 and 2022, 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. The overall increase of $1.3 million is primarily attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval and increased volume of sales of our product Jelmyto . 

Research and Development Expenses

Research and development expenses were $24.1 million and $25.3 million for the six months ended June 30, 2023 and 2022, respectively.

The overall decrease of $1.2 million is primarily attributable to lower research and development expenses due to the conclusion of the ATLAS trial and lower cost related to the Phase 3 ENVISION trial for UGN-102, partially offset by higher research and development expenses related to our Phase 1 study for UGN-301. 

Selling and Marketing Expenses

Selling and marketing expenses were $28.1 milli on and $26.2 million for the six months ended June 30, 2023 and 2022 , respectively.

The increase in selling and marketing expenses of $1.9 million is primarily attributable to 

brand marketing related expenses and commercial operation advertisement, data management and trainings, partially offset by lower market research related expenses.

General and Administrative Expenses

General and administrative expenses were $18.9 million and $15.9 million for the six months ended June 30, 2023 and 2022 , respectively.

The increase in general and administrative expenses of $3.0 million resulted primarily from third-party advisory providers, professional services, and ongoing managed services.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $10.6 million and $11.7 million for the six months ended June 30, 2023 and 2022, respectively.

The decrease in financing on prepaid forward obligation of $1.1 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense on Long-term Debt

Interest expense was $7.3 million and $2.5 million for the six months ended June 30, 2023 and 2022, respectively.

The cost in 2023 relates to interest expense on the Pharmakon loan for two full quarters versus the prior year given the loan closed in March 2022. 

In addition, the increase was attributable to increase in interest rates related to the Pharmakon loan and the funding of the second tranche of the Pharmakon loan in December 2022.

Interest and Other Income (Expense), Net

Interest and other income (expense), net was $1.0 million and $0.1 million for the six months ended June 30, 2023 and 2022, respectively.

The increase in interest and other income (expense), net was primarily due to interest earned on investments due to changes in the overall interest rate environment.

Liquidity and Capital Resources

As of March 31, 2023, we had $75.2 million in cash and cash equivalents and marketable securities.

As of June 30, 2023, we had $55.3 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.

dollars. 

Through March 31, 2023, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangements with RTW and Pharmakon.

Through June 30, 2023, 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.

The remaining capacity under the ATM Sales Agreement is approximately $83.4 million as of March 31, 2023.

The remaining capacity under the ATM Sales Agreement is approximately $83.4 million as of June 30, 2023.

The shares will be offered and sold pursuant to our shelf registration statement on Form S-3 filed with the SEC on November 15, 2022, which was declared effective on November 29, 2022.

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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, and the second tranche of $25.0 million was funded in December 2022. 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%.

Upon 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, 2023 we had an accumulated deficit of $607.3 million.

On June 29, 2023, the Loan Agreement was amended to replace the benchmark governing the interest rate with a rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York. 

Effective July 2023, the loan will accrue interest using a benchmark rate of 3-month SOFR plus a 0.26161% adjustment.

On July 26, 2023, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which we agreed to sell and issue to the Purchasers 12,579,156 ordinary shares of the Company (“Shares”) (or in lieu of Shares, pre-funded warrants to purchase ordinary shares of the Company) at a purchase price of $9.54 per Share (or $9.539 for each ordinary share underlying a pre-funded warrant), in a private placement transaction (the “Private Placement”) for aggregate gross proceeds of $120.0 million, before deducting fees to placement agents and financial advisors and before other expenses payable by us.

Each pre-funded warrant has an exercise price of $0.001 per ordinary share, subject to customary adjustments, and became exercisable upon original issuance and will not expire until exercised in full.

The aggregate fee payable by us to placement agents and financial advisors is $3.6 million, plus the reimbursement of certain expenses. 

We have incurred losses since our inception and negative cash flows from our operations, and as of June 30, 2023 we had an accumulated deficit of $631.5 million.

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

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Our ability to continue as a going concern is expected to be impacted by our ability to raise additional capital to fund our operations, produce cash inflows from Jelmyto product sales and develop UGN-102. 

We believe that absent sufficient proceeds received from equity, financing, or business development transactions, we will not have sufficient cash and cash equivalents to fund our operations beyond one year from the issuance of our condensed consolidated financial statements included elsewhere in this Quarterly Report.

We estimate that our existing resources and projected revenues will only be sufficient to fund our planned operations until mid-way through the first quarter of 2024. 

Accordingly, we will, within the next 12 months, require significant additional financing to continue our operations. In addition, there can be no assurances that we will be able to secure such additional financing if at all, on terms that are satisfactory to us, and in amounts sufficient to meet our needs.

These factors raise substantial doubt about our ability to continue as a going concern. Failure to successfully receive additional financing will require us to delay, limit or reduce product development and commercialization efforts.

We cannot estimate the actual amounts necessary to successfully commercialize any approved products, or whether, or when, we may achieve profitability.

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The lease commencement date was November 29, 2019 and the lease term is 38 months. In June 2022, we signed an amendment to our 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 March 31, 2023. 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 $2.4 million as of June 30, 2023. 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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The Term Loans bear interest at 8.25% plus three-month LIBOR per annum with a LIBOR floor of 1.25%.

Upon 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.

On June 29, 2023, the Loan Agreement was amended ("Amended Loan Agreement") to replace the benchmark governing the interest rate with a rate based on the SOFR published by the Federal Reserve Bank of New York. 

Effective July 2023, the loan will accrue interest using a benchmark rate of 3-month SOFR plus a 0.26161% adjustment as described in the Amended Loan Agreement. 

Interest is payable quarterly in arrears.

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $25.8 million during the three months ended March 31, 2023, compared to $24.0 million during the three months ended March 31, 2022.

The $1.8 million increase was attributable primarily to financing costs related to the prepaid forward obligation and Pharmakon loan, as well as timing of certain accruals, partially offset by the increase in net sales of our product Jelmyto during 2023.

Net cash used in operating activities was $46.1 million during the six months ended June 30, 2023, compared to $48.2 million during the six months ended June 30, 2022.

The $2.1 million decrease was attributable primarily to timing of certain accruals, as well as increase in net sales of our product Jelmyto during 2023, partially offset by increase in interest on long-term debt.  

Investing Activities

Net cash provided by investing activities was $6.3 million during the three months ended March 31, 2023, compared to $13.6 million during the three months ended March 31, 2022.

The net change of $ 7.3 million is attributable primarily to proportionately less maturities to purchase marketable securities in 2023 as compared to 2022.

Net cash provided by investing activities was $10.0 million during the six months ended June 30, 2023, compared to $13.5 million during the six months ended June 30, 2022.

The net change of $3.5 million is attributable primarily to more reinvestment of marketable securities in 2023 as compared to 2022.

Financing Activities

Net cash provided by financing activities was $0.7 million during the three months ended March 31, 2023, compared to $70.7 million during the three months ended March 31, 2022.

Net cash provided by financing activities was $0.8 million during the six months ended June 30, 2023, compared to $70.7 million during the six months ended June 30, 2022.

The decrease of $69.9 million is attributable primarily to proceeds from the Pharmakon loan 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