What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-13 · 181 added, 129 removed, 383 unchanged (45% of the section changed)

3 unchanged sentences

in thousands, except share amounts and par value)

March 31, 2021

December 31, 2020

Current assets:

3 unchanged sentences

Accounts receivable

Prepaid expenses and other current assets

Prepaid expense and other current assets

Total current assets

7 unchanged sentences

Current liabilities:

Accounts payable and accrued expenses

Employee related accrued expenses

Accounts payable and accrued expense

Employee related accrued expense

Other current liabilities

1 unchanged sentence

Non-current liabilities:

Prepaid forward obligation

Long-term lease liability

5 unchanged sentences

100,000,000 shares

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

authorized at June 30, 2021 and December 31, 2020;

and 22,167,791 shares issued and outstanding as

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

of June 30, 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 March 31,

Cost of revenues

Operating expenses:

Research and development expenses

Selling, general and administrative expenses

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Cost of revenue

Operating expense:

Research and development expense

Selling, general and administrative expense

Operating loss

Financing on prepaid forward obligation

Interest and other income, net

Loss before income taxes

Income tax expense

Statements of Comprehensive Loss

13 unchanged sentences

comprehensive

Balance as of January 1, 2020

income (loss)

Balance as of April 1, 2021

Changes During the Three

Months Ended March 31, 2020

Months Ended June 30, 2021

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive income

Balance as of March 31, 2020

Balance as of January 1, 2021

Other comprehensive loss

Balance as of June 30, 2021

Balance as of April 1, 2020

Changes During the Three

Months Ended March 31, 2021

Months Ended June 30, 2020

Exercise of options into ordinary shares

Share-based compensation

Issuance of ordinary shares, net

of issuance expense

Other comprehensive loss

Balance as of March 31, 2021

Balance as of June 30, 2020

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

Ordinary Shares

comprehensive

Income (loss)

Balance as of January 1, 2021

Changes During the Six

Months Ended June 30, 2021

Exercise of options into ordinary shares

Share-based compensation

Other comprehensive loss

Balance as of June 30, 2021

Balance as of January 1, 2020

Changes During the Six

Months Ended June 30, 2020

Exercise of options into ordinary shares

Share-based compensation

Issuance of ordinary shares in public

offering, net of issuance expense

Other comprehensive income

Balance as of June 30, 2020

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

UroGen Pharma Ltd.

1 unchanged sentence

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities

1 unchanged sentence

Depreciation and amortization

Accrued financing on prepaid forward obligation

Amortization on marketable securities

4 unchanged sentences

Accounts receivable

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Employee related accrued expenses

Prepaid expense and other current assets

Other non-current assets

Accounts payable and accrued expense

Employee related accrued expense

Other current liabilities

Net cash used in operating activities

Cash Flows From Investing Activities

Purchase of marketable securities

Purchases of marketable securities

Maturities of marketable securities

Purchases of property and equipment

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash Flows From Financing Activities

Proceeds from prepaid forward arrangement

Proceeds from exercise of options into ordinary shares

Issuances of ordinary shares, net of issuance expense

Issuance cost related to at-the-market issuances

Net cash provided by financing activities

Decrease in Cash and Cash Equivalents

Increase (Decrease) in Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

1 unchanged sentence

Supplemental Disclosures of Non-Cash Activities

Non-cash purchases of property and equipment

Non-cash new lease liabilities

Non-cash issuance cost

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

21 unchanged sentences

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.

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.

Intercompany balances and transactions have been eliminated during consolidation.

The Company has experienced net losses since its inception and has an accumulated deficit of $ 408.7 million and $ 356.5 million as of June 30, 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.

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.

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

7 unchanged sentences

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 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

8 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 $ 75.9 million as of March 31, 2021.

Cash and cash equivalents and marketable securities totaled $ 129.3 million as of June 30, 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”.

43 unchanged sentences

See Note 8 for further discussion regarding property and equipment.

