Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the UroGen Pharma Full Year 2023 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Vincent Perrone, Head of Investor Relations. You may begin.

Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's full year 2023 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 and year ended December 31, 2023. The press release can be accessed on the Investors 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; Jeff Bova, Chief Commercial Officer; and Don Kim, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These may include statements regarding our ongoing commercialization activities related to JELMYTO, our ongoing and planned clinical trials, commercial and clinical milestones, market and revenue projections and opportunities, our commercialization strategy and expectations as well as potential future commercialization activities for UGN-102, if approved, anticipated data, regulatory filings and decisions, including UGN-102 potentially receiving a priority review, UGN-102 being transformative and the major growth driver for UroGen if approved, future research and development efforts for UGN-103, UGN-104 and UGN-301, our corporate goals and 2024 financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of potential risks can be found in our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements, and UroGen disclaims any obligation to update these statements. I'll now turn the call over to Liz. Liz?

Thanks, Vincent, and thank you to everyone joining us this morning. 2023 was a very successful year for UroGen, laying the groundwork for progress and growth in the years ahead. The Phase III ATLAS and ENVISION trial evaluating our lead development candidate, UGN-102, both met their primary endpoints. The data underscore the potential of UGN-102 to be a transformational product and to advance the standard of care in low-grade, intermediate risk, non-muscle invasive bladder cancer. We have started the regulatory submission process and believe that, if approved, UGN-102 will be the major growth driver for our company. We see a great opportunity to improve the lives of patients and create value for our stakeholders. Meanwhile, our existing commercial product, JELMYTO, continues to enjoy double-digit growth and positive adoption trends. The current clinical development plan for UGN-102 was agreed with the FDA in a pre-NDA meeting that was held in late 2023. The FDA confirmed that the current clinical development plan for UGN-102, which includes evaluation of duration of complete response data at 12 months from the pivotal ENVISION trial, would support submission of an NDA for the treatment of low-grade, intermediate risk, non-muscle invasive bladder cancer. We announced in January this year that we had submitted the Chemistry Manufacturing and Controls, or CMC modules of this application. The objective of enrolling NDA is to facilitate early engagement with the agency and potentially allow for more efficient and timely review of the application. We plan to share the data on the duration of response endpoint from ENVISION in June of this year. Assuming the data is as expected, we will complete the submission of the NDA late in the third quarter. If granted priority review, we anticipate approval and launch of UGN-102 as early as the first quarter of 2025. The commercial opportunity in low-grade, intermediate risk, non-muscle invasive bladder cancer is significant. We estimate that approximately 82,000 patients are eligible each year in the U.S. So the overall market is around 10 times the size of the urothelial carcinoma market that JELMYTO currently addresses. This translates into a total market in excess of $3 billion and over a $1 billion revenue opportunity for UGN-102 when using conservative assumptions. We also announced in January that we entered into a strategic license and supply agreement with medac to develop next-generation novel mitomycin-based RTGel formulations of JELMYTO and UGN-102. Through this agreement, we are combining our proprietary RTGel with medac's proprietary formulation of mitomycin. Our next-generation products are anticipated to provide advantages in terms of production, manufacturing efficiency, supply and product convenience. Importantly, the program could provide additional patent protection for our urothelial cancer franchise. Medac has issued IP with protection expected to last until 2035, and UroGen has separate pending U.S. patent applications that, if granted, could provide protection until December of 2041. We will need to conduct clinical endpoint studies to support NDA for UGN-103 and for UGN-104, our next-generation formulation of JELMYTO. Importantly, this will be a smaller development program, and we intend to move directly into Phase III for both products beginning in 2024. Turning to JELMYTO revenue. The product achieved sales of $23.5 million in Q4 and $82.7 million for the full year 2023. Reflected in this number are some non-patient sales. We have also seen an increase in gross-to-net deductions. But most importantly, patient demand drivers remain strong with patient enrollment forms, new patient starts and doses, all achieving approximately 25% growth for the year. Jeff will provide additional details in a few minutes. As we look toward long-term growth, it is critical that we maintain a strong balance sheet and the ability to expand our patient impact through life cycle management and development of new medicines to treat urothelial and specialty cancers. We are pleased to announce our expanded partnership with Pharmakon Advisors, providing us with additional funding of up to $100 million. As part of the agreement, we are required to draw down on the first tranche of $25 million by September 30, with the option to draw up to an additional $75 million following UGN-102 approval, if needed. The benefits of this agreement are that we now have an additional source of capital with flexibility on the amount we utilize. We have enjoyed a productive and collaborative partnership with Pharmakon Advisors and look forward to closely working with them in the future. With our current cash balance and approximately $25 million recently sourced from the ATM, we expect to have the capital to execute a comprehensive launch for UGN-102, if approved, and fund new potential clinical studies. I will now turn the call over to Mark Schoenberg, our Chief Commercial Officer. Mark?

