UroGen Pharma Ltd. Q2 FY2020 Earnings Call

Thank you for standing by and welcome to the UroGen Pharma Second Quarter 2020 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peter Pfreundschuh, CFO. Thank you. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's second quarter 2020 financial results and business update conference call. Earlier this morning we issued a press release providing an overview of our recent corporate highlights and financial results for the quarter ended June 30th, 2020. The press release can be accessed on the Investor's portion of our website at investors.urogen.com. Joining me on the call today are Liz Barrett, President and Chief Executive Officer; Dr. Mark Schoenberg, Chief Medical Officer; and Jeff Bova, Chief Commercial Officer. Please note that we are conducting our call today from different locations. So, we appreciate your patience and understanding should we have any technical difficulties. In just a minute, I will turn things over to Liz who will provide a summary of our recent corporate developments. Mark will then share a clinical development update and Jeff will discuss our commercial progress made since launching Jelmyto in June. Following Jeff, I will provide an overview of our financial highlights for the second quarter before opening up the call for questions. As a reminder, during today's call, we will be making forward-looking statements. Various remarks that we make during this call about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of UroGen Pharma's quarterly report on Form 10-Q filed with the SEC this morning and other filings that UroGen Pharma makes with the SEC from time to time, as well as any negative effects on UroGen's business and commercialization and product development plans caused by or associated with COVID-19 pandemic to the extent not disclosed previously. We encourage all investors to read the company's quarterly report on Form 10-Q and the company's other SEC filings. These documents are available under the SEC Filings section of the Investors page of UroGen's website at investors.urogen.com. In addition, all information we provide on this conference call represents our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. I will now turn the call over to Liz.

Thank you, Peter. Good morning, everyone, and thank you for joining us today. I'm delighted to be speaking with you representing a company that has successfully transitioned from a clinical to commercial stage biopharmaceutical company. Since the June 1 launch of Jelmyto for patients with low-grade, upper tract urothelial cancer or low-grade UTUC, we have been extremely pleased with the response from both physicians and patients. We are very pleased that as of June 30, 20 doses have been administered to patients, and thanks to the preparedness of our team, we've been able to meet every request for product and support. Jeff will provide more details on the launch, but interest has been significant and we continue to see increased demand despite the challenging environment. I would like to recognize and thank Jeff and the entire commercial team as they have proven their commitment to bringing this breakthrough therapy to patients. Further supporting our launch efforts have been the publication of results from the pivotal Phase 3 OLYMPUS trial of Jelmyto in the Lancet Oncology and in a supplement to the April 2020 issue of The Journal of Urology. This data was also the focus of a virtual presentation at the 2020 American Urological Association Annual Meeting in mid-May. Additionally, Dr. Karim Chamie from UCLA highlighted the benefits of Jelmyto as a kidney-sparing option for low-grade UTUC and reviewed the clinical profile and safety data as part of a presentation during the AUA live meeting at the end of June. The publication and presentation of OLYMPUS data continue to underscore why Jelmyto is important to patients as the first and only approved nonsurgical chemo-ablative treatment for those with this rare and difficult-to-treat disease. The OLYMPUS study has now completed, and we’ve submitted an updated label to the FDA including the final safety and efficacy data. While there's no mandated timeline for review, we believe the FDA will approve an updated label in the second half of 2020. It's important to note that the final data is consistent with our previous results, so we don't anticipate significant changes to our label. In addition to the approval and launch of our first therapy, we continue to advance key initiatives designed to build a long-term growth company. This includes the presentation of updated data from the Phase 2 OPTIMA trial of UGN-102 at the AUA Annual Meeting in May. No drugs are currently approved by the FDA as first-line treatment for low-grade intermediate-risk non-muscle invasive bladder cancer. This is a sizable opportunity with over 80,000 addressable patients in the US alone, and we believe UGN-102 has the potential to be the first FDA-approved therapy in this setting and an important nonsurgical treatment alternative for this difficult-to-treat patient population. Mark will share our latest update to the data as of July, but we remain very encouraged by the positive complete response in 12 months durability data. This data combined with the data from OLYMPUS durability data, supports the potential of UGN-102 to have a profound impact on patients who deserve better options. We remain on track to share the final CR and durability data from the OPTIMA II trial by year-end, and we will initiate the pivotal Phase 3 clinical study. Mark will share the details of the trial design including patient numbers and timing which are in line with our previous discussions and expectations. Additionally, our UGN-302 program has generated a lot of excitement internally and externally, and it has the potential to transform how high-grade non-muscle invasive bladder cancer is treated. UGN-302 is a combination of UGN-201, our TLR7/8 agonist, and zalifrelimab, the anti-CTLA-4 antibody we licensed from Agenus. There remains a significant unmet need in these patients despite recent approval, as the data supporting these approvals reflect only incremental improvement and the continued need for treatment post-BCG. Lastly, we have a strong balance sheet and are pleased with our financial outperformance in Q2. Peter will discuss in more detail, but our cash position allows for our current operations well into 2022, and we have no need for additional capital at this time. We continue to search for new medicines and partnerships to ensure sustainable growth, but early successes demonstrate the potential of our medicines and strengthen our belief that we can achieve peak revenue of more than $1 billion annually from our current portfolio. With that, I'll turn the call over to Mark to discuss our recent clinical update. Mark?

