What changed in this filing

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Item 1. Financial Statements

2024-05-13 compared with 2023-11-14 · 480 added, 835 removed, 515 unchanged (72% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

September 30,

Current assets:

Cash and cash equivalents

$ 119,305  

$ 55,408  

$ 131,439 $ 95,002

Marketable securities

28,114  

44,556  

32,606 41,966

Restricted cash

Accounts receivable

12,847  

12,704  

14,158 15,443

Prepaid expenses and other current assets

16,038  

11,101  

10,491 10,281

Total current assets

182,123  

128,907  

196,760 169,186

Non-current assets:

4 unchanged sentences

Other non-current assets

$ 193,633  

$ 135,619  

$ 200,574 $ 178,311

Liabilities and Shareholders' Deficit

1 unchanged sentence

Accounts payable and accrued expenses

$ 14,083  

$ 12,383  

$ 18,158 $ 16,538

Employee related accrued expenses

1 unchanged sentence

Total current liabilities:

25,788  

23,916  

26,340 31,212

Non-current liabilities:

Prepaid forward obligation

107,276  

98,923  

112,947 109,722

Long-term debt

98,518  

97,537  

97,590 98,551

Long-term lease liabilities

1 unchanged sentence

Total Liabilities

235,626  

224,980  

240,708 243,523

Commitments and Contingencies (Note 18)

Shareholders' Deficit:

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

30,854,778 and 23,129,953 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at March 31, 2024 and December 31, 2023;

36,127,687 and 32,490,119 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

611,389  

487,787  

671,438 614,035

Accumulated deficit

( 653,332 )  

( 711,634 ) ( 679,348 )

Accumulated other comprehensive loss

( 134 )  

Total Shareholders' Deficit

( 41,993 )  

( 40,134 ) ( 65,212 )

Total Liabilities and Shareholders' Deficit

$ 193,633  

$ 135,619  

$ 200,574 $ 178,311

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

2 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

$ 20,852  

$ 16,097  

$ 59,183  

$ 46,265  

For the Three Months Ended March 31,

Cost of revenue

18,485  

14,077  

52,108  

40,874  

Operating expenses:

Research and development expenses

10,230  

13,093  

34,312  

38,429  

Selling, general and administrative expenses

21,755  

19,071  

68,723  

61,204  

Operating loss

( 13,500 )  

( 18,087 )  

( 50,927 )  

Financing on prepaid forward obligation

( 5,479 )  

( 4,819 )  

( 16,047 )  

Interest expense on long-term debt

( 3,815 )  

( 2,694 )  

( 11,129 )  

Interest and other income, net

Loss before income taxes

( 21,888 )  

( 25,122 )  

( 76,162 )  

Income tax expense

( 709 )  

( 66 )  

$ ( 21,879 )  

$ ( 25,831 )  

$ ( 76,228 )  

Statements of Comprehensive Loss

$ ( 21,879 )  

$ ( 25,831 )  

$ ( 76,228 )  

Other comprehensive income (loss)

Unrealized gain (loss) on investments

( 99 )  

( 27 )  

Comprehensive Loss

$ ( 21,859 )  

$ ( 25,930 )  

$ ( 76,255 )  

Net loss per ordinary share - basic and diluted

$ ( 0.68 )  

$ ( 1.13 )  

$ ( 2.89 )  

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

32,298,182  

22,798,263  

26,358,719  

22,711,686  

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

UroGen Pharma Ltd.

Condensed Consolidated Statements of Shareholders ’

 Deficit

in thousands, except share amounts)

Ordinary Shares

Additional paid-in

Accumulated other comprehensive

Balance as of July 1, 2023

23,498,617  

$ 493,109  

$ (631,453 )  

$ (154 )  

Changes During the Three Months Ended September 30, 2023

Exercise of options into ordinary shares

55,781  

Share-based compensation

Issuance of pre-funded warrant, net of issuance costs

48,700  

Issuance of ordinary share, net of issuance costs

7,300,380  

67,338  

67,358  

Other comprehensive income

(21,879 )  

Balance as of September 30, 2023

30,854,778  

$ 611,389  

$ ( 653,332 )  

$ ( 134 )  

Balance as of July 1, 2022

22,727,891  

$ 481,485  

$ (522,404 )  

( 56 )  

Changes During the Three Months Ended September 30, 2022

Exercise of options into ordinary shares

283,433  

Share-based compensation

Other comprehensive loss

( 99 )  

( 25,831 )  

Balance as of September 30, 2022

23,011,324  

$ 485,041  

$ ( 548,235 )  

$ ( 155 )  

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

UroGen Pharma Ltd.

Condensed Consolidated Statements of Shareholders ’

 Deficit

Condensed Consolidated Statements of Shareholders ’ Deficit

in thousands, except share amounts)

3 unchanged sentences

Balance as of January 1, 2024

23,129,953  

$ 487,787  

$ (577,104 )  

$ (107 )  

Changes During the Nine Months Ended September 30, 2023

Changes During the Three Months Ended March 31, 2024

Exercise of options into ordinary shares

424,445  

Share-based compensation

Issuance of pre-funded warrant, net of issuance costs

48,700  

Issuance of ordinary share, net of issuance costs

7,300,380  

67,338  

67,358  

Other comprehensive loss

( 27 )  

(76,228 )  

Balance as of September 30, 2023

30,854,778  

$ 611,389  

$ ( 653,332 )  

$ ( 134 )  

Balance as of March 31, 2024

Balance as of January 1, 2023

22,462,995  

$ 475,698  

$ (467,321 )  

$ ( 25 )  

$ 8,413  

Changes During the Nine Months Ended September 30, 2022

Changes During the Three Months Ended March 31, 2023

Exercise of options into ordinary shares

548,329  

Share-based compensation

Other comprehensive loss

( 130 )  

( 80,914 )  

Balance as of September 30, 2022

23,011,324  

$ 485,041  

$ ( 548,235 )  

$ ( 155 )  

Other comprehensive income

Balance as of March 31, 2023

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

UroGen Pharma Ltd.

1 unchanged sentence

in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows From Operating Activities

$ ( 76,228 )  

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

Depreciation and amortization

Inventory Obsolescence

Accrued financing on prepaid forward obligation

11,019  

(Accretion) on marketable securities

( 622 )  

Share-based compensation

2 unchanged sentences

Changes in operating assets and liabilities:

( 677 )  

Accounts receivable

( 143 )  

Prepaid expenses and other current assets

( 4,937 )  

Other non-current assets

1 unchanged sentence

Employee related accrued expenses

( 105 )  

Other current liabilities

Lease liabilities

( 766 )  

Net cash used in operating activities

( 63,380 )  

Cash Flows From Investing Activities

Purchases of marketable securities

( 35,009 )  

Maturities of marketable securities

45,538  

41,202  

Purchases of property and equipment

( 138 )  

Net cash (used in) provided by investing activities

10,391  

Cash Flows From Financing Activities

Proceeds from exercise of options into ordinary shares

Proceeds from issuance of long-term debt

70,793  

Proceeds from pre-funded warrant issuance, net of $ 1,654 of issuance costs

48,700  

Proceeds from ordinary share issuance, net of $ 2,288 of issuance costs

67,358  

Issuance cost related to at-the-market issuances

Proceeds from ordinary share issuance, net of issuance costs

Net cash provided by financing activities

116,891  

71,766  

Increase (Decrease) in Cash and Cash Equivalents

63,902  

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

56,220  

45,587  

Cash, Cash Equivalents and Restricted Cash at End of Period

$ 120,122  

$ 29,498  

Supplemental Disclosures of Non-Cash Activities

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

$ 2,165  

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

1 unchanged sentence

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 –

Business and Nature of Operations

Note 1 – Business and Nature of Operations

Nature of Operations

UroGen Pharma Ltd.

is an Israeli company incorporated in 

April 2004 ( “UPL”).

