Q3 2021 Urogen Pharma Ltd Earnings Call
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Good morning, ladies and gentlemen, thank you for standing by and welcome to Euro Gen. Pharm. Its third quarter 2021 financial results and business update conference call. It is now my pleasure to turn the call over to Lee Roth.
That's your relations for your Gen Pharma. Please go ahead.
Thank you Jonathan good morning, everyone and once again welcome to the origin pharma third quarter 2021 financial results and business update conference call.
Earlier. This morning, we issued a press release, providing an overview of our recent corporate highlights and financial results for the quarter ended September 32021.
A copy of this press release can be accessed on the investors section of our website at investors is that in your region dotcom.
Many on the call today are Liz Barrett, President and Chief Executive Officer, Dr. Mark Schoenberg, Chief Medical Officer, Jeff BOVA, Chief Commercial Officer, and Molly Henderson, Chief Financial Officer.
During today's call, we will be making certain forward looking statements. These may include statements regarding the success and timing of our ongoing commercialization of gel Midol planned clinical trials data presentations regulatory filings future research and development efforts manufacturing capabilities and 2021 financial guidance among other things. These.
Forward looking statements are based on current information assumptions and expectations that are subject to change a description of potential risks can be found in our earnings press release as well as our latest SEC disclosure documents.
Cautions not to place undue reliance on these forward looking statements and European disclaims any obligation to update such statements with that it's now my pleasure to turn the call over to <unk>, President and CEO Liz Barrett Liz.
Thank you Lee and thank you to everyone. Joining us today. Many of you joined us for our spotlight day last week and were pleased you are here with us today, well discuss our third quarter earnings and highlight recent developments.
During the third quarter, we made further progress in both our commercial and clinical development areas of our business.
Our commercial team continued to execute on the rollout of jump Idaho in the face of ongoing impacts of the pandemic and the third quarter, especially in certain regions in the U S and our development and regulatory teams have made significant progress in our discussions with the FDA regarding you can why no too as highlighted in last week's events.
Jeff will provide more detail on the jump Ida commercialization, but at a high level is the delta variant increased new Covid cases.
[laughter] visits and access declined causing Q3 patient starts to also decline which is reflected in our revenue results.
They reported we had a strong Q2 that included a small bowl is from delayed patient in Q1, even given the revenue results, we saw a quarter over quarter increase in patient enrollment forms in Q3 versus Q2.
Importantly, we have experienced accelerated momentum in September and October marking our two highest ever month for both new patient starts and patient enrollment forms.
The other 11 $4 million of revenue, but we had changed for the third quarter were shy of our initial expectations. We remain confident in our ability to finish the year strong.
In addition to making progress on driving awareness of Joe might have in the U S. We also made progress internationally.
We recently launched a named patient program for Jim might owe in five European countries.
<unk>, Germany, Switzerland, Austria, and the U K. This is a pilot program with the potential to be expanded into other European countries and will provide physicians access to and experience with Yamato as an initial step to determine commercial feasibility in Europe.
The program will be managed by Tanner G. A P Inc. A division of 10, a form of a group, which is a global provider of specialty access solution.
Turning to new G. M. One O. Two we were excited to announce last week that after several rounds of discussions with the FDA, we'll be initiating a new phase III study of Eugene and one or two and low grade intermediate risk non muscle invasive bladder cancer. This new trial would be a multinational single arm study and replace the current phase II.
Atlas trial.
We believe the new study design is more appropriate for demonstrating safety and efficacy for Eugene one O two in patients with low grade non muscle invasive bladder cancer right intermediate risk for recurrence.
We also believe the new design increases the probability of success and Mark will provide more details.
In addition to these important updates we and Abbvie recently made the decision to terminate our collaboration agreement as we announced last year, our phase II trial of our T gel in combination with botox for inter basketball installation for overactive bladder in urinary incontinence did not meet its primary endpoint and we believe this.
Due to the inability of botox to effectively permeate the year old failure.
As we evaluated the potential to leverage our T gel with the Abbvie portfolio. There was nothing compelling to continue our agreement and therefore, we believe terminating this relationship was the most prudent path forward to allow for maximum flexibility for our T gel intellectual property.
