UroGen Pharma Ltd. 10-K

Item 8. Financial Statements and Supplementary Data UroGen Pharma Ltd. Index to financial statements Pages Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 75 Consolidated Balance Sheets 76 Consolidated Statements of Operations and Comprehensive Loss 77 Consolidated Statements of Shareholders’ Deficit 78 Consolidated Statements of Cash Flows 79 Notes to Consolidated Financial Statements 80 74 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of UroGen Pharma Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of UroGen Pharma Ltd. and its subsidiary (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of shareholders' deficit and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition - Gross Revenue from Product Sales As described in Notes 1, 3 and 12 to the consolidated financial statements, product sales from the Company’s commercial products, Jelmyto and Zusduri, are recognized as revenue at the transaction price when the specialty distributors obtain control of the Company’s products, which occurs at a point in time, typically upon delivery of the product to the treating physician or mixing pharmacy. All product sales of Jelmyto and Zusduri are recognized through the Company's arrangements with two customers as defined by ASC 606, both of which are third-party national specialty distributors. Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customers, 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. The Company’s consolidated net revenue was $109.8 million for the year ended December 31, 2025, of which gross revenue from product sales represented a majority. The principal consideration for our determination that performing procedures relating to revenue recognition for gross revenue from product sales is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing the Company’s reconciliation of gross revenue recognized from product sales to third-party information, (ii) evaluating reconciling items, as applicable, (iii) confirming sales terms with the Company’s customers, (iv) confirming a sample of outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining cash receipts from customers or purchase orders, invoices and proof of delivery, and (v) evaluating a sample of gross revenue transactions by obtaining and inspecting source documents, including the customer contract, purchase orders, invoices, proof of delivery, cash remittances, and bank statements, as applicable. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey March 2, 2026 We have served as the Company’s auditor since 2020. 75 Table of Contents UROGEN PHARMA LTD. CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts and par value) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 110,745 $ 171,987 Marketable securities 9,711 64,698 Restricted cash 1,350 1,076 Accounts receivable, net 33,082 20,302 Inventories 16,464 9,227 Prepaid expenses and other current assets 14,672 8,845 Total current assets 186,024 276,135 Non-current assets: Property and equipment, net 637 655 Restricted deposit 177 176 Right-of-use assets 8,456 3,134 Marketable securities — 5,022 Other non-current assets 5,161 589 Total Assets $ 200,455 $ 285,711 Liabilities and Shareholders' Deficit Current liabilities: Accounts payable and accrued expenses $ 27,717 $ 27,431 Employee related accrued expenses 13,516 10,570 Other current liabilities 5,185 7,948 Total current liabilities: 46,418 45,949 Non-current liabilities: Prepaid forward obligation 127,276 121,387 Long-term debt 122,210 121,734 Long-term lease liabilities 6,122 1,653 Uncertain tax positions liability 3,903 3,791 Total Liabilities 305,929 294,514 Commitments and Contingencies (Note 20) Shareholders' Deficit: Ordinary shares, NIS 0.01 par value; 100,000,000 shares authorized at December 31, 2025 and 2024; 48,350,272 and 42,231,746 shares issued and outstanding as of December 31, 2025 and 2024, respectively 133 115 Additional paid-in capital 854,090 797,248 Accumulated deficit ( 959,716 ) ( 806,222 ) Accumulated other comprehensive income 19 56 Total Shareholders' Deficit ( 105,474 ) ( 8,803 ) Total Liabilities and Shareholders' Deficit $ 200,455 $ 285,711 The accompanying notes are an integral part of these consolidated financial statements. 76 Table of Contents UROGEN PHARMA LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 Revenue $ 109,788 $ 90,398 Cost of revenue 12,447 8,881 Gross profit 97,341 81,517 Operating expenses: Research and development expenses 67,107 57,145 Selling, general and administrative expenses 155,097 121,154 Operating loss ( 124,863 ) ( 96,782 ) Financing on prepaid forward obligation ( 18,503 ) ( 23,411 ) Interest expense on long-term debt ( 15,345 ) ( 12,521 ) Interest and other income, net 5,295 8,672 Loss before income taxes ( 153,416 ) ( 124,042 ) Income tax expense ( 78 ) ( 2,832 ) Net Loss $ ( 153,494 ) $ ( 126,874 ) Statements of Comprehensive Loss Net loss $ ( 153,494 ) $ ( 126,874 ) Other comprehensive loss Unrealized income (loss) on investments ( 37 ) 44 Comprehensive Loss $ ( 153,531 ) $ ( 126,830 ) Net loss per ordinary share - basic and diluted $ ( 3.19 ) $ ( 2.96 ) Weighted average number of shares outstanding used in computation of basic and diluted loss per ordinary share 48,116,098 42,876,737 The accompanying notes are an integral part of these consolidated financial statements. 77 Table of Contents UROGEN PHARMA LTD. CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ DEFICIT (in thousands, except share amounts) Ordinary Shares Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Number of Shares Amount Amounts Balance as of December 31, 2023 32,490,119 $ 89 $ 614,035 $ ( 679,348 ) $ 12 $ ( 65,212 ) Changes during 2024 Exercise of options into ordinary shares 419,731 1 320 321 Share-based compensation 13,108 13,108 Issuance of pre-funded warrants, net of issuance costs 18,641 18,641 Issuance of ordinary shares, net of issuance costs 9,321,896 25 151,144 151,169 Other comprehensive income 44 44 Net loss ( 126,874 ) ( 126,874 ) Balance as of December 31, 2024 42,231,746 $ 115 $ 797,248 $ ( 806,222 ) $ 56 $ ( 8,803 ) Changes during 2025 Exercise of options into ordinary shares 750,202 2 1,970 1,972 Share-based compensation 11,959 11,959 Conversion of pre-funded warrants into ordinary shares 3,206,271 9 ( 6 ) 3 Issuance of ordinary shares, net of issuance costs 2,162,053 7 42,919 42,926 Other comprehensive loss ( 37 ) ( 37 ) Net loss ( 153,494 ) ( 153,494 ) Balance as of December 31, 2025 48,350,272 $ 133 $ 854,090 $ ( 959,716 ) $ 19 $ ( 105,474 ) The accompanying notes are an integral part of these consolidated financial statements. 78 Table of Contents UROGEN PHARMA LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 Cash Flows From Operating Activities Net loss $ ( 153,494 ) $ ( 126,874 ) Adjustment to reconcile net loss to net cash from operating activities: Depreciation and amortization 307 329 Accrued financing on prepaid forward obligation 2,865 15,077 Accretion on marketable securities ( 1,875 ) ( 2,891 ) Share-based compensation 11,959 13,108 Amortization (accretion) of discount on long-term debt 476 ( 1,305 ) Amortization of right-of-use assets 2,104 857 Acquisitions of IPR&D 3,128 — Changes in operating assets and liabilities: Inventory ( 7,237 ) ( 3,554 ) Accounts receivable, net ( 12,780 ) ( 4,859 ) Prepaid expenses and other current assets ( 5,827 ) 1,436 Other non-current assets ( 4,572 ) 1,449 Accounts payable and accrued expenses 286 10,893 Employee related accrued expenses 2,946 ( 244 ) Other current liabilities ( 202 ) 200 Lease liabilities ( 639 ) ( 1,034 ) Restricted deposit ( 1 ) 49 Uncertain tax positions 112 597 Net cash used in operating activities ( 162,444 ) ( 96,766 ) Cash Flows From Investing Activities Purchases of marketable securities ( 77,400 ) ( 128,023 ) Maturities of marketable securities 139,247 107,705 Purchases of property and equipment ( 289 ) ( 295 ) Net cash provided by (used in) investing activities 61,558 ( 20,613 ) Cash Flows From Financing Activities Principal payments on finance leases ( 1,855 ) — Proceeds from exercise of options into ordinary shares 1,972 321 Proceeds from issuance of long-term debt, net of issuance costs — 24,488 Proceeds from pre-funded warrant issuance, net of issuance costs — 18,641 Proceeds from ordinary shares issuances, net of issuance costs 39,801 151,169 Net cash provided by financing activities 39,918 194,619 Increase (Decrease) in Cash and Cash Equivalents ( 60,968 ) 77,240 Cash, Cash Equivalents and Restricted Cash at Beginning of Year 173,063 95,823 Cash, Cash Equivalents and Restricted Cash at End of Year $ 112,095 $ 173,063 Supplemental Disclosures of Non-Cash Activities Right-of-use assets obtained in exchange for new operating and finance lease liabilities $ 7,427 $ 2,321 Acquisitions of IPR&D $ 3,128 $ — The accompanying notes are an integral part of these consolidated financial statements. 