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

October 2015 

and began operating in 

February 2016 ( “UPI”).

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

first  commercial product, 

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

April 15, 2020, 

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

Jelmyto , a 

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

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

RTGel  technology.

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

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

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

Since commencing operations, the Company has devoted substantially all of its efforts to securing intellectual property rights, performing research and development activities, including conducting clinical trials and manufacturing activities, hiring personnel, launching the Company’s first commercial product, Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN- 101, clinical development of UGN- 102, and raising capital to support and expand these activities.

On April 15, 2020, the U.S.

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

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

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

Note 2 –

Basis of Presentation

Note 2 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q and Article 10 of Regulation S- X.

Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.

In the opinion of the Company’s management, the accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary for fair statement of its financial position, results of operations and cash flows of the Company at the dates and for the periods indicated.

Interim results are not necessarily indicative of results for the full fiscal year.

The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States.

The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto contained in the Company’s Annual Report on Form 10 -K for the year ended December 

31, 2022, as filed with the U.S.

Securities and Exchange Commission (“SEC”) on March 24, 2023.

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 653.3  

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

31, 2022, respectively.

Securities and Exchange Commission (“SEC”) on March 14, 2024.

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 711.6 million and $ 679.3 million as of March 31, 2024 and December 31, 2023, respectively.

The Company expects to incur losses and have negative net cash flows from operating activities as it executes on its strategy including engaging in further research and development activities, particularly conducting non-clinical studies and clinical trials.

The success of the Company depends on the ability to successfully commercialize its technologies to support its operations and strategic plan. 

In accordance with the accounting guidance related to the presentation of financial statements, management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date the financial statements are issued.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, and do not include any adjustments relating to the carrying amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

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

On July 

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

See Note 14  for further discussion regarding the private placement transaction.

Based on the Company's cash, cash equivalents and marketable securities as of September 

30, 2023, together with management’s cash flow projections, the Company believes that it has sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these financial statements.

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

There can be 

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

In the event the Company is 

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

Note 3 –

Significant Accounting Policies

The success of the Company depends on the ability to successfully commercialize its technologies to support its operations and strategic plan.

Based on the Company's cash, cash equivalents and marketable securities as of March 31, 2024, together with management’s cash flow projections, the Company believes that it has sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these financial statements.

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

There can be no assurances that the Company will be able to secure such additional financing on terms that are satisfactory to the Company, in an amount sufficient to meet the Company's needs, or at all.

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

Note 3 – Significant Accounting Policies

Principles of Consolidation

6 unchanged sentences

Functional Currency

dollar (“Dollar”) is the currency of the primary economic environment in which the operations of the Company are conducted.

Therefore, the functional currency of the Company is the Dollar.

1 unchanged sentence

At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the Dollar are measured using the official exchange rate at the balance sheet date.

The effects of foreign currency re-measurements are recorded in the condensed consolidated statements of operations as “Interest and other income, net.”

Cash and Cash Equivalents;

2 unchanged sentences

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

Cash and cash equivalents and marketable securities totaled $ 153.9  million as of September 30, 2023 .

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

Debt and Equity Securities”.

Available-for-sale debt securities are carried at fair value with unrealized gains and losses reported in other comprehensive income/loss within shareholders’

Cash and cash equivalents and marketable securities totaled $ 164.5 million as of March 31, 2024 .

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

Available-for-sale debt securities are carried at fair value with unrealized gains and losses reported in other comprehensive income/loss within shareholders’ equity.

Realized gains and losses are recorded as a component of interest and other income, net.

2 unchanged sentences

These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, default rates, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures.

The majority of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. 

For individual debt securities classified as available-for-sale securities where there has been a decline in fair value below amortized cost, the Company determines whether the decline resulted from a credit loss or other factors.

5 unchanged sentences

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents and marketable securities.

The primary objectives for the Company’s investment portfolio are the preservation of capital and the maintenance of liquidity.

The Company does not enter into any investment transaction for trading or speculative purposes.

The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, obligations issued by the U.S.

government and U.S.

2 unchanged sentences

The accounts are monitored by management to mitigate the risk.

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

The Company assesses the need for an allowance for doubtful accounts primarily based on creditworthiness, historical payment experience and general economic conditions.

7 unchanged sentences

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

See Note 16  for further discussion related to income taxes.

See Note 16 for further discussion related to income taxes.

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

The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. For Jelmyto , the Company commenced capitalization of inventory at the receipt of FDA approval.

The Company values its inventory at the lower of cost or net realizable value. The Company measures inventory approximating actual cost under a first -in, first -out basis.

For Jelmyto , the Company commenced capitalization of inventory at the receipt of FDA approval.

The Company values its inventory at the lower of cost or net realizable value.

The Company measures inventory approximating actual cost under a first -in, first -out basis.

The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories .

5 unchanged sentences

Laboratory equipment

3 - 6.5  

5 - 16.5  

Manufacturing equipment

2 - 10  

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

1 unchanged sentence

Prepaid Forward Obligation

The Company is party to a transaction with RTW Investments (the “RTW Transaction”) in which the Company 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 Company is party to a transaction with RTW Investments (the “RTW Transaction”) in which the Company received funds to support the 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 Company recognizes the current cash payable amounts under the arrangement within other current liabilities on the condensed consolidated balance sheets.

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

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

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

1 unchanged sentence

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

(“Pharmakon”).

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

3 unchanged sentences

The Company currently has no finance leases.

The Company accounts for leases in accordance with ASC Topic 842, “Leases”

The Company accounts for leases in accordance with ASC Topic 842, “Leases” .

The Company determines if an arrangement is a lease at inception.

Right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date.

Operating lease ROU assets are presented as operating lease right-of-use assets on the condensed consolidated balance sheets.

1 unchanged sentence

Lease expense is recognized on a straight-line basis for operating leases.

Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs.

Variable lease payments are presented as operating expense on the condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments.

The Company’s lease terms may include options to extend the lease.

The lease extensions are included in the measurement of the right-of-use asset and lease liability when it is reasonably certain that it will exercise that option.

Because most of the Company’s leases do not provide an implicit rate of return, an incremental borrowing rate is used based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis.

The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

ROU assets for operating leases are periodically reviewed for impairment losses under ASC 360 - 10, “Property, Plant, and Equipment”, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

Product sales from Jelmyto are recognized as revenue under ASC 606 at the point in time that control of the product has been transferred to the customer, generally at the point the product has been delivered to the treating physician.

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

Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to 340b drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refund for discarded drug, which are estimated based on the Company’s historical experience.

Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to 340b drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds for discarded drug, which are estimated based on the Company’s historical experience.

Research and Development Expenses

5 unchanged sentences

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel costs (including share-based compensation related to directors, employees and consultants).

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

Selling, general and administrative expenses consist primarily of personnel costs (including share-based compensation related to directors, employees and consultants).

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

Selling, general and administrative costs are expensed as incurred, and the Company accrues for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known.

1 unchanged sentence

Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the required 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”) or a PSU equals the closing price of the Company’s ordinary shares on the grant date.

The Company accounts 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 the Company’s ordinary shares on the grant date.

The Company accounts for forfeitures as they occur in accordance with ASC Topic 718, “Compensation—Stock Compensation”.

The Company 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.

Pre-funded Warrants

and ASC 815, “Derivatives and Hedging.” 

