What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-04 compared with 2021-05-13 · 131 added, 93 removed, 179 unchanged (56% of the section changed)

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The sales representatives are led by seven regional business managers.

Each region is supported by a Clinical Nurse Educator to provide education and training around instillation, as well as a Field Reimbursement manager to help ensure access and reimbursement for appropriate patients.

Each region is supported by a Clinical Nurse Educator to provide education around instillation, as well as a Field Reimbursement manager to help ensure access and reimbursement for appropriate patients.

In addition, we have a team of seven medical science liaisons who appropriately engage with physicians interested in learning more about UroGen, Jelmyto and our technology, including through virtual meetings.

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We initiated the Phase 3 ATLAS trial in December 2020 and are currently enrolling patients in this trial assessing UGN-102 with or without trans-urethral resection of bladder tumor (TURBT) compared to standard of care, TURBT.

As of the end of July 2021, nearly 100 global centers have been activated for the Phase 3 ATLAS trial in the U.S., Europe and Israel.

Urothelial cancer, which is comprised of bladder cancer and UTUC, affects a large, and what we believe to be, an underserved patient population.

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The majority of the expenditures are spent on tumor resection surgeries such as transurethral resection of bladder tumor, or TURBT.

In 2017, the estimated prevalence of urothelial cancer in the United States was 748,000 and in 2020 the annual incidence of urothelial cancer was approximately 85,000.

The prevalence in 2017 of low-grade intermediate risk NMIBC was approximately 340,000.

The prevalence of bladder cancer in the United States based on most recently published data was approximately 724,000 and estimated 2021 annual incidence of bladder cancer was approximately 85,000.

We estimate based upon a review of peer-reviewed literature and publicly available data that there are approximately 80,000 low-grade intermediate risk NMIBC patients in the U.S.

UGN-102 is administered locally using the standard practice of intravesical instillation directly into the bladder via a catheter.

The instillation into the bladder is expected to take place in a physician’s office as a same-day treatment, in comparison with TURBT or similar surgical procedures, which are operations conducted under general anesthesia and may require an overnight stay.

The instillation into the bladder is expected to take place in a physician’s office as a non-operative same-day treatment, in comparison with TURBT or similar surgical procedures, which are operations conducted under general anesthesia and may require an overnight stay.

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

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In addition, by removing the need for surgery, patients may avoid potential complications associated with surgery.

Our immuno-uro-oncology pipeline includes UGN-302, the sequential use of UGN-201, a TLR 7/8 agonist and UGN-301, an anti-CTLA-4 antibody, being studied as an investigational treatment for high-grade non-muscle invasive bladder cancer (high-grade NMIBC).

UroGen’s approach involves the local delivery of these potent immunomodulators.

UGN-301, an immune checkpoint inhibitor, is delivered using UroGen’s proprietary RTGel platform to increase dwell time, which has been shown to significantly improve the effectiveness of intravesical therapy.

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

We are initially studying the sequential use of UGN-201 (imiquimod), a TLR 7/8 agonist, and UGN-301 as an investigational treatment for high-grade non-muscle invasive bladder cancer (high-grade NMIBC), together referred to as UGN-302.

Our approach involves the local delivery of these potent immunomodulators.

UGN-301, an immune checkpoint inhibitor, is delivered using our proprietary RTGel platform to increase dwell time, which has been shown to significantly improve the effectiveness of intravesical therapy.

UGN-201 is a proprietary novel, liquid formulation of imiquimod, a generic toll-like receptor 7/8, or TLR 7/8 agonist, which has been evaluated for the treatment of high-grade NMIBC, which may include carcinoma in situ, or CIS.

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

to develop and commercialize zalifrelimab, an anti-CTLA-4 antibody, via intravesical delivery in combination with UGN-201 (together referred to as UGN-302) for the treatment of urinary tract cancers, initially in high-grade NMIBC.

to develop and commercialize zalifrelimab, an anti-CTLA-4 antibody, via intravesical delivery in combination with UGN-201 for the treatment of urinary tract cancers, initially in high-grade NMIBC.

We believe that the combination treatment makes local therapy a potentially more effective treatment option while minimizing systemic exposure and potential side effects.