Turning lastly to Eugene and three O one mark will share our progress in advancing Eugene in 301 for high grade non muscle invasive bladder cancer into patients.
We hope you were able to watch our spotlight event last week and hear from notable key opinion leaders on the opportunity for your agenda to provide patients with new treatments in this high unmet need disease.
At your Gen. One of our primary goals is to transform the treatment paradigm in euro and specialty oncology away from repeated surgical procedures to noninvasive therapeutic ablation of tumors as well as locally administered immunotherapy approaches I'm extremely proud of the progress we continue to make towards this goal.
With that I'll turn the call over to Mark to discuss our recent clinical and development update Mark.
So he was the majority of my comments today will focus on the recent change to our clinical trial design for <unk> and one or two which we were excited to announce last week spotlight has been on our path ahead for U T M 301.
We mentioned that the events after substantive conversations with the FDA, we have begun the process of initiating new study of <unk> in one or two which is a more streamlined single arm design.
Good work that has to be Optima study, our pivotal trial for Joe myself.
The new phase III study will be a multinational multicenter study enrolling approximately 220 patients we will evaluate the safety and efficacy of <unk> in one or two as a primary chemo ablative therapy in patients with low grade <unk>.
Risk non muscle invasive bladder cancer.
And for this new trial will be similar to the Optima trial met the patient population will have the same clinical characteristics with feed the same treatment regimen undergo the same efficacy and safety assessments and qualitative follow up.
Patients will receive six once a week reentry basketball installations that you've hit on one or two where the primary endpoint is complete response rate at three months. After the first installation and the key secondary endpoint of durability of response in patients who achieve a CR at the three month assessment. In addition to the design that we believe carries a high price.
The ability of success one of the most significant benefits of this new study design is that we will no longer need to have a comparator arm surgery. The new design is based on time to recurrence and this should provide greater clarity regarding the duration of the study.
We expect to enroll the first patient in this new study in early 2022.
We aim to enroll 220 patients across an estimated 90 sites and anticipate enrollment in less than a year and an FDA submission in 2024.
In light of these developments, we have stopped enrollment in the phase III study, but we will continue to treat and follow patients. Currently enrolled we believe the data generated from the Animas patients will be important as we continue to expand our knowledge around the role that Eugene and one or two can play in the treatment of low grade intermediate risk disease.
In addition to the near future in one or two study we have begun a small study that will evaluate the feasibility of at home administration, usually in one or two by qualified home health professionals, we believe offering them at home solution for low grade intermediate risk non muscle invasive bladder cancer patients will be the first of its current.
And then moving what is traditionally an in office treatment into the home setting we will address access to care issues that many elderly patient space. We are working with several U S states centers and aim to enroll up to 10 patients.
We plan to enroll the study over the next six to nine months.
In addition to the exciting developments around new Gen. One or two we continue to make progress with our earlier stage pipeline candidates, most notably Eugene in 301, our anti <unk> four monoclonal antibody in our T. Gel, we believe that by delivering the mtc till.
Like four and traditionally we will be able to achieve the necessary level of immune checkpoint inhibition without systemic toxicity, commonly associated with IV administration of this antibody.
We currently have the nonhuman primate toxicity study underway and anticipate initiating a phase one clinical trial of <unk> 301 in the first half of 2022.
All of this planned phase one study is to establish the safety and dose range for UGI and 301 and to serve as a gateway for combining 301 with other agents and subsequent arms of the study the first such arm will combine your Gen 301, with <unk> 201, our telos seven agonist, which has demonstrated single agent activity.
<unk> in high risk non muscle invasive bladder cancer patients.
Leave your Gen 301 is a fundamental checkpoint inhibitor and the cornerstone of a variety of potential combination therapy approaches both in neurologic oncology via intramuscular administration and <unk>.
Other specialty cancers, we are excited to evaluate its potential in the clinic next year and look forward to sharing details of our progress and with that I'd like to turn the call over to Jeff to provide a commercial update Jeff.
Thank you Mark I'm pleased to provide you with an update on our ongoing commercial rollout of Yamato our revenues for the third quarter was 11 4 million, while our field force is now primarily engaging with physicians in person as Luc mentioned during the month of July and August we experienced a tightening of restrictions in several parts of the country due to the delta.