79 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 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, developing, securing regulatory approval of and commercializing Zusduri (mitomycin) for intravesical solution, formerly known as UGN- 102, and raising capital to support and expand these activities. On April 15, 2020, the U.S. Food and Drug Administration (“FDA”) granted 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 the Company's 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. On June 12, 2025 , the FDA approved Zusduri, the first and only FDA-approved medication for adults with recurrent low-grade intermediate risk non-muscle invasive bladder cancer (“low-grade intermediate risk NMIBC”). Zusduri consists of mitomycin and sterile hydrogel, uses the Company’s proprietary sustained release RTGel technology, and is delivered directly into the bladder in an out-patient procedure by a trained healthcare professional using a urinary catheter to enable the treatment of tumors by non-surgical means. Note 2 – Basis of Presentation The Company has experienced net losses since its inception and had an accumulated deficit of $ 959.7 million and $ 806.2 million as of December 31, 2025 and 2024 , respectively. The Company expects to incur losses and have negative net cash flows from operating activities as it executes its strategy, including the ongoing commercial launch of Zusduri , the continued commercialization of Jelmyto , and engaging in further research and development activities. The success of the Company depends on its ability to successfully commercialize its technologies to support its operations and strategic plan. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of UPL and its wholly owned subsidiary UPI. All material intercompany balances and transactions have been eliminated during consolidation. 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 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 produce cash inflows from Jelmyto and Zusduri product sales, the rate of physician and patient adoption of Zusduri and the Company's ability to raise additional capital to fund its operations in the future. Based on the Company's cash and cash equivalents and marketable securities as of December 31, 2025, 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. If the Company is unable to generate sufficient cash inflows from Jelmyto and Zusduri product sales, the Company may need to raise additional capital in the future or reduce operating expenditures. 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, reduce or terminate the Company's product development, commercialization efforts or other operations. Note 3 – Significant Accounting Policies Principles of Consolidation The Company’s consolidated financial statements include the accounts of UPL and its subsidiary, UPI. Intercompany balances and transactions have been eliminated during consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results may differ from those estimates. As applicable to the consolidated financial statements, the critical accounting estimates relate to the fair value of share-based compensation, measurement of revenue, estimate of uncertain tax positions, and measurement of liabilities accounted for under the interest method. 80 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Functional Currency The U.S. 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. Accordingly, transactions in currencies other than the Dollar are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. 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 consolidated statements of operations as “Interest and other income, net.” Cash and Cash Equivalents; Marketable Securities The Company presents all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. 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 $ 120.5 million as of December 31, 2025. 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 accumulated other comprehensive income (loss) within the consolidated statements of shareholders’ deficit. Realized gains and losses are recorded as a component of interest and other income, net. The cost of securities sold is based on the specific-identification method. Certain short-term investments are valued using models or other valuation methodologies that use Level 2 inputs. 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. The Company records impairment relating to credit losses through an allowance for credit losses, limited by the amount that the fair value is less than the amortized cost basis. Impairment that has not been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes. Restricted cash is related primarily to cash held to secure corporate credit cards; restricted deposits are related to cash held to secure leases. Concentration of Credit Risk 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. government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer. The Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation and concentrated within a limited number of financial institutions. The accounts are monitored by management to mitigate the risk. The Company’s accounts receivables are composed of net sales of Jelmyto and Zusduri arising from the Company's arrangements with two customers, both of which are third -party national specialty distributors. The Company assesses the need for an allowance for doubtful accounts primarily based on creditworthiness, historical payment experience and general economic conditions. The Company has not experienced any credit losses related to arrangements with customers and has not currently recognized any allowance for doubtful accounts. 81 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Income Taxes The Company provides for income taxes based on pretax income, if any, and applicable tax rates available in the various jurisdictions in which it operates, including Israel and the United States. Deferred taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. The Company follows a two -step approach in recognizing and measuring uncertain tax positions. After concluding that a particular filing position can be recognized (i.e., has a more-likely-than- not chance of being sustained), ASC 740 - 10 - 30 - 7 requires that the amount of benefit recognized be measured using a methodology based on the concept of cumulative probability. Under this methodology, the amount of benefit recorded represents the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with a taxing authority that has full knowledge of all relevant information. See Note 18 for further discussion related to income taxes. Inventory 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 both Jelmyto and Zusduri , the Company commenced capitalization of inventory at the receipt of FDA approval. Costs related to inventories that are not expected to be manufactured and sold within the next 12 months are classified as long-term assets and presented within "Other non-current assets" on the consolidated balance sheets. 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. Property and Equipment Property and equipment are recorded at historical cost, net of accumulated depreciation, amortization and, if applicable, impairment charges. The Company reviews its property and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Property and equipment are depreciated over the following useful lives (in years): Useful Lives Computers and software 3 Laboratory equipment 3 - 6.5 Furniture 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. See Note 8 for further discussion regarding property and equipment. Prepaid Forward Obligation 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 Zusduri in return for tiered, future cash payments based on net sales of Jelmyto and Zusduri , and, subject to FDA approval, UGN- 103 and UGN- 104. 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 consolidated balance sheets. 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. Long-Term Debt 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 consolidated balance sheets. The Company recognizes capitalized financing expenses as a direct offset to the long-term debt on the Company's consolidated balance sheets, and amortizes them over the term of the debt using the effective interest method. See Note 10 for further discussion related to long-term debt. Leases The Company is a lessee in several noncancelable operating and finance leases, primarily for office space, office equipment and vehicles. The Company accounts for leases in accordance with ASC Topic 842, “Leases.” The Company determines if an arrangement is a lease at inception. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease. Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Certain adjustments to the ROU assets may be required for items such as initial direct costs paid or incentives received. Operating and finance lease ROU assets are presented as right-of-use assets on the consolidated balance sheets. The current portion of lease liabilities is included in other current liabilities and the long-term portion is presented separately as long-term lease liabilities on the consolidated balance sheets. 82 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Lease expense for operating leases is recognized on a straight-line basis over the lease term. For finance leases, the expense consists of interest on the lease liability and amortization of the ROU assets. 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 selling, general and administrative expenses in the consolidated statements of operations. The Company has elected the practical expedient to not separate between lease and non-lease components. The Company’s lease terms may include options to extend the lease. The lease extensions are included in the measurement of the ROU assets and lease liability when it is reasonably certain that it will exercise that option. Because the implicit rates of return on the Company’s leases are not readily determinable, the Company uses an incremental borrowing rate, based on the information available at the commencement date, to determine 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 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. Revenue Net revenue from product sales is recognized at the transaction price when the specialty distributors obtain control of the Company’s products, which occurs at a point in time, typically upon delivery of the product to the treating physician or mixing pharmacy. All product sales of Jelmyto and Zusduri are recognized through the Company's arrangements with two customers as defined by ASC 606, both of which are third -party national specialty distributors. Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customers, 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 contractual or statutory terms governing the arrangements and the Company’s historical experience. Research and Development Expenses Research and development costs are expensed as incurred and consist primarily of the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and development activities, including nonclinical studies, clinical trials, manufacturing costs and professional services. The costs of services performed by others in connection with the research and development activities of the Company, including research and development conducted by others on behalf of the Company, are included in research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from its external service providers. The Company adjusts its accrual as actual costs become known. Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when such development milestone results are probable of being achieved. When a transaction accounted for as an asset acquisition includes in-process research and development (“IPR&D”), the IPR&D asset is only capitalized as an intangible asset if it is determined to have an alternative future use other than in a particular research and development project. Otherwise, acquired IPR&D is recognized as research and development expenses in the period the transaction is closed. 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 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. Share-Based Compensation 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. PSUs that include both a performance condition and a service condition are subject to graded vesting, and the related compensation cost is recognized on a straight-line basis over the requisite service period for each separately vesting tranche. 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 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 The Company issued pre-funded warrants in connection with both a private placement transaction and a public offering 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 applicable issuance date using a relative fair value allocation method. The Company valued the pre-funded warrants at the applicable issuance date, concluding that their sales price approximated their fair value, and allocated the net sales proceeds from the applicable equity transaction proportionately to the ordinary shares and pre-funded warrants. Net Loss per Ordinary Share Basic net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if the potential ordinary shares had been issued and if the additional ordinary shares were dilutive. For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share as their effect is anti-dilutive. Such potentially dilutive securities consist solely of outstanding restricted share units and stock options issued under the Company’s share-based compensation plans. See Note 17 Share-based Compensation for more information. The Company’s pre-funded warrants require 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.” 83 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the calculation of basic and diluted loss per ordinary share for the periods presented (in thousands, except share and per share amounts): Year Ended December 31, 2025 2024 Basic and diluted: Loss attributable to equity holders of the Company $ ( 153,494 ) $ ( 126,874 ) Weighted-average number of ordinary shares 48,116,098 42,876,737 Loss per ordinary share $ ( 3.19 ) $ ( 2.96 ) Recently Adopted or Issued Accounting Pronouncements 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 requires enhanced disclosures related to income tax rate reconciliations, including specified additional information and further disaggregation of reconciling items that meet a quantitative threshold. ASU 2023 - 09 also requires disaggregation of income taxes paid by federal, state, and foreign jurisdictions, with additional disaggregation for significant individual jurisdictions. The Company adopted ASU 2023 - 09 effective for the year ended December 31, 2025 using a retrospective approach. Prior-period income tax disclosures have been recast to conform to the current-year presentation. The adoption of ASU 2023 - 09 impacted the Company’s income tax disclosures but did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows. In November 2024, the FASB issued Accounting Standards Update No. 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ) ("ASU 2024 - 03" ), which provides guidance to improve the disclosures about a public business entity’s expenses. Public entities must adopt the new guidance for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the potential impact of the adoption of ASU 2024 - 03 on the Company’s financial disclosures. In July 2025, the FASB issued Accounting Standards Update No. 2025 - 05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025 - 05” ), which clarifies the application of the current expected credit losses (CECL) model under ASC 326 to current accounts receivable and contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The guidance, which is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, and will be adopted prospectively, is intended to provide consistency in estimating expected credit losses for short-term receivables and contract assets. The Company does not expect the adoption of ASU 2025 - 05 to have a material impact on its consolidated financial position, results of operations, or cash flows as the Company’s trade receivables primarily arise from product sales recognized at a point in time and are due from two large, established customers, both of which are third -party national specialty distributors, with short payment terms. 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. N OTE 4 – o THER f INANCIAL I NFORMATION Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 December 31, 2024 Accounts payable $ 12,137 $ 10,931 Accrued sales reserves 6,493 5,151 Accrued clinical expenses 2,364 2,027 Accrued research and development expenses 886 2,173 Accrued selling, general and administrative expenses 3,903 6,000 Accrued other expenses 1,934 1,149 Total accounts payable and accrued expenses $ 27,717 $ 27,431 Interest and Other Income, Net Interest and other income, net consisted of the following for the year ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Interest income $ 5,965 $ 8,901 Other loss, net ( 670 ) ( 229 ) Total interest and other income, net $ 5,295 $ 8,672 N OTE 5 – I NVENTORIES Inventories consisted of the following as of December 31, 2025 and December 31, 2024 (in thousands): December 31, 2025 December 31, 2024 Raw materials (1) $ 11,042 $ 4,924 Finished goods 5,422 4,522 Total inventories $ 16,464 $ 9,446 ( 1 ) No raw materials were included as other non-current assets on the consolidated balance sheets at December 31, 2025. $ 0.2 million of raw materials are included within other non-current assets on the consolidated balance sheets at December 31, 2024. These raw materials are not expected to be manufactured and sold within the next 12 months. Changes in non-current inventories are reflected on the consolidated statements of cash flows within the caption of other non-current assets. N OTE 6 – F AIR V ALUE M EASUREMENTS 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. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. 84 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As a basis for considering such assumptions, a three -tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. 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. Level 3: 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. 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. Based on a reasonable range of yields for debt instruments of similar tenor in a similar industry, the Company determined that the carrying value of the long-term debt on the Company's balance sheet approximates its fair value. 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 December 31, 2025 are as follows (in thousands): Fair Value Measurements Using Quoted Prices Significant in Active Other Balance as of Markets for Observable December 31, Identical Assets Inputs 2025 (Level 1) (Level 2) Assets: Cash equivalents Money market funds $ 39,618 $ 39,618 $ — Marketable securities Corporate bonds 6,058 — 6,058 Commercial paper 1,695 — 1,695 Certificates of deposit 1,958 — 1,958 Total marketable securities $ 9,711 $ — $ 9,711 Total assets at fair value $ 49,329 $ 39,618 $ 9,711 Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2024 are as follows (in thousands): Fair Value Measurements Using Quoted Prices Significant in Active Other Balance as of Markets for Observable December 31, Identical Assets Inputs 2024 (Level 1) (Level 2) Assets: Cash equivalents Money market funds $ 41,008 $ 41,008 $ — Marketable securities U.S. government 26,053 26,053 — Corporate bonds 14,980 — 14,980 Commercial paper 26,622 — 26,622 Certificates of deposit 2,065 — 2,065 Total marketable securities $ 69,720 $ 26,053 $ 43,667 Total assets at fair value $ 110,728 $ 67,061 $ 43,667 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 December 31, 2025 and 2024 . 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 – I nvestments The following table summarizes the Company’s investments as of December 31, 2025 (in thousands): Amortized Cost Basis Unrealized Gains Unrealized Losses Fair Value Assets: Cash equivalents Money market funds $ 39,618 $ — $ — $ 39,618 Marketable securities Corporate bonds 6,043 15 — 6,058 Commercial paper 1,693 2 — 1,695 Certificates of deposit 1,956 2 — 1,958 Total marketable securities $ 9,692 $ 19 $ — $ 9,711 Total assets at fair value $ 49,310 $ 19 $ — $ 49,329 85 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the Company’s investments as of December 31, 2024 ( in thousands): Amortized Cost Basis Unrealized Gains Unrealized Losses Fair Value Assets: Cash equivalents Money market funds $ 41,008 $ — $ — $ 41,008 Marketable securities U.S. government 26,019 34 — 26,053 Corporate bonds 14,966 15 ( 1 ) 14,980 Commercial paper 26,608 15 ( 1 ) 26,622 Certificates of deposit 2,071 — ( 6 ) 2,065 Total marketable securities $ 69,664 $ 64 $ ( 8 ) $ 69,720 Total assets at fair value $ 110,672 $ 64 $ ( 8 ) $ 110,728 The Company classifies its investments as available-for-sale, and they consist entirely of debt securities. As of December 31, 2025 , the amortized cost of investments included an immaterial amount of accrued interest. As of December 31, 2025 , 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 December 31, 2025 , the Company did not hold any investments in an unrealized loss position. Accordingly, no allowance for credit losses was recorded during the period. In accordance with the Company’s general investment strategy, the Company does not intend to sell the investments before maturity. The Company believes the cost basis of its marketable securities was recoverable in all material respects as of December 31, 2025 . The Company’s investments as of December 31, 2025 mature at various dates through September 2026. The fair values of investments by contractual maturity consist of the following (in thousands): December 31, 2025 December 31, 2024 Maturities within one year $ 49,329 $ 105,706 Maturities after one year through three years — 5,022 Total investments $ 49,329 $ 110,728 N OTE 8 – P ROPERTY AND E QUIPMENT Property and equipment, consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 2024 Laboratory equipment $ 504 $ 473 Computer equipment and software 2,799 2,542 Furniture 612 612 Leasehold improvements 626 626 Manufacturing equipment 683 683 5,224 4,936 Less: accumulated depreciation and amortization ( 4,587 ) ( 4,281 ) Property and equipment, net $ 637 $ 655 Depreciation and amortization expense was $ 0.3 million and $ 0.3 million for the years ended December 31, 2025 and 2024 , respectively. NOTE 9 – Prepaid Forward Obligation 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 Zusduri . 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, subject to FDA approval, 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 twelve months ended December 31, 2025 for annual net sales up to $ 200 million was 13.0 %. RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of Zusduri and, subject to FDA approval, 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. 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 December 31, 2025, the cumulative amounts paid and payable by the Company were $ 47.4 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 , Zusduri , 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. 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 expenses. The Company is not contractually obligated, nor does it anticipate making any repayments of the original $ 75.0 million received to RTW 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, 2025 and 2024 (in thousands): Carrying value of prepaid forward obligation as of December 31, 2023 $ 109,722 Financing on prepaid forward obligation 23,411 Amounts paid and payable (1) ( 11,746 ) Carrying value of prepaid forward obligation as of December 31, 2024 121,387 Financing on prepaid forward obligation 18,503 Amounts paid and payable (1) ( 12,614 ) Carrying value of prepaid forward obligation as of December 31, 2025 $ 127,276 ( 1 ) $ 3.4 million and $ 6.5 million of the Amounts paid and payable are included as the current portion of the prepaid forward obligation within other current liabilities on the consolidated balance sheets as of December 31, 2025 and December 31, 2024 , respectively. 86 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 "2022 Loan Agreement"). 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 accrued interest using a benchmark rate of three -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, which replaced the 2022 Loan Agreement, with Pharmakon for an additional third and fourth tranche of senior secured loan (the “2024 Loan Agreement”). The third tranche of $ 25.0 million was funded in September 2024. The fourth tranche of $ 75.0 million became available at the Company's option no later than August 29, 2025, based upon having received FDA approval of a new drug application (“NDA”) for Zusduri by June 30, 2025. The Company did not draw down the fourth tranche. Under the 2024 Loan Agreement, prior to the refinancing described in the immediately following paragraph, all outstanding loans accrued interest using a benchmark rate of three -month SOFR plus 7.25 % plus an additional adjustment of 0.26161 %. On February 26, 2026, the Company entered into a second amended and restated loan agreement, which replaced the 2024 Loan Agreement, with Pharmakon providing for a senior secured term loan facility of up to $ 250.0 million, consisting of two tranches (the “2026 Loan Agreement”). The first tranche of $ 200.0 million refinanced the Company's term loan facility under the 2024 Loan Agreement which had $ 125.0 million of outstanding principal, with the remaining proceeds available for general corporate purposes and working capital. The second tranche of $ 50.0 million may, at the Company's option, be requested no later than June 30, 2027 for a funding to occur no later than August 29, 2027, subject to customary conditions. All outstanding loans with Pharmakon pursuant to the 2026 Loan Agreement accrue interest at a fixed rate of 8.25 %. The principal amount of the loans outstanding under the 2026 Loan Agreement shall be repayable in four equal quarterly payments commencing in the first quarter of 2030. The Company may prepay the full outstanding principal amount of the loans whole at the Company's discretion at any time, together with accrued but unpaid interest thereon and subject to prepayment premiums, make-whole amounts, as applicable, and fees. The obligations of UroGen Pharma, Inc., as the borrower under the 2026 Loan Agreement, are guaranteed by UroGen Pharma Ltd., subject to customary limitations on parent guarantees under Israeli