Accordingly, the Company classifies the pre-funded warrants as a component of permanent stockholders’

equity within additional paid-in capital and records them at the issuance date using a relative fair value allocation method.

The Company issued pre-funded warrants in connection with a private placement transaction that are accounted for as a freestanding equity-linked financial instrument that meets the criteria for equity classification under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging.” Accordingly, the Company classifies the pre-funded warrants as a component of permanent shareholders’ equity within additional paid-in capital and records them at the issuance date using a relative fair value allocation method.

The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value, and allocated the net sales proceeds from the private placement transaction proportionately to the ordinary shares and pre-funded warrants.

4 unchanged sentences

For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share as their effect is anti-dilutive.

The Company’s pre-funded warrants requires the holder to pay nominal consideration to receive the Company’s ordinary shares and are therefore considered outstanding shares in determining basic and diluted earnings per share in accordance with ASC Topic 260, “Earnings per Share”.

Recently Adopted Issued Pronouncements

The Company has reviewed the Accounting Standards Updates recently issued by the Financial Accounting Standards Board, and determined that they are not applicable to the Company.

Note 4 –

Other Financial Information

Recently Adopted or Issued Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update No.

2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures ("ASU 2023 - 07" ), which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses.

Public entities must adopt the new guidance for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted.

The Company is currently evaluating the potential impact of the adoption of ASU 2023 - 07 on the Company’s financial disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures (“ASU 2023 - 09” ), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023 - 09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

The Company will adopt ASU 2023 - 09 for the 2025 year-end and is currently evaluating the potential impact of the adoption on the Company’s financial disclosures.

ASU 2023 - 09 allows for adoption using either a prospective or retrospective transition method.

The Company has reviewed other Accounting Standards Updates recently issued by the FASB, and determined that none of these pronouncements will have a significant impact on the Company's consolidated financial statements and related disclosures.

SEC Climate Disclosures

In March 2024, the SEC issued its final climate disclosure rule, which requires certain disclosures relating to emissions and other climate-related topics.

For smaller reporting companies, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2027.

Subsequently, in April 2024, the SEC issued an order staying implementation of the SEC Climate Disclosure Rules pending the resolution of certain challenges.

The Company is currently evaluating the impact these rules will have on its consolidated financial statements and related disclosures.

Note 4 – Other Financial Information

Accounts Payable and Accrued Expenses

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

September 30,

Accounts payable and accrued expenses consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Accounts payable

$ 4,041  

$ 5,527  

Accrued sales reserves

4 unchanged sentences

Total accounts payable and accrued expenses

$ 14,083  

$ 12,383  

Interest and Other Income, Net

Interest and other income, net consisted of the following for the nine months ended 

September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Interest and other income, net consisted of the following for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Interest income

$ 1,915  

Other income, net

Other income (loss), net

Total interest and other income, net

$ 1,941  

Note 5 –

Inventories consisted of the following as of 

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

September 30,

Note 5 – Inventories

Inventories consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Raw materials (1)

$ 4,948  

$ 4,676  

Finished goods

Total inventories

$ 6,683  

$ 6,695  

( 1 )  $ 1.7  million and $ 2.4  million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at September 

30, 2023  and December 31, 2022, respectively.

Changes in non-current assets are reflected on the condensed consolidated statements of cash flows within the caption of other non-current assets. 

Note 6 –

Fair Value Measurements

( 1 ) $ 0.7 million and $ 1.7 million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at March 31, 2024 and December 31, 2023, respectively.

These raw materials are not expected to be manufactured and sold within the next 12 months.

Changes in non-current assets are reflected on the condensed consolidated statements of cash flows within the caption of other non-current assets.

Note 6 – Fair Value Measurements

The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

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These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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

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

The carrying value of the prepaid forward obligation (See Note 9 - Prepaid Forward Obligation) approximates its fair value. The Company estimated the fair value of the prepaid forward obligation using Level 3 inputs, including internally developed financial forecasts and management's estimate of probability of success related to product candidates, and determined that the effective interest rate in the obligation approximates market rates for loans with similar terms and risk characteristics. 

The Company estimated the fair value of long-term debt (see Note 10 - Long-Term Debt) using the income approach with Level 3 inputs.

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

The carrying value of the prepaid forward obligation (See Note 9 - Prepaid Forward Obligation) approximates its fair value.

The Company estimated the fair value of the prepaid forward obligation using Level 3 inputs, including internally developed financial forecasts and management's estimate of probability of success related to product candidates, and determined that the effective interest rate in the obligation approximates market rates for loans with similar terms and risk characteristics.

The Company estimated the fair value of long-term debt (see Note 10 - Long-Term Debt) using the income approach with Level 3 inputs.

The Company estimated future floating rate interest payments using a forward curve of a three -month benchmark rate, and estimated fair value based on publicly available data reported in the financial statements of publicly traded venture lending companies.

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No transfers between levels have occurred during the periods presented.

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2023 are as follows (in thousands):

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of March 31, 2024 are as follows (in thousands):

Fair Value Measurements Using

1 unchanged sentence

Balance as of

September 30,

Identical Assets

1 unchanged sentence

Money market funds

$ 15,591  

US government

Commercial paper

Total cash equivalents

20,543  

17,567  

Marketable securities

17,022  

Corporate bonds

2 unchanged sentences

Total marketable securities

34,621  

17,022  

17,599  

Total assets at fair value

$ 55,164  

$ 34,589  

$ 20,575  

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2023 are as follows (in thousands):

3 unchanged sentences

Identical Assets

Cash equivalents

Money market funds

Marketable securities

$ 28,693  

Corporate bonds

2 unchanged sentences

Total marketable securities

$ 44,556  

$ 28,693  

$ 15,863  

The Company’s investments in U.S.

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

30, 2023 and December 31, 2022.

Total assets at fair value

The Company’s investments in U.S.

government bonds and money market funds are measured based on publicly available quoted market prices for identical securities as of March 31, 2024 and December 31, 2023.

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

Note 7 –

 Investments

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

Note 7 – Investments

The following table summarizes the Company’s investments as of March 31, 2024 (in thousands):

Cash equivalents

Money market funds

$ 15,591  

US government

Commercial paper

Total cash equivalents

20,544  

Marketable securities:

17,089  

( 67 )  

17,022  

Corporate bonds

( 62 )  

Commercial paper

1 unchanged sentence

Total marketable securities

34,754  

( 134 )  

34,621  

Total assets at fair value

$ 55,299  

$ ( 135 )  

$ 55,165  

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

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

As of September 30, 2023 , marketable securities were in a net unrealized loss position. Unrealized gains and losses on available-for-sale debt securities are included as a component of comprehensive loss. 

September 30, 2023 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 32.7 million which consisted of 

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

As of March 31, 2024 , the amortized cost of investments included an immaterial amount of accrued interest.

As of March 31, 2024 , marketable securities were in a net unrealized loss position.

Unrealized gains and losses on available-for-sale debt securities are included as a component of comprehensive loss.

As of March 31, 2024 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 16.2 million which consisted of 20 securities.

The unrealized loss was primarily driven by minor fluctuations in the fair value of corporate bonds and historically rising interest rates.

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

the Company expects to recover the entire amortized cost basis of the security.

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

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

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

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

September 30,

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

As of March 31, 2024 , the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no allowance for credit losses were recognized in the period.

The Company’s investments as of March 31, 2024 mature at various dates through January 2026.