Prepaid Forward Obligation

The Company is party to a transaction with RTW Investments (the “RTW Transaction”) in which the Company received funds to support the continued launch of Jelmyto and the development of UGN-102 in return for tiered, future cash payments based on net sales of Jelmyto and UGN-102, if approved by the FDA.

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

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

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

The Company is a lessee in several noncancelable operating leases, primarily for office space, office equipment and vehicles.

15 unchanged sentences

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

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.

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.

Net revenue 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.

Research and Development Expense

Research and development costs are expensed as incurred and consist primarily of the cost of salaries, share-based compensation expense, 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, shall be included in research and development costs and expensed as the contracted work is performed.

2 unchanged sentences

Where contingent milestone payments are due to third parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when the milestone results are achieved.

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).

Selling General and Administrative Expense

Selling, general and administrative expense consists 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 Issued Accounting Pronouncements

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

Note 4 – Other Financial Information

Accounts Payable and Accrued Expenses

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 and Accrued Expense

Accounts payable and accrued expense consists of the following as of June 30, 2021 and December 31, 2020 (in thousands):

Accounts payable

Accrued sales reserves

Accrued clinical expenses

Accrued research and development costs

Accrued selling, general and administrative expenses

Accrued clinical expense

Accrued research and development expense

Accrued selling, general and administrative expense

Accrued other expense

Total accounts payable and accrued expenses

Interest and Other Income (Expenses), Net

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

Three Months Ended March 31,

Total accounts payable and accrued expense

Interest and Other Income (Expense), Net

Interest and other income (expense) consisted of the following as of June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

Interest income

Other finance income(expenses)

Other finance (expense)

Total interest and other income

Note 5 – Inventories

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

March 31, 2021

Inventories consist of the following as of June 30, 2021 and December 31, 2020 (in thousands):

December 31, 2020

2 unchanged sentences

Total inventories

$ 1.0 million of raw materials at June 30, 2021 are included within other non-current assets on the condensed consolidated balance sheets .

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 March 31, 2021 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 June 30, 2021 are as follows (in thousands):

Fair Value Measurements Using

5 unchanged sentences

Corporate bonds

Commercial paper

Money market funds (1)

Certificates of deposit (2)

Total marketable securities

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

$ 3.0 million included within cash and cash equivalents on the condensed consolidated balance sheets.

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2020 are as follows (in thousands):

9 unchanged sentences

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

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.

The Company ’ s in money market funds are valued based on publicly available quoted market prices for identical securities as of June 30, 2021 and December 31, 2020.

Note 7 – Marketable Securities

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

The following table summarizes the Company’s marketable securities as of June 30, 2021 (in thousands):

Marketable securities:

1 unchanged sentence

Corporate bonds

Commercial paper

Money market funds (1)

Certificates of deposit (2)

Total marketable securities

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

$ 3.0 million 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 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 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 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 amortized cost basis as of June 30, 2021 includes $ 0.2 million of accrued interest receivable .

As of June 30, 2021 marketable securities were no t in a net unrealized gain or loss position.

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

As of June 30, 2021, the aggregate fair value of marketable securities held by the Company in an unrealized loss position was $ 40.2 million which consisted of 24 securities.

The unrealized loss was driven by investments in commercial paper and certificates of deposit which are measured at fair value based on bid price and purchased at ask price (bid-ask spread).

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

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

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

As of June 30, 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 June 30, 2021 mature at various dates through February 2022.

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

March 31, 2021

December 31, 2020

Maturities within one year

2 unchanged sentences

Note 8 – Property and Equipment

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

March 31, 2021

December 31, 2020

Property and equipment, consists of the following as of June 30, 2021 and December 31, 2020 (in thousands):

Laboratory equipment

4 unchanged sentences

Property and equipment, net

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

Depreciation and amortization expense was $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2021 and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2020.