Thank you, Liz. We are very encouraged by the progress we’ve made and equally excited about what’s to come. I can tell you firsthand that the excitement in the urologic community about our recent advances is palpable. As a practicing neurologist, I'm particularly encouraged by the interest from my medical colleagues regarding the recent launch of Jelmyto and how they can incorporate this paradigm-shifting therapy into their practices. We had two virtual presentations at the AUA Annual Meeting in May. The first featured data from the Jelmyto pivotal OLYMPUS trial in patients with low-grade UTUC. The data in the presentation also published in Lancet Oncology demonstrated that 59% of low-grade UTUC patients treated with Jelmyto achieved a complete response. Based on interim data, durability at 12 months was estimated to be 84% by Kaplan-Meier analysis and median duration of response was not reached. Overall, the most frequently reported adverse events were ureteric stenosis, urinary tract infection, hematuria, flank pain, and nausea. We also shared interim data from the Phase 2b OPTIMA II trial of UGN-102 in patients with low-grade, intermediate-risk, non-muscle invasive bladder cancer. These data were also published as a supplement to the April 2020 issue of the Journal of Urology. We are pleased to share updated results as of June 19, 2020, which are consistent with our previous reports showing that 65% or 41 out of 63 patients treated with UGN-102 achieved a complete response three months after the start of therapy. In the subset of patients, the interim Kaplan-Meier analysis shows a 72.4% estimated duration of response to 12 months. This analysis includes only patients who are present for evaluation at each time point. Follow-up of these patients will continue until all patients have reached the 12-month timepoint. The most common adverse events, greater than 10%, were reported as mild to moderate and include dysuria, hematuria, urinary frequency, fatigue, urgency, and urinary tract infection. This data continue to validate our hypothesis that increased dwell time significantly improves the effectiveness of intravesical therapy. But UTUC and non-muscle invasive bladder cancer are treated by repetitive surgical intervention, which carries associated risks in an elderly population. Much like Jelmyto, UGN-102 may have the potential to fundamentally change the way low-grade, intermediate-risk non-muscle invasive bladder cancer is treated and help patients avoid recurrence of their cancer and repetitive surgeries. We have agreed to the design elements of our Phase 3 study with the FDA and are finalizing the protocol. The study will be a randomized, controlled trial in approximately 600 patients of UGN-102 with or without TURBT versus TURBT alone in patients with low-grade, non-muscle invasive bladder cancer and intermediate risk of occurrence. Patients will be randomized to either UGN-102 plus or minus TURBT or TURBT alone. At the three-month timepoint, patients will be assessed for response. Patients who have demonstrated a complete response to either UGN-102 or TURBT will continue for long-term follow-up. Patients who demonstrate a recurrence in either arm will undergo a TURBT. Based on previous Phase 2 data generated in this population, we believe the majority of patients treated with UGN-102 will not require a TURBT at three months. The primary endpoint of the study is disease-free survival, and the study is designed to conclude superiority and non-inferiority. We expect completion of the study within approximately three years, with the potential to stop early and prespecified interim analyses. We are excited by the robustness of the study design, which is important given the potential UGN-102 has to significantly disrupt the current treatment paradigm. We want to ensure patients have access as soon as possible, and the head-to-head comparison is expected to generate data demonstrating the value of treating patients with UGN-102 versus repetitive surgical intervention. Before I turn things over to Jeff, I want to provide a little more detail on UGN-302, a combination of UGN-201, which is our TLR7 agonist, as a monotherapy and zalifrelimab, the anti-CTLA4 antibody which we are developing in high-grade, non-muscle invasive bladder cancer. Patients with this disease are at higher risk for rapid progression with an increased risk of developing a life-threatening illness. Since the disease primarily impacts people in their 60s and 70s, often with other comorbidities, non-surgical treatment options are of vital importance. The current standard of care for high-grade, non-muscle invasive bladder cancer is transurethral resection of bladder tumor or TURBT, in addition to BCG. Those who do not respond to BCG then receive alternative intravesical therapies, enroll in a clinical trial, or undergo radical cystectomy, which is a complex surgery involving bladder removal and urinary tract reconstruction using a segment of the intestinal tract. This operation is associated with all of the typical risks of a major surgery and specific risks such as dehydration, electrolyte abnormalities, urinary tract infection, bowel obstruction, and ureter blockage. A cystectomy is associated with high rates of complication including gastrointestinal dysfunction, deep vein thrombosis, heart attacks, and death. The hypothesis that the preclinical team has been working on is that combinatorial immunotherapy is feasible and meaningful when applied locally, which is a very novel idea. Delivering the combination intravesically may sidestep systemic side effects and adverse events associated with systemic immunotherapy. What we found is that a combination of UGN-201 with an anti-CTLA-4 antibody resulted in smaller tumors and better survival in mice and some changes to immunological markers such as decreased T regulatory cells and increased CD8 to T-reg ratios in our model. We think these data support advancing this program into human trials as this may represent a novel approach to managing high-grade disease that has otherwise failed therapy with contemporary standards of care. As Liz mentioned, this program has generated considerable interest based on its potential to dramatically change how we treat this disease. I'd like to now turn the call over to Jeff.