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The license grants the exclusivity for the 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, we granted Allergan a non-exclusive, worldwide license to use certain of our 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, at its expense, for developing, obtaining regulatory approvals for and commercializing, on a worldwide basis, pharmaceutical products that contain RTGel and clostridial toxins (including BOTOX), alone or in combination with certain other active ingredients, collectively, the Licensed Products.

Allergan is obligated to pay us 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 our 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 us a tiered royalty based primarily on worldwide annual net sales of Licensed Products.

We are responsible for payments to any third party for certain RTGel -related third-party intellectual properties.

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In August 2020, we 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.

We are continuing to explore the potential use of RTGel in combination with other products in AbbVie’s portfolio.

Agenus Agreement

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In the event of a prolonged disruption related to COVID-19, there could be detrimental impact to our ongoing and future clinical trials, our ongoing commercial launch and future commercialization activities for Jelmyto , and our ability to access capital markets.

Specifically, we have experienced a delay in site initiation activities in certain countries outside the U.S.

within our UGN-102 clinical trial as well as a softening of our first quarter 2021 Jelmyto revenues.

Recently, the U.S.

has mounted a comprehensive COVID-19 vaccination campaign.

During the first quarter 2021, t he staged vaccination rollout prioritize d health-care workers, certain other essential workers and high-risk populations, which generally include d individuals in their 60s and 70s, and individuals with certain underlying medical conditions.

We believe t he vaccination effort in the U.S.

impacted our ongoing commercialization of Jelmyto in three main aspects.

First, current or potentially eligible patients chose to delay their procedures until after they have been vaccinated for COVID-19.

Second, the p rioritization of hospital and clinic resources towards the vaccination effort may have hinder ed the ability of patients who are currently using Jelmyto or who are eligible to use Jelmyto to schedule Jelmyto instillation procedures.

Lastly, our commercial team was limited in their ability to visit hospitals and clinics due to many facilities restricting access.

As of the end of April 2021, the majority of people over age 65 in the U.S.

have received vaccinations to protect against COVID-19, we believe this is correlated with the increasing amount of new patient starts we observed in both March and April.

It is difficult to predict how COVID-19, and any associated variants, will impact the healthcare industry for the remainder of 2021, as such we continue to monitor the evolving COVID-19 situation, and the potential further impacts that the pandemic and related government response may have on our business throughout 2021.

During the first quarter 2021, the staged vaccination rollout prioritized health-care workers, certain other essential workers and high-risk populations, which generally included individuals in their 60s and 70s, and individuals with certain underlying medical conditions.

According to the Centers for Disease Control and Prevention, as of the end of May 2021, approximately 80% of people over age 65 in the U.S.

have received vaccinations to protect against COVID-19.

However, as circumstances evolve, in particular related to the emergence of variants (including the Delta variant), it will be important to understand potential impacts to patients and the hospital system, and the ability for patients to access Jelmyto.

While it is difficult to predict how COVID-19, and any associated variants (including the Delta variant),

will impact our business and the healthcare industry for the remainder of 2021 , we continue to monitor the evolving COVID-19 situation, and the potential further impacts that the pandemic and related government response may have on our business throughout the remainder of 2021 .

Components of Operating Results

During the three months ended March 31, 2021 we recognized $7.5 million, of revenues from sales of our product, Jelmyto .

Cost of Revenues

Cost of revenues consist primarily of inventory and related costs associated with the manufacturing, distribution, warehousing and preparation of Jelmyto .

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expenses.

Research and Development Expenses

Research and development expenses, net consist primarily of:

During the three and six months ended June 30, 2021 we recognized $13.0 million and $20.5 million of revenue, respectively from sales of our product, Jelmyto .

Cost of Revenue

Cost of revenue consists primarily of inventory and related costs associated with the manufacturing, distribution, warehousing and preparation of Jelmyto .

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expense.

