UroGen Pharma Ltd.
ANNUAL REPORT
2023
Dear Shareholders,
As we reflect on this past year, I continue to be amazed by the persistence and resilience of our UroGen team. Following many
years of developing medicines to treat patients with urothelial cancers, we are on the precipice of what has the potential to be
the most exciting time for our company.
A major milestone was reached in our UGN-102 clinical development program when we announced the 12-month durability
data from the Phase 3 ENVISION study in June. The results showed an unprecedented 12-month duration of response of 82.3%
by Kaplan-Meier estimate in patients who had achieved a complete response with UGN-102 at three months after the first
instillation. UGN-102 has demonstrated a strong clinical profile across multiple trials, with these latest results reinforcing its
potential to be the first U.S. Food and Drug Administration (FDA)-approved medicine for the treatment of low-grade intermediate
risk non-muscle invasive bladder cancer, a disease impacting nearly 82,000 patients in the U.S. each year.
We initiated the submission of a rolling New Drug Application (NDA) to the FDA for UGN-102 in January and we plan to complete
the filing of our NDA in the third quarter of 2024. We believe we have a compelling package for a high unmet need and may
qualify for priority review, which if granted, could allow for a commercial launch in the first quarter of 2025, if approved.
The compelling data demonstrating significant complete response rates, with the vast majority of patients maintaining their
complete response at 12 months, gives us confidence in UGN-102’s rapid adoption if approved. We plan on leveraging our existing
commercial organization with an incremental increase in resources to execute on the potential launch of UGN-102. We recently
made an important addition to our management team with the appointment of David Lin as Chief Commercial Officer. David
has a proven track record of success within the pharmaceutical industry including multiple launches, and we are confident in
his ability to support our commercial efforts.
We continue to grow the body of real-world evidence supporting usage of Jelmyto®, highlighted by three abstracts presented at
the American Urological Association meeting in May. These included independent long-term real-world analyses that explored
the use of the product in broad patient and tumor types and with different methods of administration. The results showed that
Jelmyto treatment demonstrated favorable recurrence-free survival rates for patients who responded to initial induction. There
was no discernible difference in disease recurrence based on tumor characteristics or timing of administration, including primary
chemoablation or post-endoscopic ablation. These findings provide additional evidence reinforcing Jelmyto's position as a
valuable non-surgical therapeutic option for patients with low-grade upper tract urothelial carcinoma.
We are also working on next generation formulations of UGN-102 and Jelmyto. In April we announced FDA acceptance of the
Investigational New Drug application for UGN-103, a key step in our life cycle management strategy. UGN-103, a next-generation
formulation of UGN-102, combines our proprietary RTGel technology with medac GmbH’s proprietary formulation of mitomycin.
Importantly, this program may extend our urothelial cancer franchise patents with protection to 2035 and the potential for
additional protection up to 2041. We are preparing to initiate clinical endpoint studies to support NDAs for UGN-103 and UGN-104,
the latter being our next-generation formulation of Jelmyto. We anticipate dosing patients in the planned Phase 3 trial of UGN-103
by the end of this year and UGN-104 shortly thereafter.
Our balance sheet remains strong, reinforced by recent additional capital secured this year. This funding will support
the potential launch of UGN-102, as well as provide additional resources to invest in business development and life cycle
management initiatives.
At UroGen, we have pioneered an innovative approach to treating urothelial cancers, offering a breakthrough non-surgical
treatment option with the potential to reduce recurrence risk and prolong disease-free intervals. We believe UGN-102 addresses
a significant recognized unmet need amongst both urologists and patients. Importantly, our research indicates a strong patient
preference for non-surgical options that can reduce their overall treatment burden. Looking ahead, we remain focused on driving
for results that will have a meaningful impact on the people that use and receive our therapies. We believe this is a pivotal period
in UroGen’s evolution as we strive to establish leadership in uro-oncology and build a long-term sustainable growth enterprise.
To our shareholders, we appreciate your confidence in our medicines and in our team to generate value for you as we deliver
paradigm-shifting treatments for patients that deserve better. We sincerely appreciate the steadfast support of our shareholders
and the invaluable contributions of our dedicated employees, patients, and the urology community.
Warm regards,
Liz Barrett
President and Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10‐K
(Mark One)
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________ to ________________
Commission file number: 001‐38079
UROGEN PHARMA LTD.
(Exact name of registrant as specified in its charter)
Israel
(State or other jurisdiction of incorporation or organization)
400 Alexander Park, Princeton, NJ
(Address of principal executive offices)
98‐1460746
(I.R.S. Employer Identification Number)
08540
(Zip Code)
Title of each class
Ordinary Shares, par value NIS 0.01 per share
Name of exchange on which registered
The Nasdaq Stock Market LLC
Registrant’s telephone number, including area code:
(646) 768‐9780
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol
URGN
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well‐known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S‐T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‐accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule 12b‐2 of the Exchange Act.
Large accelerated filer
Non‐accelerated filer
☐
☑
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☑
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes‐Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive‐based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D‐1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‐2 of the Act). Yes ☐ No ☑
The aggregate market value of the ordinary shares held by non‐affiliates of the registrant as of June 30, 2023 totaled approximately $190.4 million based
on the closing price for the registrant’s ordinary shares on that day as reported by the Nasdaq Stock Market LLC. Such value excludes ordinary shares
held by executive officers, directors and certain entities affiliated with directors as of June 30, 2023.
As of March 7, 2024, there were 34,122,087 of the registrant’s ordinary shares outstanding.
Table of Contents
PART I. ..........................................................................................................................................................................
Business ...................................................................................................................................................
Item 1.
Risk Factors .............................................................................................................................................
Item 1A.
Unresolved Staff Comments ...................................................................................................................
Item 1B.
Cybersecurity ..........................................................................................................................................
Item 1C.
Properties ................................................................................................................................................
Item 2.
Legal Proceedings ....................................................................................................................................
Item 3.
Mine Safety Disclosures ..........................................................................................................................
Item 4.
Page
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4
30
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PART II. .........................................................................................................................................................................
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Equity Securities ..................................................................................................................................
[Reserved] ...............................................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ...................
Quantitative and Qualitative Disclosures about Market Risk .................................................................
Financial Statements and Supplementary Data ......................................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ..................
Controls and Procedures .........................................................................................................................
Other Information ...................................................................................................................................
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .....................................................
PART III. .......................................................................................................................................................................
Directors, Executive Officers and Corporate Governance ......................................................................
Item 10.
Executive Compensation .........................................................................................................................
Item 11.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Item 12.
Item 13.
Item 14.
Matters ................................................................................................................................................
Certain Relationships and Related Transactions and Director Independence ........................................
Principal Accountant Fees and Services ..................................................................................................
PART IV. .......................................................................................................................................................................
Exhibits, Financial Statement Schedules .................................................................................................
Item 15.
Form 10‐K Summary ................................................................................................................................
Item 16.
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PART I
INTRODUCTION
Unless otherwise indicated, “UroGen Pharma,” "UroGen," “the Company,” “our Company,” “we,” “us” and “our” refer to
UroGen Pharma Ltd. and its subsidiary, UroGen Pharma, Inc.
UroGen RTGel and Jelmyto are trademarks of ours that we use in this Annual Report on Form 10‐K (this "Annual Report").
This Annual Report also includes trademarks, tradenames, and service marks that are the property of other organizations.
Solely for convenience, our trademarks and tradenames referred to in this Annual Report appear without the ® or ™
symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under
applicable law, our rights, or the right of the applicable licensor to our trademark and tradenames. We do not intend our
use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or
sponsorship of us by, any other companies.
We maintain our books and records in U.S. dollars, and prepare our financial statements in accordance with accounting
principles generally accepted in the United States ("GAAP"), as issued by the Financial Accounting Standards Board.
The terms “shekel,” “Israeli shekel” and “NIS” refer to New Israeli Shekels, the lawful currency of the State of Israel, and
the terms “dollar,” “U.S. dollar” or “$” refer to United States dollars, the lawful currency of the United States. All
references to “shares” in this Annual Report refer to ordinary shares of UroGen Pharma Ltd., par value NIS 0.01 per share.
We have made rounding adjustments to some of the figures included in this Annual Report. Accordingly, numerical figures
shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
SPECIAL NOTE REGARDING FORWARD‐LOOKING STATEMENTS
This Annual Report contains “forward‐looking statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
subject to the “safe harbor” created by those sections. Our actual results could differ materially from those anticipated in
these forward‐looking statements as a result of various factors, including those set forth below under Part I, Item 1A,
“Risk Factors” in this Annual Report.
We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that
convey uncertainty of future events or outcomes to identify these forward‐looking statements. Any statements contained
herein that are not statements of historical facts may be deemed to be forward‐looking statements and are based upon
our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are
inherently uncertain and beyond our control. Forward‐looking statements in this Annual Report include, but are not
limited to, statements about:
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the timing and conduct of our clinical trials of UGN‐102 and our other product candidates, including statements
regarding the timing, progress and results of current and future nonclinical studies and clinical trials, and our
research and development programs;
the clinical utility, potential advantages and timing or likelihood of regulatory filings and approvals of UGN‐102
and our other product candidates;
our expectations regarding timing for application for and receipt of a regulatory review decision for any of our
product candidates;
our ongoing and planned development of product candidates including UGN‐103, UGN‐104, UGN‐201 and UGN‐
301, and our discovery of new product candidates;
our expectations regarding future growth, including our ability to develop, and obtain regulatory approval for,
new product candidates;
our ability to obtain additional financing to support our operations;
our ability to obtain and maintain adequate intellectual property rights and adequately protect and enforce such
rights;
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our ability to maintain our existing collaboration and licensing arrangements and enter into and maintain other
collaborations, licensing arrangements or in‐license or acquire rights to other products, product candidates or
technologies;
our plans to develop and commercialize our in‐line and investigational product candidates;
our estimates regarding the commercial potential and market opportunity for our product pipeline and
investigational products;
our estimates regarding expenses, future revenues, capital requirements and the need for additional financing;
the impact of our research and development expenses as we continue developing investigational product
candidates;
the future nonclinical and clinical development of licensed products, including UGN‐103, UGN‐104, UGN‐201 and
UGN‐301, and their commercial opportunity; and
the impact of government laws and regulations.
We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks,
uncertainties and other factors that are important to you. In addition, we cannot guarantee future results, level of
activity, performance or achievements. You should refer to the section of this Annual Report under Part I, Item 1A, “Risk
Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed
or implied by our forward‐looking statements. As a result of these factors, we cannot assure you that the forward‐looking
statements in this Annual Report will prove to be accurate. In addition, statements that “we believe” and similar
statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information
available to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for
such statements, such information may be limited or incomplete, and our statements should not be read to indicate that
we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These
statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
If our forward‐looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant
uncertainties in these forward‐looking statements, you should not regard these statements as a representation or
warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. Any
forward‐looking statement made by us in this Annual Report speaks only as of the date of this Annual Report or as of the
date on which it is made. We undertake no obligation to publicly update any forward‐looking statements, whether as a
result of new information, future events or otherwise, except as required by law.
You should read this Annual Report and the documents that we reference in this Annual Report and have filed as exhibits
to this Annual Report completely and with the understanding that our actual future results may be materially different
from what we expect. We qualify all of our forward‐looking statements by these cautionary statements.
This Annual Report may contain market data and industry forecasts that were obtained from industry publications. These
data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.
We have not independently verified any third‐party information. While we believe the market position, market
opportunity and market size information included in this Annual Report is generally reliable, such information is
inherently imprecise.
RISK FACTOR SUMMARY
Below is a summary of the material factors that make an investment in our ordinary shares speculative or risky. This
summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor
summary, and other risks that we face, can be found below under the heading “Risk Factors,” and should be carefully
considered, together with other information in this Annual Report and our other filings with the U.S. Securities and
Exchange Commission ("SEC") before making investment decisions regarding our ordinary shares.
• We will require additional financing to fund our operations and achieve our goals, and a failure to obtain this
capital when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our
product development, commercialization efforts or other operations.
• We are highly dependent on the successful commercialization of our only approved product, Jelmyto.
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• We have limited experience as an organization in marketing and distributing products and are therefore subject
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to certain risks in relation to the commercialization of Jelmyto and any of our product candidates that
receive regulatory approval.
The market opportunities for Jelmyto and our product candidates may be smaller than we anticipate or limited
to those patients who are ineligible for established therapies or for whom prior therapies have failed and may be
small.
Jelmyto and any of our product candidates that receive regulatory approval may fail to achieve the broad degree
of physician adoption and use and market acceptance necessary for commercial success.
Jelmyto and our product candidates, if approved, will face significant competition with competing technologies
and our failure to compete effectively may prevent us from achieving significant market penetration.
In addition to Jelmyto, we are dependent on the success of our lead product candidate, UGN‐102, and our other
product candidates, including obtaining regulatory approval to market our product candidates in the United
States.
• UGN‐102 may not meet its secondary endpoint in the ongoing Phase 3 ENVISION trial.
•
Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier
studies and trials may not be predictive of future trial results, and our clinical trials may fail to adequately
demonstrate the safety and efficacy of our product candidates.
• We have entered into collaboration and licensing agreements and in the future may enter into collaboration and
licensing arrangements with other third parties for the development or commercialization of our product
candidates. If our collaboration and licensing arrangements are not successful, we may not be able to capitalize
on the market potential of these product candidates.
• We currently contract with third‐party subcontractors and single‐source suppliers for certain raw materials,
compounds and components necessary to produce Jelmyto for commercial use, and to produce UGN‐102, UGN‐
103, UGN‐104, UGN‐201, and UGN‐301 for nonclinical studies and clinical trials, and expect to continue to do so
to support commercial scale production of UGN‐102, UGN‐103, UGN‐104 and UGN‐201, if approved, as well as
UGN‐301 if approved as a monotherapy or for any approved product that includes UGN‐301. There are
significant risks associated with the manufacture of pharmaceutical products and contracting with contract
manufacturers, including single‐source suppliers. Furthermore, our existing third‐party subcontractors and
single‐source suppliers may not be able to meet the increased need for certain raw materials, compounds and
components that may result from our commercialization efforts. This increases the risk that we will not have
sufficient quantities of Jelmyto, UGN‐102, UGN‐103, UGN‐104, UGN‐201 or UGN‐301 or be able to obtain such
quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization
efforts.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to
limit commercialization of any of our other products we develop.
If we fail to attract and keep senior management and key personnel, we may be unable to successfully develop
our product candidates, conduct our clinical trials and commercialize any of the products we develop.
• We have a limited operating history and have incurred significant losses and negative cash flows since our
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inception, and we anticipate that we will continue to incur significant losses and negative cash flows for the
foreseeable future, which makes it difficult to assess our future viability.
• Our indebtedness resulting from our Loan Agreement could adversely affect our financial condition or restrict
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our future operations.
If our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our
product candidates and technologies are not adequate, we may not be able to compete effectively, and we
otherwise may be harmed.
• We may become involved in lawsuits to protect or enforce our patents or other intellectual property rights or
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the patents of our licensors, which could be expensive and time consuming.
If the FDA does not conclude that UGN‐102 satisfies the requirements under 505(b)(2), or if the requirements for
our product candidates are not as we expect, the approval pathway for these product candidates will likely take
significantly longer, cost significantly more and entail significantly greater complications and risks than
anticipated, and in either case may not be successful.
• We expect current and future legislation affecting the healthcare industry, including healthcare reform, to
impact our business generally and to increase limitations on reimbursement, rebates and other payments, which
could adversely affect third‐party coverage of our products, our operations, and/or how much or under what
circumstances healthcare providers will prescribe or administer our products, if approved.
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Jelmyto and any of our product candidates that receive regulatory approval will be subject to ongoing regulatory
obligations and continued regulatory review, which may result in significant additional expenses, limit or
withdraw regulatory approval and subject us to penalties if we fail to comply with applicable regulatory
requirements.
It may be difficult for us to profitably sell our product candidates if coverage and reimbursement for these
products is limited by government authorities and/or third‐party payor policies.
• Our research and development and other significant operations are located in Israel and, therefore, our results
may be adversely affected by political, economic and military instability in Israel.
Item 1. Business
Overview
We are a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial
and specialty cancers. We have developed RTGel® reverse‐thermal hydrogel, a proprietary sustained release, hydrogel‐
based technology that has the potential to improve therapeutic profiles of existing drugs. Our technology is designed to
enable longer exposure of the urinary tract tissue to medications, making local therapy a potentially more effective
treatment option. Our approved product Jelmyto® (mitomycin) for pyelocalyceal solution, and our investigational
candidate, UGN‐102 (mitomycin) for intravesical solution, are designed to ablate tumors by non‐surgical means and to
treat several forms of non‐muscle invasive urothelial cancer, including low‐grade upper tract urothelial cancer (“low‐
grade UTUC”) and low‐grade intermediate risk non‐muscle invasive bladder cancer (“low‐grade intermediate risk
NMIBC”), respectively. In addition, our immuno‐uro‐oncology pipeline includes UGN‐301 (zalifrelimab), an anti‐CTLA‐4
antibody, which we intend to study as both monotherapy and combination therapy.
RTGel: Our Reverse Thermal Hydrogel Technology
RTGel is a novel proprietary polymeric biocompatible, reverse thermal gelation hydrogel technology, which, unlike the
general characteristics of most forms of matter, is liquid at lower temperatures and converts into gel form when warmed
to body temperature. We believe that these characteristics promote ease of delivery into and retention of drugs in body
cavities, including the bladder and the upper urinary tract, forming a transient reservoir of drug that dissolves over time
while preventing rapid excretion, providing for increased dwell time. RTGel leverages the physiologic flow of urine to
provide a natural exit from the body.
RTGel’s components are polymer‐based and are inactive ingredients that are used in U.S. Food and Drug Administration
(“FDA”) approved Jelmyto. We formulate RTGel with an active drug: mitomycin in the case of Jelmyto and UGN‐102. The
resulting formulations are instilled intravesically in liquid form directly into the upper urinary tract or bladder using
standard instillation methodologies via catheters or nephrostomy tube, and thereafter convert into gel form at body
temperature. Subsequently, upon contact with urine, RTGel gradually dissolves and releases the active drug over a period
of several hours and is less affected by urine creation and voiding cycles as compared to water formulations.
We believe that RTGel, when formulated with an active drug, may allow for the improved efficacy of treatment of various
types of urothelial and specialty cancers and urologic diseases without compromising the safety of the patient or
interfering with the natural flow of fluids in the urinary tract. RTGel achieves this by:
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increasing the exposure of active drugs in the bladder and upper urinary tract by significantly extending the dwell
time of the active drug while conforming to the anatomy of the bladder and the upper urinary tract, which allows
for enhanced drug tissue coverage. For example, the average dwell time of the standard aqueous mitomycin
formulation, currently used as adjuvant treatment, in the upper urinary tract is approximately five minutes,
compared to approximately six hours when mitomycin is formulated with RTGel;
administering higher doses of an active drug than would otherwise be possible using standard water‐based
formulations. For instance, it is only possible to dissolve 0.5 mg of mitomycin in 1 mL of water while it is possible
to formulate up to 8 mg of mitomycin with 1 mL of RTGel; and
• maintaining the active drug’s molecular structure and mode of action.
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These characteristics of RTGel enable sustained release of mitomycin in the urinary tract for both Jelmyto and UGN‐102.
Further, RTGel may be particularly effective in the bladder and upper urinary tract where tumor visibility and access are
challenging, and where there exists a significant amount of urine flow and voiding. We believe that these characteristics
of RTGel may prove useful for the local delivery of active drugs to other bodily cavities in addition to the bladder and
upper urinary tract.
Mitomycin—Our Target Active Drug for the Treatment of Low‐Grade UTUC and Low‐Grade Intermediate Risk NMIBC
Mitomycin is a generic drug currently utilized off‐label as an adjuvant chemotherapy for the treatment of low‐grade
NMIBC after trans‐urethral resection of bladder tumor ("TURBT"). Off‐label means that while the FDA has not approved
mitomycin as adjuvant treatment in the post‐TURBT setting for low‐grade intermediate risk NMIBC patients, physicians
are permitted to utilize it as standard of care for this indication as part of medical practice. Mitomycin is administered
using a water‐based solution, which has a relatively short dwell time in the bladder limited to first voiding. Mitomycin
often causes temporary irritation of the urinary tract, including the need to urinate frequently and urgently. In the upper
urinary tract, the dwell time of aqueous mitomycin is limited to approximately five minutes as urine flows continuously
and no active retention by the patient is feasible. Numerous in vitro models, in vivo studies and computer simulations
have shown that increased dwell time of mitomycin in the bladder results in increased time to recurrence of urothelial
cancer. In one such study, it was shown that mitomycin activity increased with exposure time. Specifically, the MIC90, or
mean inhibitory concentration that causes 90% inhibition in cell growth, was 11‐fold lower when exposure time was
increased from 30 minutes to eight hours.
Mitomycin’s mechanism of action is on the cancer cell’s DNA and has been demonstrated to be most effective when the
cancer cell is in its S‐phase, or synthesis phase, during which the DNA is replicated. Each cancer cell goes through various
phases during the cell cycle. However, the cell cycle is not synchronized in all cancer cells, which means that at any given
point in time only a portion of the cancer cells are at their S‐phase, or susceptible to the instilled mitomycin in the
bladder. Increased dwell time, facilitated by our RTGel preparations Jelmyto and UGN‐102, is designed to increase cell
killing in vitro when compared to aqueous solutions of mitomycin.
Our Pipeline
The following chart summarizes the current status of our pipeline:
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Jelmyto
Jelmyto is our novel sustained‐release RTGel‐based formulation of mitomycin that we have developed for the treatment
of low‐grade UTUC. RTGel is liquid at lower temperatures and converts into gel form at body temperature. This
temperature‐dependent viscosity characteristic allows for instillation of the chilled Jelmyto in its liquid form to the upper
urinary tract via standard urinary procedures utilizing a catheter or nephrostomy tube. Once instilled, Jelmyto converts
into gel form at body temperature. Subsequently, upon contact with urine, Jelmyto gradually dissolves and releases the
active drug, mitomycin, over a period of several hours versus several minutes for mitomycin in its water‐based
formulation. We believe that this substantial increase in dwell time of mitomycin positions Jelmyto as a chemoablation
treatment for low‐grade UTUC, potentially sparing patients from repeated tumor resection procedures and potentially
reducing the need for upper urinary tract surgeries, including kidney removal.
Upper Tract Urothelial Carcinoma ("UTUC")
UTUC refers to malignant changes of the urothelium (the epithelial lining) of the upper urinary tract of the calyces, renal
pelvis and ureter. Low‐grade UTUC managed with endoscopic resection typically exhibits a high rate of local recurrence.
High‐grade UTUC is associated with renal parenchymal invasion and the development of metastases. UTUC accounts for
approximately 5% to 10% of all new cases of urothelial cancer, which together with recurrent cases, results in an
estimated annual incidence in the United States of up to 7,000 cases. UTUC is nearly three times more common in men
than women and is typically diagnosed in patients in their 60s and 70s. Tumor grade is the key prognostic factor at the
time of diagnosis of UTUC and is assigned based upon microscopic examination of tumor tissue. Approximately 40% of the
patients diagnosed annually with UTUC in the United States have low‐grade UTUC.
Limitations of Other Treatments for Low‐Grade Upper Tract Urothelial Carcinoma
Before the approval of Jelmyto in April 2020, there were no drugs approved by the FDA for the treatment of low‐grade
UTUC, representing a significant unmet medical need. The current standard of care for the treatment of low‐grade UTUC
is radical nephroureterectomy ("RNU"), which is complete kidney and upper urinary tract removal. Recent advances in
resection instrument technology have allowed physicians to treat patients with low‐grade UTUC using endoscopic tumor
resection, a kidney‐sparing treatment, rather than nephroureterectomy followed by adjuvant chemotherapy, typically
mitomycin, treatment. However, the specific anatomy and physiology of the upper urinary tract make the performance of
organ‐sparing endoscopic tumor resection and instillation of adjuvant chemotherapy challenging, leading to high
recurrence rates. Patients often undergo multiple endoscopic resection procedures, which increases the probability of
potential complications of resection, including perforation and ureteral stricture, or a narrowing of the ureter. Endoscopic
tumor resection, which aims to be a kidney sparing surgical procedure, is conducted only in patients with low‐grade
disease and with limited tumor burden (unifocal tumor, low grade histology, less than 2 cm in greatest dimension).
Ultimately, 70% to 80% of patients with low‐grade UTUC undergo an RNU. Treatment is further complicated by the fact
that low‐grade UTUC is most commonly diagnosed in patients over 70 years of age, who may already have compromised
kidney function and other comorbidities such as cardiovascular disease, diabetes and pulmonary disease and may suffer
further complications as a result of a major surgery.
Our Solution: Jelmyto (mitomycin) for pyelocalyceal solution
On April 15, 2020, the FDA approved our new drug application (“NDA”) for Jelmyto (mitomycin) for pyelocalyceal solution,
formerly known as UGN‐101, for the treatment of adult patients with low‐grade UTUC. Jelmyto consists of mitomycin, an
established chemotherapy, and sterile hydrogel, using our proprietary sustained release RTGel technology. It has been
designed to prolong exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non‐
surgical means. New product exclusivity for Jelmyto expired on April 15, 2023; however, Orphan Drug exclusivity extends
until April 15, 2027. Additionally, the main patents that protect Jelmyto in the United States are set to expire in January
2031. These patents were listed in the FDA's Orange Book (Approved Drug Products with Therapeutic Equivalence
Evaluations).
The FDA evaluated the Jelmyto NDA under Priority Review, which is reserved for medicines that may represent significant
improvements in safety or efficacy in treating serious conditions. Jelmyto was also granted Breakthrough Therapy
Designation by the FDA, which was created to expedite the development and review of drugs developed for serious or
life‐threatening conditions with high unmet need.
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The FDA approval was based on results from our Phase 3 OLYMPUS trial showing Jelmyto achieved clinically significant
disease eradication in adults with low‐grade UTUC. Findings from the final study results include:
•
Complete response (“CR”) (primary endpoint) of 58% (41/71) in the intent‐to‐treat population and in the sub‐
population of patients who were deemed not capable of surgical removal at diagnosis.
• At the 12‐month time point for assessment of durability, 23 patients remained in CR of a total of 41 patients,
eight had experienced recurrence of disease and 10 patients were unable to be evaluated.
• Durability of response was estimated to be 81.8% at 12 months by Kaplan‐Meier analysis. The median duration
•
of response was not reached.
The most commonly reported adverse events (≥ 20%) were ureteric obstruction, flank pain, urinary tract
infection, hematuria, abdominal pain, fatigue, renal dysfunction, nausea, dysuria and vomiting. Most adverse
events were mild to moderate and manageable. No treatment‐related deaths occurred.
In December 2022, we presented new data from a follow up study to the OLYMPUS trial designed to obtain long‐term
data on Jelmyto. Based on data available for 16 of the 23 patients who had remained in CR at the end of the OLYMPUS
study, the median duration of response in that subset of patients was 28.9 months. Thirteen patients remained in CR, two
patients had recurrence of low grade‐UTUC on the same side as treated in OLYMPUS, and one patient underwent RNU
due to ureteral stricture without evidence of UTUC at the time of surgery. No patient had progressed to high‐grade
disease.
In June 2020, we initiated our commercial launch of Jelmyto in the United States. We have staffed, trained and prepared a
customer‐facing team that includes territory business managers with deep experience in both urology and oncology.
These territory business manager positions are led by seven regional business director positions, who are in turn
supported by seven regional operations manager positions. Each region is additionally supported by one to two clinical
nurse educators to provide education and training around instillation, as well as a field reimbursement manager to help
ensure access and reimbursement for appropriate patients and key account directors who engage with C‐suite individuals
to introduce a Jelmyto service line. In addition, our organization currently includes several medical science liaisons who
appropriately engage with physicians interested in learning more about UroGen, Jelmyto and our technology, both in
person and virtually. In total, our customer‐facing team comprises approximately 80 representatives.
We are committed to helping patients access Jelmyto. Our market access teams have laid the foundation for coverage and
reimbursement, meeting multiple times with payors. Medicare patients with supplemental coverage are covered and the
vast majority of commercial plans have policies in place, in whole covering over 150 million lives. In addition to
reimbursement and access, we have also been focused on ensuring seamless integration into physician practices. We
have implemented processes to help make Jelmyto preparation and administration seamless for practitioners and
patients, including entering into agreements with various national, regional and local specialty pharmacies under which
the pharmacy, following receipt of a patient prescription, prepares and dispenses the Jelmyto admixture on our behalf. In
September 2022, the FDA authorized an extension of the in‐use period for the Jelmyto admixture from eight hours to 96
hours (four days) following reconstitution of the product, adding convenience and flexibility in managing patient care.
In October 2020, a Medicare C‐Code was issued for Jelmyto. The Centers for Medicare & Medicaid Services ("CMS")
established a permanent and product‐specific J‐code for Jelmyto that took effect on January 1, 2021 and replaced the C‐
Code. CMS has granted Jelmyto a New Technology APC (Ambulatory Payment Classification), effective from October 1,
2023. We have also launched a registry to capture data and evaluate real world outcomes in patients with low‐grade
UTUC that have been or will be treated with Jelmyto. The purpose of the registry is to study the use of Jelmyto in clinical
practice in the United States and address specific clinical questions.
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Uro‐Oncological Indications Targeted by Our Product Candidates
UGN‐102 (mitomycin) for intravesical solution
UGN‐102 is our sustained‐release formulation of mitomycin that we are developing for the treatment of low‐grade
intermediate risk NMIBC. It is administered locally using standard urinary procedures utilizing a catheter inserted into the
bladder, and is designed to persist in the bladder despite urine flow and bladder movement. Once instilled, UGN‐102
converts into a semisolid gel form at body temperature. Subsequently, upon contact with urine, UGN‐102 gradually
dissolves and releases the active drug, mitomycin, over a period of several hours. In contrast, mitomycin in its current
water‐based formulation, is released at the time of first voiding, which is often less than an hour. We believe that the
resulting significantly increased dwell time of mitomycin in the bladder prolongs exposure of mitomycin to the tumor
tissue and therefore has the potential to chemoablate both visible and undetectable tumors. With regard to UGN‐102, we
own three issued U.S. patents and two issued patents in Europe. These issued patents are expected to expire in 2031.
Medac has intellectual property protection for its proprietary mitomycin formulation technology expected through June
2035.
We also own three pending U.S. applications and any patents that issue from these applications is expected to expire
between 2031 and 2043.
Bladder Cancer
The bladder is a hollow organ in the pelvis with flexible muscular walls. Its main function is to store urine before it leaves
the body. Urine is produced by the kidneys and is then carried to the bladder through the upper urinary tract tubes, called
ureters. The bladder wall has four main layers. The innermost lining is comprised of cells called urothelial or transitional
cells, and this inner layer is called the urothelium or transitional epithelium. Beneath the urothelium, there is a layer
called the lamina propria. Next is a thick layer of muscle called the muscularis propria followed by a layer of perivesical
fat.
Bladder cancer accounts for approximately 90% to 95% of all new cases of urothelial cancer in the United States
(estimated new cases in 2023 of 82,290). Bladder cancer is nearly three to four times more common in men than women,
and, is most commonly diagnosed in their 70s. Bladder cancers are described as non‐muscle invasive or muscle‐invasive
based on how far into the wall of the bladder they have invaded. Non‐muscle invasive bladder cancer ("NMIBC") can then
be characterized as low, intermediate, or high risk and can also be characterized as low‐ or high‐grade. Patients with low‐
grade intermediate risk NMIBC have frequent recurrences of disease that can be difficult to control using contemporary
standards of care.
Low Grade Intermediate Risk Non‐Muscle Invasive Bladder Cancer
NMIBC can be characterized as low, intermediate, or high risk, which is determined based on tumor grade and
stage. Tumors are graded as low or high (approximately 70% of NMIBC patients have a tumor that is classified as low‐
grade). Low‐grade intermediate risk NMIBC is defined as having one or two of following characteristics: tumor larger than
3 cm, multiple tumors in the bladder and a recurrence in less than one year from the prior tumor.
The standard of care for treating low‐grade intermediate risk NMIBC patients is TURBT. TURBT is a surgical procedure for
tumor removal usually conducted under general anesthesia in a hospital setting and may require an overnight stay. There
are known risks associated with the surgical procedure itself, including bleeding, hospitalization and an increased risk of
death in patients in their 60s and 70s. Moreover, TURBT’s success is tied to the physician’s ability to overcome challenges
in properly identifying, reaching and resecting all tumors. No drugs have been approved by the FDA for the primary
treatment of low‐grade intermediate risk NMIBC. Efficacy of drug treatments has historically been limited due to
challenges presented by bladder physiology, specifically the fact that urine is produced and voided frequently, thus
diluting the concentration of the drug almost immediately and causing the excretion of the drug from the bladder at first
urine voiding. A subset of low‐grade intermediate risk NMIBC patients is at risk for frequent local recurrences.
Due to lack of treatment options to reduce recurrences in these patients, they are managed with repeat TURBT for each
subsequent recurrence. We estimate, based upon a review of peer‐reviewed and publicly available data, an addressable
population of low‐grade intermediate risk NMIBC patients of approximately 80,000 in the U.S. annually.
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Limitations of Current Therapies for Low‐Grade Non‐Muscle Invasive Bladder Cancer
Recurrence, which occurs in approximately 80% of patients, is the primary threat for patients with low‐grade NMIBC.
Multiplicity, or number of tumors, tumor size and prior recurrence rate are the most important variables in determining
the likelihood and potential severity of recurrence. The current standard of care for low‐grade NMIBC is TURBT. The most
common complications, risks and limitations of TURBT include:
•
•
•
•
•
•
•
•
bleeding at the time of surgery that requires clot irrigation;
infection of the bladder;
injury to the urethra and bladder perforation with potential intra‐abdominal leakage;
reimplantation and cell migration;
repeat TURBT procedures, which are necessary for approximately 10% of patients within three months;
complete removal of tumor tissue often not being feasible;
potential recurrence of up to 25% of the tumors at the original treatment site; and
some tumors not being detectable.
Post‐operative adjuvant treatments for low‐grade NMIBC, which are given to prevent reimplantation of the cancerous
cells, consist primarily of chemotherapy in the case of low‐grade tumors and immunotherapy in the case of high‐grade
tumors, and are administered intravesically via catheter. Adjuvant intravesical chemotherapy is used in low‐grade tumors
following TURBT in order to try to delay tumor recurrence but is not used as a chemoablation agent. The rationale is to
expose tumors to high local drug concentrations while minimizing the systemic exposure, thereby enhancing the
treatment effect and reducing the drug toxicity. In practice, in the U.S., adjuvant chemotherapy in this setting is only used
in 0‐30% of the eligible population.
No drugs have been approved by the FDA for the primary treatment of low‐grade NMIBC. Mitomycin is the drug used
most often for intravesical chemotherapy in this patient population. It is used off‐label as an adjuvant treatment in the
post‐operative setting for low‐grade tumors with high risk of recurrence. Other drugs that have been used off‐label
include docetaxel and gemcitabine.
Our Solution: UGN‐102 (mitomycin) for intravesical solution
We are evaluating the safety and efficacy of UGN‐102, our novel sustained‐release formulation of mitomycin for the
treatment of low‐grade intermediate risk NMIBC.
UGN‐102 is administered locally using the standard practice of intravesical instillation directly into the bladder via a
catheter. The instillation into the bladder is expected to take place in a physician’s office as a non‐operative outpatient
treatment, in comparison with TURBT or similar surgical procedures, which are operations often conducted under general
anesthesia and may require an overnight stay. Complete surgical tumor removal often has limited success due to the
inability to properly identify, reach and resect all tumors. We believe that an effective chemoablation agent can
potentially provide better eradication of tumors irrespective of the detectability and location of the tumors. In addition,
by reducing the need for surgery, patients may avoid potential complications associated with surgery and anesthesia.
In October 2021, we reported final data from the Phase 2b OPTIMA II trial. The single‐arm, open label trial completed
enrollment of 63 patients at clinical sites across the United States and Israel in September 2019. Patients were treated
with six weekly instillations of UGN‐102 and underwent assessment of CR (the primary endpoint) four to six weeks
following the last instillation; 65%, or 41 out of 63 patients, treated with UGN‐102 achieved a CR three months after the
start of therapy. In this subset of patients, 39 (95%), 30 (73%), and 25 (61%) remained disease‐free at six, nine, and 12
months after treatment initiation, respectively. The probability of durable response nine months after CR (12 months
after treatment initiation) was estimated to be 72.5% by Kaplan‐Meier analysis. Thirteen patients had documented
recurrences. Fifty‐seven of 63 (90%) patients completed all six instillations of UGN‐102 according to the study protocol.
Median duration of response was not reached. The most common adverse events, greater than 10%, were most often
reported as mild to moderate in severity and include dysuria, hematuria, urinary frequency, fatigue, urgency and urinary
tract infection. The final data was published online in The Journal of Urology in October 2021 and was included in the
January 2022 print edition.
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In December 2022 we presented new data from a follow up study to the OPTIMA II study designed to obtain long‐term
data on UGN‐102 that shows median duration of response of 24.4 months based on available data for 15 out of 25
patients who achieved a CR in OPTIMA II. Seven patients remained in CR, six patients had recurrence of low‐
grade disease, one patient had progression to high‐grade disease and one patient withdrew consent but remained in CR
at the last evaluation prior to discontinuation. All patients were alive at the last contact, and five patients were known to
have had post‐study treatment with TURBT or fulguration.
We initiated our Phase 3 ATLAS trial in December 2020 and until November 2021, were enrolling patients in this trial
comparing UGN‐102 with or without TURBT to standard of care, TURBT. In parallel, we continued to engage in discussions
with the FDA and, based on this dialogue, we designed a trial in order to demonstrate the efficacy and safety of UGN‐102.
This Phase 3 ENVISION trial is a single‐arm, multinational, multicenter study evaluating the efficacy and safety of UGN‐102
as primary chemoablative therapy in patients with low‐grade intermediate risk NMIBC. The design of the Phase 3
ENVISION trial is similar to our Phase 2 OPTIMA II trial in that the patient population has similar clinical characteristics,
receives the same investigational treatment regimen and undergoes similar efficacy and safety assessments and
qualitative follow‐up. Study participants receive six once‐weekly intravesical instillations of UGN‐102. The primary
endpoint is CR rate at three months after the first instillation, and the key secondary endpoint is durability of response in
patients who achieve CR at the three‐month assessment.
In February 2022, we announced the initiation of the Phase 3 ENVISION trial, targeting enrollment of 220 patients across
90 sites. In December 2022 we completed our target enrollment of the Phase 3 ENVISION trial. As a result of the FDA's
acceptance of a single arm approach, we stopped enrollment of the Phase 3 ATLAS trial. However, at the time enrollment
was stopped, patients who had signed an informed consent were able to complete screening, and if eligible were
randomized into the trial.
On July 27, 2023, we announced topline data from our Phase 3 trials, ATLAS and ENVISION. In the ATLAS trial, UGN‐
102 met its primary endpoint of disease‐free survival, reducing risk of recurrence, progression, or death by 55%. Results of
the ATLAS trial also showed a 64.8% CR rate at three months for patients who only received UGN‐102, compared to a
63.6% CR rate at three months for patients who only received a TURBT. The ENVISION trial met its primary endpoint by
demonstrating that patients treated with UGN‐102 had a 79.2% rate of CR at three months following the initial treatment.
Additional data evaluating the secondary endpoint of duration of response from ENVISION is anticipated in 2024. In both
trials, the safety profile of UGN‐102 was acceptable, with a safety profile comparable to that observed in previous clinical
trials of UGN‐102.
We also initiated a Phase 3b study with the objective of demonstrating whether UGN‐102 can be administered at home
by a qualified home health professional, avoiding the need for repeated visits to a healthcare setting for instillation. As
per the study design, patients in this study received six once‐weekly intravesical instillations of UGN‐102 with the initial
treatment visit occurring at the investigative site and instillation performed by a qualified physician. Treatment visits two
to six took place at the patient's home and instillations were performed by a properly trained and qualified home health
professional. The primary endpoints of the study include safety and tolerability, discontinuations from at home study
treatment and feedback from patients, home health professionals and investigators via standardized questionnaires. The
study completed enrollment with a total of eight patients across four centers and all study visits for these enrolled
patients have been completed. Preliminary results were reported through a press release in February 2023, finding that
UGN‐102 was suitable to administer at home by a visiting nurse under the supervision of a treating physician and resulted
in 75% of patients achieving a CR, defined as no detectable disease three months after starting treatment. Patients,
nurses and investigators also completed home instillation feasibility questionnaires. These standardized feasibility
questionnaires highlighted that all eight patients preferred at‐home to in‐office treatment, and five of six patients
recommended UGN‐102 home instillation instead of TURBT. Home instillation was reported as feasible for visiting nurses,
and three of four investigators considered at‐home treatment “not different” than in‐office treatment.
In October 2023 we announced our agreement with the FDA on plans for submission of an NDA for UGN‐102 (mitomycin)
for intravesical solution. The FDA indicated that the current clinical development plan for UGN‐102, which includes
evaluation of duration of CR at 12 months from the pivotal ENVISION trial, will support submission of an NDA for the
treatment of low‐grade intermediate risk NMIBC. The FDA indicated that it may seek the advice of the Oncology Drug
Advisory Committee as part of the NDA review process. The FDA also agreed that the UGN‐102 NDA can utilize a rolling
review, allowing for early submission of the Chemistry, Manufacturing and Controls ("CMC") sections of the NDA, which
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we submitted in January 2024. Based on our agreement with the FDA, we expect to complete the submission of the
rolling NDA for UGN‐102 in September 2024.
In January 2024 we entered into a licensing and supply agreement with medac Gesellschaft für klinische Spezialpräparate
m.b.H. (“medac”) to develop UGN‐103 and UGN‐104 which are intended to be next‐generation formulations of UGN‐102
and Jelmyto, respectively, that combine medac’s proprietary mitomycin formulation technology with our RTGel
technology, which we believe will provide advantages related to production, cost, supply and product convenience. We
plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐103 in low‐grade intermediate risk
NMIBC. We also plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐104 in low‐grade UTUC.
UGN‐301 (zalifrelimab) intravesical solution
Our immuno‐uro‐oncology pipeline includes UGN‐301 (zalifrelimab), an anti‐CTLA‐4 antibody, which we intend to study as
a standalone agent and as a combination therapy. The first combination we are investigating clinically involves the
sequential use of UGN‐201 (imiquimod), a toll‐like receptor‐7 ("TLR 7") agonist, and UGN‐301 in high‐grade non‐muscle
invasive bladder cancer ("high‐grade NMIBC"). The second combination we are investigating clinically involves the
sequential administration of gemcitabine and UGN‐301 to the bladder in high‐grade NMIBC. UGN‐301 is delivered using
our proprietary RTGel technology, which has been designed to significantly improve the effectiveness of certain
intravesical therapies.
High‐Grade Non‐Muscle Invasive Bladder Cancer
High‐grade NMIBC is a highly aggressive form of bladder cancer. TURBT followed by adjuvant intravesical immunotherapy
with Bacillus of Calmette and Guerin ("BCG") is the current standard of care therapy for high‐grade NMIBC. However, the
high rates of recurrence and significant risk of progression to muscle‐invasive tumors are particularly dangerous. Radical
cystectomy, or bladder removal is strongly advocated in patients with BCG‐unresponsive NMIBC (i.e., patients with BCG‐
refractory and BCG‐relapsing tumors in whom further BCG therapy is not recommended) or for patients who cannot
tolerate BCG. We estimate based upon a review of peer‐reviewed and publicly available data that there are approximately
18,700 BCG‐unresponsive patients in the U.S. annually.
Limitations of Current Therapies for High‐Grade NMIBC
Only five drugs have been approved for high‐grade NMIBC, all used as adjuvant treatment: Thiotepa, which was approved
in 1959, and is no longer used in practice; BCG, which was approved in 1989; Valstar® (valrubicin), which was approved in
1998; Keytruda® (pembrolizumab), which was approved by the FDA in 2020; and Adstiladrin® (nadofaragene firadenovec‐
vncg), which was approved by the FDA in 2022 for BCG unresponsive CIS.
BCG, an immunotherapy‐based drug, is used as an adjuvant treatment for patients with high‐grade NMIBC. Upon
recurrence, which occurs in approximately 70% of patients, the patients undergo another round of BCG therapy with a
response rate of approximately 30%. Radical cystectomy, or surgical removal of the bladder, is also a common treatment
option for patients who fail multiple intravesical BCG therapies. However, treatment with BCG is associated with
undesirable side effects (including local irritation, systemic symptoms of immune activation and a small but serious risk of
systemic absorption leading to mycobacterial sepsis and death), as evidenced by a boxed warning on the label, which is a
warning placed on a prescription drug’s label by the FDA and is designed to call attention to serious or life‐threatening
risks.
Our Solution: UGN‐301 (zalifrelimab) intravesical solution
We are exploring the use of immunotherapy for the treatment of high‐grade NMIBC, and have pursued a series of
nonclinical studies to determine whether our proprietary RTGel technology might provide a method for delivering highly
potent immunomodulators directly to the bladder surface thereby avoiding toxicity associated with systemic
administration. Our immuno‐uro‐oncology pipeline includes UGN‐301, an anti‐CTLA‐4 antibody, which we intend to study
as a single agent and as a combination therapy. CTLA‐4 antibodies are seen as potentially potent and comprehensively
acting immunomodulators due to the ability to stimulate cytotoxic T cells, while simultaneously inhibiting suppressive T‐
regulatory cells. When administered systemically, they have led to improved outcomes in patients suffering from
advanced cancers.
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The completion of non‐human primate toxicity studies supported the initiation of a multi‐arm Phase 1 study of UGN‐301
in combination with other agents. We believe that this approach leverages our unique drug delivery technology and
provides an opportunity to evaluate intravesical delivery of UGN‐301 in combination with other immuno‐modulators,
chemotherapies, gene therapy and innate immune stimulators.
The first combination we are investigating clinically involves the sequential use of UGN‐201 (imiquimod), a TLR 7 agonist,
and UGN‐301 in high‐grade NMIBC. Toll‐like receptors are pattern recognition receptors whose importance in stimulating
innate and adaptive immunity has been established by recent studies. Toll‐like receptors are able to sense microbial
components as well as host‐derived endogenous molecules released by injured tissues and play a critical role in defending
against invading pathogens. Imiquimod, in its topical formulation, is FDA approved for several indications, including
superficial basal cell carcinoma. UGN‐201 is a liquid formulation of imiquimod for intravesical administration that has
been optimized for delivery in the urinary tract. We acquired UGN‐201 from Telormedix SA, a private Swiss‐based
biotechnology company, in the fourth quarter of 2015. Telormedix conducted all of the previous studies related to UGN‐
201, including the Phase 1 and Phase 1b studies. We have obtained Orphan Drug Designation for UGN‐201 for the
treatment of CIS in the bladder. We have an active Investigational New Drug Application ("IND") for UGN‐201, which has
been effective since 2013.
The second combination we are investigating clinically involves the sequential administration of gemcitabine and UGN‐
301 to the bladder in high‐grade NMIBC. Gemcitabine is a chemotherapy that is used intravesically to treat high grade
NMIBC where it is administered as a liquid formulation.
We believe these two combinations could elicit both an innate and adaptive immune response, which may translate into a
long‐lasting acquired immune response, and potentially represent a valid post‐TURBT adjuvant treatment of high‐grade
NMIBC. UGN‐301 is delivered using our proprietary RTGel technology, which has been designed to significantly improve
the effectiveness of certain intravesical therapy. We believe that these combinations make local therapy a potentially
more effective treatment option while minimizing systemic exposure and its potential side effects.
In March 2022, we announced FDA clearance of our IND to begin a novel Phase 1 clinical study of UGN‐301 in patients
with recurrent NMIBC. The novel study design utilizes a Master Protocol that we believe is a more efficient and
streamlined approach to development. It will provide more flexibility to add study arms as the trial progresses and is
expected to increase efficiency and potentially reduce costs. We expect the Master Protocol will allow us to more quickly
evaluate safety, tolerability and dosing of UGN‐301 in combination with additional immunomodulators and
chemotherapies, with the goal of developing optimized treatment regimens for patients. The multi‐arm Phase 1 study,
which is expected to support the development of UGN‐301 in high‐grade NMIBC, was initiated in April 2022 and is actively
enrolling. We expect safety and tolerability data from this Phase 1 study in mid‐2024.
Research and Development and License Agreements
Agenus Agreement
In November 2019, we entered into a license agreement with Agenus Inc. ("Agenus"), pursuant to which Agenus granted
us an exclusive, worldwide (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela and their respective
territories and possessions), royalty‐bearing, sublicensable license under Agenus’s intellectual property rights to develop,
make, use, sell, import, and otherwise commercialize products incorporating a proprietary monoclonal antibody of
Agenus known as AGEN1884 (zalifrelimab), an anti‐CTLA‐4 antagonist, for the treatment of cancers of the urinary tract via
intravesical delivery. UGN‐301 is a formulation of zalifrelimab administered using RTGel technology that is in Phase 1
clinical development for high‐grade NMIBC.
MD Anderson Agreement
In January 2021, we announced that we had entered into a three‐year strategic research collaboration agreement with
MD Anderson focusing on the sequential use of UGN‐201 and UGN‐301 as an investigational treatment for high‐grade
NMIBC. Pursuant to the agreement, we have made bi‐annual payments totaling $2.0 million to MD Anderson to fund the
collaboration, recognized evenly over the associated period through research and development expenses. In July 2022,
we determined that we had achieved the objectives that we established when the agreement was initiated, and notified
MD Anderson that we were exercising our right to conclude the collaboration in 2022 as we did not foresee initiating
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further development activities as part of the collaboration, although we will continue to collaborate on existing joint
projects. As a result of this notification, we were not responsible for any further fixed bi‐annual funding payments in 2023,
although we are responsible for costs related to existing joint projects to the extent they exceed the payments already
made to MD Anderson.
Our Competitive Strengths
We believe our approved product and lead product candidates for uro‐oncology, which are being developed by leveraging
our expertise in drug development and our proprietary formulation technology, have the ability to replace the repetitive,
costly, sub‐optimal and burdensome tumor resection procedures that represent the current standards of care.
Furthermore, we believe our proprietary formulation technology has broad applications and may allow us to develop
additional product candidates for indications within and beyond the urinary tract.
Potential ability to develop additional minimally invasive, drug therapies for uro‐oncology. Leveraging our innovative
formulation technology, we developed Jelmyto, our first commercial product and UGN‐102, our lead product candidate,
as potential replacements to treatment for low‐grade UTUC and low‐grade intermediate risk NMIBC, respectively. Jelmyto
is a chemoablation agent designed to overcome the challenges posed by the anatomy of the urinary tract by increasing
the dwell time and enhancing the tissue coverage of mitomycin. UGN‐102 is also being developed as a chemoablative
therapy that may provide a non‐invasive durable treatment option for patients. Clinical data generated to date supports
our belief that our approved product and lead product candidate may provide new therapeutic options to the current
surgical procedures, providing chemoablation treatment that has the potential to better eradicate tumors irrespective of
their detectability and location within the urinary tract.
Expertise in developing proprietary formulations of drugs for clinical benefit. We focus on developing proprietary RTGel
formulations of previously approved drugs and novel therapeutics which we are investigating, whose efficacy for a
particular indication is limited by current formulations or routes of administration. Our expertise has enabled us to
develop proprietary RTGel‐based formulations for previously approved drugs and drugs in clinical development, including
clinical stage proprietary formulations of mitomycin and zalifrelimab. Our formulations are designed to significantly
increase the dwell time and exposure of the drugs to the target sites and limit the need for urine retention, potentially
providing enhanced clinical activity, reduced patient burden and increased patient compliance over existing formulations
and modes of administration. We have a strong research and development team to advance our product candidates.
Streamlined development risks and efficiencies for our pipeline product candidates. Jelmyto was approved with the
FDA’s 505(b)(2) regulatory pathway, which provides a streamlined, capital efficient pathway when compared to
traditional drug development. We also expect to use the 505(b)(2) regulatory pathway for UGN‐102, UGN‐103 and UGN‐
104. Furthermore, Jelmyto and UGN‐201 have received Orphan Drug Designation from the FDA for the treatment of low‐
grade UTUC and CIS, respectively, which provides seven years of regulatory exclusivity following FDA approval.
Leverageable proprietary formulation technology. We believe that RTGel has multiple potential applications beyond
urology. Our formulation know‐how may enable us to develop different drug formulations to facilitate the delivery,
retention and sustained release of active drugs to a variety of targeted body cavities. We believe that our proprietary
formulation technology can improve the efficacy of locally administered drugs in body cavities that present anatomical
and physiological challenges related to frequent wash out, rapid excretion and bodily secretions.
Strong intellectual property position. We have a robust intellectual property portfolio that includes 43 granted patents
worldwide and more than 45 pending patent applications filed in the US, Europe, Israel, Japan, Canada, China, Mexico and
Australia. In the United States, we currently have 19 granted patents that are directed to protect our approved
product, Jelmyto and our lead product candidate, UGN‐102, a proprietary RTGel technology, various local compositions
comprising different active ingredients, inter alia compositions comprising a Botulinum Toxin, UGN‐201, UGN‐302 (the
sequential use of UGN‐201 and UGN‐301) and our future product candidates that are under company research. These
patents claim methods, combination products and novel compositions for treating different diseases, especially cancer in
internal cavities, in particular urinary tract cancer. Our issued patents are set to expire between 2024 and 2037.
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Experienced and accomplished leadership team with proven track record. We have an experienced management team,
with each member possessing deep experience in the biotechnology and related industries. Our President and Chief
Executive Officer, Liz Barrett was CEO of Novartis Oncology and a member of the Executive Committee of Novartis. She
previously served as Global President of Oncology at Pfizer Inc. At Pfizer, she held numerous leadership positions,
including President of Global Innovative Pharma for Europe, President of the Specialty Care Business Unit for North
America, and President of United States Oncology. Prior to Pfizer, she was Vice President and General Manager of the
Oncology Business Unit at Cephalon Inc. Ms. Barrett also worked at Johnson & Johnson. In addition, our Chairman, Arie
Belldegrun, M.D., is a seasoned biotech executive and was the founder, Chairman, Chief Executive Officer and President
of Kite Pharma, Inc., which was sold to Gilead Sciences, Inc. Dr. Belldegrun is also a urologist by training. We believe that
our leadership team is well‐positioned to lead us through clinical development, regulatory approval and
commercialization for our product candidates.
Our Growth Strategy
We are a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial
and specialty cancers. Some key growth drivers are as follows:
Establish our approved product, Jelmyto, as standard of care in low‐grade UTUC.
We secured FDA approval of Jelmyto in April 2020 and launched in June 2020. Our current priority is to continue our
efforts to ensure the successful commercialization of Jelmyto and to establish Jelmyto as standard of care in low‐grade
UTUC.
Advance our product candidate UGN‐102 and establish it as the first primary non‐surgical chemoablative therapy in its
target indication following regulatory approval.
We submitted an IND for UGN‐102 in June 2018. On July 27, 2023, we announced topline data from our Phase 3 trials,
ATLAS and ENVISION, and additional data evaluating the secondary endpoint of duration of response from ENVISION is
anticipated in 2024. We believe that UGN‐102 has the potential to be a new therapeutic option for the treatment of low‐
grade intermediate risk NMIBC patients, if approved.
Expand our uro‐oncology product pipeline.
We believe that UGN‐301 in combination with other potential agents could represent an option for the post‐TURBT
adjuvant treatment of high‐grade NMIBC. In April 2022 we initiated a multi‐arm Phase 1 study, which is expected to
support the development of UGN‐301 in high‐grade NMIBC. We believe that the combination treatments make local
therapy a potentially more effective treatment option while minimizing systemic exposure and its potential side effects.
We also plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐103 in low‐grade, intermediate
risk NMIBC. We also plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐104 in low‐grade
UTUC. UGN‐103 and UGN‐104 combine medac’s proprietary mitomycin formulation technology with our RTGel
technology, which we believe will provide advantages related to production, cost, supply and product convenience.
Utilize our proprietary technology to expand our pipeline to other body cavities and indications.
We believe that RTGel may be suitable for multiple additional applications. Our know‐how may enable us to develop
different drug formulations to facilitate the delivery, retention, increased dwell time and sustained release of active drugs
to a variety of targeted body cavities. In the future, we may also choose to develop our RTGel technology in combination
with other drugs to treat cancer and other indications endemic to such body cavities.
Evaluate and selectively pursue potential collaborations in specialty oncology, uro‐oncology and urology as well as to
develop improved formulations and RTGel product life‐cycle management strategies.
We are focused on driving growth through business development and geographic footprint expansion focusing on
sustained nearer‐term revenue growth, innovation, high unmet need and cost‐effective value creation. We are seeking
potential partnerships with leading academic institutions as well as other biotechnology and pharmaceutical companies.
Such collaborations may allow us to obtain financial support and to capitalize on the expertise and resources of our
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potential partners, which could allow for new and improved versions of approved or clinical stage drugs and could
accelerate the development and commercialization of additional product candidates.
Intellectual Property
Our patent estate includes patents and patent applications with claims directed to our approved product, Jelmyto and our
lead product candidate, UGN‐102, a proprietary RTGel technology, various local compositions comprising different active
ingredients, inter alia compositions comprising a Botulinum Toxin, UGN‐201, UGN‐302 (the sequential use of UGN‐201
and UGN‐301) and our future product candidates that are under company research.
In the United States, we currently have 19 granted patents that are directed to protect our approved product, Jelmyto
and our lead product candidate, UGN‐102, a proprietary RTGel technology, various local compositions comprising
different active ingredients, inter alia compositions comprising a Botulinum Toxin, UGN‐201 and our future product
candidates that are under company research. These patents claim methods, combination products and novel
compositions for treating different diseases, especially cancer in internal cavities, in particular urinary tract cancer. These
issued patents are set to expire between 2024 and 2037. In total, our IP portfolio includes 43 granted patents worldwide,
and more than 45 pending patent applications filed in the US, Europe, Israel, Japan, Canada, China, Mexico and Australia
that are directed to cover various methods, systems and compositions for treating cancer locally, by intravesical means,
utilize various active ingredients and the combinations thereof. These patent applications, if issued, are set to expire
between 2031 and 2043.
As noted earlier, companies are required as part of the NDA submission process to list patents with the FDA whose claims
cover the applicant’s product. Accordingly, we have listed two patents for Jelmyto in the FDA’s Orange Book upon
approval of Jelmyto for commercial sale, as part of the NDA process.
Our worldwide intellectual property portfolio includes patents and patent applications filed in many jurisdictions such as
the US, Europe, Israel, Japan, Canada, China and Australia of which are expected to remain in effect until 2043, if allowed:
• Hydrogel‐based pharmaceutical compositions for optimal delivery of various therapeutic agents to internal
cavities such as the bladder and/or urinary tract.
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The method for treating bladder cancer, upper urinary tract cancer and urothelial cancer using hydrogel‐based
compositions.
Proprietary mitomycin formulation for treating bladder cancer, upper urinary tract cancer and urothelial cancer.
The method for treating overactive bladder and interstitial cystitis topically without a need for injections in the
bladder wall.
Special catheters and in‐dwelling ureter‐catheter systems for optimal delivery of a drug into the renal cavity.
Pharmaceutical compositions comprising an imidazoquinolin‐amine (specifically imiquimod) for treating bladder
cancer diseases.
Composition comprising immunomodulators such as anti‐PD1 and/or anti‐CTLA4 for topical/intravesical
administration as a monotherapy or a combo‐therapy.
• Novel phospholipid drug analogs (new chemical entities) for treating cancer or infections.
• Hydrogel for removal ureteral and renal stones.
In addition to patents, we have filed applications for trademark registration with the United States Patent and Trademark
Office (the "USPTO"), as well as certain other international jurisdictions for Jelmyto ®, RTGel ®, UroGen ® and Cystoject™
and for certain other tradenames and logos. In addition, we have a registered trademark in the U.S. covering a stylized
design of our UroGen Pharmaceutical logo.
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Furthermore, we rely upon trade secrets, know‐how and continuing technological innovation to develop and maintain our
competitive position. Preparing and filing patent applications is a joint endeavor of our research and development team
and our in‐house and external patent attorneys. Our patent attorneys conduct patent prior‐art searches and then analyze
the data in order to provide our research and development team with recommendations on a routine basis. This results
in:
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protecting our product candidates that are under development;
encouraging pharmaceutical companies to negotiate development agreements with us; and
preventing competitors from attempting to design‐around our inventions.
Competition
We are developing products for patients with low‐grade UTUC, low‐grade NMIBC and high‐grade NMIBC.
Prior to Jelmyto, there were no approved drugs used to treat the low‐grade UTUC. Tumor resection surgeries are
conducted in some cases of low‐grade UTUC; however, complete kidney and upper urinary tract removal is the standard
of care for recurring UTUC. We are aware of a company called Steba Biotech with an IND granted in December 2020 who
has initiated a Phase 3 study of padeliporfin for the treatment of adult patients with low‐grade and unifocal high‐grade
UTUC.
We do not know whether other competitors in the NMIBC space are already developing, or plan to develop, UTUC
treatments. Competition may increase further as a result of advances in the commercial applicability of technologies and
greater availability of capital for investment in this industry. Our competitors may succeed in developing, acquiring or
licensing on an exclusive basis, products that are more effective, easier to administer or less costly than our product
candidates.
The standard of care for treating low‐grade NMIBC is repeated TURBT procedures. While effective, patients with low‐
grade intermediate risk NMIBC experience frequent recurrences and repeated surgical procedures. Mitomycin is
sometimes used off‐label as adjuvant treatment in the post‐TURBT setting for low‐grade NMIBC patients. However, off‐
label usage as a standard of care does not change the FDA’s approval criteria and does not suggest that FDA approval is
more likely than for other investigational drugs. Companies such as Janssen and Lipac are conducting, or have recently
conducted clinical trials for product candidates for the treatment of low‐grade intermediate risk NMIBC.
The standard of care for treating high‐grade NMIBC patients is the TURBT procedure for papillary tumor resection,
followed by post‐operative adjuvant BCG. In the case of high‐grade disease without papillary tumor (CIS), BCG is used
alone as primary therapy. BCG was approved by the FDA in 1989, since its approval, only three other drugs were approved
for high‐grade NMIBC: Valstar, approved by the FDA in 1998; Keytruda, approved by the FDA in 2020; and Adstiladrin,
approved by the FDA in 2022 for BCG unresponsive CIS. Valstar is indicated for patients with CIS that do not respond to
BCG treatment and is rarely used. Keytruda was approved for CIS with or without papillary involvement for patients who
do not respond to BCG treatment.