Thank you, Mark. I'm excited to speak with you today on the heels of our June 1, Jelmyto launch, which is ahead of our timing and guidance to the street. As Liz shared, interest in Jelmyto has been significant and demand continued to increase despite the challenging environment thanks to the efforts of our entire team. We booked almost $400,000 in net sales as of June 30. We're definitely off to a solid start, and I remain optimistic that we can sustain our early momentum moving forward. While patient access is challenging in today's environment due to COVID-19, we are seeing patients able to be treated. Some of our field personnel have been limited in their live interactions with physicians, especially in areas of the country where infection rates are on the rise. But we have increased our investment in digital tools and are finding ATPs open to engaging with us virtually. Importantly, while some states are not allowing certain surgical procedures including RNUs, Jelmyto can be instilled in the clinic. And when patients are treated in a hospital setting, it’s an outpatient procedure typically under local anesthesia. In fact, most installations to date have been under local anesthesia. Thanks to this flexibility, we haven't heard about procedures being canceled or delayed due to COVID-19, and we've been able to treat patients in states hit disproportionately hard by the virus, including California and New Jersey, which is where our first patient was treated in June. While we are obviously early in our launch, we've seen many positive indicators. To date, we've activated roughly 100 sites, which means they have completed their internal processes and have or are ready to treat patients. This includes sites that participated in the Phase 3 OLYMPUS trial. We have also had two accounts treat more than one patient. This is an important metric to show that the process we have put in place has been smooth and the account is identifying other patients who could benefit from treatment with Jelmyto. To date, roughly 75% of treating physicians were not part of our Phase 3 trial. This isn't surprising given UTUC is a disease predominantly diagnosed in the community. But it underscores the fact that we have been focused on the right targets and are able to generate broad awareness of Jelmyto amongst community urologists. It also validates our mixing strategy and the utility of the partnerships we established with Option Care. From a coding and reimbursement perspective, we have committed significant resources to working with our top accounts and institutional accounts. As a result, multiple treatments have already been successfully reimbursed. Additionally, thanks to our market access team, we were able to complete both our C and J code applications. We are on track to receive our C code in September, which means it will go into effect in October and our J code in January of next year. So, again, we are definitely off to a solid start and we feel we are well-positioned to build on the momentum we generated since our June 1 launch. Before I turn things over to Peter, I want to recognize and applaud the efforts of healthcare providers and staff who have worked collaboratively with us to bring Jelmyto to patients. It's certainly been a challenging couple of months, but our team has overcome every obstacle and remains committed to doing whatever is necessary to address the unmet need in the urologic community with this novel and effective kidney-sparing treatment option. The work we are doing now will not only help us achieve our short-term goals but will build a foundation for future success with UGN-102 and other opportunities in our pipeline. And with that, I'd like to turn the call over to Peter who will discuss financials.