Research and Development Expense

Research and development expense, net consists primarily of:

salaries and related costs, including share-based compensation expense, for our personnel in research and development functions;

expenses incurred under agreements with third parties, including clinical research organizations (“CROs”), subcontractors, suppliers and consultants, nonclinical studies and clinical trials;

expenses incurred to acquire, develop and manufacture nonclinical study and clinical trial materials;

expenses incurred to purchase active pharmaceutical ingredient (“API”) and other related manufacturing costs;

expense incurred under agreements with third parties, including clinical research organizations (“CROs”), subcontractors, suppliers and consultants, nonclinical studies and clinical trials;

expense incurred to acquire, develop and manufacture nonclinical study and clinical trial materials;

expense incurred to purchase active pharmaceutical ingredient (“API”) and other related manufacturing costs;

facility and equipment costs, including depreciation expense, maintenance and allocated direct and indirect overhead costs.

We expense all research and development costs as incurred.

We estimate nonclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions and contract research organizations that conduct and manage nonclinical studies and clinical trials on our behalf based on actual time and expenses incurred by them.

We estimate nonclinical study and clinical trial expense based on the services performed pursuant to contracts with research institutions and contract research organizations that conduct and manage nonclinical studies and clinical trials on our behalf based on actual time and expense incurred by them.

We accrue for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from our external service providers.

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Where at risk contingent milestone payments are due to third parties under research and development and collaboration agreements, the milestone payment obligations are expensed when the milestone results are achieved.

We have received grants under the Israeli Law for the Encouragement of Industrial Research, Development and Technological Innovation, 5754-1984 (the “R&D Law”), from the Israel Innovation Authority in Israel (the “IIA”), formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry, an independent and impartial public entity, for some of our development programs.

Through March 31, 2021, we had received grants in the aggregate amount of $2.1 million.

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.

We have received grants under the Israeli Law for the Encouragement of Industrial Research, Development and Technological Innovation, 5754-1984 (the “R&D Law”), from the Israel Innovation Authority in Israel (the “IIA”), an independent and impartial public entity, for some of our development programs.

Through June 30, 2021, we had received grants in the aggregate amount of $2.1 million.

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, amounts to $6.6 million, which was fully paid during the first quarter of 2020.

See Note 17 to the Consolidated Financial Statements included in this report for additional information.

We are currently focused on advancing our product candidates, and our future research and development expenses will depend on their clinical success.

Research and development expenses will continue to be significant and will increase over at least the next several years as we continue to develop our product candidates and conduct nonclinical studies and clinical trials of our product candidates.

We are currently focused on advancing our product candidates, and our future research and development expense will depend on their clinical success.

Research and development expense will continue to be significant and will increase over at least the next several years as we continue to develop our product candidates and conduct nonclinical studies and clinical trials of our product candidates.

Research and development activities are central to our business model.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We do not believe that it is possible at this time to accurately project total expenses required for us to reach commercialization of our product candidates.

We do not believe that it is possible at this time to accurately project total expense required for us to reach commercialization of our product candidates.

Due to the inherently unpredictable nature of nonclinical and clinical development, we are unable to estimate with certainty the costs we will incur and the timelines that will be required in the continued development and approval of our product candidates.

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In addition, we cannot forecast which product candidates may be subject to future collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

We expect our research and development expenses to increase over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

We also expect to incur increased research and development expenses as we selectively identify and develop additional product candidates.

We expect our research and development expense to increase over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product candidates.

We also expect to incur increased research and development expense as we selectively identify and develop additional product candidates.

The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors that include, but are not limited to, the following:

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License fees and development milestone payments related to in-licensed products and technology are expensed as incurred if it is determined at that point that they have no established alternative future use.

Selling and Marketing Expenses

To date, selling and marketing expenses consist primarily of commercial personnel costs (including share-based compensation) along with pre-commercialization and initial commercialization activities related to Jelmyto , formerly known as UGN-101 .

We anticipate that our selling and marketing expenses will increase in 2021 as we continue the commercialization of Jelmyto .

General and Administrative Expenses

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

Selling and Marketing Expense

To date, selling and marketing expense consists primarily of commercial personnel costs (including share-based compensation) along with pre-commercialization and initial commercialization activities related to Jelmyto , formerly known as UGN-101 .

We anticipate that our selling and marketing expense will increase in 2021 as we continue the commercialization of Jelmyto .

General and Administrative Expense

General and administrative expense consists primarily of personnel costs (including share-based compensation related to directors, executives, finance, medical affairs, business development, investor relations, and human resource functions).

