What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-13 · 231 added, 218 removed, 922 unchanged (33% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

September 30,

Current assets:

36 unchanged sentences

Shareholders' Equity (Deficit):

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at June 30, 2024 and December 31, 2023;

41,169,954 and 32,490,119 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Ordinary shares, NIS 0.01 par value, 100,000,000 shares authorized at September 30, 2024 and December 31, 2023;

42,190,815 and 32,490,119 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

2 unchanged sentences

( 768,710 ) ( 679,348 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total Shareholders' Equity (Deficit)

6 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Cost of revenue

21 unchanged sentences

Accumulated other comprehensive

Balance as of April 1, 2024

Changes During the Three Months Ended June 30, 2024

income (loss)

Balance as of July 1, 2024

Changes During the Three Months Ended September 30, 2024

Exercise of options into ordinary shares

Share-based compensation

Issuance of pre-funded warrants, net of issuance costs

Issuance of ordinary share, net of issuance costs

Issuance of ordinary shares, net of issuance costs

Other comprehensive income

Balance as of June 30, 2024

Balance as of April 1, 2023

Changes During the Three Months Ended June 30, 2023

Balance as of September 30, 2024

Balance as of July 1, 2023

Changes During the Three Months Ended September 30, 2023

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive loss

Balance as of June 30, 2023

Issuance of pre-funded warrants, net of issuance costs

Issuance of ordinary shares, net of issuance costs

Other comprehensive income

Balance as of September 30, 2023

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

7 unchanged sentences

Balance as of January 1, 2024

Changes During the Six Months Ended June 30, 2024

Changes During the Nine Months Ended September 30, 2024

Exercise of options into ordinary shares

1 unchanged sentence

Issuance of pre-funded warrants, net of issuance costs

Issuance of ordinary share, net of issuance costs

Other comprehensive loss

Balance as of June 30, 2024

Issuance of ordinary shares, net of issuance costs

Other comprehensive income

Balance as of September 30, 2024

Balance as of January 1, 2023

Changes During the Six Months Ended June 30, 2023

Changes During the Nine Months Ended September 30, 2023

Exercise of options into ordinary shares

Share-based compensation

Issuance of pre-funded warrants, net of issuance costs

Issuance of ordinary shares, net of issuance costs

Other comprehensive loss

Balance as of June 30, 2023

Balance as of September 30, 2023

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

2 unchanged sentences

in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows From Operating Activities

19 unchanged sentences

Purchases of property and equipment

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash Flows From Financing Activities

Proceeds from exercise of options into ordinary shares

Proceeds from issuance of long-term debt

Proceeds from pre-funded warrant issuance, net of issuance costs

Proceeds from ordinary share issuance, net of issuance costs

Proceeds from ordinary shares issuance, net of issuance costs

Net cash provided by financing activities

13 unchanged sentences

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.

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, advancing UGN- 102 through regulatory approval, 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”).

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.

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.

In August 2024, the Company completed the submission of the rolling NDA for UGN- 102.

In October 2024, the FDA accepted the Company's NDA for UGN- 102 (mitomycin) for intravesical solution and assigned a Prescription Drug User Fee Act (PDUFA) goal date of June 13, 2025.

Note 2 – Basis of Presentation

7 unchanged sentences

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 $ 745.0 million and $ 679.3 million as of June 30, 2024 and December 31, 2023, respectively.

The Company has experienced net losses since its inception and has an accumulated deficit o f $ 768.7 million and $ 679.3 million as of September 30, 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.

2 unchanged sentences

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.

Based on the Company's cash, cash equivalents and marketable securities as of June 30, 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 condensed consolidated financial statements.

Based on the Company's cash, cash equivalents and marketable securities as of September 30, 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 condensed consolidated financial statements.

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

19 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 $ 241.3 million as of June 30, 2024 .

Cash and cash equivalents and marketable securities totaled $ 254.2 million as of September 30, 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”.

46 unchanged sentences

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 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 (the “RTW Transaction”) with RTW Investments (“RTW”) 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, subject to FDA approval, UGN- 102, UGN- 103 and UGN- 104.

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

57 unchanged sentences

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.

The Company is currently assessing the disclosures which will be required under the new guidance and does not believe the adoption of ASU 2023 - 07 will have any material impact on its consolidated financial statements.

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

12 unchanged sentences

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):

Accounts payable and accrued expenses consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

September 30,

Accounts payable

6 unchanged sentences

Interest and Other Income, Net

Interest and other income, net consisted of the following for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Interest and other income, net consisted of the following for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Interest income

2 unchanged sentences

Note 5 – Inventories

Inventories consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):

Inventories consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

September 30,

Raw materials (1)

$ 3,785 $ 4,464

Finished goods

Total inventories

$ 7,745 $ 7,341

( 1 ) $ 0.3 million and $ 1.7 million of raw materials are included within other non-current assets on the condensed consolidated balance sheets at June 30, 2024 and December 31, 2023, respectively.