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

Maturities within one year

$ 49,635  

$ 44,556  

Maturities after one year through three years

Total investments

$ 55,164  

$ 44,556  

Note 8 –

Property and Equipment

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

September 30,

Note 8 – Property and Equipment

Property and equipment, consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

Laboratory equipment

3 unchanged sentences

accumulated depreciation and amortization

( 3,762 )  

Property and equipment, net

$ 1,297  

Depreciation and amortization expense was $ 0.2  million and $ 0.6  million for the 

three and nine months ended September 30, 2023 and $ 0.2  million and $ 0.7  million for the three and nine months ended September 30, 2022 .

Note 9 –

Prepaid Forward Obligation

In March 2021, the Company entered into a prepaid forward agreement with RTW Investments (“RTW”).

Under the terms of the RTW Transaction, the Company received $ 75.0 million ( $ 72.4  million net of transaction costs) to support the continued launch of Jelmyto and the development of UGN- 102.

Depreciation and amortization expense was $ 0.1 million for the three months ended March 31, 2024 and $ 0.2 million for the three months ended March 31, 2023 .

Note 9 – Prepaid Forward Obligation

In March 2021, the Company entered into a prepaid forward agreement with RTW Investments (“RTW”).

Under the terms of the RTW Transaction, the Company received $ 75.0 million ( $ 72.4 million net of transaction costs) to support the launch of Jelmyto and the development of UGN- 102.

In return for the transferred funds, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of Jelmyto in an amount equal to:

1 unchanged sentence

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

The rate in effect for the nine  months ended September 

30, 2023  for annual net sales up to $ 200 million was 13.0 %.

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

The rate in effect for the three months ended March 31, 2024 for annual net sales up to $ 200 million was 13.0 %.

In addition, subject to FDA approval of UGN- 102, UGN- 103 and UGN- 104, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of UGN- 102, UGN- 103 and UGN- 104 in an amount equal to:

(i) 2.5 % of annual net sales up to $200 million, (ii) 1.0 % of annual net sales for annual net sales between $200 million and $300 million, and (iii) 0.5 % of annual net sales for annual net sales above $300 million.

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

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

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

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

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

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

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

30, 2023, in thousands:

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

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

The following table shows the activity with respect to the carrying value of the prepaid forward liability for the year ended December 31, 2023 and for the three months ended March 31, 2024, in thousands:

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

$ 85,713  

Financing on prepaid forward obligation

21,559  

Amounts paid and payable (1)

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

98,923  

Financing on prepaid forward obligation

16,047  

Amounts paid and payable (1)

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

$ 107,276  

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

30, 2023  and December 31, 2022, respectively.

Note 10 –

Long-Term Debt

March 7, 

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

two  tranches.

first  tranche of $ 75  million was funded in 

The second tranche of $ 25  million was funded in 

December 2022.

The facility will mature 

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

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

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

1.25 % floor) plus 

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

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

0.26161 % adjustment.

Carrying value of prepaid forward obligation as of March 31, 2024

( 1 ) $ 2.4 million and $ 3.0 million of the Amounts paid and payable are included as current portion of the prepaid forward obligation within other current liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.

Note 10 – Long-Term Debt

On March 7, 2022, the Company entered into a loan agreement with Pharmakon for a senior secured term loan of up to $ 100 million in two tranches.

The first tranche of $ 75 million was funded in March 2022.

The second tranche of $ 25 million was funded in December 2022.

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

Effective July 2023, the loan accrues interest using a benchmark rate of 3 -month SOFR plus 8.25 % plus an additional adjustment of 0.26161 %.

On March 13, 2024, the Company 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 required to be drawn by September 30, 2024, subject to customary bring down conditions and deliverables.

The fourth tranche of $ 75.0 million will become available at the Company's option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0 million tranche, (ii) receiving FDA approval of a new drug application (“NDA”) for UGN- 102 no later than June 30, 2025 and (iii) the satisfaction of customary bring down conditions and deliverables.

Under the amended and restated loan agreement, 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 possible 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 and make-whole amounts.

The Company is not required to maintain any financial covenants.

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

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

The Company incurred financing expenses of $ 4.2 million related to the first and second tranches funded in 2022, which are recognized as a direct offset to the long-term debt on the Company's condensed consolidated balance sheets.

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

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

Long-term debt at closing of Pharmakon loan

$ 100,000  

Capitalized costs and discounts

Carrying value of Pharmakon loan as of December 31, 2022

Interest expense

Carrying value of Pharmakon loan as of December 31, 2023

97,537  

Interest expense

11,129  

Carrying value of Pharmakon loan as of September 30, 2023

$ 98,518  

Note 11  

Carrying value of Pharmakon loan as of March 31, 2024

Note 11 – Leases

Operating Leases

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

In April 2016, UPL signed an addendum to its November 2014 lease agreement for the Company’s offices located in Israel, in order to increase the office space rented and to extend the rent period for an additional three years until August 2022.

July 2022, 

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

September 2025.  

The Company's remaining contractual obligation under this lease is approximately $ 0.5  million as of September 

The Company had the following office and laboratory facility leases as of March 31, 2024 :

In April 2016, UPL signed an addendum to its November 2014 lease agreement for the Company’s offices located in Israel, in order to increase the office space rented and to extend the rent period for an additional three years until August 2022.

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

The Company's remaining contractual obligation under this lease is approximately $ 0.4 million as of March 31, 2024.

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

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

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

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

The Company’s remaining contractual obligation under this lease is approximately $ 0.1  million as of September 30, 2023 .

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

January 1, 2020 and continuing until the end of the lease term in March 2024.

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

The remaining rental payments to be received over the lease term is approximately $ 0.1  million as of September 30, 2023 .

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

In November 2019, UPI entered into a sublease for this office space, with a lease commencement date of January 1, 2020 which continued until the end of the lease term in March 2024.

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

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

In November 2019, UPI entered into a new lease agreement for an office in Princeton, New Jersey, which the Company now uses as its headquarters.

The lease commencement date was November 29, 2019 

with an original lease term of 38 months, expiring January 31, 2023.

In June 

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

The Company’s remaining contractual obligation under this lease is approximately $ 1.3  million as of September 30, 2023 .

The lease commencement date was November 29, 2019 with an original lease term of 38 months, expiring January 31, 2023.

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

The Company’s remaining contractual obligation under this lease is approximately $ 1.1 million as of March 31, 2024 .

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

The Company’s operating leases may require minimum rent payments, contingent rent payments adjusted periodically for inflation, or rent payments equal to the greater of a minimum rent or contingent rent.

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

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

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

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

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

The components of lease cost for the three months ended March 31, 2024 and 2022 were as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost

Sublease income

( 56 )  

( 168 )  

Variable lease cost

The amounts recognized as of September 30, 2023 and 

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

September 30,

The amounts recognized as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

Right-of-use assets

$ 1,905  

$ 2,452  

Long-term lease liabilities

Other current liabilities

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

Supplemental information related to leases for the nine months ended 

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

Nine Months Ended  

September 30,

As of March 31, 2024 , no impairment losses have been recognized.

Supplemental information related to leases for the three months ended March 31, 2024 and 2023 is as follows (in thousands, except for lease terms and discount rate amounts):

Three Months Ended

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

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Weighted-average discount rate of operating leases

10.16 %  

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

As of March 31, 2024 , maturities of lease liabilities were as follows (in thousands):

Years ending December 31,

Remainder of 2024

2027 and thereafter

Total future minimum lease payments

$ 2,084  

Present value of lease liabilities

$ 1,884  

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

Operating Leases

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

Years ending December 31,

Remainder of 2023

2025 and thereafter

Note 12  

Revenue From Product Sales

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

Total future minimum lease payments

Present value of lease liabilities

Note 12 – Revenue From Product Sales

Net product sales consist of the following for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended

Nine Months Ended

September 30,

$ 20,852  

$ 16,097  

$ 59,183  

$ 46,265  

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

Reserves related to items that are contractually able to be net settled are recognized as contra accounts receivable while other remaining reserves are recognized within other current liabilities on the condensed consolidated balance sheets. The following table shows the activity with respect to sales reserves for period ended of September 30, 2023  (in thousands):

Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to 340b drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds for discarded drug, which are estimated based on the Company’s historical experience.

