What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2020-11-09 · 119 added, 170 removed, 393 unchanged (42% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

September 30, 2020

March 31, 2021

December 31, 2020

12 unchanged sentences

Other non-current assets

Liabilities and Shareholder's equity

Liabilities and Shareholders' Equity

Current liabilities:

5 unchanged sentences

Long-term lease liability

Uncertain tax positions liability

Total Liabilities

3 unchanged sentences

100,000,000 shares

authorized at September 30, 2020 and December 31, 2019;

authorized at March 31, 2021 and December 31, 2020;

and 22,167,791 shares issued and outstanding as

of September 30, 2020 and December 31, 2019, respectively

of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

7 unchanged sentences

in thousands, except share and per share amounts)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cost of revenues

19 unchanged sentences

comprehensive

BALANCE AS OF JUNE 30, 2020

CHANGES DURING THE THREE

MONTHS ENDED SEPTEMBER 30, 2020

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2020

BALANCE AS OF JUNE 30, 2019

CHANGES DURING THE THREE

MONTHS ENDED SEPTEMBER 30, 2019

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2019

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

Ordinary Shares

comprehensive

Balance as of January 1, 2020

CHANGES DURING THE NINE

MONTHS ENDED SEPTEMBER 30, 2020

Changes During the Three

Months Ended March 31, 2020

Exercise of options into ordinary shares

Share-based compensation

Issuance of ordinary shares, net

of issuance expenses

Other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2020

Balance as of March 31, 2020

Balance as of January 1, 2021

CHANGES DURING THE NINE

MONTHS ENDED SEPTEMBER 30, 2019

Changes During the Three

Months Ended March 31, 2021

Exercise of options into ordinary shares

Share-based compensation

Issuance of ordinary shares in public

offering, net of issuance expenses

Other comprehensive income

BALANCE AS OF SEPTEMBER 30, 2019

Other comprehensive loss

Balance as of March 31, 2021

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

2 unchanged sentences

in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows From Operating Activities

1 unchanged sentence

Depreciation and amortization

Amortization/Accretion on marketable securities

Amortization on marketable securities

Stock-based compensation

8 unchanged sentences

Cash Flows From Investing Activities

Change in restricted deposit

Purchase of marketable securities

1 unchanged sentence

Purchases of property and equipment

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash Flows From Financing Activities

Proceeds from exercise of options into ordinary shares

Issuance of ordinary shares, net of issuance expenses

Issuance cost related to at-the-market issuances

1 unchanged sentence

Decrease in Cash and Cash Equivalents

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT

BEGINNING OF THE PERIOD

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT

END OF THE PERIOD

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

Cash, Cash Equivalents and Restricted Cash at End of Period

Supplemental Disclosures of Non-Cash Activities

Non-cash new lease liabilities

Exercise of options

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

7 unchanged sentences

UPL and UPI (together the “Company”) is a bi o pharmaceutical company focused on deve l oping and commercializing novel therapies desi g ned to change the standard of care for urological pathologies.

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, preparing for the commercial launch of our first commercial product, Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN-101, and its product candidate UGN-102, and raising capital to support and expand these activities.

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

On April 15, 2020, the U.S.

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

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

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

3 unchanged sentences

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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.

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

5 unchanged sentences

All material intercompany balances and transactions have been eliminated during consolidation.

The Company has experienced net losses since its inception and has an accumulated deficit of $ 326.0 million and $ 228.0 million as of September 30, 2020 and December 31, 2019, respectively.

The Company expects to incur losses and have negative net cash flows from operating activities as it continues its commercial launch of Jelmyto, and expands its portfolio and engages in further research and development activities, particularly conducting non-clinical studies and clinical trials.

The success of the Company depends on its ability to develop its technologies to the point of FDA approval and subsequent revenue generation and, the Company must raise enough capital to finance these efforts.

Based on management’s cash flow projections, the Company believes that its cash and cash equivalents and marketable securities are sufficient to fund the Company’s planned operations for at least the next 12 months.