Thank you, Liz. We have the opportunity to share the Phase III ATLAS and ENVISION data with the physician community at the Society of Urologic Oncology Annual Meeting, which took place in November. We were especially pleased that the SUO has selected the ENVISION data as one of only two late-breaking trials designated for oral presentation at this meeting. Looking at the body of clinical data we have generated, UGN-102 has demonstrated consistency in the 3-month complete response rate across ATLAS, ENVISION and our prior Phase IIb OPTIMA II study. The complete response rates observed in these three studies were 65%, 79% and 65%, respectively. Moreover, ATLAS data suggest UGN-102 appears to be superior to surgery once the complete response has been achieved. In the ATLAS study, 80% of patients who received UGN-102 experienced a duration of response to 12 months compared to only 68% of those patients who had a TURBT alone. We believe that the ability of UGN-102 to achieve high complete response rates, non-surgically and to potentially extend disease-free living will ultimately minimize the need for multiple surgeries in this patient population. The average age for diagnosis of bladder cancer is in the mid-70s. Many of these patients have comorbidities that highlight the need for non-surgical treatment alternatives to the contemporary standard of care TURBT. UGN-102 has the unique advantage of being easy to administer. Patients can be treated in their urologists' office without the need for an OR and all the disruption to daily life associated with surgery. As Liz mentioned, the next milestone in this program will be the secondary endpoint of 12-month duration of response data from ENVISION. Different from the ATLAS data, ENVISION consisted solely of recurrent patients that had received at least one TURBT. If we look at the comparable subgroup of recurrent patients in ATLAS, the 12-month duration of response was 66%. The Phase IIb OPTIMA study projected a 12-month duration of response in the high 50s. As we have consistently communicated, we expect the ENVISION data to show a duration of response at 12 months that is 50% or higher, and we believe this is clinically meaningful and will be an improvement over the current standard of care. Importantly, in patient interviews conducted during the ENVISION trial, patients overwhelmingly prefer UGN-102 and said they would recommend it to other patients, highlighting the lack of disruption to daily life and that UGN-102 was less invasive, less painful and less time-consuming than the standard of care. If approved, UGN-102 will be the first and only nonsurgical primary therapeutic to treat a subset of bladder cancer characterized by high recurrence rates and multiple surgeries. Beyond our lead programs, we continue to advance our immuno-oncology candidate, UGN-301, into the clinic. UGN-301 is comprised of an anti-CTLA-4 antibody delivered using our proprietary RTGel technology. We are conducting a Phase I clinical study to evaluate the safety, tolerability and establish a recommended Phase II dose for UGN-301 as monotherapy and in combination with other agents. Safety and tolerability data for the monotherapy arm are expected in mid-2024. We have also initiated combination therapy arms evaluating UGN-301, plus gemcitabine and UGN-301, plus UGN-201, our proprietary formulation of imiquimod, a TLR7 agonist in high-grade NMIBC patients. We believe we have a unique approach in this area and look forward to providing updates on this trial as it moves forward. Finally, as Liz mentioned at the beginning of the call, we are pushing ahead with next-generation formulations of our upper tract and bladder products for low-grade urothelial cancers. We look forward to commencing Phase III efforts for both drugs UGN-103 for the bladder and UGN-104 for the upper tract soon, and we'll keep you posted as those clinical programs advance. And with that, I will turn the call over to Jeff Bova to provide a commercial update. Jeff?