The following table shows the activity with respect to sales reserves for period ended of March 31, 2024 (in thousands):

Reserves related to government sponsored programs

2 unchanged sentences

Balance as of December 31, 2023

$ 1,437  

16,500  

( 7,418 )  

( 5,979 )  

Balance as of September 30, 2023

$ 1,396  

$ 3,144  

$ 4,540  

Note 13  

License and Collaboration Agreements

Balance as of March 31, 2024

Note 13 – License and Collaboration Agreements

Agenus Agreement

In November 2019, the Company entered into a license agreement with Agenus Inc., pursuant to which Agenus granted to the Company 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 non-muscle invasive bladder cancer ("high-grade NMIBC"). 

MD Anderson Agreement

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

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

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

Note 14  

Shareholders ’

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

The Company had 30.9  million and 23.1  million ordinary shares issued and outstanding as of September 30, 2023 and December 31, 2022 , respectively.

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

("Agenus"), pursuant to which Agenus granted to the Company 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 non-muscle invasive bladder cancer ("high-grade NMIBC").

Note 14 – Shareholders ’ Equity

The Company had 100.0 million ordinary shares authorized for issuance as of March 31, 2024 and December 31, 2023 .

The Company had 36.1 million and 32.5 million ordinary shares issued and outstanding as of March 31, 2024 and December 31, 2023 , respectively.

Each ordinary share is entitled to one vote.

The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors (the “Board”).

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

On July 

26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers 7,300,380 ordinary shares of the Company (“Shares”) and 5,278,776 of 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 paid by the Company.

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

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

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

The Shares and the ordinary shares issuable upon exercise of the pre-funded warrants were registered pursuant to the Company’s registration statement on Form S- 3 (File No.

ATM Sales agreement

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

In the three months ended March 31, 2024, the Company sold 3,400,468 ordinary shares under the ATM Sales Agreement, for gross proceeds of approximately $ 56.1 million.

The net proceeds to the Company after deducting sales commissions to Cowen were approximately $ 54.7 million.

The remaining capacity under the ATM Sales Agreement is approximately $ 27.3 million as of March 31, 2024.

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

Securities Purchase Agreement

On July 26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers 7,300,380 ordinary shares of the Company (“Shares”) and 5,278,776 of 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 paid by the Company.

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

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

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

Resales of the Shares and the ordinary shares issuable upon exercise of the pre-funded warrants were registered pursuant to the Company’s registration statement on Form S- 3 (File No.

333 - 274423 ) filed with the SEC on September 8, 2023, which was declared effective on September 15, 2023.

On December 20, 2023, the Company issued 1,599,733 ordinary shares through a cashless conversion of 1,599,840 pre-funded warrants for the purchase of ordinary shares of the Company.

Monograph Capital Partners I, L.P.

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

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

Note 15  

Share-Based Compensation

Cohen is the Chair and Chief Investment Officer of Monograph.

Note 15 – Share-Based Compensation

In October 2010, the Board approved a share option plan (the "2010 Plan") for grants to Company employees, consultants, directors, and other service providers.

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The 2017 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSU awards, performance share awards, performance cash awards, and other forms of share awards to the Company's employees, directors and consultants.

The grant of options to Israeli employees under the Plans is subject to the terms stipulated by Section 102 of the Israeli Income Tax Ordinance (“Section 102”

The option grants are subject to the track chosen by the Company, either the “regular income”

track or the “capital gains”

track, as set out in Section 102.

The grant of options to Israeli employees under the Plans is subject to the terms stipulated by Section 102 of the Israeli Income Tax Ordinance (“Section 102” ).

The option grants are subject to the track chosen by the Company, either the “regular income” track or the “capital gains” track, as set out in Section 102.

The Company registered the Plans under the capital gains track, which offers more favorable tax rates to the employees.

As a result, and pursuant to the terms of Section 102, the Company is not allowed to claim as an expense for tax purposes the amounts credited to the employees in respect of options granted to them under the Plans, including amounts recorded as salary benefits in the Company’s accounts, with the exception of the work-income benefit component, if any, determined on grant date.

For non-employees and for non-Israeli employees, the Plans is subject to Section 3 (i) of the Israeli Income Tax Ordinance.

Employees are typically granted stock options and/or restricted stock units ("RSUs"), upon commencement of employment.

Also, eligible employees may receive an annual grant of options or RSUs.

For non-employees and for non-Israeli employees, the Plans is subject to Section 3 (i) of the Israeli Income Tax Ordinance.

Employees are typically granted stock options and/or RSUs, upon commencement of employment.

Also, eligible employees may receive an annual grant of options, RSUs and/or PSUs.

Non-employee members of the Board typically receive a grant of stock options upon initial appointment to the Board, and/or stock options annually.

The term of any option granted under the Plans cannot exceed 10 years.

Options shall not have an exercise price less than 100 % of the fair market value of the Company’s ordinary shares on the grant date, and generally vest over a period of three years.

If the individual possesses more than 10 % of the combined voting power of all classes of equity of the Company, the exercise price shall not be less than 110 % of the fair market value of an ordinary share on the date of grant.

The Company’s RSU and option grants provide for accelerated or continued vesting in certain circumstances as defined in the plans and related grant agreements, including a termination in connection with a change in control.

Options shall not have an exercise price less than 100 % of the fair market value of the Company’s ordinary shares on the grant date, and generally vest over a period of three years.

RSUs generally vest in a 33 % increment upon the first anniversary of grant, and in either equal quarterly or annual amounts for the two years following the one -year anniversary of the grant date.

Options generally vest in a 33 % increment upon the first anniversary of the grant date, and in either equal quarterly or annual amounts for the two years following the one -year anniversary of the grant date.

The expected volatility is based on a mix of the Company’s historical volatility, and the historical volatility of comparable companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage.

The Company also grants PSUs to certain employees.

The PSU’s currently outstanding vest based on either the earlier of obtaining regulatory approval for the Company’s lead product candidate UGN- 102 or the occurrence of a change in control, or for certain other awards, the achievement of the first commercial sale of UGN- 102 in the United States following UGN- 102's receipt of regulatory approval.

The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted.

The expected term is the length of time until the expected dates of exercising the options and is estimated for employees using the simplified method due to insufficient specific historical information of employees’

exercise behavior, and for non-employees, and directors using the contractual term.

On January 31, 2023, the Board approved a performance stock unit ("PSU") award of 100,000 shares under the 2017 Plan to the Company's Chief Executive Officer, subject to shareholder approval.

Vesting of these PSUs will depend upon obtaining regulatory approval for the Company’s lead product candidate UGN- 102 in the three years following the grant.

The PSU award was approved by the Company’s shareholders at the 2023 Annual Shareholders’

Meeting on September 7, 2023.

The maximum number of ordinary shares that was initially authorized for issuance under the 2017 Plan was 

1,400,000 . On January 1, 2018, the share reserve increased by 250,167 to 1,650,167 shares.

On October 12, 2018, the Company increased the number of ordinary shares authorized for issuance under the 2017 Plan by 1,900,000 to 3,550,167 shares.

On June 8, 2020, the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 3,950,167 shares.