However, in the future, the Company may need to raise additional capital to finance the continued operating and capital requirements of the Company.

There can be no assurances that the Company will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs.

If the Company cannot obtain adequate working capital, it may be forced to reevaluate its planned business operations.

The Company has experienced net losses since its inception and has an accumulated deficit of $ 382.4 million and $ 356.5 million as of March 31, 2021 and December 31, 2020, respectively.

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

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

Based on management’s cash flow projections the Company believes that its cash and cash equivalents and marketable securities after the closing of the transaction with RTW Investments (See Note 17 for further discussion) are sufficient to fund the Company’s planned operations for at least the next 12 months.

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

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

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

Note 3 – Significant Accounting Policies

3 unchanged sentences

Use of Estimates

The preparation of financial statements in conformity with GAAP requires man a gement to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of cont i ngent assets and liabilities at the date of the financ i al statements and the reported amounts of revenues and expenses duri n g the reporting period.

The preparation of financial statements in conformity with U.S.

GAAP requires man a gement to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of cont i ngent assets and liabilities at the date of the financ i al statements and the reported amounts of revenues and expenses duri n g the reporting period.

Actual results may differ from those estimates.

As applicable to the unaudited condensed consolidated financi a l statements, the most significant estimates and assumptions relate to the fair value of share-based compensat i on and measurement of revenue.

As applicable to the unaudited condensed consolidated financi a l statements, the critical accounting estimates relate to the fair value of share-based compensat i on, measurement of revenue and estimate of uncertain tax positions.

Functional Currency

3 unchanged sentences

At the balance sheet date, monetary assets and liab i lities that are denominated in currencies other than the Dollar are measured using the official exch a nge rate at the balance sheet date.

The effects of foreign currency re-measurements are recorded in the condensed consolidated statements of operations as “fin a nce ( income) expenses.”

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

Cash and Cash Equivalents;

2 unchanged sentences

Cash and cash equivalents consist primarily 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 $ 125.5 million as of September 30, 2020.

Cash and cash equivalents and marketable securities totaled $ 75.9 million as of March 31, 2021.

The Company classifies its 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”.

27 unchanged sentences

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

As of September 30, 2020, and December 31, 2019, the Company had no t accrued a provision for uncertain tax positions.

See Note 14 for further discussion related to income taxes.

28 unchanged sentences

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.

The Company has lease agreements with lease and non-lease components.

The Company applied the modified retrospective transition method and elected the transition option to use the effective date of January 1, 2019 as the date of initial application (“Transition Date”).

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

2 unchanged sentences

Net revenues recognized include management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to 340b drug pricing programs, Medicaid drug rebate programs, and the Company’s copay assistance program, which are estimated based on industry benchmarking studies as well as the Company’s historical experience.

The Company also derives revenues from its license and supply agreement (the “Allergan/AbbVie Agreement”) with Allergan Pharmaceuticals International Limited (“Allergan”), a wholly owned subsidiary of Allergan plc which is now a part of AbbVie Inc.

Under the Allergan/AbbVie Agreement, the Company granted Allergan an exclusive license to develop, commercialize, and otherwise exploit products that contain reverse thermal hydrogel (“RTGel”) and agreed to supply Allergan with pre-clinical and clinical quantities of the RTGel product, also referred to as the RTGel vials.

The Allergan/AbbVie Agreement contains up-front license fees, future supply fees, development, regulatory, and sales-based milestone payments, and sales-based royalty payments.

Research and Development Expenses

5 unchanged sentences

Selling General and Administrative Expenses

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

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.

10 unchanged sentences

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

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No.

2016-13, Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments, or ASU 2016-13.

ASU 2016-13 requires the Company to measure and recognize expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the Company’s current estimate of credit losses expected to be incurred.

For available-for-sale debt securities with unrealized losses, the standard requires allowances to be recorded through net income instead of directly reducing the amortized cost of the investment under the prior other-than-temporary impairment model.

The Company applied the modified retrospective transition method as of the date of initial application, January 1, 2020, or the Transition Date.