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

We anticipate that our general and administrative expenses will increase in the future as we increase our administrative headcount and infrastructure to support the potential approval and commercialization of our product candidates and our continued research and development programs.

These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

Interest and Other Income (Expenses), Net

Interest and other income (expenses), net, consisted primarily of interest income.

We anticipate that our general and administrative expense will increase in the future as we increase our administrative headcount and infrastructure to support the potential approval and commercialization of our product candidates and our continued research and development programs.

These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expense.

Financing on prepaid forward obligation

Financing on prepaid forward obligation is comprised of financing expense related to the RTW Transaction.

Interest and Other Income, Net

Interest and other income, net, consisted primarily of interest income.

We have yet to generate taxable income in Israel.

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Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our unaudited condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the revenues and expenses incurred during the reported periods.

In accordance with GAAP, we base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances at the time such estimates are made.

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

We discussed the critical accounting policies used in the preparation of our financial statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on March 18, 2021 (“Annual Report”) as well as in the Note 3 to the Consolidated Financial Statements included in this report .

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

Results of Operations

Comparison of the three months ended March 31, 2021 and 2020

The following table sets forth our results of operations for the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

Comparison of the three months ended June 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended June 30, 2021 and 2020.

Three Months Ended June 30,

(in thousands)

Cost of revenues

Operating expenses:

Cost of revenue

Operating expense:

Research and development

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General and administrative

Total operating expenses

Total operating expense

Operating loss

Financing on prepaid forward obligation

Interest and other income, net

Revenues were $7.5 million and $0 for the three months ended March 31, 2021 and 2020, respectively.

The increase in revenues of $7.5 million reflects sales of our product Jelmyto following its approval by the FDA in April 2020.

Cost of Revenues

Cost of revenues were $0.9 million and $0 for the three months ended March 31, 2021 and 2020, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expenses.

We expect this to continue to impact cost of revenues through the second quarter of 2022 as we produce Jelmyto at costs reflecting the full costs of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval.

Gross margin would have been approximately 85.6% versus 88.0% for the three months ended March 31, 2021 if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expenses

Research and development (R&D) expenses were $10.5 million and $16.6 million for the three months ended March 31, 2021 and 2020, respectively.

The overall decrease of $6.1 million is primarily attributable to the one-time payment in the prior year of $6.6 million to unwind our obligation to the IIA.

Excluding the impact of the payment to the IIA, R&D expenses remained largely consistent, however, for the three months ended March 31, 2021 primarily related to the development of UGN-102, as compared to the March 31, 2020 where R&D expenses primarily related to Jelmyto.

Selling and Marketing Expenses

Selling and marketing expenses were $11.4 million and $10.7 million for the three months ended March 31, 2021 and 2020, respectively.

The increase in selling and marketing expenses of $0.7 million is primarily attributable to salaries and benefits of the commercial and marketing team members who joined subsequent to March 31, 2020, partially offset by higher brand marketing expenses in the first quarter of 2020 in preparation for the commercialization of Jelmyto .

General and Administrative Expenses

General and administrative expenses were $10.8 million and $11.3 million for the three months ended March 31, 2021 and 2020, respectively.

The decrease in general and administrative expenses of $0.5 million resulted primarily from a decrease in share-based compensation.

Interest and Other Income ( Expense s ) , Net

Interest and other income (expenses), net, was $0.2 million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively.

The decrease in interest and other income (expenses), net of $0.6 million was primarily due to a decrease in our cash and cash equivalents and marketable securities.

Loss before income taxes

Income tax expense

Revenue was $13.0 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively.

The increase in revenue of $12.6 million reflects sales of our product Jelmyto following its approval by the FDA in April 2020.

Cost of Revenue

Cost of revenue was $1.4 million and $48,000 for the three months ended June 30, 2021 and 2020, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expense.

We expect this to continue to impact cost of revenue through the second quarter of 2022 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete inventories that we had expensed prior to receiving FDA approval.

Gross margin would have been approximately 87.7% versus 89.1% for the three months ended June 30, 2021, if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expense

Research and development (R&D) expense was $12.1 million and $8.1 million for the three months ended June 30, 2021 and 2020, respectively.