On June 7, 2021, the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 4,350,167 shares.

On June 8, 2022, the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017  Plan by 400,000 to 4,750,167 shares. On September 7, 2023, the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017  Plan by 450,000 to 5,200,167  shares. 

The maximum number of ordinary shares that was initially authorized for issuance under the 2017 Plan was 1,400,000 .

On January 1, 2018, the share reserve increased by 250,167 to 1,650,167 shares.

On October 12, 2018, the Company increased the number of ordinary shares authorized for issuance under the 2017 Plan by 1,900,000 to 3,550,167 shares.

On June 8, 2020, the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 3,950,167 shares.

On June 7, 2021, the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 4,350,167 shares.

On June 8, 2022, the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 4,750,167 shares.

On September 7, 2023, the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 450,000 to 5,200,167 shares.

In May 2019, the Company adopted the UroGen Pharma Ltd.

2019 Inducement Plan (the “Inducement Plan”).

Under the Inducement Plan, the Company is authorized to issue up to 900,000 ordinary shares pursuant to inducement awards.

5635 - 1,  including individuals who were not previously an employee or director of the Company or are following a bona fide period of non-employment, in each case as an inducement material to such individual’s agreement to enter into employment with the Company.

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

As of September 30, 2023 , 3,781,335  

ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 1,498,367  ordinary shares remain available for future awards.

The only persons eligible to receive grants under the Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule 5635 (c)( 4 ) and the related guidance under Nasdaq IM 5635 - 1, including individuals who were not previously an employee or director of the Company or are following a bona fide period of non-employment, in each case as an inducement material to such individual’s agreement to enter into employment with the Company.

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

As of March 31, 2024 , 4,171,525 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 385,469 ordinary shares remain available for future awards.

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

Three Months Ended

Nine Months Ended

September 30,

Research and development expenses

$ 1,436  

$ 2,040  

Selling, general and administrative expenses

Total share-based compensation expense

$ 2,224  

$ 2,440  

$ 6,732  

$ 8,212  

The total unrecognized compensation cost of options and RSUs at September 30, 2023 is $ 15.6  million with a weighted average recognition period of 2.0  years.

Note 16  

The total unrecognized compensation cost of options and RSUs at March 31, 2024 is $ 21.0 million with a weighted average recognition period of 2.24 years.

Note 16 – Income Taxes

UroGen Pharma Ltd.

is taxed under Israeli tax laws.

As of September 30, 2023 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of March 31, 2024 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

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

The Company has cumulative global pretax losses for the years ended 2022, 2021  and 

2020, and for the nine months ended September 30, 2023 .

The Company has cumulative global pretax losses for the years ended 2023, 2022 and 2021, and for the three months ended March 31, 2024 .

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

The Company has a liability for uncertain tax positions of $ 3.0  million as of September 30, 2023 , for tax positions relating to transfer pricing between affiliated entities.

The Company has a liability for uncertain tax positions of $ 3.2 million as of March 31, 2024 , for tax positions relating to transfer pricing between affiliated entities.

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

As of September 30, 2023 , the Company’s liability for uncertain tax positions includes $ 1.1  million of accrued interest and penalties.

The Company operates on a global basis and is subject to tax laws and regulations in the United States and Israel.

The estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax laws and regulations, expectations regarding the outcome of tax authority examinations, as well as the ultimate measurement of potential liabilities.

As of March 31, 2024 , the Company’s liability for uncertain tax positions includes $ 1.2 million of accrued interest and penalties.

The Company operates on a global basis and is subject to tax laws and regulations in the United States and Israel.

The uncertain tax positions are reviewed quarterly and adjusted as events occur that could affect potential liabilities for additional taxes, including lapsing of applicable statutes of limitations, correspondence with tax authorities, proposed assessments by tax authorities, identification of new issues, and issuance of new legislation or regulations.

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

Note 17  

Related Parties

See Note 14  for discussion regarding an affiliated investor in the private placement transaction for the nine months ended September 30, 2023. 

There were no related party transactions for the nine months ended September 30, 2022.

Note 18  

Commitments and Contingencies

Note 17 – Related Parties

There were no related party transactions for the three months ended March 31, 2024.

Note 18 – Commitments and Contingencies

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers.

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

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

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

The Company’s maximum exposure under these arrangements is unknown as of March 31, 2024 and December 31, 2023.

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

See Note 11  for further discussion regarding lease commitments.

Note 19  

Subsequent Events

The Company has evaluated and determined there were 

no  subsequent events.

Management ’

s Discussion and Analysis of Financial Condition and Results of Operations.

the audited financial statements and notes thereto as of and for the year ended December  

31, 2022 and the related Management ’

s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2022 ( “

Annual Report ”

), which was filed with the SEC 

on March 24, 2023.

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended ( “

Securities Act ”

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

Exchange Act ”

), which are subject to the “

safe harbor ”

created by those sections.

The Company received from Teva Pharmaceuticals, Inc.

(“Teva”), a Paragraph IV Certification Notice Letter dated February 20, 2024, providing notification that Teva submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of Jelmyto .

In the Notice Letter, Teva alleges that two of the patents listed in the FDA Orange Book for Jelmyto , U.S.

Patent Numbers 9,040,074 and 9,950,069, each of which expires in January 2031, are invalid, unenforceable, or will not be infringed by Teva’s manufacture, use, or sale of the generic product described in its ANDA submission.

On April 2, 2024, the Company filed a lawsuit in the U.S.

District Court for the District of Delaware against Teva Pharmaceuticals, Inc., Teva Pharmaceuticals USA, Inc., and Teva Pharmaceutical Industries, Ltd., alleging infringement of U.S.

Patent Numbers 9,040,074 and 9,950,069 and seeking a permanent injunction preventing U.S.

market entry of Teva’s generic product prior to the expiry of such patents.

If the Company is unsuccessful in securing the requested court relief, Jelmyto may be subject to immediate competition from an FDA approved generic product after regulatory exclusivity for Jelmyto expires in April 2027.

See Note 11 for further discussion regarding lease commitments.

Note 19 – Subsequent Events

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

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management ’ s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2023 ( “ Annual Report ” ), which was filed with the SEC on March 14, 2024.

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended ( “ Securities Act ” ), and Section 21E of the Securities Exchange Act of 1934, as amended ( “ Exchange Act ” ), which are subject to the “ safe harbor ” created by those sections.

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

The words “

anticipates, ”

believes, ”

estimates, ”

expects, ”

intends, ”

may, ”

plans, ”

projects, ”

will, ”

would ”

and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The words “ anticipates, ” “ believes, ” “ estimates, ” “ expects, ” “ intends, ” “ may, ” “ plans, ” “ projects, ” “ will, ” “ would ” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make.

These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “

Risk Factors ”

in this Quarterly Report.

In addition, statements that “

we believe ”

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

In addition, statements that “ we believe ” and similar statements reflect our beliefs and opinions on the relevant subject.

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

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

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

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 both monotherapy and in 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.

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.

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.

RTGel (or hydrogel) 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.

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.

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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 aqueous mitomycin 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.

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.

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On April 15, 2020, the U.S.

F ood and Drug Administration ("FDA") appro ved 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.

F ood and Drug Administration ("FDA") appro ved 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 expired on April 15, 2023, however, Orphan Drug exclusivity extends until 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, the latter which involves the removal of the renal pelvis, kidney, ureter and bladder cuff.

Prior to Jelmyto , the standard of care included endoscopic resection(s) and radical nephroureterectomy, the latter involving 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 radical nephroureterectomy.

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.

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 a follow up study to the OLYMPUS trial designed to obtain long‐term data on Jelmyto .