It remains to be seen whether the broader urology community will adopt a systemic infused immunotherapy into their
clinical management of BCG unresponsive NMIBC. In addition to these approved options, off‐label intravesical
chemotherapy can be used (such as gemcitabine and cisplatin). If the disease can no longer be controlled, patients will
typically proceed to cystectomy, or surgical removal of the bladder, to prevent progression to muscle invasive and
metastatic disease. There are several products in the development pipeline, most of which are treatments targeted for
high‐grade NMIBC patients who have failed BCG treatment and are facing cystectomy.
We are aware of several pharmaceutical companies that are developing drugs in the fields of urology and uro‐oncology,
such as AADi, LLC, Biocancell Ltd., Bristol Myers Squibb, CG Oncology Inc., enGene Holdings, Ferring Pharmaceuticals, FKD
Therapies Oy, GSK, ImmunityBio, Janssen, Merck Sharp & Dohme Corp, Pfizer, Prokarium, Protara Therapeutics, Roche,
Samyang Biopharma, Steba Biotech Ltd., SURGE Therapeutics, Viralytics Limited and Vyriad. In addition, we face
competition from existing standards of treatment, surgical tumor resection procedures. If we are not able to demonstrate
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that our product candidates are at least as safe and effective as such courses of treatment, medical professionals may not
adopt our product candidates in replacement of the existing standard of care.
The biotechnology industry is intensely competitive and subject to rapid and significant technological change. Our
potential competitors include large and experienced companies that enjoy significant competitive advantages over us,
such as greater financial, research and development, manufacturing, personnel and marketing resources, greater brand
recognition, and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory
authorities. These companies may develop new drugs to treat the indications that we target or seek to have existing drugs
approved for use for the treatment of the indications that we target.
These potential competitors may therefore introduce competing products without our prior knowledge and without our
ability to take preemptive measures in anticipation of their commercial launch. Competition may increase further as a
result of advances in the commercial applicability of technologies and greater availability of capital for investment in this
industry. Our competitors may succeed in developing, acquiring or exclusively licensing products that are more effective,
easier to administer or less costly than our product candidates.
Government Regulation
The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose substantial
requirements upon the clinical development, manufacture and marketing of pharmaceutical products. These agencies
and other federal, state and local entities regulate research and development activities and the testing, manufacture,
quality control, safety, effectiveness, labeling, storage, packaging, recordkeeping, tracking, approval, import, export,
distribution, advertising and promotion of our products.
The process required by the FDA before product candidates may be marketed in the United States generally involves the
following:
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nonclinical laboratory and animal tests that must be conducted in accordance with good laboratory practices
("GLPs");
submission of an IND, which must become effective before clinical trials may begin;
approval by an independent institutional review board ("IRB"), for each clinical site or centrally before each trial
may be initiated;
adequate and well‐controlled human clinical trials to establish the safety and efficacy of the proposed product
candidate for its intended use, performed in accordance with good clinical practices ("GCPs");
submission to the FDA of an NDA;
satisfactory completion of an FDA advisory committee review, if applicable;
pre‐approval inspection of manufacturing facilities and selected clinical investigators for their compliance with
current good manufacturing practices ("cGMP") and GCPs; and
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FDA approval of an NDA to permit commercial marketing for particular indications for use.
The testing and approval process requires substantial time, effort and financial resources. Nonclinical studies include
laboratory evaluation of drug substance chemistry, pharmacology, toxicity and drug product formulation, as well as
animal studies to assess potential safety and efficacy. Prior to commencing the first clinical trial with a product candidate,
we must submit the results of the nonclinical tests and nonclinical literature, together with manufacturing information,
analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some
nonclinical studies may continue even after the IND is submitted. The IND automatically becomes effective 30 days after
receipt by the FDA, unless the FDA, within the 30‐day time period, raises safety concerns or questions about the conduct
of the clinical trial by imposing a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding
concerns before the clinical trial can begin. Submission of an IND may not result in FDA authorization to commence a
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clinical trial. A separate submission to the existing IND must be made for each successive clinical trial conducted during
product development, as well as amendments to previously submitted clinical trials. Further, an independent IRB for each
study site proposing to conduct the clinical trial must review and approve the plan for any clinical trial, its informed
consent form and other communications to study subjects before the clinical trial commences at that site. The IRB must
continue to oversee the clinical trial while it is being conducted, including any changes to the study plans. Regulatory
authorities, an IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a
finding that the subjects are being exposed to an unacceptable health risk, the clinical trial is not being conducted in
accordance with the FDA’s or the IRB’s requirements, if the drug has been associated with unexpected serious harm to
subjects, or based on evolving business objectives or competitive climate. Some studies also include a data safety
monitoring board, which receives special access to unblinded data during the clinical trial and may advise us to halt the
clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no
demonstration of efficacy.
In general, for purposes of NDA approval, human clinical trials are typically conducted in three sequential phases that may
overlap.
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Phase 1—Studies are initially conducted to test the product candidate for safety, dosage tolerance, structure‐
activity relationships, mechanism of action, absorption, metabolism, distribution and excretion in healthy
volunteers or subjects with the target disease or condition. If possible, Phase 1 trials may also be used to gain an
initial indication of product effectiveness.
Phase 2—Controlled studies are conducted with groups of subjects with a specified disease or condition to
provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule and expanded
evidence of safety. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning
larger and more expensive Phase 3 clinical trials.
Phase 3—These clinical trials are undertaken in larger subject populations to provide statistically significant
evidence of clinical efficacy and to further test for safety in an expanded subject population at multiple clinical
trial sites. Evidence is considered to be statistically significant when the probability of the result occurring by
random chance, rather than from the efficacy of the treatment, is sufficiently low. These clinical trials are
intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product
labeling. These trials may be done globally to support global registrations so long as the global sites are also
representative of the U.S. population and the conduct of the study at global sites comports with FDA regulations
and guidance, such as compliance with GCPs.
The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so‐called
Phase 4 studies may be made a condition to be satisfied after approval. The results of Phase 4 studies can confirm the
effectiveness of a product candidate and can provide important safety information.
Clinical trials must be conducted under the supervision of qualified investigators in accordance with GCP requirements,
which includes the requirements that all research subjects provide their informed consent in writing for their participation
in any clinical trial, and the review and approval of the study by an IRB. Investigators must also provide information to the
clinical trial sponsors to allow the sponsors to make specified financial disclosures to the FDA. Clinical trials are conducted
under protocols detailing, among other things, the objectives of the trial, the trial procedures, the parameters to be used
in monitoring safety and the efficacy criteria to be evaluated and a statistical analysis plan. Information about some
clinical trials, including a description of the trial and trial results, must be submitted within specific timeframes to the
National Institutes of Health, or NIH, for public dissemination on their ClinicalTrials.gov website.
The manufacture of investigational drugs for the conduct of human clinical trials is subject to cGMP requirements.
Investigational drugs and active pharmaceutical ingredients imported into the United States are also subject to regulation
by the FDA relating to their labeling and distribution. Further, the export of investigational drug products outside of the
United States is subject to regulatory requirements of the receiving country as well as U.S. export requirements under the
Federal Food, Drug and Cosmetic Act ("FDCA"). Progress reports detailing the results of the clinical trials must be
submitted at least annually to the FDA and the IRB and more frequently if serious adverse events ("SAEs") occur.
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Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional
information about the chemistry and physical characteristics of the product candidate as well as finalize a process for
manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process
must be capable of consistently producing quality batches of the product candidate and, among other things, must
develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate
packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product
candidate does not undergo unacceptable deterioration over its shelf life.
505(b)(2) Regulatory Approval Process
Section 505(b)(2) of the FDCA ("505(b)(2)"), provides an alternate regulatory pathway to FDA approval for new or
improved formulations or new uses of previously approved drug products. Specifically, 505(b)(2) permits the filing of an
NDA where at least some of the information required for approval comes from studies not conducted by or for the
applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the
investigations were conducted. The applicant may rely upon the FDA’s prior findings of safety and efficacy for an
approved product that acts as the reference listed drug for purposes of a 505(b)(2) NDA. The FDA may also require
505(b)(2) applicants to perform additional studies or measurements to support any changes from the reference listed
drug. The FDA may then approve the new product candidate for all or some of the labeled indications for which the
referenced product has been approved, as well as for any new indication sought by the 505(b)(2) applicant.
Orange Book Listing
Section 505 of the FDCA describes three types of marketing applications that may be submitted to the FDA to request
marketing authorization for a new drug. A Section 505(b)(1) NDA is an application that contains full reports of
investigations of safety and efficacy. A 505(b)(2) NDA is an application that contains full reports of investigations of safety
and efficacy, but where at least some of the information required for approval comes from investigations that were not
conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the
person by or for whom the investigations were conducted. This regulatory pathway enables the applicant to rely, in part,
on the FDA’s prior findings of safety and efficacy for an existing product, or published literature, in support of its
application. Section 505(j) establishes an abbreviated approval process for a generic version of approved drug products
through the submission of an abbreviated new drug application ("ANDA"). An ANDA provides for marketing of a generic
drug product that has the same active ingredients, dosage form, strength, route of administration, labeling, performance
characteristics and intended use, among other things, to a previously approved product. ANDAs are termed “abbreviated”
because they are generally not required to include nonclinical and clinical data to establish safety and efficacy. Instead,
generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner
as, the innovator drug through in vitro, in vivo or other testing. The generic version must deliver the same amount of
active ingredients into a subject’s bloodstream in the same amount of time as the innovator drug and under Part D, can
often be substituted by pharmacists under prescriptions written for the reference listed drug.
In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list patents with the
FDA which claims cover the applicant’s product. The patents chosen as part of this submission do not reflect the entire
patent estate or set of product protections associated with this product, which may provide various protections beyond
the patents submitted in the NDA application. Upon approval of an NDA, each of the patents listed in the application for
the drug is then published in Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the
Orange Book. These products may be cited by potential competitors in support of approval of an ANDA or 505(b)(2) NDA.
Any applicant who submits an ANDA seeking approval of a generic equivalent version of a drug listed in the Orange Book
or a 505(b)(2) NDA referencing a drug listed in the Orange Book must certify to the FDA that (1) no patent information on
the drug product that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the
date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or
sale of the drug product for which the application is submitted. This last certification is known as a Paragraph IV
certification. Generally, the ANDA or 505(b)(2) NDA cannot be approved until all listed patents have expired, except
where the ANDA or 505(b)(2) NDA applicant challenges a listed patent through a Paragraph IV certification. If the
applicant does not challenge the listed patents or does not indicate that it is not seeking approval of a patented method
of use, the ANDA or 505(b)(2) NDA application will not be approved until all of the listed patents claiming the referenced
product have expired.
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If the competitor has provided a Paragraph IV certification to the FDA, the competitor must also send notice of the
Paragraph IV certification to the holder of the NDA for the reference listed drug and the patent owner once the
application has been accepted for filing by the FDA. The NDA holder or patent owner may then initiate a patent
infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit
within 45 days of the receipt of a Paragraph IV certification prevents the FDA from approving the application until the
earlier of 30 months from the date of the lawsuit, expiration of the patent, settlement of the lawsuit, a decision in the
infringement case that is favorable to the applicant, or such shorter or longer period as may be ordered by a court. This
prohibition is generally referred to as the 30‐month stay. In instances where an ANDA or 505(b)(2) NDA applicant files a
Paragraph IV certification, the NDA holder or patent owner regularly takes action to trigger the 30‐month stay,
recognizing that the related patent litigation may take many months or years to resolve. Thus, approval of an ANDA or
505(b)(2) NDA could be delayed for a significant period of time depending on the patent certification the applicant makes
and the reference drug sponsor’s decision to initiate patent litigation. The applicant may also elect to submit a statement
certifying that its proposed label does not contain, or carves out, any language regarding the patented method‐of‐use
rather than certify to a listed method‐of‐use patent. On February 25, 2024, we received a Paragraph IV Certification
Notice Letter from Teva Pharmaceuticals, Inc. (“Teva”), providing notification that Teva has submitted an ANDA to the
FDA seeking approval to manufacture, use or sell a generic version of Jelmyto. In the Notice Letter, Teva alleges that two
of the patents listed in the FDA Orange Book for Jelmyto, U.S. Patent Numbers 9,040,074 and 9,950,069 each of which
expires in January 2031, are invalid, unenforceable, or will not be infringed by Teva’s manufacture, use, or sale of the
generic product described in its ANDA submission.
Exclusivity
The FDA provides periods of regulatory exclusivity, which provides the holder of an approved NDA limited protection from
new competition in the marketplace for the innovation represented by its approved drug for a period of three or five
years following the FDA’s approval of the NDA. Five years of exclusivity are available to New Chemical Entities ("NCEs").
An NCE is a drug that contains no active moiety that has been approved by the FDA in any other NDA. An active moiety is
the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, including
a salt with hydrogen or coordination bonds, or other noncovalent, or not involving the sharing of electron pairs between
atoms, derivatives, such as a complex (i.e., formed by the chemical interaction of two compounds), chelate (i.e., a
chemical compound), or clathrate (i.e., a polymer framework that traps molecules), of the molecule, responsible for the
therapeutic activity of the drug substance. During the exclusivity period, the FDA may not accept for review or approve an
ANDA or a 505(b)(2) NDA submitted by another company that contains the previously approved active moiety. An ANDA
or 505(b)(2) application, however, may be submitted one year before NCE exclusivity expires if a Paragraph IV
certification is filed.
If a product is not eligible for the NCE exclusivity, it may be eligible for three years of exclusivity. Three‐year exclusivity is
available to the holder of an NDA, including a 505(b)(2) NDA, for a particular condition of approval, or change to a
marketed product, such as a new formulation for a previously approved product, if one or more new clinical trials, other
than bioavailability or bioequivalence trials, was essential to the approval of the application and was conducted or
sponsored by the applicant. This three‐year exclusivity period protects against FDA approval of ANDAs and 505(b)(2) NDAs
for the condition of the new drug’s approval. As a general matter, three‐year exclusivity does not prohibit the FDA from
approving ANDAs or 505(b)(2) NDAs for generic versions of the original, unmodified drug product. Five‐year and three‐
year exclusivity will not delay the submission or approval of a full NDA; however, an applicant submitting a full NDA would
be required to conduct or obtain a right of reference to all of the nonclinical studies and adequate and well‐controlled
clinical trials necessary to demonstrate safety and efficacy.
The Orphan Drug Act
Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to drugs intended to treat a rare disease or
condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan Drug
Designation must be requested before submitting an NDA. After the FDA grants Orphan Drug Designation, the generic
identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan Drug Designation does not
convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA applicant
to receive FDA approval for a particular active ingredient to treat a particular disease with FDA Orphan Drug Designation
is entitled to a seven‐year exclusive marketing period in the United States for that product, for that indication. During the
seven‐year exclusivity period, the FDA may not approve any other applications to market the same drug for the same
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disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug
exclusivity. Orphan drug exclusivity does not prevent FDA from approving a different drug for the same disease or
condition, or the same drug for a different disease or condition. Among the other benefits of Orphan Drug Designation
are tax credits for certain research and a waiver of the NDA application user fee.
Expedited Development and Review Programs
The FDA is required to facilitate the development and expedite the review of drugs that are intended for the treatment of
a serious or life‐threatening condition for which there is no effective treatment, and which demonstrate the potential to
address unmet medical needs for the condition. Under the Fast Track program, the sponsor of a new product candidate
may request the FDA to designate the product for a specific indication as a Fast Track product concurrent with or after the
submission of the IND for the product candidate. The FDA must determine if the product candidate qualifies for Fast Track
and Breakthrough Therapy designations within 60 days after receipt of the sponsor’s request.
For Fast Track and Breakthrough Therapy products, the sponsor may have more frequent interactions with the FDA and
the FDA may initiate review of sections of a Fast Track or Breakthrough Therapy product’s NDA before the application is
complete. This rolling review is available if the applicant provides and the FDA approves a schedule for the submission of
the remaining information and the applicant pays applicable user fees. However, the FDA’s time period goal for reviewing
a Fast Track or Breakthrough Therapy application does not begin until the last section of the NDA is submitted. In
addition, the Fast Track and Breakthrough Therapy designations may be withdrawn by the FDA if the FDA believes that
the designation is no longer supported by data emerging in the clinical trial process. A Fast Track and Breakthrough
Therapy designated product candidate would ordinarily meet the FDA’s criteria for priority review.
Drug products studied for their safety and effectiveness in treating serious or life‐threatening illnesses and that provide
meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that they may be
approved on the basis of adequate and well‐controlled clinical trials establishing that the product has an effect on a
surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on an intermediate
clinical endpoint other than survival or irreversible morbidity, taking into account the severity, rarity, or prevalence of the
condition and the availability or lack of alternative treatments. As a condition of approval, the FDA generally requires that
a sponsor of a drug product receiving accelerated approval perform adequate and well‐controlled post‐marketing clinical
trials to verify the clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the
clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre‐approval of
promotional materials, which could adversely impact the timing of the commercial launch of the product. The FDA may
withdraw approval of a drug or indication approved under accelerated approval if, for example, the confirmatory trial fails
to verify the predicted clinical benefit of the product.
NDA Submission and Review by the FDA
Assuming successful completion of the required clinical and nonclinical testing, among other items, the results of product
development, including chemistry, manufacture and controls, nonclinical studies and clinical trials are submitted to the
FDA, along with proposed labeling, as part of an NDA. The submission of an NDA requires payment of a substantial user
fee to the FDA. These user fees must be paid at the time of the first submission of the application, even if the application
is being submitted on a rolling basis. Fee waivers or reductions are available in some circumstances. One basis for a
waiver of the application user fee is if the applicant employs fewer than 500 employees, including employees of affiliates,
the applicant does not have an approved marketing application for a product that has been introduced or delivered for
introduction into interstate commerce, and the applicant, including its affiliates, is submitting its first marketing
application.
In addition, under the Pediatric Research Equity Act ("PREA"), an NDA or supplement to an NDA for a new active
ingredient, indication, dosage form, dosage regimen or route of administration must contain data that are adequate to
assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations, and to
support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA
may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data
until after approval of the product for use in adults or full or partial waivers from the pediatric data requirements.
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The FDA may refer applications for drugs that contain active ingredients that have not previously been approved by the
FDA or drugs which present difficult questions of safety, purity or potency to an advisory committee. An advisory
committee is typically a panel that includes clinicians and other experts who review, evaluate and make a
recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by
the recommendations of an advisory committee, but it considers such recommendations carefully when making
decisions.
The FDA reviews applications to determine, among other things, whether a product is safe and effective for its intended
use and whether the manufacturing controls are adequate to assure and preserve the product’s identity, strength, quality
and purity. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. The
FDA will not approve an application unless it determines that the manufacturing processes and facilities, including
contract manufacturers and subcontracts, are in compliance with cGMP requirements and adequate to assure consistent
production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically
inspect one or more clinical trial sites to assure compliance with GCPs.
Once the FDA receives an application, it has 60 days to review the NDA to determine if it is substantially complete to
permit a substantive review, before it accepts the application for filing. Once the submission is accepted for filing, the FDA
begins an in‐depth review of the NDA. The FDA’s NDA review times may differ based on whether the application is a
standard review or priority review application. The FDA may give a priority review designation to drugs that are intended
to treat serious conditions and provide significant improvements in the safety or effectiveness of the treatment,
diagnosis, or prevention of serious conditions. Under the goals and policies agreed to by the FDA under the Prescription
Drug User Fee Act ("PDUFA"), the FDA has set the review goal of 10 months from the 60‐day filing date to complete its
initial review of a standard NDA for a New Molecular Entity ("NME") and make a decision on the application. For non‐NME
standard applications, the FDA has set the review goal of 10 months from the submission date to complete its initial
review and to make a decision on the application. For priority review applications, the FDA has set the review goal of
reviewing NME NDAs within six months of the 60‐day filing date and non‐NME applications within six months of the
submission date. Such deadlines are referred to as the PDUFA date. The PDUFA date is only a goal and the FDA does not
always meet its PDUFA dates. The review process and the PDUFA date may also be extended if the FDA requests or the
NDA sponsor otherwise provides additional information or clarification regarding the submission.
Once the FDA’s review of the application is complete, the FDA will issue either a Complete Response Letter ("CRL"), or
approval letter. A CRL indicates that the review cycle of the application is complete, and the application is not ready for
approval. A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of
the NDA and may require additional clinical or nonclinical testing, or other information or analyses in order for the FDA to
reconsider the application. The FDA has the goal of reviewing 90% of application resubmissions in either two or six
months of the resubmission date, depending on the kind of resubmission. Even with the submission of additional
information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If
and when those conditions have been met to the FDA’s satisfaction, the FDA may issue an approval letter. An approval
letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.
The FDA may delay or refuse approval of an NDA if applicable regulatory criteria are not satisfied, require additional
testing or information and/or require post‐marketing testing and surveillance to monitor safety or efficacy of a product,
or impose other conditions, including distribution restrictions or other risk management mechanisms. For example, the
FDA may require a risk evaluation and mitigation strategy ("REMS"), as a condition of approval or following approval to
mitigate any identified or suspected serious risks and ensure safe use of the drug. The FDA may prevent or limit further
marketing of a product, or impose additional post‐marketing requirements, based on the results of post‐marketing
studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new
indications, manufacturing changes and additional labeling claims, are subject to further testing requirements, FDA
notification and FDA review and approval. Further, should new safety information arise, additional testing, product
labeling or FDA notification may be required.
If regulatory approval of a product is granted, such approval may entail limitations on the indicated uses for which such
product may be marketed or may include contraindications, warnings or precautions in the product labeling, which has
resulted in a boxed warning. The FDA also may not approve the inclusion of labeling claims necessary for successful
marketing. Once approved, the FDA may withdraw the product approval if compliance with pre‐ and post‐marketing
regulatory standards is not maintained or if problems occur after the product reaches the marketplace. In addition, the
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FDA may require Phase 4 post‐marketing studies to monitor the effect of approved products and may limit further
marketing of the product based on the results of these post‐marketing studies.
Post‐approval Requirements
Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuing regulation by the
FDA, including manufacturing, periodic reporting, product sampling and distribution, advertising, promotion, drug
shortage reporting, compliance with any post‐approval requirements imposed as a conditional of approval such as Phase
4 clinical trials, REMS and surveillance, recordkeeping and reporting requirements, including adverse experiences.
After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject
to prior FDA review and approval. There also are continuing annual program user fee requirements for any approved
products, as well as new application fees for supplemental applications with clinical data. Drug manufacturers and their
subcontractors are required to register their establishments with the FDA and certain state agencies and to list their drug
products and are subject to periodic announced and unannounced inspections by the FDA and these state agencies for
compliance with cGMPs and other requirements, which impose procedural and documentation requirements upon us and
our third‐party manufacturers. We cannot be certain that we or our present or future suppliers will be able to comply
with the cGMP regulations and other FDA regulatory requirements.
Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being
implemented, or FDA notification. FDA regulations also require investigation and correction of any deviations from cGMPs
and specifications and impose reporting and documentation requirements upon the sponsor and any third‐party
manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money
and effort in the area of production and quality control to maintain cGMP compliance.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or
frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in withdrawal
of marketing approval, mandatory revisions to the approved labeling to add new safety information or other limitations,
imposition of post‐market studies or clinical trials to assess new safety risks or imposition of distribution or other
restrictions under a REMS program, among other consequences.
The FDA closely regulates the marketing and promotion of drugs. A company can make only those claims relating to safety
and efficacy, purity and potency that are approved by the FDA. Physicians, in their independent professional medical
judgement, may prescribe legally available products for uses that are not described in the product’s labeling and that
differ from those tested by us and approved by the FDA. We, however, are prohibited from marketing or promoting drugs
for uses outside of the approved labeling but may share truthful and not misleading information that is otherwise
consistent with the product’s approved labeling.
In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug
Marketing Act ("PDMA"), which regulates the distribution of drugs and drug samples at the federal level, and sets
minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws
limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability
in distribution. The Drug Supply Chain Security Act also imposes obligations on manufacturers of pharmaceutical products
related to product tracking and tracing.
Failure to comply with any of the FDA’s requirements could result in significant adverse enforcement actions. These
include a variety of administrative or judicial sanctions, such as refusal to approve pending applications, license
suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning
letters, untitled letters, cyber letters, modification of promotional materials or labeling, product recalls, product seizures
or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment,
injunctions, fines, consent decrees, corporate integrity agreements, refusals of government contracts and new orders
under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement
or civil or criminal penalties, including fines and imprisonment. Any of these sanctions could result in adverse publicity,
among other adverse consequences.
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Other Healthcare Regulations
Our business activities, including but not limited to, research, sales, promotion, distribution, medical education and other
activities following product approval will be subject to regulation by numerous regulatory and law enforcement
authorities in the United States in addition to the FDA, including potentially the Department of Justice, the Department of
Health and Human Services ("HHS"), and its various divisions, including the CMS, and the Health Resources and Services
Administration, the Department of Veterans Affairs, the Department of Defense and state and local governments. Our
business activities must comply with numerous federal, state, and foreign healthcare laws and regulations, including
those described below.
The federal Anti‐Kickback Statute prohibits, among other things, any person or entity from knowingly and willfully
offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to
induce or reward, or in return for, the referral of an individual for, or purchasing, leasing, ordering, or arranging for the
purchase, lease or order of, any good, facility, item or service reimbursable, in whole or in part, by Medicare, Medicaid or
other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value,
including unlawful financial inducements paid to prescribers and beneficiaries, as well as impermissible promotional
practices. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities
from prosecution, but the exceptions and safe harbors are drawn narrowly. Failure to meet all of the requirements of a
particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the
federal Anti‐Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case‐by‐case basis based on
a cumulative review of all of its facts and circumstances. Additionally, the Patient Protection and Affordable Care Act of
2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively the "ACA"), amended the
intent requirement of the federal Anti‐Kickback Statute so that a person or entity no longer needs to have actual
knowledge of the federal Anti‐Kickback Statute, or the specific intent to violate it, to have violated the statute. The ACA
also provided that a violation of the federal Anti‐Kickback Statute is grounds for the government or a whistleblower to
assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for
purposes of the federal civil False Claims Act.
The federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit, among other things,
any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to, or for approval
by, the federal government, including the Medicare and Medicaid programs, or knowingly making, using, or causing to be
made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an
obligation to pay money to the federal government.
The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is
determined to have presented or caused to be presented a claim to a federal health program that the person knows or
should know is for an item or service that was not provided as claimed or is false or fraudulent.
As a condition of receiving Medicaid coverage for prescription drugs, the Medicaid Drug Rebate Program requires
manufacturers to calculate and report to CMS their Average Manufacturer Price ("AMP"), which is used to determine
rebate payments shared between the states and the federal government and, for some multiple source drugs, Medicaid
payment rates for the drug, and for drugs paid under Medicare Part B, to also calculate and report their average sales
price, which is used to determine the Medicare Part B payment rate for the drug. In January 2016, CMS issued a final rule
regarding the Medicaid Drug Rebate Program, effective April 1, 2016, that, among other things, revises the manner in
which the AMP is to be calculated by manufacturers participating in the program and implements certain amendments to
the Medicaid rebate statute created under the ACA. On March 11, 2021, President Biden signed the American Rescue Plan
Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s AMP for
single source and innovator multiple source drugs beginning January 1, 2024. Drugs that are approved under a biologics
license application ("BLA"), or an NDA, including a 505(b)(2) NDA, are subject to an additional requirement to calculate
and report the manufacturer’s best price for the drug and inflation penalties which can substantially increase rebate
payments. For BLA and NDA drugs, the Veterans Health Care Act requires manufacturers to calculate and report to the
Department of Veterans Affairs a different price called the Non‐Federal AMP, offer the drugs for sale on the Federal
Supply Schedule, and charge the government no more than a statutory price referred to as the Federal Ceiling Price,
which includes an inflation penalty. A separate law requires manufacturers to pay rebates on these drugs when paid by
the Department of Defense under its TRICARE Retail Pharmacy Program. Knowingly submitting false pricing information to
the government could result in significant penalties and creates potential federal civil False Claims Act liability.
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The Federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), created additional federal civil and
criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any
healthcare benefit program, including public and private payors, or obtain, by means of false or fraudulent pretenses,
representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare
benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from
a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and
willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false
statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to
healthcare matters. The ACA amended the federal health care fraud criminal statute implemented under HIPAA so that a
person or entity no longer needs to have actual knowledge of the statute, or the specific intent to violate it, to have
violated the statute.
Additionally, the federal Open Payments program pursuant to the Physician Payments Sunshine Act, created under
Section 6002 of the ACA and its implementing regulations, require some manufacturers of drugs, devices, biologicals and
medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program
(with specified exceptions) to report annually information related to specified payments or other transfers of value
provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other
healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or
individuals at the request of, or designated on behalf of, such professionals and teaching hospitals and to report annually
specified ownership and investment interests held by physicians and their immediate family members.
In addition, we may be subject to data privacy and security regulation by both the federal government and the states in
which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical
Health Act ("HITECH"), and their implementing regulations, impose requirements relating to the privacy, security and
transmission of individually identifiable health information on HIPAA covered entities, which include certain healthcare
providers, health plans and healthcare clearinghouses, and their business associates as well as their covered
subcontractors, including mandatory contractual terms and the implementation of certain safeguards of such
information. Among other things, HITECH makes HIPAA’s security standards directly applicable to business associates,
independent contractors or agents of covered entities that receive or obtain protected health information in connection
with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties,
amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys
general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws
and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy
and security of health information in some circumstances, many of which differ from each other in significant ways, may
not have the same effect and may not be preempted by HIPAA, thus complicating compliance efforts.
Many states have also adopted laws similar to each of the above federal laws, which may be broader in scope and apply
to items or services reimbursed by any payor, including commercial insurers. In addition, we may be subject to certain
analogous foreign healthcare laws. We may also be subject to state laws that require pharmaceutical companies to
comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance
promulgated by the federal government, and/or state laws that require drug manufacturers to report information related
to marketing expenditures or payments and other transfers of value to physicians and other healthcare providers, and
drug pricing. Certain state and local laws also require the registration of pharmaceutical sales representatives.
Enforcement actions can be brought by federal or state governments or, in some cases, as “qui tam” actions brought by
individual whistleblowers in the name of the government. Depending on the circumstances, failure to comply with these
laws can result in significant penalties, including criminal, civil and administrative penalties, damages, fines, disgorgement,
debarment from government contracts, imprisonment, additional reporting requirements and oversight if we become
subject to a corporate integrity agreement or similar agreement to resolve allegations of non‐compliance with these laws,
exclusion from government programs, refusal to allow us to enter into supply contracts, including government contracts,
reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations, any of
which could adversely affect our business.
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Coverage and Reimbursement
Our ability to commercialize any products successfully, including Jelmyto, UGN‐102 and our other product candidates, if
approved, also will depend in part on the extent to which coverage and adequate reimbursement for our products, once
approved, and related treatments will be available from third‐party payors, such as government health administration
authorities, private health insurers and managed care organizations. Third‐party payors determine which medications
they will cover and separately establish reimbursement levels. Even if we obtain coverage for a given product by a third‐
party payor, the third‐party payor’s reimbursement rates may not be adequate to make the product affordable to
patients or profitable to us, or the third‐party payors may require co‐payments that patients find unacceptably high.
Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally
rely on third‐party payors to reimburse all or part of the costs associated with their prescription drugs. Patients are
unlikely to use our products unless coverage is provided, and reimbursement is adequate to cover all or a significant
portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new product
acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when
more established or lower cost therapeutic alternatives are already available or subsequently become available.
Additionally, reimbursement by a third‐party payor may depend upon a number of factors including the third‐party
payor’s determination that use of a product is:
• a covered benefit under its health plan;
• safe, effective and medically necessary;
• appropriate for the specific patient;
• cost‐effective; and
• neither experimental nor investigational.
Obtaining and maintaining coverage and reimbursement approval for a product from a government or other third‐party
payor is a time‐consuming and costly process that could require us to provide supporting scientific, clinical and cost
effectiveness data for the use of our products to the payor.
Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third‐party
payors in the United States. Therefore, coverage and reimbursement for drug products can differ significantly from payor
to payor. As a result, the coverage determination process may require us to provide scientific and clinical support for the
use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be
applied consistently or obtained in the first instance.
In the United States, decisions about reimbursement for new medicines under Medicare are made by CMS, as the
administrator for the Medicare program. Private third‐party payors often use CMS as a model for their coverage and
reimbursement decisions, but also have their own methods and approval process apart from CMS’s determinations. Our
experience to date has demonstrated coverage with CMS and commercial payors for Jelmyto, and we have established
written policies with certain commercial providers. For example, in October 2020, a Medicare C‐Code was issued for
Jelmyto. CMS has established a permanent and product‐specific J‐code for Jelmyto that took effect on January 1,
2021. CMS granted Jelmyto a New Technology APC (Ambulatory Payment Classification), effective from October 1, 2023.
A service is separately for paid under a New Technology APC until sufficient claims data have been collected to allow CMS
to assign the procedure to a clinical APC group that is appropriate in clinical and resource terms. This generally occurs
within two to three years from the time a new HCPCS code becomes effective. However, if CMS are able to collect
sufficient claims data in less than two years, CMS may consider reassigning the service to an appropriate APC, or, if CMS
does not have sufficient data at the end of three years upon which to base its reassignment to an appropriate clinical APC,
CMS may keep the service in a New Technology APC until adequate data become available. Loss of our New Technology
APC may result in Medicare beneficiaries losing access to Jelmyto in the hospital outpatient setting and Jelmyto becoming
packaged into a comprehensive ambulatory payment classification.
Additionally, coverage policies and reimbursement rates may change at any time. Even if favorable coverage and
reimbursement status is attained for any of our products or product candidates that receive regulatory approval, less
favorable coverage policies and reimbursement rates may be implemented in the future. Government authorities and
other third‐party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as by
limiting coverage and the amount of reimbursement for particular medications. Increasingly, third‐party payors are
requiring that drug companies provide them with predetermined discounts from list prices as a condition of coverage, are
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using restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes and are
challenging the prices charged for medical products. Further, no uniform policy for determining coverage and
reimbursement for drug products exists among third‐party payors in the United States. Therefore, coverage and
reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination
process is often a time‐consuming and costly process that will require us to provide scientific and clinical support for the
use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be
applied consistently or obtained in the first instance.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if
reimbursement is available, that the level of reimbursement will be adequate. Coverage and reimbursement may impact
the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and
reimbursement are not available, or if reimbursement is available only to limited levels, we may not successfully
commercialize any product candidate for which we obtain marketing approval.
Healthcare Reform Measures
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory
proposals designed to change the healthcare system in ways that could affect our ability to sell our products profitably.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in
healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the
United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected
by major legislative initiatives.
For example, in March 2010, the ACA was passed, which has changed health care financing by both governmental and
private insurers and significantly affected the U.S. pharmaceutical industry. The ACA, among other things, subjected
manufacturers to new annual fees and taxes for specified branded prescription drugs, increased the minimum Medicaid
rebates owed by most manufacturers under the Medicaid Drug Rebate Program, expanded health care fraud and abuse
laws, revised the methodology by which rebates owed by manufacturers to the state and federal government for covered
outpatient drugs under the Medicaid Drug Rebate Program are calculated, imposed an additional rebate similar to an
inflation penalty on new formulations of drugs, extended the Medicaid Drug Rebate Program to Medicaid managed care
organizations, expanded the 340B program, which caps the price at which manufacturers can sell covered outpatient
pharmaceuticals to specified hospitals, clinics and community health centers, and provided incentives to programs that
increase the federal government’s comparative effectiveness research.
There have been judicial and Congressional challenges, as well as efforts by the Trump Administration to repeal or replace
certain aspects of the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural
grounds that argued the ACA is unconstitutional in its entirety because the individual mandate was repealed by Congress.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law, which among other
things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through
plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by
significantly lowering the beneficiary maximum out‐of‐pocket cost and creating a newly established manufacturer
discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is
unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the ACA.
Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August
2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint
Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for
the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction
to several government programs. This includes aggregate reductions of Medicare payments to providers up to 2% per
fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute will remain
in effect until 2032 unless additional U.S. Congressional action is taken. In addition, in January 2013, then President
Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare
payments to several categories of healthcare providers and increased the statute of limitations period for the government
to recover overpayments to providers from three to five years.
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Further, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug
pricing practices. Specifically, there have been several U.S. Presidential executive orders. Congressional inquiries and
proposed and enacted legislation at the federal and state levels designed to, among other things, bring more
transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the
cost of drugs under Medicare, and reform government program reimbursement methodologies for drugs. At the federal
level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American
Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9,
2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform
and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative
actions HHS can take to advance these principles. Further, on November 15, 2021, President Biden signed into law the
Infrastructure Investment and Jobs Act. Beginning on January 1, 2023, manufacturers will be required to pay quarterly
refunds to CMS for discarded amounts of certain single‐dose container and single‐use package drugs payable under part B
of the Medicare program. Refunds are based on the discarded volume above 10% of the total allowed amount. However,
in unique circumstances, CMS will increase the applicable threshold to 35%. At this time, CMS has determined that
Jelmyto fits within this unique circumstance classification. In addition, the IRA, among other things, (1) directs HHS to
negotiate the price of certain single‐source drugs and biologics covered under Medicare and (2) imposes rebates under
Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect
progressively starting in fiscal year 2023. On August 29, 2023, HHS announced the list of the first ten drugs that will be
subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal
challenges. It is unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical
industry. In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a
report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to
lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be
utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced
an initiative to control the price of prescription drugs through the use of march‐in rights under the Bayh‐Dole Act. On
December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency
Guidance Framework for Considering the Exercise of March‐In Rights which for the first time includes the price of a
product as one factor an agency can use when deciding to exercise march‐in rights. While march‐in rights have not
previously been exercised, it is uncertain if that will continue under the new framework. At the state level, legislatures
have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological
product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access
and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from
other countries and bulk purchasing. Additional health reform measures may continue and affect our business in
unknown ways.
The Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act ("FCPA"), prohibits any U.S. individual or business from paying, offering or authorizing
payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the
purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or
retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with
accounting provisions requiring the companies to maintain books and records that accurately and fairly reflect all
transactions of the companies, including international subsidiaries, and to devise and maintain an adequate system of
internal accounting controls for international operations.
Foreign Regulation
In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials
and commercial sales and distribution of our products to the extent we choose to develop or sell any products outside of
the United States. The approval process varies from country to country and the time may be longer or shorter than that
required to obtain FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and
reimbursement vary greatly from country to country.
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Manufacturing, Supply and Production
We do not own or operate manufacturing facilities for the production of our product candidates, nor do we have plans to
develop our own manufacturing operations in the foreseeable future. We currently rely on third‐party contract
manufacturers for all of our required raw materials, active ingredients and finished products for our nonclinical research
and clinical trials. We have signed commercial supply agreements for Jelmyto with third‐party vendors. We may negotiate
additional commercial supply agreements for our product candidates UGN‐102, UGN‐103, UGN‐104, UGN‐201 and UGN‐
301, or other back‐up supply agreements with other third‐party manufacturers for the commercial production of any
approved products.
Development and commercial quantities of any products that we develop will need to be manufactured in facilities, and
by processes, that comply with the requirements of the FDA and the regulatory agencies of other jurisdictions in which we
are seeking approval. We currently employ internal resources to manage our manufacturing contractors. The relevant
manufacturers of our drug products for our current nonclinical and clinical trials have advised us that they are compliant
with both current good laboratory practice ("cGLP"), and cGMP.
Our future product candidates, if approved, may not be producible in sufficient commercial quantities, in compliance with
regulatory requirements or at an acceptable cost. We and our contract manufacturers are, and will be, subject to
extensive governmental regulation in connection with the manufacture of any pharmaceutical products or medical
devices. We and our contract manufacturers must ensure that all of the processes, methods and equipment are compliant
with cGMP and cGLP for drugs on an ongoing basis, as mandated by the FDA and foreign regulatory authorities, and
conduct extensive audits of vendors, contract laboratories and suppliers.
Marketing, Sales and Distribution
Our U.S. subsidiary, UroGen Pharma, Inc., was formed to support our U.S. development and potential commercialization
efforts. Our commercial management team is comprised of experienced professionals in sales, sales operations, market
access, marketing and medical affairs. In addition, we have established a customer‐facing team that includes territory
business managers with deep experience in both urology and oncology. These territory business manager positions are
led by seven regional business director positions, who are in turn supported by three regional operations manager
positions. Each region is additionally supported by one to two clinical nurse educators to provide education and training
around instillation, as well as a field reimbursement manager to help ensure access and reimbursement for appropriate
patients and key account directors who engage with C‐suite individuals to introduce a Jelmyto service line. In addition, our
organization currently includes several medical science liaisons who appropriately engage with physicians interested in
learning more about UroGen, Jelmyto and our technology, both in person and virtually. In total, our customer‐facing team
comprises approximately 80 representatives.
Our sales force is focused on promoting Jelmyto, and educating potential prescribers to identify patients, activate
accounts and gain formulary access, as applicable. In the event that we receive regulatory approvals for our products in
markets outside of the United States, we intend, where appropriate, to pursue commercialization relationships, including
strategic alliances and licensing, with pharmaceutical companies and other strategic partners, which are equipped to
market or sell our products through their well‐developed sales, marketing and distribution organizations in such
countries.
In addition, we may out‐license some or all of our worldwide patent rights to more than one party to achieve the fullest
development, marketing and distribution of any products we develop.
Employees
As of January 31, 2024, we had 201 employees worldwide, 161 in the United States and 40 in Israel, many of whom hold
advanced degrees. Of the 161 employees in the United States one was a part‐time employee, and of the 40 employees in
Israel, two were part‐time. None of our employees are subject to a collective bargaining agreement. We have never
experienced any employment‐related work stoppages and consider our relationships with our employees are good.
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Israeli labor laws govern the length of the workday and workweek, minimum wages for employees, procedures for hiring
and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination,
payments to the National Insurance Institute, and other conditions of employment and include equal opportunity and
anti‐discrimination laws. While none of our employees is party to any collective bargaining agreements, certain provisions
of the collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordination Bureau of Economic Organizations (including the Industrialists’ Associations) are applicable to our
employees in Israel by order of the Israeli Ministry of Economy and Industry. These provisions primarily concern pension
fund benefits for all employees, insurance for work‐related accidents, recuperation pay and travel expenses. We generally
provide our employees with benefits and working conditions beyond the required minimums.
Corporate Information
Our legal and commercial name is UroGen Pharma Ltd, with registered offices at 9 Ha'Ta'asiya St., Ra'anana 4365007,
Israel. We are a company organized under the laws of State of Israel. We were formed in 2004 with an indefinite duration.
We are registered with the Israeli Registrar of Companies. Our principal executive offices are located at 400 Alexander
Park Drive, 4th Floor, Princeton, NJ 08540. Our telephone number is (646)768‐9780. Investors should contact us for any
inquiries through the address and telephone number of our principal executive office. We maintain a web site at
http://www.urogen.com. The reference to our website is an inactive textual reference only and the information
contained in, or that can be accessed through, our website is not incorporated into this Annual Report.
We file Annual Reports on Form 10‐K, Quarterly Reports on Form 10‐Q, Current Reports on Form 8‐K, and other
information with the SEC. Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and
on our website under the “Investors & Media” tab as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC.
Item 1A. Risk Factors
RISK FACTORS
An investment in our ordinary shares involves a high degree of risk. You should carefully consider all of the information set
forth in this Annual Report and in our other filings with the SEC, including the following risk factors which we face. Our
business, financial condition or results of operations could be materially adversely affected by any of these risks. This
Annual Report also contains forward‐looking statements that involve risks and uncertainties. Our results could materially
differ from those anticipated in these forward‐looking statements, as a result of certain factors including the risks
described below and elsewhere in this Annual Report. See “Special Note Regarding Forward‐Looking Statements” above.
Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements
We have a limited operating history and have incurred significant losses and negative cash flows since our inception,
and we anticipate that we will continue to incur significant losses and negative cash flows for the foreseeable future,
which makes it difficult to assess our future viability.
We are a biotechnology company with a limited operating history upon which you can evaluate our business and
prospects. We are not profitable and have incurred net losses in each period since we commenced operations in 2004,
including net losses of $102.2 million and $109.8 million for the years ended December 31, 2023 and 2022,
respectively. As of December 31, 2023, we had an accumulated deficit of $679.3 million. We expect to continue to incur
significant expenses and operating losses for the foreseeable future. Our ability to ultimately achieve recurring revenues
and profitability is dependent upon our ability to successfully complete the development of our product candidates and
obtain necessary regulatory approvals for and successfully manufacture, market and commercialize our products.
We believe that we will continue to expend substantial resources in the foreseeable future for the clinical development of
our current product candidates or any additional product candidates and indications that we may choose to pursue in the
future. These expenditures will include costs associated with research and development, conducting nonclinical studies
and clinical trials, and payments for third‐party manufacturing and supply, as well as sales and marketing of any of our
product candidates that are approved for sale by regulatory agencies. Because the outcome of any clinical trial is highly
uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and
30
commercialization of our clinical stage and nonclinical drug candidates and any other drug candidates that we may
develop in the future. Other unanticipated costs may also arise.
Our future capital requirements depend on many factors, including:
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the timing of, and the costs involved in, clinical development and obtaining regulatory approvals for our product
candidates;
changes in regulatory requirements during the development phase that can delay or force us to stop our
activities related to any of our product candidates;
the cost of commercialization activities for Jelmyto and any other products approved for sale, including
marketing, sales and distribution costs;
our degree of success in commercializing Jelmyto;
the cost of third‐party manufacturing of our products candidates and any approved products;
the number and characteristics of any other product candidates we develop or acquire;
our ability to establish and maintain strategic collaborations, licensing or other commercialization arrangements,
and the terms and timing of such arrangements;
the extent and rate of market acceptance of any approved products;
the expenses needed to attract and retain skilled personnel;
the costs associated with being a public company;
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent and other
intellectual property claims, including potential litigation costs, and the outcome of such litigation;
the timing, receipt and amount of sales of, or royalties on, future approved products, if any;
the repayment of outstanding debt;
any product liability or other lawsuits related to our products or business arrangements;
scientific breakthroughs in the field of urothelial cancer treatment and diagnosis that could significantly diminish
the demand for our product candidates or make them obsolete; and
changes in reimbursement or other laws, regulations or policies that could have a negative impact on our future
revenue stream.
In addition, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the
risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the
biotechnology industry. Drug development is a highly speculative undertaking and involves a substantial degree of risk. To
date, we have not obtained regulatory approval for or commercialized any product except Jelmyto.
We will require additional financing to fund our operations and achieve our goals, and a failure to obtain this capital
when needed and on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product
development, commercialization efforts or other operations.
We are not profitable and have had negative cash flow from operations since our inception. Since our inception, almost
all our resources have been dedicated to the nonclinical and clinical development of our first commercial product,
Jelmyto, and our lead product candidate UGN‐102. As of December 31, 2023, we had cash and cash equivalents and
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marketable securities of $141.5 million. To fund our operations and develop our product candidates and commercialize
Jelmyto, we have relied primarily on equity and debt financings and, following the launch of Jelmyto in June 2020,
revenue generated from sales of Jelmyto.
In December 2019, we entered into a sales agreement (the "ATM Sales Agreement”) with Cowen and Company, LLC
(“Cowen”) pursuant to which we may from time to time offer and sell our ordinary shares having an aggregate offering
price of up to $100.0 million. The remaining capacity under the ATM Sales Agreement was approximately $83.4 million as
of December 31, 2023, and subsequent to December 31, 2023, we sold approximately $26.6 million of our ordinary shares
pursuant to the ATM Sales Agreement. As of February 29, 2024, $56.8 million remains available for sale under the ATM
Sales Agreement.
In March 2021, we announced a transaction with RTW Investments ("RTW") totaling $75 million in funding for our
company, which was received in May 2021, to support the launch of Jelmyto and the development of UGN‐102 (the “RTW
Transaction”). In return for the upfront cash payment, RTW is entitled to receive tiered future payments based on global
annual net product sales of Jelmyto and UGN‐102, if approved.
On March 7, 2022, UroGen Pharma Ltd., UroGen Pharma, Inc., as the borrower (the "Borrower"), and certain direct and
indirect subsidiaries of the Company party thereto from time to time, as guarantors ("Guarantors" and, collectively with
UroGen Pharma Ltd. and Borrower, "Credit Parties"), entered into a loan agreement (the "Loan Agreement") with funds
managed by Pharmakon Advisors, L.P., including BPCR Limited Partnership (as a "Lender"), BioPharma Credit Investments
V (Master) LP (as a "Lender"), and BioPharma Credit PLC, as collateral agent for the Lenders (in such capacity, "Collateral
Agent"), pursuant to which the Lenders agreed to make term loans to the Borrower in an aggregate principal amount of
up to $100.0 million (the “Term Loans”) to be funded in two tranches. The first tranche of $75.0 million ($72.6 million of
proceeds were received, $70.8 million net of additional transaction costs) was funded in March 2022, and the second
tranche of $25.0 million was funded in December 2022.
On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third
and fourth tranche of senior secured loan. The third tranche of $25.0 million is mandatory and required to be drawn by
September 30, 2024, subject to satisfaction of customary conditions. The fourth tranche of $75.0 million may be drawn at
our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M
tranche, (ii) receiving FDA approval of an NDA for UGN‐102 no later than June 30, 2025 and (iii) satisfaction of customary
conditions.
In July 2023, we entered into a private placement transaction with certain institutional and other accredited investors
pursuant to which we agreed to sell our ordinary shares and pre‐funded warrants to purchase ordinary shares to the
investors, for aggregate gross proceeds of $120.0 million ($116.1 million net of issuance cost), $115.0 million of which
closed on July 28, 2023 and the remaining $5.0 million closed on August 9, 2023.
We cannot be certain that our existing resources and anticipated revenues will be sufficient to fund our planned
operations and expenditures for at least the next 12 months from the date of issuance of our consolidated financial
statements included elsewhere in this Annual Report. These circumstances raise substantial doubt about our ability to
continue as a going concern. We will require additional capital to complete clinical trials, obtain regulatory approval for
and commercialize our product candidates, and otherwise fund our operations. Our operating plan may change as a result
of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public
or private equity financings, convertible debt or debt financings, third‐party funding, marketing and distribution
arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or a combination of these
approaches. In any event, we will require additional capital to pursue nonclinical and clinical activities, and pursue
regulatory approval for, and to commercialize, our pipeline product candidates.
Any additional fundraising efforts may divert the attention of our management from day‐to‐day activities, which may
adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that
future financing will be available in sufficient amounts or on favorable terms, if at all. Moreover, the terms of any
financing may negatively impact the holdings or the rights of our shareholders, and the issuance of additional securities,
whether equity or debt, by us or the possibility of such issuance may cause the market price of our shares to decline. The
incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to
certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to
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acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability
to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or
otherwise at an earlier stage than would be desirable and we may be required to relinquish rights to some of our
technologies, intellectual property or product candidates or otherwise agree to terms unfavorable to us, any of which
may harm our business, financial condition, cash flows, operating results and prospects.
If adequate funds are not available to us on a timely basis, we may be required or choose to:
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delay, limit, reduce or terminate nonclinical studies, clinical trials or other development activities for our product
candidates or any of our future product candidates;
delay, limit, reduce or terminate our other research and development activities; or
delay, limit, reduce or terminate our establishment or expansion of manufacturing, sales and marketing or
distribution capabilities or other activities that may be necessary to commercialize Jelmyto or any of our product
candidates that obtain marketing approval.
We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which
could harm our business, financial condition, cash flows and results of operations.
Our indebtedness resulting from our Loan Agreement could adversely affect our financial condition or restrict our future
operations.
In March 2022, we entered into the Loan Agreement pursuant to which the Lenders funded the Term Loans to Borrower
in an aggregate principal amount of $100.0 million in two tranches. In March of 2024, we amended and restated the Loan
Agreement, pursuant to which the Lenders agreed to make additional term loans to the Borrower in an aggregate
principal amount of up to $100.0 million to be funded in two tranches. We are required to draw the third tranche of $25.0
million by September 30, 2024. The fourth tranche of $75.0 million will become available at our option upon FDA
approval of UGN‐102, subject to customary bringdown conditions and deliverables. There is no assurance that the
additional term loans will be funded as expected or at all.
The obligations of the Borrower under the Loan Agreement are guaranteed on a full and unconditional basis by UroGen
Pharma Ltd. and the other Guarantor and are secured by substantially all of the respective Credit Parties’ tangible and
intangible assets and property, including intellectual property, subject to certain exceptions.
The Loan Agreement contains negative covenants that, among other things and subject to certain exceptions, restrict our
ability to:
sell or dispose of assets, including certain intellectual property;
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• consummate certain change in control transactions;
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• pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests; and
• make payments of certain subordinated indebtedness.
incur certain additional indebtedness;
incur any non‐permitted lien or other encumbrance on the Credit Parties’ assets;
In addition, we are required under the Loan Agreement to comply with various operating covenants and default clauses
that may restrict our ability to finance our operations, engage in business activities or expand or fully pursue our business
strategies. A breach of any of these covenants or clauses could result in a default under the Loan Agreement, which could
cause all of the outstanding indebtedness under the facility to become immediately due and payable, including a make
whole amount and prepayment premium.
If we are unable to generate sufficient cash to repay our debt obligations when they become due and payable, we may
not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively affect our
business operations and financial condition.
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Covenants under our Prepaid Forward Contract with RTW restrict our ability to borrow additional capital.
In March 2021, we entered into a Prepaid Forward Contract (the “Forward Contract”) with RTW, pursuant to which we
are obligated to make tiered cash payments to RTW, based on the worldwide annual net product sales of Jelmyto and,
subject to FDA approval, UGN‐102, UGN‐103 and UGN‐104 (together, the “Products”), subject to an aggregate revenue
cap of $300.0 million.
Until the earlier of such time that (i) our aggregate worldwide annual net product sales of the Products reach a certain
threshold or (ii) our market capitalization reaches a certain threshold, (a) we have granted RTW a security interest in the
Products and the regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable
related to the Products (the “Product Collateral”), (b) we are subject to a negative pledge in respect of the Product
Collateral and (c) we may not incur additional indebtedness secured by Product Collateral without such secured debt
provider entering into a intercreditor agreement with RTW. Upon the occurrence of an insolvency event, as defined in the
Forward Contract, any remaining payment obligations under the Forward Contract will be automatically accelerated.
The Forward Contract requires us to use a significant portion of our cash flow to make payments to RTW, limits our ability
to borrow additional funds for working capital, capital expenditures or other general business purposes, limits our
flexibility to plan for, or react to, changes in our business and industry, places us at a competitive disadvantage compared
to our competitors not subject to similar restrictions and increases our vulnerability to the impact of adverse economic
industry conditions.
Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish
rights to our technologies or product candidates.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through
equity, convertible debt or debt financings, as well as selectively continuing to enter into collaborations, strategic
alliances and licensing arrangements. We do not currently have any committed external source of funds. To the extent
that we raise additional capital through the sale of equity or convertible debt securities, including pursuant to the ATM
Sales Agreement, your ownership interest will be diluted, and the terms of these securities may include liquidation or
other preferences that adversely affect your rights as an ordinary shareholder. Debt financing, if available, may involve
agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional
debt, making capital expenditures or declaring and distributing dividends, and may be secured by all or a portion of our
assets.
If we raise funds by selectively continuing to enter into additional collaborations, strategic alliances or licensing
arrangements with third parties, we may have to relinquish additional valuable rights to our technologies, future revenue
streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are
unable to raise additional funds through equity, convertible debt or debt financings when needed, we may be required to
delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop
and market product candidates that we would otherwise prefer to develop and market ourselves. If we are unable to
raise additional funds through other collaborations, strategic alliances or licensing arrangements, we may be required to
terminate product development or future commercialization efforts or to cease operations altogether.
Risks Related to Our Business and Strategy
We are highly dependent on the successful commercialization of our only approved product, Jelmyto.
Jelmyto is our first product, which we commercially launched in the United States in June 2020. We have not
commercialized any other product candidates. We have invested significant efforts and financial resources in the research
and development of Jelmyto, our first and only product approved for commercial sale. We are focusing a significant
portion of our activities and resources on Jelmyto, and we believe our prospects are highly dependent on, and a
significant portion of the value of our company relates to, our ability to successfully commercialize Jelmyto in the United
States.
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Successful commercialization of Jelmyto is subject to many risks. We initiated our commercial launch of Jelmyto in June
2020, and prior to that, we had never, as an organization, launched or commercialized any product. There is no guarantee
that our commercialization efforts will be successful, or that we will be able to successfully launch and commercialize any
other product candidates that receive regulatory approval. There are numerous examples of unsuccessful product
launches and failures to meet high expectations of market potential, including by pharmaceutical companies with more
experience and resources than us. While we have established our commercial team and have hired our U.S. sales force,
we will need to maintain, further train and develop our team in order to be prepared to successfully coordinate the
ongoing commercialization of Jelmyto. Even if we are successful in maintaining and further developing our commercial
team, there are many factors that could cause the commercialization of Jelmyto to be unsuccessful, including a number of
factors that are outside our control. We must also properly educate physicians and nurses on the skillful preparation and
administration of Jelmyto, and develop a broad experiential knowledge base of aggregated clinician feedback from which
we can refine appropriate procedures for product administration, without which there could be a risk of adverse events.
Because no drug has previously been approved by the FDA for the treatment of low‐grade UTUC, it is especially difficult to
estimate Jelmyto’s market potential. The commercial success of Jelmyto depends on the extent to which patients and
physicians accept and adopt Jelmyto as a treatment for low‐grade UTUC, and we do not know whether our or others’
estimates in this regard will be accurate. For example, if the patient population suffering from low‐grade UTUC is smaller
than we estimate or if physicians are unwilling to prescribe or patients are unwilling to be treated with Jelmyto due to
label warnings, adverse events associated with product administration or other reasons, the commercial potential of
Jelmyto will be limited. Physicians may not prescribe Jelmyto and patients may be unwilling to be treated with Jelmyto if
coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any
negative development for Jelmyto in our post‐marketing commitments, or in regulatory processes in other jurisdictions,
may adversely impact the commercial results and potential of Jelmyto. Thus, significant uncertainty remains regarding the
commercial potential of Jelmyto.
In addition, our commercialization efforts for Jelmyto could be hindered by pandemics, epidemics or public health
emergencies.
If Jelmyto sales do not meet expectations, our share price could decline significantly and the long‐term success of the
product and our company could be harmed.
Jelmyto has only been studied in a limited number of patients and in limited populations. Jelmyto is now available to a
much larger number of patients and to a broader population, and we do not know whether the results of Jelmyto use in
this larger number of patients and broader populations will be consistent with the results from our clinical studies.
Jelmyto has been administered only to a limited number of patients and in limited populations in clinical studies, including
our positive pivotal Phase 3 OLYMPUS clinical trial for the treatment of adult patients with low‐grade UTUC. While the
FDA granted approval of Jelmyto based on the data included in the NDA including data from the Phase 3 OLYMPUS clinical
trial, and we have subsequently presented new long‐term data from OLYMPUS trial, we do not know whether the results
when a larger number of patients and a broader population are exposed to Jelmyto, including results related to safety and
efficacy, will be consistent with the results from earlier clinical studies of Jelmyto that served as the basis for the approval
of Jelmyto. New data relating to Jelmyto, including from spontaneous adverse event reports and post‐marketing studies in
the United States, and from other ongoing clinical studies, may result in changes to the product label and may adversely
affect sales, or result in withdrawal of Jelmyto from the market. The FDA and regulatory authorities in other jurisdictions
may also consider the new data in reviewing potential marketing applications in other jurisdictions, or imposing
post‐approval requirements. If any of these actions were to occur, it could result in significant expense and delay or limit
our ability to generate sales revenues.
We have limited experience as an organization in marketing and distributing products and are therefore subject to
certain risks in relation to the commercialization of Jelmyto and any of our product candidates that receive regulatory
approval.
Our strategy is to build and maintain a fully integrated biotechnology company to successfully execute the
commercialization of Jelmyto in the United States. Jelmyto is our only product that has been approved for sale by any
regulatory body, and it became available in the United States in June 2020. While we have established a commercial
management team and have also established a field‐based organization comprised of a sales team, reimbursement
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support team, clinical nurse educators, national account managers and medical science liaisons, we currently have limited
experience commercializing pharmaceutical products as an organization. In order to successfully commercialize Jelmyto,
we must continue to develop our sales, marketing, managerial, compliance and related capabilities or make arrangements
with third parties to perform these services. This involves many challenges, such as recruiting and retaining talented
personnel, training employees, setting the appropriate system of incentives, managing additional headcount and
integrating new business units into an existing corporate infrastructure. These efforts will continue to be expensive and
time‐consuming, and we cannot be certain that we will be able to successfully further develop these capabilities.
Additionally, we will need to maintain and further develop our sales force, and we will be competing with other
pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel. In the event
we are unable to effectively develop and maintain our commercial team, including our sales force, our ability to
effectively commercialize Jelmyto would be limited, and we would not be able to generate product revenues successfully.
If we fail to establish and maintain an effective sales and marketing infrastructure, we will be unable to successfully
commercialize our product candidates, which in turn would have an adverse effect on our business, financial condition
and results of operations.
If we are unable to effectively train and equip our sales force, our ability to successfully commercialize Jelmyto will be
harmed.
None of the members of our sales force had ever promoted Jelmyto prior to its launch in June 2020. In addition, Jelmyto is
the first drug approved by the FDA for the treatment of low‐grade UTUC. As a result, we are and will continue to be
required to expend significant time and resources to train our sales force to be credible, persuasive, and compliant with
applicable laws in marketing Jelmyto for the treatment of low‐grade UTUC to physicians and nurses. In addition, we must
train our sales force to ensure that a consistent and appropriate message about Jelmyto is being delivered to our
customers. If we are unable to effectively train our sales force and equip them with effective materials, including medical
and sales literature to help them inform and educate customers about the benefits and risks of Jelmyto and its proper
administration, our efforts to successfully commercialize Jelmyto could be put in jeopardy, which would negatively impact
our ability to generate product revenues.
There can be no assurance that our territory business managers will continue to have in‐person access to physicians as a
result of pandemics, epidemics or public health emergencies, or that digital materials and virtual engagement will be
effective at growing and sustaining prescription levels of Jelmyto. Disruptions in the prescription volume of Jelmyto could
also occur:
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if patients are physically quarantined or are unable or unwilling to visit healthcare providers;
if physicians restrict access to their facilities for a material period of time;
if healthcare providers prioritize treatment of acute or communicable illnesses over treatment of low‐grade
UTUC;
if pharmacies are closed or suffering staff shortages or supply chain disruptions;
if patients lose access to employer‐sponsored health insurance due to periods of high unemployment; or
as a result of general disruptions in the operations of payors, distributors, logistics providers and other third
parties that are necessary for Jelmyto to be prescribed, reconstituted, instilled and reimbursed.
