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Item 5. Market for Registrant’s Common Equity

2024-03-14 compared with 2023-03-24 · 222 added, 197 removed, 186 unchanged (69% of the section changed)

Market for Registrant ’

s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market for Registrant ’ s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market Information

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Prior to such time, there was no public market for our ordinary shares.

Recent Sales of Unregistered Securities

As of March 20, 2023, there were 17 registered holders of record of our ordinary shares.

As of March 7, 2024, there were 16 registered holders of record of our ordinary shares.

Dividend Policy

We have not paid any dividends on our ordinary shares since our inception and do not expect to pay dividends on our ordinary shares in the foreseeable future.

The Loan Agreement with Pharmakon restricts our ability to pay dividends.

In addition, Israeli law limits our ability to declare and pay dividends and may subject our dividends to Israeli withholding taxes.

We currently intend to retain all available funds as well as future earnings, if any, to fund the development and expansion of our operations.

Any future determination to pay dividends will be made at the discretion of our board of directors.

Purchases of Equity Securities by the Issuer or Affiliated Purchasers

Management ’

s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains management ’

s discussion and analysis of our financial condition and results of operations and should be read together with the historical consolidated financial statements and the notes thereto included in “

Financial Statements and Supplementary Data ”

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “

Risk Factors ”

section of this Annual Report.

Recent Sales of Unregistered Securities

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains management ’ s discussion and analysis of our financial condition and results of operations and should be read together with the historical consolidated financial statements and the notes thereto included in “ Financial Statements and Supplementary Data ” .

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in the “ Risk Factors ” section of this Annual Report.

Actual results may differ materially from those contained in any forward-looking statements.

You should carefully read “

Special Note Regarding Forward-Looking Statements ”

Risk Factors.

You should carefully read “ Special Note Regarding Forward-Looking Statements ” and “ Risk Factors.

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

We have developed RTGel ®

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

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

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

Our approved product Jelmyto ®

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

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

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

In addition, our immuno-uro-oncology pipeline includes UGN-301 (zalifrelimab), an anti-CTLA-4 antibody, which we intend to study as both monotherapy and combination therapy.

We estimate that the annual treatable patient population of low-grade UTUC in the United States is approximately 6,000 to 7,000 and the annual treatable population of low-grade intermediate risk NMIBC is approximately 80,000.

is a novel proprietary polymeric biocompatible, reverse thermal gelation hydrogel technology, which, unlike the general characteristics of most forms of matter, is liquid at lower temperatures and converts into gel form when warmed to body temperature.

We believe that these characteristics promote ease of delivery into and retention of drugs in body cavities, including the bladder and the upper urinary tract, forming a transient reservoir of drug that dissolves over time while preventing rapid excretion, providing for increased dwell time.

RTGel is a novel proprietary polymeric biocompatible, reverse thermal gelation hydrogel technology, which, unlike the general characteristics of most forms of matter, is liquid at lower temperatures and converts into gel form when warmed to body temperature.

We believe that these characteristics promote ease of delivery into and retention of drugs in body cavities, including the bladder and the upper urinary tract, forming a transient reservoir of drug that dissolves over time while preventing rapid excretion, providing for increased dwell time.

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

We believe that RTGel 

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

achieves this by:

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

RTGel achieves this by:

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

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

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

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

For instance, it is only possible to dissolve 0.5 mg of mitomycin in 1 mL of water while it is possible to formulate up to 8 mg of mitomycin with 1 mL of RTGel ;

maintaining the active drug’s molecular structure and mode of action.

These characteristics of RTGel  enable sustained release of mitomycin in the urinary tract for both Jelmyto and UGN-102.

Further, RTGel may be particularly effective in the bladder and upper urinary tract where tumor visibility and access are challenging, and where there exists a significant amount of urine flow and voiding.

maintaining the active drug’s molecular structure and mode of action.

These characteristics of RTGel enable sustained release of mitomycin in the urinary tract for both Jelmyto and UGN-102.

Further, RTGel may be particularly effective in the bladder and upper urinary tract where tumor visibility and access are challenging, and where there exists a significant amount of urine flow and voiding.

We believe that these characteristics of RTGel may prove useful for the local delivery of active drugs to other bodily cavities in addition to the bladder and upper urinary tract.

Jelmyto 

On April 15, 2020, the FDA approved our new drug application (“NDA”) for Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN-101, for the treatment of adult patients with low-grade UTUC.

On April 15, 2020, the FDA approved our NDA for Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN-101, for the treatment of adult patients with low-grade UTUC.

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

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

New product exclusivity for Jelmyto exists through April 15, 2023 and Orphan Drug exclusivity applies through April 15, 2027 as well as a composition of matter patents set to expire in early 2031.

