What changed in this filing

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Item 1A. Risk Factors

2023-08-10 compared with 2023-05-11 · 48 added, 37 removed, 1509 unchanged (5% of the section changed)

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In addition to Jelmyto , we are dependent on the success of our lead product candidate, UGN-102, and our other product candidates, including obtaining regulatory approval to market our product candidates in the United States.

UGN-102 may not meet its secondary endpoint in the ongoing Phase 3 ENVISION trial.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier studies and trials may not be predictive of future trial results, and our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates.

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We are a biotechnology company with a limited operating history upon which you can evaluate our business and prospects.

We are not profitable and have incurred net losses in each period since we commenced operations in 2004, including net losses of $109.8 million for the year ended December 31, 2022 and a net loss of $30.2 million for the quarter ended March 31, 2023. As of March 31, 2023, we had an accumulated deficit of $607.3 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.

We are not profitable and have incurred net losses in each period since we commenced operations in 2004, including net losses of $109.8 million for the year ended December 31, 2022 and a net loss of $24.1 million for the quarter ended June 30, 2023. As of June 30, 2023, we had an accumulated deficit of $631.5 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future.

Our ability to ultimately achieve recurring revenues and profitability is dependent upon our ability to successfully complete the development of our product candidates and obtain necessary regulatory approvals for and successfully manufacture, market and commercialize our products.

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Since our inception, almost all our resources have been dedicated to the nonclinical and clinical development of our first commercial product, Jelmyto , and our lead product candidate UGN-102.

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

As of June 30, 2023, we had cash and cash equivalents and marketable securities of $55.3 million.

This amount does not include the proceeds from our $120.0 million private placement of ordinary shares and pre-funded warrants, $115.0 million of which closed on August 2, 2023 and the remaining $5.0 million of which closed on August 9, 2023.

Fees to placement agents and financial advisors for the private placement are 3.0% of the gross proceeds, plus the reimbursement of certain expenses.

To fund our operations and develop our product candidates and commercialize Jelmyto , we have relied primarily on equity and debt financings and, following the launch of Jelmyto in June 2020, revenue generated from sales of 

In March 2021, we announced a transaction with RTW Investments ("RTW") totaling $75 million in funding for our company, which was received in May 2021, to support the launch of Jelmyto and the development of UGN-102.

In return for the upfront cash payment, RTW is entitled to receive tiered future payments based on global annual net product sales of Jelmyto and UGN-102, if approved. In addition, in March 2022, we entered into the Loan Agreement, pursuant to which the Lenders agreed to make the Term Loans to Borrower in an aggregate principal amount of up to $100 million to be funded in two tranches.

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.

We cannot be certain that our existing resources and anticipated revenues will be sufficient to fund our planned operations and expenditures for at least the next 12 months from the date of issuance of our condensed consolidated financial statements included elsewhere in this Quarterly Report, and we currently expect that our existing resources will only be sufficient to fund our planned operations until mid-way through the first quarter of 2024.

These circumstances raise substantial doubt about our ability to continue as a going concern. We will require additional capital to complete clinical trials, obtain regulatory approval for and commercialize our product candidates, and otherwise fund our operations.

In return for the upfront cash payment, RTW is entitled to receive tiered future payments based on global annual net product sales of Jelmyto and UGN-102, if approved. In March 2022, we entered into the Loan Agreement, pursuant to which the Lenders agreed to make the Term Loans to Borrower in an aggregate principal amount of up to $100 million to be funded in two tranches.

We will require additional capital to complete clinical trials, obtain regulatory approval for and commercialize our product candidates, and otherwise fund our operations.

Our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity financings, convertible debt or debt financings, third-party funding, marketing and distribution arrange ments, as well as other collaborations, strategic alliances and licensing arrangements, or a combination of these approaches.

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Thus, significant uncertainty remains regarding the commercial potential of Jelmyto .

In addition, our ongoing commercial launch of Jelmyto and subsequent commercialization efforts could be hindered by a resurgence of COVID-19 or other pandemics, epidemics or public health emergencies, although we are currently not able to predict or quantify any such potential impact with any degree of certainty.

In addition, our ongoing commercial launch of Jelmyto and subsequent commercialization efforts could be hindered by pandemics, epidemics or public health emergencies, although we are currently not able to predict or quantify any such potential impact with any degree of certainty.