The overall increase of $4.0 million is primarily attributable to the launch of our Phase 3 ATLAS study for UGN-102 at the end of 2020, and development cost of UGN-301 partially offset by a decrease in R&D expense related to Jelmyto .

Selling and Marketing Expense

Selling and marketing expense was $11.8 million and $12.8 million for the three months ended June 30, 2021 and 2020, respectively.

The decrease in selling and marketing expense of $1.0 million is primarily attributable to decrease in share-based compensation expense, as well as the higher brand marketing expense in the second quarter of 2020 in preparation for the commercialization of Jelmyto .

General and Administrative Expense

General and administrative expense was $10.5 million and $11.3 million for the three months ended June 30, 2021 and 2020, respectively.

The decrease in general and administrative expense of $0.8 million resulted primarily from a decrease in share-based compensation expense as a result of reduction in the amount of equity awards and changes in our share price.

Financing on P repaid F orward O bligation

Financing on prepaid forward obligation was $3.1 million and $0 for the three months ended June 30, 2021 and 2020, respectively.

The cost in 2021 relates to the financing cost of the RTW Transaction which closed in May 2021.

Interest and Other Income, Net

Interest and other income, net was $33,000 and $0.5 million for the three months ended June 30, 2021 and 2020, respectively.

The decrease in interest and other income, net of $0.5 million was primarily due to lower interest earned on cash and marketable securities.

Comparison of the six months ended June 30, 2021 and 2020

The following table sets forth our results of operations for the six months ended June 30, 2021 and 2020.

Six Months Ended June 30,

(in thousands)

Cost of revenue

Operating expense:

Research and development

Selling and marketing

General and administrative

Total operating expense

Operating loss

Financing on prepaid forward obligation

Interest and other income, net

Loss before income taxes

Income tax expense

Revenue was $20.5 million and $0.4 million for the six months ended June 30, 2021 and 2020, respectively.

The increase in revenue of $20.1 million reflects sales of our product Jelmyto following its approval by the FDA in April 2020.

Cost of Revenue

Cost of revenue was $2.3 million and $48,000 for the six months ended June 30, 2021 and 2020, respectively.

In periods prior to receiving FDA approval for Jelmyto , we recognized inventory and related costs associated with the manufacture of Jelmyto as research and development expense.

Gross margin would have been approximately 87.0% versus 88.7% for the six months ended June 30, 2021 if we had not sold Jelmyto units that were expensed prior to regulatory approval.

Research and Development Expense

Research and development (R&D) expense was $22.6 million and $24.7 million for the six months ended June 30, 2021 and 2020, respectively.

The decrease of $2.1 million is primarily attributable to the one-time payment in the prior year of $6.6 million to unwind our obligation to the IIA as well as a decrease in R&D expense related to Jelmyto, partially offset by R&D expense in the current year related to the launch of our Phase 3 ATLAS study for UGN-102 at the end of 2020.

Selling and Marketing Expense

Selling and marketing expense was $22.9 million and $23.4 million for the six months ended June 30, 2021 and 2020, respectively.

The decrease in selling and marketing expense of $0.5 million is primarily attributable to the higher brand marketing expense in the first half of 2020 in preparation for the commercialization of Jelmyto .

General and Administrative Expense

General and administrative expense was $21.5 million and $22.6 million for the six months ended June 30, 2021 and 2020, respectively.

The decrease in general and administrative expense of $1.1 million resulted primarily from a decrease in share-based compensation as a result of reduction in the amount of equity awards and changes in our share price, as well as a decrease in our cash and cash equivalents and marketable securities .

Financing on Prepaid Forward Obligation

Financing on prepaid forward obligation was $3.1 million and $0 for the six months ended June 30, 2021 and 2020, respectively.

The cost in 2021 relates to the financing cost of the RTW Transaction which closed in May 2021.

Interest and Other Income, Net

Interest and other income, net was an $0.2 million and $1.2 million for the six months ended June 30, 2021 and 2020, respectively.

The decrease in interest and other income, net of $1.0 million was primarily due to lower interest earned on cash and marketable securities.