Thank you, Jeff. And good morning, everyone on today's call. UroGen recorded net product sales of Jelmyto for the second quarter of 2020 of approximately $371,500, reflecting sales only during the month of June 2020. Associated costs of revenues were approximately $48,200 including certain one-time initial costs. In periods prior to receiving FDA approval for Jelmyto, the company recognized inventory and related costs associated with the manufacturing of Jelmyto as research and development expenses. We expect this to continue to impact our cost of revenues during the fourth quarter of 2021 as we produce Jelmyto at costs reflecting the full cost of manufacturing and as we deplete these inventories that we had expensed prior to receiving FDA approval. For the second quarter ended June 30, 2020, we recorded a net loss of $31.3 million or $1.44 per share. This compares to a net loss of approximately $22.5 million or $1.08 per share for the same period in 2019. The net loss for the second quarter ended June 30, 2020 includes $7.1 million in noncash share-based compensation expense as compared to $7.2 million for the same period in 2019. For the six months ended June 30, 2020, we recorded a net loss of $69.1 million or $3.22 per share. This compares to a net loss of approximately $43.9 million or $2.19 per share for the same period in 2019. The net loss for the six months ended June 30, 2020 includes $14.7 million in noncash share-based compensation expense as compared to $14.7 million for the same period in 2019. Research and development expenses for the second quarter ended June 30, 2020 were $8.1 million as compared to $10 million for the same period in 2019. Research and development expenses also include $1.6 million of noncash share-based compensation expenses in the second quarter ended June 30, 2020 as compared to $2 million for the same period in 2019. The decrease in research and development expenses from 2019 to 2020 is mainly attributable to the completion of the Phase 3 clinical trials and regulatory activity for UGN-101, and decreased activity related to UGN-102 Phase 2 clinical trials, partially offset by an increase in headcount and related costs in anticipation of UGN-102 Phase 3 clinical trials. Research and development expenses for the six months ended June 30, 2020 were $24.7 million as compared to $19.7 million for the same period in 2019. Research and development expenses also include $3.5 million of noncash share-based compensation expense for the six months ended June 30, 2020 as compared to $4.3 million for the same period in 2019. In addition to the above, the increase in research and development expenses for the six months ended June 30 from 2019 to 2020 was mainly attributable to a one-time payment of $6.6 million to fulfill the company's obligation to the Israeli Innovation Authority during the first quarter of 2020. Sales and marketing expenses for the second quarter ended June 30, 2020 were $12.8 million as compared to $3.2 million for the same period in 2019. Sales and marketing expenses include $1.2 million of non-cash share-based compensation expense for the second quarter ended June 30, 2020, as compared to $0.5 million for the same period in 2019. The increase in selling and expenses resulted from the increased costs and activities related to the launch of Jelmyto including headcount and related costs associated with our sales force. Selling and marketing expenses for the six months ended June 30, 2020 were $23.4 million compared to $5.8 million for the same period in 2019. Selling and marketing expenses include $2.3 million of non-cash share-based compensation expense for the six months ended June 30, 2020, as compared to $0.9 million for the same period in 2019. The increase in selling and marketing expenses resulted from increased costs and activities related to the launch of Jelmyto including headcount and related costs associated with our sales force. General and administrative expenses for the second quarter ended June 30, 2020, were $11.3 million as compared to $10.6 million for the same period in 2019. General and administrative expenses include $4.3 million of non-cash share-based compensation expense for the second quarter ended June 30, 2020, as compared to $4.7 million for the same period in 2019. The increase in general and administrative expenses from 2019 to 2020 resulted primarily from an increase in costs as part of the build-out of our company with the commercialization of our first products and consulting and other outside fees. General and administrative expenses for the six months ended June 30, 2020 were $22.6 million as compared to $20.7 million for the same period in 2019. General and administrative expenses include $8.9 million of noncash share-based compensation expense for the six months ended June 30, 2020, as compared to $9.4 million for the same period in 2019. The increase in general and administrative expenses from 2019 to 2020 resulted primarily from an increase in costs as part of the build-out of the company for the commercialization of our first product and consulting and other outside fees. We closed the second quarter of 2020 with $151.6 million in cash, cash equivalents, and marketable securities. This excludes restricted cash. Our current balance sheet supports the company well into 2022 as we ramp the commercialization of Jelmyto and start to see offsetting operating margin and cash inflows from commercial sales. This will allow us to vigorously advance the clinical development of UGN-102 as well as other clinical programs already in the pipeline. With that, operator, I would like to turn the call over for questions.