If the launch or commercialization of Jelmyto is unsuccessful or perceived as disappointing, our share price could decline significantly and the long-term success of the product and our company could be harmed.

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If we are unable to effectively train our sales force and equip them with effective materials, including medical and sales literature to help them inform and educate customers about the benefits and risks of Jelmyto and its proper administration, our efforts to successfully commercialize Jelmyto could be put in jeopardy, which would negatively impact our ability to generate product revenues.

There can be no assurance that our territory business managers will continue to have in-person access to physicians as a result of a resurgence of COVID-19 or other pandemics, epidemics or public health emergencies, or that digital materials and virtual engagement will be effective at growing and sustaining prescription levels of Jelmyto .

There can be no assurance that our territory business managers will continue to have in-person access to physicians as a result of pandemics, epidemics or public health emergencies, or that digital materials and virtual engagement will be effective at growing and sustaining prescription levels of Jelmyto .

Disruptions in the prescription volume of Jelmyto could also occur:

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These companies may develop new drugs to treat the indications that we target or seek to have existing drugs approved for use for the treatment of the indications that we target.

We are aware of several pharmaceutical companies that are developing drugs in the general fields of urology and uro-oncology, such as AADi, LLC, Biocancell Ltd., Bristol Myers Squibb, CG Oncology Inc., Ferring Pharmaceuticals, FKD Therapies Oy, GSK, ImmunityBio, Janssen, Merck Sharp & Dohme Corp, Roche, Samyang Biopharma, Seagen Inc., Steba Biotech Ltd., SURGE Therapeutics, Viralytics Limited and Vyriad. In January 2023, SURGE Therapeutics received FDA clearance on an IND to proceed with a Phase 1/2a study of its SURGERx platform with resiquimod for prevention of recurrence and/or progression after TURBT in patients previously diagnosed with high-grade NMIBC that experience recurrence.

We are aware that Ferring Pharmacuticals plans to begin production of its Adstiladrin, approved by the FDA for the treatment of high-risk BCG-unresponsive NMIBC, in the second half of 2023.

In January 2023, SURGE Therapeutics received FDA clearance on an IND to proceed with a Phase 1/2a study of its SURGERx platform with resiquimod for prevention of recurrence and/or progression after TURBT in patients previously diagnosed with high-grade NMIBC that experience recurrence.

We are aware of a company called Steba Biotech with an IND granted in December 2020 which has initiated a Phase 3 study of padeliporfin ImPACT for the treatment of adult patients with low-grade and unifocal high-grade UTUC in the first quarter of 2021.

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the FDA’s acceptance of the manufacturing processes or facilities of third-party manufacturers with which we contract;

our ability to secure supply of the raw materials from TAPI (Teva Active Pharmaceutical Ingredients) or other suppliers for our product candidates to support clinical trials and commercial use;

our ability to secure supplies for our product candidates to support clinical trials and commercial use;

our ability to manufacture or secure finished product from third-party suppliers for product candidates, including UGN-102, if approved;

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Many of these clinical, regulatory and commercial risks are beyond our control.

Further, these risks and uncertainties impact all of our clinical programs that we pursue and have been amplified by resurgence of COVID-19 or other pandemics, epidemics or public health emergencies, as described below.

Further, these risks and uncertainties impact all of our clinical programs that we pursue and may be amplified by pandemics, epidemics or public health emergencies, as described below.

Accordingly, we cannot assure you that we will be able to advance any more of our product candidates through clinical development, or to obtain additional regulatory approval of any of our product candidates.

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Even if we receive approval of any of the product candidates in our pipeline or future product candidates, there is no assurance that we will be able to successfully commercialize any of them.

To date we have only generated limited clinical data for our investigational product candidates.

Positive results in nonclinical testing and early clinical trials do not ensure that later clinical trials will be successful.

A number of pharmaceutical companies have suffered significant setbacks in clinical trials, including in Phase 3 clinical trials, after promising results in nonclinical testing and early clinical trials.

These setbacks have included negative safety and efficacy observations in later clinical trials, including previously unreported adverse effects.

To date, our clinical trials and other programs have involved small patient populations and because of the small sample size, the results of these clinical trials may be subject to substantial variability and may not be indicative of future results.

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.