Barry.
Our third quarter softness with confined to these regions.
Corresponding with those hardest hit by the Covid surge.
We have already seen a rebounding in these areas in September and October and our sales reps are now mostly back to in person meetings.
In order to get a sense of the continuing impact of Covid and the ultimate timing of the rebound. We recently conducted a survey of 56 urologists.
With approximately 75% of our respondents indicating that they believe COVID-19 was the basis for patients delaying treatment for low grade you till you see with such delays lapping an average of approximately four months.
Overall positions remain enthusiastic on the use of gel mitel as evidenced by the increases in both the number of activated sites.
106 as of November 1st up from 407 on August 1st and the number of repeat accounts or sites treating more than one patient which increased from 63 on August 1st to 80 sits on November 1st an increase of 37%.
Both of these numbers gives us confidence and continued adoption of Joe myself, and our physicians positive experience in administering it to their patients.
Although we have had a quarter over quarter decline in revenues from Q2 to Q3, we believe we are largely past.
The latest Covid wave and are hopeful that much of the volatility we experienced this year will begin to subside and we will experience a more normal launch trajectory for Joe might own in 2022.
Notwithstanding the final revenue number we ended the quarter strong and as Liz mentioned September and October were our highest months ever for both new patient starts and patient enrollment forms as.
As a reminder, patient enrollment forms or the initial step to getting a patient treated and our best leading indicator of future patient starts.
We closely track the challenges many companies are experienced as it relates to supply chain and we will work diligently with hospitals and sites of care to ensure product availability and delivery for all patients.
I remain excited by what we're seeing in adoption and physician engagement and very optimistic that we have set a strong foundation for a solid 2022.
Lastly over the past few months, we've made progress on initiating a registry for Joe model.
We are in the process of setting up the first 10 sites to enroll and collect important data on the long term benefits of gel mitel and evaluate real world outcomes of UTC patients treated with Telemundo and to study its used in clinical practice in the United States.
Patient data will be captured following Joe might have treatment with specific clinical questions being asked the participants.
We expect to have initial information from this study in 2022.
With that I'd like to turn the call over to Molly for a review of the find it financials Molly.
Thank you, Jeff and thank you to everyone for joining today's call.
We're just recorded net product sales of Joe made up for the third quarter ended September 32021 of approximately $11 4 million aggregating to $31 9 million for the first nine months of 2021.
This compares to $3 5 million and $3 8 million respectively. In the same periods of 2020.
The year over year increase was driven by the launch of <unk> in June 2020.
Cost of revenues for the third quarter of 2021 were approximately $1 2 million, resulting in a gross margin of 89% compared to a gross margin of 91% in the third quarter 2020.
Revenues for the first nine months of 2021 were $3 6 million, resulting in a gross margin of 89% compared to a gross margin of 91% for the comparable periods in 2020.
Research and development expenses for the third quarter ended September 30th 2021 were $11 9 million compared to $10 2 million for the same period in 2020 research and development expense includes 1 million of noncash share based compensation expense for the third quarter ended September 32021, as compared to one 5 million for the same period in 'twenty.
'twenty.
The overall increase in R&D expense in 2021 compared to 2020 relates to the initiation of the phase III Atlas study at the end of 2020.
Selling general and administrative expenses for the third quarter ended September 32021, or $21 6 million as compared to $22 1 million for the same period in 2020.
Selling general and administrative expenses included $4 5 million in noncash share based compensation expense for the third quarter ended September 30th 2021 as compared to $5 2 million for the same periods in 2020.
Total SG&A expenses are down slightly in 2021 due to the higher launch related commercial spend in 2020.
Its third quarter ended September 32021.
Financing expense related to the prepaid for it applications RTW investments was $6 8 million and we reported a net loss of $30 2 million or $1 35 per share.
Compares to a net loss of approximately $29 1 million or $1.31 cents per share for the same period 2020.
The net loss for the third quarter ended September 32021, and 2020 includes $5 5 million and $6 8 million, respectively, and noncash share based compensation expense.
Turning to our financial guidance for 'twenty 'twenty. One we are currently reducing our operating expense guidance and the previous 155 $265 million 237 242 million the.