Thank you, Mark. JELMYTO sales, as Liz mentioned, were $23.5 million and $82.7 million for the fourth quarter and full year 2023, respectively. Demand remained strong in 2023. Despite achieving our targeted unit sales, the value of each unit was lower than anticipated, primarily due to gross-to-net erosion driven by higher-than-forecasted 340B rebate and estimated Medicare refunds for discarded drug, offset by non-patient sales. We are providing guidance for 2024 for the first time today and are forecasting full year JELMYTO net revenues to be in the range of $95 million to $102 million. While slightly lower than consensus, this reflects continued gross-to-net erosion despite anticipated continuing double-digit patient growth. Don will provide additional detail on our guidance in a few minutes. It is important to note that the CMS discarded drug provision will not impact UGN-102 as the bladder allows for installation without waste. Additionally, UGN-102 will be less sensitive to 340B since it will primarily be administered in the doctor's office. As mentioned in past calls, we've added regional operational managers, which held every facet of the business, particularly operational roles intended to focus on opening new accounts and preparing them for JELMYTO use. Our data show that territories with the most sites of care are the most successful, and this role is instrumental in growing sites of care. There is a growing body of evidence from real-world evidence studies that continue to strengthen and reinforce JELMYTO's value proposition. We have data from over three years in the market that reinforce and support the product's efficacy and safety in the real-world setting. I am pleased to report three aspects reviewing JELMYTO real-world evidence outcomes have been accepted at the upcoming AUA meeting, and our registry will provide additional insight into outcomes with JELMYTO use in the real-world setting. For UGN-102, we are now executing our pre-commercialization plan in preparation for a prospective launch in early 2025. This includes engaging with urologists and patient advocacy groups. There is approximately 95% overlap in the prescriber base with JELMYTO, which allows us to leverage our existing commercial organization. Our research tells us physicians are concerned with the high rate of recurrence, and many patients often experience limited intervals between TURBT. They're seeking strategies to prolong or extend the interval between recurrences as these patients don't get much of a break between the TURBT. The literature shows the complete response rates for surgery at three months are in the range of 40% to 70%. Our understanding of bladder cancer is that the underlying pathology of this disease is not always visible to the surgeon. Normal appearing cells in the bladder may contain genetic abnormalities that will give rise to these recurrences. UGN-102 treats the disease in a way that permits us to not only treat the visible lesions but also that background pathology. And we believe that's why we achieved better long-term disease control and longer disease-free intervals than the current standard of care in our ATLAS study. We are also considering the economics of how bladder cancer is treated as there is a misconception that surgeons generate a lot of income from TURBT. The reality is that while overall costs of the surgeries are quite high, surgeons are only paid a few hundred dollars per operation. Given the potential for better outcomes with UGN-102, we do not expect practice economics to be a barrier to adoption. Based on our market research, we believe the fastest adoption for UGN-102 would initially occur in three groups of patients: those who have had multiple recurrences, those who would be considered surgical failures, patients with early recurrence, and finally, patients who are ineligible or unwilling to undergo surgery. We are confident that as physicians gain experience in these early groups, UGN-102 will quickly expand to all recurrent patients, if approved. We look forward to providing additional insight into our plan as the year progresses. I will now turn the call over to Don Kim to discuss our financials.