The main patents that protect Jelmyto ®

in the United States are set to expire in January 2031.

New product exclusivity for Jelmyto expired on April 15, 2023, however, Orphan Drug exclusivity extends until April 15, 2027.

Additionally, the main patents that protect Jelmyto in the United States are set to expire in January 2031.

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

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It is a challenging condition to treat due to the complex anatomy of the urinary tract system.

Prior to Jelmyto, the current standard of care included endoscopic resection(s) and radical nephroureterectomy, which involves the removal of the renal pelvis, kidney, ureter and bladder cuff.

Prior to Jelmyto , the current standard of care included endoscopic resection(s) and RNU, the latter which involves the removal of the renal pelvis, kidney, ureter and bladder cuff.

Treatment is further complicated by the fact that low-grade UTUC is most commonly diagnosed in patients over 70 years of age, who may already have compromised kidney function and may suffer further complications as a result of a major surgery.

We are focused on changing the way urothelial cancers are treated, an area in which there has been no significant advancements in recent years. Jelmyto ®

is the first drug therapy of its kind, providing an alternative to endoscopic resection(s) and/or radical nephroureterectomy.

The FDA approval is based on results from our Phase 3 OLYMPUS trial showing Jelmyto achieved clinically significant disease eradication in adults with low-grade UTUC.

We are focused on changing the way urothelial cancers are treated, an area in which there has been no significant advancements in recent years.

Jelmyto is the first drug therapy of its kind, providing an alternative to endoscopic resection(s) and/or RNU.

The FDA approval was based on results from our Phase 3 OLYMPUS trial showing Jelmyto achieved clinically significant disease eradication in adults with low-grade UTUC.

Findings from the final study results include:

Complete response (“CR”) (primary endpoint) of 58% (41/71) in the intent-to-treat population and in the sub-population of patients who were deemed not capable of surgical removal at diagnosis.

CR (primary endpoint) of 58% (41/71) in the intent-to-treat population and in the sub-population of patients who were deemed not capable of surgical removal at diagnosis.

At the 12-month time point for assessment of durability, 23 patients remained in CR of a total of 41 patients, eight had experienced recurrence of disease and ten patients were unable to be evaluated.

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The median duration of response was not reached.

The most commonly reported adverse events (≥ 20%) were ureteric obstruction, flank pain, urinary tract infection, hematuria, abdominal pain, fatigue, renal dysfunction, nausea, dysuria and vomiting.

The most commonly reported adverse events (≥ 20%) were ureteric obstruction, flank pain, urinary tract infection, hematuria, abdominal pain, fatigue, renal dysfunction, nausea, dysuria and vomiting.

Most adverse events were mild to moderate and manageable.

No treatment-related deaths occurred.

In December 2022, we presented new data from the OLYMPUS trial designed to obtain long‐term follow‐up data on Jelmyto.

Based on data available for 16 of the 23 patients who had remained in CR at the end of the OLYMPUS study, the median duration of response was 28.9 months.

Thirteen patients remained in CR, two patients had recurrence of low grade‐UTUC on the same side as treated in OLYMPUS, and one patient underwent RNU due to ureteral stricture without evidence of UTUC at the time of surgery.

No patient had progressed to high‐grade disease.

In December 2022, we presented new data from a follow up study to the OLYMPUS trial designed to obtain long‐term data on Jelmyto .

Based on data available for 16 of the 23 patients who had remained in CR at the end of the OLYMPUS study, the median duration of response in that subset of patients was 28.9 months.

No patient had progressed to high‐grade disease.

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

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

These territory business managers are led by seven regional business directors, who are in turn supported by three regional operations managers. Each region is additionally supported by one to two clinical nurse educators to provide education and training around instillation, as well as a field reimbursement manager to help ensure access and reimbursement for appropriate patients.

These territory business manager positions are led by seven regional business director positions, who are in turn supported by seven regional operations manager positions.

Each region is additionally supported by one to two clinical nurse educators to provide education and training around instillation, as well as a field reimbursement manager to help ensure access and reimbursement for appropriate patients and key account directors who engage with C-suite individuals to introduce a Jelmyto service line.

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

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

We are committed to helping patients access Jelmyto .

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

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

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

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

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

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

We have implemented processes to help make Jelmyto preparation and administration seamless for practitioners and patients, including entering into agreements with various national, regional and local specialty pharmacies under which the pharmacy, following receipt of a patient prescription, prepares and dispenses the Jelmyto admixture on our behalf.

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

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

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

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

CMS has granted Jelmyto a New Technology APC (Ambulatory Payment Classification), effective from October 1, 2023.