law, and are secured by substantially all of the tangible and intangible assets and property, including intellectual property, of UroGen Pharma, Inc. and UroGen Pharma Ltd., subject to certain exceptions. The Company incurred financing expenses of $ 4.2 million related to the first and second tranches under the 2022 Loan Agreement funded in 2022, and $ 0.5 million related to the third tranche funded in 2024 under the 2024 Loan Agreement, which are recognized as a direct offset to the long-term debt on the Company's 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 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: Carrying value of Pharmakon loan as of December 31, 2023 $ 98,551 Third tranche of Pharmakon loan 25,000 Capitalized costs and discounts ( 512 ) Interest expense 12,521 Amounts paid ( 13,826 ) Carrying value of Pharmakon loan as of December 31, 2024 121,734 Interest expense 15,345 Amounts paid ( 14,869 ) Carrying value of Pharmakon loan as of December 31, 2025 $ 122,210 The aggregate principal maturities of long-term debt as of December 31, 2025 are as follows, in thousands: Principal Payments 2026 $ — 2027 93,750 2028 31,250 2029 — 2030 — Thereafter — Total $ 125,000 N OTE 11 – L eases Operating Leases The Company had the following office and laboratory facility leases during the periods covered by this report: • 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, and, effective as of June 2025, was renewed through September 2028. The Company's remaining contractual obligation under this lease is approximately $ 1.0 million as of December 31, 2025 . • 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 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. 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. In August 2025, the Company signed an additional lease extension for the Princeton office, extending the term of the lease through April 30, 2031. The Company concluded that the lease renewal option in the agreement is not reasonably certain to be exercised. The modification did not result in a separate lease under ASC 842. As a result, the Company remeasured its lease liability and corresponding right-of-use asset using its incremental borrowing rate at the modification date. The Company’s remaining contractual obligation under this lease is approximately $ 3.0 million as of December 31, 2025 . Finance Leases • In July 2024, UPI entered into a new master lease agreement for vehicles, primarily for use by employees in sales, field services, and roles that require regular travel. Under the terms of the master lease agreement, the Company will lease various vehicles from time to time with an initial lease term of 48 months commencing on the delivery date of the vehicle with an option to continue month-to-month for an unlimited period of time. Lease payments are fixed, with payments due monthly in advance, and include charges for depreciation, maintenance, and other related services. At the end of each lease term, the Company is required to make a terminal rental adjustment based on the difference between the vehicle’s contractual book value and its estimated wholesale value, which may result in additional payments or refunds. The Company may also be required to pay additional rent if the vehicle exceeds certain mileage limits or shows abnormal wear and tear during the lease term. The Company’s remaining contractual obligation relating to the leases entered into under this master agreement is approximately $ 5.9 million as of December 31, 2025 . 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 2026 through 2031, with varying renewal and termination options. The components of lease cost for the year ended December 31, 2025 and 2024 were as follows (in thousands): Year Ended December 31, 2025 Year Ended December 31, 2024 Finance lease cost: Amortization of right-of-use assets $ 1,356 $ 36 Interest on lease liabilities 576 20 Operating lease cost 932 900 Sublease income - ( 42 ) Variable lease cost 65 70 $ 2,929 $ 984 The amounts recognized as of December 31, 2025 and 2024 were as follows (in thousands): Year Ended December 31, 2025 Year Ended December 31, 2024 Finance lease right-of-use assets $ 5,376 $ 2,285 Operating lease right-of-use assets 3,080 849 Finance long-term lease liabilities 3,475 1,595 Operating long-term lease liabilities 2,646 58 Other current liabilities related to finance leases 1,274 745 Other current liabilities related to operating leases 481 785 As of December 31, 2025 , no impairment losses have been recognized. Supplemental information related to leases for the periods reported is as follows (in thousands, except for lease terms and discount rate amounts): Year Ended December 31, 2025 Year Ended December 31, 2024 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 1,855 $ — Operating cash flows from operating leases $ 914 $ 933 Right-of-use assets obtained in exchange for new finance lease liabilities $ 4,445 $ 2,321 Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,982 $ — Weighted-average remaining lease term of finance leases (in years) 2.32 3.94 Weighted-average remaining lease term of operating leases (in years) 4.52 1.02 Weighted-average discount rate of finance leases 13.97 % 13.82 % Weighted-average discount rate of operating leases 11.81 % 10.24 % 87 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2025 , maturities of lease liabilities were as follows (in thousands): Finance Leases Years ending December 31, 2026 $ 1,852 2027 1,852 2028 1,808 2029 396 Total future minimum lease payments 5,908 Less: Interest ( 1,158 ) Present value of lease liabilities $ 4,750 Operating Leases Years ending December 31, 2026 $ 818 2027 960 2028 878 2029 603 2030 and there after 819 Total future minimum lease payments 4,078 Less: Interest ( 951 ) Present value of lease liabilities $ 3,127 N OTE 12 – R EVENUE F ROM P RODUCT S ALES Net product sales consist of the following for the year ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 Year Ended December 31, 2024 Jelmyto $ 93,989 $ 90,398 Zusduri 15,799 — Total Revenue $ 109,788 $ 90,398 All product sales of Jelmyto and Zusduri are recognized through the Company's arrangements with two customers as defined by ASC 606, both of which are third -party national specialty distributors. The Company's largest customer comprises approximately 76 % and over 90 % of product sales for the twelve months ended December 31, 2025 and 2024, respectively. The Company's largest customer comprises approximately 59 % and 80 % of accounts receivables at December 31, 2025 and 2024, respectively. Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customers including rebates that may be offered from time to time, 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. The Company does not anticipate any Medicare refunds for discarded drug for Zusduri . The Company estimates these elements of variable consideration based on the contractual or statutory terms governing the arrangements and the Company’s historical experience, and constrains the net revenue recognized for product sales to the value that is not probable to be reversed when the uncertainty associated with the variable consideration is subsequently resolved. Reserves for chargebacks and returns are net settled and recognized as contra accounts receivable while the remaining reserves are recognized within other current liabilities on the consolidated balance sheets. The following table shows the activity with respect to sales reserves for the year ended December 31, 2025 and 2024 , in thousands: Reserves related to government sponsored programs Medicare refunds for discarded drug reserve Other reserves Total accrued sales reserves Balance as of December 31, 2023 $ 1,062 $ 3,451 $ 1,458 $ 5,971 Changes during 2024 Accruals 13,870 3,920 11,273 29,063 Utilizations ( 13,822 ) — ( 10,785 ) ( 24,607 ) Changes to prior period estimates ( 223 ) $ 358 — 135 Balance as of December 31, 2024 $ 887 $ 7,729 $ 1,946 $ 10,562 Changes during 2025 Accruals 17,237 3,969 12,938 34,144 Utilizations ( 16,594 ) $ ( 7,262 ) ( 11,035 ) ( 34,891 ) Changes to prior period estimates — ( 414 ) — ( 414 ) Balance as of December 31, 2025 $ 1,530 $ 4,022 $ 3,849 $ 9,401 88 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS N OTE 13 – L ICENSE AND C OLLABORATION A GREEMENTS Agenus Agreement 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 was in Phase 1 clinical development for high-grade NMIBC. In November 2025, the Company provided notice to terminate the license agreement with Agenus in connection with its decision to discontinue development of UGN- 301. Under the terms of the license agreement, following notice of termination, the agreement will terminate upon the later of (a) the expiration of a 180 -day notice period; or (b) completion of all wind-down activities and delivery of all Agenus Improvements (as defined in the license agreement) to Agenus. The Company does not expect to incur significant additional costs related to this program going forward. N OTE 14 – E MPLOYEE R IGHTS U PON R ETIREMENT In Israel, the Company is required by law to make severance payments upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company operates a number of post-employment defined contribution plans. A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes fixed payments to a separate and independent entity so that the Company has no legal or constructive obligation to pay additional contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The fund assets are not included in the Company’s financial position. The Company operates pension and severance compensation plans subject to Section 14 of the Israeli Severance Pay Law, 5723 - 1963. The plans are funded through payments to insurance companies or pension funds administered by trustees. In accordance with its terms, the plans meet the definition of a defined contribution plan, as defined above. 