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

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

16 unchanged sentences

No transfers between levels have occurred during the periods presented.

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of June 30, 2024 are as follows (in thousands):

Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 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

$ 30,943 $ 30,943 $ —

Commercial paper

Total cash equivalents

Marketable securities

12,999 12,999 —

Corporate bonds

5,063 — 5,063

Commercial paper

1,236 — 1,236

Certificates of deposit

2,010 — 2,010

Total marketable securities

21,308 12,999 8,309

Total assets at fair value

$ 52,251 $ 43,942 $ 8,309

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):

5 unchanged sentences

Money market funds

$ 9,704 $ 9,704 $ —

Marketable securities

28,634 28,634 —

Corporate bonds

6,738 — 6,738

Commercial paper

7,101 — 7,101

Certificates of deposit

3,995 — 3,995

Total marketable securities

46,468 28,634 17,834

Total assets at fair value

$ 56,172 $ 38,338 $ 17,834

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 June 30, 2024 and December 31, 2023.

government bonds and money market funds are measured based on publicly available quoted market prices for identical securities as of September 30, 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 June 30, 2024 (in thousands):

The following table summarizes the Company’s investments as of September 30, 2024 (in thousands):

Cash equivalents

Money market funds

$ 30,943 $ — $ — $ 30,943

Commercial paper

Total cash equivalents

Marketable securities:

13,014 — ( 15 ) 12,999

Corporate bonds

5,081 1 ( 19 ) 5,063

Commercial paper

1,236 — — 1,236

Certificates of deposit

2,008 2 — 2,010

Total marketable securities

21,339 3 ( 34 ) 21,308

Total assets at fair value

$ 52,282 $ 3 $ ( 34 ) $ 52,251

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

As of June 30, 2024 , the amortized cost of investments included an immaterial amount of accrued interest.

As of June 30, 2024 , marketable securities were in a net unrealized loss position.

As of September 30, 2024 , the amortized cost of investments included an immaterial amount of accrued interest.

As of September 30, 2024 , marketable securities were in a net unrealized gain position.

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

As of June 30, 2024 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 15.9 million which consisted of 14 securities.

The unrealized loss was primarily driven by minor fluctuations in the fair value of corporate bonds and U.S.

government securities.

As of September 30, 2024 , the aggregate fair value of investments held by the Company in an unrealized loss position was $ 4.6 million which consisted of 4 securities.

The unrealized loss was primarily driven by minor fluctuations in the fair value of certain U.S.

government and corporate bond positions.

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

1 unchanged sentence

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

As of June 30, 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 June 30, 2024 mature at various dates through January 2026.

As of September 30, 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 September 30, 2024 mature at various dates through August 2026.

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

September 30,

Maturities within one year

$ 52,048 $ 51,670

Maturities after one year through three years

Total investments

$ 52,251 $ 56,172

Note 8 – Property and Equipment

Property and equipment, consists of the following as of June 30, 2024 and December 31, 2023 (in thousands):

Property and equipment, consists of the following as of September 30, 2024 and December 31, 2023 (in thousands):

September 30,

Laboratory equipment

3 unchanged sentences

accumulated depreciation and amortization

( 4,145 ) ( 3,952 )

Property and equipment, net

Depreciation and amortization expense was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024 and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2023 .

Depreciation and amortization expense was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2024 and $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2023 .

Note 9 – Prepaid Forward Obligation

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

In March 2021, the Company entered into a prepaid forward agreement with 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:

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 and, if approved, UGN- 104, in an amount equal to:

(i) 9.5 % of annual net sales up to $200 million, (ii) 3.0 % of annual net sales for annual net sales between $200 million and $300 million, and (iii) 1.0 % of annual net sales for annual net sales above $300 million.

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

The rate in effect for the six months ended June 30, 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:

Pursuant to the agreement, the initial cash payment rate of 9.5% on Jelmyto aggregate worldwide annual net sales of up to $ 200 million was increased to 13.0 % and remained at that rate during the nine months ended September 30, 2024 because certain revenue thresholds were not met.

This rate may decrease in the future back to 9.5 % if the Company subsequently meets certain Jelmyto aggregate worldwide annual net sales thresholds.

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

If the Company does not receive FDA approval for UGN- 102 by a specified date, the future cash payments to RTW with respect to aggregate worldwide annual net sales of Jelmyto across all Jelmyto annual net sales tiers will increase by 1.5 %.

If the Company does not receive FDA approval for UGN- 102 by June 30, 2025, the future cash payments to RTW with respect to aggregate worldwide annual net sales of Jelmyto across all Jelmyto annual net sales tiers will increase by 1.5 %.