Thank you, Jeff. Revenues for the fourth quarter of 2023 were $23.5 million compared to $18.1 million in the comparable period in 2022. Revenues for the full year ended December 31, 2023, were $82.7 million compared to $64.4 million in 2022. Cost of revenues for the fourth quarter and full year 2023 were $2.3 million and $9.4 million, respectively, compared to $2.3 million and $7.7 million, respectively, for the fourth quarter and full year 2022. The overall increase of $1.7 million year-over-year was primarily due to the increased volume of JELMYTO sales. R&D expenses were $11.3 million and $45.6 million, respectively, for the fourth quarter and full year 2023 compared with $14.5 million and $52.9 million, respectively, for the comparable period in 2022. The decrease in R&D expenses year-over-year is primarily attributable to lower research and development expenses due to the conclusion of the ATLAS trial, lower costs related to Phase III ENVISION trial for UGN-102, and the ending of our collaboration with MD Anderson, partially offset by higher R&D expenses related to our Phase I study for UGN-301, costs incurred related to research into ingredient scale-up and production for UGN-102, and clinical compensation expenses. SG&A expenses were $24.6 million and $93.3 million, respectively, for the fourth quarter and full year 2023 compared with $21.6 million and $82.8 million for the fourth quarter and full year 2022. The increase year-over-year was the result of an increase in brand marketing and general commercial expenses as well as an increase in compensation expenses, third-party advisory providers, recruiting fees, certain media and meeting expenses, and ongoing managed services. These were partially offset by lower commercial back-office services and support expenses. Interest expense was $3.6 million and $14.7 million, respectively, for the fourth quarter and full year 2023, compared with $3.2 million and $8.4 million, respectively, for the fourth quarter and full year 2022. The cost for the full year 2023 relates to interest expense on the Pharmakon loan for the four full quarters versus the prior year given the funding of the first tranche and second tranche of the Pharmakon loan was in March 2022 and in December 2022, respectively. In addition, the increase year-over-year was attributable to an increase in interest rates related to the Pharmakon loan. Net loss was $26 million or $0.72 per share and $102.2 million or $3.55 per share for the fourth quarter and full year 2023. This compares with net losses of $28.9 million or $1.25 per share and $109.8 million or $4.81 per share for the fourth quarter and full year 2022. UroGen had $141.5 million in cash and cash equivalents and marketable securities at December 31, 2023. Based on our latest financial forecast, we believe our current cash position and resources and projected revenue will support our commercial organization through the potential launch of UGN-102 in early 2025. Switching now to 2024 full year guidance. We anticipate full year 2024 JELMYTO net revenues to be in the range of $95 million to $102 million. Full year operating expense is expected to be in the range of $175 million to $185 million, including non-cash share-based compensation expense of $6 million to $11 million, subject to market conditions. We continue to scrutinize all expenses in support of our efforts to prioritize cash preservation. Financing expenses related to the prepaid forward obligation to RTW investment is expected to be in the range of $21 million to $26 million, of which approximately $12.4 million to $13.3 million will be in cash. In addition to the RTW financing expense, interest-only payments on the $100 million term loan facility with funds managed by Pharmakon Advisors will continue to be made quarterly and accrue at a rate of adjusted term SOFR plus 7.25% in 2024. For further details on our financials, please refer to our annual report on Form 10-K with the SEC. We are now ready to open the call for questions. Operator?

Our first question will come from Tara Bancroft with TD Cowen.

Hi, good morning. So I was hoping you could tell us more about what you envision for how the early launch of 102 could look like? I understand there's significant overlap in practice across the two products with JELMYTO. So I was hoping to better understand how you're thinking about commercial synergy and how you expect that to play out in the coming years as 102 launches?

Hi Tara, it's Liz. Thanks for the message and I apologize for my voice; I'm overcoming a bad cold right now. So I'm going to turn it over to Jeff, but just say, to your point, there are lots of synergies here, but we also want to ensure early significant uptake. And so, because of that, we are adding resources. But Jeff, can you put more color around exactly what that's going to look like? And I also want to let everybody know that we have Silvio Pacheco, who's our Vice President of Market Access, joined the call as well.

Sure. Tara. So I have said in the past, we look to expand from one to two regions. I feel comfortable now confirming we will expand a region and roughly go from 45 to 60 TBMs. Two main drivers there are, obviously, with 45 territories, you have some significant geography. So we would increase efficiency there with those TBMs. And then the other is there are a lot more physicians that really do specialize in bladder cancer. As opposed to upper tract, not a lot of urologists really do a significant number of upper tract, quite contrary with bladder. There are more urologists that specialize in bladder, and we want to make sure that we increase and have a significant reach and frequency on those key targets. We discussed the operational differences between 102 and JELMYTO. We're looking at how to deliver the product, and I mentioned the possibility of introducing a mixed product for added convenience. Additionally, we are preparing for a permanent J code shortly after the launch. The three areas I previously mentioned will be our focus for positioning and messaging, with the aim of growing our reach to include any patient who recurs as a potential candidate for UGN-102.

Thanks so much.