89 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS N OTE 15 – ACQUISITIONS On February 14, 2025 ( the “Closing Date”), the Company entered into an Asset Purchase Agreement (as amended, the “Agreement”) with IconOVir Bio, Inc. (“IconOVir”), pursuant to which the Company purchased and acquired certain assets of IconOVir (the “Transferred Assets”), including the product candidate ICVB- 1042 and certain contracts, intellectual property rights, regulatory applications, submissions and registrations, and data and other rights related thereto, and assumed certain liabilities and obligations of IconOVir arising under certain contracts of IconOVir acquired by the Company. As consideration for the Transferred Assets and subject to the terms and conditions of the Agreement, on the Closing Date the Company (i) issued 374,843 ordinary shares of the Company (the “Company Shares”) to IconOVir, which represented a purchase price of $ 4.0 million divided by the volume-weighted average closing price of the Company Shares on The Nasdaq Stock Market over the 30 consecutive trading days ending on (and including) the trading day immediately prior to the Closing Date, (ii) agreed to pay IconOVir a one -time payment of $ 15.0 million in cash upon the achievement of a cumulative aggregate worldwide net sales milestone for all products, including combination products, that incorporate or comprise ICVB- 1042 (“ICVB Products”), (iii) agreed to pay IconOVir a low, single-digit percentage royalty, on an ICVB Product-by-ICVB Product basis, on the annual, worldwide net sales of such ICVB Product during the royalty term, subject to certain reductions as set forth in the Agreement, and (iv) agreed to assume certain immaterial liabilities arising under certain acquired contracts ((i), (ii), (iii), and (iv) collectively, the “Purchase Price”). Entities affiliated with Arie Belldegrun, M.D., the Chair of the Board of Directors of the Company, held certain promissory notes of IconOVir at the time, that may entitle such entities to receive, in the aggregate, approximately 28.3 % of the Purchase Price paid to IconOVir pursuant to the Agreement. The Company evaluates acquisitions of assets and other similar transactions to assess whether the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. The cost of an asset acquisition is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any contingent consideration in an asset acquisition is recognized only when amounts are both probable and estimable, at which point the consideration is allocated to the assets acquired on a relative fair value basis. Based on the Company's assessment of the value of the assets acquired as well as consideration of the inputs, processes and outputs, the Company concluded that this represented an asset acquisition. When a transaction accounted for as an asset acquisition includes IPR&D, the IPR&D asset is only capitalized as an intangible asset if it is determined to have an alternative future use other than in a particular research and development project. Otherwise, amounts allocated to the IPR&D are recognized as research and development expenses in the period. The Company accounted for the acquisition of the Transferred Assets from IconOVir as an asset acquisition. The Company determined the fair value of the consideration transferred was $ 3.1 million, which represented the fair value of the unregistered shares at issuance date. Given the early-stage nature of such assets and level of further development necessary to produce an output, the Company recognized the cost of the acquisition as a research and development expense during the twelve months ended December 31, 2025. N OTE 16 – S HAREHOLDERS ’ E QUITY The Company had 100.0 million ordinary shares authorized for issuance as of December 31, 2025 and 2024 . The Company had 48.4 million and 42.2 million ordinary shares issued and outstanding as of December 31, 2025 and 2024 , 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 the Company's inception, the Board has not declared any dividends. ATM Sales Agreement In December 2019, the Company entered into a sales agreement (the “ATM Sales Agreement”) with TD Securities (USA) LLC (f/k/a Cowen and Company, LLC) (“TD Cowen”), pursuant to which the Company may from time to time offer and sell its ordinary shares having an aggregate offering price of up to $ 100.0 million, to or through TD Cowen, acting as sales agent or principal, in any manner deemed to be an “at-the-market offering.” During the first quarter of 2024, the Company sold 3,400,468 ordinary shares under the ATM Sales Agreement for net proceeds to the Company of approximately $ 54.7 million after deducting sales commissions to TD Cowen of up to 3 %. During the third quarter of 2025, the Company sold 416,248 ordinary shares under the ATM Sales Agreement for net proceeds to the Company of approximately $ 8.0 million after deducting sales commissions to TD Cowen of up to 3 %. In November 2025, the Company amended the ATM Sales Agreement to remove the aggregate offering price limit of $ 100.0 million and filed a registration statement on Form S- 3 providing for the offer and sale of ordinary shares pursuant to the ATM Sales Agreement having an aggregate offering price of up to $ 75.0 million, which became effective automatically (the “ATM Prospectus”). Following the amendment, during the fourth quarter of 2025, the Company sold 1,370,962 ordinary shares pursuant to the ATM Prospectus for net proceeds of approximately $ 31.8 million after deducting sales commissions to TD Cowen of up to 3 %. As of December 31, 2025, the remaining capacity under the ATM Prospectus was approximately $ 42.4 million. 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 exercise of 1,599,840 pre-funded warrants for the purchase of ordinary shares of the Company. On January 24, 2025, the Company issued 3,206,271 ordinary shares upon exercise of 3,206,271 pre-funded warrants for the purchase of ordinary shares of the Company. As of December 31, 2025, 472,665 pre-funded warrants from the Purchase Agreement remain outstanding. Monograph Capital Partners I, L.P. (“Monograph”), a life sciences venture firm that is affiliated with Fred Cohen, M.D., purchased 1,572,327 of the Shares in the Private Placement, for an aggregate purchase price of $ 15.0 million. Dr. Cohen was a director of the Company and the Chair and Chief Investment Officer of Monograph at the time of purchase. Underwritten Public Offering On June 17, 2024, the Company entered into an underwriting agreement with TD Securities (USA) LLC and Guggenheim Securities, LLC, as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the issuance and sale in a public offering of 5,000,000 ordinary shares of the Company for $ 17.50 per share and pre-funded warrants to purchase 1,142,857 ordinary shares of the Company for $ 17.499 per pre-funded warrant. The offering closed on June 20, 2024. The gross proceeds to the Company from this closing of the offering were $ 107.5 million, before deducting underwriting discounts and commissions and offering expenses paid by the Company of $ 7.3 million. Each pre-funded warrant has an exercise price of $ 0.001 per ordinary share, subject to customary adjustments, is exercisable at any time 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. As of December 31, 2025, all 1,142,857 pre-funded warrants remain outstanding. 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 offering expenses paid by the Company of $ 1.0 million. N OTE 17 – S HARE- B ASED C OMPENSATION In October 2010, the Board approved a share option plan (the “2010 Plan”) for grants to Company employees, consultants, directors, and other service providers. Subsequently, in March 2017, the Board adopted the 2017 Equity Incentive Plan (the "2017 Plan" and, together with the 2010 Plan, the "Plans"), which was approved by the shareholders in April 2017. 