The market opportunities for Jelmyto and our product candidates may be smaller than we anticipate or limited to those
patients who are ineligible for established therapies or for whom prior therapies have failed and may be small.
Cancer therapies are sometimes characterized as first‐line, second‐line or third‐line. When cancer is detected early
enough, first‐line therapy, often chemotherapy, hormone therapy, surgery, radiotherapy or a combination of these, is
sometimes adequate to cure the cancer or prolong life. Second‐ and third‐line therapies are administered to patients
when prior therapy is not or is no longer effective. For urothelial cancers, the current first‐line standard of care is surgery
designed to remove one or more tumors. Chemotherapy is currently used in treating urothelial cancer only as an
adjuvant, or supplemental therapy, after tumor resection. We are designing our lead product candidate UGN‐102 as an
alternative to surgery as the standard of care for certain urothelial cancers. However, there is no guarantee that this
product candidate will be approved or that we will not have to conduct additional clinical trials. Even if approved, the
market opportunity for UGN‐102 may be smaller than we anticipate or limited to those patients who are ineligible for
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established therapies or for whom prior therapies have failed. Our other or future product candidates, including UGN‐
103, UGN‐104, UGN‐201 and UGN‐301, may face similar risks.
Our projections of both the number of people who have the cancers we are targeting, as well as the subset of people with
these cancers who have previously failed prior treatments, and who have the potential to benefit from treatment with
our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of
sources, including scientific literature, surveys of clinics, patient foundations or third‐party market research, and may
prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers and the
number of patients may turn out to be lower than expected. Additionally, the potentially addressable patient population
for our product candidates may be limited or may not be amenable to treatment with our product candidates. For
instance, our pivotal Phase 3 OLYMPUS clinical trial for Jelmyto was designed to evaluate the use of Jelmyto for the
treatment of tumors in the renal pelvis (the funnel‐like dilated part of the ureter in the kidney) and was not designed to
evaluate the use of Jelmyto for the treatment of tumors in the ureter (the tube that connects the kidneys to the bladder).
Even though Jelmyto is approved for the treatment of low‐grade UTUC, some physicians have chosen, and physicians may
choose in the future, to only use it to treat tumors in the renal pelvis and not tumors in the ureter, which would limit the
degree of physician adoption and market acceptance of Jelmyto. Even if we obtain significant market share, because the
potential target populations are small, we may never achieve profitability without obtaining regulatory approval for
additional indications, including the use of the products as first‐ or second‐line therapy. For example, low‐grade UTUC is a
rare malignant tumor of the cells lining the urinary tract and there is limited scientific literature or other research on the
incidence and prevalence of low‐grade UTUC. If our estimates of the incidence and prevalence of low‐grade UTUC are
incorrect, Jelmyto’s commercial viability may prove to be limited, which may negatively affect our financial results.
Jelmyto and any of our product candidates that receive regulatory approval may fail to achieve the broad degree of
physician adoption and use and market acceptance necessary for commercial success.
The commercial success of Jelmyto and any other product candidates that receive regulatory approval will depend
significantly on their broad adoption and use by physicians for approved indications, including, in the case of Jelmyto, for
the treatment of low‐grade UTUC, and in the case of UGN‐102, for the treatment of low‐grade intermediate risk NMIBC,
and for other therapeutic indications that we may seek to pursue with any of our product candidates. Physicians treating
low‐grade UTUC and low‐grade intermediate risk NMIBC have never had to consider treatments other than surgery. The
degree and rate of physician and patient adoption of Jelmyto, UGN‐102 or any of our other product candidates, if
approved, will depend on a number of factors, including:
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the clinical indications for which the product is approved;
the safety and efficacy data from the clinical trial(s) supporting the approved clinical indications;
the approved labeling and packaging for our products, including the degree of product preparation and
administration convenience and ease of use that is afforded to physicians by the approved labeling and product
packaging;
the prevalence and severity of adverse side effects and the level of benefit/risk observed in our clinical trials;
sufficient patient satisfaction with the results and administration of our products and overall treatment
experience, including relative convenience, ease of use and avoidance of, or reduction in, adverse side effects;
the extent to which physicians recommend our products to patients;
physicians’ and patients’ willingness to adopt new therapies in lieu of other products or treatments, including
willingness to adopt Jelmyto, and our lead product candidate UGN‐102 as locally‐administered drug
replacements to current surgical standards of care;
the cost of treatment, safety and efficacy of our products in relation to alternative treatments, including the
recurrence rate of our treatments;
the extent to which the costs of our products are covered and reimbursed by third‐party payors, including the
availability of a physician reimbursement code for our treatments, and patients’ willingness to pay for our
products;
• whether treatment with our products, including the treatment of low‐grade UTUC with Jelmyto and the
treatment of low‐grade intermediate risk NMIBC with UGN‐102, if approved, will be deemed to be an elective
procedure by third‐ party payors; if so, the cost of treatment would be borne by the patient and would be less
likely to be broadly adopted;
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proper education of physicians or nurses for the skillful administration of our approved product, Jelmyto, and
UGN‐102, if approved, and development of a broad experiential knowledge base of aggregated clinician
feedback from which we can refine appropriate procedures for product administration, without which there
could be a risk of adverse events;
the effectiveness of our sales and marketing efforts, especially the success of any targeted marketing efforts
directed toward physicians and clinics and any direct‐to‐consumer marketing efforts we may initiate; and
third‐party clinical practice guidelines.
If Jelmyto, UGN‐102 or any of our other product candidates are approved for use but fail to achieve the broad degree of
physician adoption and market acceptance necessary for commercial success, our operating results and financial
condition would be adversely affected.
Jelmyto and our product candidates, if approved, will face significant competition with competing technologies and our
failure to compete effectively may prevent us from achieving significant market penetration.
The biotechnology industry is intensely competitive and subject to rapid and significant technological change. Our
potential competitors include large and experienced companies that enjoy significant competitive advantages over us,
such as greater financial, research and development, manufacturing, personnel and marketing resources, greater brand
recognition and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory
authorities. These companies may develop new drugs to treat the indications that we target or seek to have existing drugs
approved for use for the treatment of the indications that we target.
We are aware of several pharmaceutical companies that are developing drugs in the general fields of urology and uro‐
oncology, such as AADi, LLC, Biocancell Ltd., Bristol Myers Squibb, CG Oncology Inc., enGene Holdings, Ferring
Pharmaceuticals, FKD Therapies Oy, GSK, ImmunityBio, Janssen, Merck Sharp & Dohme Corp, Pfizer, Prokarium, Protara
Therapeutics, Roche, Samyang Biopharma, Steba Biotech Ltd., SURGE Therapeutics, Viralytics Limited and Vyriad. We are
aware that Ferring Pharmacuticals began production of Adstiladrin, approved by the FDA for the treatment of high‐risk
BCG‐unresponsive NMIBC, in the second half of 2023. We are also aware there are companies among this list conducting
clinical trials in various phases in the same indications in which we are developing products.In addition, on February 25,
2024, we received a Paragraph IV Certification Notice Letter from Teva Pharmaceuticals, Inc. (“Teva”), providing
notification that Teva has submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of
Jelmyto. In the Notice Letter, Teva alleges that two of the patents listed in the FDA Orange Book for Jelmyto, U.S. Patent
Numbers 9,040,074 and 9,950,069 each of which expires in January 2031, are invalid, unenforceable, or will not be
infringed by Teva’s manufacture, use, or sale of the generic product described in its ANDA submission. If we are unable to
maintain patent protection for Jelmyto, Jelmyto will be subject to immediate competition from generic entrants after
regulatory exclusivity expires in April 2027.
Additionally, outside of these indications where we are developing products, we are aware of other companies doing
work in both bladder and upper tract cancers, but these are with agents or on targets in high‐grade, metastatic, or muscle
invasive cancers. Competition may increase further as a result of advances in the commercial applicability of technologies
and greater availability of capital for investment in this industry. Our competitors may succeed in developing, acquiring or
licensing products that are more effective, easier to administer or less costly than our product candidates.
In addition, we face competition from existing standards of treatment, surgical tumor resection procedures. If we are not
able to demonstrate that our product candidates are at least as safe and effective as such courses of treatment, medical
professionals may not adopt our product candidates in replacement of the existing standard of care. Generic mitomycin
injectable drug products, while approved by FDA for gastric and pancreatic cancers, are neither approved for low‐grade
UTUC nor reconstituted with hydrogel in an FDA‐approved product as Jelmyto is, although they may be used off‐label by
physicians for the treatment of low‐grade UTUC, as they have been prior to the approval of Jelmyto.
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Our ability to market Jelmyto and any of our product candidates that receive marketing approval is and will be limited
to certain indications. If we want to expand the indications for which we may market our products, we will need to
obtain additional regulatory approvals, which may not be granted.
Jelmyto is indicated for adult patients with low‐grade UTUC. We are currently developing UGN‐102, UGN‐103, UGN‐104,
UGN‐201 and UGN‐301 for the treatment of various forms of bladder cancer. The FDA and other applicable regulatory
agencies will restrict our ability to market or advertise our products to the scope of the approved label for the applicable
product and for no other indications, which could limit physician and patient adoption. We may attempt to develop and, if
approved, promote and commercialize new treatment indications for our products in the future, but we cannot predict
when or if we will receive the regulatory approvals required to do so. Failure to receive such approvals will prevent us
from promoting or commercializing new treatment indications. In addition, we would be required to conduct additional
clinical trials or studies to support approvals for additional indications, which would be time consuming and expensive,
and may produce results that do not support regulatory approvals. If we do not obtain additional regulatory approvals,
our ability to expand our business will be limited.
If we are found to have improperly promoted off‐label uses of Jelmyto or any of our product candidates that
receive regulatory approval, or if physicians misuse our products, we may become subject to prohibitions on the sale or
marketing of our products, significant sanctions, and product liability claims, and our image and reputation within the
industry and marketplace could be harmed.
The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about drug
products. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or such
other regulatory agencies as reflected in the product’s approved labeling and may not be promoted based on overstated
efficacy or omission of important safety information. For example, we cannot promote the use of our product Jelmyto in a
manner that is inconsistent with the approved label, but we are permitted to share truthful and non‐misleading
information that is otherwise consistent with the product’s FDA approved labeling. However, physicians are able, in their
independent medical judgment, to use Jelmyto on their patients in an off‐label manner, such as for the treatment of other
urology indications. If we are found to have promoted such off‐label uses, we may receive warning letters and become
subject to significant liability, which would harm our business. The federal government has levied large administrative,
civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from
engaging in off‐label promotion. If we become the target of such an investigation or prosecution based on our marketing
and promotional practices, we could face similar sanctions, which would harm our business. In addition, management’s
attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation
could be damaged. The FDA has also requested that companies enter into consent decrees or permanent injunctions
under which specified promotional conduct is changed or curtailed. If we are deemed by the FDA to have engaged in the
promotion of our products for off‐label use, we could be subject to prohibitions on the sale or marketing of our products
or significant fines and penalties, and the imposition of these sanctions could also affect our reputation with physicians,
patients and caregivers, and our position within the industry.
Physicians may also misuse our products or use improper techniques, potentially leading to adverse results, side effects or
injury, which may lead to product liability claims. If our products are misused or used with improper technique, we may
become subject to costly litigation. Product liability claims could divert management’s attention from our core business,
be expensive to defend, and result in sizable damage awards against us that may not be covered by insurance. We
currently carry product liability insurance covering our clinical trials with policy limits that we believe are customary for
similarly situated companies and adequate to provide us with coverage for foreseeable risks. Although we maintain such
insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is
not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. In addition,
while we have established product liability insurance relating to our commercialization of Jelmyto, there can be no
assurance that we will be able to maintain this insurance on commercially reasonable terms or that this insurance will be
sufficient. Furthermore, the use of our products for conditions other than those approved by the FDA may not effectively
treat such conditions, which could harm our reputation in the marketplace among physicians and patients.
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In addition to Jelmyto, we are dependent on the success of our lead product candidate, UGN‐102, and our other product
candidates, including obtaining regulatory approval to market our product candidates in the United States.
The research, development, testing, manufacturing, labeling, packaging, approval, promotion, advertising, storage,
recordkeeping, marketing, distribution, post‐approval monitoring and reporting, and export and import of drug products
are subject to extensive regulation by the FDA and by foreign regulatory authorities. These regulations differ from country
to country. To gain approval to market our product candidates, we must provide clinical data that adequately
demonstrate the safety and efficacy of the product for the intended indication. Other than Jelmyto, all of our product
candidates, including our lead product candidate, UGN‐102, remain in clinical development and have not yet received
regulatory approval from the FDA or any other regulatory agency in the United States or any other country. Our business
depends upon obtaining these regulatory approvals. There are no drugs that have been approved by the FDA for the
primary treatment of low‐grade intermediate risk NMIBC, and only a limited number of drugs have been approved by the
FDA as adjuvant treatment for BCG unresponsive NMIBC. The FDA can delay, limit or deny approval of our product
candidates for many reasons.
While we announced on October 3, 2023 that the FDA agreed with our plan for a rolling NDA submission for UGN‐102,
there is no guarantee that the FDA will accept the NDA for filing once the rolling submission is complete or eventually
approve UGN‐102 for the indication and patient population that we request or approve the labeling that we believe is
necessary or desirable for the successful commercialization of UGN‐102, as the FDA has the authority to refuse to file or
approve NDAs for a variety of reasons.
The success of our product candidates is subject to significant risks, including risks associated with successfully completing
current and future clinical trials, such as:
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the FDA’s acceptance of our parameters for regulatory approval relating to UGN‐102 and our other product
candidates, including our proposed indications, primary and secondary endpoint assessments and
measurements, safety evaluations and regulatory pathways, and proposed labeling and packaging;
our ability to successfully complete the FDA requirements related to CMC, for UGN‐102 and our other product
candidates, and if completed, their sufficiency to support an NDA;
the FDA’s timely acceptance of our INDs, for our product candidates and our inability to commence clinical trials
in the United States without such IND acceptances;
the FDA’s acceptance of the design, size, conduct and implementation of our clinical trials, our trial protocols
and the interpretation of data from nonclinical studies or clinical trials;
the FDA’s acceptance of the population studied in our clinical trials being sufficiently large, broad and
representative to assess efficacy and safety in the patient population for which we seek approval;
our ability to successfully complete the clinical trials of our product candidates, including timely patient
enrollment and acceptable safety and efficacy data and our ability to demonstrate the safety and efficacy of the
product candidates undergoing such clinical trials;
our ability to demonstrate meaningful clinical or other benefits which outweigh any safety or other perceived
risks, through the completion of our clinical trials for our product candidates;
the FDA’s need to schedule an advisory committee meeting, and to conduct such meeting, in a timely manner to
evaluate and decide on the approval of our potential future NDA for UGN‐102;
if applicable, the recommendation of the FDA’s advisory committee to approve our applications to market UGN‐
102 and our other product candidates in the United States, without limiting the approved labeling,
specifications, distribution or use of the products, or imposing other restrictions;
the FDA’s determination of safety and efficacy of our product candidates;
the FDA’s determination that the Section 505(b)(2) is available for our product candidates;
the prevalence and severity of adverse events associated with our product candidates, including UGN‐102, as
there are no drugs and related drug administration procedures approved for the primary treatment of low‐grade
NMIBC, that are based on RTGel technology;
the timely and satisfactory performance by third‐party contractors of their obligations in relation to our clinical
trials;
our success in educating physicians and patients about the benefits, risks, administration and use of our product
candidates, if approved, particularly in light of the fact that there are no drugs that have been approved by the
FDA for the primary treatment of low‐grade NMIBC, and only a limited number of drugs have been approved by
the FDA as adjuvant treatment for high‐grade NMIBC;
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the availability, perceived advantages, relative cost, safety and efficacy of alternative and competing treatments
for the indications addressed by our product candidates;
the effectiveness of our marketing, sales and distribution strategy, and operations, as well as that of any current
and future licensees;
the FDA’s acceptance of the quality of our drug substance or drug product, formulation, labeling, packaging, or
the specifications of our product candidates is sufficient for approval;
our ability to develop, validate and maintain a commercially viable manufacturing process that is compliant with
cGMP;
the FDA’s acceptance of the manufacturing processes or facilities of third‐party manufacturers with which we
contract;
our ability to secure supplies for our product candidates to support clinical trials and commercial use;
our ability to manufacture or secure finished product from third‐party suppliers for product candidates,
including UGN‐102, if approved;
our ability to obtain, maintain, protect and enforce our intellectual property rights with respect to our product
candidates;
the extent to which the costs of our products, once approved, are covered and reimbursed by third‐party
payors, including the availability of a physician reimbursement code for our treatments, and patients’ willingness
to pay for our products; and
our ability to properly train physicians or nurses for the skillful preparation and administration of any of our
product candidates that receive approval, including UGN‐102, and our ability to develop a broad experiential
knowledge base of aggregated clinician feedback from which we can refine appropriate procedures for product
administration, without which there could be a risk of adverse events.
Many of these clinical, regulatory and commercial risks are beyond our control. Further, these risks and uncertainties
impact all of our clinical programs that we pursue and may be amplified by pandemics, epidemics or public health
emergencies, as described below. Accordingly, we cannot assure you that we will be able to advance any more of our
product candidates through clinical development, or to obtain additional regulatory approval of any of our product
candidates. To the extent we seek regulatory approval in foreign countries, we may face challenges similar to those
described above with regulatory authorities in applicable jurisdictions. Any delay in obtaining, or inability to obtain,
applicable regulatory approval for any of our product candidates would delay or prevent commercialization of our
product candidates and would thus negatively impact our business, results of operations and prospects. Even if we
receive approval of any of the product candidates in our pipeline or future product candidates, there is no assurance that
we will be able to successfully commercialize any of them.
UGN‐102 may not meet its secondary endpoint in the ongoing Phase 3 ENVISION trial.
On July 27, 2023, we announced that UGN‐102 met its primary endpoints in the Phase 3 ATLAS and ENVISION trials.
Additional data evaluating the secondary endpoint of duration of response from ENVISION are anticipated in 2024. If
UGN‐102 does not meet its secondary endpoint or we receive other data that negatively impacts the efficacy and safety
profile of UGN‐102, then our ability to seek and potentially obtain regulatory approval of UGN‐102 may be adversely
affected.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change
as more patient data become available and are subject to audit and verification procedures that could result in material
changes in the final data.
From time to time, we may publicly disclose preliminary, interim or topline data from our clinical trials. These interim
updates are based on a preliminary analysis of then‐available data, and the results and related findings and conclusions
are subject to change as patient data become available and following a more comprehensive review of the data related to
the particular study or trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses
of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the
topline results that we report may differ from future results of the same studies, or different conclusions or
considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also
remain subject to audit and verification procedures that may result in the final data being materially different from the
preliminary data we previously published. As a result, topline data should be viewed with caution until the final data are
available. In addition, we may report interim analyses of only certain endpoints rather than all endpoints. Interim data
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from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially
change as patient enrollment continues and more patient data become available. In particular, interim data may reflect
small sample sizes, be subject to substantial variability and may not be indicative of either future interim results or final
results. Publications based on interim data may differ from FDA approved product labeling. Adverse changes between
interim data and final data could significantly harm our business and prospects. Further, additional disclosure of interim
data by us or by our competitors in the future could result in volatility in the price of our ordinary shares. See the
description of risks under the heading “Risks Related to Ownership of our Ordinary Shares” for additional disclosures
related to the risk of volatility in the price of our ordinary shares.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations,
conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the
particular program, the approvability or commercialization of the particular product candidate or product and our
company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial
is typically selected from a more extensive amount of available information. Furthermore, we may report interim analyses
of only certain endpoints rather than all endpoints. You or others may not agree with what we determine is the material
or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may
ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a
particular product, product candidate or our business. If the preliminary or topline data that we report differ from late,
final or actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to
obtain approval for, and commercialize, UGN‐102 or any other investigational product candidate may be harmed, which
could harm our business, financial condition, results of operations and prospects.
We have limited experience in conducting clinical trials and obtaining approval for product candidates and may be
unable to do so successfully.
As a company, we have limited experience in conducting clinical trials and have progressed only one product candidate
through to regulatory approval. In part because of this lack of experience, our clinical trials may require more time and
incur greater costs than we anticipate. We cannot be certain that the planned clinical trials will begin or conclude on time,
if at all. Large‐scale trials will require significant additional financial and management resources. Third‐party clinical
investigators do not operate under our control. Any performance failure on the part of such third parties could delay the
clinical development of our product candidates or delay or prevent us from obtaining regulatory approval or
commercializing our current or future product candidates, depriving us of potential product revenue and resulting in
additional losses.
We have not yet applied for regulatory approvals to market UGN‐102 or the other product candidates in our pipeline,
and we may be delayed in obtaining or failing to obtain such regulatory approvals and to commercialize our product
candidates.
The process of developing, obtaining regulatory approval for and commercializing our product candidates is long,
complex, costly and uncertain, and delays or failure can occur at any stage. The research, testing, manufacturing, labeling,
marketing, sale and distribution of drugs are subject to extensive and rigorous regulation by the FDA and foreign
regulatory agencies, as applicable. These regulations are agency‐specific and differ by jurisdiction. We are not permitted
to market any product candidate in the United States until we receive approval of an NDA from the FDA, or in any foreign
countries until we receive the requisite approval from the respective regulatory agencies in such countries. To gain
approval of an NDA or other equivalent regulatory approval, we must provide the FDA or relevant foreign regulatory
authority with nonclinical and clinical data that demonstrates the safety and efficacy of the product for the intended
indication.
Before we can submit an NDA to the FDA or comparable similar applications to foreign regulatory authorities, we must
conduct Phase 3 clinical trials, or a pivotal/registration trial equivalent, for each product candidate. After submission of an
NDA, the FDA may raise additional questions on any data contained in the application. These questions may come in the
form of information requests or in the NDA 74‐day letter as review issues. We must address these questions during the
review, but we do not know whether our responses will be acceptable to the FDA. We cannot assure you that the FDA will
not decide to require us to perform additional clinical trials, including potentially requiring us to perform an additional
pivotal study with a control arm, before approving, or as a condition of approving, NDAs for our product candidates.
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Phase 3 clinical trials often produce unsatisfactory results even though prior clinical trials were successful. Moreover, the
results of clinical trials may be unsatisfactory to the FDA or foreign regulatory authorities even if we believe those clinical
trials to be successful. The FDA or applicable foreign regulatory agencies may suspend one or all of our clinical trials or
require that we conduct additional clinical, nonclinical, manufacturing, validation or drug product quality studies and
submit that data before considering or reconsidering any NDA or comparable foreign regulatory application that we may
submit. Depending on the extent of these additional studies, approval of any applications that we submit may be
significantly delayed or may cause the termination of such programs or may require us to expend more resources than we
have available.
If any of these outcomes occur, we may not receive regulatory approval for the corresponding product candidates, and
our business would not be able to generate revenue from the sale of any such product candidates.
Changes in funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key
leadership and other personnel, prevent new products and services from being developed or commercialized in a timely
manner or otherwise prevent those agencies from performing normal functions on which the operation of our business
may rely, which could negatively impact our business.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government
budget and funding levels, ability to hire and retain key personnel and accept payment of user fees, and statutory,
regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition,
government funding of the SEC and other government agencies on which our operations may rely, including those that
fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or
approved by necessary government agencies, which would adversely affect our business. For example, over the last
several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the
SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a
prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process
our regulatory submissions, which could have a material adverse effect on our business. Further, future government
shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly
capitalize and continue our operations.
We may not be able to advance our nonclinical product candidates into clinical development and through regulatory
approval and commercialization.
Certain of our product candidates are currently in nonclinical development and are therefore currently subject to the risks
associated with nonclinical development, including the risks associated with:
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generating adequate and sufficient nonclinical safety and efficacy data in a timely fashion to support the
initiation of clinical trials;
obtaining regulatory approval to commence clinical trials in any jurisdiction, including the submission and
acceptance of INDs;
contracting with the necessary parties to conduct a clinical trial;
enrolling sufficient numbers of patients in clinical trials in timely fashion, if at all; and
timely manufacture of sufficient quantities of the product candidate for use in clinical trials.
These risks and uncertainties impact all of our nonclinical programs that we pursue. If we are unsuccessful in advancing
our nonclinical product candidates into clinical trials in a timely fashion, our business may be harmed. Even if we are
successful in advancing our nonclinical product candidates into clinical development, their success will be subject to all of
the clinical, regulatory and commercial risks described elsewhere in this Annual Report and our other filings with the SEC.
Accordingly, we cannot assure you that we will be able to develop, obtain regulatory approval for, commercialize or
generate significant revenue from our product candidates.
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Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier
studies and trials may not be predictive of future trial results, and our clinical trials may fail to adequately demonstrate
the safety and efficacy of our product candidates.
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. A failure of one
or more of our clinical trials can occur at any time during the clinical trial process. We do not know whether our ongoing
and future clinical trials, if any, will begin on time, need to be redesigned, enroll an adequate number of patients on time
or be completed on schedule, if at all. Clinical trials can be delayed, suspended or terminated for a variety of reasons,
including failure to:
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generate sufficient nonclinical, toxicology, or other in vivo or in vitro data to support the initiation or
continuation of clinical trials;
obtain regulatory approval or feedback on trial design, in order to commence a trial;
identify, recruit and train suitable clinical investigators;
reach agreement on acceptable terms with prospective contract research organizations ("CROs") and clinical trial
sites, and have such CROs and sites effect the proper and timely conduct of our clinical trials;
obtain and maintain institutional review board ("IRB") approval at each clinical trial site;
identify, recruit, enroll and retain suitable patients to participate in a trial;
have a sufficient number of patients enrolled, complete a trial or return for post‐treatment follow‐up;
ensure clinical investigators and clinical trial sites observe trial protocol or continue to participate in a trial;
address any patient safety concerns that arise during the course of a trial;
address any conflicts with new or existing laws or regulations;
add a sufficient number of clinical trial sites;
• manufacture sufficient quantities at the required quality of product candidate for use in clinical trials; or
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raise sufficient capital to fund a trial.
Patient enrollment is a significant factor in the timing and success of clinical trials and is affected by many factors,
including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for
the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ or caregivers’ perceptions as
to the potential advantages of the drug candidate being studied in relation to other available therapies, including any new
drugs or treatments that may be developed or approved for the indications we are investigating.
We may also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which
such trials are being conducted, by the trial’s data safety monitoring board, by the FDA or by the applicable foreign
regulatory authorities. Such authorities may suspend or terminate one or more of our clinical trials due to a number of
factors, including our failure to conduct the clinical trial in accordance with relevant regulatory requirements or clinical
protocols, inspection of the clinical trial operations or trial site by the FDA or foreign regulatory authorities resulting in the
imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using
a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical
trial.
If we experience delays in carrying out or completing any clinical trial of our product candidates, the commercial
prospects of our product candidates may be harmed, and our ability to generate product revenues from any of these
product candidates will be delayed.
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In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate
development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of
these occurrences may significantly harm our business and financial condition. In addition, many of the factors that cause,
or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of
regulatory approval of our product candidates.
Jelmyto or any of our product candidates may produce undesirable side effects that we may not have detected in our
previous nonclinical studies and clinical trials or that are not expected with mitomycin treatment or inconsistent with
catheter administration procedures. This could prevent us from gaining marketing approval or market acceptance for
these product candidates, or from maintaining such approval and acceptance, and could substantially increase
commercialization costs and even force us to cease operations.
As with most pharmaceutical products, Jelmyto and our product candidates may be associated with side effects or
adverse events that can vary in severity and frequency. Side effects or adverse events associated with the use of Jelmyto
or any of our product candidates, including UGN‐102, may be observed at any time, including in clinical trials or once a
product is commercialized, and any such side effects or adverse events may negatively affect our ability to obtain
regulatory approval or market our product candidates. To date, in our nonclinical testing, Compassionate Use Program for
Jelmyto, clinical trials and post‐marketing experience, we have observed several adverse events and SAEs, including
ureteric obstruction, ureteral stenosis, inhibition of urine flow, rash, flank pain, kidney swelling, kidney infection, renal
dysfunction, hematuria, fatigue, nausea, abdominal pain, dysuria, vomiting, urinary tract infection, urgency in urination
and pain during urination. In addition, we have observed transient perturbation of laboratory measures of renal and
hematopoietic function. These adverse events are known mitomycin or procedure‐related adverse events and many are
indicated as potential side effects of mitomycin usage on the mitomycin label. However, we cannot assure you that we
will not observe additional drug or procedure‐related adverse events or SAEs in the future or that the FDA will not
determine them as such. Side effects such as toxicity or other safety issues associated with the use of Jelmyto or our
product candidates could require us to perform additional studies or halt development or sale of Jelmyto or our product
candidates or expose us to product liability lawsuits, which will harm our business.
Furthermore, our Phase 2b clinical trial for UGN‐102 involved larger patient bases than in our prior studies of these
candidates, and the commercial marketing of Jelmyto and, if approved, UGN‐102, will further expand the clinical exposure
of the drugs to a wider and more diverse group of patients than those participating in the clinical trials, which may
identify undesirable side effects caused by these products that were not previously observed or reported.
The FDA and foreign regulatory agency regulations require that we report certain information about adverse medical
events if our products may have caused or contributed to those adverse events. The timing of our obligation to report
would be triggered by the date upon which we become aware of the adverse event as well as the nature and severity of
the event. We may fail to report adverse events of which we become aware within the prescribed timeframe. We may
also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an
adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to
comply with our reporting obligations, the FDA or a foreign regulatory agency could take action including enforcing a hold
on or cessation of clinical trials, withdrawal of approved drugs from the market, criminal prosecution, the imposition of
civil monetary penalties or seizure of our products.
Additionally, in the event we discover the existence of adverse medical events or side effects caused by one of our
products or product candidates, a number of other potentially significant negative consequences could result, including:
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our inability to submit an NDA or similar application for our product candidates because of insufficient risk‐
reward, or the denial of such application by the FDA or foreign regulatory authorities;
the FDA or foreign regulatory authorities suspending or terminating our clinical trials or suspending or
withdrawing their approval of the product;
the FDA or foreign regulatory authorities requiring the addition of labeling statements, such as boxed or other
warnings or contraindications or distribution and use restrictions;
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the FDA or foreign regulatory authorities requiring us to issue specific communications to healthcare
professionals, such as letters alerting them to new safety information about our product, changes in dosage or
other important information;
the FDA or foreign regulatory authorities issuing negative publicity regarding the affected product, including
safety communications;
our being limited with respect to the safety‐related claims that we can make in our marketing or promotional
materials;
our being required to change the way the product is administered, conduct additional nonclinical studies or
clinical trials or restrict or cease the distribution or use of the product; and
•
our being sued and held liable for harm caused to patients.
Any of these events could prevent us from achieving market acceptance or approval of the affected product or product
candidate and could substantially increase development or commercialization costs, force us to withdraw from the
market any approved product, or even force us to cease operations. We cannot assure you that we will resolve any issues
related to any product‐related adverse events to the satisfaction of the FDA or any regulatory agency in a timely manner
or ever, which could harm our business, prospects and financial condition.
We may face future developmental and regulatory difficulties related to Jelmyto and any of our product candidates
that receive marketing approval. In addition, we are subject to government regulations and we may experience delays
in obtaining required regulatory approvals to market our proposed product candidates.
We are subject to certain post‐marketing commitments related to Jelmyto, including a requirement for a period of five
years to provide annual updates for the duration of response for all patients with ongoing CRs enrolled in the Phase 3
OLYMPUS trial. With respect to our current and future candidates, even if we complete clinical testing and receive
approval of any regulatory filing for our product candidates, the FDA or applicable foreign regulatory agency may grant
approval contingent on the performance of additional costly post‐approval clinical trials, risk mitigation requirements and
surveillance requirements to monitor the safety or efficacy of the product, which could negatively impact us by reducing
revenues or increasing expenses, and cause the approved product candidate not to be commercially viable. Absence of
long‐term safety data may further limit the approved uses of our products, if any.
The FDA or applicable foreign regulatory agency also may approve our product candidates for a more limited indication or
a narrower patient population than we originally requested or may not approve the labeling that we believe is necessary
or desirable for the successful commercialization of our product candidates. Furthermore, any such approved product will
remain subject to extensive regulatory requirements, including requirements relating to manufacturing, labeling,
packaging, adverse event reporting, storage, advertising, promotion, distribution and recordkeeping.
If we fail to comply with the regulatory requirements of the FDA or other applicable foreign regulatory authorities, or
previously unknown problems with any approved commercial products, manufacturers or manufacturing processes are
discovered, we could be subject to administrative or judicially imposed sanctions or other setbacks, including the
following:
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suspension or imposition of restrictions on operations, including costly new manufacturing requirements;
regulatory agency refusal to approve pending applications or supplements to applications;
suspension of any ongoing clinical trials;
suspension or withdrawal of marketing approval;
an injunction or imposition of civil or criminal penalties or monetary fines;
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seizure or detention of products;
bans or restrictions on imports and exports;
issuance of warning letters or untitled letters;
suspension or imposition of restrictions on operations, including costly new manufacturing requirements; or
refusal of regulatory authorities to approve pending applications or supplements to applications.
In addition, various aspects of our operations are subject to federal, state or local laws, rules and regulations, any of
which may change from time to time. Costs arising out of any regulatory developments could be time‐consuming and
expensive and could divert management resources and attention and, consequently, could adversely affect our business,
financial condition, cash flows and results of operations.
If we are not successful in developing, receiving regulatory approval for and commercializing our nonclinical and clinical
product candidates, our ability to expand our business and achieve our strategic objectives could be impaired.
Although we have received FDA approval of Jelmyto for pyelocalyceal solution, for the treatment of adult patients with
low‐grade UTUC, and we plan to devote a substantial portion of our resources to the continued clinical testing and
potential approval of UGN‐102 for the treatment of low‐grade intermediate risk NMIBC. Another key element of our
strategy is to discover, develop and commercialize a portfolio of products to serve additional therapeutic markets. We are
seeking to do so through our internal research programs, but our resources are limited, and those that we have are
geared towards clinical testing and seeking regulatory approval of UGN‐102 and our other existing product candidates.
We may also explore strategic collaborations for the development or acquisition of new products, but we may not be
successful in entering into such relationships. Research programs to identify product candidates require substantial
technical, financial and human resources, regardless of whether any product candidates are ultimately identified. Our
research programs may initially show promise in identifying potential product candidates, yet fail to yield product
candidates for clinical development for many reasons, including:
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the research methodology used may not be successful in identifying potential product candidates;
competitors may develop alternatives that render our product candidates obsolete or less attractive;
a product candidate may in a subsequent trial be shown to have harmful side effects or other characteristics that
indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;
a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at
all;
a product candidate may not be accepted as safe and effective by patients, the medical community or third‐
party payors, if applicable; and
intellectual property or other proprietary rights of third parties for product candidates we develop may
potentially block our entry into certain markets or make such entry economically impracticable.
If we fail to develop and successfully commercialize other product candidates, our business and future prospects may be
harmed, and our business will be more vulnerable to any problems that we encounter in developing and commercializing
our product candidates.
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We have entered into collaboration and licensing agreements and in the future may enter into collaboration and
licensing arrangements with other third parties for the development or commercialization of our product candidates. If
our collaboration and licensing arrangements are not successful, we may not be able to capitalize on the market
potential of these product candidates.
We may utilize a variety of types of licensing, collaboration, distribution and other marketing arrangements with third
parties to develop our product candidates and commercialize our approved product candidates, if any. We are not
currently party to any such arrangement that we consider material. Our ability to generate revenues from these
arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to
them in these arrangements.
Any collaborations that we enter into may pose a number of risks, including the following:
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collaborators have significant discretion in determining the amount and timing of efforts and resources that they
will apply to these collaborations;
collaborators may not perform their obligations as expected;
product candidates developed by collaborators may not perform sufficiently in clinical trials to be determined to
be safe and effective, thereby delaying or terminating the drug approval process and reducing or eliminating
milestone payments to which we would otherwise be entitled if the product candidates had successfully met
their endpoints and/or received FDA approval;
clinical trials conducted by collaborators could give rise to new safety concerns;
collaborators may not pursue development and commercialization of our product candidates that receive
marketing approval or may elect not to continue or renew development or commercialization programs based
on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such
as an acquisition, that divert resources or create competing priorities;
collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial
or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product
candidate for clinical testing;
collaborators could independently develop, or develop with third parties, products that compete directly or
indirectly with our products or product candidates if the collaborators believe that competitive products are
more likely to be successfully developed or can be commercialized under terms that are more economically
attractive than ours;
product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with
their own product candidates or products, which may cause collaborators to cease to devote resources to the
commercialization of our product candidates;
a collaborator with marketing and distribution rights to one or more of our product candidates that achieve
regulatory approval may not commit sufficient resources to the marketing and distribution of such product or
products;
disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or
the preferred course of development, might cause delays or termination of the research, development or
commercialization of product candidates, might lead to additional responsibilities for us with respect to product
candidates, or might result in litigation or arbitration, any of which would divert management attention and
resources, be time‐consuming and expensive;
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collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary
information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or
proprietary information or expose us to potential litigation;
collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and
potential liability; and
collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be
required to raise additional capital to pursue further development or commercialization of the applicable
product candidates.
Collaborations may not lead to development or commercialization of product candidates in the most efficient manner, or
at all, and may otherwise experience challenges. For example, in August 2020, we announced that the Phase 2 APOLLO
trial of BOTOX/RTGel for the treatment of overactive bladder, which was conducted by Allergan Pharmaceuticals Limited
(“Allergan”), did not meet the primary endpoint. The data suggested that this result may have been due to
BOTOX not effectively permeating the urothelium. In November 2021 our arrangement with Allergan was terminated.
If any future material collaborations that we enter into do not result in the successful development and commercialization
of products or if one of our collaborators terminates its agreement with us, we may not receive any future research
funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these
agreements, our development of our product candidates could be delayed, and we may need additional resources to
develop our product candidates. All the risks relating to product development, regulatory approval and commercialization
described in this report also apply to the activities of our collaborators.
Additionally, subject to its contractual obligations to us, if a collaborator of ours were to be involved in a business
combination, it might deemphasize or terminate the development or commercialization of any product candidate
licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract
new collaborators and perception of us in the business and financial communities could be harmed.
We currently contract with third‐party subcontractors and single‐source suppliers for certain raw materials, compounds
and components necessary to produce Jelmyto for commercial use, and to produce UGN‐102, UGN‐103, UGN‐104, UGN‐
201 and UGN‐301 for nonclinical studies and clinical trials, and expect to continue to do so to support commercial scale
production of UGN‐102, UGN‐103, UGN‐104 and UGN‐201, if approved, as well as UGN‐301 if approved as a
monotherapy or for any approved product that includes UGN‐301. There are significant risks associated with the
manufacture of pharmaceutical products and contracting with contract manufacturers, including single‐source
suppliers. Furthermore, our existing third‐party subcontractors and single‐source suppliers may not be able to meet the
increased need for certain raw materials, compounds and components that may result from our commercialization
efforts. This increases the risk that we will not have sufficient quantities of Jelmyto, UGN‐102, UGN‐103, UGN‐104,
UGN‐201 or UGN‐301 or be able to obtain such quantities at an acceptable cost, which could delay, prevent or impair
our development or commercialization efforts.
We currently rely on third party subcontractors and suppliers for certain compounds and components necessary to
produce Jelmyto for commercial use and UGN‐102, UGN‐103, UGN‐104, UGN‐201 and UGN‐301 for our nonclinical studies
and clinical trials, and expect to rely on third party subcontractors and suppliers for commercial use for any of our drug
candidates that receive regulatory approval. We currently depend on Teva Pharmaceuticals Industries Ltd, as our single‐
source supplier of mitomycin active pharmaceutical ingredient ("API") for Jelmyto and UGN‐102. We currently rely on
Cenexi‐Laboratories Thissen s.a. for the mitomycin contained in Jelmyto and UGN‐102. We depend on Isotopia Molecular
Imaging Ltd. as our single contracted suppliers for the hydrogel contained in Jelmyto and UGN‐102. We also currently
depend on a single source supplier for imiquimod for UGN‐201 and zalifrelimab for UGN‐301. We have entered into a
supply agreement with medac, and pending successful completion of development we will depend on medac as our
supplier for UGN‐103 and UGN‐104. Because there are a limited number of suppliers for the raw materials that we use to
manufacture our product candidates, we may need to engage alternate suppliers to prevent a possible disruption of the
manufacture of the materials necessary to produce Jelmyto for commercial sale and our product candidates for our
clinical trials and their subsequent commercial sale, if approved. Even if we are able to engage alternate suppliers on
reasonable terms, we may face delays or increased costs in our supply chain that could jeopardize the commercialization
of Jelmyto and the development of UGN‐102. We do not have any control over the availability of these compounds and
49
components beyond our existing contractual arrangements. If we or our suppliers and manufacturers are unable to
purchase these raw materials on acceptable terms, at sufficient quality levels, or in adequate quantities, if at all, the
development and commercialization of our product candidates or any future product candidates, would be delayed or
there would be a shortage in supply, which would impair our ability to meet our development objectives for our product
candidates or generate revenues from the sale of Jelmyto or any other approved products.
We expect to continue to rely on these or other subcontractors and suppliers to support our commercial requirements for
Jelmyto, as well as UGN‐102 or any of our other product candidates if approved for marketing by the FDA or foreign
regulatory authorities. We plan to continue to rely on third parties for the manufacture of mitomycin API, the hydrogel
contained in Jelmyto, UGN‐102, UGN‐103, UGN‐104 and UGN‐301, and for imiquimod for UGN‐201, and for zalifrelimab
for UGN‐301, as well as for the raw materials, compounds and components necessary to produce our product candidates
and for nonclinical studies and clinical trials.
Even though we are approved as a commercial supplier of Jelmyto, we have limited experience as a company in the
commercial supply of drugs and may never be successful as a commercial supplier of drug products containing mitomycin.
In addition, cost‐overruns, unexpected delays, equipment failures, logistics breakdowns, labor shortages, natural
disasters, power failures, production failures or product recalls, and numerous other factors could prevent us from
realizing the intended benefits of our sales strategy and have a material adverse effect on our business. Further, although
we commercially supply Jelmyto, further build‐out is required and establishing such commercial‐scale supply capabilities
requires additional investment, is time‐consuming and may be subject to delays, including because of shortage of labor,
compliance with regulatory requirements or receipt of necessary regulatory approvals. In addition, building out our
Jelmyto commercial supply capabilities may cost more than we currently anticipate, and delays or problems may
adversely impact our ability to provide sufficient quantities of Jelmyto to support our commercialization of Jelmyto and
planned future commercialization of UGN‐102, if approved, as well as our financial condition.
While we currently have over 12 months of mitomycin API and/or Jelmyto finished product on hand to continue our
commercial and clinical operations as planned, we may face such delays or costs in future years. Although we believe we
have sufficient quantities of bulk mitomycin API for planned manufacturing operations through 2024, a prolonged supply
interruption of certain components could adversely affect our ability to conduct commercialization activities and planned
clinical trials. If any third party in our supply or distribution chain for materials or finished product is adversely impacted
by restrictions resulting from pandemics, epidemics or public health emergencies or other disruptions caused by the
outbreak of war, terrorist attacks or other acts of hostility, including staffing shortages, production slowdowns and
disruptions in delivery systems, our supply chain may be disrupted, limiting our ability to manufacture and distribute
Jelmyto for commercial sales and our product candidates for our clinical trials and research and development operations.
In addition, before we can begin to commercially manufacture any product candidates that receive regulatory approval in
the future other than Jelmyto, whether in a third‐party facility or in our own facility, once established, we must obtain
regulatory approval from the FDA for our manufacturing process and facility in order to sell such products in the United
States. A manufacturing authorization would also have to be obtained from the appropriate European Union regulatory
authorities in order to sell such products in the European Union. In order to obtain approval, we will need to ensure that
all of the processes, methods and equipment of such manufacturing facilities are compliant with cGMP, and perform
extensive audits of vendors, contract laboratories and suppliers. If any vendors, contract laboratories or suppliers are
found to be out of compliance with cGMP, we may experience delays or disruptions in manufacturing while we work with
these third parties to remedy the violation or while we work to identify suitable replacement vendors. The cGMP
requirements govern quality control of the manufacturing process and documentation policies and procedures. In
complying with cGMP, we will be obligated to expend time, money and effort in production, record keeping and quality
control to assure that the product meets applicable specifications and other requirements. If we fail to comply with these
requirements, we would be subject to possible regulatory action and may not be permitted to sell any product candidate
that we may develop.
Our continuing reliance on third party subcontractors and suppliers entails a number of risks, including reliance on the
third party for regulatory compliance and quality assurance, the possible breach of the manufacturing or supply
agreement by the third party, and the possible termination or nonrenewal of the agreement by the third party at a time
that is costly or inconvenient for us. In addition, third party subcontractors and suppliers may not be able to comply with
cGMP or quality system regulation ("QSR") or similar regulatory requirements outside the United States. If any of these
risks transpire, we may be unable to timely retain alternate subcontractors or suppliers on acceptable terms and with
50
sufficient quality standards and production capacity, which may disrupt and delay our clinical trials or the manufacture
and commercial sale of our in‐line or investigational product candidates, if approved.
Our failure or the failure of our third‐party subcontractors and suppliers to comply with applicable regulations could result
in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of
approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of
which could significantly and adversely affect supplies of Jelmyto, UGN‐102 or any of our other product candidates that
we may develop. Any failure or refusal to supply or any interruption in supply of the components for Jelmyto, UGN‐102 or
any other product candidates that we may develop could delay, prevent or impair our clinical development or
commercialization efforts.
We currently use single source suppliers relative to production of the RTGel products, the ureteral catheter and injector
which are required to be used with Jelmyto. Both the ureteral catheter and injector are used as part of the delivery of
Jelmyto. We are assessing second source suppliers regarding certain components of Jelmyto and are advancing these
conversations as a means to ensure both a second source and potential future reductions in cost of revenues. However,
there can be no assurance that we will be able to secure any second‐source suppliers for these key components on a
timely basis, on favorable terms, or at all.
We rely on third party transportation to deliver materials to our facilities and ship products to our customers. Transport
operators are exposed to various risks, such as extreme weather conditions, natural disasters, outbreaks of war, terrorist
attacks or other acts of hostility, work stoppages, personnel shortages, and operating hazards, as well as interstate and
international transportation requirements. In addition, transport operators were affected by the impact of COVID‐19 and
the related shipping crisis and backlog, which led to increased shipping costs and supply chain disruptions, and any future
pandemics, epidemics or public health emergencies may cause similar disruptions that may impact our operations in the
future.
If we experience transportation problems, or if there are other significant changes in the cost of these services, we may
not be able to arrange efficient alternatives and timely means to obtain materials or ship products to our customers. Our
failure to obtain such materials, ship products or maintain sufficient buffer inventory could materially and adversely
impact our business, financial condition and results of operations.
We may need to enter into agreements with additional distributors or suppliers, and there is no guarantee that we will be
able to do so on commercially reasonable terms or at all. If we are unable to maintain and, if needed, expand, our
network of specialty distributors or suppliers, this would expose us to substantial risk in our clinical development or
commercialization efforts.
Failure to obtain marketing approval in international jurisdictions would prevent our approved product, Jelmyto, and
our product candidates from being marketed abroad.
In order to market and sell our products in the European Union and other jurisdictions, we or our third‐party collaborators
must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval
procedure varies among countries and can involve additional testing. The time required to obtain approval may differ
substantially from that required to obtain FDA approval. Regulatory approval processes outside the United States
generally include all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United
States, it is required that the product be approved for reimbursement before the product can be commercialized in that
country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.
Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval
by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other
countries or jurisdictions or by the FDA. We may not be able to submit for marketing approvals and may not receive the
necessary approvals to commercialize our product candidates in any particular market. Even though Jelmyto is fully
approved for marketing in Israel, there can be no assurance that it will achieve the broad degree of physician adoption
and use, reimbursement and market acceptance necessary for commercial success.
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We rely on third parties and consultants to assist us in conducting our clinical trials for our product candidates. If these
third parties or consultants do not successfully carry out their contractual duties or meet expected deadlines, we may
be unable to obtain regulatory approval for or commercialize UGN‐102 or any of our other product candidates.
We do not have the ability to independently conduct many of our nonclinical studies or our clinical trials. We rely on
medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs to conduct clinical
trials on our product candidates. Third parties play a significant role in the conduct of our clinical trials and the
subsequent collection and analysis of data. These third parties are not our employees, and except for remedies available
to us under our agreements, we have limited ability to control the amount or timing of resources that any such third party
will devote to our clinical trials. Due to the limited drug development for non‐muscle invasive urothelial cancers over the
past 15 years, neither we nor any third‐party clinical investigators, CROs and/or consultants are likely to have extensive
experience conducting clinical trials for the indications we are targeting. If our CROs or any other third parties upon which
we rely for administration and conduct of our clinical trials do not successfully carry out their contractual duties or
obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they
obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, or for other
reasons, or if they otherwise perform in a substandard manner, our clinical trials may be extended, delayed, suspended or
terminated, and we may not be able to complete development of, obtain regulatory approval for, or successfully
commercialize UGN‐102 or any of our other product candidates.
We and the third parties upon whom we rely are required to comply with Good Clinical Practice ("GCP"), regulations,
which are regulations and guidelines enforced by regulatory authorities around the world for products in clinical
development. Regulatory authorities enforce these GCP regulations through periodic inspections of clinical trial sponsors,
principal investigators and clinical trial sites. If we or our third parties fail to comply with applicable GCP regulations, the
clinical data generated in our clinical trials may be deemed unreliable and our submission of marketing applications may
be delayed, or the regulatory authorities may require us to perform additional clinical trials before approving our
marketing applications. We cannot assure you that, upon inspection, a regulatory authority will determine that any of our
clinical trials comply or complied with applicable GCP regulations. In addition, our clinical trials must be conducted with
material produced under current GMP regulations, which are enforced by regulatory authorities. Our failure to comply
with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
Moreover, our business may be impacted if our CROs, clinical investigators or other third parties violate federal or state
fraud and abuse or false claims laws and regulations; healthcare privacy and security laws; and bribery and anti‐
corruption laws.
In order for our clinical trials to be carried out effectively and efficiently, it is imperative that our CROs and other third
parties communicate and coordinate with one another. Moreover, our CROs and other third parties may also have
relationships with other commercial entities, some of which may compete with us. Our CROs and other third parties may
terminate their agreements with us upon as few as 30 days’ notice under certain circumstances. If our CROs or other third
parties conducting our clinical trials do not perform their contractual duties or obligations, experience work stoppages, do
not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of
the clinical data they obtain is compromised due to the failure to adhere to our clinical trial protocols or GCPs, or for any
other reason, we may need to conduct additional clinical trials or enter into new arrangements with alternative CROs,
clinical investigators or other third parties. We may be unable to enter into arrangements with alternative CROs, clinical
investigators or other third parties on commercially reasonable terms, or at all. Switching or adding CROs, clinical
investigators or other third parties can involve substantial cost and require extensive management time and focus. In
addition, there is a natural transition period when a new CRO commences work. As a result, delays may occur, which can
impact our ability to meet our desired clinical development timelines. Although we carefully manage our relationship with
our CROs, clinical investigators and other third parties, there can be no assurance that we will not encounter such
challenges or delays in the future or that these delays or challenges will not have a negative impact on our business,
prospects, financial condition or results of operations.
If in the future we acquire or in‐license technologies or product candidates, we may incur various costs, may have
integration difficulties and may experience other risks that could harm our business and results of operations.
In the future, we may acquire or in‐license additional product candidates and technologies. Any product candidate or
technologies we in‐license or acquire will likely require additional development efforts prior to commercial sale, including
extensive nonclinical or clinical testing, or both, and approval by the FDA and applicable foreign regulatory authorities, if
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any. All product candidates are prone to risks of failure inherent in pharmaceutical product development, including the
possibility that the product candidate, or product developed based on in‐licensed technology, will not be shown to be
sufficiently safe and effective for approval by regulatory authorities. If intellectual property related to product candidates
or technologies we in‐license is not adequate, we may not be able to commercialize the affected products even after
expending resources on their development. In addition, we may not be able to economically manufacture or successfully
commercialize any product candidate that we develop based on acquired or in‐licensed technology that is granted
regulatory approval, and such products may not gain wide acceptance or be competitive in the marketplace. Moreover,
integrating any newly acquired or in‐licensed product candidates could be expensive and time‐consuming. If we cannot
effectively manage these aspects of our business strategy, our business may be materially harmed.
We will need to continue to increase the size of our organization. If we fail to manage our growth effectively, our
business could be disrupted.
As of January 31, 2024, we had 201 employees, of whom 40 are based in Israel and 161 are based in the United States.
We will need to continue to expand our development, quality, managerial, operational, finance, marketing, sales and
other resources to manage our operations and clinical trials, continue our development activities and commercialize our
product candidates, if approved. Our management, personnel, systems and facilities currently in place may not be
adequate to support this future growth. Our need to effectively execute our expansion strategy requires that we:
• manage our clinical trials effectively;
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identify, recruit, retain, incentivize and integrate additional employees;
• manage our internal development efforts effectively while carrying out our contractual obligations to third
parties; and
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continue to improve our operational, financial and management controls, reporting systems and procedures.
As we continue to grow as an organization, including by expanding our development efforts and building out and
developing our commercial capabilities to support our commercialization of Jelmyto, we will evaluate, and may
implement, changes to our organization that may be appropriate in order to properly manage and direct our growth and
transformation into a commercial‐stage company. Due to our limited financial resources and our limited experience in
managing a larger company, we may not be able to effectively manage the expansion of our operations or recruit and
train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert
our management and business development resources. Any inability to manage expansion or other significant changes to
our organization could delay the execution of our development, commercialization and strategic objectives or disrupt our
operations; and if we are not successful in commercializing our approved product or any of our product candidates that
may receive regulatory approval, either on our own or through collaborations with one or more third parties, our
revenues will suffer, and we would incur significant additional losses.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit
commercialization of any of our other products we develop.
We face an inherent risk of product liability as a result of the clinical testing of our product candidates and face or will face
an even greater risk with the commercialization of Jelmyto and any investigational product candidates that
receive marketing approval. For example, we may be sued if any product we develop allegedly causes injury or is found to
be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may
include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product,
negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be
required to limit commercialization of our products. Even a successful defense would require significant financial and
management resources. Regardless of the merits or eventual outcome, liability claims may result in:
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decreased demand for Jelmyto and our investigational product candidates we develop;
injury to our reputation and significant negative media attention;
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• withdrawal of clinical trial participants or cancellation of clinical trials;
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costs to defend the related litigation, which may be only partially recoverable even in the event of successful
defenses;
a diversion of management’s time and our resources;
substantial monetary awards to trial participants or patients;
regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
loss of revenues;
exhaustion of any available insurance and our capital resources; and
the inability to commercialize any product we develop.
Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to
protect against potential product liability claims could prevent or inhibit the commercialization of products we may
develop. We currently carry general clinical trial product liability insurance in an amount that we believe is adequate to
cover the scope of our ongoing clinical programs. Although we maintain such insurance, any claim that may be brought
against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our
insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions
and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay
any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not
covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Moreover, in
the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us
against losses. As a result of receiving marketing approval of Jelmyto, we have expanded our insurance coverage to
include the commercialization of Jelmyto; however, we may be unable to continue to obtain this liability insurance on
commercially reasonable terms and such insurance may be insufficient to cover our exposure. In addition, if and when we
obtain approval for marketing UGN‐102 or any other product candidate, we intend to further expand our insurance
coverage to include the commercialization of UGN‐102 or any other approved product; however, we may be unable to
obtain this additional liability insurance on commercially reasonable terms.
If we fail to attract and keep senior management and key personnel, we may be unable to successfully develop our
product candidates, conduct our clinical trials and commercialize any of the products we develop.
Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical,
scientific and other personnel. We believe that our future success is highly dependent upon the contributions of members
of our senior management, as well as our senior scientists and other members of our management team. The loss of
services of any of these individuals could delay or prevent the successful development of our product pipeline,
completion of our planned clinical trials or the commercialization of our product candidates.
Although we have not historically experienced unique difficulties in attracting and retaining qualified employees, we could
experience such problems in the future. For example, competition for qualified personnel in the pharmaceutical field is
intense due to the limited number of individuals who possess the skills and experience required by our industry. We will
need to hire additional personnel as we expand our clinical development and commercial activities. We may not be able
to attract and retain quality personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from
competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged
proprietary or other confidential information, or that their former employers own their research output.
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If our information technology systems or data, or those of third parties upon whom we rely, are or were compromised,
this could result in adverse consequences resulting from such compromise including but not limited to regulatory
investigations or actions; litigation; fines and penalties; a material disruption of our drug development
program; compromise sensitive information related to our business; harm our reputation; triggering our breach
notification obligations; prevent us from accessing critical information; disruptions of our business operations; loss of
revenue or profits; loss of customers or sales and expose us to liability or other adverse effects to our business.
In the ordinary course of our business, we, and the third parties upon which we rely, process proprietary, confidential and
sensitive information, including personal data (such as health information), intellectual property, trade secrets, and
proprietary business information owned or controlled by ourselves or other parties (collectively, sensitive information).
We, our CROs and other contractors, consultants, third‐party vendors, and other third parties on which we rely, depend
on information technology, telecommunication systems and data processing for significant elements of our operations,
including, for example, systems handling human resources, financial reporting and controls, regulatory compliance and
other infrastructure operations. Cyber‐attacks, malicious internet‐based activity, online and offline fraud, and other
similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information
technology systems, and those of the third parties upon which we rely. Such threats are prevalent and continue to rise,
are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat
actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation
states, and nation‐state‐supported actors.
Some actors now engage and are expected to continue to engage in cyber‐attacks, including without limitation nation‐
state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war
and other major conflicts, we, the third parties upon which we rely, may be vulnerable to a heightened risk of these
attacks, including retaliatory cyber‐attacks, that could materially disrupt our systems and operations, supply chain, and
ability to produce, sell and distribute our goods and services. We and the third parties upon which we rely are subject to a
variety of evolving threats, including but not limited to social‐engineering attacks (including through deep fakes, which
may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms),
malware (including as a result of advanced persistent threat intrusions), denial‐of‐service attacks, credential stuffing
attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply‐chain attacks, software bugs,
server malfunctions, software or hardware failures, loss of data or other information technology assets, adware,
telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
In particular, ransomware attacks are becoming increasingly prevalent and severe and can lead to significant
interruptions, delays, or outages in our operations, disruption of clinical trials, loss of data (including data related to
clinical trials), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of
funds. To alleviate the financial, operational and reputational impact of a ransomware attack, ransomware attack victims
may prefer to make payment demands, but if we were to be a victim of such an attack, we may be unwilling or unable to
do so (including, for example, if applicable laws or regulations prohibit such payments). Similarly, supply chain attacks
have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply
chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach or
disruption of our systems and networks or the systems or networks of third parties that support us. Remote work has
become more common and has increased risks to our information technology systems and data, as more of our
employees utilize network connections, computers and devices outside our premises or network, including working at
home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or
integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively
affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may
discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be
difficult to integrate companies into our information technology environment and security program.
We rely on third‐party service providers and technologies to operate critical business systems to process sensitive
information in a variety of contexts, including, without limitation, cloud‐based infrastructure, data center facilities,
encryption and authentication technology, employee email, content delivery to customers, and other functions. Our
ability to monitor these third parties’ information security practices is limited, and these third parties may not have
adequate information security measures in place. If our third‐party service providers experience a security incident or
other interruption, we could experience adverse consequences. While we may be entitled to damages if our third‐party
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service providers fail to satisfy their privacy or security‐related obligations to us, any award may be insufficient to cover
our damages, or we may be unable to recover such award.
While we have implemented security measures designed to protect against security incidents, there can be no assurance
that these measures will be effective. We take steps to detect and remediate vulnerabilities in our information systems
(such as our hardware and/or software, including that of third parties upon which we rely), but we may be unable to
detect and remediate all vulnerabilities on a timely basis in our information technology systems because such threats and
techniques used to exploit the vulnerability change frequently and are often sophisticated in nature. Despite our efforts
to identify and address vulnerabilities, if any, in our information technology systems, our efforts may not be successful.
Further, we may experience delays in developing and deploying remedial measures designed to address any such
identified vulnerabilities. Therefore, such vulnerabilities could be exploited and result in a security incident, which may
not be detected until after the incident has occurred.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in
unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or
access to our sensitive information or our information technology systems, or those of the third parties upon whom we
rely. A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to
operate our business. Additionally, our sensitive information could be leaked, disclosed, or revealed as a result of or in
connection with our employees', personnel’s, or vendors' use of generative AI technologies.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try to
protect against security incidents. Certain data privacy and security obligations may require us to implement and maintain
specific security measures or industry‐standard or reasonable security measures to protect our information technology
systems and sensitive information.
Additionally, applicable data privacy and security obligations and public company disclosure obligations may require us to
notify relevant stakeholders, including affected individuals, regulators and investors, of certain security incidents. Such
disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse
consequences. If we (or a third party upon whom we rely) experience a security incident or are perceived to have
experienced a security incident, we may experience adverse consequences. These consequences may include:
government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional
reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data);
litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund
diversions; diversion of management attention; interruptions in our operations (including availability of data); financial
loss; and other similar harms. For example, failures or significant downtime of our information technology or
telecommunication systems or those used by our third‐party service providers could cause significant interruptions in our
operations and adversely impact the confidentiality, integrity and availability of sensitive information, including
preventing us from conducting clinical trials, tests or research and development activities and preventing us from
managing the administrative aspects of our business. In addition, the loss of clinical trial data from completed, ongoing or
planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to
recover or reproduce the data. To the extent that any disruption or security incident results in a loss of or damage to our
data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the
further development of our product candidates could be delayed. If the information technology systems of our third‐party
vendors and other contractors become subject to disruptions or security incidents, we may have insufficient recourse
against such third parties and may have to expend significant resources to mitigate the impact of such an event, and to
develop and implement protections to prevent future events of this nature from occurring. In addition, whether a
cybersecurity incident is reportable to our investors may not be straightforward, may take considerable time to
determine, and may be subject to change as the investigation of the incident progresses, including changes that may
significantly alter any initial disclosure we provide. Moreover, experiencing a material cybersecurity incident and any
mandatory disclosures could lead to negative publicity, loss of investor, customer or partner confidence in the
effectiveness of our cybersecurity measures, diversion of management’s attention, governmental investigations, lawsuits,
and the expenditure of significant capital and other resources.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations
of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and
security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to
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mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on
commercially reasonable terms or at all, or that such coverage will pay future claims.
Under applicable employment laws, we may not be able to enforce covenants not to compete.