The reduction in our operating expense guidance as a result of lower anticipated cost in the fourth quarter associated with commercial and clinical activities.
Note that this operating expense guidance includes estimated noncash share based compensation expense of $22 million to $25 million.
Additionally, as we near the end of 2021, we have this visibility into our expected full year 2020 revenue.
As a result, we are providing our estimates for full year 2021 revenue to be in the range of $47 million to $51 million.
Lastly, we closed the third quarter with $110 3 million in cash cash equivalents and marketable securities. We believe our current cash position will take us into 2023, we.
We continue to explore opportunities to strengthen our balance sheet with non dilutive capital in order to ensure we have sufficient resources to execute on our strategy.
With that operator, I'd like to turn the call over for questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchstone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from line of Chris Howerton from Jefferies. Your question. Please.
Great. Thank you so much for taking the questions I think two for me.
First with respect to kind of the commercial activities and the progress there.
I appreciate obviously, Jeff that you were mentioning that some of the COVID-19 restrictions in the access to.
Providers was one of the key headwinds curious if you could speculate on other factors that may or may not be going on to ensure that there will be continued growth.
Once COVID-19 does hopefully clear and then the second question I would have is with respect to kind of the R&D expenditures that we can expect for the phase III in one or two programs I'm.
Just curious if you could give us some initial thoughts in terms of either the relative cost for to Atlas or some of the other trials out there that we can estimate.
The cost of capital or the cost for the new trial. Thank you.
So Jeff why don't you take that first question and then Molly can answer the second question.
Sure. Thanks, Chris.
We're.
At September and October being record months, just sell me at all I mean July and August where patients werent coming in as I mentioned.
As much as they are.
It would be in without Covid and then when you saw kind of a summer months go by you saw the rebound. So what we're just saying that the similar rebound got strong September strong October things are continuing and.
And so yes as I've always said to you is that we hope that this is getting back to normal just got back from a recent conference. The first live larger group conference in Chicago. They also the urologists. There told me that their patients are coming back in greater and greater amounts and have a lot of positive.
Things to say about Joe myself, so you're just seeing accounts coming on board either for the first time or accounts that have been on board for a period of time and they're finding additional patients that can benefit from Joe myself.
Okay cool thank you.
Oh, Yeah Kristen to answer your question on the R&D expenses. So at this point, we're still working with our CFO to determine what synergies exist between the two studies at this point, we feel comfortable that the cash balance will get us into 2023, which is consistent with the guidance we provided before as it relates to our spend.
Cash balance.
But I will say I think we feel pretty good like I said that there's a lot of synergies between the two studies. So we're really working hard to minimize any incremental cost associated with with the switch.
Yeah, and Chris I'll, just make a couple of a couple of more comments on the commercial and why we why we are bullish for the rest of the year and into 2022. There were there were a couple of things at play one we talked about the fact that you know Q2 had some bullets from Q1 patient's not coming in the other thing we saw in the summer.
Months as I said.
Delta variant.
The increase as dumb as Jeff said, you know there was another locked down as far as our access but also fewer patients are coming into the office and we've done an analysis that shows our pay.
Patient enrollment forms and pace of new patient starts are directly correlated to the increases and decreases in Covid cases, and then what we also saw was an increase of vacation happening in the summertime I think that's sort of a pent up demand you know, whereas some people.
Time off that hadn't hadn't done so and I think when you put all of those things together and look at kind of what we've seen.
Jeff mentioned coming into September and October it gives us a lot of confidence that you know, maybe we're getting over that hump.
Hope, hoping that it doesn't it doesn't happen again, but we definitely we definitely see the reduction in patient and then we and then the increase in patient because it's really clear that patients aren't visiting the Doctor's office and then you see a kind of a bolus like that and.
As Jeff mentioned in the conference. We just had this past weekend.
That's what you're hearing back from physicians now is that they are seeing a more normal.
They kind of kind of back to normal Ah patient patient flows. So if and you know we have patient enrollment forms that kind of give us an early indicator and we have seen actually every quarter. Despite the fact that Q3 <unk>.
Revenue was flat in Q2 revenue, we actually had an increase in patient enrollment forms and the transition of those patient enrollment forms from you know from identifying a patient taxi getting a patient started so those are a couple of things that we looked at that that you know give us confidence as we whereas we've seen kind of a.