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.

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 2024, we released data from a post-hoc analysis of the OLYMPUS trial assessing the long-term effects in treating low grade-UTUC with Jelmyto .

Of the 71 patients who enrolled in OLYMPUS, 41 achieved a CR and their health outcomes were tracked for up to 12 months.

20 of these patients remaining in CR enrolled in a 5-year rollover study.

All 41 patients with an initial CR indicated a promising median duration of response of 47.8 months, based on a median follow-up of 28.1 months.

In the 5-year rollover trial, 75% (N=15) showed no disease recurrence, indicating potential for extended disease-free periods.

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 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.

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 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 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 colleagues.

We are committed to helping patients access Jelmyto .

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

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 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.

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 ("CMS") 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 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.

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

UGN-102 

(mitomycin) for intravesical solution

UGN-102 (mitomycin) for intravesical solution

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;

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 outpatient treatment, in comparison with trans-urethral resection of bladder tumor ("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 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.

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 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 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 trans-urethral resection of bladder tumor ("TURBT") or similar surgical procedures, which are operations conducted under general anesthesia and may require an overnight stay.

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

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 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.

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

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 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 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, any patients who had signed an informed consent were able to complete screening, and if eligible were randomized into the trial. 

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

In the ATLAS trial, UGN-102 met its primary endpoint of disease-free survival, reducing risk of recurrence, progression, or death by 55%. UGN-102 also showed a 64.8% 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 3-months following the initial treatment.

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

In both trials, the safety profile of UGN-102 was acceptable, with a adverse reaction profile similar to that of previous clinical trials of UGN-102.

We also initiated a Phase 3b study with the objective of demonstrating whether UGN-102 can be administered at home by a qualified home health professional, avoiding the need for repeated visits to a healthcare setting for instillation.

As 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 the second quarter of 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 were 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 CR, 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.

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.

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 Chemistry, Manufacturing and Controls ("CMC") sections of the NDA, which is planned for January 2024.

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

UGN-103 (mitomycin) for intravesical solution and UGN-104 (mitomycin) for pyelocalyceal solution

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 80 mg mitomycin formulation with our RTGel technology, which we believe will provide advantages related to production, cost, supply and product convenience.

We are preparing to initiate clinical endpoint studies to support NDAs for UGN-103 and UGN-104 in low-grade intermediate risk NMIBC and low grade-UTUC, respectively.

In April, we announced that the FDA has accepted our Investigational New Drug Application ("IND") for UGN-103.

We anticipate dosing patients in the planned Phase 3 trial of UGN-103 by the end of this year and initiating a Phase 3 trial of UGN-104 shortly thereafter.

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.

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.

High-grade non-muscle invasive bladder cancer ("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.

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.

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.

The first combination we are investigating clinically involves the sequential use of UGN-201 (imiquimod), a toll like receptor 7 ("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.

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

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 that UGN-201 and gemcitabine 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 these two combinations 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 

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

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

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

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 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

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.

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

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

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.

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

Components of Operating Results

During the three and nine months ended September 30, 2023, we recognized $20.9 million and $59.2 million of revenue, respectively from sales of our product, Jelmyto .

During the three months ended March 31, 2024 and March 31, 2023 we recognized $18.8 million and $17.2 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;

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 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:

Three Months Ended March 31,

(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 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.

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.

UGN-102 and UGN-301 are still in clinical development.

UGN-102 and UGN-301 are still in clinical development.

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.

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.

Selling and Marketing Expenses

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

formerly known as UGN-101. 

To date, selling and marketing expenses consist primarily of commercial personnel costs (including share-based compensation) along with commercialization activities related to Jelmyto and pre-commercialization activities related to UGN-102.

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 condensed consolidated financial statements appearing elsewhere in this Quarterly Report).

Interest Expense

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

Interest expense is comprised of interest related to our long-term debt with Pharmakon (see Note 10 to our condensed consolidated financial statements appearing elsewhere in this Quarterly 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 16 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report for further information.

See Note 16 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report for further information.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates under different assumptions or conditions.

We discussed the critical accounting policies used in the preparation of our financial statements in Management ’

s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report as well as in the Note 3 to the condensed consolidated financial statements included in this Quarterly Report.

We discussed the critical accounting policies used in the preparation of our financial statements in Management ’ s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report as well as in the Note 3 to the condensed consolidated financial statements included in this Quarterly Report.

Results of Operations

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

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

Three Months Ended September 30,

(in thousands)

Cost of revenue

Operating expenses:

Research and development

Selling and marketing

General and administrative

Total operating expenses

Operating loss

Financing on prepaid forward obligation

Interest expense on long-term debt

Interest and other income, net

Loss before income taxes

Income tax expense

Revenue was $20.9 million and $16.1 million for the three months ended September 30, 2023 and 2022, respectively.

The increase in revenue of $4.8 million primarily reflects the increased volume of sales of Jelmyto .

Cost of Revenue

Cost of revenue was $2.4 million and $2.0 million for the three months ended September 30, 2023 and 2022, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expenses. The overall increase of $0.4 million is primarily attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval and increased volume of sales of our product Jelmyto . 

Research and Development Expenses

Research and development expenses were $10.2 million and $13.1 million for the three months ended September 30, 2023 and 2022, respectively.

The overall decrease of $2.9 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 $12.6 milli on and $11.9 million for the three months ended September 30, 2023 and 2022 , respectively.

The increase in selling and marketing expenses of $0.7 million is primarily attributable to commercial operation conferences and trainings, market research related expenses, and commercial compensation expenses, partially offset by lower commercial back-office services and support expenses.

General and Administrative Expenses

General and administrative expenses were $9.2 million and $7.2 million for the three months ended September 30, 2023 and 2022 , respectively.

The increase in general and administrative expenses of $2.0 million resulted primarily from higher compensation expenses, recruiting fees, certain media and meeting expenses, and ongoing managed services.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $5.5 million and $4.8 million for the three months ended September 30, 2023 and 2022, respectively.

The measurement of financing on prepaid forward obligation is an accounting estimate under the "imputed interest method" of accounting (see Note 3 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report) which is affected by estimated future payments to RTW, which are based on a percentage of revenues.

The increase in financing on prepaid forward obligation of $0.7 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense on Long-term Debt

Interest expense was $3.8 million and $2.7 million for the three months ended September 30, 2023 and 2022, respectively.

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

Interest and Other Income, Net

Interest and other income, net was $0.9 million and $0.5 million for the three months ended September 30, 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.

Comparison of the nine months ended September 30, 2023 and 2022

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

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2024 and 2023

The following table sets forth our results of operations for the three months ended March 31, 2024 and 2023.

Three Months Ended March 31,

(in thousands)

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Income tax expense

Revenue was $59.2 million and $46.3 million for the nine months ended September 30, 2023 and 2022, respectively.

The increase in revenue of $12.9 million primarily reflects the increased volume of sales of Jelmyto .

Revenue was $18.8 million and $17.2 million for the three months ended March 31, 2024 and 2023, respectively.

The increase in revenue of $1.6 million primarily reflects the increased volume of sales of Jelmyto .

Cost of Revenue

Cost of revenue was $7.1 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expenses. The overall increase of $1.7 million is primarily attributable to the full depletion of inventories that we had expensed prior to receiving FDA approval and increased volume of sales of our product Jelmyto . 

Cost of revenue was $1.7 million and $2.3 million for the three months ended March 31, 2024 and 2023, respectively.

The overall decrease of $0.6 million is primarily attributable to certain nonrecurring payments made in connection with our supply arrangement in the prior year, decrease in mixing fees, lower manufacturing costs, and decrease in the Jelmyto unit cost.