In accordance with the prepaid forward agreement, the Company will be required to make payments of amounts owed to RTW each calendar quarter, through and until the quarter in which the aggregate cash payments received by RTW are equal to or greater than $300 million.

As of June 30, 2024, the cumulative amounts paid and payable by the Company were $ 28.4 million.

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.

As of September 30, 2024, the cumulative amounts paid and payable by the Company were $ 31.6 million.

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, UGN- 102, UGN- 103 and UGN- 104, including the regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable related to these products.

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.

3 unchanged sentences

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 six months ended June 30, 2024, in thousands:

The following table shows the activity with respect to the carrying value of the prepaid forward liability for the year ended December 31, 2023 and for the nine months ended September 30, 2024, in thousands:

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

4 unchanged sentences

Amounts paid and payable (1)

Carrying value of prepaid forward obligation as of June 30, 2024

( 1 ) $ 2.8 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 June 30, 2024 and December 31, 2023, respectively.

Carrying value of prepaid forward obligation as of September 30, 2024

( 1 ) $ 3.3 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 September 30, 2024 and December 31, 2023, respectively.

Note 10 – Long-Term Debt

3 unchanged sentences

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 %.

Effective July 2023, the loan accrued 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.

The third tranche of $ 25.0 million was funded in September 2024.

The fourth tranche of $ 75.0 million will become available at the Company's option no later than August 29, 2025, subject to (i) receiving FDA approval of a new drug application (“NDA”) for UGN- 102 no later than June 30, 2025 and (ii) 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 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.

The Company incurred financing expenses of $ 4.2 million related to the first and second tranches funded in 2022, and $ 0.5 million related to the third tranche funded in 2024, 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".

3 unchanged sentences

Carrying value of Pharmakon loan as of December 31, 2023

Third tranche of Pharmakon loan

Capitalized costs and discounts

Interest expense

Carrying value of Pharmakon loan as of June 30, 2024

Carrying value of Pharmakon loan as of September 30, 2024

Note 11 – Leases

3 unchanged sentences

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 $ 0.3 million as of June 30, 2024 .

The Company's remaining contractual obligation under this lease is approximately $ 0.3 million as of September 30, 2024 .

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

7 unchanged sentences

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 $ 0.9 million as of June 30, 2024 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.8 million as of September 30, 2024 .

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

2 unchanged sentences

The Company’s active leases expire at various dates from 2025 through 2026, with varying renewal and termination options.

The components of lease cost for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

The components of lease cost for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating lease cost

$ 225 $ 257 $ 450 $ 485

Sublease income

— ( 56 ) ( 42 ) ( 112 )

Variable lease cost

$ 239 $ 220 $ 451 $ 411

The amounts recognized as of June 30, 2024 and December 31, 2023 were as follows (in thousands):

The amounts recognized as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30,

Right-of-use assets

$ 1,250 $ 1,671

Long-term lease liabilities

Other current liabilities

As of June 30, 2024 , no impairment losses have been recognized.

Supplemental information related to leases for the six months ended June 30, 2024 and 2023 is as follows (in thousands, except for lease terms and discount rate amounts):

Six Months Ended

As of September 30, 2024 , no impairment losses have been recognized.

Supplemental information related to leases for the nine months ended September 30, 2024 and 2023 is as follows (in thousands, except for lease terms and discount rate amounts):

Nine Months Ended

September 30,

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

3 unchanged sentences

Weighted-average discount rate of operating leases

10.26 % 10.16 %

As of June 30, 2024 , maturities of lease liabilities were as follows (in thousands):

As of September 30, 2024 , maturities of lease liabilities were as follows (in thousands):

Years ending December 31,

2 unchanged sentences

Present value of lease liabilities

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

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

Years ending December 31,

3 unchanged sentences

Note 12 – Revenue From Product Sales

Net product sales consist of the following for the three and six months ended June 30, 2024 and 2023 (in thousands):

Net product sales consist of the following for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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.

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 June 30, 2024 (in thousands):

The following table shows the activity with respect to sales reserves for period ended of September 30, 2024 (in thousands):

Reserves related to government sponsored programs

3 unchanged sentences

Balance as of December 31, 2023

Balance as of June 30, 2024

Balance as of September 30, 2024

Note 13 – License and Collaboration Agreements

4 unchanged sentences

Note 14 – Shareholders ’ Equity

The Company had 100.0 million ordinary shares authorized for issuance as of June 30, 2024 and December 31, 2023 .

The Company had 41.2 million and 32.5 million ordinary shares issued and outstanding as of June 30, 2024 and December 31, 2023 , respectively.

The Company had 100.0 million ordinary shares authorized for issuance as of September 30, 2024 and December 31, 2023 .

The Company had 42.2 million and 32.5 million ordinary shares issued and outstanding as of September 30, 2024 and December 31, 2023 , respectively.

Each ordinary share is entitled to one vote.

5 unchanged sentences

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

The remaining capacity under the ATM Sales Agreement was approximately $ 27.3 million as of June 30, 2024.

The remaining capacity under the ATM Sales Agreement was approximately $ 27.3 million as of September 30, 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.

8 unchanged sentences

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.

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

Cohen is the Chair and Chief Investment Officer of Monograph.

6 unchanged sentences

In addition, the Underwriters were granted an option exercisable for 30 days, to purchase up to 921,428 additional shares at the public offering price, less the underwriting discounts and commissions.

On July 18, 2024, the Company completed the closing of the sale of 921,428 additional shares in the offering following the exercise in full of the Underwriters’ option to purchase additional shares, which resulted in additional gross proceeds to the Company of $ 16.1 million before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company of $ 1.0 million.

On July 18, 2024, the Company completed the closing of the sale of 921,428 additional shares in the offering following the exercise in full of the Underwriters’ option to purchase additional shares, which resulted in additional gross proceeds to the Company of $ 16.1 million before deducting underwriting discounts and commissions and offering expenses paid by the Company of $ 1.0 million.

Note 15 – Share-Based Compensation

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On October 12, 2018, the Company increased the number of ordinary shares authorized for issuance under the 2017 Plan by 1,900,000 shares 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 of 400,000 shares to a total share reserve of 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 of 400,000 shares to a total share reserve of 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 of 400,000 shares to a total share reserve of 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 of 450,000 shares to a total share reserve of 5,200,167 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 shares to a total share reserve of 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 shares to a total share reserve of 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 shares to a total share reserve of 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 shares to a total share reserve of 5,200,167 shares.

On August 6, 2024 the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 800,000 shares to a total of 6,000,167 shares.

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

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In December 2021, the Board approved an increase to the number of shares authorized for issuance under the Inducement Plan of 300,000 shares.

In June 2024, the Board approved an increase to the number of shares authorized for issuance under the Inducement Plan of 600,000 shares to a total share reserve of 1,800,000 shares.

As of June 30, 2024 , 4,149,388 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 364,517 ordinary shares remain available for future awards.

In June 2024, the Board approved an increase to the number of shares authorized for issuance under the Inducement Plan of 600,000 shares to a total of 1,800,000 shares.

As of September 30, 2024 , 3,961,302 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 1,853,992 ordinary shares remain available for future awards.

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Research and development expenses

$ 594 $ 496 $ 1,112 $ 1,021

Selling, general and administrative expenses

2,966 1,726 5,204 3,487

Total share-based compensation expense

$ 3,560 $ 2,222 $ 6,316 $ 4,508

The total unrecognized compensation cost of options and RSUs at June 30, 2024 is $ 18.4 million with a weighted average recognition period of 2.01 years.

The total unrecognized compensation cost of options and RSUs at September 30, 2024 is $ 15.1 million with a weighted average recognition period of 1.82 years.

Note 16 – Income Taxes

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is taxed under Israeli tax laws.

As of June 30, 2024 , the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of September 30, 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 2023, 2022 and 2021, and for the six months ended June 30, 2024 .

The Company has cumulative global pretax losses for the years ended 2023, 2022 and 2021, and for the nine months ended September 30, 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 $ 3.2 million as of June 30, 2024 , 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 September 30, 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 June 30, 2024 , the Company’s liability for uncertain tax positions includes $ 1.2 million of accrued interest and penalties.

As of September 30, 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.

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Note 17 – Related Parties

There were no related party transactions for the six months ended June 30, 2024 or 2023.

There were no related party transactions for the nine months ended September 30, 2024.

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

Note 18 – Commitments and Contingencies

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

The Company’s maximum exposure under these arrangements is unknown as of June 30, 2024 and December 31, 2023.

The Company’s maximum exposure under these arrangements is unknown as of September 30, 2024 and December 31, 2023.

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

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 .

(“Teva”), a Paragraph IV Certification Notice Letter dated February 20, 2024, providing notification that Teva submitted an abbreviated new drug application ("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.

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

The Company stipulated to the dismissal of Teva Pharmaceutical Industries, Ltd.

without prejudice and the action continues against the other two Teva entities.

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.

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The arrangement includes cash severance, a pro rata portion of the target annual bonus for calendar year 2024, and partial acceleration of share-based compensation.

The Company recognized $ 0.5 million within selling, general and administrative expenses during the six months ended June 30, 2024 in relation to this arrangement.

The Company recognized $ 1.1 million within selling, general and administrative expenses during the nine months ended September 30, 2024 in relation to this arrangement.

See Note 11 for further discussion regarding lease commitments.