Note 9 – Prepaid Forward Obligation

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

Under the terms of the RTW Transaction, the Company received $ 75 .0 million ($ 72.5 million net of transactions costs) to support the continued launch of Jelmyto and the development of UGN-102.

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

(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.

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

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

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

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

In May 2021, following the receipt of necessary regulatory approvals, the Company received the $ 75.0 million prepaid forward payment ($ 72.5 million net of transaction costs) from RTW and recognized an associated prepaid forward obligation liability.

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

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

The Company uses a prospective approach for reassessing the effective rate in which a new rate is computed 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 the future financing expense on a prospective basis.

The Company does no t expect to make any principal payments in the next 12 months.

The following table shows the activity with respect to the carrying value of the prepaid forward liability, in thousands:

Prepaid forward obligation at closing of RTW Transaction

Capitalized closing costs

Financing on prepaid forward obligation

Expected payments

Carrying value of prepaid forward obligation as of June 30, 2021

Note 10 – Leases

8 unchanged sentences

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

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

The Company’s remaining contractual obligation under this lease is approximately $ 0.8 million as of June 30, 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 $ 0.7 million as of March 31, 2021 .

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

The remaining rental payments to be received over the lease term is approximately $ 0.7 million as of June 30, 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.

2 unchanged sentences

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 $ 1.0 million as of March 31, 2021.

The Company’s remaining contractual obligation under this lease is approximately $ 0.9 million as of June 30, 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 2023 , with varying renewal and termination options.

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

Three Months Ended March 31, 2021

The components of lease cost for the three and six months ended June 30, 2021 were as follows (in thousands) :

Three Months Ended

Six Months Ended

Operating lease cost

1 unchanged sentence

Variable lease cost

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

March 31, 2021

The amounts recognized as of June 30, 2021 and December 31, 2020 were as follows (in thousands):

Right of use asset

Long-term lease liability

Long-term lease liabilities

Other current liabilities

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

As of June 30, 2021, no impairment losses have been recognized to date.

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

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

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

3 unchanged sentences

Weighted-average discount rate of operating leases

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):

As of June 30, 2021, undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

Operating Leases

2 unchanged sentences

2026 and thereafter

Sublease income is recognized net within operating expenses.

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

Three Months Ended March 31, 2021

Sublease income is recognized net within operating expense.

Sublease income for the three and six months ended June 30, 2021 was as follows (in thousands):

Ended June 30,

Sublease income from fixed lease payments

Sublease income from variable payments

Note 11 – Revenue From Product Sales

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

Three Months Ended March 31, 2021

Net product sales consist of the following for the three and six months ended June 30, 2021 (in thousands):

Ended June 30,

Note 12 – License and Collaboration Agreements

1 unchanged sentence

In October 2016, the Company entered into the Allergan/AbbVie Agreement and granted Allergan (now part of AbbVie) an exclusive worldwide license to research, develop, manufacture and commercialize pharmaceutical products that contain RTGel and clostridial toxins (including BOTOX ® ), alone or in combination with certain other active ingredients, referred to as the Licensed Products, which are approved for the treatment of adults with overactive bladder who cannot use or do not adequately respond to anticholinergics.

Additionally, the Company granted Allergan a non-exclusive, worldwide license to use certain of the Company’s trademarks as required for Allergan to practice its exclusive license with respect to the Licensed Products.

Under the Allergan/AbbVie Agreement, Allergan is solely responsible for costs and development of the Licensed Products and obtaining all regulatory approvals for Licensed Products worldwide, as well as worldwide commercialization of the Licensed Products after receiving the regulatory approval to do so.

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

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 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.

Under the Allergan/AbbVie Agreement , Allergan is solely responsible , at its expense, for developing, obtaining regulatory approvals for and commercializing the Licensed Products on a worldwide basis .

Allergan is obligated to 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.

The Company is responsible for payments to any third party for certain RTGel -related third-party intellectual properties.