Thank you, sir. Our first question comes from the line of Ram Selvaraju from H.C. Wainwright. Please go ahead.

Hi. This is Blair on for Ram. A couple of questions from me. First, can you talk a little bit more about how COVID-19 has affected the launch of Jelmyto? And what kind of strategies are you employing to mitigate this impact? Do you anticipate a more normalized commercial environment to materialize later on? And how is your virtual platform been functioning thus far and what attendance might there be?

I would like to make a few comments before handing it over to Jeff, who can provide more details. As Jeff mentioned earlier, we haven't encountered issues when patients are scheduled or coming in for their treatment. He also noted that in some states, face-to-face interactions with representatives are limited, which is why much of our engagement is virtual. Additionally, we have nurse educators and medical science liaisons who can educate doctors and address their questions. In my opinion, while we lack specific data to back this up, there is a general decline in patient engagement with physicians across the board, not just for us. However, despite this trend, we are performing better than we anticipated at this stage, and we don't currently see it having a direct impact. The long-term effects of COVID remain uncertain and will depend on developments over the coming months. While reports indicate that cancer diagnoses and treatments have dropped by over 40%, we haven't experienced that directly, although we are noticing some restrictions in engagement. Jeff can elaborate on our strategies moving forward. It's a changing situation, but I want to emphasize that the number of patients in our pipeline and those we have treated so far significantly exceeds our expectations at this point. We need to stay aware of this situation, and now I will let Jeff discuss our strategy further.

Sure. Thanks, Liz. We have increased our resources and investment in our digital platform and non-personnel promotions. The virtual AUA was successfully launched and continues to show high click-through rates and engagement times that exceed industry averages. As Liz mentioned, the situation remains fluid, and many hospitals are currently unable to perform an RNU surgery, which is done overnight. I spoke with a few physicians who can't perform this procedure at the moment. Jelmyto is now another viable option since it can be administered in an outpatient setting with local anesthesia. We are also boosting our investment in major publications that urologists read to maintain awareness. The challenges we are encountering mainly involve our customers' internal processes, such as informal formulary reviews and coordinating with billing and coding. We have not experienced delays due to COVID-19.

Okay. Great. And could you talk a little bit about the impact of the inclusion of the NCCN Clinical Practice Guidelines for Jelmyto?

It's a record inclusion, and NCCN acknowledges the unmet need in this area, which led to its swift addition to their guidelines. We will work with NCCN to communicate this, as it's an aspect we can actively promote. Any inclusion like this will certainly benefit the brand and support our promotional team, making it a positive development, especially considering it happened shortly after the launch.

I think the other only comment about the NCCN Guidelines, as you know a lot of payers follow NCCN Guidelines and so that also helps us when we think about any reimbursement as we go forward. So, thanks, Blair.