As of September 30, 2020, the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no credit impairments were recognized in the period.

Similarly, the Company estimates minimal current expected credit losses on trade receivables and has not recognized any allowance for doubtful accounts in the period.

Note 4 – Other Financial Information

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020

Accounts payable and accrued expenses consist of the following as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021

December 31, 2020

Accounts payable

Accrued sales reserves

Accrued clinical expenses

4 unchanged sentences

Interest and Other Income (Expenses), Net

Interest and other income (expenses) consisted of the following as of September 30, 2020 and 2019 (in thousands):

Nine Months Ended September 30,

Interest and other income (expenses) consisted of the following as of March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

Interest income

Other finance expenses

Total finance income

Other finance income(expenses)

Total interest and other income

Note 5 – Inventories

Inventories consist of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020

Inventories consist of the following as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021

December 31, 2020

1 unchanged sentence

Finished goods

Total inventories

Note 6 – Fair Value Measurements

9 unchanged sentences

No transfers between levels have occurred during the periods presented.

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2020 are as follows (in thousands):

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of March 31, 2021 are as follows (in thousands):

Fair Value Measurements Using

1 unchanged sentence

Balance as of

September 30,

Identical Assets

2 unchanged sentences

Corporate bonds

Commercial paper

Money market funds (1)

Certificates of deposit

Total marketable securities

Included within cash and cash equivalents on the condensed consolidated balance sheets.

7 unchanged sentences

Corporate bonds

Commercial paper

Money market funds (1)

Certificates of deposit

Total marketable securities

Included within cash and cash equivalents on the condensed consolidated balance sheets.

The Company ’ s marketable securities are valued based on publicly available quoted market prices for identical securities as of September 30, 2020 and December 31, 2019.

The Company ’ s in money market funds are valued based on publicly available quoted market prices for identical securities as of March 31, 2021 and December 31, 2020.

Note 7 – Marketable Securities

The following table summarizes the Company’s marketable securities as of September 30, 2020 (in thousands):

The following table summarizes the Company’s marketable securities as of March 31, 2021 (in thousands):

Marketable securities:

1 unchanged sentence

Corporate bonds

Commercial paper

Money market funds (1)

Certificates of deposit

Total marketable securities

Included within cash and cash equivalents on the condensed consolidated balance sheets.

The Company classifies its marketable securities as available-for-sale and they consist of all debt securities.

The amortized cost basis as of September 30, 2020 includes $ 0.3 million of accrued interest receivable .

As of September 30, 2020, marketable securities were in a net unrealized gain position of $ 0.5 million.

The amortized cost basis as of March 31, 2021 includes $ 0.1 million of accrued interest receivable .

As of March 31, 2021, marketable securities were in a net unrealized gain position of $ 0.1 million.

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

As of September 30, 2020 , the Company did no t hold any marketable securities in an unrealized loss position.

As of March 31, 2021 , the Company did no t hold any marketable securities in an unrealized loss position.

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

As of September 30, 2020, the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no credit impairments were recognized in the period.

The Company’s marketable securities as of September 30, 2020 mature at various dates through February 2022.

As of March 31, 2021, the Company believes the cost basis for its marketable securities were recoverable in all material aspects and no credit impairments were recognized in the period.

The Company’s marketable securities as of March 31, 2021 mature at various dates through February 2022.

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

September 30, 2020

March 31, 2021

December 31, 2020

1 unchanged sentence

Maturities after one year through three years

Total marketable securities

Note 8 – Property and Equipment

Property and equipment, consists of the following as of September 30, 2020 and December 31, 2019 (in thousands):

September 30, 2020

Property and equipment, consists of the following as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021

December 31, 2020

5 unchanged sentences

Property and equipment, net

Depreciation and amortization expenses were $ 0.1 million and $ 0.3 million and $ 0.1 million and $ 0.2 million, for the three and nine months ended September 30, 2020 and 2019, respectively.

Depreciation and amortization expenses were $ 0.2 million and $ 0.1 million for the three months ended March 31, 2021 and 2020, respectively.