Liquidity and Capital Resources

As of March 31, 2021, we had $75.9 million in cash and cash equivalents and marketable securities.

As of June 30, 2021, we had $129.3 million in cash and cash equivalents and marketable securities.

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

Based on our cash flow projections, we believe that our current cash and cash equivalents and marketable securities are sufficient to fund our planned operations for at least the next 12 months.

Through March 31, 2021, we funded our operations primarily through public equity offerings and private placements of equity securities.

Through June 30, 2021, we funded our operations primarily through public equity offerings, private placements of equity securities and our funding arrangement with RTW Investments (“RTW”).

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

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

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

RTW will provide us 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.

We received the $75.0 million of cash in May 2021 following the receipt of necessary regulatory approvals.

We have incurred losses since our inception and negative cash flows from our operations, and as of March 31, 2021 we had an accumulated deficit of $382.4 million.

We anticipate that we will continue to incur losses for at least the next two years.

Our primary uses of capital are, and we expect will continue to be, commercialization activities, research and development expenses, including third-party clinical research and development services, laboratory and related supplies, clinical costs, including manufacturing costs, legal and other regulatory expenses and general and administrative costs, partially offset by proceeds from sales of Jelmyto.

In March 2021, we entered into a prepaid forward agreement with RTW, pursuant to which RTW agreed to provide us with an upfront cash payment of $75.0 million to support the launch of Jelmyto and the development of UGN-102, and we agreed to provide RTW with tiered future payments based on global annual net product sales of Jelmyto and UGN-102, if approved.

In May 2021, following the receipt of necessary regulatory approvals, we received the $75.0 million prepaid forward payment ($72.5 million net of transaction costs) from RTW.

We have incurred losses since our inception and negative cash flows from our operations, and as of June 30, 2021 we had an accumulated deficit of $408.7 million.

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

Our primary uses of capital are, and we expect will continue to be, commercialization activities, research and development expense, including third-party clinical research and development services, laboratory and related supplies, clinical costs, including manufacturing costs, legal and other regulatory expense and general and administrative costs, partially offset by proceeds from sales of Jelmyto .

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

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $27.4 million during the three months ended March 31, 2021, compared to $35.6 million during the three months ended March 31, 2020.

The $8.2 million decrease was attributable primarily to the decrease of $11.9 million in the net loss driven by revenue from sales of our product Jelmyto during the three months ended March 31, 2021, as well as the payment to the IIA during the three months ended March 31, 2020, partially offset by inventory build and sales commission payments during the three months ended March 31, 2021.

Net cash used in operating activities was $46.3 million during the six months ended June 30, 2021, compared to $59.6 million during the six months ended June 30, 2020.

The $13.2 million decrease was attributable primarily to the decrease of $17.0 million in the net loss driven by revenue from sales of our product Jelmyto during the six months ended June 30, 2021, as well as the payment to the IIA during the six months ended June 30, 2020.

These were partially offset by inventory build and sales commission payments during the six months ended June 30, 2021.

Investing Activities

Net cash provided by investing activities was $15.0 million during the three months ended March 31, 2021, compared to $13.0 million provided by investing activities during the three months ended March 31, 2020.

The increase of $2.0 million is primarily related to a decrease in purchases of marketable securities as compared to the prior year.

Net cash used in investing activities was $15.7 million during the six months ended June 30, 2021, compared to $30.5 million provided by investing activities during the six months ended June 30, 2020.

The net increase of $46.2 million is primarily related to a decrease in maturities of marketable securities, in addition to an increase in purchases of marketable securities as compared to the prior year.

Financing Activities

Net cash provided by financing activities was $4,000 during the three months ended March 31, 2021, compared to $0.1 million during the three months ended March 31, 2020.

The decrease of $0.1 million is primarily related a decrease in proceeds from exercise of options, partially offset by reduction in issuance costs.

Net cash provided by financing activities was $72.5 million during the six months ended June 30, 2021, compared to $16.4 million during the six months ended June 30, 2020.

The increase of $56.1 million is related to the receipt of $72.5 million of net proceeds from the RTW Transaction in the current year, as compared to net proceeds received from sales under the ATM Sales Agreement in 2020.

Off‑Balance Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis