Earnings Call Transcript - URGN Q2 FY2025

Tara Bancroft, Analyst — TD Cowen

Good morning, everyone. I'm Tara Bancroft. I'm one of the senior biotech analysts at TD Cowan. Thank you very much for joining our seventh annual Oncology Innovation Summit. And so for the next session, we have a Q&A with Eurogen, and it's my pleasure to introduce Liz Barrett, the president and CEO, Chris Degnan, CFO, and Mark Schoenberg, the CMO. And it's a privilege to have you all here as always, and thank you very much for joining me. And before I get started on the Q&A, I just want to remind you in the audience that you can email me questions at any time at tara.bancroft at tdsecurities.com, and I'll make sure to get them asked. And also, as you all may know, the Extel voting, it kicks off today. And from myself and the TD Cowan biotech team as a whole, we would really appreciate your support if you feel like we have earned it, which of course, we truly hope that we have. But with that aside, let's get into questions. So I don't know, So, Liz, maybe you want to start with some high-level thoughts, and then we'll talk a little about Zestdury and the pipeline.

Liz Barrett, CEO

Well, it's hard not to talk about AUA since we all just got back from the AUA conference a week or so ago. And it was a great conference for us. And I think what it did would really solidify Zestdury as sort of the go-to in recurrent, low-grade, intermediate risk, non-muscle-based bladder cancer. So, we're excited about that. If you were there at the meeting, and I know some investors were there and some analysts were there, you saw Zesturi all over the place. But I think more importantly, we had an opportunity to spend time with physicians, a lot of physicians in the sense that we were getting feedback from them where they see not just Zesturi and Gelmido, but to your point, our other programs in place, just talking to them about Urogen. and you know it's a lot of excitement about the company right now so you know we're happy to be here as always Tara and enjoy always um our conversation so as do I so okay then let's let's

Tara Bancroft, Analyst — TD Cowen

um start with Zesturi so I mean you guys posted a great quarter nearly 30 million um So, maybe you could just start with reminding us, you know, from Q1, what can we expect from here? Like, I know we went over these types of things a few weeks ago, but as we get every single week further into Q2, it'll be really helpful to hear what you guys are hearing, how that's evolving your expectations, not just for Q2, but for the year. What kind of growth can we expect from here?

Liz Barrett, CEO

Sure. And I'll ask Chris to sort of comment, and I'll add any commentary at the end.

Chris Degnan, CFO

Sure. So maybe just reflect again just on Q1 to your point, Tara. So just as folks may recall, we had $14 million in revenue for the story in Q4 of last year. We did expect to see an inflection once the permanent J code came into effect on January 1 of this year, and we absolutely saw that inflection. And, you know, as we talked about Q1 performance, you mentioned, you know, 29, over 29 million in Q1 revenues and more than doubled our revenue quarter over quarter. And importantly, you know, we saw acceleration across all of our key metrics that we're looking at. So, you know, we exited last year with about 100 writers of the story, and now we ended Q1 with over 250. And importantly, we saw an acceleration in the number of adopters or repeat writers. So those who treated, you know, more than one patient was the story. So we went from 30 repeat writers at the end of last year to over 100 at the end of March. And so really pleased to see not only the number of new writers, but the number of repeat writers just shown conviction in adopting this story into their workflow. And then that led into additional patient enrollment forms, new patient starts, et cetera. So really pleased with the ramp in Q1. And the other thing we mentioned in Q1 was it was a ramp. We didn't see a bolus. There wasn't a huge amount of patient warehousing or things of that nature. And we don't really have any type of inventory dynamics in our revenue. And so what we saw in Q1 was month-over-month growth. And then we also said that, you know, we did see that trend of month-over-month growth continue into Q2. And so what that gives us is confidence in durable revenue growth as we look at the rest of the year. And, you know, we haven't provided guidance for the year, but what I would say is, you know, think about the growth more in a linear trend, but we do expect to see continued growth throughout

Tara Bancroft, Analyst — TD Cowen

the year and beyond this year. Great. Okay. So then maybe, you know, I think one of the most helpful things is us to understand on a larger scale KOL or physician feedback that you're hearing, how that's evolved from, you know, prior to and following the permanent J code. It helps us to understand the sentiment among physicians to use the story or not.

Liz Barrett, CEO

Yeah, I mean, what I'll say is that in all of the research that we've done and in all of the anecdotal feedback in meetings, very positive feedback from physicians. You know, the survey work we've done, 92% of physicians say that they will use Susturi. I think what we see and what we hear is what I would characterize as a traditional adoption curve. What do I mean by that? What I mean by that is actually you already have some physicians that are already all the way to the right that say, I'm going to use this in all of my patients. And I'm not sure if anyone has listened to or saw the webcast that we did while we were at AUA, but we had three users of Sesturi. And trust me, we didn't pick them based off of the fact that we knew they were going to say this, but they all three said, yes. I mean, when we asked the question, what percentage of your patients or which patients, there's not a patient that's a recurrent IR patient that they felt like they couldn't use it in. And so that was great to hear. So I think you, and we've already seen that. We have a couple of physicians that their conviction, they've adopted it. This is their standard of care. Then you have a few on the other side that say, yeah, I'm going to use it on my older frail patient that I don't want to take to the operating room. And then you have everybody in the middle, right? And it's our job, obviously, to move all of those along the continuum of adoption. But if the feedback that we're getting so far has been very positive and if that continues, we need both. And Chris talked about repeat users. We are focused on both increasing the number of users and also increasing the depth of the users. So we have some physicians that say, I want to try it, see how it goes. But we really talk to a lot of doctors that have used it, not on one patient, but on multiple patients. And I think that that's also a big difference between Jomito and Sesturi, because it's really, where are the patients? Where do you find them? Are they there? And with Jomito, as we know, it's a rare disease. Some of these, a lot of these doctors only see one or two patients a year. And what we're hearing, and Mark can comment on that as well, because he talked about one of the big surprises that he's heard so far, is physicians are sort of surprised at how many patients they have that they believe are eligible for this jury. So we're hearing more and more about that. So that gives us a lot of confidence in the durable, you know, growth that Chris talked And I think we believe that we'll continue to see that, you know, again, along a traditional kind of continuum of adoption.

Tara Bancroft, Analyst — TD Cowen

yeah and uh i i will say that aua webinar that that you guys hosted that was super well done and really helpful to have all of those um kols there but you know i i basically it was just well

Liz Barrett, CEO

done i felt like we were watching the morning show well we appreciate that we didn't do a whole lot of rehearsals above around that but you know it's good when you have good people that are convicted and you and the patient that we had was amazing. And, you know, she flew all the way from California, but because she was convicted, I mean, she had gone through a really difficult time and she was so enthusiastic and happy with, you know, with, you know, with the result, but also, you know, with the treatment compared to what she had been going through the last, you know, couple of

Tara Bancroft, Analyst — TD Cowen

years. Yeah, no, absolutely. Definitely the patient testimony was new information and also super helpful. I mean, would you say that what you heard from the patient there is something, you know, kind of, I don't know, how representative of the patient population as a whole would you

Liz Barrett, CEO

say that that experience was? I mean, and again, this is all anecdotal, but from what we're hearing kind of very similar. I'm going to ask Mark just to talk about some of the patients that we're hearing about from, you know, mostly doctors, but also through ourselves. But Mark, just talk about like some of the difficult to treat patients and what we're hearing from doctors. Yeah, I hesitate

Mark Schoenberg, Analyst — Other

to do this, but I'm going to tell a joke. I mean, one of the sort of old teachings of medicine is, and this is done in a cartoon form with an older doctor talking to a younger doctor walking out of a patient's room. And the advice is, when what you've advised works, don't act surprised. And so, you know, I think one of the real joys of this launch for me has been talking to my colleagues, as Liz pointed out, their surprise at how applicable this is to a large population of patients they've previously treated with surgery. And then what we're hearing anecdotally, as Liz said, is that patients are asking for this drug, and they come into their doctor's office requesting, having heard about the gel, and I would expect that trend will continue. The other thing that's been very surprising to me, or interesting to me, is that we're hearing that patients who've had a lot of surgery, and a lot of disease, and a lot of different therapies are kind of getting cured, so to speak, and their disease is really eradicated when they use Zesturia. And a number of my colleagues have actually called me very surprised to say, hey, this is a person I tried everything in, and this is the first thing that's really worked. And, you know, the kind of thing where the patient comes in in tears saying, wow, finally, I don't have to have surgery anymore or, you know, as frequent intervention as we've been doing before. So it's really nice. And it actually aligns nicely with work done by UNC on our Envision cohort, where when we asked patients who'd had a TURBT and then had experience with what was then UGN-102 and is now Zesturi, which they'd prefer, and then 90% of patients wanted to do the Zesturi therapy rather than surgery. So it's beginning to kind of line up anecdotal experience, what we've seen from scholarship, and then just personal experience with patients who previously been treated with surgery. It's very encouraging.

Tara Bancroft, Analyst — TD Cowen

Yeah, it definitely sounds like it. Okay, so I want to go back to one of the metrics that Liz mentioned briefly, and so did Chris. This repeat prescriber rate, I mean, if you're at 40% of prescribing physicians actually either, you know, repeat in potentially the same patient or other patients, I mean, maybe you could go into some more specifics on what exactly you think the plan is to increase that proportion of prescribers that are repeating and how to basically keep the ones that are already using in multiple patients or not. Do you want to comment?

Chris Degnan, CFO

Yeah, I mean, I think, you know, Liz mentioned this too, Tara. I think the important part is, one, we want to continue to drive breadth of utilization, right? So, we talk about our prescriber target universe is about 8,000 physicians. And we, you know, at the end of March, we had a little over 250 who have used this story. So plenty of room for us to continue to drive breadth of utilization. But then to your point, you know, what's really encouraging for us is the adopter rate, right? So those are the physicians who may have tried on one patient or, and then have moved along the continuum that Liz mentioned, and then now willing to treat on multiple patients. And so we went from, you know, 30% of our physicians at the end of the year were, you know, repeat writers that are now 40%. So it's a balance. We want to make sure we're continuing to drive, you know, depth of utilization in the adopter base and really get people who are one-time writers to multiple writers. So we're going to continue to focus on that while at the same time, really, you know, with a lot of room to run on the number of actual writers of the story

Liz Barrett, CEO

as well. Yeah. And I think the depth of, you know, the patient population gets to their experience. So one of the things we're really focused on is ensuring that their first experience is a positive experience. So we have a lot of roles in the field. So in addition to your sort of traditional rep, we have a nurse educator, we have field reimbursement managers, we have regional operations managers, what they do is, you know, I call it the easy button, you know, the Staples easy button, is try to make it as easy as possible on the doctor and the doctor's office and staff to seamlessly integrate Zesturi into their practice. And I think when you do that and they see, oh, okay, not only am I getting positive results from my patients, but it's easy for me to do and it fits and it flows. And then the practice economics piece of it is another piece. And we're seeing really good reimbursement. They're seeing the practice economics. So when all of those things come together, I think that's when you start to see the real depth. And, you know, even one of, you know, Dr. Berger commented on the panel that, you know, every patient that, you know, they've actually looked through their database, so they know these patients. So now they've identified these low-grade intermediate-risk patients. So when they come in, they know to consider Zesturi. And I think that's really important. And the other thing is making sure that doctors, to Mark's point, are at least talking to their patient about alternatives so that they hear about Zesturi. And that's important. But we are ourselves, and we've talked about this before, we're really going to elevate some of our own initiatives toward patients to ensure that patients are aware. So, you know, second half of 26 into 27, really having that as a key driver for repeat usage and trial for that.

Tara Bancroft, Analyst — TD Cowen

Yes, definitely. Okay, great. So, I do want to make sure that we spend a little bit more time on the pipeline among 103 and 501, but I feel like, you know, obligatory need to ask the question on your thoughts on competition and how the IR market could potentially play out. I mean, in Lexio, I know it was approved in high-risk, of course, a pretty staggering price, but they're also developing in the IR space. We have CG that might, you know, be approved in the next couple of years, also in high-risk, but we have IR data coming up. CIRA also has IR data coming up, and so maybe just your thoughts on not only upcoming data sets and how you think that they could compare it as a story, but really how you see all of these therapies playing out in the IR space.

Liz Barrett, CEO

Yeah, I'm going to ask Mark to comment first, and then I'll ask any commentary.

Mark Schoenberg, Analyst — Other

Yeah, thanks, Liz. Tara, thanks for the question. So I think what we learned at the AUA, and I think this comes through in the panel discussion with the KOLs that we did on that Sunday, is that now the Zesturi is out there and now people are beginning to understand how it works. and coupled with the durability data that were recently released showing 65% durability response and the complete responder set of three years, people are beginning to think that when a patient with intermediate risk disease recurs after standard of care therapy, which in this country is a TURBT, typically not augmented by adjuvant chemotherapy, the new choice for that patient feels like Zesturi. And a number of the doctors said that. It is very acceptable to patients. The workflow is very compatible with what goes on in the urologist's office. So the impact on the patient is minimal, and the outcome is favorable, and there's long durability of that response. And what I heard docs say, and I've heard this in more than one venue, is now that Zesturi is there, it is conceivable that what will happen is Zesturi will be the go-to for recurrent patients. And when patients recur, if they do after zestory, remembering that only 20% of people didn't get a complete response and that durability of three years is 65%, then an adjuvant therapy might be applicable. And it's very important also for everybody to remember that in contrast to zestory, which is a primary therapy, the other therapies that are being approved in high-grade disease, which might migrate into the intermediate risk space, are also adjuvants, so they will follow surgery. They are not primary therapies, a key distinguisher and differentiator for patients and for physicians.

Liz Barrett, CEO

So not only, look, not only is it adjuvant, but I think the other thing we've talked about, and Mark talks about this a lot too, is just the burden of administration. So we're six weeks and you're done. So I often like to think my new sort of mantra is recurrence-free and treatment-free living because when you have six weeks and then you're done in these recurrent patients versus everyone else is that the burden of administration is much higher um cg is an example you get your six weeks and then you might get reinduced if you don't get a cr and then you have maintenance therapy and the same thing with j and j when you think about you know the um and lexo or the you know, the FGFR, you know, tar that will be in low grade. So I think Mark's right. And that's what we're hearing. And I think we have not only the data on our side, because keep in mind, our data is just with the story. Everyone else's data is I did surgery plus this. And so we, you know, we think that we have set a very high bar from an efficacy and safety standpoint for others to come in. Having said that, I've always been a big proponent of more therapies because one, these are not cures, unfortunately. Patients will recur. And I also think that it's good to have other companies talking about that because then that's what happens, right? You start to expand the category. So we believe that we have the ability to maintain our base at the same time that others

Tara Bancroft, Analyst — TD Cowen

come in and maybe grow the space. Okay, great. Thanks. Yeah, so we can use the last five minutes, I guess, to go over the other pipeline programs, but I want to start with 103. I know we have the six-month results now. Maybe you could tell us a little bit more about the filing timeline and what could be included there, and maybe your confidence in it being approved on the single

Mark Schoenberg, Analyst — Other

trial platform, I guess? Yep. Mark? Yeah. So our plan is still to submit in Q3. We're on track to do that. As you said, we've released the six-month data, very encouraging, very much in line with our experience with Zesturi, as was the complete response rate at three months. And as we have done before, both with GelMito and with Zesturi, because we want to move this forward quickly, and it's a regular review, so it will take 10 months. We're going to submit with the data that we have with a plan to update with 12-month durability data, which we know the agency will want for the cohort. And at Liz's insistence, as she's said before publicly, we are very clear about the agreement with the FDA about the acceptability of the single-arm trial and the endpoints that we would be providing. We have agreement in writing that this trial as an acceptable way of presenting data on EGN-103 as a successor molecule to the Zestory. So we're quite confident in our design and the data that we'll be presenting, and we're very optimistic based on what we've seen so far. So just to be very clear, so that would anticipate approval in 27, and then I'll defer to Liz regarding the mechanics of the launch and the substitution of 103 for Zestory.

Tara Bancroft, Analyst — TD Cowen

Yeah.

Liz Barrett, CEO

Yeah, from that standpoint, and look, I think we're going to do it right. And so we'll want to make sure we have the J code first. And then, you know, the worst thing that could happen is the physician writes a drug that's not there. So we want to make sure that we do it right. And so the transition time will TBD, but just know that we're going to focus on making sure we do it at the time that it's, you know, optimal for the market from that perspective.

Tara Bancroft, Analyst — TD Cowen

Yep. Makes sense. Okay. All right. Now I want to talk about 501 alcolytic virus. Maybe you can remind us the various advantages that you think that 501 has, why it was attractive to you to bring it in, and just, yeah, how it compares to other alcolytic viruses in development.

Mark Schoenberg, Analyst — Other

Yeah. Just to sort of set the stage with this, and I know we have a little time, so let me be very brief. The oncologic virus concept is basically, in the hands of many who have preceded us, an immunomodulatory program where the virus infects tumor cells and then lysis them, and the release of tumor antigens is thought to incite a primary immune response. One key differentiator with respect to 501 that we found very attractive is it has actually been rationally designed, including using AI, to take advantage of the fact that as a very potent, highly replicative virus that is widely taken up by both normal and tumor cells by virtue of its fiber and some other issues related to the design of the virus, it gets into everything, but it can only replicate successfully inside of tumor cells because they have a deficient DNA replication machinery that the virus takes advantage of. So it only works in tumor cells. It's very specific for tumor cells and it is highly potent with respect to the ability to kill tumor cells. So it actually starts by acting like chemotherapy and secondarily like immunotherapy. So it is a one-two punch, which is quite different than the way most oncolytic viruses are thought to act. Highly potent, highly replicative, widely distributed, easily taken up, and we think very appropriate for use initially in the urinary tract and to treat urethelial carcinoma, but also with potential, as Liz has said publicly before, for treatment of other cancers, and we will certainly explore those opportunities once we've moved forward with our urethelial cancer program.

Tara Bancroft, Analyst — TD Cowen

Okay, great. And then, so this, you're developing first with a liquid formulation, right? But you're moving it into RT gel formulation eventually, right? Maybe you could tell us a

Mark Schoenberg, Analyst — Other

little bit more of that. So, yes, we are doing, we are completing our IND enabling studies for the liquid or the aqueous-based delivery system. And we're going to take that into phase one this year. So that will begin this year. That said, we're very excited about the possibility that our RT gel platform can provide a better way of delivering the virus that would in fact facilitate even better performance, better dosing, potentially better intervals between doses. So we are actively exploring that as well, and we hope to roll that out after we move forward with the initial AQUIAS program that's going to start this year. But yes, we are very optimistic about the benefits of combining the two assets.

Tara Bancroft, Analyst — TD Cowen

Okay, great. And perfect timing on that, Mark. and I guess so since we are up on time I want to thank you for joining us everyone for listening and please vote for Cowan for Excel

Liz Barrett, CEO

we appreciate it Tara always good to see you

Mark Schoenberg, Analyst — Other

thank you very much

Tara Bancroft, Analyst — TD Cowen

bye guys