Note 9 - Leases

4 unchanged sentences

In September 2017, UPI entered into a new lease agreement for its office space in New York, which the Company previously used as its headquarters.

The lease agreement commenced in October 2017 and terminates in February 2021 .

The Company’s remaining contractual obligation under this lease is approximately $ 0.3 million as of September 30, 2020.

The lease agreement commenced in October 2017 and terminated in February 2021 .

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

1 unchanged sentence

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

The Company’s remaining contractual obligation under this lease is approximately $ 1.0 million as of September 30, 2020.

The Company’s remaining contractual obligation under this lease is approximately $ 0.8 million as of March 31, 2021.

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

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

The remaining rental payments to be received over the lease term is approximately $ 0.8 million as of September 30, 2020 .

The remaining rental payments to be received over the lease term is approximately $ 0.7 million as of March 31, 2021 .

The Company accounts for the sublease as on operating lease in accordance with ASC 842-10-25-2 and ASC 842-10-25-3.

The main lease was considered for impairment and the amount was determined to be immaterial.

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

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 and the lease term is 38 months.

The Company’s remaining contractual obligation under this lease is approximately $ 1.3 million as of September 30, 2020.

The Company’s remaining contractual obligation under this lease is approximately $ 1.0 million as of March 31, 2021.

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

2 unchanged sentences

The Company’s leases expire at various dates from 2021 through 2024 , with varying renewal and termination options.

The components of lease cost for the three and nine months ended September 30, 2020 were as follows (in thousands) :

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

The components of lease cost for the three months ended March 31, 2021 were as follows (in thousands) :

Three Months Ended March 31, 2021

Operating lease cost

1 unchanged sentence

Variable lease cost

The amounts recognized as of September 30, 2020 were as follows (in thousands):

September 30, 2020

The amounts recognized as of March 31, 2021 were as follows (in thousands):

March 31, 2021

Right of use asset

1 unchanged sentence

Other current liabilities

As of September 30, 2020, no impairment losses have been recognized to date.

As of March 31, 2021, no impairment losses have been recognized to date.

Supplemental information related to leases for the periods reported is as follows (in thousands):

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

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

3 unchanged sentences

Weighted-average discount rate of operating leases

As of September 30, 2020 undiscounted cash flows to be received under the Company’s operating sublease on an annual basis was as follows (in thousands):

As of March 31, 2021 undiscounted cash flows to be received under the Company’s operating sublease on an annual basis was as follows (in thousands):

Operating Leases

3 unchanged sentences

Sublease income is recognized net within operating expenses.

Sublease income for the three and nine months ended September 30, 2020 was as follows (in thousands):

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Sublease income for the three months ended March 31, 2021 was as follows (in thousands):

Three Months Ended March 31, 2021

Sublease income from fixed lease payments

Sublease income from variable payments

Note 10 – Revenue From Product Sales

Net product sales consist of the following for the three and nine months ended September 30, 2020 (in thousands):

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Net product sales consist of the following for the three months ended March 31, 2021 (in thousands):

Three Months Ended March 31, 2021

Note 11 – License and Collaboration Agreements

4 unchanged sentences

Allergan is required to use commercially reasonable efforts to develop and commercialize the Licensed Products for overactive bladder in certain major market countries.

The Company will supply Allergan with certain quantities of RTGel for development of Licensed Products through Phase 2 clinical trials using BOTOX together with RTGel in patients with overactive bladder, at Allergan’s request and expense.

Allergan has the right to reduce the next milestone payment if there is a material supply failure from the Company.

Prior to completion of the first Phase 2 clinical trial, Allergan has the right to request that the Company transfers to Allergan the Company’s manufacturing process for RTGel and Allergan will assume the responsibility to manufacture RTGel and Licensed Product for its own development and commercialization activities.

Further, the Company is eligible to receive additional material milestone payments of up to an aggregate of $ 200.0 million upon the successful completion of certain development, regulatory and commercial milestones.