Note 19 – Subsequent Events

On July 18, 2024, the Company completed the sale of an additional 921,428 ordinary shares in its underwritten public offering pursuant to the exercise in full of the Underwriters’ option to purchase additional shares, which resulted in additional gross proceeds to the Company from the offering of $ 16.1 million before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company of $ 1.0 million.

See Note 14 – Shareholders’ Equity for further discussion.

On October 7, 2024, the Company entered into a separation and consulting agreement with Don Kim, pursuant to which Mr.

Kim resigned from his positions as the Company’s Chief Financial Officer, principal financial officer and principal accounting officer, effective October 8, 2024.

The arrangement includes cash severance and target annual bonus for calendar year 2024 of approximately $ 0.5 million, which will be recognized in the fourth quarter of 2024, as well as a post-separation consulting arrangement.

Kim's outstanding share-based awards will remain eligible for continued vesting during the post-separation consulting period.

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

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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.

If approved, UGN-102 may become the first FDA-approved medicine for low-grade intermediate risk NMIBC.

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 82,000, of which approximately 23,000 are estimated to be newly diagnosed and 59,000 are estimated to be recurrent patients.

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

If approved, UGN-102 would become the first U.S.

Food and Drug Administration ("FDA") approved medicine for low-grade intermediate risk NMIBC.

We estimate that the annual treatable population of low-grade intermediate risk NMIBC is approximately 82,000, of which approximately 23,000 are estimated to be newly diagnosed and 59,000 are estimated to be recurrent patients.

We estimate that the total addressable market opportunity for UGN-102 in low-grade intermediate risk NMIBC is potentially over $5.0 billion, assuming an expected pricing range of $16,000 to $19,000 per dose.

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We estimate that around 35% of patients will experience an adverse event within 90 days of undergoing a TURBT, and patients who have had two to four procedures have an estimated 14% greater risk of death than patients who have only had one procedure.

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.

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

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

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

On April 15, 2020, the U.S.

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.

On April 15, 2020, the 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.

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

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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).

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

Low-grade UTUC is a rare cancer that develops in the lining of the upper urinary tract, which consists of the kidneys and ureters.

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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 each of 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.

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

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

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

However, we did not observe this trend in 2024 and therefore cannot say with confidence whether this seasonality trend will continue in future periods.

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

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UGN-102 is administered locally using the standard practice of intravesical instillation directly into the bladder via a urethral 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 in an operating room and may require an overnight stay.

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

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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 we submitted in January 2024.

Based on our agreement with the FDA, we expect to complete the submission of the rolling NDA for UGN-102 in the third quarter of 2024, with a potential FDA acceptance in the fourth quarter of 2024 and potential FDA approval in the first quarter of 2025 (assuming priority review) or the second quarter of 2025 (assuming standard review).

On June 13, 2024, we announced positive secondary endpoint DOR data from the Phase 3 ENVISION trial investigating UGN-102 for intravesical solution in patients with low-grade intermediate risk NMIBC.

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The ENVISION trial demonstrated a similar safety profile to that observed in the OPTIMA II and ATLAS trials, with treatment-emergent adverse events typically mild-to-moderate in severity.

In August 2024, we completed the submission of the rolling NDA for UGN-102.

In October 2024, the FDA accepted our NDA for UGN-102 (mitomycin) for intravesical solution and assigned a Prescription Drug User Fee Act ("PDUFA") goal date of June 13, 2025.

We anticipate, and are preparing for, an FDA advisory committee meeting.

We expect to receive notification from the FDA in early 2025 regarding such meeting.

If approved, UGN-102 would become the first FDA-approved medicine for the treatment of low-grade intermediate-risk NMIBC.

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

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(“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.

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

We have initiated a Phase 3 clinical study to support the NDA for UGN-103 in low-grade intermediate risk NMIBC, and plan to enroll approximately 87 patients.

The first patients are expected to be dosed in the third quarter of 2024, with full enrollment anticipated by the first half of 2025.

An NDA filing is projected for the first half of 2026, followed by a standard review period and potential approval and, if approved, the commercial launch in the first half of 2027.

We also plan to initiate a Phase 3 trial of UGN-104 in low-grade UTUC early next year.

In April 2024, we announced that the FDA accepted our Investigational New Drug Application ("IND") for UGN-103 and we initiated our Phase 3 UTOPIA trial, a single-arm, multicenter study that will evaluate the efficacy and safety of UGN-103 in low-grade intermediate risk NMIBC.

We plan to enroll 87 patients in the UTOPIA trial, with patients receiving 75 mg of UGN-103 via intravesical instillation once a week for six weeks.

Efficacy will be assessed by the complete response rate at the three-month visit.

Patients who have a complete response at the three-month visit, defined as having no detectable disease in the bladder, will enter the follow-up period of the study.

Patients will remain on study until disease recurrence, disease progression, death, or the last patient completes 12 months of follow-up (i.e., 15 months after the first instillation), whichever occurs first.

In October 2024, we announced the first patient dosed in the UTOPIA trial.

An NDA submission is projected for the first half of 2026, followed by a standard review period and potential approval and, if approved, the commercial launch in the first half of 2027.

We also plan to initiate a Phase 3 trial of UGN-104 in low-grade UTUC in early 2025.

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.

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

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

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

Enrollment of patients in this arm investigating the combination of UGN-301 and gemcitabine is complete.

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

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

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

We are investigating these combinations to determine if they may 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.

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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.

Safety and dosing data from the first arm evaluating UGN-301 as monotherapy are expected in late 2024.

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 enrollment is nearing completion.

Safety and dosing data from the first arm evaluating UGN-301 as monotherapy will be presented in late 2024.

Research and Development and License Agreements

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Components of Operating Results

During the three and six months ended June 30, 2024, we recognized $21.8 million and $40.6 million of revenue, respectively from sales of our product, Jelmyto .

During the three and nine months ended September 30, 2024, we recognized $25.2 million and $65.8 million of revenue, respectively, from sales of our product, Jelmyto .

Cost of Revenue

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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

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

UGN-102, UGN-103, UGN-104 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.

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Results of Operations

Comparison of the three months ended June 30, 2024 and 2023

The following table sets forth our results of operations for the three months ended June 30, 2024 and 2023.

Three Months Ended June 30,

Comparison of the three months ended September 30, 2024 and 2023

The following table sets forth our results of operations for the three months ended September 30, 2024 and 2023.

Three Months Ended September 30,

(in thousands)

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Income tax expense

Revenue was $21.8 million and $21.1 million for the three months ended June 30, 2024 and 2023, respectively.

The increase in revenue of $0.7 million primarily reflects the increased volume of sales of Jelmyto .

Revenue was $25.2 million and $20.9 million for the three months ended September 30, 2024 and 2023, respectively.

The increase in revenue of $4.3 million primarily reflects the increased volume of sales of Jelmyto, including CREATES Act sales of $2.6 million in the third quarter of 2024, compared to $1.1 million of CREATES Act sales in the third quarter of 2023.

The increase in volume of sales of Jelmyto was partially offset by higher revenue reserves primarily driven by estimated Medicare refunds for discarded drugs.

Cost of Revenue

Cost of revenue was $2.2 million and $2.4 million for the three months ended June 30, 2024 and 2023, respectively.

The decrease of $0.2 million is primarily attributable to certain nonrecurring payments made in connection with our supply arrangement in the prior year.

Cost of revenue was $2.5 million and $2.4 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $0.1 million is primarily attributable to the increased volume of sales of Jelmyto, partially offset by certain nonrecurring payments made in connection with our supply arrangement in the prior year.

Research and Development Expenses

Research and development expenses were $15.4 million and $11.6 million for the three months ended June 30, 2024 and 2023, respectively.

The increase of $3.8 million is primarily attributable to higher costs related to manufacturing of UGN-102 which are recognized within research and development expenses prior to our product candidates receiving FDA approval 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 and costs related to the research into ingredient scale-up and production efficiency for Jelmyto .

Research and development expenses were $11.4 million and $10.2 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $1.2 million is primarily attributable to higher costs related to the initiation of the Phase 3 UTOPIA trial for UGN-103, partially offset by lower UGN-102 clinical trial costs and costs related to the research into ingredient scale-up and production efficiency for Jelmyto .

Selling and Marketing Expenses

Selling and marketing expenses were $18.9 milli on and $13.9 million for the three months ended June 30, 2024 and 2023 , respectively.

The increase in selling and marketing expenses of $5.0 million is primarily attributable to UGN-102 brand marketing costs as well as an increase in overall commercial operation costs including meetings, conferences, and trainings.

Selling and marketing expenses were $17.8 milli on and $12.6 million for the three months ended September 30, 2024 and 2023 , respectively.

The increase in selling and marketing expenses of $5.2 million is primarily attributable to UGN-102 brand marketing costs as well as an increase in overall commercial operation costs related to the planned expansion of the sales force and incentive compensation, meetings, conferences, and trainings.

General and Administrative Expenses

General and administrative expenses were $11.2 million and $8.6 million for the three months ended June 30, 2024 and 2023 , respectively.

The increase in general and administrative expenses of $2.6 million is primarily attributable to higher compensation expenses, legal and compliance activities, pre-commercialization marketing communication expenses related to UGN-102, third-party advisory services, and ongoing managed services.

General and administrative expenses were $11.2 million and $9.2 million for the three months ended September 30, 2024 and 2023 , respectively.