We generally enter into non‐competition agreements as part of our employment agreements with our employees. These
agreements generally prohibit our employees, if they cease working for us, from competing directly with us or working for
our competitors or clients for a limited period. We may be unable to enforce these agreements under the laws of the
jurisdictions in which our employees work, and it may be difficult for us to restrict our competitors from benefitting from
the expertise our former employees or consultants developed while working for us.
For example, Israeli labor courts have required employers seeking to enforce non‐compete undertakings of a former
employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of
material interests of the employer which have been recognized by the courts as justification for the enforcement of non‐
compete undertakings, such as the protection of a company’s trade secrets or other intellectual property.
Additionally, on July 9, 2021, President Biden signed an executive order encouraging the Federal Trade Commission
(“FTC”) to curtail unfair use of non‐compete agreements and other agreements that may unfairly limit worker mobility.
While we cannot predict how the initiatives set forth in the executive order will be implemented or, as a result, the
impact that the executive order will have on our operations, there is now increased uncertainty regarding the long‐term
enforceability of our non‐compete agreements. In January 2023, the FTC proposed a rule that, if enacted, would prohibit
employers from entering into non‐compete clauses with workers and require employers to rescind existing non‐complete
clauses. Moreover, the law governing non‐compete agreements and other forms of restrictive covenants varies from state
to state within the U.S. and some states are reluctant to strictly enforce non‐compete agreements.
Our employees, independent contractors, clinical investigators, CROs, consultants and vendors may engage in
misconduct or other improper activities, including noncompliance with regulatory standards and requirements and
insider trading.
We are exposed to the risk that our employees, independent contractors, clinical investigators, CROs, consultants and
vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional,
reckless and/or negligent conduct, breach of contract or other unauthorized activities that violate: FDA regulations,
including those laws requiring the reporting of true, complete and accurate information to the FDA; manufacturing
standards; federal, state and foreign healthcare fraud and abuse laws; buying or selling of our ordinary shares while in
possession of material non‐public information; or laws that require the reporting of financial information or data
accurately.
Specifically, research, sales, marketing, education and other business arrangements in the healthcare industry are subject
to extensive laws intended to prevent fraud, misconduct, kickbacks, self‐dealing and other abusive practices. These laws
may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer
incentive and other business arrangements. Activities subject to these laws also include the improper use of information
obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We
have adopted a Corporate Code of Ethics and Conduct and a Compliance Program, but it is not always possible to identify
and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this
activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental
investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions
are instituted against us, even if we are successful in defending ourselves or asserting our rights, those actions could have
a significant impact on our business. Violations of such laws subject us to numerous penalties, including, but not limited
to, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement,
imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement
or similar agreement to resolve allegations of non‐compliance with these laws, possible exclusion from participation in
Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits
and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our
business and our results of operations.
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Most states also have statutes or regulations similar to these federal laws, which may apply to items such as
pharmaceutical products and services reimbursed by private insurers. We and/or our future partners may be subject to
administrative, civil and criminal sanctions for violations of any of these federal and state laws. Pharmaceutical and other
healthcare companies have been prosecuted under these laws for a variety of promotional and marketing activities, such
as: providing free trips, free goods, improper consulting fees and grants and other monetary benefits to prescribers;
reporting to pricing services inflated average wholesale prices that were then used by federal programs to set
reimbursement rates; engaging in off‐label promotion; and submitting inflated best price information to the Medicaid
Rebate Program to reduce liability for Medicaid rebates. Ensuring that our internal operations and future business
arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs. It is
possible that governmental authorities will conclude that our business practices do not comply with current or future
statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and
regulations, which could have a significant impact on the conduct of our business.
Our business involves the use of hazardous materials and we and our third‐party manufacturers and suppliers must
comply with environmental laws and regulations, which can be expensive and restrict how we do business.
Our research and development activities and our third‐party subcontractors’ and suppliers’ activities involve the
controlled storage, use, transportation and disposal of hazardous materials owned by us, including mitomycin, key
components of our product candidates, and other hazardous compounds. We and our manufacturers and suppliers are
subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous
materials. Despite our efforts, we cannot eliminate the risk of contamination. This could cause an interruption of our
commercialization efforts and business operations, environmental damage resulting in costly clean‐up and liabilities
under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified
waste products. Although we believe that the safety procedures utilized by us and our subcontractors and suppliers for
handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations,
we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.
In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state
or federal or other applicable authorities may curtail our use of certain materials and interrupt our business operations.
Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more
stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance.
Exchange rate fluctuations between the U.S. Dollar and the New Israeli Shekel may negatively affect our earnings.
The U.S. dollar is our functional and reporting currency. However, a significant portion of our operating expenses are
incurred in NIS, which is the lawful currency of the State of Israel. As a result, we are exposed to the risks that the NIS may
appreciate relative to the dollar, or, if the NIS instead devalues relative to the dollar, that the inflation rate in Israel may
exceed such rate of devaluation of the NIS, or that the timing of such devaluation may lag behind inflation in Israel. In any
such event, the dollar cost of our operations in Israel would increase and our dollar‐denominated results of operations
would be adversely affected. For example, the dollar appreciated against the NIS during 2023 by a total of 2.4%. We
cannot predict any future trends in the rate of inflation in Israel or the rate of devaluation (if any) of the NIS against the
dollar. If the dollar cost of our operations in Israel increases, our dollar‐measured results of operations will be adversely
affected.
Our business could be adversely affected by the effects of health pandemics, epidemics or other public health
emergencies.
A pandemic, epidemic or other public health emergencies pose the risk that we or our employees, contractors, suppliers,
customers, and other partners may be prevented from conducting certain business activities for an indefinite period of
time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated
by governmental authorities. For example, COVID‐19 and mitigation measures to slow its spread had an adverse impact
on global economic conditions. While it is not possible at this time to estimate the impact that any such pandemic,
epidemic or other public health emergency could have on our business, if such an event were to occur, it could have an
adverse impact on global economic conditions which could have an adverse effect on our business and financial condition,
including impairing our ability to raise capital when needed. The measures that may be taken by various governments, in
response to a pandemic, epidemic or other public health emergency could disrupt the supply chain of material needed for
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our product candidates and our approved product, Jelmyto, interrupt healthcare services, delay coverage decisions from
Medicare and third party payors, delay ongoing and planned clinical trials involving our product candidates, curtail access
to hospitals, surgery centers, clinics, healthcare providers and pharmacies by our sales force and have a material adverse
effect on our business, financial condition and results of operations.
To the extent any future pandemics, epidemics or public health emergencies adversely affects our business and financial
results, it may also have the effect of heightening many of the other risks described in the “Risk Factors” section of this
report.
Certain of our clinical trials and other significant operations (including our Israeli corporate offices and contract
manufacturers) are located outside of the United States and, therefore, our results may be adversely affected by
geopolitical, economic and military instability.
Certain of our clinical trials operate outside the U.S. and certain of our research and development facilities and key
vendors and suppliers are located in Israel. If any of these current or future trials or the related facilities or our or our
vendors' and suppliers' facilities in Israel were to be damaged, destroyed or otherwise unable to operate, whether due to
war, acts of hostility, earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee
malfeasance, terrorist acts, pandemic, power outages or otherwise, or if performance of our clinical trials are disrupted
for any other reason, such an event could cause significant development and product delays. If we experience delays in
achieving our development objectives within a timeframe that meets our prospective customers’ expectations, our
business, prospects, financial results and reputation could be harmed.
Geopolitical, economic and military conditions around the world may directly affect our business. Any hostilities involving
any of the countries in which we operate, including terrorist activities, political instability or violence in the region or the
interruption or curtailment of trade or transport between such country and its trading partners could adversely affect our
operations and results of operations and adversely affect the market price of our ordinary shares.
Our business activities may be subject to the FCPA and similar anti‐bribery and anti‐corruption laws of other countries
in which we operate, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and
regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject
us to liability if we violate them.
We currently dedicate certain resources to comply with numerous laws and regulations in each jurisdiction in which we
operate outside of the United States. Our business activities in these foreign countries may be subject to the FCPA and
similar anti‐bribery or anti‐corruption laws, regulations or rules of other countries in which we operate.
The FCPA generally prohibits companies and their employees and third party intermediaries from offering, promising,
giving or authorizing the provision of anything of value, either directly or indirectly, to a non‐U.S. government official in
order to influence official action or otherwise obtain or retain business. The FCPA also requires public companies to make
and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and
maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves
significant interaction with public officials, including officials of non‐U.S. governments. Additionally, in many other
countries, hospitals owned and operated by the government, and doctors and other hospital employees would be
considered foreign officials under the FCPA. Recently the SEC and U.S. Department of Justice have increased their FCPA
enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our
employees, agents or contractors, or those of our affiliates, will comply with all applicable laws and regulations,
particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in fines,
criminal sanctions against us, our officers or our employees, disgorgement, and other sanctions and remedial measures,
and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our
product in one or more countries and could materially damage our reputation, our brand, our international activities, our
ability to attract and retain employees and our business.
In addition, our product and activities may be subject to U.S. and foreign export controls, trade sanctions and import laws
and regulations. Governmental regulation of the import or export of our product, or our failure to obtain any required
import or export authorization for our product, when applicable, could harm our international sales and adversely affect
our revenue. Compliance with applicable regulatory requirements regarding the export of our product may create delays
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in the introduction of our product in international markets or, in some cases, prevent the export of our product to some
countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the shipment of certain
products and services to countries, governments, and persons targeted by U.S. sanctions. If we fail to comply with export
and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain
export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the
enforcement or scope of existing regulations, or in the countries, persons, or product targeted by such regulations, could
result in decreased use of our product by, or in our decreased ability to export our product to existing or potential
customers with international operations. Any decreased use of our product or limitation on our ability to export or sell
access to our product would likely significantly harm our business, financial condition, results of operations and prospects.
Risks Related to Our Intellectual Property
If our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our product
candidates and technologies are not adequate, we may not be able to compete effectively, and we otherwise may be
harmed.
Our commercial success depends in part upon our ability to obtain and maintain patent protection and utilize trade secret
protection for our proprietary technologies, our products and their uses, as well as our ability to operate without
infringing upon the proprietary rights of others. We rely upon a combination of patents, trade secret protection and
confidentiality agreements, assignment of invention agreements and other contractual arrangements to protect the
intellectual property related to hydrogel‐based pharmaceutical compositions for optimal delivery of a drug in internal
cavities such as the bladder, the method for treating cancer, in particular urothelial and bladder cancer using hydrogel‐
based compositions, the method for treating overactive bladder topically without the need for injections, including an in‐
dwelling ureter catheter system for optimal delivery of a drug into the renal cavity.
We seek patent protection for our product candidates, and we hold a broad collection of intellectual property comprised
of issued patents, in‐licensed patents, pending patent applications, trade secrets and trademarks covering our proprietary
RTGel technology, the pharmaceutical compositions, methods of use and manufacturing aspects of our product
candidates. In the United States, we currently hold 19 granted patents that are directed to protect our approved product,
Jelmyto and our lead product candidate, UGN‐102, as well as UGN‐103 and UGN‐104, a proprietary
RTGel technology, local compositions comprising different active ingredients, inter alia compositions comprising a
Botulinum Toxin, UGN‐201, the use of UGN‐201 and UGN‐301, and our future product candidates that are under company
research. These IP rights relate to certain aspects of cancer treatment. These issued patents are set to expire between
2024 and 2037. In total, our IP portfolio includes 43 granted patents worldwide, and more than 45 pending patent
applications filed in the U.S., Europe, Israel, Japan, Canada, China, Mexico and Australia that are directed to cover various
methods, systems and compositions for treating cancer locally, by intravesical means, utilize various active ingredients
and the combinations thereof. These patent applications, if issued, are set to expire between 2031 and 2043.
Limitations on the scope of our intellectual property rights may limit our ability to prevent third parties from designing
around such rights and competing against us. For example, our patents do not claim a new compound. Rather, the active
pharmaceutical ingredients of our products are known compounds and our patents and pending patent applications are
directed inter alia to novel formulations of these known compounds with our proprietary RTGel technology. Accordingly,
other parties may compete with us, for example, by independently developing or obtaining competing topical
formulations that design around our patent claims, but which may contain the same active ingredients, or by seeking to
invalidate our patents. Any disclosure of or misappropriation by third parties of our confidential proprietary information
could enable competitors to quickly duplicate or surpass our technological achievements, eroding our competitive
position in the market.
We will not necessarily seek to protect our intellectual property rights in all jurisdictions throughout the world and we
may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.
One or more of the patent applications that we filed, or license may fail to result in granted patents in the United States
or foreign jurisdictions, or if granted may fail to prevent a potential infringer from marketing its product or be deemed
invalid and unenforceable by a court. Competitors in the field of reverse thermal gel therapies have created a substantial
amount of scientific publications, patents and patent applications and other materials relating to their technologies. Our
ability to obtain and maintain valid and enforceable patents depends on various factors, including interpretation of our
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technology and the prior art and whether the differences between them allow our technology to be patentable. Patent
applications and granted patents are complex, lengthy and highly technical documents that are often prepared under
limited time constraints and may not be free from errors that make their interpretation uncertain. The existence of errors
in a patent may have an adverse effect on the patent, its scope and its enforceability. Our pending patent applications
may not issue, and the scope of the claims of patent applications that do issue may be too narrow to adequately protect
our competitive advantage. Also, our granted patents may be subject to challenges or narrowly construed and may not
provide adequate protection.
We may be subject to claims that we infringe, misappropriate or otherwise violate the intellectual property rights of
third parties.
Even if our patents do successfully issue, third parties may challenge the validity, enforceability or scope of such granted
patents or any other granted patents we own or license, which may result in such patents being narrowed, invalidated or
held unenforceable. For example, patents granted by the European Patent Office may be opposed by any person within
nine months from the publication of their grant. Also, patents granted by the USPTO may be subject to reexamination and
other challenges.
Pharmaceutical patents and patent applications involve highly complex legal and factual questions, which, if determined
adversely to us, could negatively impact our patent position. There is significant litigation activity in the pharmaceutical
industry regarding patent and other intellectual property rights. Such litigation could result in substantial costs and be a
distraction to management and other employees.
The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal
and factual questions. The interpretation and breadth of claims allowed in some patents covering pharmaceutical
compositions may be uncertain and difficult to determine and are often affected materially by the facts and
circumstances that pertain to the patented compositions and the related patent claims. Furthermore, even if they are not
challenged, our patents and patent applications may not adequately protect our intellectual property or prevent others
from designing around our claims. To meet such challenges, which are part of the risks and uncertainties of developing
and marketing product candidates, we may need to evaluate third party intellectual property rights and, if appropriate, to
seek licenses for such third party intellectual property or to challenge such third party intellectual property, which may be
costly and may or may not be successful, which could also have an adverse effect on the commercial potential for
Jelmyto, UGN‐102 and any of our other product candidates.
We may receive only limited protection, or no protection, from our issued patents and patent applications.
There can be no assurance that the patent applications will be granted. The term of individual patents depends upon the
legal term of the patents in the countries in which they are obtained.
The patent application process, also known as patent prosecution, is expensive and time consuming, and we or any future
licensors and licensees may not be able to prepare, file and prosecute all necessary or desirable patent applications at a
reasonable cost or in a timely manner. It is also possible that we or any future licensors or licensees will fail to identify
patentable aspects of inventions made in the course of development and commercialization activities before it is too late
to obtain patent protection on them. Therefore, these and any of our patents and applications may not be prosecuted
and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the
preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect
to proper priority claims, inventorship, etc., although we are unaware of any such defects that we believe are of material
import. If we or any future licensors or licensees fail to establish, maintain or protect such patents and other intellectual
property rights, such rights may be reduced or eliminated. If any future licensors or licensees are not fully cooperative or
disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be
compromised. If there are material defects in the form or preparation of our patents or patent applications, such patents
or applications may be invalid and unenforceable. Any of these outcomes could impair our ability to prevent competition
from third parties, which may have an adverse impact on our business.
The strength of patents in the pharmaceutical field involves complex legal and scientific questions and can be uncertain.
This uncertainty includes changes to the patent laws through either legislative action to change statutory patent law or
court action that may reinterpret existing law in ways affecting the scope or validity of issued patents. The patent
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applications that we own or in‐license may fail to result in issued patents in the United States or foreign countries with
claims that cover our product candidates. Even if patents do successfully issue from the patent applications that we own
or in‐license, third parties may challenge the validity, enforceability or scope of such patents, which may result in such
patents being narrowed, invalidated or held unenforceable. For example, patents granted by the European Patent Office
may be challenged, also known as opposed, by any person within nine months from the publication of their grant. Any
successful challenge to our patents could deprive us of exclusive rights necessary for the successful commercialization of
our product candidates. Furthermore, even if they are unchallenged, our patents may not adequately protect our product
candidates, provide exclusivity for our product candidates, or prevent others from designing around our claims. If the
breadth or strength of protection provided by the patents we hold or pursue with respect to our product candidates is
challenged, it could dissuade companies from collaborating with us to develop or threaten our ability to commercialize
our product candidates.
Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed.
Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent
protection for our product candidates, we may be open to competition from generic versions of our product candidates.
On February 25, 2024, we received a Paragraph IV Certification Notice Letter from Teva, providing notification that Teva
has submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of Jelmyto. In the Notice
Letter, Teva alleges that two of the patents listed in the FDA Orange Book for Jelmyto, U.S. Patent Numbers 9,040,074 and
9,950,069 each of which expires in January 2031, are invalid, unenforceable, or will not be infringed by Teva’s
manufacture, use, or sale of the generic product described in its ANDA submission. If we are unable to maintain patent
protection for Jelmyto, Jelmyto will be subject to immediate competition from generic entrants after regulatory exclusivity
expires in April 2027. Further, if we encounter delays in our development efforts, including our clinical trials, the period of
time during which we could market our product candidates under patent protection would be reduced.
A considerable number of our patents and patent applications are entitled to effective filing dates prior to March 16,
2013. For U.S. patent applications in which patent claims are entitled to a priority date before March 16, 2013, an
interference proceeding can be provoked by a third party, for example a competitor, or instituted by the USPTO to
determine who was the first to invent any of the subject matter covered by those patent claims. An unfavorable outcome
could require us to cease using the related technology or to attempt to license rights from the prevailing party. Our
business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our
participation in an interference proceeding may fail and, even if successful, may result in substantial costs and distract our
management.
Our trade secrets may not have sufficient intellectual property protection.
In addition to the protection afforded by patents, we also rely on trade secret protection to protect proprietary know‐
how that may not be patentable or that we elect not to patent, processes for which patents may be difficult to obtain or
enforce, and any other elements of our product candidates, and our product development processes (such as
manufacturing and formulation technologies) that involve proprietary know‐how, information or technology that is not
covered by patents. However, trade secrets can be difficult to protect. If the steps taken to maintain our trade secrets are
deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secrets.
Misappropriation or unauthorized disclosure of our trade secrets could significantly affect our competitive position and
may have an adverse effect on our business. Furthermore, trade secret protection does not prevent competitors from
independently developing substantially equivalent information and techniques and we cannot guarantee that our
competitors will not independently develop substantially equivalent information and techniques. The FDA, as part of its
Transparency Initiative, is currently considering whether to make additional information publicly available on a routine
basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear
at the present time how the FDA’s disclosure policies may change in the future, if at all.
In an effort to protect our trade secrets and other confidential information, we require our employees, consultants,
advisors, and any other third parties that have access to our proprietary know‐how, information or technology, for
example, third parties involved in the formulation and manufacture of our product candidates, and third parties involved
in our clinical trials to execute confidentiality agreements upon the commencement of their relationships with us. These
agreements require that all confidential information developed by the individual or made known to the individual by us
during the course of the individual’s relationship with us is kept confidential and not disclosed to third parties. However,
we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed despite
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having such confidentiality agreements. Adequate remedies may not exist in the event of unauthorized use or disclosure
of our trade secrets. In addition, in some situations, these confidentiality agreements may conflict with, or be subject to,
the rights of third parties with whom our employees, consultants, or advisors have previous employment or consulting
relationships. To the extent that our employees, consultants or contractors use any intellectual property owned by third
parties in their work for us, disputes may arise as to the rights in any related or resulting know‐how and inventions. If we
are unable to prevent unauthorized material disclosure of our trade secrets to third parties, we may not be able to
establish or maintain a competitive advantage in our market, which could harm our business, operating results and
financial condition.
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our
products.
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property,
particularly on obtaining and enforcing patents. Obtaining and enforcing patents in the pharmaceutical industry involves
both technological and legal complexity, and therefore, is costly, time‐consuming and inherently uncertain. In addition,
the United States has recently enacted and is currently implementing wide‐ranging patent reform legislation. Further,
recent U.S. Supreme Court rulings have either narrowed the scope of patent protection available in certain circumstances
or weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our
ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of
patents, once obtained.
For our U.S. patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level
of uncertainty in the patent law. In September 2011, the Leahy‐Smith America Invents Act, or the America Invents
Act ("AIA"), was signed into law. The AIA includes a number of significant changes to U.S. patent law, including provisions
that affect the way patent applications will be prosecuted and may also affect patent litigation. The USPTO is currently
developing regulations and procedures to govern administration of the AIA, and many of the substantive changes to
patent law associated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of our
business. Moreover, the AIA and its implementation could increase the uncertainties and costs surrounding the
prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our
business and financial condition.
An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a “first‐to‐file”
system for deciding which party should be granted a patent when two or more patent applications are filed by different
parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before us
could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made
by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent
application. Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the
differences between our technology and the prior art allow our technology to be patentable over the prior art. Since
patent applications in the United States and most other countries are confidential for a period of time after filing, we
cannot be certain that we were the first to either (i) file any patent application related to our product candidates or
(ii) invent any of the inventions claimed in our patents or patent applications.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent
infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO. This applies to
all of our U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO
proceedings compared to the evidentiary standard in a United States federal court necessary to invalidate a patent claim,
a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid
even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have
been invalidated if first challenged by the third party as a defendant in a district court action.
Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing
patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our
existing patents and patents that we might obtain in the future.
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Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee
payment and other requirements imposed by governmental patent agencies, and our patent protection could be
reduced or eliminated for non‐compliance with these requirements.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural,
documentary, fee payment and other similar provisions during the patent prosecution process.
Periodic maintenance fees and various other governmental fees on any issued patent and/or pending patent applications
are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent or patent
application. We have systems in place to remind us to pay these fees, and we employ an outside firm and rely on our
outside counsel to pay these fees. While an inadvertent lapse may sometimes be cured by payment of a late fee or by
other means in accordance with the applicable rules, there are many situations in which noncompliance can result in
abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the
relevant jurisdiction. If we fail to maintain the patents and patent applications directed to our product candidates, our
competitors might be able to enter the market earlier than should otherwise have been the case, which could harm our
business.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be
prohibitively expensive. The requirements for patentability may differ in certain countries, particularly developing
countries. For example, unlike other countries, China has a heightened requirement for patentability, and specifically
requires a detailed description of medical uses of a claimed drug. In addition, the laws of some foreign countries do not
protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to
prevent third parties from practicing our inventions in all countries outside the United States. Competitors may use our
technologies in jurisdictions where we have not obtained patent protection to develop their own products and further,
may export otherwise infringing products to territories where we have patent protection, but enforcement on infringing
activities is inadequate. These products may compete with our products, and our patents or other intellectual property
rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in
foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the
enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which
could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of
our proprietary rights generally.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and
attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly
and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not
prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially
meaningful. In addition, certain countries in Europe and certain developing countries, including India and China, have
compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those
countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our
patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue
opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to
obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to
protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign
intellectual property laws.
If we are unable to protect our trademarks from infringement, our business prospects may be harmed.
We filed applications for trademarks (Jelmyto®, RTGel®, and UroGen®) that identify our branding elements, such as
Jelmyto and our unique technology in the United States, Europe, Japan and China. Although we take steps to monitor the
possible infringement or misuse of our trademarks, it is possible that third parties may infringe, dilute or otherwise violate
our trademark rights. Any unauthorized use of our trademarks could harm our reputation or commercial interests. In
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addition, our enforcement against third‐party infringers or violators may be unduly expensive and time‐consuming, and
the outcome may be an inadequate remedy.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property rights or the
patents of our licensors, which could be expensive and time consuming.
Third parties may infringe or misappropriate our intellectual property, including our existing patents, patents that may
issue to us in the future, or the patents of our licensors to which we have a license. As a result, we may be required to file
infringement claims to stop third‐party infringement or unauthorized use. Further, we may not be able to prevent, alone
or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not
protect those rights as fully as in the United States.
Drug manufacturers may develop, seek approval for, and launch generic versions of our products. For example, in
February 2024, we received a Paragraph IV certification notice letter from Teva Pharmaceuticals, Inc. (“Teva”) providing
notification to us that Teva has submitted an ANDA to the FDA seeking approval to manufacture, use, or sell a generic
version of Jelmyto. If we do not file a patent infringement lawsuit against a generic manufacturer within 45 days of
receiving notice of its Paragraph IV certification, the ANDA applicant may not be subject to a 30‐month stay. If we file an
infringement action against a generic drug manufacturer, that company may challenge the scope, validity or
enforceability of our or our licensors’ patents, requiring us and/or our licensors to engage in complex, lengthy and costly
litigation or other proceedings.
In addition, if we or one of our licensors initiated legal proceedings against a third party to enforce a patent covering our
product candidates, the defendant could counterclaim that the patent covering our product candidates is invalid and/or
unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or
unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or
unenforceability of a patent.
Furthermore, within and outside of the United States, there has been a substantial amount of litigation and
administrative proceedings, including interference and reexamination proceedings before the USPTO or oppositions and
other comparable proceedings in various foreign jurisdictions, regarding patent and other intellectual property rights in
the pharmaceutical industry. Recently, the AIA introduced new procedures including inter partes review and post grant
review. The implementation of these procedures brings uncertainty to the possibility of challenges to our patents in the
future, including challenges by competitors who perceive our patents as blocking entry into the market for their products,
and the outcome of such challenges.
Such litigation and administrative proceedings could result in revocation of our patents or amendment of our patents
such that they do not cover our product candidates. They may also put our pending patent applications at risk of not
issuing or issuing with limited and potentially inadequate scope to cover our product candidates. The outcome following
legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we
cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during
prosecution. Additionally, it is also possible that prior art of which we are aware, but which we do not believe affects the
validity or enforceability of a claim, may, nonetheless, ultimately be found by a court of law or an administrative panel to
affect the validity or enforceability of a claim. If a defendant were to prevail on a legal assertion of invalidity and/or
unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a
loss of patent protection could have a negative impact on our business.
Enforcing our or our licensors’ intellectual property rights through litigation is very expensive, particularly for a company
of our size, and time‐consuming. Some of our competitors may be able to sustain the costs of litigation more effectively
than we can because of greater financial resources. Patent litigation and other proceedings may also absorb significant
management time.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our
ability to compete in the marketplace. The occurrence of any of the foregoing could harm our business, financial condition
or results of operations.
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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation
or administrative proceedings, there is a risk that some of our confidential information could be compromised by
disclosure. In addition, during the course of litigation or administrative proceedings, there could be public
announcements of the results of hearings, motions or other interim proceedings or developments or public access to
related documents. If investors perceive these results to be negative, the market price for our ordinary shares could be
significantly harmed.
We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees,
which could result in litigation and adversely affect our business.
A significant portion of our intellectual property has been developed by our employees during their employment. Our
employees execute agreements that assign to us any ownership interest in a patent or patent application created in the
scope of the employee’s employment. In Israel, the Israeli Patent Law, 5727‐1967, or the Patent Law, provides that
inventions conceived by an employee during the scope of his or her employment with a company are regarded as “service
inventions.” Accordingly, our employees in Israel also enter into agreements that, among other things, waive the right to
special remuneration for service inventions created in the scope of their employment or engagement. The Israeli
Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, has previously held,
in certain cases, that employees may be entitled to remuneration for service inventions that they develop during their
service for a company despite their explicit waiver of such right. Therefore, although we enter into agreements with our
Israeli employees that waive their right to special remuneration for service inventions created in the scope of their
employment or engagement, we may nonetheless face claims by employees demanding remuneration beyond their
regular salary and benefits.
Third‐party claims alleging intellectual property infringement may adversely affect our business.
Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third
parties, for example, the intellectual property rights of competitors. Our commercialization activities may be subject to
claims that we infringe or otherwise violate patents owned or controlled by third parties. Numerous U.S. and foreign
issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are
developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are
issued, the risk increases that our activities related to our product candidates may give rise to claims of infringement of
the patent rights of others. We cannot assure you that our product candidates will not infringe existing or future patents.
We may unknowingly infringe existing patents by commercialization of our product candidates. It is also possible that
patents of which we are aware, but which we do not believe are relevant to our product candidates, could nevertheless
be found to be infringed by our product candidates. Nevertheless, we are not aware of any issued patents that we believe
would prevent us from marketing our product candidates, if approved. There may also be patent applications that have
been filed but not published that, when issued as patents, could be asserted against us.
Third parties making claims against us for infringement or misappropriation of their intellectual property rights may seek
and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and
commercialize our product candidates. Further, if a patent infringement suit were brought against us, we could be forced
to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of
the suit. Defense of these claims, regardless of their merit, would cause us to incur substantial expenses, and would be a
substantial diversion of management time and employee resources from our business. In the event of a successful claim
of infringement against us by a third party, we may have to (i) pay substantial damages, including treble damages and
attorneys’ fees if we are found to have willfully infringed the third party’s patents; (ii) obtain one or more licenses from
the third party; (iii) pay royalties to the third party; and/or (iv) redesign any infringing products. Redesigning any infringing
products may be impossible or require substantial time and monetary expenditures. Further, we cannot predict whether
any required license would be available at all or whether it would be available on commercially reasonable terms. In the
event that we could not obtain a license, we may be unable to further develop and commercialize our product candidates,
which could harm our business significantly. Even if we are able to obtain a license, the license would likely obligate us to
pay license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our
competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a
product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent
infringement claims, we are unable to enter into licenses on acceptable terms.
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Defending ourselves or our licensors in litigation is very expensive, particularly for a company of our size, and time‐
consuming. Some of our competitors may be able to sustain the costs of litigation or administrative proceedings more
effectively than we can because of greater financial resources. Patent litigation and other proceedings may also absorb
significant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other
proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing could harm
our business, financial condition or results of operations.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or
disclosed confidential information of third parties.
We employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be
subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise
improperly used or disclosed confidential information of these third parties or our employees’ former employers. Further,
we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or
others who are involved in developing our product candidates. We may also be subject to claims that former employees,
consultants, independent contractors, collaborators or other third parties have an ownership interest in our patents or
other intellectual property. Litigation may be necessary to defend against these and other claims challenging our right to
and use of confidential and proprietary information. If we fail in defending any such claims, in addition to paying
monetary damages, we may lose our rights therein. Such an outcome could have a negative impact on our business. Even
if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our
management and employees.
Risks Related to Government Regulation
If the FDA does not conclude that UGN‐102 satisfies the requirements under 505(b)(2), or if the requirements for our
product candidates are not as we expect, the approval pathway for these product candidates will likely take
significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated,
and in either case may not be successful.
The Drug Price Competition and Patent Term Restoration Act of 1984 (the "Hatch‐Waxman Act"), added 505(b)(2) to the
FDCA. 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from
studies that were not conducted by or for the applicant, and for which the applicant has not received a right of reference,
which could expedite the development program for UGN‐102 and our other product candidates by potentially decreasing
the amount of nonclinical and clinical data that we would need to generate in order to obtain FDA approval. However,
while we believe that our product candidates are reformulations of existing drugs and, therefore, will not be treated as
NCEs, the submission of an NDA under the 505(b)(2) pathway does not preclude the FDA from determining that the
product candidate that is the subject of such submission is an NCE and therefore not eligible for review under such
regulatory pathway.
If the FDA does not allow us to pursue the 505(b)(2) pathway as anticipated, we may need to conduct additional
nonclinical experiments and clinical trials, provide additional data and information, and meet additional standards for
regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for these
product candidates, and complications and risks associated with these product candidates, would likely increase
significantly. Moreover, inability to pursue the 505(b)(2) pathway could result in new competitive products reaching the
market more quickly than our product candidates, which would likely harm our competitive position and prospects. Even
if we are allowed to pursue the 505(b)(2) pathway, our product candidates may not receive the requisite approvals for
commercialization.
In addition, notwithstanding the approval of a number of products by the FDA under 505(b)(2) certain competitors and
others have objected to the FDA’s interpretation of 505(b)(2). If the FDA’s interpretation of 505(b)(2) is successfully
challenged, the FDA may be required to change its 505(b)(2) policies and practices, which could delay or even prevent the
FDA from approving any NDA that we submit under 505(b)(2). In addition, the pharmaceutical industry is highly
competitive, and 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of
previously approved drugs that are referenced in a 505(b)(2) NDA. These requirements may give rise to patent litigation
and mandatory delays in approval of our potential future NDAs for up to 30 months depending on the outcome of any
litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to
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delay approval of, or impose additional approval requirements for, pending competing products. If successful, such
petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately
denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In
addition, even if we are able to utilize the 505(b)(2) regulatory pathway for our product candidates, there is no guarantee
this would ultimately lead to faster product development or earlier approval.
Moreover, even if these product candidates are approved under the 505(b)(2) pathway, as the case may be, the approval
may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of
approval or may contain requirements for costly post‐marketing testing and surveillance to monitor the safety or efficacy
of the products.
In addition, there have been a number of recent regulatory and legislative initiatives designed to encourage generic
competition for pharmaceutical products, including expedited review procedures for generic manufacturers and
incentives designed to spur generic competition of branded drugs. In particular, the FDA and the FTC have been focused
on brand companies’ denial of drug supply to potential generic competitors for testing. In December 2019, the CREATES
Act was enacted, which provides a legislatively defined private right of action under which generic companies can bring
suit against companies who refuse access to product for the bioequivalence testing needed to support approval of a
generic product.
We cannot currently predict the specific outcome or impact on our business of such regulatory and legislative initiatives,
litigation or investigation. However, it is our policy, which is in compliance with the CREATES Act, to evaluate requests for
samples of our approved product, and to provide samples in response to bona fide requests from qualified third parties,
including generic manufacturers, subject to specified conditions. We have provided samples of Jelmyto to certain generic
manufacturers.
We expect current and future legislation affecting the healthcare industry, including healthcare reform, to impact our
business generally and to increase limitations on reimbursement, rebates and other payments, which could adversely
affect third‐party coverage of our products, our operations, and/or how much or under what circumstances healthcare
providers will prescribe or administer our products, if approved.
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory
proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among
policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in
healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. In the
United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected
by major legislative initiatives.
For example, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), laws intended, among
other things, to broaden access to health insurance, improve quality of care, and reduce or constrain the growth of
healthcare spending.
There have been judicial, Congressional and executive branch challenges to certain aspects of the ACA. For example, on
June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is
unconstitutional in its entirety because the “individual mandate” was repealed by Congress. On August 16, 2022,
President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law, which among other things, extends enhanced
subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also
eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the
beneficiary maximum out‐of‐pocket cost and through a newly established manufacturer discount program. It is possible
that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear any such challenges, other
litigation and the healthcare reform measures of the Biden administration will impact the ACA and our business.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, in
August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things included
aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which started in 2013
and, due to subsequent legislative amendments to the statute, including the BBA, and the Consolidated Appropriations
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Act of 2023, will stay in effect until 2032, unless additional Congressional action is taken. In January 2013, President
Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare
payments to several categories of healthcare providers and increased the statute of limitations period for the government
to recover overpayments to providers from three to five years. Further, on March 11, 2021, President Biden signed the
American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at
100% of a drug’s AMP, for single source and innovator multiple source drugs, beginning January 1, 2024.
Additionally, there have been several recent U.S. presidential executive orders, Congressional inquiries and proposed and
enacted legislation at the federal and state levels designed to, among other things, bring more transparency to drug
pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under
Medicare, and reform government program reimbursement methodologies for drugs. At the federal level, for example, in
July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with
multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, the U.S.
Department of Health and Human Services ("HHS") released a Comprehensive Plan for Addressing High Drug Prices that
outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could
pursue as well as potential administrative actions HHS can take to advance these principles. Further, on November 15,
2021, President Biden signed into law the Infrastructure Investment and Jobs Act. Beginning on January 1, 2023,
manufacturers will be required to pay quarterly refunds to CMS for discarded amounts of certain single‐dose container
and single‐use package drugs payable under part B of the Medicare program. Refunds will generally be based on the
discarded volume above 10% of the total allowed amount. However, in unique circumstances, CMS will increase the
applicable threshold to 35%. At this time, CMS has determined that Jelmyto fits within this unique circumstance
classification. In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single‐source drugs
and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize
price increases that outpace inflation. These provisions will take effect progressively starting in fiscal year 2023. On
August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the
Medicare drug price negotiation program is currently subject to legal challenges. HHS has and will continue to issue and
update guidance as these programs are implemented. It is currently unclear how the IRA will be implemented but is likely
to have a significant impact on the pharmaceutical industry. Further, in response to the Biden administration's October
2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center
for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote
accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures
in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of
prescription drugs through the use of march‐in rights under the Bayh‐Dole Act. On December 8, 2023, the National
Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering
the Exercise of March‐In Rights which for the first time includes the price of a product as one factor an agency can use
when deciding to exercise march‐in rights. While march‐in rights have not previously been exercised, it is uncertain if that
will continue under the new framework.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control
pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts,
restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases,
designed to encourage importation from other countries and bulk purchasing. If healthcare policies or reforms intended
to curb healthcare costs are adopted, or if we experience negative publicity with respect to the pricing of our products or
the pricing of pharmaceutical drugs generally, the prices that we charge for any approved products may be limited, our
commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted.
These laws may result in additional reductions in healthcare funding, which could have an adverse effect on our
customers and accordingly, our financial operations. Legislative and regulatory proposals have been made to expand post‐
approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure
whether additional legislative changes will be enacted, or whether regulations, guidance or interpretations will be
changed, or what the impact of such changes on our operations, including the marketing approvals of UGN‐102 or our
other product candidates may be.
Although we cannot predict the full effect on our business of the implementation of existing legislation or the enactment
of additional legislation pursuant to healthcare and other legislative reform, we believe that legislation or regulations that
would reduce reimbursement for, or restrict coverage of, our products could adversely affect how much or under what
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circumstances healthcare providers will prescribe or administer our products. This could adversely affect our business by
reducing our ability to generate revenues, raise capital, obtain additional licensees and market our products. In addition,
we believe the increasing emphasis on managed care in the United States has and will continue to put pressure on the
price and usage of pharmaceutical products, which may adversely impact product sales.
We may be unable to obtain Orphan Drug Designation or exclusivity for future product candidates we may develop. If
our competitors are able to obtain orphan drug exclusivity for their products that are for the same indication as our
product candidates, we may not be able to have competing products approved by the applicable regulatory authority
for a significant period of time.
Under the Orphan Drug Act of 1983 (the "Orphan Drug Act"), the FDA may designate a product as an orphan drug if it is
intended to treat an orphan disease or condition, defined as a patient population of fewer than 200,000 in the United
States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that
the cost of developing the drug will be recovered from sales in the United States.
In the United States, Orphan Drug Designation entitles a party to financial incentives, such as opportunities for grant
funding towards clinical trial costs, tax advantages and user‐fee waivers. In addition, if a product receives the first FDA
approval for the indication for which it has Orphan Drug Designation, the product is entitled to orphan drug exclusivity,
which means the FDA may not approve any other application to market the same drug for the same indication for a
period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with
orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity. Although the FDA has
granted orphan drug exclusivity to Jelmyto for the treatment of UTUC, we may not receive orphan drug exclusivity for any
of our other product candidates that have received orphan designation.
Although the FDA has granted Orphan Drug Designation to Jelmyto and UGN‐201 for treatment of UTUC and CIS,
respectively, we may not receive Orphan Drug Designation for any of our other product candidates. If our competitors are
able to obtain orphan drug exclusivity for their products that are the same or similar to our product candidates before our
drug candidates are approved, we may not be able to have competing product candidates approved by the FDA for a
significant period of time. Any delay in our ability to bring our product candidates to market would negatively impact our
business, revenue, cash flows and operations.
Orphan Drug Designation may not ensure that we will enjoy market exclusivity in a particular market, and if we fail to
obtain or maintain orphan drug exclusivity for our product candidates, we may be subject to earlier competition and
our potential revenue will be reduced.
Orphan Drug Designation entitles a party to financial incentives, such as opportunities for grant funding towards clinical
trial costs, tax advantages, user‐fee waivers and market exclusivity for certain periods of time.
Jelmyto and UGN‐201 have been granted Orphan Drug Designation for the treatment of UTUC and CIS, respectively, in the
United States. Even if we obtain Orphan Drug Designation for our other product candidates, we may not be the first to
obtain regulatory approval for any particular orphan indication due to the uncertainties associated with developing
biotechnology products. Further, even if we obtain Orphan Drug Designation for a product candidate, that exclusivity may
not effectively protect the product from competition because different drugs with different active moieties can be
approved for the same condition. In addition, if a competitor obtains approval and marketing exclusivity for a drug
product with an active moiety that is the same as that in a product candidate we are pursuing for the same indication,
approval of our product candidate would be blocked during the period of marketing exclusivity unless we could
demonstrate that our product candidate is clinically superior to the approved product. Conversely, even if we are granted
orphan exclusivity, a competitor that demonstrates clinical superiority with the same active moiety may obtain approval
prior to expiration of our exclusivity. In addition, if a competitor obtains approval and marketing exclusivity for a drug
product with an active moiety that is the same as that in a product candidate, we are pursuing for a different orphan
indication, this may negatively impact the market opportunity for our product candidate. There have been legal
challenges to aspects of the FDA’s regulations and policies concerning the exclusivity provisions of the Orphan Drug Act,
and future challenges could lead to changes that affect the protections afforded our product candidates in ways that are
difficult to predict.
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Jelmyto and any of our product candidates that receive regulatory approval will be subject to ongoing regulatory
obligations and continued regulatory review, which may result in significant additional expenses, limit or withdraw
regulatory approval and subject us to penalties if we fail to comply with applicable regulatory requirements.
Jelmyto and any of our product candidates that receive regulatory approval will be subject to continual regulatory review
by the FDA and/or foreign regulatory authorities. Additionally, Jelmyto and any of our product candidates that receive
regulatory approval will be subject to extensive and ongoing regulatory requirements, including labeling and other
restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements
or experience unanticipated problems with our products.
The FDA approval of Jelmyto is, and any regulatory approvals that we receive for our product candidates may be, subject
to limitations on the approved indications for which the product may be marketed or to the conditions of approval. In
addition, any regulatory approvals that we receive for our current or future product candidates may contain requirements
for potentially costly post‐marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and
efficacy of the product. In addition, the manufacturing processes, labeling, packaging, distribution, adverse event
reporting, storage, advertising, promotion and recordkeeping for Jelmyto is, and any of our product candidates that
receive regulatory approval will be, subject to extensive and ongoing regulatory requirements. These requirements
include submissions of safety and other post‐marketing information and reports, registration, as well as continued
compliance with cGMP and GCP for any clinical trials that we conduct post‐approval.
Later discovery of previously unknown problems with our products or product candidates, including adverse events of
unanticipated severity or frequency, or problems with our third‐party manufacturers’ processes, or failure to comply with
regulatory requirements, may result in, among other things:
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restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or
voluntary or mandatory product recalls;
fines, warning letters or holds on clinical trials;
refusal by the FDA to approve pending applications or supplements to approved applications submitted by us, or
suspension or revocation of product license approvals; and
product seizure or detention, or refusal to permit the import or export of products; and injunctions or the
imposition of civil or criminal penalties.
Our ongoing regulatory requirements may also change from time to time, potentially harming or making costlier our
commercialization efforts. We cannot predict the likelihood, nature or extent of government regulation that may arise
from future legislation or administrative action, either in the United States or other countries. If we are slow or unable to
adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to
maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not
achieve or sustain profitability, which would adversely affect our business.
Our relationships with healthcare professionals, independent contractors, clinical investigators, CROs, consultants and
vendors in connection with our current and future business activities may be subject to federal and state healthcare
fraud and abuse laws, false claims laws, transparency laws, government price reporting, and health information
privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face
significant penalties.
We are subject to various U.S. federal, state and foreign health care laws, including those intended to prevent health care
fraud and abuse. These laws may impact, among other things, our clinical research, sales and marketing activities, and
constrain the business or financial arrangements with healthcare providers, physicians, and other parties that have the
ability to directly or indirectly influence the prescribing, ordering, marketing, or distribution of products for which we
obtain marketing approval.
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The federal Anti‐Kickback Statute prohibits, among other things, persons or entities from knowingly and willfully soliciting,
offering, receiving or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase,
lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in
part, by a federal healthcare program such as Medicare and Medicaid. Remuneration has been broadly defined to include
anything of value, including, but not limited to, cash, improper discounts, and free or reduced‐price items and services.
Federal false claims laws, including the federal civil False Claims Act (the "FCA"), and civil monetary penalties law impose
penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the
federal government, claims for payment or approval that are false or fraudulent or making a false record or statement to
avoid, decrease or conceal an obligation to pay money to the federal government. The FCA has been used to, among
other things, prosecute persons and entities submitting claims for payment that are inaccurate or fraudulent, that are for
services not provided as claimed, or for services that are not medically necessary. The FCA includes a whistleblower
provision that allows individuals to bring actions on behalf of the federal government and share a portion of the recovery
of successful claims.
Many states have similar fraud and abuse statutes and regulations that may be broader in scope and may apply regardless
of payor, in addition to items and services reimbursed under Medicaid and other state programs. State and federal
authorities have aggressively targeted pharmaceutical companies for, among other things, alleged violations of these anti‐
fraud statutes, based on among other things, unlawful financial inducements paid to prescribers and beneficiaries, as well
as impermissible promotional practices, including certain marketing arrangements that rely on volume‐based pricing and
off‐label promotion of FDA‐approved products.
The federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), among other things, imposes civil and
criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare
benefit program, including public and private payors, or knowingly and willfully falsifying, concealing or covering up a
material fact or making any materially false statement in connection with the delivery of or payment for healthcare
benefits, items or services.
Additionally, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009
(“HITECH”), and their implementing regulations, impose, among other things, specified requirements on covered entities,
including certain healthcare providers, health plans, and healthcare clearinghouses, and their business associates as well
as their covered subcontractors relating to the privacy, security and transmission of individually identifiable health
information, including mandatory contractual terms and required implementation of certain safeguards of such
information. Among other things, HITECH makes HIPAA’s security standards directly applicable to business associates,
independent contractors or agents of covered entities that receive or obtain protected health information in connection
with providing a service on behalf of a covered entity. HITECH also created four new tiers of civil monetary penalties,
amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys
general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek
attorneys’ fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and
security of health information in some circumstances, many of which differ from each other in significant ways, may not
have the same effect and may not be preempted by HIPAA, thus complicating compliance efforts.
Our operations are also subject to the federal Open Payments program pursuant to the Physician Payments Sunshine Act,
created under Section 6002 of the ACA and its implementing regulations, which requires certain manufacturers of drugs,
devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s
Health Insurance Program, with specific exceptions, to annually report to CMS information related to payments and other
transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and
chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners) and teaching
hospitals and certain ownership and investment interests held by physicians and their immediate family members to CMS.
We may also be subject to state laws that require drug manufacturers to report information related to payments and
other transfers of value to physicians and other healthcare providers or marketing expenditures, drug pricing, and/or
state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance
guidelines and the relevant compliance guidelines promulgated by the federal government.
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Many states have also adopted laws similar to each of the above federal laws, which may be broader in scope and apply
to items or services reimbursed by any payor, including commercial insurers. In addition, we may be subject to certain
foreign healthcare laws that are analogous to the U.S. healthcare laws described above. If any of our business activities,
including but not limited to our relationships with healthcare providers, are found to violate any of the aforementioned
laws, we may be subject to significant administrative, civil and criminal penalties, damages, monetary fines,
disgorgement, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare
programs, contractual damages, reputational harm, additional reporting requirements and oversight if we become
subject to a corporate integrity agreement or similar agreement to resolve allegations of non‐compliance with these laws,
diminished profits and future earnings and curtailment or restructuring of our operations.
Also, the FCPA and similar worldwide anti‐bribery laws generally prohibit companies and their intermediaries from
making improper payments to non‐U.S. officials for the purpose of obtaining or retaining business. We cannot assure you
that our internal control policies and procedures will protect us from reckless or negligent acts committed by our
employees, future distributors, partners, collaborators or agents. Violations of these laws, or allegations of such
violations, could result in fines, penalties or prosecution and have a negative impact on our business, results of operations
and reputation.
Legislative or regulatory healthcare reforms in the United States or abroad may make it more difficult and costly for us
to obtain regulatory clearance or approval of our product candidates or any future product candidates and to produce,
market, and distribute our products after clearance or approval is obtained.
From time to time, legislation is drafted and introduced in Congress in the United States or by governments in foreign
jurisdictions that could significantly change the statutory provisions governing the regulatory clearance or approval,
manufacture, and marketing of regulated products or the reimbursement thereof. In addition, FDA or foreign regulatory
agency regulations and guidance are often revised or reinterpreted by the FDA or the applicable foreign regulatory agency
in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations
of existing regulations may impose additional costs or lengthen review times of our product candidates or any future
product candidates. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies,
when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other
things, require:
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changes to manufacturing methods;
recall, replacement, or discontinuance of one or more of our products; and
additional recordkeeping.
Each of these would likely entail substantial time and cost and could harm our business and our financial results. In
addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products would harm
our business, financial condition, and results of operations.
We are subject to stringent and changing U.S. and foreign laws, regulations, and rules, contractual obligations, industry
standards, self‐regulatory schemes, government regulation, policies, standards, and other obligations related to data
privacy and security. The actual or perceived failure by us, our customers, partners or vendors to comply with such
obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration
demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss
of customers or sales; or otherwise adversely affect our business.
In the ordinary course of our business, we collect, receive, store, process, generate, use, transfer, disclose, make
accessible, protect, secure, dispose of, transmit, and share (collectively, "process") proprietary, confidential, and sensitive
data, including personal data, intellectual property, and trade secrets (collectively, "sensitive information"). Our data
processing activities are subject to numerous data privacy and security obligations, such as domestic and foreign laws and
regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements,
and other obligations relating to privacy, data protection, and data security.
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In the United States, federal, state, and local governments have enacted numerous privacy, data protection, and data
security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws (e.g.,
Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, as further
described above, HIPAA imposes specific requirements relating to the privacy, security, and transmission of individually
identifiable health information. In the past few years, numerous U.S. states—including California, Virginia, Colorado,
Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses,
including providing specific disclosures in privacy notices and affording residents with certain rights concerning their
personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to
opt‐out of certain data processing activities, such as targeted advertising, profiling, and automated decision‐making. The
exercise of these rights may impact our business and ability to provide our products and services. Certain states also
impose stricter requirements for processing certain personal data, including sensitive information, such as conducting
data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the
California Consumer Privacy Act of 2018 as amended by the California Privacy Rights Act of 2020 (collectively “CCPA”)
applies to personal data of consumers, business representatives, and employees who are California residents, and
requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise
certain privacy rights. The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants
affected by certain data breaches to recover significant statutory damages. Although the CCPA exempts some data
processed in the context of clinical trials, the CCPA may increase compliance costs and potential liability with respect to
other personal data we maintain about California residents. Similar laws are being considered at the federal, state, and
local levels and we expect more states to pass similar laws in the future. While these states, like the CCPA, also exempt
some data processed in the context of clinical trials, these developments further complicate compliance efforts and
increase legal risk and compliance costs for us, the third parties upon whom we rely. Furthermore, we may be subject to
new laws governing the privacy of consumer health data. For example, Washington’s My Health My Data Act (“MHMD”)
broadly defines consumer health data, places restrictions on processing consumer health data (including imposing
stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a
private right of action to allow individuals to sue for violations of the law. Other states are considering and may adopt
similar laws. These laws demonstrate our vulnerability to the evolving regulatory environment related to personal data.
As we expand our operations, these and similar laws may increase our compliance costs and potential liability.
Outside the United States, an increasing number of laws, regulations, and industry standards apply to privacy, data
protection, and data security. For example, the European Union’s General Data Protection Regulation (“EU GDPR”) and
the United Kingdom’s GDPR (“UK GDPR”) impose strict requirements for processing personal data. Our upcoming clinical
trial will include sites in the EU, which will increase our exposure to potential liability under the EU GDPR. For example,
under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines
of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of
annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes
of data subjects or consumer protection organizations authorized at law to represent their interests. We anticipate that
over time we may expand our business to include additional operations outside of the United States and Israel. With such
expansion, we would be subject to increased governmental regulation in other countries in which we might operate,
including the EU GDPR. Assisting our customers, partners, and vendors in complying with the EU GDPR or other foreign
laws, or complying with such laws ourselves, may cause us to incur substantial operational costs or require us to change
our business practices. Additionally, under various privacy laws and other obligations, we may be required to obtain
certain consents to process personal data. Our inability or failure to do so could result in adverse consequences, including
class action litigation and mass arbitration demands.
Moreover, in the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the
United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or
limiting the transfer of personal data to other countries. In particular, the European Economic Area ("EEA") and the
United Kingdom ("UK") have significantly restricted the transfer of personal data to the United States and other countries
whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations
of their data localization and cross‐border data transfer laws. Although there are currently various mechanisms that may
be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA
standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU‐U.S. Data Privacy
Framework and the UK extension thereto (which allows for transfers to relevant U.S.‐based organizations who self‐certify
compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no
assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States. If there is
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no lawful manner for us to transfer personal data from other jurisdictions to the United States, or if the requirements for
a legally‐compliant transfer are too onerous, we could face significant adverse consequences, including the interruption
or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other
jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and
penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against
our processing or transferring of personal data necessary to operate our business. Inability to import personal data from
Europe to the United States may limit our ability to conduct clinical trial activities in Europe, limit our ability to collaborate
with contract research organizations, service providers, contractors and other entities subject to European data
protection laws, adversely impact our operations, product development and ability to provide our products, and require
us to increase our data processing capabilities in Europe at significant expense. Additionally, companies that transfer
personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased
scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain
companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross‐
border data transfer limitations.
Our employees and personnel may use generative artificial intelligence (“AI”) technologies to perform their work, and the
disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy
obligations. Governments have passed and are likely to pass additional laws regulating generative AI. Our use of this
technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are
unable to use generative AI, it could make our business less efficient and result in competitive disadvantages. We may
also use AI or machine learning ("ML") to assist us in making certain decisions, which is regulated by certain privacy laws.
Due to inaccuracies or flaws in the inputs, outputs, or logic of the AI/ML, the model could be biased and could lead us to
make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights,
employment, and ability to obtain certain pricing, products, services, or benefits.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such
obligations may not be successful. For example, certain privacy laws, such as the GDPR and the CCPA, require our
customers to impose specific contractual restrictions on their service providers. We publish privacy policies, marketing
materials and other statements regarding data privacy and security. If these policies, materials or statements are found to
be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to
investigation, enforcement actions by regulators or other adverse consequences.
Obligations related to data privacy and security (and individuals’ data privacy expectations) are quickly changing,
becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing
applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying
with these obligations requires us to devote significant resources, which may necessitate changes to our services,
information technologies, systems, and practices and to those of any third parties that process personal data on our
behalf. In addition, these obligations may require us to change our business model. Our business model materially
depends on our ability to process personal data, so we are particularly exposed to the risks associated with the rapidly
changing legal landscape. For example, we may be at heightened risk of regulatory scrutiny, and any changes in the
regulatory framework could require us to fundamentally change our business model. We may at times fail (or be
perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our
efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively
impact our business operations. If we or the third parties on which we rely fail, or are perceived to have failed, to address
or comply with applicable data privacy and security obligations, we could face significant consequences, including but not
limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
litigation (including class‐action claims) and mass arbitration demands; additional reporting requirements and/or
oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company
officials. In particular, plaintiffs have become increasingly more active in bringing privacy‐related claims against
companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory
damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the
volume of data and the number of violations. Any of these events could have a material adverse effect on our reputation,
business, or financial condition, including but not limited to: loss of customers; interruptions or stoppages in our business
operations (including clinical trials); inability to process personal data or to operate in certain jurisdictions; limited ability
to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse
publicity; or substantial changes to our business model or operations.
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If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or
penalties or incur costs that could negatively impact our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory
procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations
involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also
produce hazardous waste products. We generally contract with third parties for the disposal of these materials and
wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or
injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability
could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.
We maintain workers compensation insurance to cover us for costs and expenses we may incur due to injuries to our
employees resulting from the use of hazardous materials or other work‐related injuries with policy limits that we believe
are customary for similarly situated companies and adequate to provide us with coverage for foreseeable risks. Although
we maintain such insurance, this insurance may not provide adequate coverage against potential liabilities. In addition,
we may incur substantial costs in order to comply with current or future environmental, health and safety laws and
regulations. These current or future laws and regulations may impair our research, development or production efforts.
Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
It may be difficult for us to profitably sell our product candidates if coverage and reimbursement for these products is
limited by government authorities and/or third‐party payor policies.
In addition to any healthcare reform measures which may affect reimbursement, market acceptance and sales of Jelmyto,
UGN‐102 and our other product candidates, if approved, will depend on the coverage and reimbursement policies of
third‐party payors, like government authorities, private health insurers, and managed care organizations. Third‐party
payors decide which medications they will cover and separately establish reimbursement levels. In October 2020, a
Medicare C‐Code was issued for Jelmyto and we have obtained pass‐through status for two years, no more than three.
CMS has established a permanent and product‐specific J‐code for Jelmyto that took effect on January 1, 2021. Our existing
pass‐through status was set to expire in the fourth quarter of 2023. However, CMS granted Jelmyto a New Technology
APC (Ambulatory Payment Classification), effective from October 1, 2023. A service is separately for paid under a New
Technology APC until sufficient claims data have been collected to allow CMS to assign the procedure to a clinical APC
group that is appropriate in clinical and resource terms. This generally occurs within two to three years from the time a
new HCPCS code becomes effective. However, if CMS are able to collect sufficient claims data in less than two years, CMS
may consider reassigning the service to an appropriate APC, or, if CMS does not have sufficient data at the end of three
years upon which to base its reassignment to an appropriate clinical APC, CMS may keep the service in a New Technology
APC until adequate data become available. Loss of our New Technology APC may result in Medicare beneficiaries losing
access to Jelmyto in the hospital outpatient setting and Jelmyto becoming packaged into a comprehensive ambulatory
payment classification.
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government and other third‐party
payors are increasingly challenging the prices charged for health care products, examining the cost effectiveness of drugs
in addition to their safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement
for prescription drugs. Although our experience to date has demonstrated coverage for Jelmyto, we cannot be sure that
adequate coverage will be available for UGN‐102 or our other product candidates, if approved, or, if coverage is available,
the level of reimbursement will be adequate to make our products affordable for patients or profitable for us. In addition,
if inflation or other factors were to significantly increase our business costs, it may not be feasible to pass price increases
on to our customers due to the process by which healthcare providers are reimbursed for our product candidates.
There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the
United States, decisions about reimbursement for new medicines under Medicare are made by CMS, as the administrator
for the Medicare program. Private third‐party payors often use CMS as a model for their coverage and reimbursement
decisions, but also have their own methods and approval process apart from CMS’s determinations. Our experience to
date has demonstrated coverage with CMS and commercial payors for Jelmyto, and we have established written policies
with certain commercial providers. However, it is difficult to predict what CMS as well as other third‐party payors will
decide with respect to reimbursement for fundamentally novel products such as ours, as there is no body of established
practices and precedents for these new products.
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Reimbursement may impact the demand for, and/or the price of, any product for which we obtain marketing approval.
Assuming we obtain coverage for a given product by a third‐party payor, the resulting reimbursement payment rates may
not be adequate or may require co‐payments that patients find unacceptably high. Patients who are prescribed
medications for the treatment of their conditions, and their prescribing physicians, generally rely on third‐party payors to
reimburse all or part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless
coverage is provided, and reimbursement is adequate to cover all or a significant portion of the cost of our products.
Moreover, for products administered under the supervision of a physician, obtaining and maintaining coverage and
adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.
Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used
may not be available, which may impact physician utilization. Therefore, coverage and adequate reimbursement is critical
to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug
products when more established or lower cost therapeutic alternatives are already available or subsequently become
available. There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and
coverage may be more limited than the purposes for which the drug is approved by the FDA or applicable foreign
regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in
all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.
Reimbursement by a third‐party payor may depend upon a number of factors including the third‐party payor’s
determination that use of a product is:
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safe, effective and medically necessary;
appropriate for the specific patient;
cost‐effective; and
neither experimental nor investigational.
Obtaining and maintaining coverage and reimbursement approval for a product from a government or other third‐party
payor is a time‐consuming and costly process that could require us to provide supporting scientific, clinical and cost
effectiveness data for the use of our products to the payor. Further, no uniform policy requirement for coverage and
reimbursement for drug products exists among third‐party payors in the United States. Therefore, coverage and
reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination
process may require us to provide scientific and clinical support for the use of our products to each payor separately, with
no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. We
may not be able to provide data sufficient to gain acceptance with respect to coverage and/or sufficient reimbursement
levels.
Although we have obtained written policy coverage in commercial plans as well as coverage for government plans for
Jelmyto to date, we cannot be sure that adequate coverage or reimbursement will continue to be available for Jelmyto, or
be available for UGN‐102 or any of our other product candidates, if approved. Also, we cannot be sure that
reimbursement amounts will not reduce the demand for, or the price of, our future products. If reimbursement is not
available, or is available only to limited levels, we may not be able to successfully commercialize Jelmyto, UGN‐102 or our
other product candidates, or achieve profitably at all, even if approved. Additionally, coverage policies and
reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for any of
our products or product candidates that receive regulatory approval, less favorable coverage policies and reimbursement
rates may be implemented in the future. For example, beginning on January 1, 2023, manufacturers will be required to
pay quarterly refunds to CMS for discarded amounts of single‐dose container and single‐use package drugs covered under
Medicare Part B. Rebates will generally be based on the discarded volume above 10% of the total allowed amount. CMS
has been receptive to evaluating the feasibility of the 10% threshold, and where appropriate, has modified the discarded
volume threshold accordingly. In unique circumstances, CMS will increase the applicable threshold to 35%. At this time,
CMS has determined that Jelmyto fits within this unique circumstance. If we are unable to obtain and maintain sufficient
third‐party coverage and adequate reimbursement for our products, the commercial success of our products may be
greatly hindered and our financial condition and results of operations may be materially and adversely affected.
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Risks Related to Ownership of Our Ordinary Shares
The market price of our ordinary shares has been and may continue to be subject to fluctuation and you could lose all or
part of your investment.