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 2017, the Company announced that Allergan had submitted an IND to the FDA in order to be able to commence clinical trials in the United States using an RTGel formulation in combination with BOTOX.

In October 2017, Allergan commenced a Phase 2 clinical trial of BOTOX/ RTGel for the treatment of OAB, with the potential to evolve from multiple injections of BOTOX into the bladder to a single instillation of the novel formulation.

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

14 unchanged sentences

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 .

As of June 30, 2021, the Company has made payments to MD Anderson of $ 500,000 recognized evenly over the associated six-month period through research and development expense .

Note 13 – Shareholders’ Equity

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.

The Company had 100.0 million ordinary shares authorized for issuance as of June 30, 2021 and December 31, 2020.

The Company had 22.4 million and 22.2 million ordinary shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

Each ordinary share is entitled to one vote.

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

In addition, the number of ordinary shares reserved for issuance under the 2017 Plan will automatically increase on January 1st of each calendar year, from January 1, 2018 through January 1, 2026, so that the number of such shares reserved for issuance will equal 12 % of the total number of ordinary shares outstanding on the last day of the calendar month prior to the date of each automatic increase, or a lesser number of shares determined by the Board.

The maximum number of ordinary shares that may be issued upon the exercise of stock options under the 2017 Plan is 5,600,000 .

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

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

On October 12, 2018, the Company increased the amount of registered ordinary shares of the Company’s 2017 Plan by 1,900,000 to 3,550,167 .

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 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.

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

On June 7, 2021, the Company’s shareholders approved an increase of the amount of registered ordinary shares of the Company’s 2017 Plan by 400,000 to 4,350,167 .

As of June 30, 2021, 3,197,979 ordinary shares are subject to outstanding awards under the 2017 Plan and 752,188 ordinary shares remain available for future awards.

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

4 unchanged sentences

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

Three Months Ended March 31,

Research and development expenses

Selling, general and administrative expenses

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.

For the Three Months Ended June 30,

Six Months Ended June 30,

Research and development expense

Selling, general and administrative expense

The total unrecognized compensation cost of options and RSUs at June 30, 2021 is $ 27.7 million with a weighted average recognition period of 1.78 years.

Note 15 – Income Taxes

1 unchanged sentence

is taxed under Israeli tax laws.

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

As of June 30, 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 2020, 2019 and 2018, and for the three months ended March 31, 2021.

The Company has cumulative global pretax losses for the years ended 2020, 2019 and 2018, and for the six months ended June 30, 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 has a liability for uncertain tax positions of $ 2.7 million as of June 30, 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.

As of June 30, 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.

2 unchanged sentences

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.

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

Note 16 – Related Parties

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

There were no related party transactions for the six months ended June 30, 2021 or 2020.

Note 17 – 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 March 31, 2021 and December 31, 2020.

The Company ’ s maximum exposure under these arrangements is unknown as of June 30, 2021 and December 31, 2020.

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

1 unchanged sentence

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.

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.

On January 12, 2020, the IIA Office of Chief Scientist approved the Company's request to unwind its obligation to the IIA regarding grants that were loaned to the Company between January 2004 and September 2016.

On January 12, 2020, the IIA approved the Company's request to unwind its obligation to the IIA regarding grants that were loaned to the Company between January 2004 and September 2016.

The total payment under the IIA approval, net of the royalties already paid, $ 6.6 million, was fully paid during the first quarter of 2020 and recognized as research and development expense.

1 unchanged sentence

Other than the commitment to continue at least 75 % of its based R&D jobs in Israel (at the time of settlement) for a period of at least three years , all other obligations with the IIA ceased to exist as per the agreement.

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.

Pfreundschuh’s termination of employment with the Company, effective as of October 15, 2020.

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 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.

See Note 10 for further discussion regarding lease commitments.

Note 18 – Subsequent Events

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.

The Company has evaluated and determined there were no subsequent events through August 4, 2021.

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