The increase in general and administrative expenses of $2.0 million is primarily attributable to higher compensation expenses, expenses related pre-commercialization readiness support related to UGN-102, general third-party advisory services, and ongoing managed services.

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $5.8 million and $5.3 million for the three months ended June 30, 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.

Financing on prepaid forward obligation was $5.9 million and $5.5 million for the three months ended September 30, 2024 and 2023, respectively.

The increase in financing on prepaid forward obligation of $0.4 million was driven primarily by changes in underlying assumptions for remeasuring the effective rate.

Interest Expense on Long-term Debt

Interest expense was $3.5 million and $3.8 million for the three months ended June 30, 2024 and 2023, respectively.

Interest expense was $2.7 million and $3.8 million for the three months ended September 30, 2024 and 2023, respectively.

The decrease of $1.1 million was primarily attributable 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 $1.7 million and $0.4 million for the three months ended June 30, 2024 and 2023, respectively.

Interest and other income, net was $2.6 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $1.7 million in interest and other income, net was primarily due to higher cash and investment balances.

Comparison of the six months ended June 30, 2024 and 2023

The following table sets forth our results of operations for the six months ended June 30, 2024 and 2023.

Six Months Ended June 30,

Comparison of the nine months ended September 30, 2024 and 2023

The following table sets forth our results of operations for the nine months ended September 30, 2024 and 2023.

Nine Months Ended September 30,

(in thousands)

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Income tax expense

Revenue was $40.6 million and $38.3 million for the six months ended June 30, 2024 and 2023, respectively.

The increase in revenue of $2.3 million primarily reflects the increased volume of sales of Jelmyto .

Revenue was $65.8 million and $59.2 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase in revenue of $6.6 million primarily reflects the increased volume of sales of Jelmyto, including CREATES Act sales of $2.8 million for the nine months ended September 30, 2024, compared to $2.0 million of CREATES Act sales in same period in 2023.

Cost of Revenue

Cost of revenue was $4.0 million and $4.7 million for the six months ended June 30, 2024 and 2023, respectively.

The decrease of $0.7 million is primarily attributable to certain nonrecurring payments made in connection with our supply arrangement in the prior year, lower shipping and warehousing costs, and decrease in the Jelmyto unit cost.

Cost of revenue was $6.4 million and $7.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Research and Development Expenses

Research and development expenses were $30.9 million and $24.1 million for the six months ended June 30, 2024 and 2023, respectively.

The increase of $6.8 million is primarily attributable to higher manufacturing costs, which are recognized as research and development expense prior to our product candidates receiving FDA approval, and regulatory related expense 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 and costs related to the research into ingredient scale-up and production efficiency for Jelmyto .

Research and development expenses were $42.3 million and $34.3 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $8.0 million is primarily attributable to higher manufacturing costs, which are recognized as research and development expense prior to our product candidates receiving FDA approval, and regulatory related expense in connection with UGN-102 as well as research and development expenses, in connection with the Phase 3 UTOPIA trial for UGN-103, partially offset by lower UGN-102 clinical trial costs and costs related to the research into ingredient scale-up and production efficiency for Jelmyto .

Selling and Marketing Expenses

Selling and marketing expenses were $36.0 milli on and $28.1 million for the six months ended June 30, 2024 and 2023 , respectively.

The increase in selling and marketing expenses of $7.9 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.

Selling and marketing expenses were $53.8 milli on and $40.7 million for the nine months ended September 30, 2024 and 2023 , respectively.

The increase in selling and marketing expenses of $13.1 million is primarily attributable to UGN-102 brand marketing costs as well as an increase in overall commercial operation costs including compensation, advisory, meetings, conferences, trainings and software costs.

General and Administrative Expenses

General and administrative expenses were $21.4 million and $18.9 million for the six months ended June 30, 2024 and 2023 , respectively.

The increase in general and administrative expenses of $2.5 million is primarily attributable to higher compensation expenses, legal and compliance activities, marketing communication expenses related to UGN-102, third-party advisory services, and ongoing managed services, partially offset by lower professional services .

General and administrative expenses were $32.5 million and $28.1 million for the nine months ended September 30, 2024 and 2023 , respectively.

The increase in general and administrative expenses of $4.4 million is primarily attributable to higher compensation expenses, communication expenses related to UGN-102, third-party advisory services, and ongoing managed services .

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $11.4 million and $10.6 million for the six months ended June 30, 2024 and 2023, respectively.

Financing on prepaid forward obligation was $17.3 million and $16.0 million for the nine months ended September 30, 2024 and 2023, respectively.

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Interest Expense on Long-term Debt

Interest expense was $5.9 million and $7.3 million for the six months ended June 30, 2024 and 2023, respectively.

Interest expense was $8.6 million and $11.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The decrease of $2.5 million 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 $3.3 million and $1.0 million for the six months ended June 30, 2024 and 2023, respectively.