The stock market in general has been, and the market price of our ordinary shares in particular has been and may
continue to be, subject to fluctuation, whether due to, or irrespective of, our operating results and financial condition.
The market price of our ordinary shares on the Nasdaq Global Market may fluctuate as a result of a number of factors,
some of which are beyond our control, including, but not limited to:
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the commercial success of Jelmyto;
actual or anticipated variations in our and our competitors’ results of operations and financial condition;
physician and market acceptance of Jelmyto or any other approved product;
the mix of products that we sell;
any voluntary or mandatory recall of Jelmyto or any other approved product, or the imposition of any additional
labeling, marketing or promotional restrictions;
our success or failure to obtain approval for and commercialize our product candidates;
changes in the structure of healthcare payment systems;
changes in earnings estimates or recommendations by securities analysts, if our ordinary shares are covered by
analysts;
development of technological innovations or new competitive products by others;
announcements of technological innovations or new products by us;
publication of the results of nonclinical or clinical trials for Jelmyto, UGN‐102 or our other product candidates;
failure by us to achieve a publicly announced milestone;
delays between our expenditures to develop and market new or enhanced product candidates and the
generation of sales from those products;
developments concerning intellectual property rights;
the announcement of, or developments in, any litigation matters, including any product liability claims related to
Jelmyto or any of our product candidates;
regulatory developments and the decisions of regulatory authorities as to the approval or rejection of new or
modified products;
changes in the amounts that we spend to develop, acquire or license new products, technologies or businesses;
changes in our expenditures to promote our products;
our sale or proposed sale, or the sale by our significant shareholders, of our ordinary shares or other securities in
the future;
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success or failure of our research and development projects or those of our competitors;
the trading volume of our ordinary shares; and
general economic and market conditions and other factors, including factors unrelated to our operating
performance.
These factors and any corresponding price fluctuations may negatively impact the market price of our ordinary shares and
result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public
company shareholders have often instituted securities class action litigation. If we were to become involved in securities
litigation, it could impose a substantial cost upon us and divert the resources and attention of our management from our
business.
Future sales of our ordinary shares could reduce the market price of our ordinary shares.
If our existing shareholders, particularly our directors, their affiliates, or our executive officers, sell a substantial number
of our ordinary shares in the public market, the market price of our ordinary shares could decrease significantly. The
perception in the public market that our shareholders might sell our ordinary shares could also depress the market price
of our ordinary shares and could impair our future ability to obtain capital, especially through an offering of equity
securities.
In addition, our sale of additional ordinary shares or other securities in order to raise capital might have a similar negative
impact on the share price of our ordinary shares. A decline in the price of our ordinary shares might impede our ability to
raise capital through the issuance of additional ordinary shares or other equity securities and may cause you to lose part
or all of your investment in our ordinary shares.
Future equity offerings could result in future dilution and could cause the price of our ordinary shares to decline.
In order to raise additional capital, we may in the future offer additional ordinary shares or other securities convertible
into or exchangeable for our ordinary shares at prices that we determine from time to time, and investors purchasing
shares or other securities in the future could have rights superior to existing shareholders. We may choose to raise
additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our
current or future operating plans. On December 20, 2019, we entered into the ATM Sales Agreement pursuant to which
we may from time to time offer and sell our ordinary shares, having an aggregate offering price of up to $100.0 million, to
or through Cowen, acting as sales agent or principal, in any manner deemed to be an “at‐the market offering”. As of
February 29, 2024, $56.8 million remain available for sale under the ATM Sales Agreement. The shares will be offered and
sold pursuant to our shelf registration statement on Form S‐3 filed with the SEC on November 15, 2022, which was
declared effective on November 29, 2022.
The significant share ownership position of our officers, directors and entities affiliated with certain of our directors
may limit your ability to influence corporate matters.
Our officers, directors and entities affiliated with certain of our directors beneficially own a significant portion of our
outstanding ordinary shares. Accordingly, these persons are able to significantly influence, though not independently
determine, the outcome of matters required to be submitted to our shareholders for approval, including decisions
relating to the election of our board of directors, and the outcome of any proposed merger or consolidation of our
company. These interests may not be consistent with those of our other shareholders. In addition, these persons’
significant interest in us may discourage third parties from seeking to acquire control of us, which may adversely affect
the market price of our ordinary shares.
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We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the
foreseeable future.
We have never declared or paid cash dividends on our share capital, nor do we anticipate paying any cash dividends on
our share capital in the foreseeable future. We currently intend to retain all available funds and any future earnings to
fund the development and growth of our business. As a result, capital appreciation, if any, of our ordinary shares will be
investors’ sole source of gain for the foreseeable future. In addition, Israeli law limits our ability to declare and pay
dividends and may subject our dividends to Israeli withholding taxes. The Loan Agreement also restricts our ability to pay
dividends.
If we are classified as a passive foreign investment company ("PFIC"), our U.S. shareholders may suffer adverse tax
consequences.
Generally, for any taxable year, if at least 75% of our gross income is passive income, or at least 50% of the value of our
assets is attributable to assets that produce passive income or are held for the production of passive income, including
cash, we would be characterized as a PFIC for U.S. federal income tax purposes.
The determination of whether we are a PFIC is a fact‐intensive determination made on an annual basis and the applicable
law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in
part on our current and intended future business plans, which are subject to change. In addition, the total value of our
assets for PFIC testing purposes may be determined in part by reference to the market price of our ordinary shares from
time to time, which may fluctuate considerably. Under the income test, our status as a PFIC depends on the composition
of our income which will depend on the transactions we enter into in the future and our corporate structure. The
composition of our income and assets is also affected by how, and how quickly, we spend the cash we raise in any
offering.
Based on our analysis of our income, assets, activities and market capitalization, we do not believe that we were a PFIC
for the taxable year ended December 31, 2023. However, because the determination of whether or not we are a PFIC is a
fact‐intensive determination made on an annual basis, and because the applicable law is subject to varying interpretation,
we cannot provide any assurances regarding our PFIC status for any past, current or future taxable years. Our U.S. tax
counsel has not provided any opinion regarding our PFIC status in any taxable year.
If we are characterized as a PFIC, our U.S. shareholders may suffer adverse tax consequences, including having gains
realized on the sale of our ordinary shares treated as ordinary income, rather than capital gain, the loss of the preferential
rate applicable to dividends received on our ordinary shares by individuals who are U.S. shareholders who are individuals,
having interest charges apply to distributions by us and gains from the sales of our shares, and additional reporting
requirements under U.S. federal income tax laws and regulations. A U.S. Holder that (i) owns our ordinary shares at any
point during a year in which we are characterized as a PFIC and (ii) does not timely make a QEF election (as described
below) will treat such ordinary shares as stock in a PFIC for all subsequent tax years, even if we no longer qualify as a PFIC
under the relevant tests in such subsequent tax years. A U.S. shareholder of a PFIC generally may mitigate these adverse
U.S. federal income tax consequences by making a qualified electing fund (“QEF”) election, or, in some circumstances, a
“mark to market” election. However, there is no assurance that we will provide the information required by the IRS in
order to enable U.S. shareholders to make a timely QEF election. Moreover, there is no assurance that we will have timely
knowledge of our status as a PFIC in the future. Accordingly, U.S. shareholders may be unable to make a timely QEF
election with respect to our ordinary shares.
Changes to tax laws could have a material adverse effect on us and reduce net returns to our shareholders.
Our tax treatment is subject to changes in tax laws, regulations and treaties, or the interpretation thereof, as well as tax
policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate,
including those related to the Organisation for Economic Co‐Operation and Development’s ("OECD") Base Erosion and
Profit Shifting ("BEPS") Project (including "BEPS 2.0"), and the European Commission’s state aid investigations and other
initiatives.
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Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends
received or, in the specific context of withholding tax, dividends paid. The OECD has published a package of measures for
reform as a product of BEPS, which include the reallocation of global profits of large multinational companies to market
jurisdictions based on customer location as well as the introduction of a global minimum tax. Many of the package’s
proposed measures require amendments to the domestic tax legislation of various jurisdictions.
We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would
have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or
practices, could affect our financial position and overall or effective tax rates in the future in countries where we have
operations, reduce post‐tax returns to our shareholders, and increase the complexity, burden and cost of tax compliance.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which
could affect the tax treatment of our domestic and foreign earnings. For example, effective in 2022, the U.S. Tax Cuts and
Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the current period and
requires U.S. taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code
Section 174. Although Congress may defer, modify, or repeal this provision, potentially with retroactive effect, we have no
assurance that Congress will take any action with respect to this provision. Any new taxes could adversely affect our
domestic and international business operations, and our business and financial performance. Further, existing tax laws,
statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. Changes in
corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings,
and the deductibility of expenses could have a material impact on the value of our deferred tax assets, could result in
significant one‐time charges, and could increase our future tax expenses.
Tax authorities may disagree with our positions and conclusions regarding certain tax positions, resulting in
unanticipated costs, taxes or non‐realization of expected benefits.
A tax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities. For
example, the U.S. Internal Revenue Service or another tax authority could challenge our allocation of income by tax
jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and
transfer pricing policies, including amounts paid with respect to our intellectual property development. Similarly, a tax
authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable
nexus, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if
successful, could increase our expected tax liability in one or more jurisdictions. A tax authority may take the position that
material income tax liabilities, interest and penalties are payable by us, in which case, we expect that we might contest
such assessment. Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the
assessment, the implications could increase our anticipated effective tax rate, where applicable.
If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to
adverse U.S. federal income tax consequences.
If a “United States person” (as defined by the Internal Revenue Code of 1986, as amended (the “Code”)) is treated as
owning (directly, indirectly or constructively) at least 10% of the total combined voting power of all classes of our stock
entitled to vote or 10% or more of the total value of all classes of our stock, such United States person may be treated as a
“United States shareholder” with respect to each “controlled foreign corporation” ("CFC") in our group (if any). Each
United States shareholder of a CFC may be required to annually report and include in its U.S. taxable income its pro rata
share of “Subpart F income,” “global intangible low‐taxed income” and investments in U.S. property by the CFC,
regardless of whether the CFC makes any distributions. In addition, a United States shareholder that realizes gain from the
sale or exchange of shares in a CFC may be required to classify a portion of such gain as dividend income rather than
capital gain. An individual who is a United States shareholder with respect to a CFC generally would not be allowed certain
tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. A
non‐U.S. corporation generally will be classified as a CFC for U.S. federal income tax purposes if United States
shareholders own, directly or indirectly, more than 50% of either the total combined voting power of all classes of stock of
such corporation entitled to vote or of the total value of the stock of such corporation. The determination of CFC status is
complex and includes attribution rules, the application of which is not entirely certain. Because our group includes at least
one U.S. subsidiary (UroGen Pharma, Inc.), if we were to form or acquire any non‐U.S. subsidiaries in the future,
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attribution rules could cause them to be treated as CFCs with respect to any United States person owning (directly,
indirectly or constructively) at least 10% of the value or voting power of our ordinary shares.
We cannot provide any assurances that we will assist investors in determining whether we or any non‐U.S. subsidiaries
that we may form or acquire in the future would be treated as a CFC or whether such investor would be treated as a
United States shareholder with respect to any such CFC. Further, we cannot provide any assurances that we will furnish to
any United States shareholder information that may be necessary to comply with the reporting and tax paying obligations
discussed above. Failure to comply with these reporting obligations may subject you to significant monetary penalties and
may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting
was due from starting. U.S. shareholders should consult their tax advisors regarding the potential application of these
rules to their investment in our ordinary shares.
Our ability to use our U.S. net operating loss carryforwards and certain other tax attributes to offset future taxable
income and taxes may be limited.
Under U.S. federal income tax law, federal net operating losses ("NOLs") incurred in tax years beginning after December
31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable
income. In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation
undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity
ownership over a three‐year period, the corporation’s ability to utilize its pre‐change NOL carryforwards and other pre‐
change tax attributes to offset its post‐change income or taxes may be limited. We have not performed a detailed analysis
to determine whether an ownership change under Section 382 of the Code has occurred for UroGen Pharma, Inc. If we
undergo or have undergone an ownership change, our ability to utilize NOLs and other tax attributes could be limited by
Sections 382 and 383 of the Code. Future changes in our share ownership, some of which are outside of our control, could
result in an ownership change under Section 382 of the Code. As a result, even if we attain profitability, we may be unable
to use a material portion of our NOLs and other tax attributes, which could negatively impact our future cash flows. In
addition, at the state level, there may be periods during which the use of net operating loss carryforwards is suspended or
otherwise limited, which could accelerate or permanently increase state taxes owed.
Risks Related to our Operations in Israel
Our research and development and other significant operations are located in Israel and, therefore, our results may be
adversely affected by political, economic and military instability in Israel.
Our research and development facility is located in Ra’anana, Israel, and certain of our key vendors and suppliers,
including Isotopia Molecular Imaging Ltd., our single contracted supplier for the hydrogel contained in Jelmyto and UGN‐
102, are located within Israel. If these or any future facilities in Israel were to be damaged, destroyed or otherwise unable
to operate, whether due to war, acts of hostility, earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural
disasters, employee malfeasance, terrorist acts, pandemic, power outages or otherwise, or if performance of our research
and development is disrupted for any other reason, such an event could delay our clinical trials or, if our product
candidates are approved and we choose to manufacture all or any part of them internally, jeopardize our ability to
manufacture our products as promptly as our prospective customers will likely expect, or possibly at all. If we experience
delays in achieving our development objectives, or if we are unable to manufacture an approved product within a
timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation
could be harmed.
In addition, several countries, principally in the Middle East, restrict doing business with Israel, and additional countries
may impose restrictions on doing business with Israel and Israeli companies whether as a result of hostilities in the region
or otherwise. Any hostilities involving Israel, terrorist activities, political instability or violence in the region or the
interruption or curtailment of trade or transport between Israel and its trading partners could adversely affect our
operations and results of operations and adversely affect the market price of our ordinary shares.
In October 2023, Hamas initiated an attack against Israel, provoking a state of war and the risk of a larger conflict. The
intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s economic implications
on our business and operations and on Israel's economy in general.
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Additionally, the newly elected Israeli government has announced plans to significantly reduce the Israeli Supreme Court's
judicial oversight, including reducing its ability to strike down legislation that it deems unreasonable, and plans to increase
political influence over the selection of judges. These plans have prompted protests of Israeli citizens and criticism of
leading Israeli business leaders as well as some foreign leaders. If such government plans are eventually enacted, they
may cause operational challenges for us. In addition, if foreign policy is negatively impacted with regard to Israel, this
could impact our business with suppliers and customers which could in turn adversely impact our reputation, results of
operations or financial condition.
Our commercial insurance does not cover losses that may occur as a result of an event associated with the security
situation in the Middle East. Although the Israeli government is currently committed to covering the reinstatement value
of direct damages that are caused by terrorist attacks or acts of war, there can be no assurance that this government
coverage will be maintained, or if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or
damages incurred by us could have a material adverse effect on our business, financial condition and results of
operations.
Further, our operations could be disrupted by the obligations of our employees to perform military service. As of January
31, 2024, we had 40 employees based in Israel. Of these employees, some may be military reservists, and may be called
upon to perform military reserve duty of up to 36 days per year (and in some cases more) until they reach the age of 40
(and in some cases, up to the age of 45 or older). Since October 7, 2023, the Israeli Defense Force has called up more than
350,000 of its reserve forces to serve. It is possible that there will be further military reserve duty call‐ups in the future,
which may affect our business due to a shortage of skilled labor and loss of institutional knowledge, and necessary
mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third‐party
outsourcing, for example, may have unintended negative effects and adversely impact our results of operations, liquidity
or cash flows.
Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an
acquisition of, us, even when the terms of such a transaction are favorable to us and our shareholders.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds,
requires special approvals for transactions involving directors, officers or significant shareholders and regulates other
matters that may be relevant to such types of transactions. For example, a tender offer for all of a company’s issued and
outstanding shares can only be completed if shareholders not accepting the tender offer hold less than 5% of the issued
share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a
personal interest in the tender offer, unless shareholders not accepting the tender offer hold less than 2% of the
company’s outstanding shares. Furthermore, the shareholders, including those who indicated their acceptance of the
tender offer, may, at any time within six months following the completion of the tender offer, petition an Israeli court to
alter the consideration for the acquisition, unless the acquirer stipulated in its tender offer that a shareholder that accepts
the offer may not seek such appraisal rights.
Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose
country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example,
Israeli tax law does not recognize tax‐free share exchanges to the same extent as U.S. tax law. With respect to mergers,
Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of a
number of conditions, including, in some cases, a holding period of two years from the date of the transaction during
which sales and dispositions of shares of the participating companies are subject to certain restrictions. Moreover, with
respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax
becomes payable even if no disposition of the shares has occurred. These provisions could delay, prevent or impede an
acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or
to our shareholders.
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It may be difficult to enforce a judgment of a U.S. court against us, our officers and directors or the Israeli experts
named in our reports filed with the SEC in Israel or the United States, to assert U.S. securities laws claims in Israel or to
serve process on our officers and directors and these experts.
We are incorporated in Israel. One of our directors resides outside of the United States, and most of the assets of this
director are located outside of the United States. Therefore, a judgment obtained against us, or this director, including a
judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United
States and may not be enforced by an Israeli court. It may also be difficult for you to effect service of process on this
director in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may
refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most
appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may
determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of
applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process.
Certain matters of procedure will also be governed by Israeli law.
There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated
with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or
foreign court.
Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects
from the rights and responsibilities of shareholders of U.S. companies.
The rights and responsibilities of the holders of our ordinary shares are governed by our articles of association and by
Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of
shareholders in U.S. companies. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a
customary manner in exercising its rights and performing its obligations towards the company and other shareholders,
and to refrain from abusing its power in the company, including, among other things, in voting at a general meeting of
shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized
share capital, mergers and acquisitions and related party transactions requiring shareholder approval, as well as a general
duty to refrain from discriminating against other shareholders. In addition, a shareholder who is aware that it possesses
the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the
appointment of a director or executive officer in the company has a duty of fairness toward the company.
There is limited case law available to assist us in understanding the nature of these duties or the implications of these
provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary
shares that are not typically imposed on shareholders of U.S. companies.
Risks Related to Our Management and Employees
We depend on our executive officers and key clinical, technical and commercial personnel to operate our business
effectively, and we must attract and retain highly skilled employees in order to succeed.
Our success depends upon the continued service and performance of our executive officers who are essential to our
growth and development. The loss of one or more of our executive officers could delay or prevent the continued
successful implementation of our growth strategy, could affect our ability to manage our company effectively and to carry
out our business plan, or could otherwise be detrimental to us. As of January 31, 2024, we had 201 employees. Therefore,
knowledge of our product candidates and clinical trials is concentrated among a small number of individuals. Members of
our executive team as well as key clinical, scientific, technical and commercial personnel may resign at any time and there
can be no assurance that we will be able to continue to retain such personnel. If we cannot recruit suitable replacements
in a timely manner, our business will be adversely impacted.
Our growth and continued success will also depend on our ability to attract and retain additional highly qualified and
skilled research and development, operational, managerial and finance personnel. However, we face significant
competition for experienced personnel in the pharmaceutical field. Many of the other pharmaceutical companies that we
compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer
history in the industry than we do. They also may provide more diverse opportunities and better chances for career
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advancement. Some of these characteristics may be more appealing to quality candidates than what we have to offer. If
we cannot retain our existing skilled scientific and operational personnel and attract and retain sufficiently skilled
additional scientific and operational personnel, as required, for our research and development and manufacturing
operations on acceptable terms, we may not be able to continue to develop and commercialize our existing product
candidates or new products. Further, any failure to effectively integrate new personnel could prevent us from successfully
growing our company.
General Risk Factors
If equity research analysts do not publish research or reports about our business or if they issue unfavorable
commentary or downgrade our ordinary shares, the price of our ordinary shares could decline.
The trading market for our ordinary shares relies in part on the research and reports that equity research analysts publish
about us and our business, if at all. We do not have control over these analysts, and we do not have commitments from
them to write research reports about us. The price of our ordinary shares could decline if no research reports are
published about us or our business, or if one or more equity research analysts downgrade our ordinary shares or if those
analysts issue other unfavorable commentary or cease publishing reports about us or our business.
Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact
the trading value of our securities.
Shareholders may, from time to time, engage in proxy solicitations or advance shareholder proposals, or otherwise
attempt to effect changes and assert influence on our board of directors and management. Activist campaigns that
contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an
adverse effect on our operating results and financial condition. A proxy contest would require us to incur significant legal
and advisory fees, proxy solicitation expenses and administrative and associated costs and require significant time and
attention by our board of directors and management, diverting their attention from the pursuit of our business strategy.
Any perceived uncertainties as to our future direction and control, our ability to execute on our strategy, or changes to
the composition of our board of directors or senior management team arising from a proxy contest could lead to the
perception of a change in the direction of our business or instability which may result in the loss of potential business
opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified
personnel and business partners, any of which could adversely affect our business and operating results. If individuals are
ultimately elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively
implement our business strategy and create additional value for our shareholders. We may choose to initiate, or may
become subject to, litigation as a result of the proxy contest or matters arising from the proxy contest, which would serve
as a further distraction to our board of directors and management and would require us to incur significant additional
costs. In addition, actions such as those described above could cause significant fluctuations in our share price based upon
temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals
and prospects of our business.
Adverse developments affecting the financial services industry could adversely affect our current and projected
business operations and our financial condition and results of operations.
Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have
in the past and may in the future lead to bank failures and market‐wide liquidity problems. For example, on March 10,
2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which
appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank
and Silvergate Capital Corp. were each swept into receivership. In addition, on May 1, 2023, the FDIC seized First Republic
Bank and sold its assets to JPMorgan Chase & Co. It is uncertain whether the U.S. Department of Treasury, FDIC and
Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or
financial institutions, or that they would do so in a timely fashion.
Although we assess our banking relationships as we believe necessary or appropriate, our access to cash in amounts
adequate to finance or capitalize our current and projected future business operations could be significantly impaired by
factors that affect the financial institutions with which we have banking relationships. These factors could include, among
others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial,
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credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial
markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These
factors could also include factors involving financial markets or the financial services industry generally. The results of
events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on
our current and projected business operations and our financial condition and results of operations. These could include,
but may not be limited to, delayed access to deposits or other financial assets or the uninsured loss of deposits or other
financial assets; or termination of cash management arrangements and/or delays in accessing or actual loss of funds
subject to cash management arrangements.
In addition, widespread investor concerns regarding the U.S. or international financial systems could result in less
favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating
covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to
acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity
resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or
fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of
federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described
above or other related or similar factors not described above, could have material adverse impacts on our liquidity and
our current and/or projected business operations and financial condition and results of operations.
Unstable market, economic and geo‐political conditions may have serious adverse consequences on our business,
financial condition and share price.
The global credit and financial markets have experienced extreme volatility and disruptions in the past. These disruptions
can result in severely diminished liquidity and credit availability, increase in inflation, declines in consumer confidence,
declines in economic growth, increases in unemployment rates, further bank failures and uncertainty about economic
stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic
conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn,
volatile business environment, higher inflation, bank failures or continued unpredictable and unstable market conditions.
If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more
costly and more dilutive. Our portfolio of corporate and government bonds could also be adversely impacted. Failure to
secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our
operations, growth strategy, financial performance and share price and could require us to delay or abandon clinical
development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other
partners may not survive an economic downturn or rising inflation, which could directly affect our ability to attain our
operating goals on schedule and on budget.
Other international and geo‐political events could also have a serious adverse impact on our business. For instance, in
February 2022, Russia initiated military action against Ukraine. In response, the United States and certain other countries
imposed significant sanctions and trade actions against Russia and could impose further sanctions, trade restrictions, and
other retaliatory actions. In October 2023, Hamas initiated an attack against Israel, provoking a state of war and the risk of
a larger conflict. While we cannot predict the broader consequences, these conflicts and retaliatory and counter‐
retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies,
and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or
access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial
condition, and results of operations.
Our business could be negatively impacted by environmental, social and corporate governance matters or our reporting
of such matters.
There is an increasing focus from certain investors, employees, partners, and other stakeholders concerning
environmental, social and corporate governance ("ESG") matters. We may be, or be perceived to be, not acting
responsibly in connection with these matters, which could negatively impact us. For instance, the SEC has recently
proposed climate change and ESG reporting requirements, which, if approved, would significantly increase our costs. In
addition, we currently do not report our environmental emissions, and lack of reporting or future reporting could result in
certain investors from declining to invest in our ordinary shares.
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Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk management and strategy
We have implemented and maintain various information security processes designed to identify, assess and manage
material risks from cybersecurity threats to our critical computer networks, third‐party hosted services, communications
systems, hardware and software, and our critical data, including intellectual property, clinical trial data, customer data,
manufacturing data, and confidential information that is proprietary, strategic or competitive in nature (“Information
Systems and Data”).
Our Chief Financial Officer supervises our Information Technology Department (the “IT Department”) which coordinates
with third‐party service providers that perform security management roles, including those of a chief information security
officer, to identify, assess and manage our cybersecurity threats and risks. Our IT Department and security management
team, including third‐party service providers, identify and assess risks from cybersecurity threats by monitoring and
evaluating our threat environment using various methods including, for example: manual and automated tools,
subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting
scans of the threat environment, internal audits relating to cybersecurity, conducting threat assessments for internal and
external threats, third‐party threat assessments, conducting vulnerability assessments to identify vulnerabilities, use of
external intelligence feeds, evaluating our and our industry’s risk profile, and evaluating threats reported to us.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures,
processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our
Information Systems and Data, including, for example: a cybersecurity incident response policy; asset management,
tracking and disposal; incident detection and response; systems monitoring; vulnerability management policy; risk
assessments; encryption of certain of our data; third‐party cybersecurity staff; network security controls; segregation of
certain of our data; access controls; physical security; employee training; penetration testing; and cybersecurity
insurance.
Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk
management processes. For example, our IT Department works with management to prioritize our risk management
processes and mitigate cybersecurity threats that are expected to be more likely to lead to a material impact to our
business. In addition, our management evaluates material risks from cybersecurity threats against our overall business
objectives and reports to the audit committee of our board of directors, which, together with our board of directors,
evaluates our overall enterprise risk.
We use third‐party service providers to assist us to identify, assess, and manage material risks from cybersecurity threats,
including, for example: a third‐party IT and cybersecurity consultant; professional services firms, including legal counsel;
threat intelligence service providers; cybersecurity software providers; managed cybersecurity service providers;
penetration testing firms; dark web monitoring services; and forensic investigators.
We use third‐party service providers to perform a variety of functions throughout our business, such as: conducting
nonclinical and clinical trials; supplying certain raw materials, compounds and components; delivering materials to our
facilities; and shipping products to our customers. Additionally, we rely on third‐party service providers and technologies
to operate critical business systems to process sensitive information in a variety of contexts, including, without limitation,
cloud‐based infrastructure, data center facilities, encryption and authentication technology, employee email, and content
delivery. Third‐party service providers we rely on include: application providers, distributors, hosting companies, supply
chain resources, contract research organizations, and contract manufacturing organizations. Our vendor assessment
process is generally limited to reputational due diligence of the vendor and, in some cases, examination of the vendor’s
security certifications.
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For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our
risk factors under Part I, Item 1A. Risk Factors in this Annual Report on Form 10‐K, including “Risk Factors – If our
information technology systems or data, or those of third parties upon whom we rely, are or were compromised, this could
result in adverse consequences resulting from such compromise including but not limited to regulatory investigations or
actions; litigation; fines and penalties; a material disruption of our drug development program; compromise sensitive
information related to our business; harm our reputation; triggering our breach notification obligations; prevent us from
accessing critical information; disruptions of our business operations; loss of revenue or profits; loss of customers or sales
and expose us to liability or other adverse effects to our business.”
Governance
Our board of directors addresses our cybersecurity risk management as part of its general oversight function. The audit
committee of our board of directors is responsible for overseeing our cybersecurity risk management processes, including
oversight of risks from cybersecurity threats.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of
our management, including, among others, the Chief Financial Officer, Head of IT, and Associate Director of IT Operations.
Our Head of IT is an IT security professional and members of our IT Department have certain credentialling in
cybersecurity. We also rely on third‐party security analysts who have certain certifications related to cybersecurity.
Our Chief Financial Officer and Head of IT are responsible for hiring appropriate personnel, helping to integrate
cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant
personnel. Additionally, they are responsible for approving budgets, helping prepare for cybersecurity incidents,
approving cybersecurity processes, and reviewing security assessments and other security‐related reports.
Our cybersecurity incident response policy is designed to escalate certain cybersecurity incidents to members of
management depending on the circumstances, including our Chief Financial Officer and General Counsel and Chief
Compliance Officer. Our management works with our incident response team to help us mitigate and remediate
cybersecurity incidents of which they are notified. In addition, our cybersecurity incident response policy includes
reporting to the audit committee of our board of directors for certain cybersecurity incidents.
The audit committee periodically reviews and discusses with the appropriate members of our management material risks
relating to cybersecurity threats and our processes for assessing, identifying, and managing material risks from
cybersecurity threats, as well as our internal controls and disclosure controls and procedures relating to cybersecurity
incidents. Our board of directors and audit committee are also provided with reports, summaries or presentations related
to cybersecurity threats, risk and mitigation.
Item 2. Properties
Effective November 2019, we leased approximately 20,913 square feet of space in Princeton, NJ, which serves as our
principal executive offices and is used for commercial and marketing as well as general and administrative purposes. We
lease an approximately 11,495 square foot facility in Israel, which is used primarily as research and development
laboratories as well as for administrative purposes. We believe that our existing facilities are adequate to meet our
current needs, and that suitable additional or alternative spaces will be available in the future on commercially
reasonable terms.
Item 3. Legal Proceedings
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our
operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to
have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us
because of defense and settlement costs, diversion of management resources and other factors.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information
Our ordinary shares have been traded on the Nasdaq Global Market since May 4, 2017 under the symbol URGN. Prior to
such time, there was no public market for our ordinary shares.
Holders
As of March 7, 2024, there were 16 registered holders of record of our ordinary shares.
Dividend Policy
We have not paid any dividends on our ordinary shares since our inception and do not expect to pay dividends on our
ordinary shares in the foreseeable future. The Loan Agreement with Pharmakon restricts our ability to pay dividends. In
addition, Israeli law limits our ability to declare and pay dividends and may subject our dividends to Israeli withholding
taxes. We currently intend to retain all available funds as well as future earnings, if any, to fund the development and
expansion of our operations.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion contains management’s discussion and analysis of our financial condition and results of
operations and should be read together with the historical consolidated financial statements and the notes thereto
included in “Financial Statements and Supplementary Data”. This discussion contains forward‐looking statements that
reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those
described in the “Risk Factors” section of this Annual Report. Actual results may differ materially from those contained in
any forward‐looking statements. You should carefully read “Special Note Regarding Forward‐Looking Statements” and
“Risk Factors.”
Overview
We are a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial
and specialty cancers. We have developed RTGel reverse‐thermal hydrogel, a proprietary sustained release, hydrogel‐
based technology that has the potential to improve therapeutic profiles of existing drugs. Our technology is designed to
enable longer exposure of the urinary tract tissue to medications, making local therapy a potentially more effective
treatment option. Our approved product Jelmyto (mitomycin) for pyelocalyceal solution, and our investigational
candidate, UGN‐102 (mitomycin) for intravesical solution, are designed to ablate tumors by non‐surgical means and to
treat several forms of non‐muscle invasive urothelial cancer, including low‐grade upper tract urothelial cancer (“low‐
grade UTUC”) and low‐grade intermediate risk non‐muscle invasive bladder cancer (“low‐grade intermediate risk
NMIBC”), respectively. In addition, our immuno‐uro‐oncology pipeline includes UGN‐301 (zalifrelimab), an anti‐CTLA‐4
antibody, which we intend to study as both monotherapy and combination therapy.
We estimate that the annual treatable patient population of low‐grade UTUC in the United States is approximately 6,000
to 7,000 and the annual treatable population of low‐grade intermediate risk NMIBC is approximately 80,000.
RTGel is a novel proprietary polymeric biocompatible, reverse thermal gelation hydrogel technology, which, unlike the
general characteristics of most forms of matter, is liquid at lower temperatures and converts into gel form when warmed
to body temperature. We believe that these characteristics promote ease of delivery into and retention of drugs in body
cavities, including the bladder and the upper urinary tract, forming a transient reservoir of drug that dissolves over time
while preventing rapid excretion, providing for increased dwell time. RTGel leverages the physiologic flow of urine to
provide a natural exit from the body.
We believe that RTGel, when formulated with an active drug, may allow for the improved efficacy of treatment of various
types of urothelial and specialty cancers and urologic diseases without compromising the safety of the patient or
interfering with the natural flow of fluids in the urinary tract. RTGel achieves this by:
•
•
increasing the exposure of active drugs in the bladder and upper urinary tract by significantly extending the
dwell time of the active drug while conforming to the anatomy of the bladder and the upper urinary tract, which
allows for enhanced drug tissue coverage. For example, the average dwell time of the standard aqueous
mitomycin formulation, currently used as adjuvant treatment, in the upper urinary tract is approximately five
minutes, compared to approximately six hours when mitomycin is formulated with RTGel;
administering higher doses of an active drug than would otherwise be possible using standard water‐based
formulations. For instance, it is only possible to dissolve 0.5 mg of mitomycin in 1 mL of water while it is possible
to formulate up to 8 mg of mitomycin with 1 mL of RTGel; and
• maintaining the active drug’s molecular structure and mode of action.
These characteristics of RTGel enable sustained release of mitomycin in the urinary tract for both Jelmyto and UGN‐102.
Further, RTGel may be particularly effective in the bladder and upper urinary tract where tumor visibility and access are
challenging, and where there exists a significant amount of urine flow and voiding. We believe that these characteristics
of RTGel may prove useful for the local delivery of active drugs to other bodily cavities in addition to the bladder and
upper urinary tract.
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Jelmyto
On April 15, 2020, the FDA approved our NDA for Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN‐
101, for the treatment of adult patients with low‐grade UTUC. Jelmyto consists of mitomycin, an established
chemotherapy, and sterile hydrogel, using our proprietary sustained release RTGel technology. It has been designed to
prolong exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non‐surgical means.
New product exclusivity for Jelmyto expired on April 15, 2023, however, Orphan Drug exclusivity extends until April 15,
2027. Additionally, the main patents that protect Jelmyto in the United States are set to expire in January 2031. These
patents were listed in the FDA's Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations).
Low‐grade UTUC is a rare cancer that develops in the lining of the upper urinary tract, ureters and kidneys. In the United
States, there are approximately 6,000 ‐ 7,000 new or recurrent low‐grade UTUC patients annually. It is a challenging
condition to treat due to the complex anatomy of the urinary tract system. Prior to Jelmyto, the current standard of care
included endoscopic resection(s) and RNU, the latter which involves the removal of the renal pelvis, kidney, ureter and
bladder cuff. Treatment is further complicated by the fact that low‐grade UTUC is most commonly diagnosed in patients
over 70 years of age, who may already have compromised kidney function and may suffer further complications as a
result of a major surgery. We are focused on changing the way urothelial cancers are treated, an area in which there has
been no significant advancements in recent years. Jelmyto is the first drug therapy of its kind, providing an alternative
to endoscopic resection(s) and/or RNU.
The FDA approval was based on results from our Phase 3 OLYMPUS trial showing Jelmyto achieved clinically significant
disease eradication in adults with low‐grade UTUC. Findings from the final study results include:
•
•
•
•
CR (primary endpoint) of 58% (41/71) in the intent‐to‐treat population and in the sub‐population of patients
who were deemed not capable of surgical removal at diagnosis.
At the 12‐month time point for assessment of durability, 23 patients remained in CR of a total of 41 patients,
eight had experienced recurrence of disease and ten patients were unable to be evaluated.
Durability of response was estimated to be 81.8% at 12 months by Kaplan‐Meier analysis. The median duration
of response was not reached.
The most commonly reported adverse events (≥ 20%) were ureteric obstruction, flank pain, urinary tract
infection, hematuria, abdominal pain, fatigue, renal dysfunction, nausea, dysuria and vomiting. Most adverse
events were mild to moderate and manageable. No treatment‐related deaths occurred.
In December 2022, we presented new data from a follow up study to the OLYMPUS trial designed to obtain long‐term
data on Jelmyto. Based on data available for 16 of the 23 patients who had remained in CR at the end of the OLYMPUS
study, the median duration of response in that subset of patients was 28.9 months. Thirteen patients remained in CR, two
patients had recurrence of low grade‐UTUC on the same side as treated in OLYMPUS, and one patient underwent RNU
due to ureteral stricture without evidence of UTUC at the time of surgery. No patient had progressed to high‐grade
disease.
In June 2020, we initiated our commercial launch of Jelmyto in the United States. We have staffed, trained and prepared a
customer‐facing team that includes territory business managers with deep experience in both urology and oncology.
These territory business manager positions are led by seven regional business director positions, who are in turn
supported by seven regional operations manager positions. Each region is additionally supported by one to two clinical
nurse educators to provide education and training around instillation, as well as a field reimbursement manager to help
ensure access and reimbursement for appropriate patients and key account directors who engage with C‐suite individuals
to introduce a Jelmyto service line. In addition, our organization currently includes several medical science liaisons who
appropriately engage with physicians interested in learning more about UroGen, Jelmyto and our technology, both in
person and virtually. In total, our customer‐facing team comprises approximately 80 representatives.
We are committed to helping patients access Jelmyto. Our market access teams have laid the foundation for coverage and
reimbursement, meeting multiple times with payors. Medicare patients with supplemental coverage are covered and the
vast majority of commercial plans have policies in place, in whole covering over 150 million lives. In addition to
reimbursement and access, we have also been focused on ensuring seamless integration into physician practices. We
have implemented processes to help make Jelmyto preparation and administration seamless for practitioners and
patients, including entering into agreements with various national, regional and local specialty pharmacies under which
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the pharmacy, following receipt of a patient prescription, prepares and dispenses the Jelmyto admixture on our behalf. In
September 2022, the FDA authorized an extension of the in‐use period for the Jelmyto admixture from eight hours to 96
hours (four days) following reconstitution of the product, adding convenience and flexibility in managing patient care.
In October 2020, a Medicare C‐Code was issued for Jelmyto. The Centers for Medicare & Medicaid Services established a
permanent and product‐specific J‐code for Jelmyto that took effect on January 1, 2021 and replaced the C‐Code. CMS has
granted Jelmyto a New Technology APC (Ambulatory Payment Classification), effective from October 1, 2023. We have
also launched a registry to capture data and evaluate real world outcomes in patients with low‐grade UTUC that have
been or will be treated with Jelmyto. The purpose of the registry is to study the use of Jelmyto in clinical practice in the
United States and address specific clinical questions.
In the first three fiscal years beginning after the initiation of our commercial launch of Jelmyto in June 2020, we have
experienced a moderate decline in revenue during the third quarter from the preceding quarter. We believe this result is
primarily attributable to the nature of low‐grade disease, which does not require immediate treatment and therefore we
believe there is an impact in the summer months. However, it is too early to say with confidence whether this seasonality
trend will continue in future periods. Moreover, our future Jelmyto revenue will be impacted by various factors and we
expect our Jelmyto revenue to fluctuate quarter‐to‐quarter for the foreseeable future.
UGN‐102 (mitomycin) for intravesical solution
UGN‐102 is our sustained‐release formulation of mitomycin that we are developing for the treatment of low‐grade
intermediate risk NMIBC.
UGN‐102 is administered locally using the standard practice of intravesical instillation directly into the bladder via a
catheter. The instillation into the bladder is expected to take place in a physician’s office as a non‐operative outpatient
treatment, in comparison with TURBT or similar surgical procedures, which are operations often conducted under general
anesthesia and may require an overnight stay. Complete surgical tumor removal often has limited success due to the
inability to properly identify, reach and resect all tumors. We believe that an effective chemoablation agent can
potentially provide better eradication of tumors irrespective of the detectability and location of the tumors. In addition,
by reducing the need for surgery, patients may avoid potential complications associated with surgery and anesthesia.
In October 2021, we reported final data from the Phase 2b OPTIMA II trial. The single‐arm, open label trial completed
enrollment of 63 patients at clinical sites across the United States and Israel in September 2019. Patients were treated
with six weekly instillations of UGN‐102 and underwent assessment of CR (the primary endpoint) four to six weeks
following the last instillation; 65%, or 41 out of 63 patients, treated with UGN‐102 achieved a CR three months after the
start of therapy. In this subset of patients, 39 (95%), 30 (73%), and 25 (61%) remained disease‐free at six, nine, and 12
months after treatment initiation, respectively. The probability of durable response nine months after CR (12 months
after treatment initiation) was estimated to be 72.5% by Kaplan‐Meier analysis. Thirteen patients had documented
recurrences. Fifty‐seven of 63 (90%) patients completed all six instillations of UGN‐102 according to the study protocol.
Median duration of response was not reached. The most common adverse events, greater than 10%, were most often
reported as mild to moderate in severity and include dysuria, hematuria, urinary frequency, fatigue, urgency and urinary
tract infection. The final data was published online in The Journal of Urology in October 2021 and was included in the
January 2022 print edition.
In December 2022 we presented new data from a follow up study to the OPTIMA II study designed to obtain long‐term
data on UGN‐102 that shows median duration of response of 24.4 months based on available data for 15 out of 25
patients who achieved a CR in OPTIMA II. Seven patients remained in CR, six patients had recurrence of low‐
grade disease, one patient had progression to high‐grade disease and one patient withdrew consent but remained in CR
at the last evaluation prior to discontinuation. All patients were alive at the last contact, and five patients were known to
have had post‐study treatment with TURBT or fulguration.
We initiated our Phase 3 ATLAS trial in December 2020 and until November 2021, were enrolling patients in this trial
comparing UGN‐102 with or without TURBT to standard of care, TURBT. In parallel, we continued to engage in discussions
with the FDA and based on this dialogue, we designed a trial in order to demonstrate the efficacy and safety of UGN‐102.
This Phase 3 ENVISION trial is a single‐arm, multinational, multicenter study evaluating the efficacy and safety of UGN‐102
as primary chemoablative therapy in patients with low‐grade intermediate risk NMIBC. The design of the Phase 3
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ENVISION trial is similar to our Phase 2 OPTIMA II trial in that the patient population has similar clinical characteristics,
receives the same investigational treatment regimen and undergoes similar efficacy and safety assessments and
qualitative follow‐up. Study participants receive six once‐weekly intravesical instillations of UGN‐102. The primary
endpoint is CR rate at three months after the first instillation, and the key secondary endpoint is durability of response in
patients who achieve CR at the three‐month assessment.
In February 2022, we announced the initiation of the Phase 3 ENVISION trial, targeting enrollment of 220 patients across
90 sites. In December 2022, we completed our target enrollment of the Phase 3 ENVISION trial. As a result of the FDA's
acceptance of a single arm approach, we stopped enrollment of the Phase 3 ATLAS trial. However, at the time enrollment
was stopped, patients who had signed an informed consent were able to complete screening, and if eligible were
randomized into the trial.
On July 27, 2023, we announced topline data from our Phase 3 trials, ATLAS and ENVISION. In the ATLAS trial, UGN‐
102 met its primary endpoint of disease‐free survival, reducing risk of recurrence, progression, or death by 55%. Results of
the ATLAS trial also showed a 64.8% CR rate at three months for patients who only received UGN‐102, compared to a
63.6% CR rate at three months for patients who only received a TURBT. The ENVISION trial met its primary endpoint by
demonstrating that patients treated with UGN‐102 had a 79.2% rate of CR at three‐months following the initial treatment.
Additional data evaluating the secondary endpoint of duration of response from ENVISION is anticipated in 2024. In both
trials, the safety profile of UGN‐102 was acceptable, with a safety profile comparable to that observed in previous clinical
trials of UGN‐102.
We also initiated a Phase 3b study with the objective of demonstrating whether UGN‐102 can be administered at home
by a qualified home health professional, avoiding the need for repeated visits to a healthcare setting for instillation. As
per the study design, patients in this study received six once‐weekly intravesical instillations of UGN‐102 with the initial
treatment visit occurring at the investigative site and instillation performed by a qualified physician. Treatment visits two
to six took place at the patient's home and instillations were performed by a properly trained and qualified home health
professional. The primary endpoints of the study include safety and tolerability, discontinuations from at home study
treatment and feedback from patients, home health professionals and investigators via standardized questionnaires. The
study completed enrollment with a total of eight patients across four centers and all study visits for these enrolled
patients have been completed. Preliminary results were reported through a press release in February 2023, finding that
UGN‐102 was suitable to administer at home by a visiting nurse under the supervision of a treating physician and resulted
in 75% of patients achieving a CR, defined as no detectable disease three months after starting treatment. Patients,
nurses and investigators also completed home instillation feasibility questionnaires. These standardized feasibility
questionnaires highlighted that all eight patients preferred at‐home to in‐office treatment, and five of six patients
recommended UGN‐102 home instillation instead of TURBT. Home instillation was reported as feasible for visiting nurses,
and three of four investigators considered at‐home treatment “not different” than in‐office treatment.
In October 2023 we announced our agreement with the FDA on plans for submission of an NDA for UGN‐102 (mitomycin)
for intravesical solution. The FDA indicated that the current clinical development plan for UGN‐102, which includes
evaluation of duration of CR at 12 months from the pivotal ENVISION trial, will support submission of an NDA for the
treatment of low‐grade intermediate risk NMIBC. The FDA indicated that it may seek the advice of the Oncology Drug
Advisory Committee as part of the NDA review process. The FDA also agreed that the UGN‐102 NDA can utilize a rolling
review, allowing for early submission of the CMC sections of the NDA, which we submitted in January 2024. Based on our
agreement with the FDA, we expect to complete the submission of the rolling NDA for UGN‐102 in September 2024.
In January 2024 we entered into a licensing and supply agreement with medac Gesellschaft für klinische Spezialpräparate
m.b.H. (“medac”) to develop UGN‐103 and UGN‐104 which are intended to be a next‐generation formulation of UGN‐102
and Jelmyto, respectively, that combine medac’s proprietary mitomycin formulation technology with our RTGel
technology, which we believe will provide advantages related to production, cost, supply and product convenience. We
plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐103 in low‐grade intermediate risk
NMIBC. We also plan to initiate a Phase 3 study in 2024 to explore the safety and efficacy of UGN‐104 in low‐grade UTUC.
93
UGN‐301 (zalifrelimab) intravesical solution
Our immuno‐uro‐oncology pipeline includes UGN‐301, an anti‐CTLA‐4 monoclonal antibody, which we intend to study as
a standalone agent and as a combination therapy. UGN‐301 is delivered using our proprietary RTGel technology, which
has been designed to significantly improve the effectiveness of certain intravesical therapies.
High‐grade NMIBC is a highly aggressive form of bladder cancer. TURBT followed by adjuvant intravesical immunotherapy
with BCG is the current standard of care therapy for high‐grade NMIBC. However, the high rates of recurrence and
significant risk of progression to muscle‐invasive tumors are particularly dangerous. Radical cystectomy, or bladder
removal is strongly advocated in patients with BCG‐unresponsive NMIBC (i.e., patients with BCG‐refractory and BCG‐
relapsing tumors in whom further BCG therapy is not recommended) or for patients who cannot tolerate BCG.
The first combination we are investigating clinically involves the sequential use of UGN‐201 (imiquimod), a TLR 7 agonist,
and UGN‐301 in high‐grade NMIBC. UGN‐201 is a liquid formulation of imiquimod for intravesical administration that has
been optimized for delivery in the urinary tract. The second combination we are investigating clinically involves the
sequential administration of gemcitabine and UGN‐301 to the bladder in high‐grade NMIBC. Gemcitabine is a
chemotherapy that is used intravesically to treat high grade NMIBC where it is administered as a liquid formulation. We
believe these two combinations could elicit both an innate and adaptive immune response, which may translate into a
long‐lasting acquired immune response, and potentially represent a valid post‐TURBT adjuvant treatment of high‐grade
NMIBC. UGN‐301 is delivered using our proprietary RTGel technology, which has been designed to significantly improve
the effectiveness of certain intravesical therapy. We believe that these combinations make local therapy a potentially
more effective treatment option while minimizing systemic exposure and potential side effects.
In March 2022, we announced FDA clearance of our IND to begin a novel Phase 1 clinical study of UGN‐301 in patients
with recurrent NMIBC. The novel study design utilizes a Master Protocol that we believe is a more efficient and
streamlined approach to development. It will provide more flexibility to add study arms as the trial progresses and is
expected to increase efficiency and potentially reduce costs. We expect the Master Protocol will allow us to more quickly
evaluate safety, tolerability and dosing of UGN‐301 in combination with additional immunomodulators and
chemotherapies, with the goal of developing optimized treatment regimens for patients. The multi‐arm Phase 1 study,
which is expected to support the development of UGN‐301 in high‐grade NMIBC, was initiated in April 2022 and is actively
enrolling. We expect safety and tolerability data from this Phase 1 study in mid‐2024.
Research and Development and License Agreements
Agenus Agreement
In November 2019, we entered into a license agreement with Agenus, pursuant to which Agenus granted us an exclusive,
worldwide (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela and their respective territories and
possessions), royalty‐bearing, sublicensable license under Agenus’s intellectual property rights to develop, make, use, sell,
import, and otherwise commercialize products incorporating a proprietary monoclonal antibody of Agenus known as
AGEN1884 (zalifrelimab), an anti‐CTLA‐4 antagonist, for the treatment of cancers of the urinary tract via intravesical
delivery. UGN‐301 is a formulation of zalifrelimab administered using RTGel technology that is in Phase 1
clinical development for high‐grade NMIBC.
MD Anderson Agreement
In January 2021, we announced that we had entered into a three‐year strategic research collaboration agreement with
MD Anderson focusing on the sequential use of UGN‐201 and UGN‐301 as an investigational treatment for high‐grade
NMIBC. Pursuant to the agreement, we have made bi‐annual payments totaling $2.0 million to MD Anderson to fund the
collaboration, recognized evenly over the associated period through research and development expenses. In July 2022,
we determined that we had achieved the objectives that we established when the agreement was initiated, and notified
MD Anderson that we were exercising our right to conclude the collaboration in 2022 as we did not foresee initiating
further development activities as part of the collaboration, although we will continue to collaborate on existing joint
projects. As a result of this notification, we were not responsible for any further fixed bi‐annual funding payments in 2023,
although we are responsible for costs related to existing joint projects to the extent they exceed the payments already
made to MD Anderson.
94
For additional information regarding our research and development and license agreements, see Note 13 to our
consolidated financial statements appearing elsewhere in this Annual Report.
Components of Operating Results
Revenue
During the year ended December 31, 2023 and December 31, 2022, we recognized $ 82.7 million and $64.4 million of
revenue, respectively, from sales of our product, Jelmyto.
Cost of Revenue
Cost of revenue consists primarily of inventory and related costs associated with the manufacturing, distribution,
warehousing and preparation of Jelmyto, including inventory write‐downs. In periods prior to receiving FDA approval for
Jelmyto, we recognized inventory and related costs associated with the manufacture of Jelmyto as research and
development expense.
Research and Development Expenses
Research and development expenses, net consists primarily of:
•
•
•
salaries and related costs, including share‐based compensation expense, for our personnel in research and
development functions;
facility and equipment costs, including depreciation expense, maintenance and allocated direct and indirect
overhead costs;
expense incurred under agreements with third parties, including CROs, subcontractors, suppliers and
consultants, nonclinical studies and clinical trials;
•
expense incurred to acquire, develop and manufacture nonclinical study and clinical trial materials; and
•
expense incurred to purchase API in support of R&D activities and other related manufacturing costs.
We manage and prioritize our research and development expenses based on scientific data, probability of successful
technical development and regulatory approval, market potential and unmet medical need, available human and capital
resources and other considerations. We regularly review our research and development activities and, as necessary,
reallocate resources among our program, product candidates and external opportunities that we believe will best support
the long‐term growth of our business. We do not track total research and development expenses by program, product
candidates, or development phase.
The following table provides a breakout of expenses by major cost type:
(in thousands)
Personnel, facility and equipment, and other overhead costs ............................
Clinical and other development costs ..................................................................
Total ..................................................................................................................... $
2023
2022
16,245
29,369
45,614$
16,993
35,913
52,906
We expense all research and development costs as incurred. We estimate nonclinical study and clinical trial
expense based on the services performed pursuant to contracts with research institutions and contract research
organizations that conduct and manage nonclinical studies and clinical trials on our behalf based on actual time and
expense incurred by them.
95
We recognize costs incurred as the services are being provided by monitoring the status of the trial or project and the
invoices received from our external service providers. We adjust our accrual as actual costs become known. Where at risk
contingent milestone payments are due to third parties under research and development and collaboration agreements,
the milestone payment obligations are expensed when such development milestone results are achieved.
License fees and development milestone payments related to in‐licensed products and technology are expensed as
incurred, or achieved in the case of milestones, if it is determined at that point that they have no established alternative
future use.
We are currently focused on advancing our product candidates, and our future research and development expense will
depend on their clinical success. Research and development expense will continue to be significant.
Research and development activities are central to our business model. Product candidates in later stages of clinical
development generally have higher development costs than those in earlier stages of clinical development, primarily due
to the increased size and duration of later‐stage clinical trials. We do not believe that it is possible at this time to
accurately project total expenses required for us to reach commercialization of our product candidates. Due to the
inherently unpredictable nature of nonclinical and clinical development, we are unable to estimate with certainty the
costs we will incur and the timelines that will be required in the continued development and approval of our product
candidates. Clinical and nonclinical development timelines, the probability of success and development costs can differ
materially from expectations. In addition, we cannot forecast which product candidates may be subject to future
collaborations, if and when such arrangements will be entered into, if at all, and to what degree such arrangements would
affect our development plans and capital requirements. We expect our research and development expense to increase
over the next several years as our clinical programs progress and as we seek to initiate clinical trials of additional product
candidates. We also expect to incur increased research and development expense as we selectively identify and develop
additional product candidates.
The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of
factors that include, but are not limited to, the following:
•
per patient trial costs;
•
the number of patients that participate in the trials;
•
the number of sites included in the trials;
•
the countries in which the trials are conducted;
•
the length of time required to enroll eligible patients;
•
the number of doses that patients receive;
•
the drop‐out or discontinuation rates of patients;
•
potential additional safety monitoring or other studies requested by regulatory agencies;
•
the duration of patient follow‐up; and
•
the efficacy and safety profile of the product candidates.
In addition, the probability of success for each product candidate will depend on numerous factors, including competition,
manufacturing capability and commercial viability. We will determine which programs to pursue and how much to fund
each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each
product candidate’s commercial potential.
96
Other than Jelmyto, which was approved by the FDA in April 2020, we have not received approval of any of our product
candidates. UGN‐102 and UGN‐301 are still in clinical development. As such, we cannot estimate the actual amounts
necessary to successfully complete the development and commercialization of our product candidates or whether, or
when, we may achieve profitability. We expect to finance our cash needs through revenue from commercial sales of
Jelmyto and a combination of equity or debt financings and collaboration arrangements.
Selling and Marketing Expenses
To date, selling and marketing expenses consist primarily of commercial personnel costs (including share‐based
compensation) along with pre‐commercialization and commercialization activities related to Jelmyto, formerly known as
UGN‐101.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs (including share‐based compensation related to
directors, executives, finance, medical affairs, business development, investor relations, and human resource functions).
Other significant costs include medical affairs services, external professional service costs, facility costs, accounting and
audit services, legal services, and other consulting fees.
Financing on Prepaid Forward Obligation
Financing on prepaid forward obligation is comprised of financing expense related to the RTW Transaction (see Note 9 to
our consolidated financial statements appearing elsewhere in this Annual Report).
Interest Expense
Interest expense is comprised of interest related to our long‐term debt with Pharmakon (see Note 10 to our consolidated
financial statements appearing elsewhere in this Annual Report).
Interest and Other Income, Net
Interest and other income, net, consisted primarily of interest income, net losses on foreign exchange and bank
commissions.
Income Taxes
We have yet to generate taxable income in Israel. We have historically incurred operating losses resulting in carry forward
tax losses totaling approximately $452.0 million as of December 31, 2023. We anticipate that we will continue to generate
tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future
taxable years. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of
our carry forward tax losses. We have provided a full valuation allowance with respect to the deferred tax assets related
to these carry forward losses. Income tax expense also consists of our estimate of uncertain tax positions, and related
interest and penalties. See Note 17 to our consolidated financial statements appearing elsewhere in this Annual Report
for further information.
97
Results of Operations
Comparison of the Years Ended December 31, 2023 and 2022
The following table sets forth our results of operations for the years ended December 31, 2023 and 2022.
Revenue ........................................................................ $
Cost of revenue .............................................................
Gross profit ...................................................................
Operating expenses:
Research and development .....................................
Selling and marketing ..............................................
General and administrative .....................................
Total operating expenses ..............................................
Operating loss ...............................................................
Financing on prepaid forward obligation ......................
Interest expense on long‐term debt .............................
Interest and other income, net .....................................
Loss before income taxes ..............................................
Income tax expense ......................................................
Net loss .......................................................................... $
Revenue
2023
Year Ended December 31,
2022
(in thousands)
Change
82,713 $
9,361
73,352
45,614
54,703
38,571
138,888
(65,536)
(21,552)
(14,715)
3,479
(98,324)
(3,920)
(102,244) $
64,357 $
7,654
56,703
52,906
51,920
30,918
135,744
(79,041 )
(21,559 )
(8,438 )
1,010
(108,028 )
(1,755 )
(109,783 ) $
18,356
1,707
16,649
(7,292)
2,783
7,653
3,144
13,505
7
(6,277)
2,469
9,704
(2,165)
7,539
Revenues were $82.7 million and $64.4 million for the years ended December 31, 2023 and 2022, respectively. The
increase of $18.3 million was primarily driven by the increased volume of sales of Jelmyto. 2023 full‐year Jelmyto net
revenues also include higher revenue reserves driven by 340B chargebacks and estimated Medicare refunds for discarded
drugs, offset by $4.4 million in CREATES Act sales, of which $2.4 million was realized in the fourth quarter of 2023.
Cost of Revenue
Cost of revenue was $9.4 million and $7.7 million for the years ended December 31, 2023 and 2022, respectively. In
periods prior to receiving FDA approval for Jelmyto, we recognized inventory and related costs associated with the
manufacture of Jelmyto as research and development expense. The overall increase of $1.7 million is primarily
attributable to the increased volume of sales of Jelmyto and partially attributable to the full depletion of inventories that
we had expensed prior to receiving FDA approval.
Research and Development Expenses
Research and development expenses were $45.6 million and $52.9 million for the years ended December 31, 2023 and
2022, respectively. The decrease in research and development expenses of $7.3 million is primarily attributable to
lower research and development expenses due to the conclusion of the ATLAS trial, lower cost related to the Phase 3
ENVISION trial for UGN‐102, and the ending of our collaboration with MD Anderson, partially offset by higher research
and development expenses related to our Phase 1 study for UGN‐301, cost incurred related to research into ingredient
scale‐up and production for UGN‐102, and clinical compensation expenses.
Selling and Marketing Expenses
Selling and marketing expenses were $54.7 million and $51.9 million for the years ended December 31, 2023 and 2022,
respectively. The increase in selling and marketing expenses of $2.8 million is primarily attributable to brand marketing
related expenses and commercial operation advertisement, conferences and trainings, and commercial compensation
expenses, partially offset by lower commercial back‐office services and support expenses.
98
General and Administrative Expenses
General and administrative expenses were $38.6 million and $30.9 million for the years ended December 31, 2023 and
2022, respectively. The increase in general and administrative expenses of $7.7 million resulted primarily from higher
compensation expenses, third‐party advisory providers, recruiting fees, certain media and meeting expenses, and ongoing
managed services.
Financing on Prepaid Forward Obligation
Financing on prepaid forward obligation was $21.6 million and $21.6 million for the years ended December 31, 2023 and
2022, respectively. The measurement of financing on prepaid forward obligation is an accounting estimate under the
"imputed interest method" of accounting (see Note 9 to our consolidated financial statements appearing elsewhere in
this Annual Report) which is affected by estimated future payments to RTW, which are based on a percentage of
revenues.
Interest Expense on Long‐term Debt
Interest expense was $14.7 million and $8.4 million for the years ended December 31, 2023 and 2022, respectively. The
cost in 2023 relates to interest expense on the Pharmakon loan for four full quarters versus the prior year given the
funding of the first tranche and second tranche of the Term Loans was in March 2022 and in December 2022,
respectively. In addition, the increase was attributable to increase in interest rates related to the Pharmakon loan.
Interest and Other Income, Net
Interest and other income, net was $3.5 million and $1.0 million for the years ended December 31, 2023 and 2022,
respectively. The increase in interest and other income, net was primarily due to higher cash and investment balance
earning interest and changes in the overall interest rate environment.
Liquidity and Capital Resources
As of December 31, 2023, we had $141.5 million in cash and cash equivalents and marketable securities. Cash in excess of
immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and
capital preservation, and is held primarily in U.S. dollars.
Through December 31, 2023, we funded our operations primarily through public equity offerings, private placements of
equity securities and our funding arrangements with RTW and Pharmakon.
In December 2019, we entered into the ATM Sales Agreement with Cowen pursuant to which we may from time to time
offer and sell our ordinary shares having an aggregate offering price of up to $100.0 million. The remaining capacity under
the ATM Sales Agreement was approximately $83.4 million as of December 31, 2023, and subsequent to December 31,
2023, we sold approximately $26.6 million of our ordinary shares pursuant to the ATM Sales Agreement. The shares will
be offered and sold pursuant to our shelf registration statement on Form S‐3 filed with the SEC on November 15, 2022,
which was declared effective on November 29, 2022.
In March 2021, we entered into a prepaid forward agreement with RTW, pursuant to which RTW agreed to provide us
with an upfront cash payment of $75.0 million to support the launch of Jelmyto and the development of UGN‐102, and we
agreed to provide RTW with tiered future payments based on global annual net product sales of Jelmyto and UGN‐102, if
approved. In May 2021, following the receipt of necessary regulatory approvals, we received the $75.0 million prepaid
forward payment ($72.4 million net of transaction costs) from RTW.
On March 7, 2022, we entered into the Loan Agreement with Pharmakon for a senior secured term loan of up to $100.0
million in two tranches. The first tranche of $75.0 million ($72.6 million of proceeds were received, $70.8 million net of
additional transaction costs) was funded in March 2022, and the second tranche of $25.0 million was funded in December
2022.
99
On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third
and fourth tranche of senior secured loan. The third tranche of $25.0 million is mandatory and required to be drawn by
September 30, 2024, subject to satisfaction of customary conditions. The fourth tranche of $75.0 million may be drawn at
our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M
tranche, (ii) receiving FDA approval of an NDA for UGN‐102 no later than June 30, 2025 and (iii) satisfaction of customary
conditions.