Our next question will come from the line of Leland Gershell with Oppenheimer.

Hi, good morning. Thank you for taking my questions. I have two. First for Jeff, I wanted to inquire about the 340B related discounting. Should we expect to see more of this as we progress through 2024 and beyond for JELMYTO, or is it more of a one-time event that we shouldn't worry about concerning your guidance for 2024? Additionally, could you clarify how much exposure JELMYTO has to the 340B program? I also have a question for Mark. Thank you.

Thanks, Lee. Why don't I ask Silvio to comment on the 340B and what we saw last year and what we think will continue?

I would say that the impact of the 340B program is a widespread issue, similar to what other companies have experienced. The program continues to grow in the market and poses challenges for manufacturers. We are currently keeping a close eye on its potential impacts, and we will continue to incorporate this into our future forecasts. Regarding UGN-102, as Jeff mentioned, we expect its adoption to mainly occur in community private practices, which means it will likely not be significantly affected by the 340B program.

And Silvio, to respond to Leland's question, we do not anticipate significant growth from our current position. It's important to note that while there may be some risks, we expect only a slight decline this year, which is minimal compared to previous years. As Silvio pointed out, the largest challenge we face as an industry is the 340B discounts. However, I believe we are in a more stable position now compared to the past couple of years.

Thanks, Liz. That's all very helpful. And then, Mark, just wanted to ask you, obviously, NMIBC highly recurrent disease and given the level of recurrence, it could be pretty strong use of 102 as it's a friendlier option than TURBT, but wanted to ask about risk of progression from low grade to high grade and even to MIBC. How does that play into urologists' sort of interest and productivity, I guess, in terms of treating patients who have recurrent disease. Is there a time factor as patients recur, that there's an increased chance that they will progress and therefore, those patients should come in sooner for procedures? Maybe, Mark, if you could kind of share with us from a medical perspective what the risk of progression beyond low grade is? Thank you.

Leland, this raises an interesting clinical question. Our understanding of the progression of intermediate risk low-grade disease to higher risk invasive or even muscle-invasive disease is very limited. Based on our clinical experience at UroGen, we have seen no instances of progression to muscle invasion. In this carefully monitored population, we do not expect such progression to occur in the near term. While changes in grade have been noted, as Liz and others have mentioned, our experience, along with that of others, indicates that this condition is a chronically relapsing illness. That is why UroGen is focused on developing treatments to avoid surgical resection with each recurrence.

Okay. Thanks. I think I got most of that; a little broken up on the connection, but thank you for taking the question.

Our next question will come from the line of Paul Choi with Goldman Sachs.

Hi, thanks and good morning. Thank you for taking our questions. My first question is for Mark. I think there seems to be some persistent confusion in the market just with regard to follow-up period for ENVISION here. And could you maybe just again clarify for us what the total follow-up period will be? It's three months for the installation period followed by 12 months, if my understanding is correct, if you could just confirm that for us?

Paul, thank you. I hope you can hear me. You are absolutely correct. So when we say 12 months of follow-up, we mean 12 months after the initial evaluation in trial. So it would be 15 months from the beginning of the study, but 12 months from the primary disease evaluation. So you are correct: it's 12 months after that initial three months of evaluation.

Great. Perfect. Thanks for clarifying the 15 months of total time. And then my second question is just for both maybe Liz and Don, just with respect to the guidance and cash burn. If we take the midpoint of your revenue guidance and the midpoint of your OpEx guidance and we strip out the non-cash items, including stock comp as well as the RTW financing expense, we get to a range of roughly $40 million to $45 million in incremental cash burn versus 2023. And I was just wondering if you could clarify how much of that related to the build-out of your sales force that Jeff referenced earlier versus incremental R&D spend for UGN-103 and 104 and just the timing of when that cash burn would potentially accelerate. Are we correct to assume that it will be primarily back-end weighted towards the end of 2024? Thanks so much.

I will let Don provide more details. Yes, you are correct that it will be more in the later part of the year. Don, would you like to elaborate on that?

Thank you, Paul. The $40 million increase in operating expenses is primarily driven by one or two commercial product developments. Since we can't classify these costs as expenses until we receive FDA approval, they are currently reflected as inventory expenses. Additionally, roughly 50% of this increase is due to the expansion of our sales force and brand marketing efforts. As you noted, most of these costs will be incurred later in the year, but they will still contribute to our incremental expenses.

And there's just a minor increase in R&D due to the 103 and 104 trials starting this year.

Okay, great. That's a lot of helpful detail. Thanks so much for clarifying.

Thanks, Paul.

Our next question will come from the line of Matt Kaplan with Ladenburg Thalmann.

Hi, good morning guys. Thanks for taking the questions. I guess just staying on 102 initially. What's your expected chance for the FDA toward a priority review once the final is complete in September?

Look, you never know, Matt, so we can't guarantee it, but I think there are several factors working in our favor. First, we had a priority review for JELMYTO. Second, assuming the data is consistent when we see the duration data, the current data is very compelling. I believe the FDA is aware of the unmet need out there and the necessity to expedite these treatments. We believe we have a high probability of receiving a priority review, which is our expectation. However, we can't say for certain as we won't know until we file and request that review. We have initiated the rolling submission that we requested, so we feel we're in a good position to proceed.

Sure. Makes sense. And then in terms of after approval, what's your expected ramp of payer coverage for 102? And how should we think about that?

Yes. Silvio, since you joined us today, why don't you talk about the payer from a 102 perspective?

Sure. Matt, thanks for the question. So from a payer coverage perspective, I think there are a couple of elements to consider. One is the inclusion of 102 in the treatment guidelines with the National Comprehensive Cancer Network. And also the application of the J-code. So the application for a J-Code happens on a quarterly basis, and it is dependent on the FDA approval. So we will work expeditiously to get the J-Code up and running. And we will start engaging payers in the next few months here, providing them with some pre-approval information so they can become aware of UGN-102 and the clinical value proposition of UGN-102.

But Silvio, can you just comment on our expectation that we have over 99% coverage on JELMYTO? We don't expect it to be different for UGN-102. We anticipate significant coverage from the start. As you know, about 70% of the population is covered by Medicare, which will cover it once we receive FDA approval. So we don't foresee any issues there. Even with commercial plans initially, we don't expect any problems and anticipate coverage to be very close to what we have with JELMYTO, which is over 99% coverage.

Okay. Great. Great. And then just with UGN-103 and 104 you stated that you plan to start Phase III development for both, but that it would be smaller and more focused studies. Can you give us a little bit more detail in terms of what the regulatory path looks like for both of those? Is it just one study needed for each of them? Or how will it work, do you think?

Yes. When we spoke to the FDA about it, they felt like they were different enough that we needed a clinical study. And as we've said in the past, we actually think that's good news because if we have to do it, so will others, right? And that's part of our strategy around any other company trying to come into our space. So we feel really good about that. But what we have discussed with the FDA and we'll continue to align with them is that it needs to show efficacy, safety and durability. But they want to see results consistent, but we don't have to have the same timeline. So the 102 study will be probably around 85 patients. If you think about ENVISION at 220 patients where we ended up with 240 patients, we only have to do an 85-patient study and something smaller than that for UGN-104 for the next-generation JELMYTO formulation. So maybe in the 50 to 60 patient perspective. We're prioritizing UGN-102 for obvious reasons from a start perspective and then the follow-up as well. So as long as the results are consistent, then the FDA is open to us filing on less data but just showing consistency. And so that's kind of where we are. So our expectation at this point is that we would have approval for both of those in the 2027 time period. So we feel really good about kind of where we are and our ability to get those approved, or get the J-Code for both of them and do an appropriate switch to the new formulation before taking the old formulations off the market.

Okay. That's really helpful. Thanks. Thanks, Liz.

That concludes today's question-and-answer session. I'd like to turn the call back to Liz Barrett for closing remarks.

Thank you all for joining us today. This is a pivotal year for UroGen, and we are optimistic about the opportunities ahead as we prepare for UGN-102 and work to expand the adoption of JELMYTO. We're encouraged by the positive data emerging from our registry and various investigator-initiated studies. We'll keep you updated as things progress, and we truly value your interest in our company. Thank you. Operator, you may disconnect now.