Following discussions with the FDA, we initiated our Phase 3 ENVISION trial, a new single-arm Phase 3 trial of UGN-102 in low-grade, intermediate-risk, NMIBC in the first quarter of 2022.

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

However, there can be no assurance that the Phase 3 ENVISION trial will have a higher probability of clinical or regulatory success notwithstanding similarities in its design to our Phase 2 OPTIMA II trial. If our clinical trials do not ultimately indicate that our product candidates are safe and effective for their intended use, the FDA may not approve any NDA that we may submit to market such product candidates, and our business would not be able to generate revenue from the sale of any such product candidates.

UGN-102 may not meet its secondary endpoint in the ongoing Phase 3 ENVISION trial.*

On July 27, 2023, we announced that UGN-102 met its primary endpoints in the Phase 3 ATLAS and ENVISION trials.

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

If UGN-102 does not meet its secondary endpoint or we receive other data that negatively impacts the efficacy and safety profile of UGN-102, then our ability to seek and potentially obtain regulatory approval of UGN-102 on the timeline we currently expect may be adversely affected.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

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We currently depend on Teva Pharmaceuticals Industries Ltd ("Teva"), as our single-source supplier of mitomycin active pharmaceutical ingredient ("API") for Jelmyto and UGN-102.

We rely on Cenexi-Laboratoires Thissen s.a., and Isotopia Molecular Imaging Ltd.

We rely on Cenexi-Laboratories Thissen s.a., and Isotopia Molecular Imaging Ltd.

as our single contracted suppliers for the mitomycin and gel contained in Jelmyto and UGN-102, respectively.

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Although we believe we have sufficient quantities of mitomycin API for planned manufacturing operations during 2023, a prolonged supply interruption of certain components could adversely affect our ability to conduct commercialization activities and planned clinical trials.

If any third party in our supply or distribution chain for materials or finished product is adversely impacted by restrictions resulting from a resurgence of COVID-19 or other pandemics, epidemics or public health emergencies, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted, limiting our ability to manufacture and distribute Jelmyto for commercial sales and our product candidates for our clinical trials and research and development operations.

If any third party in our supply or distribution chain for materials or finished product is adversely impacted by restrictions resulting from pandemics, epidemics or public health emergencies, including staffing shortages, production slowdowns and disruptions in delivery systems, our supply chain may be disrupted, limiting our ability to manufacture and distribute Jelmyto for commercial sales and our product candidates for our clinical trials and research and development operations.

In addition, before we can begin to commercially manufacture any product candidates that receive regulatory approval in the future other than Jelmyto , whether in a third-party facility or in our own facility, once established, we must obtain regulatory approval from the FDA for our manufacturing process and facility in order to sell such products in the United States.

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If we fail to manage our growth effectively, our business could be disrupted.*

As of March 31, 2023, we had 194 employees, of whom 41 are based in Israel and 153 are based in the United States.

As of June 30, 2023, we had 193 employees, of whom 41 are based in Israel and 152 are based in the United States.

We will need to continue to expand our development, quality, managerial, operational, finance, marketing, sales and other resources to manage our operations and clinical trials, continue our development activities and commercialize our product candidates, if approved.

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During times of war and other major conflicts, we, the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.

We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.

We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fake, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.

In particular, ransomware attacks are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruption of clinical trials, loss of data (including data related to clinical trials), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds.

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A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to operate our business.

Additionally, our sensitive information could be leaked, disclosed, or revealed as a result of or in connection with our employee’s, personnel’s, or vendor’s use of generative AI technologies.

We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.

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, RTGel ®

, UroGen ®

and Cystoject™) that identify our branding elements, such as Jelmyto and our unique technology in the United States, Europe, Japan and China.

, and UroGen ®

) that identify our branding elements, such as Jelmyto and our unique technology in the United States, Europe, Japan and China.

Although we take steps to monitor the possible infringement or misuse of our trademarks, it is possible that third parties may infringe, dilute or otherwise violate our trademark rights.

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In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

These provisions will take effect progressively starting in fiscal year 2023, although the Medicare drug price negotiation program is currently subject to legal challenges.

HHS has and will continue to issue and update guidance as these programs are implemented.

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The actual or perceived failure by us, our customers, partners or vendors to comply with such obligations could lead to regulatory investigations or actions;

litigation 

(including class claims) and mass arbitration demands ;

fines and penalties;

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In the ordinary course of our business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, "processing") proprietary, confidential, and sensitive data, including personal data, intellectual property, and trade secrets (collectively, "sensitive information").