Okay. Great. And if I could just squeeze in one more real quick. Do you anticipate any impediments to enrollment with UGN-102 the pivotal study due to COVID-19?

We currently do not anticipate any issues with enrollment for UGN-102, mainly because we have expanded our number of sites outside of the US and in certain Eastern European markets where we do not see delays. While there may be some delays in the US, we have already planned for that and do not expect it to affect our enrollment at all.

Thank you. Our next question comes from Derek Archila from Stifel. Please go ahead.

Hey, thanks for taking my call. I'm interested in knowing the current number of patients using the drug, as well as how many doctors are prescribing it. Does this vary by different regions in the country? That's all from me. Thanks.

Yes, it's Liz. The figure we discussed regarding the 20 doses refers to eight patients. Moving forward, we won't provide all patient numbers every month or quarter as we begin our revenue generation. However, it's crucial to note that we have an influx of both new and returning patients. As we progress over the weeks and months, these patients are being transitioned to weekly doses, so it's vital that they continue to receive all six doses. In June, we had patients who received one dose, as well as those who received multiple doses. I'll let Jeff provide insights on the physicians involved. We're pleased with our progress and, while we can't share numbers after Q2, I can say we're seeing ongoing improvement as we approach Q3. Jeff, would you like to add anything about the physicians without revealing too much detailed information since we are still in the early stages?

We’ve seen increasing interest from physicians in both community and academic environments. Regarding your question about specific areas, we don’t have distinct pockets to mention. Our patient base includes individuals from California, with our first patient located in New Jersey, and we recently treated a patient in Long Island, which has been significantly affected. We also have patients in Missouri. Overall, there doesn’t seem to be a geographical barrier impacting patient access. I hope that provides clarification.

Thank you. Our next question comes from the line of Boris Peaker from Cowen. Please go ahead.

Good morning. For Jelmyto, I'm just curious, do you anticipate a stronger uptake in the academic or community settings? And if you can also expand on what some of the economic implications for using the drug in both of these settings would be?

Yeah. Jeff, why don’t you answer that?

Sure. We believe that most diagnoses occur in the community, and this has been confirmed with the patients we currently have, suggesting that approximately 75% of patients will be diagnosed there. However, some patients we have received come from our Phase 3 physicians who were part of the OLYMPUS trial, which includes major referral centers that will continue to play a significant role for Jelmyto. As mentioned, the majority of patients are diagnosed in the community, and the location where a urologist performs surgery will influence where the treatment is administered. From a financial perspective, this is a buy-and-bill drug under Part B, and physicians are preparing their claims submissions to be reimbursed accordingly. Reimbursement will remain consistent until we establish an Average Selling Price (ASP), which we expect will happen in January. The reimbursement will depend on the MAC carrier, with 9 to 10 MACs overseeing Medicare nationwide, covering either 95% of the Average Wholesale Price or the Wholesale Acquisition Cost plus model until the ASP is set. Fortunately, physicians are already familiar with the buy-and-bill process from drugs like PROVENGE and Xofigo, so this should not pose a significant challenge for us. They have a good understanding of the buy-and-bill landscape.

Got you. And my last question, what's the status of the European update? When should we be hearing from there?

Yeah. We just recently engaged a small firm that has two principals who were part of the EMA, and we're working through that as we've said before. So, we expect to have a plan in the next couple of months. As we've stated before, the issue isn't so much getting an approval; it’s really getting reimbursement. So, we've got to work through countries like Germany and France, and we've got upcoming meetings around what would it actually take to get good reimbursement there, because they use the comparator model. That’s a challenging situation for UGN-101. For UGN-101 with the head-to-head in UGN-102, we won’t have that issue, but we do want to make sure that we have it available. We also have engaged in Japan, the regulatory authorities, and so we’re working through those and I think we’ll see something in the next three to four months, we'll have a more clear plan. When do we need to do another study or what exactly we would need to commercialize in those geographies.

Thank you. Our next question comes from the line of Leland Gershell from Oppenheimer. Please go ahead.