As of September 30, 2020, since inception of the Allergan/AbbVie Agreement the Company has received a total of $ 25.0 million in milestone payments from Allergan.

As of March 31, 2021, since inception of the Allergan/AbbVie Agreement the Company has received a total of $ 25.0 million in milestone payments from Allergan.

Allergan will pay the Company a tiered royalty in the low single digits based on worldwide annual net sales of Licensed Products, subject to certain reductions for the market entry of competing products and/or loss of the Company’s patent coverage of Licensed Products.

1 unchanged sentence

Under the Allergan/AbbVie Agreement, Allergan granted the Company a non-exclusive, sublicensable, fully paid-up, perpetual, worldwide license under any improvements Allergan makes to the composition, formulation, or manufacture of RTGel for the research, development, manufacture and commercialization of any product containing RTGel and any active ingredient (other than a clostridial toxin) for all indications other than indications covered by the agreement and an exclusive, sublicensable, royalty-bearing (in low single digits), perpetual worldwide license under such improvements for use in the prevention or treatment of oncology indications.

In August 2020, the Company announced that the Phase 2 APOLLO trial did not meet the primary endpoint, believed to be the result of BOTOX not effectively permeating the urothelium.

UroGen and AbbVie will continue to explore the use of RTGel with AbbVie’s portfolio of toxin proteins.

In August 2020, the Company announced that the Phase 2 APOLLO trial did not meet the primary endpoint, it is believed to be the result of BOTOX not effectively permeating the urothelium.

The Company is continuing to explore the potential use of RTGel in combination with other products in AbbVie’s portfolio.

Agenus Agreement

1 unchanged sentence

AGEN1884 is an anti-CTLA-4 antagonist that is currently being evaluated by Agenus as a monotherapy in PD-1 refractory patients and in combination with Agenus’ anti-PD-1 antibody in solid tumors.

Initially, the Company plans to develop AGEN1884 in combination with UGN-201 for the treatment of high-grade non-muscle invasive bladder cancer.

Initially, the Company plans to develop AGEN1884 in combination with UGN-201 for the treatment of high-grade NMIBC.

Pursuant to the license agreement, the Company paid Agenus an upfront fee of $ 10.0 million and has agreed to pay Agenus up to $ 115.0 million upon achieving certain clinical development and regulatory milestones, up to $ 85.0 million upon achieving certain commercial milestones, and royalties on net sales of licensed products in the 14 %- 20 % range.

5 unchanged sentences

In addition, either party may terminate the license agreement in the event of an uncured material breach of the other party.

As of September 30, 2020, since inception of the Agenus Agreement, the Company has paid a total of $ 10.0 million in milestone payments, which was recognized in acquired in-process research and development expenses during the three months ended December 31, 2019.

MD Anderson Agreement

In January 2021, the Company announced that it entered into a three-year strategic research collaboration agreement with MD Anderson focusing on UGN-302 as an investigational treatment for high-grade NMIBC.

Under the agreement, MD Anderson and the Company will collaborate on the design and conduct of non-clinical and clinical studies with oversight from a joint steering committee.

The Company will provide funding, developmental candidates, and other support.

Pursuant to the agreement, the Company makes bi-annual payments to MD Anderson fund the collaboration.

As of March 31, 2021, the Company has made payments to MD Anderson of $ 500,000 recognized evenly over the associated six-month period through research and development expenses .

Note 12 – Shareholders’ Equity

The Company had 100.0 million ordinary shares authorized for issuance as of September 30, 2020 and December 31, 2019, respectively.

The Company had 22.1 million and 21.0 million ordinary shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.

The Company had 100.0 million ordinary shares authorized for issuance as of March 31, 2021 and December 31, 2020, respectively.

The Company had 22.3 million and 22.2 million ordinary shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.

Each ordinary share is entitled to one vote.

1 unchanged sentence

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

In January 2019, the Company completed an underwritten public offering of 4,207,317 of its ordinary shares, including 548,780 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $ 41.00 per

The net proceeds to the Company from the offering were approximately $ 161.4 million, after deducting the underwriting discounts and commissions and payment of other offering expenses.

In December 2019, the Company entered into a sales agreement (the “ATM Sales Agreement”) w ith Cowen and Company, LLC (“Cowen”), pursuant to which the Company may from time to time offer and sell the Company’s ordinary shares having an aggregate offering price of up to $ 100.0 million to or through Cowen, acting as sales agent or principal .

During the second quarter of 2020, the Company sold 700,000 ordinary shares under the ATM Sales Agreement, for gross proceeds of approximately $ 16.6 million.

The net proceeds to the Company after deducting sales commissions to Cowen and other issuance expenses were approximately $ 15.8 million.

The remaining capacity under the ATM Sales Agreement is approximately $ 83.4 million.

Note 13 – Share-Based Compensation

5 unchanged sentences

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

Certain management and professional level employees typically receive options and restricted stock units, or RSU, grants upon commencement of employment.

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

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

Non-employee members of the Board and any new, future directors may receive a grant of RSUs and/or stock options annually.

Non-employee members of the Board typically receive a grant of RSUs and/or stock options annually.

The term of any option granted under the Plan 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.

5 unchanged sentences

In March 2017, the Board adopted the 2017 Equity Incentive Plan (the "2017 Plan"), which was approved by the shareholders in April 2017.

The 2017 Plan provides for the grant of incentive stock options to the Company's employees and for the grant of nonstatutory 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 2017 Plan provides for the grant of incentive stock options to the Company's employees and for the grant of

nonstatutory 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 maximum number of ordinary shares that may initially be issued under the 2017 Plan is 1,400,000 .

4 unchanged sentences

On June 8, 2020 the Company increased the amount of registered ordinary shares of the Company’s 2017 Plan by 400,000 to 3,950,167 .

On January 3, 2019, the Company appointed Elizabeth Barrett as its President and Chief Executive Officer.

In connection with Ms.

Barrett’s employment, she was granted 277,432 options to purchase the Company’s ordinary shares, at an exercise price of $ 47.57 , as well as 317,065 RSUs, with a combined grant-date fair value of $ 24.1 million.

On March 17, 2021, the Board approved an increase to the amount of registered ordinary shares of the Company’s 2017 Plan by 400,000 to 4,350,167 , subject to approval by the Company’s shareholders.

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

3 unchanged sentences

Under the Inducement Plan, an “Award” is a nonstatutory stock option, restricted stock unit or other right to receive ordinary shares pursuant to the Inducement Plan.

In June 2019, as part of the Company’s Annual Meeting of Shareholders, the Board approved grants of 70,000 options to its non-employee directors.

Each then current non-employee director, including the Chairman of the Board, received a grant of 10,000 options.

Each option is exercisable into one ordinary share of the Company’s stock at an exercise price of $ 34.83 per share.

The options vest quarterly over one year and expire 10 years from grant date.

The grant date fair value of these options was approximately $ 1.9 million.

In December 2019, the Board approved a modification of options and RSU's for a consultant.

The Company recorded an expense of $ 0.9 million under general and administrative expenses with respect to options' modification.

No compensation expense was taken in relation to the RSUs modification because the award vests upon a future performance condition that is not currently probable of occurring.

In June 2020, the Board granted an aggregate of 70,000 options to its non-employee directors.

Each non-employee director, including the Chairman of the Board, received a grant of 10,000 options.

Each option is exercisable into one ordinary share of the Company’s stock at an exercise price of $ 28.24 per share.

The options vest quarterly over one year and expire 10 years from the grant date.

The grant date fair value of these options was approximately $ 1.5 million.

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

For the Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development expenses

Selling, general and administrative expenses

The total unrecognized compensation cost of options and RSUs at September 30, 2020 is $ 34.3 million with a weighted average recognition period of 1.67 years.

The total unrecognized compensation cost of options and RSUs at March 31, 2021 is $ 33.6 million with a weighted average recognition period of 1.86 years.

Note 14 – Income Taxes

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is taxed under Israeli tax laws.