Our data processing activities may subject to numerous data privacy and security obligations, such as domestic and foreign laws and regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to privacy, data protection, and data security.

Our data processing activities subject to numerous data privacy and security obligations, such as domestic and foreign laws and regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to privacy, data protection, and data security.

In the United States, federal, state, and local governments have enacted numerous privacy, data protection, and data security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

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In addition, the California Privacy Rights Act of 2020 (“CPRA”), expands the CCPA’s requirements, including by adding a new right for individuals to correct their personal information and establishing a new California Privacy Protection Agency to implement and enforce the CPRA, which could increase the risk of enforcement.

Other states, such as Virginia, Colorado, Utah and Connecticut, have also passed comprehensive privacy laws, all of which become effective in 2023, and similar laws are being considered at the federal, state, and local levels in recent years.

While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts and increase legal risk and compliance costs for us, the third parties upon whom we rely.

Other states, such as Virginia, Colorado, Utah and Connecticut, have also passed comprehensive privacy laws, which have taken effect or will become effective in 2023, and additional similar laws are being considered at the federal, state, and local levels.

While these laws, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts and increase legal risk and compliance costs for us, the third parties upon whom we rely.

These laws demonstrate our vulnerability to the evolving regulatory environment related to personal data.

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Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.

Our inability or failure to do so could result in adverse consequences.

Our inability or failure to do so could result in adverse consequences, including class action litigation and mass arbitration demands.

Moreover, in the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.

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Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.

Data Privacy Framework (which allows for transfers for relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

If there is no lawful manner for us to transfer personal data from other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Inability to import personal data from Europe to the United States may limit our ability to conduct clinical trial activities in Europe, limit our ability to collaborate with contract research organizations, service providers, contractors and other entities subject to European data protection laws, adversely impact our operations, product development and ability to provide our products, and require us to increase our data processing capabilities in Europe at significant expense.

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Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

Our employees and personnel may use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations.

Governments have passed and are likely to pass additional laws regulating generative AI.

Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and consumer lawsuits.

If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages.

We may also use AI/ML to assist us in making certain decisions, which is regulated by certain privacy laws.

Due to inaccuracies or flaws in the inputs, outputs, or logic of the AI/ML, the model could be biased and could lead us to make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits.

We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.

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government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

litigation (including class-action claims);

litigation (including class-action claims) and mass arbitration demands;

additional reporting requirements and/or oversight;

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and imprisonment of company officials.

In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.

Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.

Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:

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On December 20, 2019, we entered into the ATM Sales Agreement 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, to or through Cowen, acting as sales agent or principal, in any manner deemed to be an “at-the market offering”.

As of March 31, 2023, $83.4 million remain available for sale under the ATM Sales Agreement. 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.

As of June 30, 2023, $83.4 million remain available for sale under the ATM Sales Agreement. 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.

The significant share ownership position of our officers, directors and entities affiliated with certain of our directors may limit your ability to influence corporate matters.

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Further, our operations could be disrupted by the obligations of our employees to perform military service.

As of March 31, 2023, we had 41 employees based in Israel.

As of June 30, 2023, we had 41 employees based in Israel.

Of these employees, some may be military reservists, and may be called upon to perform military reserve duty of up to 36 days per year (and in some cases more) until they reach the age of 40 (and in some cases, up to the age of 45 or older).

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The loss of one or more of our executive officers could delay or prevent the continued successful implementation of our growth strategy, could affect our ability to manage our company effectively and to carry out our business plan, or could otherwise be detrimental to us.

As of March 31, 2023, we had 194 employees.

As of June 30, 2023, we had 193 employees.

Therefore, knowledge of our product candidates and clinical trials is concentrated among a small number of individuals.

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For instance, the SEC has recently proposed climate change and ESG reporting requirements, which, if approved, would significantly increase our costs.

In addition, we currently do not report our environmental emissions, and lack of reporting or future reporting could result in certain investors from declining to invest in our common stock. 

In addition, we currently do not report our environmental emissions, and lack of reporting or future reporting could result in certain investors from declining to invest in our ordinary shares. 

Unregistered Sales of Equity Securities and Use of Proceeds.

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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 1A. Risk Factors