Good morning. Thank you for taking my questions. I have a question regarding the commercial sector, directed to Jeff, but Mark might want to weigh in as well. Recently, there have been publications analyzing data from previous studies across various tumors, particularly focusing on how long patients can delay treatment and the potential outcomes of such delays. In the context of COVID-19, urologists are determining which patients require immediate intervention versus those who can wait. Specifically, for low-grade UTUC, how likely do you think urologists will postpone therapy to prioritize patients with more aggressive or advanced diseases, despite lacking clear evidence of this happening? Furthermore, given that some hospitals may not be performing RNUs, will urologists have more time to conduct in-office procedures for earlier-stage cancers? How should we consider these conflicting factors as we navigate through the pandemic? I also have a few questions related to R&D. Thank you.

Yeah. So, Jeff, why don’t you start first and then Mark can give his perspective from a physician's standpoint, and then answer your R&D questions. So, Jeff.

Sure. What we've noticed is that just like everyone else is searching for solutions to COVID-19, our physicians are doing the same. For example, there was a patient who didn't want to go to the hospital, so the physician looked for surgery centers where the patient would feel more at ease. As the physician mentioned to me, and I’ll let Mark elaborate on this, patients often have to wait for treatment. These patients are constantly reminded that their cancer has returned, and they may experience significant symptoms, such as blood in their urine. This naturally increases their anxiety as they wait for treatment. We're seeing that physicians are making an effort to work with their patients to ensure they feel comfortable, especially in situations where hospital access is limited, where other patients are being prioritized, or if the patient simply feels uneasy about going to a hospital. Mark, would you like to add anything?

Yeah. Leland, it's a great question, and I think as you might well anticipate, everyone is struggling. We're all struggling with huge backlogs of patients who were delayed because of the limitations on the availability of elective surgery time for patients just like this. So, we're doing all the things that Jeff just described. But I do think actually the circumstances provide an opportunity for physicians to think creatively about how to treat patients with low-grade disease. So, in a very paradoxical way, COVID is providing an interesting opportunity for physicians to really think through alternative therapies for patients with low-grade disease, and obviously Jelmyto is such an alternative. So, in a paradoxical way, it may actually push physicians and patients to consider this therapy more readily than they might otherwise have.

Thank you. I have a question about Jelmyto on the R&D side. I believe there has been a study, possibly addressing its use in maintenance settings for long-term treatment or for patients who might return to Jelmyto after initial usage in case of recurrence. Could you share the current status of those data? Also, regarding the upcoming bladder trial, I recall you mentioned some interim opportunities that might not be too early or could advance toward a filing. Can you provide more details on what the expectations are for those interim results? Thank you.

Sure. Thanks. Regarding maintenance, the Lancet article provides a good overview of what we know and don’t know about maintenance therapy. What we know is that most patients in the trial received at least some maintenance therapy, but the personalized approach made it challenging to draw definitive conclusions about its value. Therefore, the decision on maintenance use is left to physicians in the context of using Jelmyto for treating upper tract urothelial disease. In terms of retreatment, we are considering a program that would benefit patients who respond well but then relapse. We want to study the usefulness of retreatment and plan to initiate that study. We previously had a retreatment trial, but we didn’t have any patients to treat. We are looking to resume that program as we continue monitoring patients on Jelmyto for up to three years for more information. Lastly, regarding the bladder program and the Phase 3 trial, we have not disclosed the parameters for early closure or data reevaluation yet, as that is part of the study design. Once we start the trial and gather data, we will share any significant updates, but we haven't provided specific details about that yet.

Great. Thanks for answering my questions.

Thank you. Our next question comes from Paul Choi from Goldman Sachs. Please go ahead.

Hi. Thank you and good morning, everyone, and congratulations on all the progress. I have two questions regarding the pipeline. First, regarding UGN-102, can you clarify how patient stratification will be handled in the Phase 3 plan starting later this year? Specifically, will you consider risk factors, prior treatment experiences, or treatment-naive patients? I also have a follow-up question related to that.

Mark, you want to go ahead and answer that?