As of September 30, 2020, the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

As of March 31, 2021, the Company continues to maintain a full valuation allowance against deferred tax assets for all jurisdictions.

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

The Company has cumulative global pretax accounting losses for the years ended 2019, 2018 and 2017, and for the nine months ended September 30, 2020.

The Company has cumulative global pretax accounting losses for the years ended 2020, 2019 and 2018, and for the three months ended March 31, 2021.

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

The Company has a liability for uncertain tax positions of $ 2.7 million as of March 31, 2021 for tax positions relating to transfer pricing between affiliated entities.

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

As of March 31, 2021, the Company’s liability for uncertain tax positions includes $ 0.7 million of interest and penalties accrued during 2020.

The Company operates on a global basis and is subject to tax laws and regulations in the U.S.

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 believes that adequate amounts of tax have been provided in income tax expense for any adjustments that may result from its uncertain tax positions.

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

Note 15 – Related Parties

There were no related party transactions for the nine months ended September 30, 2020 or the nine months ended September 30, 2019.

There were no related party transactions for the three months ended March 31, 2021 or the three months ended March 31, 2020.

Note 16 – Commitments and Contingencies

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

The Company ’ s maximum exposure under these arrangements is unknown as of September 30, 2020 and December 31, 2019.

The Company ’ s maximum exposure under these arrangements is unknown as of March 31, 2021 and December 31, 2020.

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

Grants from the Israeli Innovation Authority in Israel (“IIA”)

The Company has received grants from the IIA for research and development fundi n g.

Up until 2007, the IIA participation in the funding of the Company’s operations was as part of the Israeli Ministry of Industry and Commerce Director General Directive 8.2 by grants provi d ed to Granot Ventures, a government supported technology incubator.

The Company has received grants from the IIA for research and development funding.

Up until 2007, the IIA participation in the funding of the Company’s operations was by grants provided to Granot Ventures, a government supported technology incubator, as part of the Israeli Ministry of Industry and Commerce Director General Directive 8.2.

Since 2008, the funding was provided directly to Company.

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Separation Agreement

On March 20, 2020, the Company entered into a Separation Agreement with Stephen Mullennix, the Company’s Chief Operating Officer, which sets forth the terms of Mr.

Mullennix’s termination of employment with the Company, effective as of April 30, 2020, or Separation Date.

The arrangement includes cash severance, as well as a pro rata portion of the target annual bonus for calendar year 2020, contingent on certain performance conditions.

The Company accrued $ 0.4 million during the quarter ended March 31, 2020 in relation to this arrangement.

On September 7, 2020, the Company entered into a Separation Agreement with Peter Pfreundschuh, the Company’s Chief Financial Officer, which sets forth the terms of Mr.

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The arrangement includes cash severance, a pro rata portion of the target annual bonus for calendar year 2020 contingent on certain performance conditions, and partial acceleration of share-based compensation.

The Company recognized $ 0.7 million during the quarter ended September 30, 2020 in relation to this arrangement.

See Note 9 for further discussion regarding lease commitments.

The Company recognized $ 0.7 million during the year ended December 31, 2020 in relation to this arrangement, which was paid during March and April 2021.

See N ote 9 for further discussion regarding lease commitments.

Note 17 – Subsequent Events

In October 2020, the Company appointed a new Chief Financial Officer and General Counsel.

In connection with their employment, they were granted options to purchase the Company’s ordinary shares as well as RSUs under the Inducement Plan with a combined grant-date fair value of $ 2.4 million.

In March 2021, the Company announced a transaction with RTW Investments (“RTW”) totaling $75.0 million in funding for the Company to support the launch of Jelmyto and the development of UGN-102.

RTW will provide the Company with an upfront cash payment of $ 75.0 million and will receive tiered future payments based on global annual net product sales of Jelmyto and UGN-102, if approved.

The Company received the $ 75.0 million of cash, net of costs in May 2021 following the receipt of necessary regulatory approvals, and recognized an associated long term liability.

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

What changed 10-Q

Item 1. Financial Statements