Interest and other income, net was $5.9 million and $1.9 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $4.0 million in interest and other income, net was primarily due to higher cash and investment balances.

Liquidity and Capital Resources

As of June 30, 2024, we had $241.3 million in cash and cash equivalents and marketable securities.

As of September 30, 2024, we had $254.2 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.

Through June 30, 2024, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangements with RTW and Pharmakon.

Through September 30, 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 TD 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 December 2019, we entered into the ATM Sales Agreement with TD Securities (USA) LLC (f/k/a Cowen and Company, LLC) (“TD 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 us after deducting sales commissions to TD Cowen were approximately $54.7 million.

The remaining capacity under the ATM Sales Agreement was approximately $27.3 million as of June 30, 2024.

We did not sell any ordinary shares under the ATM Sales Agreement in the three months ended September 30, 2024.

The remaining capacity under the ATM Sales Agreement was approximately $27.3 million as of September 30, 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.

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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.

The third tranche of $25.0 million was funded in September 2024.

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

Securities Purchase Agreement

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On July 18, 2024, we completed the closing of the sale of 921,428 additional shares in the offering following the exercise in full of the Underwriters’ option to purchase additional shares, which resulted in additional gross proceeds of $16.1 million before deducting underwriting discounts and commissions and estimated offering expenses of $1.0 million.

We have incurred losses since our inception and negative cash flows from our operations, and as of June 30, 2024 we had an accumulated deficit of $744.4 million.

We have incurred losses since our inception and negative cash flows from our operations, and as of September 30, 2024 we had an accumulated deficit o f $768.7 million.

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

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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.

Based on our cash, cash equivalents and marketable securities as of June 30, 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.

Based on our cash, cash equivalents and marketable securities as of September 30, 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 may need to raise additional capital in the future.

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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 $1.3 million as of June 30, 2024.

The total obligation for future minimum lease payments under our operating leases is $1.1 million as of September 30, 2024.

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

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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 third tranche of $25.0 million was funded in September 2024.

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 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 by June 30, 2025.

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

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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.

On June 26, 2024, we entered into a Separation Agreement with Jeff Bova, the Company’s former Chief Commercial Officer, which sets forth the terms of Mr.

On June 26, 2024, we entered into a separation agreement with Jeff Bova, our former Chief Commercial Officer, which sets forth the terms of Mr.

Bova's termination of employment, effective as of September 30, 2024.

The arrangement includes cash severance, a pro rata portion of the target annual bonus for calendar year 2024, and partial acceleration of share-based compensation.

We recognized $0.5 million during the six months ended June 30, 2024 in relation to this arrangement.

We recognized $1.1 million during the nine months ended September 30, 2024 in relation to this arrangement.

On October 7, 2024, we entered into a separation and consulting agreement with Don Kim, pursuant to which Mr.

Kim resigned from his positions as our Chief Financial Officer, principal financial officer and principal accounting officer, effective October 8, 2024.

The arrangement includes cash severance and target annual bonus for calendar year 2024 of approximately $0.5 million, which will be recognized in the fourth quarter of 2024, as well as a post-separation consulting arrangement.

Kim's outstanding share-based awards will remain eligible for continued vesting during the post-separation consulting period.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $55.5 million during the six months ended June 30, 2024, compared to $46.1 million during the six months ended June 30, 2023.

The $9.4 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.

Net cash used in operating activities was $83.1 million during the nine months ended September 30, 2024, compared to $63.4 million during the nine months ended September 30, 2023.

The $19.7 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.

Investing Activities

Net cash provided by investing activities was $25.5 million during the six months ended June 30, 2024, compared to net cash provided by investing activities of $10.0 million during the six months ended June 30, 2023.

The net change of $15.5 million is attributable primarily to less reinvestment of marketable securities in 2024 as compared to 2023.

Net cash used in investing activities was $81.2 million during the nine months ended September 30, 2024, compared to net cash provided by investing activities of $10.4 million during the nine months ended September 30, 2023.

The net change of $91.6 million is attributable primarily to additional investment in marketable securities in 2024 as compared to 2023.

Financing Activities

Net cash provided by financing activities was $155.0 million during the six months ended June 30, 2024, compared to $0.8 million during the six months ended June 30, 2023.

The increase of $154.2 million is attributable primarily to proceeds from the issuance of ordinary shares under the ATM Sales Agreement and underwritten public offering.

Net cash provided by financing activities was $194.5 million during the nine months ended September 30, 2024, compared to $116.9 million during the nine months ended September 30, 2023.

The increase of $77.6 million is attributable primarily to proceeds from the issuance of ordinary shares under the ATM Sales Agreement, the underwritten public offering and the issuance of debt related to the third tranche of the Pharmakon loan.

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