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 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 are 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. 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 Company also grants PSUs to certain employees. The PSUs granted during 2023 vested upon U.S. regulatory approval of Zusduri . The PSUs granted in 2024 vested upon the achievement of the first commercial sale of Zusduri in the United States following receipt of U.S. regulatory approval. The PSUs granted in 2025 vest based on both performance and service conditions, with one - third of each award vesting upon the filing of financial statements reflecting the achievement of a cumulative net product sales target and with one - third vesting on January 31 st of each of the next two calendar years following such achievement, subject to continued service on each vesting date. In June 2024, the Company amended certain RSU and PSU awards granted to its chief executive officer to defer vesting until the end of 2025. In December 2025, the Company further amended certain RSU and PSU awards granted to its chief executive offer to defer vesting until the end of 2026. The Company accounted for the modifications as Type I probable-to-probable modifications under ASC 718. As the modifications did not result in any incremental fair value at the modification dates, the Company continues to recognize the original grant-date fair value ratably over the original service period or expected performance period. 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 shares to a total share reserve of 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 shares to a total share reserve of 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 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 share reserve of 6,000,167 shares. On August 26, 2025, the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 2,750,000 shares to a total share reserve of 8,750,167 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. 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 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 December 31, 2025, 4,348,248 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans and 3,425,913 ordinary shares remain available for future awards. 90 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Options granted: Set forth below are grants made by the Company as of December 31, 2025 . The majority of options vest over three years and expire on the tenth anniversary of the date of grant. During 2025, the Company granted 122,500 options with exercise prices ranging from $ 11.52 to $ 19.50 per share. The weighted average fair value of options granted during 2025 and 2024 was $ 1.6 million and $ 2.5 million, respectively. The total unrecognized compensation cost of options as of December 31, 2025 was $ 2.2 million, which is expected to be recognized over a weighted average period of 1.2 years. The fair value of options granted was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: 2025 2024 Value of ordinary shares $ 11.52 - 19.50 $ 13.11 - 15.16 Dividend yield 0 % 0 % Expected volatility 73.01 %- 87.22 % 81.00 %- 89.12 % Risk-free interest rate 4.15 %- 4.26 % 3.61 %- 4.42 % Expected term (in years) 6.0-10 years 6.0-10 years 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 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. The following table summarizes the number of employee and non-employee options outstanding under the Plans for the years ended December 31, 2025 and 2024 , and related information: Number of options Weighted average exercise price per share Weighted average remaining contractual life Aggregate intrinsic value (in thousands) Outstanding as of December 31, 2024 2,611,843 $ 24.65 5.80 $ 1,092 Granted 122,500 16.08 Forfeited ( 120,667 ) 24.26 Exercised ( 192,822 ) 10.23 Outstanding as of December 31, 2025 2,420,854 $ 25.38 5.14 $ 13,723 Vested and expected to vest, December 31, 2025 2,420,854 $ 25.38 5.14 $ 13,723 Exercisable, December 31, 2025 2,100,275 $ 27.24 4.64 $ 10,453 91 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The intrinsic value of stock options exercised was $ 2.1 million and $ 0.2 million for the years ended December 31, 2025 and 2024 , respectively. The following table summarizes information about RSU activity as of December 31, 2025 : Outstanding Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding as of December 31, 2024 1,507,828 $ 13.84 Granted 1,123,946 11.68 Vested and released ( 557,380 ) 12.84 Forfeited ( 147,000 ) 12.76 Outstanding as of December 31, 2025 1,927,394 $ 12.95 The fair value of RSUs granted during 2025 and 2024 was $ 13.1 million and $ 14.5 million, respectively. The total unrecognized compensation cost of RSUs as of December 31, 2025 is $ 14.0 million with a weighted average recognition period of 1.83 years. The following table illustrates the effect of share-based compensation on the Statements of Operations (in thousands): Year ended December 31, 2025 2024 Research and development expenses $ 2,324 $ 2,235 Selling, general and administrative expenses 9,635 10,873 Total share-based compensation expense $ 11,959 $ 13,108 92 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS N OTE 18 – I NCOME T AXES The Company is taxed under Israeli tax laws: Corporate tax rate The applicable Israeli tax rate relevant to the Company for 2024 and thereafter is 23 %. For financial reporting purposes, the (benefit) expense for current income taxes consists of the following (in thousands): 2025 2024 Current taxes: U.S. Federal $ 196 $ 2,206 U.S. State ( 118 ) 626 Total current taxes $ 78 $ 2,832 Cash taxes paid Total cash taxes paid during 2025 and 2024 totaled approximately $ 3.0 million and $ 1.8 million, respectively, which related entirely to foreign jurisdictions (U.S. Federal and U.S. states). No individual U.S. states comprised more than 5% of total cash taxes paid in 2025. In 2024, cash taxes paid to the state of New Hampshire comprised approximately 6.3 % of total cash taxes paid. Deferred income taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company and its subsidiary deferred tax assets are as follows (in thousands): December 31, 2025 2024 In respect of: Net operating loss carryforward $ 153,354 $ 122,944 Research and development expenses 20,028 26,231 Stock-based compensation 13,254 12,441 Accrued expenses 2,973 2,371 Interest expense 6,054 2,630 In-process research and development 527 815 Lease Liabilities 1,741 683 Issuance costs 107 221 Other 2,364 988 Total deferred tax assets 200,402 169,324 Less—valuation allowance ( 198,448 ) ( 168,555 ) Deferred tax assets, net of valuation allowance 1,954 769 Right-of-use asset ( 1,898 ) ( 725 ) Depreciation of fixed assets ( 56 ) ( 44 ) Total deferred tax liabilities ( 1,954 ) ( 769 ) Net deferred tax assets $ — $ — The change in valuation allowance for the years ended December 31, 2025 and 2024 were as follows (in thousands): 2025 2024 Balance at the beginning of the year $ ( 168,555 ) $ ( 143,566 ) Changes during the year ( 29,893 ) ( 24,989 ) Balance at the end of the year $ ( 198,448 ) $ ( 168,555 ) The main reconciling items between the statutory tax rates of the Company and the effective rate are nondeductible expenses related to financing on the prepaid forward obligation and share-based compensation, the provision for a full valuation allowance in respect of tax benefits from carryforward tax losses due to the uncertainty of the realization of such tax benefits, utilization of tax credits and expense related to uncertain tax positions. A reconciliation of the Company’s statutory tax rate to effective tax is as follows (in thousands, except statutory rate): December 31, 2025 December 31, 2024 USD thousands Percentage of Pretax Loss USD thousands Percentage of Pretax Loss Loss before income taxes $ ( 153,416 ) $ ( 124,042 ) Statutory rate 23 % 23 % Income tax expense/(benefit) at statutory rate ( 35,286 ) ( 28,530 ) Additional tax (tax saving) in respect of: Foreign tax effects United States Differing tax rate of foreign subsidiaries 605 - 0.39 % 219 - 0.18 % Current and deferred US state taxes 175 - 0.11 % ( 887 ) 0.72 % Tax credits in foreign jurisdictions ( 789 ) 0.51 % ( 510 ) 0.41 % Changes in valuation allowances in foreign jurisdictions 6,792 - 4.43 % 4,893 - 3.94 % Nontaxable or nondeductible items in foreign jurisdictions 1,002 - 0.65 % 1,040 - 0.84 % Changes in unrecognized tax benefits in foreign jurisdictions 112 - 0.07 % 598 - 0.48 % Changes in valuation allowances 23,102 - 15.06 % 20,095 - 16.20 % Nondeductible financing cost on prepaid forward obligation 4,256 - 2.77 % 5,385 - 4.34 % Other nontaxable or nondeductible items 20 - 0.01 % 502 - 0.40 % Other 89 - 0.06 % 27 - 0.02 % Income tax expense $ 78 $ 2,832 93 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Pretax loss for December 31, 2025 and 