On July 26, 2023, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional
and other accredited investors (the “Purchasers”), pursuant to which we agreed to sell and issue to the Purchasers
12,579,156 ordinary shares of the Company (“Shares”) (or in lieu of Shares, pre‐funded warrants to purchase ordinary
shares of the Company) at a purchase price of $9.54 per Share (or $9.539 for each ordinary share underlying a pre‐
funded warrant), in a private placement transaction that closed on July 28, 2023 and August 9, 2023 (the “Private
Placement”) for aggregate gross proceeds of $120.0 million, before deducting fees to placement agents and financial
advisors and before other expenses. Each pre‐funded warrant has an exercise price of $0.001 per ordinary share, subject
to customary adjustments, and became exercisable upon original issuance and will not expire until exercised in full.
The pre‐funded warrants may not be exercised if the aggregate number of ordinary shares beneficially owned by the
holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation. The
aggregate fee paid by us to placement agents and financial advisors was $3.6 million, plus the reimbursement of certain
expenses.
We have incurred losses since our inception and negative cash flows from our operations, and as of December 31, 2023
we had an accumulated deficit of $679.3 million. We anticipate that we will continue to incur losses for the reasonably
foreseeable future. Our primary uses of capital are, and we expect will continue to be, commercialization activities,
research and development expense, including third‐party clinical research and development services, laboratory and
related supplies, clinical costs, including manufacturing costs, legal and other regulatory expense and general and
administrative costs, partially offset by proceeds from sales of Jelmyto.
We routinely evaluate our liquidity needs, including assessment of our current financial condition, sources of liquidity
including current cash and cash equivalents and marketable securities and management’s cash flow projections. Our
ability to continue as a going concern is expected to be impacted by our ability to raise additional capital to fund our
operations, produce cash inflows from Jelmyto product sales and develop UGN‐102. We believe that absent sufficient
proceeds received from equity, financing, or business development transactions, we will not have sufficient cash and cash
equivalents to fund our operations beyond one year from the issuance of our consolidated financial statements included
elsewhere in this Annual Report. We estimate that our existing resources and projected revenues will only be sufficient to
fund our planned operations until the first quarter of 2025. Accordingly, we will, within the next 12 months, require
significant additional financing to continue our operations. In addition, there can be no assurances that we will be able to
secure such additional financing if at all, on terms that are satisfactory to us, and in amounts sufficient to meet our needs.
These factors raise substantial doubt about our ability to continue as a going concern. Failure to successfully receive
additional financing will require us to delay, limit or reduce product development and commercialization efforts.
We cannot estimate the actual amounts necessary to successfully commercialize any approved products, or whether, or
when, we may achieve profitability. Until such time, if ever, as we can generate substantial product revenue, we expect to
finance our cash needs through a combination of equity or debt financings and collaboration arrangements.
Cash Flows
The following table sets forth the significant sources and uses of cash for the periods set forth below:
Year Ended December 31,
2022
2023
(in thousands)
Net cash (used in) provided by:
Operating activities ..................................................................................... $
Investing activities ......................................................................................
Financing activities .....................................................................................
Net change in cash and cash equivalents ......................................................... $
(76,376) $
(953)
116,931
39,602 $
(87,559)
1,060
97,134
10,635
100
Operating Activities
Net cash used in operating activities was $76.4 million during the year ended December 31, 2023, compared to
$87.6 million used in operating activities during the year ended December 31, 2022. The $11.2 million decrease was
attributable primarily to timing of certain accruals and cash payments, as well as increase in net sales of our product
Jelmyto during 2023 and higher inventory purchases, including non‐current inventory, in 2022, partially offset by increase
in interest on long‐term debt.
Investing Activities
Net cash used in investing activities was $1.0 million during the year ended December 31, 2023, compared to net cash
provided by investing activities of $1.1 million during the year ended December 31, 2022. The decrease of $2.1 million is
attributable primarily to proportionately less maturities to purchases of marketable securities during 2023 as compared to
2022.
Financing Activities
Net cash provided by financing activities was $116.9 million during the year ended December 31, 2023, compared to net
cash provided by financing activities of $97.1 million during the year ended December 31, 2022. The increase of $19.8 is
attributable primarily to proceeds from the Private Placement in the current year as compared to proceeds from the
Pharmakon loan in the prior year.
Funding and Material Cash Requirements
Our present and future funding and material cash requirements will depend on many factors, including, among other
things:
•
the progress, timing and completion of clinical trials for UGN‐102 and UGN‐301;
•
nonclinical studies and clinical trials for any of our other product candidates;
•
•
•
•
•
the costs related to obtaining regulatory approval UGN‐102 and UGN‐301 and any of our other product
candidates, and any delays we may encounter as a result of regulatory requirements or adverse clinical trial
results with respect to any of these product candidates;
selling, marketing and patent‐related activities undertaken in connection with the commercialization of Jelmyto
and UGN‐102 and any of our other product candidates, and costs involved in the continued development of an
effective sales and marketing organization;
the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents
or defending against claims or infringements raised by third parties, and license royalties or other amounts we
may be required to pay to obtain rights to third party intellectual property rights;
potential new product candidates we identify and attempt to develop;
revenues we may derive either directly or in the form of royalty payments from future sales of Jelmyto, UGN‐
102, UGN‐301, RTGel reverse thermal hydrogel technology and any other product candidates; and
•
the repayment of outstanding debt.
Accordingly, we will need to obtain additional funding in connection with our continuing operations. If we are unable to
raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and
development programs or future commercialization efforts.
101
We may finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic
alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or
convertible debt securities, your ownership interest will be diluted, and the terms of any additional securities may include
liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing, if available, may involve
agreements that include covenants that further limit or restrict our ability to take specific actions, such as incurring
additional debt, making capital expenditures or declaring dividends. In addition, the terms of the Forward Contract with
RTW and the Loan Agreement limit our ability to take certain actions, including incurring additional indebtedness.
If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we
may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product
candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds
through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product
development or future commercialization efforts or grant rights to develop and market product candidates that we would
otherwise prefer to develop and market ourselves.
For more information as to the risks associated with our future funding needs, see “Item 1.A – Risk Factors.” We will
require additional financing to achieve our goals, and a failure to obtain this capital when needed and on acceptable
terms, or at all, could force us to delay, limit, reduce or terminate our product development, commercialization efforts or
other operations.
Contractual Obligations and Commitments
In April 2016, we signed an addendum to our November 2014 lease agreement for our executive offices located in Israel,
in order to increase the office space rented and to extend the rent period until 2019. In March 2019, we utilized the
agreement extension option and extended the rent period for an additional three years until August 2022. In July 2022,
we signed a lease extension agreement extending the term of the lease through September 2025.
In April 2018, we entered into a new lease agreement for an office in Los Angeles, CA. The lease commencement date was
July 10, 2018 and terminated in March 2024. In November 2019, we subleased our offices in Los Angeles, CA. The lease
commencement date was January 1, 2020 and terminated in March 2024. The subtenants exercised their early access
clause and moved into the premises at the end of November 2019.
Also, in November 2019, we entered into a new lease agreement, dated effective October 31, 2019, for an office in
Princeton, NJ. The lease commencement date was November 29, 2019 and the lease term is 38 months. In June 2022, we
signed an amendment to our November 2019 lease agreement to extend the term for an additional three years through
January 31, 2026.
The total obligation for future minimum lease payments under our operating leases is $1.8 million as of December 31,
2023. See Note 11 to the consolidated financial statements appearing elsewhere in this Annual Report for further
information.
On March 7, 2022, we entered into the Loan Agreement with Pharmakon for a senior secured term loan of up to $100.0
million in two tranches. The first tranche of $75.0 million ($72.6 million of proceeds were received, $70.8 million net of
additional transaction costs) was funded in March 2022, and the second tranche of $25.0 million was funded in December
2022.
On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third
and fourth tranche of senior secured loan. The third tranche of $25.0 million is mandatory and required to be drawn by
September 30, 2024, subject to satisfaction of customary conditions. The fourth tranche of $75.0 million may be drawn at
our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M
tranche, (ii) receiving FDA approval of an NDA for UGN‐102 no later than June 30, 2025 and (iii) satisfaction of customary
conditions.
102
All outstanding loans with Pharmakon accrue interest using a benchmark rate of 3‐month SOFR plus 7.25% plus an
additional adjustment of 0.26161%. All outstanding principal will be required to be repaid in four equal quarterly
installments commencing in the second quarter of 2026, with a one‐year extension upon FDA approval of an NDA for
UGN‐102. All outstanding loans with Pharmakon can be prepaid in whole at the Company's discretion, at any time,
subject to prepayment premiums, make‐whole amounts and fees.
The obligations of the Borrower under the Loan Agreement are guaranteed on a full and unconditional basis by UroGen
Pharma Ltd. and the other Guarantor and are secured by substantially all of the respective Credit Parties’ tangible and
intangible assets and property, including intellectual property, subject to certain exceptions.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial
statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires
us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses
during the reporting periods. In accordance with GAAP, we base our estimates on historical experience and on various
other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual
results may differ materially from our estimates and judgments under different assumptions or conditions. We
periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material
revisions in estimates, if any, are reflected in our financial statements prospectively from the date of the change in
estimate.
We define our critical accounting policies as those accounting principles generally accepted in the United States that
require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material
impact on our financial condition and results of operations, as well as the specific manner in which we apply those
principles. While our significant accounting policies are more fully described in Note 3 to our consolidated financial
statements appearing elsewhere in this Annual Report, we believe the following are the critical accounting policies used
in the preparation of our financial statements.
Revenue
Product sales from Jelmyto are recognized as revenue under ASC 606 at the point in time that control of the product has
been transferred to the customer, generally at the point the product has been delivered to the treating physician. All
product sales of Jelmyto are recognized through our arrangement with a single customer, a third‐party national specialty
distributor. Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to
the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price
offered to the end consumer, chargebacks relating to 340B drug pricing programs and other government sponsored
programs, Medicaid drug rebate programs, our co‐pay assistance program, and Medicare refunds for discarded
drug, which are estimated based on our historical experience.
Share‐Based Compensation
We account for employees’ and directors’ share‐based payment awards classified as equity awards using the grant‐date
fair value method. The fair value of share‐based payment transactions is recognized as an expense over the requisite
service period, which is equal to the vesting period. For performance stock units (“PSUs”), cost is measured at the grant
date based on the fair value of the award and is recognized over any relevant service period as expense when the
achievement of the performance condition is probable. The fair value of options is determined using the Black‐Scholes
option‐pricing model. The fair value of a restricted stock unit (“RSU”) or a PSU equals the closing price of our ordinary
shares on the grant date. We account for forfeitures as they occur in accordance with ASC Topic 718, “Compensation—
Stock Compensation”.
We elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting
schedule using the straight‐line method and to value the awards based on the single‐option award approach.
Performance based awards are expensed over the requisite service period when the achievement of performance criteria
is probable.
103
Prepaid Forward Obligation
Under the RTW Transaction, we received funds to support the continued launch of Jelmyto and the development of UGN‐
102 in return for tiered, future cash payments based on net sales of Jelmyto and UGN‐102, if approved by the FDA. The
net proceeds received under the RTW Transaction were recognized as a long‐term liability. We recognize the current cash
payable amounts under the arrangement within other current liabilities on the consolidated balance sheets. The
subsequent measurement for the liability follows the accounting principles defined in ASC Topic 835‐30, “Imputation of
Interest”. Each period we make a payment to RTW, an expense is recognized related to financing on the prepaid forward
obligation based on an imputed rate derived from the expected future payments. Management reassesses the effective
rate each period based on the current carrying value of the obligation and the revised estimated future payments.
Changes in future payments from previous estimates are included in future financing expense.
Income Taxes
We provide for income taxes based on pretax income, if any, and applicable tax rates available in the various jurisdictions
in which we operate, including Israel and the U.S. Deferred taxes are computed using the asset and liability method.
Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax
rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will
not be realized in the foreseeable future.
We follow a two‐step approach in recognizing and measuring uncertain tax positions. After concluding that a particular
filing position can be recognized (i.e., has a more‐likely‐than‐not chance of being sustained), ASC 740‐10‐30‐7 requires
that the amount of benefit recognized be measured using a methodology based on the concept of cumulative probability.
Under this methodology, the amount of benefit recorded represents the largest amount of tax benefit that is greater than
50% likely to be realized upon settlement with a taxing authority that has full knowledge of all relevant information.
Item 7A. Quantitative and Qualitative Disclosures about Market Risks
Interest Rate Fluctuation Risk
Some of the securities in which we invest have market risk in that a change in prevailing interest rates may cause the
principal amount of the marketable securities to fluctuate. Financial instruments that potentially subject us to significant
concentrations of credit risk consist primarily of cash and cash equivalents. As of December 31, 2023, we had
approximately $141.5 million in cash, cash equivalents and marketable securities. We invest our cash primarily in money
market accounts, certificates of deposit, commercial paper and debt instruments of U.S. government‐sponsored agencies,
the U.S. Treasury, financial institutions, and corporations. The primary objectives of our investment activities are to
ensure liquidity and to preserve principal while at the same time maximizing the income we receive from our marketable
securities without significantly increasing risk. We have established guidelines regarding approved investments and
maturities of investments, which are designed to maintain safety and liquidity. If a 10% change in interest rates were to
have occurred on December 31, 2023, this change would not have had a material effect on the fair value of our cash and
cash equivalents as of that date.
Inflation Risk
Inflation generally may affect us by increasing our cost of labor and clinical trial costs. Inflation did not have a material
effect on our business, financial condition or results of operations during the year ended December 31, 2023.
Foreign Currency Exchange Risk
The U.S. dollar is our functional and reporting currency. However, a significant portion of our operating expenses are
incurred in NIS. As a result, we are exposed to the risk that the NIS may appreciate relative to the dollar, or, if the NIS
instead devalues relative to the dollar, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or
that the timing of such devaluation may lag behind inflation in Israel. In any such event, the dollar cost of our operations
in Israel would increase and our dollar‐denominated results of operations would be adversely affected. We cannot predict
any future trends in the rate of inflation in Israel or the rate of devaluation, if any, of the NIS against the dollar. For
104
example, the dollar appreciated against the NIS during 2023 by a total of 2.4%. If the dollar cost of our operations in Israel
increases, our dollar‐measured results of operations will be adversely affected. Our operations also could be adversely
affected if we are unable to effectively hedge against currency fluctuations in the future.
We do not currently engage in currency hedging activities in order to reduce this currency exposure, but we may begin to
do so in the future. Instruments that may be used to hedge future risks may include foreign currency forward and swap
contracts. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully
protected against material foreign currency fluctuations.
Item 8. Financial Statements and Supplementary Data
UroGen Pharma Ltd.
Index to financial statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) ..................................................................
Consolidated Balance Sheets ..........................................................................................................................................
Consolidated Statements of Operations and Comprehensive Loss ................................................................................
Consolidated Statements of Shareholders’ Deficit .........................................................................................................
Consolidated Statements of Cash Flows .........................................................................................................................
Notes to Consolidated Financial Statements ..................................................................................................................
Pages
106
108
109
110
111
112
105
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of UroGen Pharma Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UroGen Pharma Ltd. and its subsidiary (the
“Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and
comprehensive loss, of shareholders' deficit and of cash flows for the years then ended, including the related notes
(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and
2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Substantial Doubt About the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a
going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred losses and
experienced negative operating cash flows since its inception that raise substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our
audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we
express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in
any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
106
Revenue Recognition ‐ Gross Revenue from Product Sales
As described in Notes 1, 3 and 12 to the consolidated financial statements, product sales from the Company’s
commercial product, Jelmyto, are recognized as revenue at the point in time that control of the product has been
transferred to the customer, generally at the point the product has been delivered to the treating physician. All product
sales of Jelmyto are recognized through the Company's arrangement with a single customer, a third‐party national
specialty distributor. Net revenue recognized includes gross revenue and management’s estimate of returns,
consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the
contracted price offered to the end consumer, chargebacks relating to 340B drug pricing programs and other
government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and
Medicare refunds for discarded drug. The Company’s consolidated net revenue was $82.7 million for the year ended
December 31, 2023, of which gross revenue from product sales represented a majority.
The principal consideration for our determination that performing procedures relating to revenue recognition for gross
revenue from product sales is a critical audit matter is a high degree of auditor effort in performing procedures related
to the Company’s revenue recognition.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included, among others (i) testing the
Company’s reconciliation of gross revenue recognized from product sales to third‐party information, (ii) evaluating
reconciling items, as applicable, (iii) confirming sales terms with the Company’s single customer, (iv) confirming
accounts receivable from product sales of Jelmyto with the Company’s single customer, and (v) evaluating a sample of
gross revenue transactions by obtaining and inspecting source documents, including the customer contract, purchase
orders, invoices, proof of delivery, cash remittances, and bank statements, as applicable.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
March 14, 2024
We have served as the Company’s auditor since 2020.
107
UROGEN PHARMA LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts and par value)
Current assets:
Assets
Cash and cash equivalents ......................................................................................... $
Marketable securities ................................................................................................
Restricted cash ...........................................................................................................
Accounts receivable ...................................................................................................
Inventories .................................................................................................................
Prepaid expenses and other current assets ...............................................................
Total current assets .........................................................................................................
Non‐current assets:
Property and equipment, net ....................................................................................
Restricted deposit ......................................................................................................
Right‐of‐use assets .....................................................................................................
Marketable securities ................................................................................................
Other non‐current assets ...........................................................................................
Total Assets ..................................................................................................................... $
Liabilities and Shareholders' Deficit
Current liabilities:
Accounts payable and accrued expenses .................................................................. $
Employee related accrued expenses .........................................................................
Other current liabilities ..............................................................................................
Total current liabilities:
Non‐current liabilities:
Prepaid forward obligation ........................................................................................
Long‐term debt ..........................................................................................................
Long‐term lease liabilities ..........................................................................................
Uncertain tax positions liability .................................................................................
Total Liabilities ................................................................................................................
Commitments and Contingencies (Note 19)
Shareholders' Deficit:
Ordinary shares, NIS 0.01 par value; 100,000,000 shares authorized at December
31, 2023 and 2022; 32,490,119 and 23,129,953 shares issued and outstanding
as of December 31, 2023 and 2022, respectively ..................................................
Additional paid‐in capital ...........................................................................................
Accumulated deficit ...................................................................................................
Accumulated other comprehensive income (loss) ....................................................
Total Shareholders' Deficit .............................................................................................
Total Liabilities and Shareholders' Deficit ..................................................................... $
December 31,
2023
2022
95,002 $
41,966
821
15,443
5,673
10,281
169,186
689
225
1,671
4,502
2,038
178,311 $
16,538 $
10,814
3,860
31,212
109,722
98,551
844
3,194
243,523
55,408
44,556
813
12,704
4,325
11,101
128,907
1,297
223
2,452
—
2,740
135,619
12,383
8,257
3,276
23,916
98,923
97,537
1,586
3,018
224,980
89
614,035
(679,348)
12
(65,212)
178,311 $
63
487,787
(577,104 )
(107 )
(89,361 )
135,619
The accompanying notes are an integral part of these consolidated financial statements.
108
UROGEN PHARMA LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
Year Ended December 31,
2023
2022
Revenue ........................................................................................................................ $
Cost of revenue .............................................................................................................
Gross profit ...................................................................................................................
Operating expenses:
Research and development expenses ...................................................................
Selling, general and administrative expenses ........................................................
Operating loss ...............................................................................................................
Financing on prepaid forward obligation ......................................................................
Interest expense on long‐term debt .............................................................................
Interest and other income, net .....................................................................................
Loss before income taxes ..............................................................................................
Income tax expense ......................................................................................................
Net Loss ........................................................................................................................ $
82,713 $
9,361
73,352
45,614
93,274
(65,536 )
(21,552 )
(14,715 )
3,479
(98,324 )
(3,920 )
(102,244 ) $
64,357
7,654
56,703
52,906
82,838
(79,041 )
(21,559 )
(8,438 )
1,010
(108,028 )
(1,755 )
(109,783 )
Statements of Comprehensive Loss
Net loss ......................................................................................................................... $
Other comprehensive income (loss)
(102,244 ) $
(109,783 )
Unrealized gain (loss) on investments ...................................................................
Comprehensive Loss ..................................................................................................... $
119
(102,125 ) $
Net loss per ordinary share ‐ basic and diluted ............................................................ $
(3.55 ) $
(82 )
(109,865 )
(4.81 )
Weighted average number of shares outstanding used in computation of basic and
diluted loss per ordinary share ..................................................................................
28,834,303
22,806,812
The accompanying notes are an integral part of these consolidated financial statements.
109
UROGEN PHARMA LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT
(in thousands, except share amounts)
Ordinary Shares
Number of
Shares
Amount
Additional
Paid‐in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss) Total
Amounts
Balance as of December 31, 2021 ... 22,462,995 $
Changes During 2022
61 $ 475,698 $
(467,321 ) $
(25) $
8,413
Exercise of options into ordinary
shares ........................................
Share‐based compensation ..........
Other comprehensive loss ............
Net loss .........................................
Balance as of December 31, 2022 ... 23,129,953 $
Changes during 2023
666,958
2
1,509
10,580
63 $ 487,787 $
(109,783 )
(577,104 ) $
Exercise of options into ordinary
shares ........................................
Share‐based compensation ..........
Issuance of pre‐funded warrants,
net of issuance costs .................
Conversion of pre‐funded
460,053
1
872
9,343
48,700
warrants into ordinary shares ... 1,599,733
5
(5)
Issuance of ordinary shares, net of
issuance costs ............................ 7,300,380
20
67,338
Other comprehensive income ......
Net loss .........................................
Balance as of December 31, 2023 ... 32,490,119 $
89 $ 614,035 $
(102,244 )
(679,348 ) $
1,511
10,580
(82)
(109,783)
(107) $ (89,361)
(82)
873
9,343
48,700
—
119
67,358
119
(102,244)
12 $ (65,212)
The accompanying notes are an integral part of these consolidated financial statements.
110
UROGEN PHARMA LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash Flows From Operating Activities
Net loss ...................................................................................................................... $
Adjustment to reconcile net loss to net cash from operating activities:
(102,244) $
(109,783 )
Year Ended December 31,
2023
2022
Depreciation and amortization .......................................................................
Inventory Obsolescence ..................................................................................
Accrued financing on prepaid forward obligation ..........................................
(Accretion) on marketable securities ..............................................................
Share‐based compensation .............................................................................
Amortization (accretion) of discount on long‐term debt ................................
Amortization of right‐of‐use assets .................................................................
Changes in operating assets and liabilities:
Inventory .........................................................................................................
Accounts receivable ........................................................................................
Prepaid expenses and other current assets ....................................................
Other non‐current assets ................................................................................
Accounts payable and accrued expenses ........................................................
Employee related accrued expenses...............................................................
Other current liabilities ...................................................................................
Lease liabilities ................................................................................................
Uncertain tax positions ...................................................................................
Net cash used in operating activities .........................................................................
Cash Flows From Investing Activities
Purchases of marketable securities ................................................................
Maturities of marketable securities ................................................................
Purchases of property and equipment ...........................................................
Net cash (used in) provided by investing activities ....................................................
Cash Flows From Financing Activities
Proceeds from exercise of options into ordinary shares ................................
Proceeds from issuance of long‐term debt .....................................................
Proceeds from pre‐funded warrant issuance, net of $1,654 of issuance
costs .............................................................................................................
Proceeds from ordinary share issuance, net of $2,288 of issuance costs.......
Issuance cost related to at‐the‐market issuances ...........................................
Net cash provided by financing activities ..................................................................
Increase in Cash and Cash Equivalents ..........................................................................
Cash, Cash Equivalents and Restricted Cash at Beginning of Year ................................
Cash, Cash Equivalents and Restricted Cash at End of Year .......................................... $
Supplemental Disclosures of Non‐Cash Activities .........................................................
Right‐of‐use assets obtained in exchange for new operating lease liabilities . $
802
—
11,504
(1,034)
9,343
1,014
903
(1,348)
(2,739)
820
702
4,155
2,557
—
(987)
176
(76,376)
(49,832)
49,073
(194)
(953)
873
—
48,700
67,358
—
116,931
39,602
56,221
95,823 $
924
870
14,007
(498 )
10,580
1,754
893
(362 )
(987 )
(3,626 )
(1,269 )
281
1,309
(703 )
(1,125 )
176
(87,559 )
(63,009 )
64,323
(254 )
1,060
1,511
95,783
—
—
(160 )
97,134
10,635
45,586
56,221
122 $
2,165
The accompanying notes are an integral part of these consolidated financial statements.
111
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BUSINESS AND NATURE OF OPERATIONS
Nature of Operations
UroGen Pharma Ltd. is an Israeli company incorporated in April 2004 (“UPL”).
UroGen Pharma, Inc., a wholly owned subsidiary of UPL, was incorporated in Delaware in October 2015 and began
operating in February 2016 (“UPI”).
UPL and UPI (together the “Company”) is a biotechnology company dedicated to developing and
commercializing innovative solutions that treat urothelial and specialty cancers. Since commencing operations, the
Company has devoted substantially all of its efforts to securing intellectual property rights, performing research and
development activities, including conducting clinical trials and manufacturing activities, hiring personnel, launching the
Company’s first commercial product, Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN‐101, clinical
development of UGN‐102, and raising capital to support and expand these activities.
On April 15, 2020, the U.S. Food and Drug Administration (“FDA”) granted expedited approval for Jelmyto, a first‐in‐class
treatment indicated for adults with low‐grade upper tract urothelial cancer (“low‐grade UTUC”). Jelmyto consists of
mitomycin, an established chemotherapy, and sterile hydrogel, using our proprietary sustained release RTGel technology.
It has been designed to enable longer exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of
tumors by non‐surgical means.
NOTE 2 – BASIS OF PRESENTATION
The Company has experienced net losses since its inception and has an accumulated deficit of $679.3 million and
$577.1 million as of December 31, 2023 and 2022, respectively. The Company expects to incur losses and have negative
net cash flows from operating activities as it executes on its strategy including engaging in further research and
development activities, particularly conducting non‐clinical studies and clinical trials. The success of the Company
depends on the ability to successfully commercialize its technologies to support its operations and strategic plan.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted
in the United States. The consolidated financial statements include the accounts of UPL and its wholly owned subsidiary
UPI. All material intercompany balances and transactions have been eliminated during consolidation.
In accordance with the accounting guidance related to the presentation of financial statements, management evaluates
whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s
ability to continue as a going concern for the next twelve months from the date the financial statements are issued. The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going
concern, and do not include any adjustments relating to the carrying amounts and classification of assets and liabilities
that may be necessary should the Company be unable to continue as a going concern. The Company’s ability to continue
as a going concern is expected to be impacted by its ability to raise additional capital to fund its operations, produce cash
inflows from Jelmyto product sales and develop UGN‐102.
The Company believes that absent sufficient proceeds received from equity, financing, or business development
transactions, the Company will not have sufficient cash and cash equivalents to fund its operations beyond one year from
the issuance of these financial statements. Accordingly, the Company will, over the next twelve months, require
significant additional financing to continue its operations. In addition, there can be no assurances that the Company will
be able to secure such additional financing if at all, on terms that are satisfactory to the Company, and in amounts
sufficient to meet its needs. These factors raise substantial doubt about the ability of the Company to continue as a going
concern. Failure to successfully receive additional financing will require the Company to delay, limit or reduce product
development and commercialization efforts.
112
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The Company’s consolidated financial statements include the accounts of UPL and its subsidiary, UPI. Intercompany
balances and transactions have been eliminated during consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and expense during the reporting period.
Actual results may differ from those estimates. As applicable to the consolidated financial statements, the critical
accounting estimates relate to the fair value of share‐based compensation, measurement of revenue, estimate of
uncertain tax positions, and measurement of liabilities accounted for under the interest method.
Functional Currency
The U.S. dollar (“Dollar”) is the currency of the primary economic environment in which the operations of the Company
are conducted. Therefore, the functional currency of the Company is the Dollar.
Accordingly, transactions in currencies other than the Dollar are measured and recorded in the functional currency using
the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that
are denominated in currencies other than the Dollar are measured using the official exchange rate at the balance sheet
date. The effects of foreign currency re‐measurements are recorded in the consolidated statements of operations
as “Interest and other income, net.”
Cash and Cash Equivalents; Marketable Securities
The Company presents all highly liquid investments with an original maturity of three months or less when purchased as
cash equivalents. Cash and cash equivalents generally consist of money market funds and bank money market accounts
and are stated at cost, which approximates fair value.
Cash and cash equivalents and marketable securities totaled $141.5 million as of December 31, 2023. The Company
accounts for its investments, which include cash equivalents and marketable securities, as available‐for‐sale in accordance
with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 320,
“Investments — Debt and Equity Securities”. Available‐for‐sale debt securities are carried at fair value with unrealized
gains and losses reported in other comprehensive income/loss within shareholders’ equity. Realized gains and losses are
recorded as a component of interest and other income, net. The cost of securities sold is based on the specific‐
identification method.
Certain short‐term investments are valued using models or other valuation methodologies that use Level 2 inputs. These
models are primarily industry‐standard models that consider various assumptions, including time value, yield curve,
volatility factors, default rates, current market and contractual prices for the underlying financial instruments, as well as
other relevant economic measures. The majority of these assumptions are observable in the marketplace, can be derived
from observable data or are supported by observable levels at which transactions are executed in the marketplace.
For individual debt securities classified as available‐for‐sale securities where there has been a decline in fair value below
amortized cost, the Company determines whether the decline resulted from a credit loss or other factors. The Company
records impairment relating to credit losses through an allowance for credit losses, limited by the amount that the fair
value is less than the amortized cost basis. Impairment that has not been recorded through an allowance for credit losses
is recorded through other comprehensive income, net of applicable taxes.
113
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Restricted cash is related primarily to cash held to secure corporate credit cards; restricted deposits are related to cash
held to secure leases.
Concentration of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily
of cash and cash equivalents and marketable securities. The primary objectives for the Company’s investment portfolio
are the preservation of capital and the maintenance of liquidity. The Company does not enter into any investment
transaction for trading or speculative purposes.
The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money
market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt
securities, and places restrictions on maturities and concentration by type and issuer. The Company maintains cash
balances in excess of amounts insured by the Federal Deposit Insurance Corporation and concentrated within a limited
number of financial institutions. The accounts are monitored by management to mitigate the risk.
The Company’s product sales are recognized through the Company's arrangement with a single customer, a third‐party
national specialty distributor. The Company assesses the need for an allowance for doubtful accounts primarily based on
creditworthiness, historical payment experience and general economic conditions. The Company has not experienced any
credit losses related to this customer and has not currently recognized any allowance for doubtful accounts.
Income Taxes
The Company provides for income taxes based on pretax income, if any, and applicable tax rates available in the various
jurisdictions in which it operates, including Israel and the United States. Deferred taxes are computed using the asset and
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on
the differences between the financial reporting and tax bases of assets and liabilities and are measured using the
currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that
the deferred taxes will not be realized in the foreseeable future.
The Company follows a two‐step approach in recognizing and measuring uncertain tax positions. After concluding that a
particular filing position can be recognized (i.e., has a more‐likely‐than‐not chance of being sustained), ASC 740‐10‐30‐7
requires that the amount of benefit recognized be measured using a methodology based on the concept of cumulative
probability. Under this methodology, the amount of benefit recorded represents the largest amount of tax benefit that is
greater than 50% likely to be realized upon settlement with a taxing authority that has full knowledge of all relevant
information. See Note 17 for further discussion related to income taxes.
Inventory
The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company
makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory
approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs.
For Jelmyto, the Company commenced capitalization of inventory at the receipt of FDA approval.
The Company values its inventory at the lower of cost or net realizable value. The Company measures inventory
approximating actual cost under a first‐in, first‐out basis. The Company assesses recoverability of inventory each reporting
period to determine any write down to net realizable value resulting from excess or obsolete inventories.
114
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Property and Equipment
Property and equipment are recorded at historical cost, net of accumulated depreciation, amortization and, if applicable,
impairment charges. The Company reviews its property and equipment assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Property and equipment are depreciated over the following useful lives (in years):
Computers and software .......................................................................................................................
Laboratory equipment ..........................................................................................................................
Furniture ...............................................................................................................................................
Manufacturing equipment ....................................................................................................................
Useful Lives
3
3 ‐ 6.5
5 ‐ 16.5
2 ‐ 10
Leasehold improvements are amortized on a straight‐line basis over the shorter of their estimated useful lives or lease
terms. See Note 8 for further discussion regarding property and equipment.
Prepaid Forward Obligation
The Company is party to a transaction with RTW Investments (the “RTW Transaction”) in which the Company received
funds to support the continued launch of Jelmyto and the development of UGN‐102 in return for tiered, future cash
payments based on net sales of Jelmyto and UGN‐102, if approved by the FDA. The net proceeds received under the RTW
Transaction were recognized as a long‐term liability. The Company recognizes the current cash payable amounts under
the arrangement within other current liabilities on the consolidated balance sheets. The subsequent measurement for the
liability follows the accounting principles defined in ASC Topic 835‐30, “Imputation of Interest”. See Note 9 for further
discussion related to the prepaid forward obligation.
Long‐Term Debt
The Company is party to a loan agreement with funds managed by Pharmakon Advisors, L.P. (“Pharmakon”). The
Company recognizes interest expense in current earnings, and accrued interest within other current liabilities on the
consolidated balance sheets. The Company recognizes capitalized financing expenses as a direct offset to the long‐term
debt on the Company's consolidated balance sheets, and amortizes them over the term of the debt using the effective
interest method. See Note 10 for further discussion related to long‐term debt.
Leases
The Company is a lessee in several noncancelable operating leases, primarily for office space, office equipment and
vehicles. The Company currently has no finance leases.
The Company accounts for leases in accordance with ASC Topic 842, “Leases”. The Company determines if an
arrangement is a lease at inception. Right‐of‐use (“ROU”) assets and operating lease liabilities are recognized based on
the present value of lease payments over the lease term as of the commencement date. Operating lease ROU assets are
presented as right‐of‐use assets on the consolidated balance sheets. The current portion of operating lease liabilities is
included in other current liabilities and the long‐term portion is presented separately as long‐term lease liabilities on the
consolidated balance sheets.
Lease expense is recognized on a straight‐line basis for operating leases. Variable lease payments associated with the
Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those
payments are assessed occurs. Variable lease payments are presented as operating expense on the consolidated
statements of operations in the same line item as expense arising from fixed lease payments.
115
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company’s lease terms may include options to extend the lease. The lease extensions are included in the
measurement of the right‐of‐use asset and lease liability when it is reasonably certain that it will exercise that option.
Because most of the Company’s leases do not provide an implicit rate of return, an incremental borrowing rate is used
based on the information available at the commencement date in determining the present value of lease payments on an
individual lease basis. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on
a collateralized basis to borrow an amount equal to the lease payments under similar terms.
ROU assets for operating leases are periodically reviewed for impairment losses under ASC 360‐10, “Property, Plant, and
Equipment,” to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.
Revenue
Product sales from Jelmyto are recognized as revenue under ASC 606 at the point in time that control of the product has
been transferred to the customer, generally at the point the product has been delivered to the treating physician. All
product sales of Jelmyto are recognized through the Company's arrangement with a single customer, a third‐party
national specialty distributor. Net revenue recognized includes gross revenue and management’s estimate of returns,
consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the
contracted price offered to the end consumer, chargebacks relating to 340B drug pricing programs and other government
sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds
for discarded drug, which are estimated based on the Company’s historical experience.
Research and Development Expenses
Research and development costs are expensed as incurred and consist primarily of the cost of salaries, share‐based
compensation expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and
development activities, including nonclinical studies, clinical trials, manufacturing costs and professional services. The
costs of services performed by others in connection with the research and development activities of the Company,
including research and development conducted by others on behalf of the Company, shall be included in research and
development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the
services are being provided by monitoring the status of the trial or project and the invoices received from its external
service providers. The Company adjusts its accrual as actual costs become known. Where contingent milestone payments
are due to third parties under research and development arrangements or license agreements, the milestone payment
obligations are expensed when such development milestone results are achieved.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of personnel costs (including share‐based compensation
related to directors, employees and consultants). Other significant costs include commercial, medical affairs, external
professional service costs, facility costs, accounting and audit services, legal services and other consulting fees. Selling,
general and administrative costs are expensed as incurred, and the Company accrues for services provided by third
parties related to the above expenses by monitoring the status of services provided and receiving estimates from its
service providers and adjusting its accruals as actual costs become known.
Share‐Based Compensation
Share‐based compensation cost is measured at the grant date based on the fair value of the award and is recognized as
expense over the required service period, which is equal to the vesting period. For performance stock units (“PSUs”), cost
is measured at the grant date based on the fair value of the award and is recognized over any relevant service period as
expense when the achievement of the performance condition is probable. The fair value of options is determined using
the Black‐Scholes option‐pricing model. The fair value of a restricted stock unit (“RSU”) or a PSU equals the closing price
of the Company’s ordinary shares on the grant date. The Company accounts for forfeitures as they occur in accordance
with ASC Topic 718, “Compensation—Stock Compensation”.
116
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company elected to recognize compensation costs for awards conditioned only on continued service that have a
graded vesting schedule using the straight‐line method and to value the awards based on the single‐option award
approach.
Pre‐funded Warrants
The Company issued pre‐funded warrants in connection with a private placement transaction that are accounted for as a
freestanding equity‐linked financial instrument that meets the criteria for equity classification under ASC 480,
“Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging.” Accordingly, the Company classifies the
pre‐funded warrants as a component of permanent shareholders’ equity within additional paid‐in capital and records
them at the issuance date using a relative fair value allocation method. The Company valued the pre‐funded warrants at
issuance, concluding that their sales price approximated their fair value, and allocated the net sales proceeds from the
private placement transaction proportionately to the ordinary shares and pre‐funded warrants. See Note 15 for further
discussion related to the private placement transaction.
Net Loss per Ordinary Share
Basic net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted‐
average number of ordinary shares outstanding. Diluted net loss per share is computed similarly to basic net loss per
share except that the denominator is increased to include the number of additional ordinary shares that would have been
outstanding if the potential ordinary shares had been issued and if the additional ordinary shares were dilutive.
For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share
as their effect is anti‐dilutive.
The Company’s pre‐funded warrants requires the holder to pay nominal consideration to receive the Company’s ordinary
shares and are therefore considered outstanding shares in determining basic and diluted earnings per share in accordance
with ASC Topic 260, “Earnings per Share”.
The following table summarizes the calculation of basic and diluted loss per ordinary share for the periods presented (in
thousands, except share and per share amounts):
Year Ended December 31,
2022
2023
Basic and diluted:
Loss attributable to equity holders of the Company ................................................ $
Weighted‐average number of ordinary shares ........................................................
Loss per ordinary share ............................................................................................ $
(102,244) $
28,834,303
(3.55) $
(109,783)
22,806,812
(4.81)
Recently Adopted or Issued Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update No. 2023‐07, Segment Reporting (Topic 280):
Improvements to Reportable Segment Disclosures ("ASU 2023‐07"), which provides guidance to improve the disclosures
about a public entity’s reportable segments and address requests from investors for additional, more detailed information
about a reportable segment’s expenses. Public entities must adopt the new guidance for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments in this
ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption
is permitted. The Company is currently evaluating the potential impact of the adoption of ASU 2023‐07 on the Company’s
financial disclosures.
117
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In December 2023, the FASB issued Accounting Standards Update No. 2023‐09, Income Taxes (Topic 740): Improvements
to Income Tax Disclosures (“ASU 2023‐09”), which will require the Company to disclose specified additional information in
its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative
threshold. ASU 2023‐09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state
and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU
2023‐09 for the 2025 year‐end and is currently evaluating the potential impact of the adoption on the Company’s
financial disclosures. ASU 2023‐09 allows for adoption using either a prospective or retrospective transition method.
The Company has reviewed other Accounting Standards Updates recently issued by the FASB, and determined that none
of these pronouncements will have a significant impact on the Company's consolidated financial statements and related
disclosures.
NOTE 4 – OTHER FINANCIAL INFORMATION
Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following as of December 31, 2023 and 2022 (in thousands):
Accounts payable ............................................................................................. $
Accrued sales reserves .....................................................................................
Accrued clinical expenses .................................................................................
Accrued research and development expenses ................................................
Accrued selling, general and administrative expenses ....................................
Accrued other expenses ...................................................................................
Total accounts payable and accrued expenses ................................................ $
December 31, 2023 December 31, 2022
5,527
618
2,853
1,285
1,609
491
12,383
6,514 $
4,391
1,246
1,049
2,752
586
16,538 $
Interest and Other Income, Net
Interest and other income, net consisted of the following for the year ended December 31, 2023 and 2022 (in thousands):
Interest income ................................................................................................ $
Other income, net ............................................................................................
Total interest and other income, net ............................................................... $
2,641 $
838
3,479 $
938
72
1,010
Year Ended December 31,
2022
2023
NOTE 5 – INVENTORIES
Inventories consisted of the following as of December 31, 2023 and December 31, 2022 (in thousands):
Raw materials (1) ............................................................................................... $
Finished goods .................................................................................................
Total inventories .............................................................................................. $
December 31, 2023 December 31, 2022
4,676
2,019
6,695
4,464 $
2,877
7,341 $
(1) $1.7 million and $2.4 million of raw materials are included within other non‐current assets on the consolidated balance
sheets at December 31, 2023 and December 31, 2022, respectively. Changes in non‐current assets are reflected on the
consolidated statements of cash flows within the caption of other non‐current assets.
118
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – FAIR VALUE MEASUREMENTS
The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a
consistent framework for measuring fair value and expands disclosure for each major asset and liability category
measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As
such, fair value is a market‐based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or liability.
As a basis for considering such assumptions, a three‐tier fair value hierarchy has been established, which prioritizes the
inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar
assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
The carrying amounts of the Company’s cash, restricted cash, other current assets, accounts payable and accrued
liabilities are generally considered to be representative of their fair value because of the short‐term nature of these assets
and liabilities.
The carrying value of the prepaid forward obligation (See Note 9 ‐ Prepaid Forward Obligation) approximates its fair
value. The Company estimated the fair value of the prepaid forward obligation using Level 3 inputs, including internally
developed financial forecasts and management's estimate of probability of success related to product candidates, and
determined that the effective interest rate in the obligation approximates market rates for loans with similar terms and
risk characteristics.
The Company estimated the fair value of long‐term debt (see Note 10 ‐ Long‐Term Debt) using the income approach with
Level 3 inputs. The Company estimated future floating rate interest payments using a forward curve of a three‐month
benchmark rate, and estimated fair value based on publicly available data reported in the financial statements of publicly
traded venture lending companies. Based on a reasonable range of yields for debt instruments of similar tenor in a similar
industry, the Company determined that the carrying value of the long‐term debt on the Company's balance sheet
approximates its fair value.
No transfers between levels have occurred during the periods presented.
119
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of
December 31, 2023 are as follows (in thousands):
Fair Value Measurements Using
Significant
Quoted Prices
Other
in Active
Balance as of
December 31, Identical Assets
Markets for
Observable
2023
(Level 1)
Inputs
(Level 2)
Assets:
Cash equivalents
Money market funds ............................................................. $
9,704 $
9,704 $
—
Marketable securities
U.S. government ................................................................... $
Corporate bonds ...................................................................
Commercial paper .................................................................
Certificates of deposit ...........................................................
Total marketable securities ...................................................... $
Total assets at fair value ............................................................... $
28,634 $
6,738
7,101
3,995
46,468 $
56,172 $
28,634 $
—
—
—
28,634 $
38,338 $
—
6,738
7,101
3,995
17,834
17,834
Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of
December 31, 2022 are as follows (in thousands):
Quoted Prices
in Active
Fair Value Measurements Using
Significant
Other
Observable
Inputs
(Level 2)
Identical Assets
(Level 1)
Markets for
Balance as of
December 31,
2022
Marketable securities
U.S. government ........................................................... $
Corporate bonds ...........................................................
Commercial paper ........................................................
Certificates of deposit ...................................................
Total marketable securities .............................................. $
28,693 $
2,387
9,392
4,084
44,556 $
28,693 $
—
—
—
28,693 $
—
2,387
9,392
4,084
15,863
The Company’s investments in U.S. government bonds and money market funds are measured based on publicly available
quoted market prices for identical securities as of December 31, 2023 and 2022. The Company's investments in corporate
bonds, commercial paper and certificates of deposits are measured based on quotes from market makers for similar items
in active markets.
120
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – INVESTMENTS
The following table summarizes the Company’s investments as of December 31, 2023 (in thousands):
Amortized
Cost Basis
Unrealized
Gains
Unrealized
Losses
Fair Value
Assets:
Cash equivalents
Money market funds ..................................................... $
9,704 $
— $
— $
9,704
Marketable securities
U.S. government ........................................................... $
Corporate bonds ...........................................................
Commercial paper .........................................................
Certificates of deposit ...................................................
Total marketable securities .............................................. $
Total assets at fair value ....................................................... $
28,618 $
6,756
7,094
3,988
46,456 $
56,160 $
36 $
2
8
7
53 $
53 $
(20) $
(20)
(1)
—
(41) $
(41) $
28,634
6,738
7,101
3,995
46,468
56,172
The following table summarizes the Company’s investments as of December 31, 2022 (in thousands):
Amortized Cost
Basis
Unrealized Gains
Unrealized
Losses
Fair Value
Marketable securities
U.S. government ....................................... $
Corporate bonds .......................................
Commercial paper ....................................
Certificates of deposit...............................
Total marketable securities .......................... $
28,742 $
2,392
9,417
4,112
44,663 $
— $
—
—
—
— $
(49 ) $
(5 )
(25 )
(28 )
(107 ) $
28,693
2,387
9,392
4,084
44,556
The Company classifies its investments as available‐for‐sale, and they consist entirely of debt securities. As of December
31, 2023, the amortized cost of investments included an immaterial amount of accrued interest. As of December 31,
2023, marketable securities were in a net unrealized gain position. Unrealized gains and losses on available‐for‐sale debt
securities are included as a component of comprehensive loss.
As of December 31, 2023, the aggregate fair value of investments held by the Company in an unrealized loss position was
$22.9 million which consisted of 30 securities. The unrealized loss was primarily driven by rising interest rates. The
Company does not expect to settle the debentures at a price less than the amortized cost basis of the investment; the
Company expects to recover the entire amortized cost basis of the security. In accordance with the Company’s general
investment strategy, the Company does not intend to sell the investments before maturity. As of December 31, 2023, the
Company believes the cost basis for its marketable securities were recoverable in all material aspects and no allowance
for credit losses were recognized in the period.
The Company’s investments as of December 31, 2023 mature at various dates through January 2026. The fair values of
investments by contractual maturity consist of the following (in thousands):
Maturities within one year ............................................................................... $
Maturities after one year through three years ................................................
Total investments ............................................................................................. $
December 31, 2023 December 31, 2022
44,556
—
44,556
51,670 $
4,502
56,172 $
121
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – PROPERTY AND EQUIPMENT
Property and equipment, consists of the following as of December 31, 2023 and 2022 (in thousands):
Laboratory equipment ................................................................................................ $
Computer equipment and software ............................................................................
Furniture ......................................................................................................................
Leasehold improvements ............................................................................................
Manufacturing equipment ..........................................................................................
Less: accumulated depreciation and amortization .....................................................
Property and equipment, net ...................................................................................... $
December 31,
2023
2022
464 $
2,293
612
617
655
4,641
(3,952)
689 $
452
2,168
602
617
608
4,447
(3,150)
1,297
Depreciation and amortization expense was $0.8 million and $0.9 million for the years ended December 31, 2023 and
2022, respectively.
NOTE 9 – PREPAID FORWARD OBLIGATION
In March 2021, the Company entered into a prepaid forward agreement with RTW Investments (“RTW”). Under the terms
of the RTW Transaction, the Company received $75.0 million ($72.4 million net of transaction costs) to support the
continued launch of Jelmyto and the development of UGN‐102. In return for the transferred funds, RTW is entitled to
receive tiered, future cash payments based on aggregate worldwide annual net product sales of Jelmyto in an amount
equal to: (i) 9.5% of annual net sales up to $200 million, (ii) 3.0% of annual net sales for annual net sales between $200
million and $300 million, and (iii) 1.0% of annual net sales for annual net sales above $300 million. If certain revenue
thresholds for Jelmyto aggregate worldwide annual net sales are not met, the future cash payments to RTW with respect
to Jelmyto annual net sales up to $200 million will increase by 3.5%, and may decrease back to 9.5% dependent on the
Company meeting certain subsequent Jelmyto aggregate worldwide annual net sales thresholds. The rate in effect for the
year ended December 31, 2023 for annual net sales up to $200 million was 13.0%.
In addition, subject to FDA approval of UGN‐102, RTW is entitled to receive tiered, future cash payments based on
aggregate worldwide annual net product sales of UGN‐102 in an amount equal to: (i) 2.5% of annual net sales up
to $200 million, (ii) 1.0% of annual net sales for annual net sales between $200 million and $300 million, and (iii) 0.5% of
annual net sales for annual net sales above $300 million. If the Company does not receive FDA approval for UGN‐102 by a
specified date, the future cash payments to RTW with respect to aggregate worldwide annual net sales of Jelmyto across
all Jelmyto annual net sales tiers will increase by 1.5%.
In accordance with the prepaid forward agreement, the Company will be required to make payments of amounts owed to
RTW each calendar quarter, through and until the quarter in which the aggregate cash payments received by RTW are
equal to or greater than $300 million. As security for the payment and fulfilment of these amounts throughout the
arrangement, the Company has granted RTW a first priority security interest in Jelmyto and UGN‐102, including the
regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable related to these
products.
In May 2021, following the receipt of necessary regulatory approvals, the Company received the $75.0 million prepaid
forward payment ($72.4 million net of transaction costs) from RTW and recognized an associated prepaid forward
obligation liability. Each period the Company makes a payment to RTW, an expense is recognized related to financing on
the prepaid forward obligation based on an imputed rate derived from the expected future payments. Management
reassesses the effective rate each period based on the current carrying value of the obligation and the revised estimated
future payments. Changes in future payments from previous estimates are included in future financing expense. The
Company does not expect to make any principal payments in the next 12 months.
122
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table shows the activity with respect to the carrying value of the prepaid forward liability for the year ended
December 31, 2023 and 2022 (in thousands):
Carrying value of prepaid forward obligation as of December 31, 2021 ................................................ $
Financing on prepaid forward obligation ................................................................................................
Amounts paid and payable (1) ..................................................................................................................
Carrying value of prepaid forward obligation as of December 31, 2022 ................................................
Financing on prepaid forward obligation ................................................................................................
Amounts paid and payable (1) ..................................................................................................................
Carrying value of prepaid forward obligation as of December 31, 2023 ................................................ $
85,713
21,559
(8,349)
98,923
21,552
(10,753)
109,722
(1) $3.0 million and $2.3 million of the Amounts paid and payable are included as current portion of the prepaid forward
obligation within other current liabilities on the consolidated balance sheets as of December 31, 2023 and December 31,
2022, respectively.
NOTE 10 – LONG‐TERM DEBT
On March 7, 2022, the Company entered into a loan agreement with Pharmakon for a senior secured term loan of up to
$100 million in two tranches. The first tranche of $75 million was funded in March 2022. The second tranche of $25
million was funded in December 2022. The facility will mature five years from initial funding and can be prepaid in whole
at the Company's discretion, at any time, subject to prepayment premiums and make‐whole amounts. The loan will
require interest‐only payments for the first 48 months followed by principal and interest payments with interest accruing
using 3‐month London Inter‐Bank Offered Rate (“LIBOR”) (with a 1.25% floor) plus 8.25%. On June 29, 2023, the loan
agreement with Pharmakon was amended to replace the benchmark governing the interest rate with a rate based on the
secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York. Effective July 2023, the
loan will accrues interest using a benchmark rate of 3‐month SOFR plus a 0.26161% adjustment. The Company is not
required to maintain any financial covenants.
The Company incurred financing expenses of $4.2 million which are recognized as a direct offset to the long‐term debt on
the Company's consolidated balance sheets. These debt issuance costs are amortized over the term of the debt using
the effective interest method, and are recorded in the consolidated statements of operations as “Interest expense".
The following table shows the activity with respect to the carrying value of the long‐term debt, in thousands:
Long‐term debt at closing of Pharmakon loan ........................................................................................ $
Capitalized costs and discounts ..............................................................................................................
Interest expense ......................................................................................................................................
Amounts paid ..........................................................................................................................................
Carrying value of Pharmakon loan as of December 31, 2022 .................................................................
Interest expense ......................................................................................................................................
Amounts paid ..........................................................................................................................................
Carrying value of Pharmakon loan as of December 31, 2023 ................................................................. $
100,000
(4,217)
8,438
(6,685)
97,537
14,715
(13,701)
98,551
123
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – LEASES
Operating Leases
The Company had the following office and laboratory facility leases as of December 31, 2023:
•
•
•
In April 2016, UPL signed an addendum to its November 2014 lease agreement for the Company’s offices located
in Israel, in order to increase the office space rented and to extend the rent period for an additional three years
until August 2022. In July 2022, the Company signed a lease extension agreement for the Company’s offices
located in Israel, extending the term of the lease through September 2025. The Company's remaining
contractual obligation under this lease is approximately $0.5 million as of December 31, 2023.
In April 2018, UPI entered into a new lease agreement for an office in Los Angeles, California. The lease
commencement date was July 10, 2018 and terminated in March 2024. The landlord provided a tenant
allowance for leasehold improvements of $0.2 million that was accounted for as a lease incentive. The
Company’s remaining contractual obligation under this lease is approximately $0.1 million as of December 31,
2023. In November 2019, UPI entered into a sublease for this office space, with a lease commencement date
of January 1, 2020 and terminating at the end of the lease term in March 2024. The subtenants exercised their
early access clause and moved into the premises at the end of November 2019. The remaining rental payments
to be received over the lease term is approximately $0.1 million as of December 31, 2023. The Company
accounts for the sublease as on operating lease in accordance with ASC 842.
In November 2019, UPI entered into a new lease agreement for an office in Princeton, New Jersey, which the
Company now uses as its headquarters. The lease commencement date was November 29, 2019 with an
original lease term of 38 months, expiring January 31, 2023. In June 2022, the Company signed a lease extension
for the Princeton office, extending the term of the lease through January 31, 2026. The Company’s remaining
contractual obligation under this lease is approximately $1.2 million as of December 31, 2023.
In addition, the Company has other operating office equipment and vehicle leases. The Company’s operating leases may
require minimum rent payments, contingent rent payments adjusted periodically for inflation, or rent payments equal to
the greater of a minimum rent or contingent rent. The Company’s leases do not contain any residual value guarantees or
material restrictive covenants. The Company’s leases expire at various dates from 2024 through 2026, with varying
renewal and termination options.
The components of lease cost for the year ended December 31, 2023 and 2022 were as follows (in thousands):
Year Ended
December 31,
2023
Year Ended
December 31,
2022
Operating lease cost ........................................................................................... $
Sublease income ................................................................................................
Variable lease cos ............................................................................................. t
$
934 $
(224 )
73
783 $
975
(224 )
65
816
The amounts recognized as of December 31, 2023 and 2022 were as follows (in thousands):
Right‐of‐use assets ............................................................................................... $
Long‐term lease liabilities ....................................................................................
Other current liabilities ........................................................................................
124
Year Ended
December 31, 2023
Year Ended
December 31, 2022
2,452
1,586
941
1,671 $
844
819
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2023, no impairment losses have been recognized.
Supplemental information related to leases for the periods reported is as follows (in thousands, except for lease term and
discount rate amounts):
Year Ended
December 31,
2023
Year Ended
December 31,
2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases ......................................................
Right‐of‐use assets obtained in exchange for new operating lease liabilities ...
Weighted‐average remaining lease term of operating leases (in years) ...........
Weighted‐average discount rate of operating leases ........................................
1,169
122
1.92
10.21 %
1,195
2,165
2.73
10.25 %
As of December 31, 2023, maturities of lease liabilities were as follows (in thousands):
Years ending December 31,
2024 ........................................................................................................................................................ $
2025 ........................................................................................................................................................
2026 ........................................................................................................................................................
Total future minimum lease payments ................................................................................................... $
Less: Interest ....................................................................................................................................
Present value of lease liabilities .............................................................................................................. $
938
825
58
1,821
(158)
1,663
Operating Leases
As of December 31, 2022, maturities of lease liabilities were as follows (in thousands):
Years ending December 31,
2023 ........................................................................................................................................................ $
2024 ........................................................................................................................................................
2025 ........................................................................................................................................................
2026 ........................................................................................................................................................
Total future minimum lease payments ................................................................................................... $
Less: Interest ....................................................................................................................................
Present value of lease liabilities .............................................................................................................. $
1,146
904
788
49
2,887
(360)
2,527
Operating Leases
Subleases
As of December 31, 2023, undiscounted cash flows to be received under the Company’s operating sublease on an annual
basis were as follows (in thousands):
Years ending December 31,
2024 ...................................................................................................................................................... $
Total future minimum sublease payments ........................................................................................... $
49
49
Operating Leases
125
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2022, undiscounted cash flows to be received under the Company’s operating sublease on an annual
basis was as follows (in thousands):
Years ending December 31,
2023 ...................................................................................................................................................... $
2024 ......................................................................................................................................................
Total future minimum sublease payments ........................................................................................... $
251
49
300
Operating Leases
NOTE 12 – REVENUE FROM PRODUCT SALES
Net product sales consist of the following for the year ended December 31, 2023 and 2022 (in thousands):
Jelmyto .................................................................................................................. $
82,713 $
Year Ended
December 31, 2023
Year Ended
December 31, 2022
64,357
Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the
customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to
the end consumer, chargebacks relating to 340B drug pricing programs and other government sponsored programs,
Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds for discarded drug,
which are estimated based on the Company’s historical experience. Reserves related to items that are contractually able
to be net settled are recognized as contra accounts receivable while other remaining reserves are recognized within other
current liabilities on the consolidated balance sheets. The following table shows the activity with respect to sales reserves
for the year ended December 31, 2023 and 2022, in thousands:
Reserves related to
government
sponsored
programs
Other reserves
Total accrued sales
reserves
Balance as of December 31, 2021 ........................... $
Changes during 2022
Accruals ....................................................................
Utilizations ...............................................................
Balance as of December 31, 2022 ........................... $
Changes during 2023
Accruals ....................................................................
Utilizations ...............................................................
Balance as of December 31, 2023 ........................... $
373 $
941 $
1,314
6,967
(6,750 )
590 $
11,110
(10,638 )
1,062 $
6,463
(6,557 )
847 $
12,258
(8,196 )
4,909 $
13,430
(13,307 )
1,437
23,368
(18,834 )
5,971
NOTE 13 – LICENSE AND COLLABORATION AGREEMENTS
Agenus Agreement
In November 2019, the Company entered into a license agreement with Agenus Inc. (“Agenus”), pursuant to which
Agenus granted to the Company an exclusive, worldwide (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela
and their respective territories and possessions), royalty‐bearing, sublicensable license under Agenus’s intellectual
property rights to develop, make, use, sell, import, and otherwise commercialize products incorporating a proprietary
monoclonal antibody of Agenus known as AGEN1884 (zalifrelimab), an anti‐CTLA‐4 antagonist, for the treatment of
126
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
cancers of the urinary tract via intravesical delivery. UGN‐301 is a formulation of zalifrelimab administered using
RTGel technology that is in Phase 1 clinical development for high‐grade NMIBC.
MD Anderson Agreement
In January 2021, the Company announced that it entered into a three‐year strategic research collaboration agreement
with MD Anderson focusing on the sequential use of UGN‐201 and UGN‐301 as an investigational treatment for high‐
grade NMIBC. Pursuant to the agreement, the Company has made bi‐annual payments totaling $2.0 million to MD
Anderson to fund the collaboration, recognized evenly over the associated period through research and development
expenses. In July 2022, the Company determined that it had achieved the objectives that it established when the
agreement was initiated, and notified MD Anderson that it was exercising its right to conclude the collaboration in 2022
as the Company did not foresee initiating further development activities as part of the collaboration, although the
Company will continue to collaborate on existing joint projects. As a result of this notification, the Company is not
responsible for any further fixed bi‐annual funding payments in 2023, although the Company will be responsible for costs
related to existing joint projects to the extent they exceed the payments already made to MD Anderson.
NOTE 14 – EMPLOYEE RIGHTS UPON RETIREMENT
In Israel, the Company is required by law to make severance payments upon dismissal of an employee or upon
termination of employment in certain other circumstances.
The Company operates a number of post‐employment defined contribution plans. A defined contribution plan is a
program that benefits an employee after termination of employment, under which the Company regularly makes fixed
payments to a separate and independent entity so that the Company has no legal or constructive obligation to pay
additional contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee
service in the current and prior periods. The fund assets are not included in the Company’s financial position.
The Company operates pension and severance compensation plans subject to Section 14 of the Israeli Severance Pay Law,
5723‐1963. The plans are funded through payments to insurance companies or pension funds administered by trustees. In
accordance with its terms, the plans meet the definition of a defined contribution plan, as defined above.
NOTE 15 – SHAREHOLDERS’ EQUITY
The Company had 100.0 million ordinary shares authorized for issuance as of December 31, 2023 and 2022. The Company
had 32.5 million and 23.1 million ordinary shares issued and outstanding as of December 31, 2023 and 2022, respectively.
Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever
funds are legally available, when and if declared by the Board of Directors (the "Board"). Since its inception, the Board has
not declared any dividends.
On July 26, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain
institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to
the Purchasers 7,300,380 ordinary shares of the Company (“Shares”) and 5,278,776 of pre‐funded warrants to purchase
ordinary shares of the Company at a purchase price of $9.54 per Share or $9.539 for each ordinary share underlying a pre‐
funded warrant, in a private placement transaction that closed on July 28, 2023 and August 9, 2023 (the “Private
Placement”) for aggregate gross proceeds of $120.0 million, before deducting fees to placement agents and financial
advisors and before other expenses paid by the Company. Each pre‐funded warrant has an exercise price of $0.001 per
ordinary share, subject to customary adjustments, became exercisable upon original issuance and will not expire until
exercised in full. The pre‐funded warrants may not be exercised if the aggregate number of ordinary shares beneficially
owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership
limitation. The aggregate fee paid by the Company to placement agents and financial advisors was $3.6 million, plus the
reimbursement of certain expenses.
127
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Resales of the Shares and the ordinary shares issuable upon exercise of the pre‐funded warrants were registered pursuant
to the Company’s registration statement on Form S‐3 (File No. 333‐274423) filed with the U.S. Securities and Exchange
Commission (“SEC”) on September 8, 2023, which was declared effective on September 15, 2023.
On December 20, 2023, the Company issued 1,599,733 ordinary shares through a cashless conversion of 1,599,840 pre‐
funded warrants for the purchase of ordinary shares of the Company.