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

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

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

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

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

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

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

Patients were treated with six weekly instillations of UGN-102 and underwent assessment of CR (the primary endpoint) four to six weeks following the last instillation; 65%, or 41 out of 63 patients, treated with UGN-102 achieved a complete response three months after the start of therapy.

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

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

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

Median duration of response was not reached.

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

In December 2022 we presented new data from the OPTIMA II study designed to obtain long-term follow-up data on UGN-102 that shows median duration of response of 24.4 months based on available data for 15 out of 25 patients. Seven patients remained in CR, six patients had recurrence of low-grade disease, one patient had progression to high-grade disease and one patient withdrew consent but remained in CR at the last evaluation prior to discontinuation.

All patients were alive at the last contact, and five patients were known to have had post-study treatment with transurethral resection of the bladder tumors or fulguration.

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.

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

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

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

We believe that an effective chemoablation agent can potentially provide better eradication of tumors irrespective of the detectability and location of the tumors.

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

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

The design of 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 investigational treatment regimen and undergoes similar efficacy and safety assessments and qualitative follow-up.

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.

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.

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.

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.

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

In October 2021, we reported final data from the Phase 2b OPTIMA II trial.

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

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

65%, or 41 out of 63 patients, treated with UGN-102 achieved a CR three months after the start of therapy.

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

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

Thirteen patients had documented recurrences.

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

Median duration of response was not reached.

The final data was published online in The Journal of Urology in October 2021 and was included in the January 2022 print edition.

In December 2022 we presented new data from a follow up study to the OPTIMA II study designed to obtain long-term data on UGN-102 that shows median duration of response of 24.4 months based on available data for 15 out of 25 patients who achieved a CR in OPTIMA II.

Seven patients remained in CR, six patients had recurrence of low-grade disease, one patient had progression to high-grade disease and one patient withdrew consent but remained in CR at the last evaluation prior to discontinuation.

All patients were alive at the last contact, and five patients were known to have had post-study treatment with TURBT or fulguration.

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.

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

The design of 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 investigational treatment regimen and undergoes similar efficacy and safety assessments and qualitative follow-up.

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

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

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, 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%.

Results of the ATLAS trial also showed a 64.8% CR rate at three months for patients who only received UGN-102, compared to a 63.6% CR 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 CR at three-months following the initial treatment.

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

In both trials, the safety profile of UGN-102 was acceptable, with a safety profile comparable to that observed in 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 instillations 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.

The study completed enrollment with a total of eight patients across four centers and all study visits for these enrolled patients have been completed.

Preliminary results were reported through a press release in February 2023, finding that UGN-102 was suitable to administer at home by a visiting nurse under the supervision of a treating physician and resulted in 75% of patients achieving a complete response, defined as no detectable disease three months after starting treatment.

The study completed enrollment with a total of eight patients across four centers and all study visits for these enrolled patients have been completed.

Preliminary results were reported through a press release in February 2023, finding that UGN-102 was suitable to administer at home by a visiting nurse under the supervision of a treating physician and resulted in 75% of patients achieving a CR, defined as no detectable disease three months after starting treatment.

Patients, nurses and investigators also completed home instillation feasibility questionnaires.

These standardized feasibility questionnaires highlighted that all eight patients preferred at-home to in-office treatment, and five of six patients recommended UGN-102 home instillation instead of TURBT.

Home instillation was reported as feasible for visiting nurses, and three of four investigators considered at-home treatment “not different”

than in-office treatment.

We believe establishing the precedent for a convenient at home solution may facilitate access to care and address quality of life issues that certain patients may face with the current standard of care.

UGN-301 

(zalifrelimab) intravesical solution

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

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

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

These standardized feasibility questionnaires highlighted that all eight patients preferred at-home to in-office treatment, and five of six patients recommended UGN-102 home instillation instead of TURBT.

Home instillation was reported as feasible for visiting nurses, and three of four investigators considered at-home treatment “not different” than in-office treatment.

In October 2023 we announced our agreement with the FDA on plans for submission of an NDA for UGN-102 (mitomycin) for intravesical solution.

The FDA indicated that the current clinical development plan for UGN-102, which includes evaluation of duration of CR at 12 months from the pivotal ENVISION trial, will support submission of an NDA for the treatment of low-grade intermediate risk NMIBC.

The FDA indicated that it may seek the advice of the Oncology Drug Advisory Committee as part of the NDA review process.

The FDA also agreed that the UGN-102 NDA can utilize a rolling review, allowing for early submission of the CMC sections of the NDA, which we submitted in January 2024.

Based on our agreement with the FDA, we expect to complete the submission of the rolling NDA for UGN-102 in September 2024.

In January 2024 we entered into a licensing and supply agreement with medac Gesellschaft für klinische Spezialpräparate m.b.H.

(“medac”) to develop UGN-103 and UGN-104 which are intended to be a next-generation formulation of UGN-102 and Jelmyto , respectively, that combine medac’s proprietary mitomycin formulation technology with our RTGel technology, which we believe will provide advantages related to production, cost, supply and product convenience.

We plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN-103 in low-grade intermediate risk NMIBC.

We also plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN-104 in low-grade UTUC.

UGN-301 (zalifrelimab) intravesical solution

Our immuno-uro-oncology pipeline includes UGN-301, an anti-CTLA-4 monoclonal antibody, which we intend to study as a standalone agent and as a combination therapy.

UGN-301 is delivered using our proprietary RTGel technology, which has been designed to significantly improve the effectiveness of certain intravesical therapies.

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

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

TURBT followed by adjuvant intravesical immunotherapy with BCG is the current standard of care therapy for high-grade NMIBC.

However, the high rates of recurrence and significant risk of progression to muscle-invasive tumors are particularly dangerous.

Radical cystectomy, or bladder removal is strongly advocated in patients with BCG-unresponsive NMIBC (i.e., patients with BCG-refractory and BCG-relapsing tumors in whom further BCG therapy is not recommended) or for patients who cannot tolerate BCG.

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

The first combination we are investigating clinically involves the sequential use of UGN-201 (imiquimod), a TLR 7 agonist, and UGN-301 in high-grade NMIBC.

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

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

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

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

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

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

We believe that the combination of UGN-301 and UGN-201 makes local therapy a potentially more effective treatment option while minimizing systemic exposure and potential side effects.

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

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

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

Our Research and Development and License Agreements

The second combination we are investigating clinically involves the sequential administration of gemcitabine and UGN-301 to the bladder in high-grade NMIBC.

Gemcitabine is a chemotherapy that is used intravesically to treat high grade NMIBC where it is administered as a liquid formulation.

We believe these two combinations could elicit both an innate and adaptive immune response, which may translate into a long-lasting acquired immune response, and potentially represent a valid post-TURBT adjuvant treatment of high-grade NMIBC.

UGN-301 is delivered using our proprietary RTGel technology, which has been designed to significantly improve the effectiveness of certain intravesical therapy.

We believe that these combinations make local therapy a potentially more effective treatment option while minimizing systemic exposure and potential side effects.

In March 2022, we announced FDA clearance of our IND to begin a novel Phase 1 clinical study of UGN-301 in patients with recurrent NMIBC.

The novel study design utilizes a Master Protocol that we believe is a more efficient and streamlined approach to development.

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

The multi-arm Phase 1 study, which is expected to support the development of UGN-301 in high-grade NMIBC, was initiated in April 2022 and is actively enrolling.

We expect safety and tolerability data from this Phase 1 study in mid-2024.

Research and Development and License Agreements

Agenus Agreement

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

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

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

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

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

MD Anderson Agreement

In January 2021, we announced that we had entered into a three-year strategic research collaboration agreement with MD Anderson focusing on the sequential use of UGN-201 and UGN-301 as an investigational treatment for high-grade NMIBC. Pursuant to the agreement, as of December 31, 2022, we have made bi-annual payments totaling $2.0 million to MD Anderson to fund the collaboration, recognized evenly over the associated period through research and development expenses. 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, although we will be responsible for costs related to existing joint projects that exceed the payments already made to MD Anderson.  

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

Pursuant to the agreement, we have made bi-annual payments totaling $2.0 million to MD Anderson to fund the collaboration, recognized evenly over the associated period through research and development expenses.

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 were not responsible for any further fixed bi-annual funding payments in 2023, although we are 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 consolidated financial statements appearing elsewhere in this Annual Report.

Components of Operating Results

During the year ended December 31, 2022 and December 31, 2021, we recognized $ 64.4 million and $48.0 million of revenue, respectively, from sales of our product, Jelmyto .

During the year ended December 31, 2023 and December 31, 2022, we recognized $ 82.7 million and $64.4 million of revenue, respectively, from sales of our product, Jelmyto .

Cost of Revenue

Cost of revenue consists primarily of inventory and related costs associated with the manufacturing, distribution, warehousing and preparation of Jelmyto, including inventory write-downs.

Cost of revenue consists primarily of inventory and related costs associated with the manufacturing, distribution, warehousing and preparation of Jelmyto, including inventory write-downs.

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

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salaries and related costs, including share-based compensation expense, for our personnel in research and development functions;

expense incurred under agreements with third parties, including clinical research organizations ("CROs"), subcontractors, suppliers and consultants, nonclinical studies and clinical trials;

expense incurred to acquire, develop and manufacture nonclinical study and clinical trial materials;

expense incurred to purchase active pharmaceutical ingredient (“API”) in support of R&D activities and other related manufacturing costs;

facility and equipment costs, including depreciation expense, maintenance and allocated direct and indirect overhead costs;

We expense all research and development costs as incurred. We estimate nonclinical study and clinical trial expense based on the services performed pursuant to contracts with research institutions and contract research organizations that conduct and manage nonclinical studies and clinical trials on our behalf based on actual time and expense incurred by them.

We accrue for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from our external service providers.

expense incurred under agreements with third parties, including CROs, subcontractors, suppliers and consultants, nonclinical studies and clinical trials;

expense incurred to acquire, develop and manufacture nonclinical study and clinical trial materials;

expense incurred to purchase API in support of R&D activities and other related manufacturing costs.

We manage and prioritize our research and development expenses based on scientific data, probability of successful technical development and regulatory approval, market potential and unmet medical need, available human and capital resources and other considerations.

We regularly review our research and development activities and, as necessary, reallocate resources among our program, product candidates and external opportunities that we believe will best support the long-term growth of our business.

We do not track total research and development expenses by program, product candidates, or development phase.

The following table provides a breakout of expenses by major cost type:

(in thousands)

Personnel, facility and equipment, and other overhead costs

Clinical and other development costs

We expense all research and development costs as incurred.

We estimate nonclinical study and clinical trial expense based on the services performed pursuant to contracts with research institutions and contract research organizations that conduct and manage nonclinical studies and clinical trials on our behalf based on actual time and expense incurred by them.

We recognize costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from our external service providers.

We adjust our accrual as actual costs become known.

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

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

Research and development expense will continue to be significant and will increase over at least the next several years as we continue to develop our product candidates and conduct nonclinical studies and clinical trials of our product candidates.

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

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

Research and development expense will continue to be significant.

Research and development activities are central to our business model.

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In addition, we cannot forecast which product candidates may be subject to future collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

We expect our research and development expense to increase over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

We also expect to incur increased research and development expense as we selectively identify and develop additional product candidates.

We expect our research and development expense to increase over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

We also expect to incur increased research and development expense as we selectively identify and develop additional product candidates.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors that include, but are not limited to, the following:

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In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability.

We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each product candidate’s commercial potential.

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

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

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

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

We expect to finance our cash needs through revenue from commercial sales of Jelmyto and a combination of equity or debt financings and collaboration arrangements.

Selling and Marketing Expenses

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

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

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs (including share-based compensation related to directors, executives, finance, medical affairs, business development, investor relations, and human resource functions).

General and administrative expenses consist primarily of personnel costs (including share-based compensation related to directors, executives, finance, medical affairs, business development, investor relations, and human resource functions).

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

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation is comprised of financing expense related to the RTW Transaction (see Note 9 to our consolidated financial statements appearing elsewhere in this Annual Report).

Financing on prepaid forward obligation is comprised of financing expense related to the RTW Transaction (see Note 9 to our consolidated financial statements appearing elsewhere in this Annual Report).

Interest Expense

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

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

Interest and Other Income, Net

Interest and other income, net, consisted primarily of interest income, net losses on foreign exchange and bank commissions.

Interest and other income, net, consisted primarily of interest income, net losses on foreign exchange and bank commissions.

We have yet to generate taxable income in Israel.

We have historically incurred operating losses resulting in carry forward tax losses totaling approximately $419.1 million as of December 31, 2022.

We have historically incurred operating losses resulting in carry forward tax losses totaling approximately $452.0 million as of December 31, 2023.

We anticipate that we will continue to generate tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future taxable years.

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

See Note 17 to our consolidated financial statements appearing elsewhere in this Annual Report for further information.  

See Note 17 to our consolidated financial statements appearing elsewhere in this Annual Report for further information.

Results of Operations

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Income tax expense

Revenues were $64.4 million and $48.0 million for the years ended December 31, 2022 and 2021, respectively.

The increase of $16.4 million reflects the increased volume of sales of our product Jelmyto .

Revenues were $82.7 million and $64.4 million for the years ended December 31, 2023 and 2022, respectively.

The increase of $18.3 million was primarily driven by the increased volume of sales of Jelmyto .

2023 full-year Jelmyto net revenues also include higher revenue reserves driven by 340B chargebacks and estimated Medicare refunds for discarded drugs, offset by $4.4 million in CREATES Act sales, of which $2.4 million was realized in the fourth quarter of 2023.

Cost of Revenue

Cost of revenue was $7.7 million and $5.2 million for the years ended December 31, 2022 and 2021, respectively.

Cost of revenue was $9.4 million and $7.7 million for the years ended December 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 expense.

Gross margin would have been approximately 87.5% versus 88.1% for the year ended December 31, 2022, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

The overall increase of $1.7 million is primarily attributable to the increased volume of sales of Jelmyto and partially attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval.

Research and Development Expenses

Research and development expenses were $52.9 million and $47.6 million for the years ended December 31, 2022 and 2021, respectively.

The increase in research and development expenses of $5.3 million is primarily attributable to higher research and development expenses in 2022 related to the Phase 3 ENVISION study for UGN-102, research into ingredient scale-up and production efficiency for 

Jelmyto , partially offset by lower stock-based compensation expenses in 2022.

Research and development expenses were $45.6 million and $52.9 million for the years ended December 31, 2023 and 2022, respectively.

The decrease in research and development expenses of $7.3 million is primarily attributable to lower research and development expenses due to the conclusion of the ATLAS trial, lower cost related to the Phase 3 ENVISION trial for UGN-102, 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, cost incurred related to research into ingredient scale-up and production for UGN-102, and clinical compensation expenses.

Selling and Marketing Expenses

Selling and marketing expenses were $51.9 million and $47.6 million for the years ended December 31, 2022 and 2021, respectively.

The increase in selling and marketing expenses of $4.3 million is primarily attributable to brand marketing related expenses as well as expenses related to our participation in the American Urological Association's annual meeting, as well as our annual sales meeting, which did not occur in 2021, partially offset by lower stock-based compensation expenses in 2022.

Selling and marketing expenses were $54.7 million and $51.9 million for the years ended December 31, 2023 and 2022, respectively.

The increase in selling and marketing expenses of $2.8 million is primarily attributable to brand marketing related expenses and commercial operation advertisement, conferences and trainings, and commercial compensation expenses, partially offset by lower commercial back-office services and support expenses.

General and Administrative Expenses

General and administrative expenses were $30.9 million and $39.9 million for the years ended December 31, 2022 and 2021, respectively.

The decrease in general and administrative expenses of $9.0 million resulted primarily from a decrease in compensation related costs in 2022.

General and administrative expenses were $38.6 million and $30.9 million for the years ended December 31, 2023 and 2022, respectively.

The increase in general and administrative expenses of $7.7 million resulted primarily from higher compensation expenses, third-party advisory providers, recruiting fees, certain media and meeting expenses, and ongoing managed services.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $21.6 million and $17.3 for the years ended December 31, 2022 and 2021, respectively. The measurement of financing on prepaid forward obligation is an accounting estimate under the "imputed interest method" of accounting (see Note 9 to our consolidated financial statements appearing elsewhere in this Annual Report) which is affected by estimated future payments to RTW, which are based on a percentage of revenues.

The increase in financing on prepaid forward obligation of $4.3 million was driven primarily from a full twelve months of financing cost in 2022 for the RTW transaction, which was entered into in March 2021, partially offset by changes in underlying assumptions for remeasuring the effective rate.

Financing on prepaid forward obligation was $21.6 million and $21.6 million for the years ended December 31, 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 9 to our consolidated financial statements appearing elsewhere in this Annual Report) which is affected by estimated future payments to RTW, which are based on a percentage of revenues.

Interest Expense on Long-term Debt

Interest expense was $8.4 million and zero for the years ended December 31, 2022 and 2021, respectively, related to the Pharmakon loan which closed in March 2022.

Interest expense was $14.7 million and $8.4 million for the years ended December 31, 2023 and 2022, respectively.

The cost in 2023 relates to interest expense on the Pharmakon loan for four full quarters versus the prior year given the funding of the first tranche and second tranche of the Term Loans was in March 2022 and in December 2022, respectively.

In addition, the increase was attributable to increase in interest rates related to the Pharmakon loan.

Interest and Other Income, Net

Interest and other income, net was income of $1.0 million and income of $0.2 million for the years ended December 31, 2022 and 2021, respectively.

The increase of $0.8 million was primarily due to changes in the overall interest rate environment.

Interest and other income, net was $3.5 million and $1.0 million for the years ended December 31, 2023 and 2022, respectively.

The increase in interest and other income, net was primarily due to higher cash and investment balance earning interest and changes in the overall interest rate environment.

Liquidity and Capital Resources

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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 December 31, 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 December 31, 2022.

In December 2019, we entered into the ATM Sales Agreement with 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 was approximately $83.4 million as of December 31, 2023, and subsequent to December 31, 2023, we sold approximately $26.6 million of our ordinary shares pursuant to 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.

In March 2021, we entered into a prepaid forward agreement with RTW, pursuant to which RTW agreed to provide us with an upfront cash payment of $75.0 million to support the launch of Jelmyto and the development of UGN-102, and we agreed to provide RTW with tiered future payments based on global annual net product sales of Jelmyto and UGN-102, if approved.

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

On March 7, 2022, we entered into a loan agreement ("Loan Agreement") with Pharmakon for a senior secured term loan of up to $100.0 million 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. The Pharmakon loan will mature five years from initial funding and can be prepaid in whole at our discretion, at any time, subject to prepayment premiums and make-whole amounts. The Pharmakon loan will require interest-only payments for the first 48 months followed by principal and interest payments with interest accruing using 3-month LIBOR (with a 1.25% floor) plus 8.25%. In the event of the cessation of LIBOR, the benchmark governing the interest rate will be replaced with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York. 

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

On March 7, 2022, we entered into the Loan Agreement with Pharmakon for a senior secured term loan of up to $100.0 million in two tranches.

On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third and fourth tranche of senior secured loan.

The third tranche of $25.0 million is mandatory and required to be drawn by September 30, 2024, subject to satisfaction of customary conditions.

The fourth tranche of $75.0 million may be drawn at our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M tranche, (ii) receiving FDA approval of an NDA for UGN-102 no later than June 30, 2025 and (iii) satisfaction of customary conditions.

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 that closed on July 28, 2023 and August 9, 2023 (the “Private Placement”) for aggregate gross proceeds of $120.0 million, before deducting fees to placement agents and financial advisors and before other expenses.

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 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 paid by us to placement agents and financial advisors was $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 December 31, 2023 we had an accumulated deficit of $679.3 million.

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

Our primary uses of capital are, and we expect will continue to be, commercialization activities, research and development expense, including third-party clinical research and development services, laboratory and related supplies, clinical costs, including manufacturing costs, legal and other regulatory expense and general and administrative costs, partially offset by proceeds from sales of Jelmyto .

We routinely evaluate our liquidity needs, including assessment of our current financial condition, sources of liquidity including current cash and cash equivalents and marketable securities and management’s cash flow projections.

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. 

Our primary uses of capital are, and we expect will continue to be, commercialization activities, research and development expense, including third-party clinical research and development services, laboratory and related supplies, clinical costs, including manufacturing costs, legal and other regulatory expense and general and administrative costs, partially offset by proceeds from sales of Jelmyto .

We routinely evaluate our liquidity needs, including assessment of our current financial condition, sources of liquidity including current cash and cash equivalents and marketable securities and management’s cash flow projections.

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 consolidated financial statements included elsewhere in this Annual 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 twelve months, require significant additional financing to continue our operations. 

We estimate that our existing resources and projected revenues will only be sufficient to fund our planned operations until the first quarter of 2025.

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.

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

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

Year Ended December 31,

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Net cash used in operating activities was $76.4 million during the year ended December 31, 2023, compared to $87.6 million used in operating activities during the year ended December 31, 2022.

The $2.7 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 2022.

The $11.2 million decrease was attributable primarily to timing of certain accruals and cash payments, as well as increase in net sales of our product Jelmyto during 2023 and higher inventory purchases, including non-current inventory, in 2022, partially offset by increase in interest on long-term debt.

Investing Activities

Net cash provided by investing activities was $1.1 million during the year ended December 31, 2022, compared to net cash provided by investing activities of $4.1 million during the year ended December 31, 2021.

The decrease of $3.0 million is attributable primarily to proportionately less maturities to purchases of marketable securities during 2022 as compared to 2021.

Net cash used in investing activities was $1.0 million during the year ended December 31, 2023, compared to net cash provided by investing activities of $1.1 million during the year ended December 31, 2022.

The decrease of $2.1 million is attributable primarily to proportionately less maturities to purchases of marketable securities during 2023 as compared to 2022.

Financing Activities

Net cash provided by financing activities was $116.9 million during the year ended December 31, 2023, compared to net cash provided by financing activities of $97.1 million during the year ended December 31, 2022.

The increase of $24.8 is primarily due to the receipt of net proceeds from the Pharmakon loan in 2022, as compared to net proceeds received from the RTW Transaction in 2021.

Funding and Cash Requirements

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

The increase of $19.8 is attributable primarily to proceeds from the Private Placement in the current year as compared to proceeds from the Pharmakon loan in the prior year.

Funding and Material Cash Requirements

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

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

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

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

Risk Factors.”

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

For more information as to the risks associated with our future funding needs, see “Item 1.A – Risk Factors.” We will require additional financing to achieve our goals, and a failure to obtain this capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization efforts or other operations .

Contractual Obligations and Commitments

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

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

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

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

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

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

The lease commencement date was July 10, 2018 and terminated in March 2024.