Yeah. Sure. Paul, thank you. So, a great question. This is in our Phase 2 study. As you know, the study included both patients with new disease, patients who had not previously been treated as well as patients who have recurred. And in fact, we know that the majority of patients in the Phase 2 trial were patients with a prior history of tumor which is very characteristic, as I’m sure you know, of the group we are focusing on, which is the intermediate-risk low-grade population. And just to remind everyone, the intermediate risk is disease that is low-grade for the most part. Our study will be low-grade multifocal larger tumors and very importantly, a history of prior treatment for relapsing disease. So, we will be focusing on exactly the same population that we looked at in the Phase 2 trial and would expect that there might well be a greater number of patients with recurrent disease because that is the nature of the population. They will likely also be patients with de novo disease as well.

Okay. Thanks for that clarification, Mark. And then my second pipeline question is on UGN-302 and specifically with regard to sort of next steps and potential data updates either for UGN-201 or for the zalifrelimab CTLA-4, either when you would might potentially provide either monotherapy or combination updates. Thank you very much.

Paul, thanks. So, we are working in earnest internally as we have announced previously. Our plan is to initiate a human trial as part of this composite program this year, and that is still our intention, but we haven't disclosed any additional details about that. And some of this is, as I think you can well imagine, a series of complex interactions, the planning of the clinical trial with various preclinical activities as well after including some aspects of formulation. But our plan is to go ahead with clinical experiments for the end of this year, and we're certainly update you as we have more specifics to share.

Thank you. Our last question comes from the line of Matt Kaplan from Ladenburg Thalmann. Please go ahead.

Hey, guys. Good morning. Thanks for taking the question. Just wanted to follow up a little bit more on the UGN-102 Phase 3 clinical trial design and timeline. Mark, maybe perhaps you can give us some additional detail in terms of what you expect the primary endpoint would be and the potential timeline for the completion of that study?

Thank you for the question, Matt. Mark provided most of the details earlier. We are targeting approximately 600 patients and plan to complete enrollment within a year. As I mentioned in our earlier discussion, a significant number of patients will be located outside of the US to avoid any delays caused by the pandemic. We are very confident in the development team's efforts, particularly with Mark’s focus on engaging some accelerated clinical research organizations. We are on track to initiate the study and feel optimistic about it. Additionally, as Mark highlighted, we have planned a couple of interim analyses to monitor progress. Since this is an event-driven trial, we cannot predict the exact timing, but we have a conservative estimate indicating that it should be completed within three years, assuming it follows the entire course. The study will assess both non-inferiority and superiority, and those are the guidelines we will adhere to. There will also be a data monitoring committee reviewing the data as it comes in, providing us with insights. I believe that covers the information we can share at this moment. Mark, have I overlooked anything? Would you like to add anything?

No. Liz, thanks. No. I think that’s what we can share right now...

Sorry. He asked about the endpoint. Yeah. I'm sorry, Mark. He asked about the endpoint if you could talk about that endpoint would be very...

Right. So yeah. So, obviously, in this game with this disease which is managing recurrence shows, you know, in any typical setting, we'd be talking about recurrence-free survival for this type of disease. So, I hope that helps with that particular question.

Great. No. Thanks. Thanks, Liz. Thanks, Mark and congrats on the progress.

Thank you. This concludes our Q&A session. At this time, I'd like to turn the call over to Liz Barrett for closing comments. Please go ahead.

Great. Thank you. Thank you, operator. We've made significant progress in 2020. We look forward to continuing the momentum. It has been, as I mentioned a couple of times on the call, better than we expected even including in the pandemic. We know we've hit the ground running from a commercial standpoint. We've hit every milestone with a positive outcome. That you used to heard Peter talk about our financial situation. The team is really showing creativity and resilience. They're launching our first product as we navigate through COVID-19 and I'm really confident in our ability to continue to advance the mission to pioneer new treatments for improved patient care and specialty cancers and neurologic disease. Our overall fundamentals and long-term prospects remain strong. Our team continues to work around the clock to make sure that we provide Jelmyto to patients who have been waiting for better options. And as we make progress with our commercial launch, we advance our pipeline of innovative medicines. We look forward to providing you with further updates. So, we really appreciate your time and interest in our company and for your continued support. So, operator, you may disconnect at this time. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Good day.