Monograph Capital Partners I, L.P. (“Monograph”), a life sciences venture firm that is affiliated with Fred Cohen, M.D., a
director of the Company, purchased 1,572,327 of the Shares in the Private Placement, for an aggregate purchase price of
$15.0 million. Dr. Cohen is the Chair and Chief Investment Officer of Monograph.
NOTE 16 – SHARE‐BASED COMPENSATION
In October 2010, the Board approved a share option plan (the “2010 Plan”) for grants to Company employees,
consultants, directors, and other service providers. Subsequently, in March 2017, the Board adopted the 2017 Equity
Incentive Plan (the "2017 Plan" and, together with the 2010 Plan, the "Plans"), which was approved by the shareholders in
April 2017. The 2017 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSU
awards, performance share awards, performance cash awards, and other forms of share awards to the Company's
employees, directors and consultants.
The grant of options to Israeli employees under the Plans is subject to the terms stipulated by Section 102 of the Israeli
Income Tax Ordinance (“Section 102”). The option grants are subject to the track chosen by the Company, either the
“regular income” track or the “capital gains” track, as set out in Section 102. The Company registered the Plans under the
capital gains track, which offers more favorable tax rates to the employees. As a result, and pursuant to the terms of
Section 102, the Company is not allowed to claim as an expense for tax purposes the amounts credited to the employees
in respect of options granted to them under the Plans, including amounts recorded as salary benefits in the Company’s
accounts, with the exception of the work‐income benefit component, if any, determined on grant date. For non‐
employees and for non‐Israeli employees, the Plans is subject to Section 3(i) of the Israeli Income Tax Ordinance.
Employees are typically granted stock options and/or restricted stock units ("RSUs"), upon commencement of
employment. Also, eligible employees may receive an annual grant of options or RSUs. Non‐employee members of the
Board typically receive a grant of stock options upon initial appointment to the Board, and/or stock options annually. The
term of any option granted under the Plans cannot exceed 10 years. Options shall not have an exercise price less
than 100% of the fair market value of the Company’s ordinary shares on the grant date, and generally vest over a period
of three years. If the individual possesses more than 10% of the combined voting power of all classes of equity of the
Company, the exercise price shall not be less than 110% of the fair market value of an ordinary share on the date of grant.
The Company’s RSU and option grants provide for accelerated or continued vesting in certain circumstances as defined in
the plans and related grant agreements, including a termination in connection with a change in control. RSUs generally
vest in a 33% increment upon the first anniversary of grant, and in either equal quarterly or annual amounts for
the two years following the one‐year anniversary of the grant date. Options generally vest in a 33% increment upon
the first anniversary of the grant date, and in either equal quarterly or annual amounts for the two years following
the one‐year anniversary of the grant date.
The expected volatility is based on a mix of the Company’s historical volatility, and the historical volatility of comparable
companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The
risk‐free interest rate assumption is based on observed interest rates appropriate for the expected term of the options
granted. The expected term is the length of time until the expected dates of exercising the options and is estimated for
employees using the simplified method due to insufficient specific historical information of employees’ exercise behavior,
and for non‐employees, and directors using the contractual term.
128
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
On January 31, 2023, the Board approved a performance stock unit ("PSU") award of 100,000 shares under the 2017 Plan
to the Company's Chief Executive Officer, subject to shareholder approval. Vesting of these PSUs will depend upon
obtaining regulatory approval for the Company’s lead product candidate UGN‐102 in the three years following the grant.
The PSU award was approved by the Company’s shareholders at the 2023 Annual Shareholders’ Meeting on September 7,
2023.
The maximum number of ordinary shares that was initially authorized for issuance under the 2017 Plan was
1,400,000. On January 1, 2018, the share reserve increased by 250,167 to 1,650,167 shares. On October 12, 2018, the
Company increased the number of ordinary shares authorized for issuance under the 2017 Plan by 1,900,000 to 3,550,167
shares. On June 8, 2020, the Company’s shareholders approved an increase to the number of ordinary shares authorized
for issuance under the 2017 Plan by 400,000 to 3,950,167 shares. On June 7, 2021, the Company’s shareholders approved
an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 400,000 to 4,350,167
shares. On June 8, 2022, the Company's shareholders approved an increase to the number of ordinary shares authorized
for issuance under the 2017 Plan by 400,000 to 4,750,167 shares. On September 7, 2023, the Company's shareholders
approved an increase to the number of ordinary shares authorized for issuance under the 2017 Plan by 450,000 to
5,200,167 shares.
In May 2019, the Company adopted the UroGen Pharma Ltd. 2019 Inducement Plan (the “Inducement Plan”). Under the
Inducement Plan, the Company is authorized to issue up to 900,000 ordinary shares pursuant to inducement awards. The
only persons eligible to receive grants under the Inducement Plan are individuals who satisfy the standards for
inducement grants under Nasdaq Marketplace Rule 5635(c)(4) and the related guidance under Nasdaq IM 5635‐
1, including individuals who were not previously an employee or director of the Company or are following a bona fide
period of non‐employment, in each case as an inducement material to such individual’s agreement to enter into
employment with the Company. In December 2021, the Board approved a 300,000 increase in the share reserve of the
Inducement Plan to 1,200,000 shares.
As of December 31, 2023, 3,784,480 ordinary shares are subject to outstanding awards under the Company's share‐based
compensation plans, and 1,009,614 ordinary shares remain available for future awards.
Options granted:
Set forth below are grants made by the Company as of December 31, 2023. The majority of options vest over three years
and expire on the tenth anniversary of the date of grant.
a) During 2023, the Company granted 530,000 options with exercise prices ranging from $8.84 to $17.94 per share.
b) During 2022, the Company granted 410,064 options with exercise prices ranging from $5.19 to $11.88 per share.
The fair value of options granted during 2023 and 2022 was $4.3 million and $2.2 million, respectively.
The total unrecognized compensation cost of options as of December 31, 2023 was $4.4 million, which is expected to be
recognized over a weighted average period of 1.7 years.
The fair value of options granted was computed using the Black‐Scholes model. The underlying data used for computing
the fair value of the options are as follows:
Value of ordinary shares ....................................................................................
Dividend yield ....................................................................................................
Expected volatility .............................................................................................. 67.21%‐81.00%
Risk‐free interest rate ........................................................................................
Expected term (in years) .....................................................................................
3.47%‐4.42%
6.0‐10 years
2023
$8.84‐17.94
0%
2022
$5.19‐11.88
0%
72.35%‐81.00%
1.69%‐4.14%
6.0‐10 years
129
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The expected volatility is based on a mix of the Company's historical volatility and the historical volatility of comparable
companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The
risk‐free interest rate assumption is based on observed interest rates appropriate for the expected term of the options
granted. The expected term is the length of time until the expected dates of exercising the options and is estimated for
employees using the simplified method due to insufficient specific historical information of employees’ exercise behavior,
and for non‐employees, and directors using the contractual term.
The following table summarizes the number of employee and non‐employee options outstanding under the Plan for the
years ended December 31, 2023 and 2022, and related information:
Number of
options
Weighted
Average price
per share
Outstanding as of December 31, 2021 .......................................................................
Granted .......................................................................................................................
Forfeited ......................................................................................................................
Exercised .....................................................................................................................
Outstanding as of December 31, 2022 .......................................................................
Granted .......................................................................................................................
Forfeited ......................................................................................................................
Exercised .....................................................................................................................
Outstanding as of December 31, 2023 .......................................................................
Vested and expected to vest, December 31, 2023 ....................................................
Exercisable, December 31, 2023 ................................................................................
2,969,557 $
410,064
(496,417)
(292,665)
2,590,539 $
530,000
(268,316)
(166,427)
2,685,796 $
2,685,796 $
1,831,743 $
27.70
7.82
27.97
5.16
27.05
11.75
27.42
5.25
25.35
25.35
6.10
The intrinsic value of stock options exercised was $0.7 million and $0.8 million for the years ended December 31, 2023
and 2022, respectively.
The following table summarizes the outstanding and exercisable options as of December 31, 2023:
Options outstanding
Options exercisable
Exercise price per
share
Number of options
outstanding at end
of year
Weighted average
remaining
contractual life
Number of options
exercisable at end
of year
Weighted average
remaining
contractual life
$
$
$
$
$
$
0.00 ‐ 10.00
10.01 ‐ 20.00
20.01 ‐ 30.00
30.01 ‐ 40.00
40.01 ‐ 50.00
50.01 ‐ 59.23
386,064
920,000
455,300
201,000
637,432
86,000
2,685,796
13.00
8.27
6.11
4.83
4.78
4.43
152,018
372,496
382,797
201,000
637,432
86,000
1,831,743
12.22
7.11
5.92
4.83
4.78
4.43
The aggregate intrinsic value of the total vested and exercisable options as of December 31, 2023 is $1.6 million.
130
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information about RSU activity as of December 31, 2023:
Outstanding
Restricted Stock
Units
Outstanding as of December 31, 2021 .......................................................................................................
Granted ................................................................................................................................................
Vested and released .............................................................................................................................
Forfeited ...............................................................................................................................................
Outstanding as of December 31, 2022 .......................................................................................................
Granted ................................................................................................................................................
Vested and released .............................................................................................................................
Forfeited ...............................................................................................................................................
Outstanding as of December 31, 2023 .......................................................................................................
753,274
445,980
(374,293)
(134,006)
690,955
854,249
(293,626)
(152,894)
1,098,684
The fair value of RSUs granted during 2023 and 2022 was $10.4 million and $3.2 million, respectively. The total
unrecognized compensation cost of RSUs as of December 31, 2023 is $9.2 million with a weighted average recognition
period of 1.86 years.
The following table illustrates the effect of share‐based compensation on the Statements of Operations:
Research and development expenses ...................................................................... $
Selling, general and administrative expenses ..........................................................
Total share‐based compensation expense ............................................................... $
1,905 $
7,439
9,343 $
2,626
7,954
10,580
Year ended December 31,
2022
2023
NOTE 17 – INCOME TAXES
The Company is taxed under Israeli tax laws:
Corporate tax rate
The applicable Israeli tax rate relevant to the Company for 2022 and thereafter is 23%.
For financial reporting purposes, the expense for current income taxes consists of the following (in thousands):
Current taxes:
U.S. Federal .................................................................................................... $
U.S. State ........................................................................................................
Total current taxes ............................................................................................. $
2,937 $
983
3,920 $
584
1,171
1,755
2023
2022
131
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Deferred income taxes:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the
Company and its subsidiary deferred tax assets are as follows (in thousands):
In respect of:
Net operating loss carryforward .......................................................................... $
Research and development expenses ..................................................................
Stock‐based compensation ..................................................................................
Interest expense ...................................................................................................
In‐process research and development .................................................................
Right‐of‐use asset .................................................................................................
Lease Liabilities ....................................................................................................
Accrued expenses .................................................................................................
Depreciation of fixed assets .................................................................................
Other ....................................................................................................................
Less—valuation allowance ...................................................................................
Net deferred tax assets ........................................................................................ $
December 31,
2023
2022
103,566 $
22,451
11,953
1,345
1,102
(276)
283
2,310
(45)
875
(143,566)
— $
96,434
17,949
11,485
‐
1,489
(434)
461
1,769
(113)
561
(129,601)
—
The change in valuation allowance for the years ended December 31, 2023 and 2022 were as follows (in thousands):
Balance at the beginning of the year ................................................................... $
Changes during the year ......................................................................................
Balance at the end of the year ............................................................................. $
(129,601) $
(13,965)
(143,566) $
(100,619)
(28,982)
(129,601)
2023
2022
The main reconciling items between the statutory tax rates of the Company and the effective rate are nondeductible
expenses related to financing on the prepaid forward obligation and share‐based compensation, the provision for a full
valuation allowance in respect of tax benefits from carryforward tax losses due to the uncertainty of the realization of
such tax benefits, utilization of tax credits and expense related to uncertain tax positions. A reconciliation of the
Company’s statutory tax rate to effective tax is as follows (in thousands, except statutory rate):
Pretax loss ........................................................................................................... $
Statutory rate ......................................................................................................
Income tax expense/(benefit) at statutory rate ..................................................
Additional tax (tax saving) in respect of:
Non‐deductible expenses ................................................................................
R&D and orphan drug credits ..........................................................................
Different tax rate of foreign subsidiaries .........................................................
Uncertain tax positions ....................................................................................
Change in valuation allowance(1) .....................................................................
Other ................................................................................................................
Income tax expense ............................................................................................ $
December 31,
2023
2022
(98,324) $
23%
(22,615)
5,704
(1,197)
(689)
176
22,898
(358)
3,920 $
(108,028)
23%
(24,847)
1,052
(3,586)
(263)
176
28,982
241
1,755
(1) In the course of preparing the 2022 tax returns, adjustments were made for certain nondeductible amounts, reducing
net operating loss carryforward and reflected as a change in valuation allowance of approximately $8.9 million in the
current year.
132
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Pretax loss for December 31, 2023 and 2022 includes pretax loss from foreign (United States) jurisdictions of $17.9 million
and $13.3 million, respectively.
The Internal Revenue Code contains provisions that may limit our use of federal net operating loss carryforwards if
significant changes occur in the constructive stock ownership of UroGen Pharma Inc. In the event it has had an
“ownership change” within the meaning of Section 382 of the Code, utilization of its net operating loss carryforwards
could be restricted under Section 382 of the Code and similar state provisions. Such limitations could result in the
expiration of the net operating carryforwards incurred before 2018 before their utilization.
Losses for tax purposes carried forward to future years
As of December 31, 2023 and 2022, the Company had approximately $452.0 million and $419.1 million of carryforward
tax losses, prior to tax effecting, respectively, available to reduce future taxable income without limitation of use.
Uncertain tax positions
A reconciliation of the beginning and ending amount of uncertain tax positions is as follows (in thousands):
Uncertain tax positions at the beginning of the year ............................................ $
Gross increases — tax positions in current period .................................................
Gross increases — tax positions in prior period ....................................................
Uncertain tax positions at the end of the year ...................................................... $
2023
2022
3,018 $
—
176
3,194 $
2,842
—
176
3,018
The balances of uncertain tax positions as of December 31, 2023 would affect the Company’s effective tax rate if
recognized.
The Company has recorded a liability for uncertain tax positions of $3.2 million as of December 31, 2023 for tax positions
relating to transfer pricing between affiliated entities. The Company recognizes interest accrued and penalties related to
uncertain tax positions as a component of income tax expense. As of December 31, 2023, the Company's liability for
uncertain tax positions includes $1.2 million of accrued interest and penalties.
The Company operates on a global basis and is subject to tax laws and regulations in the United States and Israel. The
estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties
and to make judgments about the application of complex tax laws and regulations, expectations regarding the outcome of
tax authority examinations, as well as the ultimate measurement of potential liabilities.
The uncertain tax positions are reviewed quarterly and adjusted as events occur that could affect potential liabilities for
additional taxes, including lapsing of applicable statutes of limitations, correspondence with tax authorities, proposed
assessments by tax authorities, identification of new issues, and issuance of new legislation or regulations. The Company
believes that adequate amounts of tax have been provided in income tax expense for any adjustments that may result
from its uncertain tax positions. Based upon the information currently available, the Company does not reasonably expect
changes in its existing uncertain tax positions in the next 12 months and has recorded the gross uncertain tax positions as
a long‐term liability.
The Company has received final tax assessments up to and including its 2017 tax year.
NOTE 18 – RELATED PARTIES
See Note 15 for discussion regarding an affiliated investor in the Private Placement for the year ended December 31,
2023. There were no related party transactions for the year ended December 31, 2022.
133
UROGEN PHARMA LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19 – COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its
employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who
are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these
arrangements is unknown as of December 31, 2023 and 2022. The Company does not anticipate recognizing any
significant losses relating to these arrangements.
On February 25, 2024, we received a Paragraph IV Certification Notice Letter from Teva, providing notification that Teva
has submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of Jelmyto. In the Notice
Letter, Teva alleges that two of the patents listed in the FDA Orange Book for Jelmyto, U.S. Patent Numbers 9,040,074 and
9,950,069 each of which expires in January 2031, are invalid, unenforceable, or will not be infringed by Teva’s
manufacture, use, or sale of the generic product described in its ANDA submission. If we are unable to maintain patent
protection for Jelmyto, Jelmyto will be subject to immediate competition from generic entrants after regulatory exclusivity
expires in April 2027.
Leases
See Note 11 for further discussion regarding lease commitments.
NOTE 20 – SUBSEQUENT EVENTS
In February 2024, the Company sold 1,400,468 ordinary shares under the ATM Sales Agreement, for gross proceeds of
approximately $26.6 million. The net proceeds to the Company after deducting sales commissions to Cowen were
approximately $25.9 million. Following such sale, the remaining capacity under the ATM Sales Agreement is
approximately $56.8 million.
On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third
and fourth tranche of senior secured loan. The third tranche of $25.0 million is mandatory and required to be drawn by
September 30, 2024, subject to satisfaction of customary conditions. The fourth tranche of $75.0 million may be drawn at
our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M
tranche, (ii) receiving FDA approval of an NDA for UGN‐102 no later than June 30, 2025 and (iii) satisfaction of customary
conditions.
All outstanding loans with Pharmakon accrue interest using a benchmark rate of 3‐month SOFR plus 7.25% plus an
additional adjustment of 0.26161%. All outstanding principal will be required to be repaid in four equal quarterly
installments commencing in the second quarter of 2026, with a one‐year extension upon FDA approval of an NDA for
UGN‐102. All outstanding loans with Pharmakon can be prepaid in whole at the Company's discretion, at any time,
subject to prepayment premiums, make‐whole amounts and fees.
134
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive
officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures,
as defined in Rules 13a‐15(e) and 15d‐15(e) under the Exchange Act, as of December 31, 2023. The term “disclosure
controls and procedures,” as defined in Rules 13a‐15(e) and 15d‐15(e) under the Exchange Act, means controls and other
procedures of a company that are designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal
executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating
the cost‐benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and
procedures as of December 31, 2023, our principal executive officer and principal financial officer concluded that, as of
such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Rule 13a‐15(f) under the Exchange Act. Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial
statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management has assessed the effectiveness of our internal control over financial reporting based on the framework
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control‐
Integrated Framework (2013 framework). Based on our evaluation, management has concluded that our internal control
over financial reporting was effective as of December 31, 2023.
Changes in Internal Control over Financial Reporting
An evaluation was also performed under the supervision and with the participation of our management, including our
Chief Executive Officer and Chief Financial Officer, of any changes in our internal control over financial reporting that
occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. That evaluation did not identify any change in our internal control over financial
reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
Item 9B. Other Information
Trading Plans
On December 26, 2023, our Chief Medical Officer, Mark Schoenberg, entered into a trading plan intended to satisfy the
affirmative defense conditions of Rule 10b5‐1(c) under the Exchange Act, to sell up to 30,000 ordinary shares. The trading
plan expires on April 10, 2025.
135
Amended and Restated Loan Agreement
On March 13, 2024, we entered into an amended and restated loan agreement with Pharmakon for an additional third
and fourth tranche of senior secured loan. The third tranche of $25.0 million is mandatory and required to be drawn by
September 30, 2024, subject to satisfaction of customary conditions. The fourth tranche of $75.0 million may be drawn at
our option no later than August 29, 2025, subject to (i) having successfully drawn the immediately preceding $25.0M
tranche, (ii) receiving FDA approval of an NDA for UGN‐102 no later than June 30, 2025 and (iii) satisfaction of customary
conditions.
All outstanding loans with Pharmakon accrue interest using a benchmark rate of 3‐month SOFR plus 7.25% plus an
additional adjustment of 0.26161%. All outstanding principal will be required to be repaid in four equal quarterly
installments commencing in the second quarter of 2026, with a one‐year extension upon FDA approval of an NDA for
UGN‐102. All outstanding loans with Pharmakon can be prepaid in whole at the Company's discretion, at any time,
subject to prepayment premiums, make‐whole amounts and fees.
Notice of 2024 Annual Meeting Date and Related Deadlines
As of the date of this Annual Report, we intend to hold our 2024 Annual meeting of Shareholders (the "2024 Annual
Meeting of Shareholders") on or about August 7, 2024. This date is more than 30 days before the one‐year anniversary of
our 2023 annual meeting of shareholders, which was held on September 7, 2023.
Under Section 66(b) of the Israeli Companies Law, 5759‐1999, as amended from time to time, and the regulations
promulgated thereunder (collectively, the “Companies Law”), shareholders who hold, in the aggregate, at least 1% of the
voting power in the Company may submit a request to include an item to the agenda within seven days following the
Company’s notice of convening a shareholders’ general meeting at which directors are to be elected and certain other
proposals are to be considered (or within three days of the Company’s notice in other instances), provided the requested
item is appropriate for presentation at a general meeting and for consideration by the shareholders.
In addition to the eligibility requirements under the Companies Law, our articles of association specify additional
procedural requirements for shareholder proposals. Under our articles of association, in the event that the date of the
annual general meeting is advanced more than 30 days prior to the anniversary of the preceding year’s annual general
meeting, notice by the proposing shareholder, in order to be timely, must be received no earlier than the close of
business 120 days prior to such annual general meeting, April 9, 2024, and no later than the close of business 90 days
prior to such annual general meeting, May 9, 2024.
In addition, shareholder proposals may be submitted for inclusion in a proxy statement under Rule 14a‐8 under
the Exchange Act. Under Rule 14a‐8 of the Exchange Act, to be eligible for inclusion in our proxy materials for the 2024
Annual Meeting of Shareholders, shareholder proposals must be received by us a reasonable time before we begin to
print and send our proxy materials. We have determined that April 13, 2024, which is the date disclosed in our definitive
proxy statement on Schedule 14A for our 2023 annual meeting of shareholders, remains a reasonable time before we
expect to begin to print and distribute our proxy materials for our 2024 Annual Meeting, and that any shareholder
proposals must be received on or before the close of business on that day. In addition, Rule 14a‐8 proposals must
otherwise comply with the requirements of the rule. Additional requirements regarding shareholder proposals submitted
for inclusion in our proxy materials for an annual general meeting of shareholders can be found in the articles of
association, which is available as an exhibit to this Annual Report. Proposals should be addressed to: UroGen Pharma Ltd.,
400 Alexander Park Drive, 4th Floor, Princeton, New Jersey 08540.
In addition to satisfying the foregoing requirements under our articles of association, to comply with the universal proxy
rules, shareholders who intend to solicit proxies in support of director nominees other than our board of directors’
nominees must provide notice that sets forth any additional information required by Rule 14a‐19 promulgated under
the Exchange Act.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
136
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this item will be set forth in an amendment to this Annual Report on Form 10‐K to be filed
with the SEC by April 29, 2024 (the "Form 10‐K Amendment").
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer
and principal accounting officer) and employees, known as the Corporate Code of Ethics and Conduct. The Corporate
Code of Ethics and Conduct is available on our website at http://www.urogen.com under the Governance section of our
Investors page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to
our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is
granted to one of these specified individuals, the name of such person who is granted the waiver and the date of the
waiver. Shareholders may request a free copy of the Corporate Code of Ethics and Conduct from c/o UroGen Pharma Ltd.,
400 Alexander Park Dr., Princeton, NJ 08540.
Item 11. Executive Compensation
The information required by this item will be set forth in the Form 10‐K Amendment.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be set forth in the Form 10‐K Amendment.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be set forth in the Form 10‐K Amendment.
Item 14. Principal Accountant Fees and Services
The information required by this item will be set forth in the Form 10‐K Amendment.
137
Item 15. Exhibits, Financial Statement Schedules
(a)(1) Financial Statements.
PART IV
The response to this portion of Item 15 is set forth under Part II, Item 8 above.
(a)(2) Financial Statement Schedules.
All schedules have been omitted because they are not required or because the required information is given in the
Financial Statements or Notes thereto set forth under Item 8 above.
(a)(3) Exhibits.
Exhibit
Number
Exhibit Description
3.1
4.1
4.2
4.3
10.1*
10.2*
10.3*
10.4*
10.5
10.6
10.7
10.8
Articles of Association of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Report
on Form 6‐K, filed with the SEC on May 18, 2017).
Reference is made to Exhibit 3.1.
Description of the Registrant’s Ordinary Shares (incorporated by reference to Exhibit 4.2 to the Registrant’s
Annual Report on Form 10‐K, filed with the SEC on March 2, 2020).
Form of July 2023 Pre‐Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current
Report on Form 8‐K, filed with the SEC on July 27, 2023).
Form of Officer Indemnity and Exculpation Agreement (incorporated by reference to Exhibit 99.2 to the
Registrant’s Report Form 6‐K, filed with the SEC on July 13, 2018).
Amended and Restated 2010 Israeli Share Option Plan (incorporated by reference to Exhibit 4.2 to the
Registrant’s Annual Report on Form 20‐F, filed with the SEC on March 15, 2018).
2017 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10‐Q, filed with the SEC on November 14, 2023).
2017 Israeli Equity Incentive Sub Plan to the 2017 Equity Incentive Plan (incorporated by reference to Exhibit
10.7 to the Registrant’s Registration Statement on Form F‐1, filed with the SEC on April 7, 2017).
Form of Stock Option Grant Notice and Stock Option Agreement under the UroGen Pharma Ltd. 2017 Equity
Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10‐Q,
filed with the SEC on November 14, 2023).
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the UroGen Pharma
Ltd. 2017 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report
on Form 10‐Q, filed with the SEC on November 14, 2023).
Amendment to Form of Restricted Stock Unit Grant Notice under the UroGen Pharma Ltd. 2017 Equity
Incentive Plan.
Form of Performance‐Based Restricted Stock Unit Grant Notice and Performance‐Based Restricted Stock Unit
Award Agreement under the UroGen Pharma Ltd. 2017 Equity Incentive Plan (incorporated by reference to
Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on November 14, 2023).
138
10.9*
10.10
10.11
UroGen Pharma Ltd. 2019 Inducement Plan, as amended (incorporated by reference to Exhibit 10.5 to the
Registrant's Annual Report on Form 10‐K, filed with the SEC on March 21, 2022).
Form of Stock Option Grant Notice and Stock Option Agreement under the UroGen Pharma Ltd. 2019
Inducement Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8‐K,
filed with the SEC on May 28, 2019).
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the UroGen Pharma
Ltd. 2019 Inducement Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on
Form 8‐K, filed with the SEC on May 28, 2019).
10.12
Amendment to Form of Restricted Stock Unit Grant Notice under the UroGen Pharma Ltd. 2019 Inducement
Plan.
10.13*
Amended and Restated Compensation Policy for Officer Holders (incorporated by reference to Exhibit 10.8 to
the Registrant's Annual Report on Form 10‐K, filed with the SEC on March 24, 2023).
10.14*
10.15*
10.16*
10.17*
Employment Agreement by and between the Registrant and Elizabeth Barrett, dated as of January 3, 2019
(incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10‐K, filed with the SEC
on February 28, 2019).
Amendment 1 to Employment Agreement by and between the Registrant and Elizabeth Barrett, dated as of
January 26, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10‐
Q, filed with the SEC on May 13, 2021).
Omnibus Amendment to Equity Awards by and between the Registrant and Elizabeth Barrett, dated as of
January 19, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10‐
Q, filed with the SEC on May 13, 2021).
Performance‐Based Restricted Stock Unit Grant Notice by and between the Registrant and Elizabeth Barrett,
dated as of November 13, 2023 (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly
Report on Form 10‐Q, filed with the SEC on November 14, 2023).
10.18*
Amended Restricted Stock Unit Grant Notice by and between the Registrant and Elizabeth Barrett, dated as of
December 20, 2023.
10.19*
10.20*
10.21*
10.22*
10.23*
Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of December 5, 2017
(incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10‐K, filed with the SEC
on February 28, 2019).
Amendment 1 to Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of
January 26, 2021 (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10‐
Q, filed with the SEC on May 13, 2021).
Amendment 2 to Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of
March 15, 2021 (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10‐Q,
filed with the SEC on May 13, 2021).
Employment Agreement between the Registrant and Jason Smith, dated August 12, 2020 (incorporated by
reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on November
9, 2020).
Amendment 1 to Employment Agreement between the Registrant and Jason Smith, dated January 26, 2021
(incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10‐Q, filed with the
SEC on May 13, 2021).
139
10.24*
10.25†
10.26
10.27
Employment Agreement between the Company and Dong Kim, dated March 20, 2022 (incorporated by
reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‐K, filed with the SEC on March 21,
2022).
License Agreement, dated November 8, 2019, by and between the Registrant and Agenus Inc. (incorporated
by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10‐K, filed with the SEC on March 2,
2020).
Lease Agreement, dated November 4, 2019, by and between the Registrant and Witman Properties, L.L.C. and
Alexander Road at Davanne, L.L.C. (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual
Report on Form 10‐K, filed with the SEC on March 2, 2020).
Amendment to Lease Agreement, dated June 8, 2022, by and between the Registrant and Witman Properties,
L.L.C. and Alexander Road at Davanne, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s
Quarterly Report on Form 10‐Q, filed with the SEC on August 11, 2022).
10.28†**
Manufacturing and Supply Agreement, dated May 26, 2020, by and between the Registrant and Isotopia
Molecular Imaging Ltd. (the “Isotopia Agreement”) and the extension to the Isotopia Agreement, dated
August 25, 2022, by and between the Registrant and Isotopia Molecular Imaging Ltd. (incorporated by
reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on November
10, 2022).
10.29†**
Manufacturing and Supply Agreement ‐ Amendment No. 2, dated May 19, 2023, by and between the
Registrant and Isotopia Molecular Imaging Ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10‐Q, filed with the SEC on August 10, 2023).
10.30†**
Manufacturing & Supply Agreement, dated as of April 24, 2020 and amended as of March 2, 2022, by and
between UroGen Pharma Ltd. and Cenexi‐Laboratoires Thissen s.a. (incorporated by reference to Exhibit 10.2
to the Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on May 10, 2022).
10.31†**
Amendment 2 to Manufacturing & Supply Agreement, dated as of December 28, 2023 by and between
UroGen Pharma Ltd. and Cenexi‐Laboratoires Thissen s.a.
10.32†**
License and Supply Agreement, dated as of January 16, 2024, by and between UroGen Pharma Ltd. and
Medac Gesellschaft für klinische Spezialpräparate m.b.H.
10.33
10.34
10.35
Loan Agreement, dated as of March 7, 2022, by and among UroGen Pharma Ltd. (the “Company”), UroGen
Pharma, Inc., as the borrower, and certain direct and indirect subsidiaries of the Company party thereto from
time to time, as guarantors, BPCR Limited Partnership, as a lender, BioPharma Credit Investments V (Master)
LP, as a lender, and BioPharma Credit PLC, as collateral agent for the lenders (incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on May 10, 2022).
Amendment to Loan Agreement, dated June 29, 2023, by and among the Company, UroGen Pharma, Inc., as
the borrower, and certain direct and indirect subsidiaries of the Company party thereto from time to time, as
guarantors, BPCR Limited Partnership, as a lender, BioPharma Credit Investments V (Master) LP, as a lender,
and BioPharma Credit PLC, as collateral agent for the lenders (incorporated by reference to Exhibit 10.2 to the
Registrant’s Quarterly Report on Form 10‐Q, filed with the SEC on August 10, 2023).
Amended and Restated Loan Agreement, dated as of March 13, 2024, by and among UroGen Pharma, Inc., as
the borrower, and a credit party, Urogen Pharma Ltd. as Parent, and a Credit Party, the other guarantors
signatory hereto or otherwise party hereto from time to time as additional Credit Parties, BioPharma Credit
PLC as collateral agent, BPCR Limited Partnership as a lender and BioPharma Credit Investments V (Master) LP
as a lender.
140
21.1
Subsidiary of the Registrant (incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on
Form 10‐K, filed with the SEC on March 24, 2023).
23.1
Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm.
24.1
Power of Attorney (see signature page hereto).
31.1
31.2
32.1
97
101
Certification of Principal Executive Officer Pursuant to Rules 13a‐14(a) and 15d‐14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‐Oxley Act of 2002.
Certification of Principal Financial Officer Pursuant to Rules 13a‐14(a) and 15d‐14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‐Oxley Act of 2002.
Certification of Principal Executive and Financial Officers Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes‐Oxley Act of 2002.
UroGen Pharma Ltd. Incentive Compensation Recoupment Policy.
The following financial information from the Annual Report on Form 10‐K of UroGen Pharma Ltd. for the year
ended December 31, 2023, formatted in Inline XBRL (extensible Business Reporting Language): (i)
Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of
Changes in Shareholders Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to
Consolidated Financial Statements.
104
The cover page to this Annual Report on Form 10‐K has been formatted in Inline XBRL
*
†
Management contract or compensatory plan.
Certain information in this exhibit has been redacted pursuant to Item 601(b)(10)(iv) of Regulation S‐K because it is
both not material and is the type of information that the registrant treats as private or confidential.
** Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S‐K.
Item 16. Form 10‐K Summary
None.
141
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
March 14, 2024
UROGEN PHARMA LTD.
By: /s/ Elizabeth Barrett
Elizabeth Barrett
President and Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned directors and officers of UroGen Pharma Ltd., hereby severally constitute and appoint Elizabeth
Barrett and Don Kim, and each of them singly, our true and lawful attorneys, with full power to them, and to each of them
singly, to sign for us and in our names in the capacities indicated below, any and all amendments to this Annual Report on
Form 10‐K, and to file or cause to be filed the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as each of us might or could do in person, and hereby ratifying and confirming all that said
attorneys, and each of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power of
Attorney.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
Date
/s/ Elizabeth Barrett
Elizabeth Barrett
President, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Don Kim
Don Kim
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Arie Belldegrun
Arie Belldegrun, M.D.
Chair
/s/ Cynthia Butitta
Cynthia Butitta
Director
/s/ Fred E. Cohen
Fred E. Cohen, M.D., D.Phil.
Director
/s/ Leana S. Wen
Leana S. Wen, M.D., M.Sc.
Director
/s/ Stuart Holden
Stuart Holden, M.D.
/s/ James Robinson Jr.
James Robinson Jr.
/s/ Dan Wildman
Dan Wildman
Director
Director
Director
142
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
March 14, 2024
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________ to _____________
Commission file number: 001-38079
UROGEN PHARMA LTD.
(Exact name of registrant as specified in its charter)
Israel
(State or other jurisdiction of incorporation or organization)
400 Alexander Park, Princeton, NJ
(Address of principal executive offices)
98-1460746
(I.R.S. Employer Identification Number)
08540
(Zip Code)
Title of each class
Ordinary Shares, par value NIS 0.01 per share
Registrant’s telephone number, including area code: (646) 768-9780
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol
URGN
Name of exchange on which registered
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐
☑
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☑
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the ordinary shares held by non-affiliates of the registrant as of June 30, 2023 totaled approximately $190.4 million based
on the closing price for the registrant’s ordinary shares on that day as reported by the Nasdaq Stock Market LLC. Such value excludes ordinary shares held
by executive officers, directors and certain entities affiliated with directors as of June 30, 2023.
As of April 22, 2024, there were 36,130,121 of the registrant’s ordinary shares outstanding.
Auditor Firm ID: 238
Auditor Name: PricewaterhouseCoopers LLP
Auditor Location: Florham Park, New Jersey
EXPLANATORY NOTE
UroGen Pharma Ltd. (the “Company,” “our,” “us” or “we”) is filing this Amendment No. 1 on Form 10-K/A (this
“Amendment No. 1”) to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”),
which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 14, 2024, to provide the
information required by Part III of Form 10-K. This Amendment No. 1 amends and restates in their entirety Items 10, 11,
12, 13 and 14 of Part III of the Form 10-K.
In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 12b-15 of the Securities Exchange Act
of 1934 (the “Exchange Act”), as amended, updated certifications of the Company’s principal executive officer and
principal financial officer are included as Exhibits 31.3 and 31.4 hereto. Because no financial statements have been
included in this Amendment No. 1 and this Amendment No. 1 does not contain or amend any disclosure with respect to
Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of the certifications have been omitted. We are not including
the certifications under Section 906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this
Amendment No. 1. This Amendment No. 1 also amends Item 15 of Part IV to add the foregoing certifications.
No other changes have been made to the Form 10-K other than those described above. This Amendment No. 1 does not
reflect subsequent events occurring after the original filing date of the Form 10-K or modify or update in any way the
financial statements, consents or any other items or disclosures made in the Form 10-K in any way other than as required to
reflect the amendments discussed above. Accordingly, this Amendment No. 1 should be read in conjunction with the Form
10-K and the Company’s other filings with the SEC subsequent to the filing of the Form 10-K.
Table of Contents
PART III.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Directors, Executive Officers and Corporate Governance. .........................................................................
Executive Compensation. ...........................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ..
Certain Relationships and Related Transactions and Director Independence. ............................................
Principal Accountant Fees and Services. ....................................................................................................
PART IV.
Item 15.
Exhibits, Financial Statement Schedules. ...................................................................................................
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5
19
21
23
24
Page
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information Concerning Our Directors
Our Board currently consists of eight directors. The brief biographies below include information, as of the date of this Form
10-K/A, regarding the specific and particular experience, qualifications, attributes or skills of each director that qualify such
director to serve on our Board.
Age Position Held With the Company
Name
Arie Belldegrun, M.D., FACS .......................................... 74
Elizabeth Barrett ............................................................... 61
Cynthia M. Butitta ............................................................ 69
Fred E. Cohen, M.D., D.Phil. ........................................... 67
Stuart Holden, M.D. ......................................................... 81
James A. Robinson, Jr ...................................................... 54
Leana Wen, M.D., M.SC. ................................................. 41
Daniel G. Wildman .......................................................... 67
Chair of the Board
Director and Chief Executive Officer
Director
Director
Director
Director
Director
Director
Arie Belldegrun, M.D., FACS has served as our Chair since December 2012. Dr. Belldegrun is a co-founder of Allogene
Therapeutics, a public biopharmaceutical company, and has served as Executive Chairman of its board of directors since
November 2017. From March 2014 until October 2017 Dr. Belldegrun served as the President and Chief Executive Officer
of Kite Pharma, Inc. and as a member of its board of directors from June 2009 until October 2017. Dr. Belldegrun currently
serves as Chairman of Bellco Capital LLC (since 2004); Chairman and Partner of Two River (since June 2009); Co-chairman
of Breakthrough Properties LLC and Breakthrough Services, L.L.C. (since April 2019); Chairman of Kronos Bio (since
November 2017); Co-chairman of Symbiotic Capital (since June 2023); Director of Gingko Bioworks (since September
2021); and Director of ByHeart, Inc. (since October 2019). Dr. Belldegrun is also Senior Managing Director of Vida Ventures,
LLC (since November 2017). Dr. Belldegrun is a Research Professor, holds the Roy and Carol Doumani Chair in Urologic
Oncology, and is Founder and Director of the UCLA Institute of Urologic Oncology at the David Geffen School of Medicine
at UCLA. Prior to joining UCLA, Dr. Belldegrun was at the National Cancer Institute/NIH as a research fellow in surgical
oncology and immunotherapy under Dr. Steven A. Rosenberg. He completed his MD at the Hebrew University Hadassah
Medical School in Jerusalem, his post-graduate studies in Immunology at the Weizmann Institute of Science, and his
residency in urologic surgery at Harvard Medical School. He has authored several books on oncology and more than 500
scientific and medical papers related to urological cancers, immunotherapy, gene therapy and cancer vaccines. He is certified
by the American Board of Urology and the American Association of Genitourinary Surgeons. Our Board believes Sr.
Belldegrun’s business and medical knowledge and experience qualify him to serve on our Board.
Elizabeth Barrett has served as our director and as our President and Chief Executive Officer since January 2019. Prior to
joining UroGen, Ms. Barrett served as the Chief Executive Officer of Novartis Oncology and a member of the Novartis
Executive Committee since February 2018. Prior to Novartis, Ms. Barrett served at Pfizer Inc. in various leadership capacities,
most recently as the Global President of Oncology and, before that, as President of Global Innovative Pharma for Europe,
President of the Specialty Care Business Unit for North America, and Regional President of United States Oncology. Prior
to Pfizer, Ms. Barrett was Vice President and General Manager of the Oncology Business Unit at Cephalon Inc. Ms. Barrett
received an M.B.A. degree in Business Administration-Marketing from Saint Joseph’s University and a B.S. from the
University of Louisiana. Ms. Barrett also currently serves on the boards of directors of Sage Therapeutics, Inc. and Allogene
Therapeutics, Inc. Our Board believes Ms. Barrett’s service as our Chief Executive Officer and her leadership of both large
organizations and growing businesses qualify her to serve on our Board.
Cynthia M. Butitta has served as our director since October 2017. Ms. Butitta served as Chief Financial Officer of Kite
Pharma, Inc. from January 2014 to May 2016 and as Chief Operating Officer from March 2014 to September 2017. From
May 2011 to December 2012, she was Senior Vice President and Chief Financial Officer at Next Wave Pharmaceuticals Inc.,
a specialty pharmaceutical company. Prior to that, Ms. Butitta served as Chief Operating Officer of Telik, Inc., a
biopharmaceutical company, from March 2001 to December 2010 and as its Chief Financial Officer from August 1998 to
December 2010. Ms. Butitta also served as Principal Accounting Officer of Telik, Inc. until December 2010. She has served
as a Director of Autolus, Ltd., a biotechnology company, since March 2018; a board member of Olema Oncology since
August 2020 and Century Therapeutics since February 2021. Ms. Butitta received her B.S. degree with honors in Business
and Accounting from Edgewood College in Madison, Wisconsin and her M.B.A. degree in Finance from the University of
Wisconsin, Madison. Our Board believes Ms. Butitta’s financial knowledge and experience qualify her to serve on our Board.
1
Fred E. Cohen, M.D., D.Phil. has served as our director since May 2017. Dr. Cohen is a Senior Advisor to TPG, where he
served for over 15 years as a Partner, and founder of TPG Biotechnology, a life science focused venture capital fund.
Beginning in November 2017, Dr. Cohen has served as a cofounder and senior managing director of Vida Ventures, LLC, a
biotechnology venture capital fund. In June 2021, Dr. Cohen founded Monograph Capital Partners, a life sciences venture
capital fund. In addition, for over two decades throughout his career, Dr. Cohen has been affiliated with the University of
California, San Francisco where he held various clinical responsibilities, including as a research scientist, an internist for
hospitalized patients, a consulting endocrinologist, and the Chief of the Division of Endocrinology and Metabolism. Dr.
Cohen received his B.S. degree in Molecular Biophysics and Biochemistry from Yale University, his D.Phil. in Molecular
Biophysics from Oxford on a Rhodes Scholarship, and his M.D. from Stanford University. He is a member of the National
Academy of Medicine and the American Academy of Arts and Sciences. Dr. Cohen currently serves on the board of directors
of several other biotechnology and pharmaceutical companies. Our Board believes Dr. Cohen’s financial and medical
knowledge and experience qualify him to serve on our Board.
Stuart Holden, M.D. has served as our director since December 2015. Dr. Holden has been the Chair of ProQuest
Investments’ Scientific Advisory Board since it was founded in 1998. Since May 2014, Dr. Holden has served as a member
of the UCLA faculty as a Health Sciences Clinical Professor of Urology, Spielberg Family Chair in Urologic Oncology, in
the Department of Urology at the UCLA David Geffen School of Medicine and Associate Director of the UCLA Institute of
Urologic Oncology. Dr. Holden has worked in the field of prostate cancer for more than 36 years. Dr. Holden also serves as
Medical Director of the Prostate Cancer Foundation since the foundation’s inception in 1993. Dr. Holden was the director of
the Louis Warschaw Prostate Cancer Center at Cedars-Sinai Medical Center and the first holder of the Warschaw, Robertson,
Law Families Chair in Prostate Cancer. Dr. Holden has served as a member of the board of directors of Telormedix SA from
2008 to 2017 and served as a member of the board of directors of Acurian, Inc. from 1999 through 2014. Dr. Holden also
served on the Board of the American College of Medical Informatics from 1999 through 2006 and is currently on the board
of Clarus Therapeutics. In addition, he was a founding partner at Tower Urology in Los Angeles. Dr. Holden received a B.S.
degree from the University of Wisconsin-Madison and completed his medical degree and received his surgical training at
Weill Cornell Medical College and the New York Hospital-Cornell University Medical College. He completed his urology
residency at Emory University School of Medicine and fellowships in urology and developmental genetics at Memorial
Sloan-Kettering Cancer Center. He also was awarded a clinical fellowship from the American Cancer Society. Our Board
believes Dr. Holden’s medical knowledge and experience qualify him to serve on our Board.
James A. Robinson, Jr. has served as our director since July 2023. Mr. Robinson currently serves as the President, Chief
Executive Officer and member of the board directors of A2 Biotherapeutics. Prior to this role, he served as the Chief Executive
Officer of Urovant Sciences, Inc. from March 23, 2020 through June 2023 and has served as a member of Urovant’s board
of directors from March 2019 through June 2023.
Prior to Urovant Sciences, Mr. Robinson held the position of President and Chief Operating Officer at Paragon Biosciences
where he oversaw Paragon’s operations from April 2019 to March 2020. Previously, Mr. Robinson served as the President
and Chief Operating Officer of Alkermes, where he was responsible for global commercial, new product planning, corporate
planning, manufacturing, quality, human resources and business development functions. Prior to Alkermes, Mr. Robinson
spent over twelve years at Astellas U.S., most recently as President, Americas Operations, where his responsibilities included
all aspects of operations for North and South America. Prior to that, he was President of Astellas Pharma US, where he was
responsible for leading the U.S. commercial organization. Prior to Astellas, Mr. Robinson spent thirteen years at Schering-
Plough Pharmaceuticals, where his last role was Vice President, Hepatitis Sales and Managed Care.
Mr. Robinson currently serves as an advisor to BridgeBio Pharma Inc. and on the board of directors of Eledon
Pharmaceuticals, a private biotechnology company, and Petauri Health, a private healthcare service company. Previously,
Mr. Robinson served on the board of directors of Neos Therapeutics prior to its acquisition by Aytu Biopharma as well as the
board of directors of Applied Genetic Technologies Corporation until its acquisition by Syncona LTD in November 2022.
He also previously served on the board of directors of the Pharmaceutical Research and Manufacturers of America
("PhRMA") and served as Chairman of PhRMA’s State Committee. He is a founding member of MATTER. Mr. Robinson
received a Bachelor of Science degree from DePaul University. Our Board believes Mr. Robinson’s broad business leadership
experience, including his experience as an executive of commercial organizations, qualifies him to serve on our Board.
Leana S. Wen, M.D., M.Sc. has served as our director since August 2022. Dr. Wen is an emergency physician and has served
as a faculty member at the George Washington University since September 2019. She has been a contributing columnist for
The Washington Post since June 2020, writing on health policy and public health, and a health and medical expert for CNN
since August 2020. From January 2015 to October 2018, she was the health commissioner for the city of Baltimore, where
she led the nation’s oldest continuously operating health department to combat the opioid epidemic and improve maternal
and child health. From 2013 to 2015, Dr. Wen served as director of patient-centered care research in the department of
emergency medicine at George Washington University, and authored a critically-acclaimed book on patient advocacy. She
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is currently on the board of the Bipartisan Policy Center and the Baltimore Community Foundation, and chairs the advisory
board of the Behavioral Health Group. She has also been a global health fellow at the World Health Organization, a consultant
with the China Medical Board, and a nonresident senior fellow at the Brookings Institution. Dr. Wen also served as the
President of Planned Parenthood from 2018 through 2019. She has been a member of more than ten nonprofit boards,
including serving as the chair of Behavioral Health System Baltimore. Dr. Wen has also served on the board of directors of
Glaukos Corporation since March 2021 and also serves on its audit committee. Dr. Wen’s work has been recognized by
numerous professional organizations, including as one of Modern Healthcare’s Top 50 Physician-Executives and a member
of the Council on Foreign Relationships. In 2019, she was named one of TIME magazine’s 100 Most Influential People and
in 2022 as one of Modern Healthcare’s 100 Most Influential People in Healthcare. She holds a B.S. from California State
University, Los Angeles, an M.D. from Washington University School of Medicine and two M.Sc.s from the University of
Oxford, where she was a Rhodes Scholar. She completed her residency training at Brigham & Women’s Hospital and
Massachusetts General Hospital, where she was a clinical fellow at Harvard Medical School. Our Board believes Dr. Wen’s
experience as a practicing physician, combined with her extensive experience working in governmental sectors, with
innovative health companies, and serving on a public company board and audit committee and on nonprofit boards and
foundations qualify her to serve on our Board.
Daniel G. Wildman has served as our director since November 2022. Mr. Wildman is Chairman of the Board of Progenerative
Medical, Inc., a pre-commercial company translating clinically proven reduced pressure technology into medical treatments
for orthopedic surgeries. He also serves on the board of directors for Nyxoah, Progenerative Medical, Inc. and Panther
Therapeutics. At Johnson & Johnson, Mr. Wildman led the Digital Surgery Strategy initiative where he was tasked with
developing an integrated strategy for robotic surgery for the company. This strategy directly led to the 2019 acquisition of
Auris Health, Inc. Prior to Digital Surgery, Mr. Wildman led Depuy Synthes Spine. In this role, he had overall responsibility
for the second-largest spine surgery business in the world ($1.8B). He served in this capacity from August of 2015 to
September of 2017, and during this period developed and implemented an integrated turn-around plan for the company.
Previously, Mr. Wildman served as Worldwide President of Ethicon Biosurgery, a division of Ethicon, Inc. From 2003-2015
he led this global business dedicated to delivering innovative and life-saving solutions to surgeons via development and
commercialization of biomaterial, biologic and combination products that changed the standard of care for intraoperative
hemostasis. In this role, Mr. Wildman transitioned the company from Advanced Wound Care to Biosurgery through a
combination of acquisitions, divestitures, and internal capability development, all focused on development and
commercialization of meaningful innovations. The Biosurgery business at Ethicon continues to be one of the fastest growing
companies in Johnson & Johnson's portfolio. Prior to Johnson & Johnson, Mr. Wildman spent 10 years with Boston Scientific
Corporation in a variety of sales, marketing, operations and strategic planning roles of increasing responsibility. Mr. Wildman
is an accomplished global leader. Throughout his career, he has earned a solid reputation for his strategic vision, motivational
leadership, innovative technologies, ability to execute and his commitment to people development. Mr. Wildman received a
Bachelor of Arts degree in Economics from St. Lawrence University in New York. Our Board believes Mr. Wildman’s
business and executive experience qualify him to serve on our Board.
Information Concerning Our Executive Officers
The following table sets forth information concerning our executive officers, including their ages, as of the date of this Form
10-K/A.
Name of Executive Officer
Elizabeth Barrett .......................................... 61
Don Kim ...................................................... 47
Mark P. Schoenberg, M.D. .......................... 66
Jason Smith ................................................. 52
Age Position(s)
Chief Executive Officer and Director
Chief Financial Officer
Chief Medical Officer
General Counsel and Chief Compliance Officer
The biography of Ms. Barrett is set forth under the heading “Information Concerning Our Directors” above.
Don Kim has served as our Chief Financial Officer since March 2022. Mr. Kim is a seasoned financial executive with
extensive pharmaceutical industry experience. Before his promotion, Mr. Kim served as VP Finance at UroGen since August
2021. Prior to UroGen, Mr. Kim was employed by Strides Pharma Inc., generic pharmaceutical company, starting as Head
of Finance in April 2020. He was subsequently appointed to the Stride Pharma board in March 2021. During his tenure at
Strides Pharma, Mr. Kim played a key role in the company’s capital-raising efforts in support of advancing its mission until
his departure in August 2021. Prior to joining Strides Pharma, Mr. Kim was Controller at Sun Pharma Inc., a pharmaceutical
company, from July 2019 to April 2020. Before that, Mr. Kim joined Zoetis Inc., an animal-health company, in December
2014 as Senior Manager-Corporate Audit. He was later promoted to Director-Corporate Audit in December 2015. He
thereafter became the US Controller at Zoetis Inc. in January 2018 until his departure from the company in July 2019. Earlier
in his career, Mr. Kim served as Audit/Assurance Manager at Deloitte, NY. He is a licensed Certified Public Accountant in
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California. Mr. Kim holds a Master of Business Administration from the University of North Carolina, Chapel Hill, and
bachelor’s degree from Yonsei University in Korea.
Mark P. Schoenberg, M.D. has served as our Chief Medical Officer since December 2017 and, prior to that, served as our
Medical Director since February 2016. Dr. Schoenberg has over 20 years of experience in clinical practice and research
focused on the care of patients with all forms of bladder cancer. Since April 2014, Dr. Schoenberg has been University
Professor and Chair of the Urology Department at The Montefiore Medical Center for The Albert Einstein College of
Medicine of Yeshiva University. Prior to joining Montefiore, from 2005 to 2014, Dr. Schoenberg served as Director of
Urologic Oncology and Bernard L. Schwartz Distinguished Professor of Urologic Oncology at Johns Hopkins Hospital.
Dr. Schoenberg is also the past chair of the Medical Advisory Board of the Bladder Cancer Advocacy Network, the author
of The Guide to Living with Bladder Cancer, co-editor of The Textbook of Bladder Cancer, a contributor to Campbell’s
Urology and a past Senior Editor of the journal Seminars in Urologic Oncology. Dr. Schoenberg received his M.D. (Alpha
Omega Alpha) from the University of Texas Health Sciences Center and completed his residency in General Surgery and
Urology at the Hospital of The University of Pennsylvania, where he served as chief resident and urology instructor, before
completing basic research and clinical urologic oncology fellowships at Johns Hopkins under the auspices of The American
Cancer Society. Dr. Schoenberg is a fellow of the American College of Surgeons, as well as a member of the American
Association of Cancer Research, the Society of Urologic Oncology and the American Urological Association.
Jason Smith has served as our General Counsel, Chief Compliance Officer and Corporate Secretary since August 2020. Mr.
Smith is responsible for leading our legal, intellectual property, and corporate compliance functions. Mr. Smith joined us
from Pfizer, where he served as Chief Counsel, Oncology from August 2016 to August 2020. Prior to Pfizer, Mr. Smith
worked in the legal department at Wyeth in a variety of roles including as antitrust counsel, Global Product Counsel and
Chief Counsel, U.S. Pharmaceuticals, leading a team of lawyers supporting the prescription pharmaceuticals businesses.
Before joining Wyeth, Mr. Smith was an associate at Howrey, Simon, Arnold & White in Washington, DC, in the antitrust
and commercial litigation groups. Mr. Smith received his bachelor's degree in Economics, cum laude from Binghamton
University and his juris doctor degree, with high honors, from George Washington University.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Conduct and Ethics
We have adopted a Corporate Code of Ethics and Conduct (the “Code of Conduct”) applicable to all of our employees,
executive officers and directors. The Code of Conduct is available on our website at www.urogen.com. Our Audit
Committee is responsible for monitoring the implementation of the Code of Conduct and must approve any material
changes to or waivers of the Code of Conduct regarding our directors or executive officers, and disclosures made in the
Company’s annual report in such regard. In addition, we intend to post on our website all disclosures that are required by
law or the listing standards of the applicable stock exchange concerning any amendments to, or waivers from, any provision
of the Code of Conduct.
Audit Committee
Our Audit Committee consists of Ms. Butitta, Dr. Holden and Dr. Wen. Ms. Butitta serves as Chair of the Audit
Committee. All members of our Audit Committee meet the requirements for financial literacy under the applicable rules and
regulations of the SEC and Nasdaq. Our Board has determined that Ms. Butitta is an “audit committee financial expert” as
such term is defined in the applicable SEC rules and has the requisite financial experience as defined by the Nasdaq listing
standards. Each of the members of our Audit Committee is “independent” as such term is defined in Rule 10A-3(b)(1) under
the Exchange Act and satisfies the independent director requirements under the Nasdaq listing standards.
Compensation Committee
Our Compensation Committee consists of Dr. Belldegrun, Dr. Cohen, and Mr. Wildman. Dr. Cohen serves as Chair of the
Compensation Committee. Each of these individuals is a non-employee director, as defined in Rule 16b-3 promulgated under
the Exchange Act. Our Board has determined that each of these individuals is “independent” as defined under the applicable
listing standards of Nasdaq, including the standards specific to members of a compensation committee.
4
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Mr. Robinson and Dr. Wen. Dr. Wen serves as Chair of
the Nominating and Corporate Governance Committee. Each of these individuals is a non-employee director, as defined in
Rule 16b-3 promulgated under the Exchange Act. Our Board has determined that each of these individuals is “independent”
as defined under the applicable listing standards of Nasdaq, including the standards specific to members of a nominating and
corporate governance committee.
Item 11. Executive Compensation.
EXECUTIVE COMPENSATION
We are a “smaller reporting company” under Item 10 of Regulation S-K promulgated under the Exchange Act and the
following compensation disclosure is intended to comply with the requirements applicable to smaller reporting companies.
Although the rules allow us to provide less detail about our executive compensation program than companies that are not
smaller reporting companies, our Compensation Committee is committed to providing the information necessary to help
shareholders understand its executive compensation-related decisions. Accordingly, this section includes supplemental
narratives that describe our 2023 compensation program for our named executive officers.
Overview
Our fundamental objective is to advance patient care while creating consistent long-term value for our shareholders. To
accomplish this objective, we have established an overall compensation program intended to attract and retain highly qualified
executives, incentivize achievement of our key performance goals in order to align our executives’ interests with those of our
shareholders and link pay to company performance. We take a holistic approach to assessing Company performance, and
identify corporate objectives that align with our short- and long-term strategic priorities, and build towards creation of long-
term, sustainable shareholder value.
Our 2023 corporate performance highlights include:
- Achieved year-over-year revenue increase of 28%
- Obtained a New Technology Ambulatory Payment Classification from Centers for Medicare & Medicaid Services
for Jelmyto, effective from October 1, 2023
- Announcement of positive topline data from our Phase 3 trials ATLAS and ENVISION studying UGN-102
(mitomycin) for intravesical solution for low-grade intermediate risk non-muscle invasive bladder cancer
-
Private placement of ordinary shares for aggregate gross proceeds of $120 million, before deducting fees to
placement agents and financial advisors and before other expenses
- Agreement with the FDA on plans for rolling submission of a New Drug Application for UGN-102 (mitomycin) for
intravesical solution
The following discussion describes our executive compensation process and policies. It provides qualitative information on
the factors relevant to these decisions and the manner in which compensation is awarded to our named executive officers for
the fiscal year ended December 31, 2023, which consisted of our principal executive officer, our chief medical officer and
our general counsel and chief compliance officer. These named executive officers were as follows:
Name
Elizabeth Barrett
Mark P. Schoenberg, M.D.
Jason Smith
Position(s)
President and Chief Executive Officer
Chief Medical Officer
General Counsel and Chief Compliance Officer
5
Objectives, Philosophy and Elements of Executive Compensation
Our compensation program aims to achieve the following main objectives:
●
●
●
●
attract, retain and reward highly qualified executives;
provide incentives that motivate executives to achieve our key performance goals that create shareholder value;
align our executives’ interests with those of our shareholders; and
link pay to company performance.
The Company’s executive compensation program is overseen by the Compensation Committee with the advice and support
of an independent third-party compensation consultant. The following are key characteristics of the Company’s executive
compensation program:
● A substantial portion of executive pay is tied to performance. We structure a significant portion of our named
executive officers’ compensation to be variable. Annual cash performance bonuses and long-term equity
compensation are dependent on achievement of corporate performance objectives and determined by the
Compensation Committee.
● Our executive bonuses are dependent on the Company and the officer achieving annually determined
objectives. As a smaller reporting company with significant development-stage activities, we take a holistic
approach to evaluating the Company's performance. We measure performance against challenging objectives
established at the beginning of each performance cycle. We establish a broad set of measurable performance
objectives that align with our long-term strategic priorities and build towards lasting long-term value. Our annual
performance-based bonus opportunities for all our named executive officers are determined by the Compensation
Committee, and ultimately the Board, based upon the Company’s and the officer’s achievement of objectives
determined on an annual basis by the Company.
● We emphasize long-term equity incentives. Equity awards are an integral part of our executive compensation
program and comprise the primary “at-risk” portion of our named executive officer compensation package. During
2023, we granted our executive officers options to purchase our ordinary shares and restricted stock units. These
equity awards granted to our named executive officers in 2023 vest in equal annual installments over three years
from the vesting commencement date. These awards strongly align our executive officers’ interests with those of
our shareholders by providing a continuing financial incentive to maximize value for our shareholders and by
encouraging our executive officers to remain in our long-term employ. In 2023 we also awarded performance stock
units as part of our CEO’s long-term incentive compensation. We have identified receipt of U.S. regulatory approval
for our lead product candidate UGN-102 as a critical long-term strategic objective. Vesting of these PSUs will
depend upon obtaining this regulatory approval in the three years following the grant, directly tying a substantial
component of our CEO’s total compensation to performance against one of the primary drivers of long-term value.
● Our Compensation Committee has retained Compensia as an independent third-party compensation
consultant for guidance in making compensation decisions. The compensation consultant advises the
Compensation Committee on market practices, including identifying a peer group of companies and their
compensation practices, so that our Compensation Committee can regularly assess the Company’s individual and
total compensation programs against these peer companies, the general marketplace and other industry data points.
● We do not provide our executive officers with any excise tax gross ups.
● We have not repriced options.
● We do not provide executive fringe benefits or perquisites to our executives.
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Our executive compensation program generally consists of, and is intended to strike a balance among, the following three
principal components: base salary, annual performance-based bonuses and long-term incentive compensation. We provided
signing bonuses to our executive officers when they joined the Company. We also provide our executive officers with benefits
available to all our employees, including participation in employee benefit plans. The following chart summarizes the three
main elements of compensation, their objectives and key features.
Element of Compensation
Base Salary
(fixed cash)
Objectives
Key Features
Provides financial stability and
security through a fixed amount of
cash for performing job
responsibilities.
Generally reviewed annually and determined based
on a number of factors, including in part, market data
provided by our independent compensation
consultant.
Performance Bonus
(at-risk cash)
Motivates and rewards for attaining
key annual Company and executive
officer performance objectives.
Target bonus amounts are generally reviewed
annually and determined based upon positions that
have similar impact on the organization and
competitive bonus opportunities in our market.
Bonus opportunities are dependent upon
achievement of specific corporate performance
objectives consistent with our strategic plan and
individual performance objectives that relate to the
officer’s role and expected contribution toward
reaching our corporate goals, determined by the
Board and communicated at the beginning of the
year. Actual bonus amounts earned are determined at
the end of the year, taking into account corporate and
individual performance objectives.
Long-Term Incentive
(at-risk equity)
Motivates and rewards for long-term
Company performance; aligns
executives’ interests with
shareholder interests and changes in
shareholder value.
Equity opportunities are generally reviewed annually
and may be granted during the first half of the year
or as appropriate during the year for new hires,
promotions, or other special circumstances, such as
to encourage retention, or as a reward for significant
achievement.
Attracts highly qualified executives
and encourages their continued
employment over the long-term.