In November 2019, we subleased our offices in Los Angeles, CA.

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

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

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

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

The total obligation for future minimum lease payments under our operating leases is $2.9 million as of December 31, 2022.

See Note 11 to our consolidated financial statements appearing elsewhere in this Annual 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.

and Borrower, "Credit Parties"), entered into the Loan Agreement with funds managed by Pharmakon Advisors, L.P., including BPCR Limited Partnership (as a "Lender"), BioPharma Credit Investments V (Master) LP (as a "Lender"), and BioPharma Credit PLC, as collateral agent for the Lenders (in such capacity, "Collateral Agent"), pursuant to which the Lenders agreed to make the Term Loans to the Borrower in an aggregate principal amount of up to $100.0 million to be funded in two tranches:

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

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

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

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

Interest is payable quarterly in arrears.

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

The 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 $1.8 million as of December 31, 2023.

See Note 11 to the consolidated financial statements appearing elsewhere in this Annual Report for further information.

On March 7, 2022, we entered into the Loan Agreement with Pharmakon for a senior secured term loan of up to $100.0 million in two tranches.

On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third and fourth tranche of senior secured loan.

The third tranche of $25.0 million is mandatory and required to be drawn by September 30, 2024, subject to satisfaction of customary conditions.

All outstanding loans with Pharmakon accrue interest using a benchmark rate of 3-month SOFR plus 7.25% plus an additional adjustment of 0.26161%.

All outstanding principal will be required to be repaid in four equal quarterly installments commencing in the second quarter of 2026, with a one-year extension upon FDA approval of an NDA for UGN-102.

All outstanding loans with Pharmakon can be prepaid in whole at the Company's discretion, at any time, subject to prepayment premiums, make-whole amounts and fees.

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

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

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

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

and the other Guarantor and are secured by substantially all of the respective Credit Parties’ tangible and intangible assets and property, including intellectual property, subject to certain exceptions.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods.

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All product sales of Jelmyto are recognized through our 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, and our co-pay assistance program, which are estimated based on our 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, our co-pay assistance program, and Medicare refunds for discarded drug, which are estimated based on our historical experience.

Share-Based Compensation

We account for employees’

and directors’

share-based payment awards classified as equity awards using the grant-date fair value method.

We account for employees’ and directors’ share-based payment awards classified as equity awards using the grant-date fair value method.

The fair value of share-based payment transactions is recognized as an expense over the requisite service period, which is equal to the vesting period.

For performance stock units (“PSUs”), cost is measured at the grant date based on the fair value of the award and is recognized over any relevant service period as expense when the achievement of the performance condition is probable.

The fair value of options is determined using the Black-Scholes option-pricing model.

The fair value of a restricted stock unit (“RSU”) equaled the closing price of the Company’s ordinary shares on the grant date.

We account for forfeitures as they occur in accordance with ASC Topic 718, “Compensation—Stock Compensation”.

The fair value of a restricted stock unit (“RSU”) or a PSU equals the closing price of our ordinary shares on the grant date.

We account for forfeitures as they occur in accordance with ASC Topic 718, “Compensation—Stock Compensation”.

We elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method and to value the awards based on the single-option award approach.

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Prepaid Forward Obligation

Under the RTW Transaction, we received funds to support the continued launch of 

Jelmyto  and the development of UGN-102 in return for tiered, future cash payments based on net sales of 

Jelmyto  and UGN-102 ,  if approved by the FDA.

Under the RTW Transaction, we received funds to support the continued launch of Jelmyto and the development of UGN-102 in return for tiered, future cash payments based on net sales of Jelmyto and UGN-102 , if approved by the FDA.

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

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

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

We recognize the current cash payable amounts under the arrangement within other current liabilities on the consolidated balance sheets.

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

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

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

Changes in future payments from previous estimates are included in future financing expense. 

We provide for income taxes based on pretax income, if any, and applicable tax rates available in the various jurisdictions in which we operate, including Israel and the U.S.

Changes in future payments from previous estimates are included in future financing expense.

We provide for income taxes based on pretax income, if any, and applicable tax rates available in the various jurisdictions in which we operate, including Israel and the U.S.

Deferred taxes are computed using the asset and liability method.

1 unchanged sentence

A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future.

We follow a two-step approach in recognizing and measuring uncertain tax positions.

We follow a two-step approach in recognizing and measuring uncertain tax positions.

After concluding that a particular filing position can be recognized (i.e., has a more-likely-than-not chance of being sustained), ASC 740-10-30-7 requires that the amount of benefit recognized be measured using a methodology based on the concept of cumulative probability.

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

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-K

Item 5. Market for Registrant’s Common Equity