2024 includes pretax loss from foreign (United States) jurisdictions of $ 35.0 million and $ 11.0 million, respectively. Losses for tax purposes carried forward to future years As of December 31, 2025 and 2024 , the Company had approximately $ 626.7 million and $ 533.9 million of carryforward tax losses, prior to tax effecting, respectively, available to reduce future taxable income without limitation of use in relation to its parent tax jurisdiction, Israel. These carryforward tax losses in Israel can be carried forward indefinitely. As of December 31, 2025, the Company had approximately $ 51.4 million of carryforward tax losses, prior to tax effecting, of United States federal and state carryforward tax losses, which can be carried forward indefinitely. The Internal Revenue Code of 1986, as amended (the “Code”), contains provisions that may limit our use of federal net operating loss carryforwards if significant changes occur in the constructive stock ownership of UroGen Pharma, Inc. In the event it has had an “ownership change” within the meaning of Section 382 of the Code, utilization of its net operating loss carryforwards could be restricted under Section 382 of the Code and similar state provisions. Uncertain tax positions A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): 2025 2024 Unrecognized tax benefits at the beginning of the year $ 1,974 $ 1,974 Gross increases — tax positions in prior period 550 — Gross decreases— tax positions in prior period ( 717 ) — Unrecognized tax benefits at the end of the year $ 1,807 $ 1,974 The liability for uncertain tax positions of $ 3.9 million as of December 31, 2025 is related to transfer pricing between affiliated entities. The uncertain tax positions liability on the consolidated balance sheets includes $ 2.1 million and $ 1.8 million of accrued interest and penalties related to unrecognized tax benefits at December 31, 2025 and December 31, 2024, respectively. The Company recognizes interest accrued and penalties related to uncertain tax positions as a component of income tax expense. If recognized, balances of uncertain tax positions as of December 31, 2025 would affect the Company's effective tax rate. 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. 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. The Company recognizes its gross uncertain tax positions as a long-term liabilities. The Company believes that adequate amounts of tax have been provided in income tax expense for any adjustments that may result from its uncertain tax positions. The current balance of the uncertain tax position relates to tax years for which the statute of limitations will expire within the next 12 months. The Company has received final tax assessments up to and including its 2017 tax year in Israel and 2020 in the US. N OTE 19 – R ELATED P ARTIES See Note 15 for discussion related to an asset purchase in February 2025, which involved a related party. There were no further related party transactions during the twelve months ended December 31, 2025 or 2024. N OTE 20 – C OMMITMENTS AND C ONTINGENCIES 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 December 31, 2025 and 2024 . The Company does not anticipate recognizing any significant losses relating to these arrangements. 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. By written stipulation dated June 11, 2024, Teva Pharmaceutical Industries, Ltd. was dismissed from the action. On May 19, 2025, the Company filed an Amended Complaint, adding U.S. Patent 12,268,745 to the litigation (the “745 Patent”). The U.S. Patent and Trademark Office issued the ‘745 Patent on April 8, 2025, and the Company subsequently added this patent to the Orange Book for JELMYTO. By orders dated February 27, 2025, and June 26, 2025, the court approved the parties’ joint stipulations to remove the Markman hearing and any related claim-construction proceedings from the court’s calendar. This matter is scheduled for a bench trial in October 2026. Following certain stipulations, the case is now styled as UroGen Pharma Ltd. et al. v. Teva Pharmaceuticals, Inc. et al. By order dated January 12, 2026, the court approved the parties’ joint stipulation to dismiss counts I, II, III, and IV of the Company’s Amended Complaint alleging infringement by Teva of U.S. Patent Numbers 9,040,074 and 9,950,069, with prejudice, and to dismiss counts I and II of Teva’s counterclaims seeking declaratory judgment that U.S. Patent Numbers 9,040,074 and 9,950,069 are invalid, as moot. No ANDA may be finally approved by the FDA until the expiration of Orphan Drug Exclusivity covering JELMYTO in April 2027. 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. 94 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Separation Agreements On June 26, 2024, the Company entered into a separation agreement with Jeff Bova, the Company’s former Chief Commercial Officer, which sets forth the terms of Mr. Bova's termination of employment with the Company, 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. The Company recognized $ 1.1 million within selling, general and administrative expenses during the year ended December 31, 2024 in relation to this arrangement. There were no expenses recognized in relation to this arrangement during the year ended December 31, 2025. 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, target annual bonus for calendar year 2024, a post-separation consulting arrangement, and partial acceleration of share-based compensation. The Company recognized $ 0.8 million within selling, general and administrative expenses during the year ended December 31, 2024 in relation to this arrangement. There were no expenses recognized in relation to this arrangement during the year ended December 31, 2025. Leases See Note 11 for further discussion regarding lease commitments. N OTE 21 – Segment Reporting The Company is engaged in the development and commercialization of innovative solutions for the treatment of urothelial and specialty cancers. The Company has a single operating segment and reportable segment focused on these business activities, and its operations are managed on a consolidated basis. The primary revenue source for the segment comes from sales of the Company’s approved products, Jelmyto and Zusduri , primarily conducted in the United States. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer (“CEO”). The CODM assesses performance and allocates resources based on net income or loss, which is the primary measure of performance, as reported in the Consolidated Statements of Operations and Comprehensive Loss. Additionally, net income or loss is used to monitor performance relative to budgeted targets and to evaluate financial performance in relation to the Company’s strategic goals. For additional information, refer to the Consolidated Statements of Operations and Comprehensive Loss for detailed measures of segment revenues, expenses, and profit or loss. Information about significant segment expenses regularly provided to the CODM is as follows (in thousands): Year Ended December 31, 2025 2024 Research and development expenses R&D project materials & services $ 46,150 $ 38,556 Employee compensation 17,286 14,882 Rent, office, utilities & technology 3,047 2,972 Other expenses 624 735 Total research and development expenses $ 67,107 $ 57,145 Selling, general and administrative expenses Employee compensation $ 77,868 $ 59,709 Commercial & medical affairs services 34,747 27,205 Professional services 14,221 14,031 Travel, meetings & conferences 16,383 12,962 Rent, office, utilities & technology 4,979 3,283 Other expenses (1) 6,899 3,964 Total selling, general and administrative expenses $ 155,097 $ 121,154 ( 1 ) Other expenses primarily consist of insurance, sponsorship, grants, other fees and taxes. N OTE 22 – Subsequent events On February 26, 2026, the Company entered into the 2026 Loan Agreement. The first tranche of $ 200.0 million refinanced the Company's existing loan facility with Pharmakon which had $ 125.0 million of outstanding principal, with the remaining proceeds available for general corporate purposes and working capital. The second tranche of $ 50.0 million may be drawn at the Company's option no later than June 30, 2027, subject to customary conditions. All outstanding loans with Pharmakon pursuant to the 2026 Loan Agreement accrue interest at a fixed rate of 8.25 %. The principal amount of the loans outstanding under the 2026 Loan Agreement shall be repayable in four equal quarterly payments commencing in the first quarter of 2030. The Company may prepay the full outstanding principal amount of the loans in whole at the Company's discretion at any time, together with accrued but unpaid interest thereon and subject to prepayment premiums, make-whole amounts, as applicable, and fees. 95 Table of Contents UROGEN PHARMA LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.