Individual awards are determined based on a number
of factors, including current corporate and individual
performance and market data provided by our
independent compensation consultant.
7
We focus on providing a competitive compensation package to our executive officers which provides short- and long-term
incentives for the achievement of measurable Company and executive officer objectives. We believe that this approach
provides an appropriate blend of short-term and long-term incentives to maximize shareholder value. We generally do not
have any formal policies for allocating compensation among salary, performance bonus awards and equity grants, short-term
and long-term compensation or among cash and non-cash compensation, although total annual cash bonus compensation to
any individual is capped at 150% of such individual’s salary pursuant to our Officers Compensation Policy. Our
Compensation Committee uses its judgment to establish a total compensation program for each named executive officer that
is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes
is appropriate to achieve the goals of our executive compensation program and our corporate objectives. In 2023 our Actual
CEO compensation was as follows:
To ensure alignment of our executive officer incentives with shareholder interests, we have historically structured a significant
portion of the named executive officers’ total target compensation with performance-based bonus opportunities and long-
term incentive equity awards. Additionally, in 2023, over half of the value of our CEO’s long-term incentive equity awards
were in the form of performance stock units which vest upon receipt of U.S. regulatory approval for our lead product
candidate UGN-102 in the three years following the grant, directly tying a substantial component of our CEO’s total
compensation to performance against one of the primary drivers of long-term value. Our CEO's total direct compensation for
2023 was positioned at approximately the 35th percentile of our compensation peer group. Our non-CEO executives' total
direct compensation for 2023 was positioned at approximately the 15th percentile of our compensation peer group (see section
titled "Use of Competitive Market Compensation Data" below for more detail on the selection of our compensation peer
group).
2023 Say-on-Pay Results
At our 2023 annual meeting of shareholders, we held a shareholder advisory vote on executive compensation, commonly
referred to as a “say-on-pay” vote, which resulted in approximately 81% of the total votes cast being in favor of the advisory
proposal, representing a significant increase over the prior year’s approval percentage.
We continue to assess and enhance our approach to executive compensation by seeking feedback from shareholders and
reviewing the analyses of the Institutional Shareholder Services and Glass Lewis published reports. Our approach to aligning
pay and performance focuses on maintaining a significant portion of executive’s annual total compensation based on
evaluation of individual executives' performance against our corporate objectives. We take a holistic approach to assessing
Company performance, undertake a robust goal-setting process to determine corporate objectives that align with our short-
and long-term strategic priorities, and build towards creation of shareholder value.
8
We continually endeavor to align our executive interests with those of our shareholders, and link pay to company
performance. We have identified receipt of U.S. regulatory approval for our lead product candidate UGN-102 as a critical
long-term strategic objective. In 2024, we have included PSUs as part of our officers’ long-term incentive compensation,
with vesting of these PSUs upon the first commercial sale of UGN-102, directly tying a substantial component of our officers’
total compensation to performance against one of the primary drivers of long-term value.
Our next “say-on-pay” vote will be held at our 2024 annual meeting of shareholders.
Our Compensation Governance Structure
Role of our Compensation Committee, Management and the Board
The Compensation Committee is appointed by the Board and has responsibilities related to the compensation of the
Company’s directors, officers, and employees and the development and administration of the Company’s compensation plans.
For details on the Compensation Committee’s oversight of the executive compensation program, see the section above titled
“Compensation Committee”. Our Compensation Committee consists solely of independent members of the Board.
The Compensation Committee reviews all compensation paid to our executive officers, including our named executive
officers. The Chief Executive Officer evaluates and provides to the Compensation Committee performance assessments and
compensation recommendations. While the Chief Executive Officer discusses her recommendations with the Compensation
Committee, she does not participate in the deliberations concerning her own compensation. More specifically, the
Compensation Committee discusses and makes final recommendations to the Board with respect to executive compensation
matters without the Chief Executive Officer present during discussions of the Chief Executive Officer’s compensation. From
time to time, various other members of management and other employees as well as outside advisors or consultants may be
invited by the Compensation Committee to make presentations, provide financial or other background information or advice
or otherwise participate in the Compensation Committee meetings.
The Compensation Committee meets periodically throughout the year to manage and evaluate our executive compensation
program, and generally determines the principal components of compensation (base salary, performance bonus and equity
awards) for our executive officers on an annual basis; however, decisions may occur at other times for new hires, promotions
or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does
not delegate authority to approve executive officer compensation. The Compensation Committee does not maintain a formal
policy regarding the timing of equity awards to our executive officers. The Compensation Committee will continue to monitor
and evaluate our executive compensation program in light of our shareholders’ views, before making any adjustments, and
continue to consider the outcome of our say-on-pay votes and our shareholders’ views when making future compensation
decisions for our named executive officers.
Role of Compensation Consultant
The Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive
compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. The
Compensation Committee has retained Compensia, Inc. (“Compensia”), a management consulting firm that provides
executive compensation and advisory services to compensation committees of life sciences companies, as its compensation
consultant. A representative of Compensia attends meetings of the Compensation Committee at the invitation of the
Committee. In addition, Compensia supported the selection of companies included in our compensation peer group, provided
competitive market assessments of the compensation of our executive officers and non-employee director compensation
programs, and provided support on other matters as requested by the Compensation Committee.
The Compensation Committee has analyzed whether the work of Compensia as compensation consultant raises any conflict
of interest, taking into account relevant factors in accordance with SEC guidelines. Based on its analysis, our Compensation
Committee determined that the work of Compensia and the individual compensation advisors employed by Compensia does
not create any conflict of interest pursuant to the SEC rules and Nasdaq listing standards.
9
Use of Competitive Market Compensation Data
The Compensation Committee believes that it is important when making its compensation decisions to be informed as to the
current practices of comparable public companies with which we compete for top talent.
Working with Compensia, the Compensation Committee approved a group of companies that were identified as peers based
on alignment with our Company’s industry, stage of drug development, headcount, and market capitalization. The peer group
that was identified and used in research that informed executive compensation for 2023 included the following companies:
Aquestive Therapeutics, AVEO Pharmaceuticals, Harpoon Therapeutics, MEI Pharma, Atara Biotherapeutics, Clovis
Oncology, Corcept Therapeutics, Eiger BioPharmaceuticals, Epizyme, G1 Therapeutics, Karyopharm Therapeutics,
MacroGenics, Progenics Pharmaceutical, Puma Biotechnology, Rigel Pharmaceuticals, TG Therapeutics, Verastem, Y-mAbs
Theapeutics and Zogenix.
Compensia completed a benchmarking assessment of our historical executive compensation at the end of 2022 to inform the
Compensation Committee’s determinations regarding executive compensation for 2023 using data compiled from the
aforementioned peer group. Identification of peers included consideration of comparable market capitalization, revenues,
investigational and/or in-line portfolio, number of employees as well as stage and maturity of the peer company. Compensia
prepared and the Compensation Committee reviewed, a range of market data reference points with respect to base salary,
performance bonuses, target total cash compensation (base salary and the annual target performance bonus), equity
compensation, and total direct compensation (target total cash compensation and equity compensation) with respect to each
of the named executive officers.
Additionally, Compensia performed benchmarking analysis of actual 2023 executive compensation awarded as compared to
the following peers: 2seventy bio, Arcus Biosciences, Day One Biopharmaceuticals, Deciphera Pharmaceuticals, Eagle
Pharmaceuticals, Erasca, IDEAYA Biosciences, Inhibrx, iTeos Therapeutics, Karyopharm Therapeutics, Kura Oncology,
RAPT Therapeutics, Rigel Pharmaceuticals, Syndax Pharmaceuticals, Tango Therapeutics, Verastem, Xencor and Y-mAbs
Therapeutics. Changes in the peer group were driven by consideration of comparable market capitalization, as well the
acquisition of several companies in the prior peer group. This benchmarking analysis found that overall target total direct
compensation awarded in 2023 was at approximately the 15th percentile for our executive officers excluding the CEO and the
35th percentile for the CEO. This analysis of 2023 compensation and other research performed by Compensia is then used to
inform the Compensation Committee’s determinations regarding executive compensation for 2024.
Factors Used in Determining Executive Compensation
Our Compensation Committee sets the compensation of our executive officers at levels they determine to be competitive and
appropriate for each named executive officer, using their professional experience and judgment. Pay decisions are not made
by use of a formulaic approach or benchmark; the Compensation Committee believes that executive pay decisions require
consideration of a multitude of relevant factors which may vary from year to year. In making executive compensation
decisions, the Compensation Committee generally takes into consideration the factors listed below.
● Company performance and existing business needs
● Each named executive officer’s individual performance, scope of job function and the critical skill set of the
named executive officer to the company’s future performance
● The need to attract new talent to our executive team and retain existing talent in a highly competitive industry
● A range of market data reference points, as described above under “Use of Competitive Market Compensation
Data”
● Recommendations from consultants on compensation policy determinations for the executive officer group
2023 Executive Compensation Summary
Base Salary
The base salaries of our executive officers are designed to compensate them for day-to-day services rendered during the fiscal
year. Appropriate base salaries are used to recognize the experience, skills, knowledge and responsibilities required of each
executive officer and to allow us to attract and retain individuals capable of leading us to achieve our business goals in
competitive market conditions.
The base salaries of our executive officers are reviewed at least annually by our Compensation Committee and adjustments
are made to reflect Company and individual performance, as well as competitive market practices. Our Compensation
Committee also takes into account subjective performance criteria, such as an executive officer’s ability to lead, organize and
10
motivate others, develop the skills necessary to mature with us, set realistic goals to be achieved in his or her respective area,
and recognize and pursue new business opportunities that enhance our growth and success. Our Compensation Committee
does not apply specific formulas to determine increases, but instead makes an evaluation of each executive officer’s
contribution to our long-term success. Annual adjustments to base salaries are effective as of March 1 of each year, with mid-
year adjustments to base salaries made under special circumstances, such as promotions or increased responsibilities, or to
align certain base salaries with those of individuals in comparable positions at the companies in our compensation peer group.
The 2023 base salaries for our named executive officers were as follows:
Executive
Elizabeth Barrett ..............................................................................................
Mark P. Schoenberg, M.D. ..............................................................................
Jason Smith .....................................................................................................
Annual Performance Bonus
Base
Salary
$799,367
$344,201
$459,680
Percentage
Increase in Base
Salary from
December 2022
4.00%
5.00%
4.00%
Our named executive officers are eligible to receive performance-based cash bonuses, which are designed to provide
appropriate incentives to our executive officers to achieve defined annual corporate goals and to reward them for individual
performance towards these goals. The annual performance-based bonus that each named executive officer is eligible to
receive is generally based on the extent to which we achieve the corporate objectives that the Board establishes each year. At
the end of the year, the Board and Compensation Committee review the Company’s performance and approve the extent to
which we achieved each of these corporate goals. Generally, the Board and Compensation Committee will assess each named
executive officer’s individual contributions towards reaching our annual corporate goals and objectives but does not typically
establish specific individual goals for our named executive officers.
The table below sets forth the targets for our named executive officers for 2023, as provided for in their respective
employment agreements. The target percentage is paid as a percentage of such executive officer’s base salary. For example,
if 100% of the Company’s performance goals are achieved, this would yield our Chief Executive Officer, Elizabeth Barrett,
a cash incentive award of 50% of her base salary.
Executive Officer
Elizabeth Barrett ....................................................................................................................................
Mark P. Schoenberg, M.D. ....................................................................................................................
Jason Smith ...........................................................................................................................................
Target
Percentage of
Base Salary
50%
(1)
50%
(1) Dr. Schoenberg’s annual target bonus is $225,000. Dr. Schoenberg is eligible to receive up to 150% of the annual target
bonus based upon the achievement of the Company’s corporate objectives.
11
In early 2023, the Compensation Committee finalized the corporate goals for the 2023 performance year as described below.
Our objective corporate goals were designed to be challenging to achieve and are directly aligned with our specific strategic
goals, including advancing our development programs, our research function, our clinical activities, commercialization
activities and certain corporate and financial goals, which we believe will create value for shareholders. The maximum
possible corporate achievement for 2023 was 170% of our 2023 corporate goals (up to 100% for the core goals and 70% for
the stretch goal). In December 2023, the Compensation Committee and the Board evaluated the accomplishments and
performance of the Company against such corporate goals, including progress towards the goal in making their
recommendations for the ultimate funding levels, and the Board made the following determinations regarding corporate
performance achieved against the pre-established performance goals.
Corporate Goal – Core
Achieve $80 million revenue target .......................................................................................
On-track execution of Phase 3 UGN-102 pivotal study per regulatory plan, measured by: ...
Weighting
40%
30%
1. Conduct Chemistry, Manufacturing and Controls meeting with FDA
2. Last patient, last visit complete
3. Finalize and release ATLAS data
Corporate
Achievement
Achieved
Achieved
Ensure cash runway to fund projected operations through December 2024 ...........................
Execute a strategic partnership or business development deal (1) ...........................................
20%
10%
Achieved
Achieved
Corporate
Corporate Goal – Stretch
Achievement
Exceed $80 million revenue target by 20%, 30%, 50% ..................................... 10%, 10%, 10% (max 30%) Not Achieved
Dose two combinations in High-Grade NMIBC ................................................
Execute business development deal over $100 million ......................................
Achieved
Not Achieved
Weighting
20%
20%
(1) The strategic partnership with medac GmbH was negotiated and considered finalized and complete by the end of
December 2023, even though the agreement was not formally executed until January 2024.
In January 2024, the Board reviewed and approved corporate cash incentives as set forth in the table below. The
Compensation Committee or Board may, in its sole discretion, eliminate any individual cash incentive or reduce or increase
the amount of compensation payable with respect to any individual cash incentive.
2023 Target Annual
Cash Incentive
2023 Actual Annual Cash
Incentive Paid
Named Executive Officer
Elizabeth Barrett ...........................................................................
Mark P. Schoenberg, M.D. ...........................................................
Jason Smith ..................................................................................
% of Base
Salary
50%
(1)
50%
$
$
$
% of
Target
Annual
Cash
$
399,684
225,000
229,840
Incentive
120%
120%
120%
$
$
$
$
497,620
270,000
275,808
(1) Dr. Schoenberg’s annual target bonus is $225,000. Dr. Schoenberg is eligible to receive up to 150% of the annual target
bonus based upon the achievement of the Company’s corporate objectives.
Equity Awards
In 2023, the Compensation Committee approved the following grants of options to purchase our ordinary shares and restricted
stock units to our named executive officers.
Executive
Elizabeth Barrett .....................................................................................
Mark P. Schoenberg ...............................................................................
Jason Smith ............................................................................................
Share Option
Grant
(# shares)
125,000
30,000
40,000
Restricted
stock units
(# shares)
75,000
45,000
30,000
Performance
Stock units
(# shares)
100,000
-
-
12
All options and restricted stock units granted to our named executive officers above vest in equal annual installments over
three years from the vesting commencement date. Performance stock units vest based on receipt of U.S. regulatory approval
for our lead product candidate UGN-102. The annual equity grants to our named executive officers are evaluated and
approved by the Compensation Committee in the context of each named executive officer’s total compensation and take into
account the market data provided by compensation consultants in addition to the individual officer’s responsibilities and
performance. The Compensation Committee also takes into account the recommendations of the Chief Executive Officer
with respect to appropriate grants and any particular individual circumstances.
Other Features of Our Executive Compensation Program
Agreements with Our Named Executive Officers
We have entered into written employment agreements with each of our executive officers. Each of these employment
agreements provides for “at will” employment and set forth the initial compensation arrangements for the executive officer,
including an initial base salary, an annual cash opportunity, and an equity award recommendation. These agreements and the
proprietary information and invention assignment agreements each executive officer executes upon commencing employment
at the Company also set forth the rights and responsibilities of each party and include, among other rights and responsibilities,
the prohibition on the executive officer from engaging directly or indirectly in competition with us, soliciting any of our
employees, or disclosing our confidential information.
Below are descriptions of our employment agreements with our named executive officers. For a discussion of the severance
payments and other benefits to be provided in connection with an involuntary termination of employment, including in
connection with a change in control of the Company under the arrangements with our executive officers, please see
“Severance and Change in Control Benefits” below.
Elizabeth Barrett. On January 3, 2019, we entered into an employment agreement with Ms. Barrett, which was amended in
January 2021 to provide certain change in control benefits, as described in more detail below under “Severance and Change
in Control Benefits”. Pursuant to her employment agreement, Ms. Barrett (i) received a signing bonus of $300,000 (subject
to full repayment if she resigned without good reason, or the Company terminated her employment for cause, before January
3, 2020); (ii) received an initial annual base salary of $700,000; (iii) was eligible to receive an annual discretionary bonus for
2019 of up to 100% of her base salary, with 50% guaranteed; and (iv) is eligible to receive annual discretionary bonuses for
years following 2020, with an annual target bonus of 50% of her base salary.
Pursuant to her employment agreement, Ms. Barrett was also initially granted a restricted stock unit covering 317,065 of our
ordinary shares and an option to purchase 277,432 ordinary shares. Under the terms of an omnibus amendment of Ms.
Barrett’s prior equity award agreements, executed in January 2021, the remainder of the unvested shares underlying both of
these equity awards vested in full in January 2022, in lieu of the prior monthly vesting.
Mark Schoenberg. On January 23, 2020, we entered into a new employment agreement with Dr. Schoenberg, which was
amended in January 2021 to provide certain change in control benefits, as described in more detail below under “Severance
and Change in Control Benefits”. Pursuant to the terms of the agreement and Dr. Schoenberg’s reduced-time status, Dr.
Schoenberg received an annual base salary of $205,000 for a 50% full-time equivalent role and is eligible to receive an annual
target cash bonus of $225,000 with a maximum of 150% of such target bonus, subject to achievement of Company goals and
objectives.
On March 15, 2021, the Compensation Committee approved an increase in the reduced-time capacity under the employment
agreement from a 50% full-time equivalent role to a 75% full-time equivalent role as of January 1, 2021 and on March 17,
2021 our Board endorsed and approved the increase to 75% full-time equivalent. Dr. Schoenberg’s employment agreement
was further amended in April 2021 to reflect the changes approved by the Board, pursuant to which he is entitled to an annual
base salary of $307,500 effective January 1, 2021 through February 28, 2021 and beginning on March 1, 2021 and thereafter
an annual base salary of $316,725 for a 75% full-time equivalent role.
Jason Smith. On August 12, 2020 we entered into an employment agreement with Mr. Smith, which was amended in January
2021 to provide certain change in control benefits, as described in more detail below under “Severance and Change in Control
Benefits”. Pursuant to the terms of the agreement, Mr. Smith (i) received a signing bonus of $100,000 (subject to full
repayment if his employment with the Company terminates for any reason before August 31, 2021), (ii) receives an annual
base salary of $425,000 and (iii) is eligible for a target annual cash bonus equal to 50% of his base salary. Mr. Smith was
granted an initial new hire option to purchase 60,000 ordinary shares and 25,000 restricted stock units.
13
Severance and Change in Control Benefits
Our employment agreements with Ms. Barrett, Dr. Schoenberg and Mr. Smith provide that they are eligible for severance
benefits upon certain involuntary terminations of employment, including in connection with a change in control, as described
below.
Pursuant to their respective amended employment agreements, if the named executive officer is terminated by the Company
without cause, by the named executive officer for good reason, or due to the named executive officer’s death or disability (in
the case of Ms. Barrett and Mr. Smith), then the named executive officer will be entitled to the following severance benefits:
(i) continuing base salary payments for 6 months (or 12 months in the case of Ms. Barrett and up to 12 months in the case of
Dr. Schoenberg); (ii) a prorated target annual bonus for the year of termination (to the extent earned based on company
performance and with any individual performance component deemed achieved); (iii) any unpaid annual bonus earned with
respect to the year preceding termination; (iv) the accelerated vesting of restricted shares and options held by the named
executive officer at the time of such termination (in the case of Ms. Barrett, the portion of the award otherwise scheduled to
vest within the 12 month period following termination; in the case of Dr. Schoenberg, 50% of the then-unvested award shall
be deemed immediately vested and exercisable as of the termination date; and in the case of Mr. Smith, vesting will be
accelerated by one quarter, such that 8.33% of the then-unvested restricted shares and options will be deemed immediately
vested and exercisable); and (v) COBRA payment reimbursement for up to 6 months for Mr. Smith, and 12 months in the
case of Ms. Barrett following such termination.
If there is a change in control and the named executive officer is terminated without cause or resigns for good reason, in either
case within three months prior to, or 24 months following the effective date of the change in control, all three named executive
officers will be entitled to 100% vesting and exercisability of all of his or her Company equity awards or other equity interests
that are outstanding and unvested as of the termination date, and Ms. Barrett and Mr. Smith will be entitled to the following
severance benefits, in lieu of the corresponding severance benefits described above: (i) a lump sum payment equal to the sum
of (1) 12 months (18 months in the case of Ms. Barrett) of his or her then-current annual base salary and (2) 100% of his or
her current target annual bonus; and (ii) the amount of any COBRA premium payments made by the named executive officer
during the 12 months (or 18 months in the case of Ms. Barrett) following such termination.
Payment of the severance benefits described in the preceding paragraphs is subject to the named executive officer signing
and not revoking a separation agreement and release of claims in a form satisfactory to us.
Other Benefits
Our named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision,
group life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as all of our
other employees. We provided a 401(k) plan to all of our U.S. employees, including our named executive officers. We do not
generally provide perquisites or personal benefits to our named executive officers. We do, however, pay the premiums for
term life insurance and disability insurance for all of our employees, including our named executive officers.
Tax and Accounting Implications
Under Financial Accounting Standard Board ASC Topic 718 (“ASC Topic 718”), we are required to estimate and record an
expense for each award of equity compensation over the vesting period of the award. We record share-based compensation
expense on an ongoing basis according to ASC Topic 718.
Under Section 162(m) of the Code, compensation paid to each of our “covered employees” that exceeds $1 million per taxable
year is generally non-deductible. Although the Compensation Committee will continue to consider tax implications as one
factor in determining executive compensation, it also looks at other factors in making its decisions and retains the flexibility
to provide compensation for our named executive officers in a manner consistent with the goals of our executive
compensation program and our best interests, and the best interests of our shareholders, which may include providing for
compensation that is not deductible by us due to the deduction limit under Section 162(m) of the Code.
Clawbacks
As a public company, if we are required to restate our financial results due to our material noncompliance with any financial
reporting requirements under the federal securities laws, including any required accounting restatement to correct an error in
previously issued financial statements that is material to the previously issued financial statements, or that would result in a
material misstatement if the error were corrected in the current period or left uncorrected in the current period, certain covered
officers, including the Chief Executive Officer and Chief Financial Officer, may be legally required to reimburse our
14
Company for any cash bonus or other incentive-based or equity-based compensation they receive in accordance with the
provisions of section 304 of the Sarbanes-Oxley Act of 2002. We have adopted an incentive compensation recoupment policy
to comply with Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder and Nasdaq Listing Rule 5608.
Risk Analysis of Our Compensation Policies and Practices
The Compensation Committee has reviewed the Company’s compensation policies and practices, in consultation with
Compensia and outside Company counsel, to assess whether they encourage employees to take inappropriate risks. After
reviewing and assessing the Company’s compensation philosophy, terms and practices, including the mix of fixed and
variable, short and long-term incentives and overall pay, incentive plan structures, and the checks and balances built into, and
oversight of, each plan and practice, the Compensation Committee determined that any risks arising from our compensation
policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company as a
whole. The Compensation Committee believes that the mix and design of the elements of executive compensation do not
encourage management to assume excessive risks; the mix of short-term compensation (in the form of salary and annual
bonus, if any, which is based on a variety of performance factors), and long-term compensation (in the form of options to
purchase our ordinary shares and restricted stock units) prevents undue focus on short-term results and helps align the interests
of the Company’s executive officers with the interests of our shareholders.
2023 Summary Compensation Table
The following table sets forth all of the compensation awarded to, earned by or paid to our named executive officers during
the fiscal years ended December 31, 2023 and 2022 with respect to Ms. Barrett, Dr. Schoenberg, and Mr. Smith.
Stock
Awards
($) (2)
Option
Awards
($) (3)
Year
Salary
($)
Bonus
($) (1)
Name and Principal
Position
Elizabeth Barrett ..................... 2023 794,243 19,984 2,464,250 836,533
Chief Executive Officer
753,195
Mark P. Schoenberg, M.D. ..... 2023 341,469 26,250 519,950 200,768
Chief Medical Officer
30,880 60,577
Jason Smith ............................ 2023 456,733 47,984 376,300 267,691
General Counsel and Chief
2022 440,019 10,000 57,900 150,639
2022 764,290 —
2022 325,963 —
—
Non-Equity
Incentive
Plan
Compensation
($) (4)
479,620
307,449
270,000
180,000
275,808
198,900
All Other
Compensation
($) (5)
44,959
45,626
2,113
2,191
83,663
68,663
Total ($)
4,639,589
1,870,560
1,360,550
599,610
1,508,179
926,121
Compliance Officer
(1) Represents discretionary bonuses paid to the named executive officer for the applicable year. Discretionary bonuses
earned in 2023 were approved by the Board based on assessment of overall achievements in the business and
individual performance, including the accomplishments noted in our 2023 corporate performance highlights, above.
(2) Represents the aggregate grant-date fair value of the restricted stock units and performance stock units awarded to
the Named Executive Officer for the applicable year, calculated in accordance with ASC Topic 718 and does not
take into account estimated forfeitures, which value is based on the closing market price of our ordinary shares on
the date of grant. The grant date fair value of the restricted stock units is based on the closing market price of the
Company’s ordinary shares on the date of the grant and does not take into account estimated forfeitures. The grant
date fair value and the maximum potential value of the performance stock units is based on the closing market price
of our ordinary shares on the date of grant.
(3) Represents the aggregate grant-date fair value of the stock options awarded to the named executive officer for the
applicable year, calculated in accordance with ASC Topic 718, and does not take into account estimated forfeitures
related to service-based conditions. The assumptions used in the calculation of these amounts are included in Note
16 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 14,
2024.
(4) For more information, see “Annual Performance Bonus” above.
(5) The amounts reported in this column represent the value of company paid life insurance, company contribution to
401(k) plans and other company paid health, dental and disability insurance premiums.
15
2023 Outstanding Equity Awards at Fiscal Year End Table
The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity
awards at fiscal year-end for our named executive officers.
Name
Grant Date Number of Number of
Securities
Securities
Underlying Underlying
Unexercised Unexercised
Options (#) Options (#)
Exercisable Unexercisable
(1)
Number Market
of Shares Value of
Option of Stock Shares of
Equity
Incentive
Plan
Equity
Incentive
Plan
Option
Exercise Expiration that have Stock that Awards: Awards:
Price ($)
have not Number of Market or
(2)
Date
not
(3)
Vested (#) Vested ($) Unearned Payout
Value of
Unearned
Shares,
Units or
Other
Rights that
have not
Vested
($)(4)
Shares,
units or
other
rights that
have not
Vested (#)
Elizabeth Barrett ....................... 1/3/2019
1/31/2020
1/31/2021
1/31/2021
1/31/2022
1/31/2023
1/31/2023
9/7/2023
Mark P. Schoenberg, M.D. ....... 12/7/2017
1/26/2019
1/31/2020
1/31/2021
1/31/2021
1/31/2022
1/31/2022
1/31/2023
1/31/2023
6/8/2023
9/7/2023
Jason Smith ................................ 10/1/2020 (5)
1/31/2021
1/31/2021
6/5/2021
1/31/2022
1/31/2022
1/31/2023
1/31/2023
9/7/2023
277,432
45,000
—
—
47.57 1/3/2029
29.41 1/31/2030
100,000
50,000
50,000
100,000
22.07 1/31/2031
7.72 1/31/2032
—
125,000
10.39 1/31/2033
15,000
7,500
15,000
14,000
4,021
—
—
—
7,000
8,043
39.26 12/7/2027
42.50 1/26/2029
29.41 1/31/2030
22.07 1/31/2031
7.72 1/31/2032
—
30,000
10.39 1/31/2033
60,000
5,333
10,000
—
19.66 10/1/2030
2,667
5,000
22.07 1/31/2031
17.98 6/5/2031
10,000
20,000
7.72 1/31/2032
—
40,000
10.39 1/31/2033
—
—
—
—
200,010
13,334
—
750,000
— 1,500,000
75,000 1,125,000
— 1,875,000
100,000 1,500,000
2,000
—
—
—
—
—
—
— 105,000
30,000
— 120,645
40,005
150,000
— 450,000
450,000
75,000
—
12,510
40,005
75,000
75,000
300,000
300,000
— 600,000
150,000
2,667
10,000
30,000
5,000
—
834
—
—
5,000
—
20,000
10,000
(1) Options granted to Ms. Barrett, Dr. Schoenberg, and Mr. Smith vest in equal annual installments over three years
from the vesting commencement date.
(2) Options to purchase our ordinary shares were granted with a per share exercise price equal to the fair market value
of one ordinary share on the date of grant, as determined in good faith by our Board.
(3) RSU grants with amounts that have not yet vested vest in equal annual installments over three years from the grant
date. Market value is based on the Company's share price as of December 31, 2023.
(4) Represents PSUs which vest upon the earlier of the receipt of U.S. regulatory approval for our lead product
candidate UGN-102 in the three years following the grant or the occurrence of a change in control. Market value is
based on the Company's share price as of December 31, 2023.
(5) Awards granted to Mr. Smith in 2020 were granted as inducement awards under equity compensation plans not
approved by security holders. All other equity awards were granted under our 2017 Plan.
16
Compensation Committee Interlocks and Insider Participation
None of our directors who serve as a member of our Compensation Committee is, or has at any time during the past year
been, one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a
member of the board of directors or compensation committee of any other entity that has one or more executive officers
serving on our Board or Compensation Committee.
Non-Employee Director Compensation
DIRECTOR COMPENSATION
The following table sets forth in summary form information concerning the compensation that we paid or was earned or
awarded during the year ended December 31, 2023 to each of our non-employee directors:
Name
Arie Belldegrun, M.D., FACS (2) ........................................................
Cynthia M. Butitta (3) ..........................................................................
Fred E. Cohen, M.D. D.Phil (4) ...........................................................
Stuart Holden, M.D. (5) .......................................................................
Leana Wen, M.D., M.SC. (6) ...............................................................
Daniel G. Wildman (Wildman Ventures LLC) (7) ..............................
James A. Robinson, Jr. (8) ...................................................................
Fees Earned
or Paid in
Cash
($)
200,000
61,875
51,576
59,348
52,228
50,533
22,118
Option
Awards
($) (1)
142,184
142,184
142,184
142,184
142,184
142,184
291,176
Total
($)
342,184
204,059
193,760
201,532
194,412
192,717
313,294
(1) The amounts reported in this column do not reflect the amounts that may actually be received by our non-employee
directors. Instead, these amounts reflect the aggregate grant date fair value of options to purchase our ordinary shares
granted to our non-employee Directors during the fiscal year ended December 31, 2023, as computed in accordance with
ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 16 in our Annual Report on
Form 10-K for the year ended December 31, 2023, filed with the SEC on March 14, 2024. As required by SEC rules, the
amounts reported exclude the impact of estimated forfeitures related to service-based vesting conditions. Our non-
employee directors who have received shares will only realize compensation with regard to these options to the extent
the market price of our ordinary shares is greater than the exercise price of such options.
(2) Aggregate number of option awards outstanding held by Dr. Belldegrun at December 31, 2023 was 72,500.
(3) Aggregate number of option awards outstanding held by Ms. Butitta at December 31, 2023 was 102,500.
(4) Aggregate number of option awards outstanding held by Dr. Cohen at December 31, 2023 was 77,500.
(5) Aggregate number of option awards outstanding held by Dr. Holden at December 31, 2023 was 62,500.
(6) Aggregate number of option awards outstanding held by Dr. Wen at December 31, 2023 was 10,833.
(7) Aggregate number of option awards outstanding beneficially owned by Mr. Wildman at December 31, 2023 was 9,166.
(8) Aggregate number of option awards outstanding held by Mr. Robinson at December 31, 2023 was 4,166.
The cash fees paid to or earned by our directors in 2023, as reflected in the table above, were paid pursuant to our director
compensation policy in effect in 2023. Pursuant to this policy, directors received $40,000 for their service on the Board,
except for our Chair, Dr. Belldegrun, who received $195,000 for his service as Chair of our Board. Members of the
Compensation Committee, Nominating and Corporate Governance Committee, and the Compliance Committee, received an
additional $5,000 per year, or $15,000 in the case of the committee Chair. Members of the Audit Committee received an
additional $7,500 per year, or $20,000 in the case of the committee Chair.
17
Non-Employee Director Compensation Policy
Our Board adopted a Director Compensation Policy pursuant to which each of our directors who is not an employee of our
company, which is currently all directors other than Ms. Barrett, is eligible to receive compensation for service on our Board
and committees of our Board. Under the Director Compensation Policy, each non-employee member of our Board is entitled
to receive a cash retainer in the following amounts for service in each specified role:
Annual Board Service Retainer:
● Chair of the Board: $195,000
● All other eligible directors: $40,000
Annual Committee Member Service Retainer (in addition to Board Service Retainer):
● Member of the Audit Committee: $7,500
● Member of the Compensation Committee: $5,000
● Member of the Nominating and Corporate Governance Committee: $5,000
● Member of the Compliance Committee: $5,000
Annual Committee Chair Service Retainer (in addition to Committee Member Service Retainer):
● Chair of the Audit Committee: $20,000
● Chair of the Compensation Committee: $15,000
● Chair of the Nominating and Corporate Governance Committee: $15,000
● Chair of the Compliance Committee: $15,000
Each non-employee director is also entitled to receive an initial option grant to purchase 20,000 of our ordinary shares, and
an annual option grant to purchase 10,000 of our ordinary shares on the date of each annual shareholders meeting of the
Company, contingent upon their continued service as a non-employee member of the Board. If a director joins the Board
between annual meetings, the annual grant awarded at his/her first annual meeting will be pro-rated based on the duration of
service leading up to the meeting date: (i) for service between 0 (zero) and 90 (ninety) days – no grant; (ii) for service between
91 (ninety-one) and 180 (one hundred eighty) days – 5,000 (five thousand) options; and (iii) for service of at least 181 (one
hundred eighty-one) days – 10,000 (ten thousand) options. The exercise price per share of each stock option granted under
the non-employee director compensation policy will be equal to 100% of the fair market value of the underlying ordinary
share on the date of grant. The initial option grants vest in equal quarterly installments over a period of two years. The annual
option grants vest in equal quarterly installments over a period of one year.
Additionally, a grant in excess of the 20,000 ordinary share initial option grant may be applied as an inducement for eligible
or prospective non-employee directors.
Our non-employee directors also received reimbursement of their actual out-of-pocket costs and expenses incurred in
connection with attending Board meetings.
18
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table summarizes our compensation plans under which our equity securities are authorized for issuance at
December 31, 2023:
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
819,351
190,263
1,009,614
Weighted-
average
exercise price
of outstanding
options,
warrants and
rights(3)
(b)
$25.98
$13.43
$25.09
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
(a)
2,493,796
192,000(2)
2,685,796
Plan category
Equity compensation plans approved by security holders .............
Equity compensation plans not approved by security holders(1) ....
Total ..............................................................................................
1.
In May 2019, we adopted the UroGen Pharma Ltd. 2019 Inducement Plan (the “Inducement Plan”) without the
approval of our security holders. Under the Inducement Plan, the Company is authorized to issue up to 900,000
ordinary shares pursuant to awards issued under the Inducement Plan. In December 2021, the Board approved a
300,000 increase in the share reserve of the Inducement plan. Our Inducement Plan provides for the grant of
nonstatutory stock options, restricted stock unit awards, and other awards. The only persons eligible to receive
awards under our Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq
Marketplace Rule 5635(c)(4) or 5635(c)(3) and the related guidance under Nasdaq IM 5635-1, including individuals
who were not previously an employee or director of the Company or are following a bona fide period of non-
employment, in each case as an inducement material to such individual’s agreement to enter into employment with
the Company. In addition, awards granted under our Inducement Plan must be approved by either a majority of the
Company’s “independent directors” (as such term is defined in Nasdaq Marketplace Rule 5605(a)(2)) or the
Compensation Committee, provided such committee comprises solely independent directors. The terms of our
Inducement Plan are otherwise substantially similar to our Amended 2017 Plan (including with respect to the
treatment of awards upon corporate transactions involving us or certain changes in our capitalization).
2. As of December 31, 2023, options to purchase 192,000 ordinary shares and restricted stock units covering 265,254
shares were outstanding under the Inducement Plan. All options granted under the Inducement Plan have a maximum
term of ten years. The Inducement Plan, and awards thereunder, may be amended by the Board at any time or from
time to time in accordance with the terms of the Inducement Plan and applicable law.
3. The weighted average exercise price does not take into account the shares subject to outstanding restricted stock
units which have no exercise price.
19
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information relating to the beneficial ownership of our ordinary shares as of March 31,
2024, by:
●
●
●
●
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding
ordinary shares;
each of our directors and each nominee for director;
each of our named executive officers; and
all of our current directors and executive officers as a group.
Beneficial ownership is based upon 36,127,687 ordinary shares issued and outstanding as of March 31, 2024 and determined
in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting
or investment power. Unless otherwise indicated, we believe that the persons or entities identified in this table have sole
voting and investment power with respect to all shares shown beneficially owned by them, subject to applicable community
property laws. Ordinary shares issuable upon vesting of outstanding equity awards that are exercisable or subject to vesting
within 60 days after March 31, 2024 are deemed beneficially owned and such shares are used in computing the percentage
ownership of the person holding the awards but are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. The information contained in the following table is not necessarily indicative of beneficial
ownership for any other purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial
ownership of those shares.
Unless otherwise noted below, the address of each shareholder, director and executive officer is c/o UroGen Pharma Ltd.,
400 Alexander Park Drive, 4th Floor, Princeton, New Jersey 08540.
Name of Beneficial Owner
Greater than 5% Shareholders
RA Capital Management, L.P.. (1) ........................................................................
Great Point Partners, LLC (2) ...............................................................................
Menora Mivtachim Holdings Ltd. (3) ...................................................................
Directors and Named Executive Officers
Elizabeth Barrett (4) ..............................................................................................
Mark P. Schoenberg, M.D. (5) ..............................................................................
Jason Smith (6) .....................................................................................................
Arie Belldegrun M.D., FACS (7) ..........................................................................
Cynthia M. Butitta (8) ...........................................................................................
Fred E. Cohen, M.D. D.Phil. (9) ...........................................................................
Stuart Holden, M.D. (10) .......................................................................................
Leana Wen, M.D., M.SC. (11) ..............................................................................
Daniel G. Wildman (12) ........................................................................................
James A. Robinson Jr. (13) ....................................................................................
All current directors and executive officers as a group (10 persons) (14) .............
Number
Percent
3,083,558
2,620,545
2,303,031
941,040
215,979
134,747
483,693
105,000
95,000
65,000
15,000
15,000
10,000
2,139,710
8.5%
7.3%
6.4%
2.6%
*
*
1.3%
*
*
*
*
*
*
5.7%
* Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
1) Represents ordinary shares beneficially owned as of December 31, 2023, based on a Schedule 13G/A filed on
February 14, 2024, by RA Capital Management, L.P. In such filing, RA Capital Management, L.P. lists its address
as RA Capital Management, L.P., 200 Berkeley Street, 18th Floor, Boston MA 02116, and indicates that it has
shared voting power with respect to 3,083,558 ordinary shares and shared dispositive power with respect to
3,083,558 ordinary shares.
2) Represents ordinary shares beneficially owned as of December 31, 2023, based on a Schedule 13G/A filed on
February 14, 2024, by Great Point Partners, LLC. In such filing, Great Point Partners, LLC lists its address as 165
Mason Street, 3rd Floor, Greenwich, CT 06830, and indicates that it has shared voting power with respect to
2,620,545 ordinary shares and shared dispositive power with respect to 2,620,545 ordinary shares.
20
3) Represents ordinary shares beneficially owned as of December 31, 2023, based on a Schedule 13G/A filed on
February 14, 2024, by Menora Mivtachim Holdings Ltd. In such filing, Menora Mivtachim Holdings Ltd. lists its
address as Menora House, 23 Jabotinsky St., Ramat Gan 5251102, Israel, and indicates that it has shared voting
power with respect to 2,303,031 ordinary shares and shared dispositive power with respect to 2,303,031 ordinary
shares.
4) Consists of 326,941 ordinary shares and 614,099 ordinary shares issuable upon exercise of options or upon
settlement of restricted stock units within 60 days following March 31, 2024.
5) Consists of 26,585 ordinary shares and 32,666 ordinary shares issuable upon exercise of options or upon settlement
of restricted stock units within 60 days following March 31, 2024.
6) Consists of 23,414 ordinary shares and 111,333 ordinary shares issuable upon exercise of options or upon settlement
of restricted stock units within 60 days following March 31, 2024.
7) Consists of 408,693 ordinary shares and 75,000 ordinary shares issuable upon exercise of options or upon settlement
of restricted stock units within 60 days following March 31, 2024.
8) Consists of 105,000 ordinary shares issuable upon exercise of options or upon settlement of restricted stock units
within 60 days following March 31, 2024.
9) Consists of 15,000 ordinary shares and 80,000 ordinary shares issuable upon exercise of options or upon settlement
of restricted stock units within 60 days following March 31, 2024. Does not include ordinary shares beneficially
owned as of July 26, 2023 based on a Schedule 13D filed on August 4, 2023 by Monograph Capital Partners I, L.P.
In such filing, Monograph Capital Partners I, L.P. lists its address as 4001 Kennett Pike Suite 302, Wilmington,
DE 19807, and indicates that it has shared voting power with respect to 1,572,327 ordinary shares and shared
dispositive power with respect to 1,572,327 ordinary shares. Dr. Cohen is the Chair and Chief Investment Officer
of Monograph.
10) Consists of 65,000 ordinary shares issuable upon exercise of options or upon settlement of restricted stock units
within 60 days following March 31, 2024.
11) Consists of 14,999 ordinary shares issuable upon exercise of options or upon settlement of restricted stock units
within 60 days following March 31, 2024.
12) Consists of 15,000 ordinary shares issuable upon exercise of options or upon settlement of restricted stock units
within 60 days following March 31, 2024.
13) Consists of 9,998 ordinary shares issuable upon exercise of options or upon settlement of restricted stock units
within 60 days following March 31, 2024.
14) Includes the shares described in notes (4) through (13) and 59,251 ordinary shares (which includes 32,666 ordinary
shares issuable upon the exercise of options or upon settlement of restricted stock units within 60 days of March 31,
2024) beneficially owned by an additional executive officer who is not named in the table above.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
TRANSACTIONS WITH RELATED PERSONS
Certain Related-Person Transactions
Described below are all transactions occurring since January 1, 2021 to which we were a party and in which (i) the amounts
involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two
completed fiscal years, and (ii) a director, executive officer, holder of more than 5% of our outstanding ordinary shares, or
any member of such person’s immediate family had or will have a direct or indirect material interest, other than the equity
and other compensation agreements that are described under “Executive Compensation” and “Director Compensation.” We
believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions
described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-
length transactions with unrelated third parties.
21
On July 26, 2023, we entered into a securities purchase agreement with certain institutional and other accredited investors
(the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers 12,579,156 ordinary shares of
the Company (“Shares”) (or in lieu of Shares, pre-funded warrants to purchase ordinary shares of the Company) at a purchase
price of $9.54 per Share (or $9.539 for each ordinary share underlying a pre-funded warrant), in a private placement
transaction (the “Private Placement”).
Monograph Capital Partners I, L.P. (“Monograph”), a life sciences venture firm that is affiliated with Dr. Cohen, a director
of the Company, purchased 1,572,327 Shares in the Private Placement, for an aggregate purchase price of $15.0 million. Dr.
Cohen is the Chair and Chief Investment Officer of Monograph.
Indemnification agreements
Our articles of association permit us to exculpate, indemnify and insure each of our directors and executive officers to the
fullest extent permitted by the Israeli Companies Law. We have entered into indemnification agreements with each of our
directors and executive officers, undertaking to indemnify them to the fullest extent permitted by Israeli law, to the extent
that these liabilities are not covered by insurance. We have also obtained Directors and Officers insurance for each of our
executive officers and directors.
Employment Agreements
We have entered into an employment agreement with our named executive officers. For more information regarding these
agreements, see “Executive Compensation”.
Share Option Grants to Executive Officers and Directors
We have granted options to purchase our ordinary shares and restricted stock units to our directors and named executive
officers as more fully described in the sections titled “Director Compensation” and “Executive Compensation,” respectively.
Policies and Procedures for Transactions with Related Persons
We adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and
approval or ratification of related person transactions. For purposes of our policy only, a “related person transaction” is a
transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and
any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving
compensation for services provided to us as an employee or director are not covered by this policy. A “related person” is any
executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their
immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a
related person transaction when originally consummated or any transaction that was not initially identified as a related person
transaction prior to consummation, our management must present information regarding the related person transaction to our
Audit Committee or, if Audit Committee approval would be inappropriate, to another independent body of our Board, for
review, consideration and approval or ratification. The presentation must include a description of, among other things, the
material facts, interests, direct and indirect, of the related persons, benefits to us of the transaction and whether the transaction
is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from
employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director,
executive officer and, to the extent feasible, significant shareholder to enable us to identify any existing or potential related-
person transactions and to effectuate the terms of the policy. In addition, under our Code of Conduct, our employees and
directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to
give rise to a conflict of interest. In considering related person transactions, our Audit Committee, or other independent body
of our Board, is required to take into account the relevant available facts and circumstances including, but not limited to:
●
●
●
●
the risks, costs and benefits to us;
the impact on a director’s independence in the event that the related person is a director, immediate family member
of a director or an entity with which a director is affiliated;
the availability of other sources for comparable services or products; and
the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
22
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit Committee,
or other independent body of our Board, must consider, in light of known circumstances, whether the transaction is in, or is
not inconsistent with, our best interests and those of our shareholders, as our Audit Committee, or other independent body of
our Board, determines in the good faith exercise of its discretion.
Independence of the Board of Directors
Applicable Nasdaq rules require a majority of a listed company’s directors to be comprised of independent directors within
one year of listing. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s
Audit, Compensation and Nominating and Corporate Governance Committees be independent and that Audit Committee
members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. The Board consults with the
Company’s counsel to ensure that the Board’s independence determinations are consistent with relevant securities and other
laws and regulations regarding the definition of “independent,” including those set forth in the pertinent listing standards of
Nasdaq, as in effect from time to time.
Consistent with these considerations, the Board has determined that all of our directors, except Ms. Barrett, are independent
directors, as defined under applicable Nasdaq listing standards. In making such determination, our Board considered the
relationships that each such non-employee director has with the Company and all other facts and circumstances that our Board
deemed relevant in determining his or her independence, including the beneficial ownership of our capital stock by each non-
employee director.
Item 14. Principal Accountant Fees and Services.
Principal Accountant Fees and Services
The following table represents aggregate fees billed to us for the years ended December 31, 2023 and 2022, by PwC.
Audit Fees(1) .......................................................................................................... $
Tax Fees(2) .............................................................................................................
All Other Fees(3) ....................................................................................................
$
Year Ended December 31,
2022
2023
(in thousands)
1,195 $
80
1
1,276 $
1,155
73
1
1,229
1) For the years ended December 31, 2023 and 2022, the aggregate audit fees were for professional services rendered
for audits, quarterly reviews of our consolidated financial statements, statutory financial statements and preparation
of comfort letters.
2) For the years ended December 31, 2023 and 2022, tax fees were tax transfer pricing services and tax consulting
services.
3) For the years ended December 31, 2023 and 2022, all other fees were for accounting research subscription services.
All fees described above were pre-approved by the Audit Committee.
Pre-Approval Policies and Procedures
The Audit Committee must pre-approve all audit, audit-related and all permitted non-audit services, and related fees and
terms, to be provided to the Company by the independent auditor under applicable law and regulations. Pre-approval may be
given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual,
explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services
may be delegated to the Audit Committee’s Chairperson, but the decision must be reported to the full Audit Committee at its
next scheduled meeting.
The Audit Committee has determined that the rendering of services other than audit services by PwC US is compatible with
maintaining the principal accountant’s independence.
23
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Financial Statements.
PART IV
The response to this portion of Item 15 is set forth under Part II, Item 8 of the Form 10-K.
(a)(2) Financial Statement Schedules.
All schedules have been omitted because they are not required or because the required information is given in the Financial
Statements or Notes thereto set forth under Part II, Item 8 of the Form 10-K.
(a)(3) Exhibits.
Exhibit
Number
Exhibit Description
3.1
4.1
4.2
4.3
10.1*
10.2*
10.3*
10.4*
10.5
10.6
10.7
10.8
Articles of Association of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Report on
Form 6-K, filed with the SEC on May 18, 2017).
Reference is made to Exhibit 3.1.
Description of the Registrant’s Ordinary Shares (incorporated by reference to Exhibit 4.2 to the Registrant’s
Annual Report on Form 10-K, filed with the SEC on March 2, 2020).
Form of July 2023 Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current
Report on Form 8-K, filed with the SEC on July 27, 2023).
Form of Officer Indemnity and Exculpation Agreement (incorporated by reference to Exhibit 99.2 to the
Registrant’s Report Form 6-K, filed with the SEC on July 13, 2018).
Amended and Restated 2010 Israeli Share Option Plan (incorporated by reference to Exhibit 4.2 to the
Registrant’s Annual Report on Form 20-F, filed with the SEC on March 15, 2018).
2017 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-Q, filed with the SEC on November 14, 2023).
2017 Israeli Equity Incentive Sub Plan to the 2017 Equity Incentive Plan (incorporated by reference to Exhibit
10.7 to the Registrant’s Registration Statement on Form F-1, filed with the SEC on April 7, 2017).
Form of Stock Option Grant Notice and Stock Option Agreement under the UroGen Pharma Ltd. 2017 Equity
Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q,
filed with the SEC on November 14, 2023).
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the UroGen Pharma
Ltd. 2017 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report
on Form 10-Q, filed with the SEC on November 14, 2023).
Amendment to Form of Restricted Stock Unit Grant Notice under the UroGen Pharma Ltd. 2017 Equity
Incentive Plan (incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K (File
No. 001-38079), filed with the SEC on March 14, 2024).
Form of Performance-Based Restricted Stock Unit Grant Notice and Performance-Based Restricted Stock Unit
Award Agreement under the UroGen Pharma Ltd. 2017 Equity Incentive Plan (incorporated by reference to
Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2023).
10.9*
UroGen Pharma Ltd. 2019 Inducement Plan, as amended (incorporated by reference to Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K, filed with the SEC on March 21, 2022).
24
10.10
10.11
10.12
Form of Stock Option Grant Notice and Stock Option Agreement under the UroGen Pharma Ltd. 2019
Inducement Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K,
filed with the SEC on May 28, 2019).
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the UroGen Pharma
Ltd. 2019 Inducement Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on
Form 8-K, filed with the SEC on May 28, 2019).
Amendment to Form of Restricted Stock Unit Grant Notice under the UroGen Pharma Ltd. 2019 Inducement
Plan (incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K (File No. 001-
38079), filed with the SEC on March 14, 2024).
10.13*
Amended and Restated Compensation Policy for Officer Holders (incorporated by reference to Exhibit 10.8 to
the Registrant's Annual Report on Form 10-K, filed with the SEC on March 24, 2023).
10.14*
10.15*
10.16*
10.17*
10.18*
10.19*
10.20*
10.21*
10.22*
10.23*
Employment Agreement by and between the Registrant and Elizabeth Barrett, dated as of January 3, 2019
(incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K, filed with the SEC
on February 28, 2019).
Amendment 1 to Employment Agreement by and between the Registrant and Elizabeth Barrett, dated as of
January 26, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q,
filed with the SEC on May 13, 2021).
Omnibus Amendment to Equity Awards by and between the Registrant and Elizabeth Barrett, dated as of January
19, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed
with the SEC on May 13, 2021).
Performance-Based Restricted Stock Unit Grant Notice by and between the Registrant and Elizabeth Barrett,
dated as of November 13, 2023 (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report
on Form 10-Q, filed with the SEC on November 14, 2023).
Amended Restricted Stock Unit Grant Notice by and between the Registrant and Elizabeth Barrett, dated as of
December 20, 2023 (incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-
K (File No. 001-38079), filed with the SEC on March 14, 2024).
Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of December 5, 2017
(incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K, filed with the SEC
on February 28, 2019).
Amendment 1 to Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of
January 26, 2021 (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q,
filed with the SEC on May 13, 2021).
Amendment 2 to Employment Agreement by and between the Registrant and Mark Schoenberg, dated as of
March 15, 2021 (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q,
filed with the SEC on May 13, 2021).
Employment Agreement between the Registrant and Jason Smith, dated August 12, 2020 (incorporated by
reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November
9, 2020).
Amendment 1 to Employment Agreement between the Registrant and Jason Smith, dated January 26, 2021
(incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q, filed with the
SEC on May 13, 2021).
10.24*
Employment Agreement between the Company and Dong Kim, dated March 20, 2022 (incorporated by reference
to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 21, 2022).
25
10.25†
License Agreement, dated November 8, 2019, by and between the Registrant and Agenus Inc. (incorporated by
reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 2,
2020).
10.26
10.27
Lease Agreement, dated November 4, 2019, by and between the Registrant and Witman Properties, L.L.C. and
Alexander Road at Davanne, L.L.C. (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual
Report on Form 10-K, filed with the SEC on March 2, 2020).
Amendment to Lease Agreement, dated June 8, 2022, by and between the Registrant and Witman Properties,
L.L.C. and Alexander Road at Davanne, L.L.C. (incorporated by reference to Exhibit 10.2 to the Registrant’s
Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2022).
10.28†** Manufacturing and Supply Agreement, dated May 26, 2020, by and between the Registrant and Isotopia
Molecular Imaging Ltd. (the “Isotopia Agreement”) and the extension to the Isotopia Agreement, dated August
25, 2022, by and between the Registrant and Isotopia Molecular Imaging Ltd. (incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 10, 2022).
10.29†** Manufacturing and Supply Agreement - Amendment No. 2, dated May 19, 2023, by and between the Registrant
and Isotopia Molecular Imaging Ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly
Report on Form 10-Q, filed with the SEC on August 10, 2023).
10.30†** Manufacturing & Supply Agreement, dated as of April 24, 2020 and amended as of March 2, 2022, by and
between UroGen Pharma Ltd. and Cenexi-Laboratoires Thissen s.a. (incorporated by reference to Exhibit 10.2
to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2022).
10.31†** Amendment 2 to Manufacturing & Supply Agreement, dated as of December 28, 2023 by and between UroGen
Pharma Ltd. and Cenexi-Laboratoires Thissen s.a (incorporated by reference to Exhibit 10.31 to the Registrant’s
Annual Report on Form 10-K (File No. 001-38079), filed with the SEC on March 14, 2024).
10.32†** License and Supply Agreement, dated as of January 16, 2024, by and between UroGen Pharma Ltd. and Medac
Gesellschaft für klinische Spezialpräparate m.b.H (incorporated by reference to Exhibit 10.32 to the Registrant’s
Annual Report on Form 10-K (File No. 001-38079), filed with the SEC on March 14, 2024).
10.33
10.34
10.35
21.1
23.1
Loan Agreement, dated as of March 7, 2022, by and among UroGen Pharma Ltd. (the “Company”), UroGen
Pharma, Inc., as the borrower, and certain direct and indirect subsidiaries of the Company party thereto from
time to time, as guarantors, BPCR Limited Partnership, as a lender, BioPharma Credit Investments V (Master)
LP, as a lender, and BioPharma Credit PLC, as collateral agent for the lenders (incorporated by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2022).
Amendment to Loan Agreement, dated June 29, 2023, by and among the Company, UroGen Pharma, Inc., as
the borrower, and certain direct and indirect subsidiaries of the Company party thereto from time to time, as
guarantors, BPCR Limited Partnership, as a lender, BioPharma Credit Investments V (Master) LP, as a lender,
and BioPharma Credit PLC, as collateral agent for the lenders (incorporated by reference to Exhibit 10.2 to the
Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 10, 2023).
Amended and Restated Loan Agreement, dated as of March 13, 2024, by and among UroGen Pharma, Inc., as
the borrower, and a credit party, Urogen Pharma Ltd. as Parent, and a Credit Party, the other guarantors signatory
hereto or otherwise party hereto from time to time as additional Credit Parties, BioPharma Credit PLC as
collateral agent, BPCR Limited Partnership as a lender and BioPharma Credit Investments V (Master) LP as a
lender (incorporated by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form 10-K (File No.
001-38079), filed with the SEC on March 14, 2024).
Subsidiary of the Registrant (incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on
Form 10-K, filed with the SEC on March 24, 2023).
Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm (incorporated by
reference to Exhibit 23.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the
SEC on March 14, 2024).
26
24.1
31.1
31.2
31.3
31.4
32.1
97
101
Power of Attorney (see signature page to the Registrant’s Annual Report on Form 10-K (File No. 001-38079),
filed with the SEC on March 14, 2024).
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (incorporated by
reference to Exhibit 31.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the
SEC on March 14, 2024).
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (incorporated by
reference to Exhibit 31.2 to the Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the
SEC on March 14, 2024).
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934.
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934.
Certification of Principal Executive and Financial Officers Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.1 to the
Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the SEC on March 14, 2024).
UroGen Pharma Ltd. Incentive Compensation Recoupment Policy (incorporated by reference to Exhibit 97 to
the Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the SEC on March 14, 2024).
The following financial information from the Annual Report on Form 10-K of UroGen Pharma Ltd. for the year
ended December 31, 2023, formatted in Inline XBRL (extensible Business Reporting Language): (i)
Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of
Changes in Shareholders Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated
Financial Statements (previously filed as Exhibit 101.SCH, 101.CAL, 101.DEF, 101.LAB and 101.PRE to the
Registrant’s Annual Report on Form 10-K (File No. 001-38079), filed with the SEC on March 14, 2024)
104
The cover page to this Annual Report on Form 10-K/A has been formatted in Inline XBRL
* Management contract or compensatory plan.
† Certain information in this exhibit has been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is
both not material and is the type of information that the registrant treats as private or confidential.
** Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
Item 16. Form 10-K Summary
None.
27
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
April 29, 2024
UROGEN PHARMA LTD.
By: /s/ Elizabeth Barrett
Elizabeth Barrett
Chief Executive Officer
28
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EXECUTIVE OFFICERS
Elizabeth Barrett
Chief Executive Officer and Director
Don Kim
Chief Financial Officer
Mark P. Schoenberg, M.D.
Chief Medical Officer
Jason Smith
General Counsel and Chief Compliance Officer
BOARD OF DIRECTORS
Arie Belldegrun, M.D., FACS
Chair of the Board
Elizabeth Barrett
Chief Executive Officer
Cynthia M. Butitta
Fred E. Cohen, M.D., D.Phil.
Stuart Holden, M.D.
James A. Robinson, Jr.
Leana S. Wen, M.D., M.Sc.
Dan G. Wildman
CORPORATE HEADQUARTERS
400 Alexander Park Drive, Princeton, New Jersey 08540
Telephone: +1 (646) 768-9780
www.urogen.com
LISTING OF ORDINARY SHARES
Ticker Symbol: URGN, The Nasdaq Global Market
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of UroGen Pharma Ltd. will be held
virtually via live audio webcast on Tuesday, August 6, 2024, at 10:00 a.m. ET.
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A. 250 Royall Street, Canton, Massachusetts
02021. Telephone: (781) 575-2000 www.computershare.com/us
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
SHAREHOLDERS’ INQUIRIES
Shareholders may obtain copies of our news releases, Securities and Exchange
Commission filings, including Forms 10-K, 10-Q, and 8-K, and other company
information by accessing our website at www.urogen.com. Shareholders may
also contact Investor Relations at (646) 768-9780.
FORWARD-LOOKING STATEMENTS
low-grade
Statements in this annual report and the accompanying letter from our Chief Executive
Officer that are not strictly historical in nature are forward-looking statements. These
statements include but are not limited to statements related to: the belief that the 12-
month durability data from the Phase 3 ENVISION is a major milestone; the potential for
UGN-102 to be the first FDA-approved medicine for the treatment of low-grade
intermediate risk non-muscle invasive bladder cancer; the estimated annual U.S. patient
population for
invasive bladder cancer;
intermediate risk non-muscle
statements related to UroGen’s planned NDA submission for UGN-102 in the third quarter
of 2024; the potential for priority review as well as timing for a decision from the FDA and
subsequent commercial launch, if approved; confidence in UGN-102’s rapid adoption, if
approved; plans to leverage UroGen’s existing commercial organization with an
incremental increase to execute on the potential launch of UGN-102; the belief that
Jelmyto is a valuable non-surgical therapeutic option for patients with low-grade upper
tract urothelial carcinoma; UroGen’s pending intellectual property protection for UGN-
103 potentially extending until 2041; plans to initiate clinical endpoint studies to support
NDAs for UGN-103 and UGN-104; the timing of the planned Phase 3 trial of UGN-103; the
timing of the planned Phase 3 trial of UGN-104; the strength of UroGen’s balance sheet
and UroGen’s ability to fund the potential launch of UGN-102 and other future initiatives;
and any statements or assumptions underlying any of the foregoing. Words such as
“anticipate,” “believe,” “could,” “may,” “plan,” “potential,” “prepare,” “will,” or other
words that convey uncertainty of future events or outcomes to identify these forward-
looking statements. These statements are subject to a number of risks, uncertainties and
assumptions, including, but not limited to: the ENVISION DOR data may not be sufficient
to support an NDA submission for UGN-102; even if an NDA for UGN-102 is accepted by
the FDA, there is no guarantee that such NDA will be sufficient to support approval of
UGN-102 on the timeframe expected, or at all; the ability to obtain regulatory approval
within the timeframe expected, or at all; the ability to maintain regulatory approval;
complications associated with commercialization activities; the labeling for any approved
product; competition in UroGen’s industry; the scope, progress and expansion of
developing and commercializing UroGen’s product candidates; the size and growth of the
market(s) therefor and the rate and degree of market acceptance thereof vis-à-vis
alternative therapies; UroGen’s ability to attract or retain key management, members of
the board of directors and other personnel; UroGen’s RTGel technology may not perform
as expected; UroGen may not successfully develop and receive regulatory approval of any
other product that incorporates RTGel technology; UroGen’s financial condition and need
for additional capital in the future. In light of these risks and uncertainties, and other risks
and uncertainties that are described in the Risk Factors section of UroGen’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May
13, 2024 (which is available at www.sec.gov), the events and circumstances discussed in
such forward-looking statements may not occur, and UroGen’s actual results could differ
materially and adversely from those anticipated or implied thereby. Any forward-looking
statements speak only as of the date of this press release and are based on information
available to UroGen as of the date of this release.
UroGen Pharma Ltd.. | ANNUAL REPORT | 2023