Research and Development Expenses

Research and development expenses were $34.3 million and $38.4 million for the nine months ended September 30, 2023 and 2022, respectively.

The overall decrease of $4.1 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.

Research and development expenses were $15.5 million and $12.5 million for the three months ended March 31, 2024 and 2023, respectively.

The overall increase of $3.0 million is primarily attributable to higher manufacturing costs and regulatory related expenses in connection with UGN-102 as well as research and development expenses in connection with our initiation of a Phase 3 study for UGN-103, partially offset by lower UGN-102 clinical trial costs.

Selling and Marketing Expenses

Selling and marketing expenses were $40.7 milli on and $38.1 million for the nine months ended September 30, 2023 and 2022 , respectively.

The increase in selling and marketing expenses of $2.6 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 .

Selling and marketing expenses were $17.1 milli on and $14.1 million for the three months ended March 31, 2024 and 2023 , respectively.

The increase in selling and marketing expenses of $3.0 million is primarily attributable to UGN-102 brand marketing costs as well as an increase in overall commercial operation costs including meetings, conferences, trainings and software costs.

General and Administrative Expenses

General and administrative expenses were $28.1 million and $23.1 million for the nine months ended September 30, 2023 and 2022 , respectively.

The increase in general and administrative expenses of $5.0 million resulted primarily from higher compensation expenses, recruiting fees, certain media and meeting expenses, third-party advisory providers, and ongoing managed services.  

General and administrative expenses were $10.2 million and $10.3 million for the three months ended March 31, 2024 and 2023 , respectively.

General and administrative expenses in the three months ended March 31, 2024 reflect lower expenses related to legal and compliance activities, offset by higher advisory and ongoing managed services related to medical affairs.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $16.0 million and $16.5 million for the nine months ended September 30, 2023 and 2022, respectively.

The decrease in financing on prepaid forward obligation of $0.5 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Financing on prepaid forward obligation was $5.7 million and $5.2 million for the three months ended March 31, 2024 and 2023, respectively.

The measurement of financing on prepaid forward obligation is an accounting estimate under the "imputed interest method" of accounting (see Note 3 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report) which is affected by estimated future payments to RTW, which are based on a percentage of revenues.

The increase in financing on prepaid forward obligation of $0.5 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense on Long-term Debt

Interest expense was $11.1 million and $5.2 million for the nine months ended September 30, 2023 and 2022, respectively.

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

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

Interest expense was $2.4 million and $3.6 million for the three months ended March 31, 2024 and 2023, respectively.

The decrease was primarily attributed to the decrease in the margin interest rate and the related impact to amortization of the discount on the Pharmakon loan as a result of the amended and restated loan agreement in March 2024.

Interest and Other Income, Net

Interest and other income, net was $1.9 million and $0.6 million for the nine months ended September 30, 2023 and 2022, respectively.

Interest and other income, net was $1.6 million and $0.6 million for the three months ended March 31, 2024 and 2023, 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

As of September 30, 2023, we had $153.9 million in cash and cash equivalents and marketable securities.

As of March 31, 2024, we had $164.5 million in cash and cash equivalents and marketable securities.

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

dollars. 

Through September 30, 2023, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangements with RTW and Pharmakon.

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

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

Through March 31, 2024, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangements with RTW and Pharmakon.

ATM Sales Agreement

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.

In the first quarter of 2024, we sold 3,400,468 ordinary shares under the ATM Sales Agreement, for gross proceeds of approximately $56.1 million.

The net proceeds to the Company after deducting sales commissions to Cowen were approximately $54.7 million.

The remaining capacity under the ATM Sales Agreement is approximately $27.3 million as of March 31, 2024.

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.

Prepaid Forward Agreement

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%.

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

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

On July 26, 2023, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which we agreed to sell and issue to the Purchasers 12,579,156 ordinary shares of the Company (“Shares”) (or in lieu of Shares, pre-funded warrants to purchase ordinary shares of the Company) at a purchase price of $9.54 per Share (or $9.539 for each ordinary share underlying a pre-funded warrant), in a private placement transaction 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 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 September 30, 2023 we had an accumulated deficit of $653.3 million.

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.

Pharmakon Loan Agreement

On March 7, 2022, we entered into a 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 required to be drawn by September 30, 2024, subject to customary bring down conditions and deliverables.

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

Securities Purchase Agreement

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 March 31, 2024 we had an accumulated deficit of $711.6 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. 

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.

Based on our cash, cash equivalents and marketable securities as of March 31, 2024, together with management’s cash flow projections, we believe we have sufficient cash and cash equivalents to fund our operations beyond one year from the issuance of our condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

We will need to raise additional capital in the future.

There can be no assurances that we will be able to secure such additional financing on terms that are satisfactory to us, in an amount sufficient to meet our needs, or at all.

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

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

10 unchanged sentences

the repayment of outstanding debt.

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

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

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

2 unchanged sentences

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

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

In addition, the terms of the Forward Contract with RTW and the loan agreement with Pharmakon limit our ability to take certain actions, including incurring additional indebtedness.

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

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

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

Risk Factors.

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

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

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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 which continued until the end of the lease term 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, we signed an amendment to our November 2019 lease agreement to extend the term for an additional three years through January 31, 2026. 

The total obligation for future minimum lease payments under our operating leases is $2.1 million as of September 30, 2023. See Note 11 to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report for further information.

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

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%.

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

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

Interest is payable quarterly in arrears.

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

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

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

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

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

Nine Months Ended September 30,

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 $1.5 million as of March 31, 2024.

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

On March 7, 2022, we entered into a 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 required to be drawn by September 30, 2024, subject to customary bring down conditions and deliverables.

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 possible upon FDA approval of an NDA for UGN-102.

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

The obligations of UroGen Pharma, Inc., as the borrower under the loan agreement (the "Borrower") are guaranteed on a full and unconditional basis by UroGen Pharma Ltd.

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

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

Three Months Ended March 31,

(in thousands)

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Operating Activities

Net cash used in operating activities was $63.4 million during the nine months ended September 30, 2023, compared to $65.8 million during the nine months ended September 30, 2022.

The $2.4 million decrease was attributable primarily to timing of certain accruals, 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.  

Net cash used in operating activities was $31.7 million during the three months ended March 31, 2024, compared to $25.8 million during the three months ended March 31, 2023.

The $5.9 million increase was attributable primarily to higher net loss driven by increased operating expenses such as regulatory and brand marketing costs related to UGN-102, as well as timing of certain accruals and higher personnel related spend.

Investing Activities

Net cash provided by investing activities was $10.4 million during the nine months ended September 30, 2023, compared to net cash used in investing activities of $22.0 million during the nine months ended September 30, 2022.

The net change of $32.4 million is attributable primarily to less investment of marketable securities in 2023 as compared to 2022.

Net cash provided by investing activities was $13.5 million during the three months ended March 31, 2024, compared to net cash provided by investing activities of $6.3 million during the three months ended March 31, 2023.

The net change of $7.2 million is attributable primarily to less reinvestment of marketable securities in 2024 as compared to 2023.

Financing Activities

Net cash provided by financing activities was $116.9 million during the nine months ended September 30, 2023, compared to $71.8 million during the nine months ended September 30, 2022.

The increase of $45.1 million 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.

Net cash provided by financing activities was $54.7 million during the three months ended March 31, 2024, compared to $0.7 million during the three months ended March 31, 2023.

The increase of $54.0 million is attributable primarily to proceeds from the issuance of ordinary shares under the ATM Sales Agreement.

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

What changed 10-Q

Item 1. Financial Statements