<unk> new patient starts, but then they continued quarter over quarter increase in our patient enrollment forms so and you know Molly for the first time, you know, we're providing guidance, which you know it just shows you where the 47 to 51 range that you know we already know that the Q4, it's gonna be a significant increase.
Over over Q3, so hopefully that helps.
Yeah. It does thank you Liz I appreciate it.
Back in the queue. Thanks al.
Thank you. Our next question comes from the line of Paul Choi from Goldman Sachs. Your question. Please.
Hi, Thank you good morning, and thanks for taking our questions maybe one for Jeff to continue on the commercial piece.
Chuck I was wondering if you could maybe just comment on whether you saw.
Hmm.
The majority of the new patient enrollments.
Forms.
Tied to the activation of the additional centers that were the primary growth is slowing or can you maybe qualitatively comment on are you is the majority of this new patient growth coming.
Mr Centers, and then we shouldn't expect a delayed.
Start for things like newly activated sites.
Yeah sure. Thanks for the question.
Combination of both what what I hear from accounts as you know typically they obviously start out with one patient they wanted to see how things go logistically they want to make sure that they're getting reimbursed. The J code now I'm hearing 28 days they'll get they're getting accurately reimburse and then what they'll do is they they they actively start to look for patients. So they talk to their call.
So.
It is a combination of both as you saw we have a number of activated sites up significantly since the last time, we reported.
That's a lot of things as well you know whether that was a formulary update a new patient that came on.
Thirdly, we will continue to grow that number in accounts and again if it.
The variance of the vaccine earlier in the year, all sort of affected how quickly you can also get up and running.
I'm not surprised to see the latest number of the other accounts get up and running.
You start to see the number of activated accounts go up but it is a combination of both I'd say, probably a little bit more accounts had to have treated a patient and now theyre looking for other patients the benefit from Joe myself.
Okay, great thanks for that color.
Maybe two more for me the first is for Molly Molly Thanks for providing the.
Fourth quarter guidance here for that for the remaining weeks here I guess as you look to next year or two to <unk> 22 could you maybe just sort of comment on how you think about the directional slope of the.
The revenue growth for Joel matter here as we get past the.
You get past the COVID-19 headwinds and then just one for Mark as well, which is just on terms of the patients who are enrolled with regard to Atlas can you maybe just comment on what the regulatory feedback has been with regard to follow up with requirements for that population and just what is required potentially from a from a filing perspective. Thank you very much for taking our questions.
Sure Hi, Paul.
To provide some color on 'twenty two so we are just as we said, giving a guidance on 'twenty one.
So we're working hard to determine what the best range for 'twenty two weeks, yes. At this point, we're not providing any additional color, but we as we look into the beginning of next year, we'll certainly look at the options for providing guidance and not just on the revenue, but also on the Opex number.
Paul Thanks.
We're going to continue to follow the patients because you can imagine.
We were very interested in the safety information that we will obtain by following these patients. So even though the study will be close the patients will continue to be followed and we will incorporate those important pieces of information.
Subsequent filings.
Thank you very much.
The queue as a reminder, ladies and gentlemen, if you have a question at this time. Please press Star then one our next question comes from the line of Matt Kaplan from latter breakdown. Your question. Please.
Hi, Thanks for taking the question just a follow up on Paul's question in terms of maybe Mark.
The data that you hope to generate from Atlas as you as the study winds down now that you have a transition and pivoted to the new single arm study.
Can you give us a sense in terms of kind of the even if you can get some efficacy data from that as well.
Given the status of the study where you are in it and and your expectation in terms of the number of patients that you'll be able to generate safety data from.
No. Thank you.
I don't think we've disclosed yet the number of patients who is going to correct me on this.
But we think that the primary value of this population at this point and it's going to be to provide safety. We have been very fortunate in terms of the enrollment in the trial as we have previously announced we were.
Even a little bit ahead of schedule in terms of enrollment. So we think there'll be lots of important safety information I think it's probably premature unless what it wants.
Wants to comment on this to talk at all about what kind of see what kind of efficacy information could be gleaned from the experience in adults.
Yeah, I mean, I think I will add that we absolutely will share the data, including efficacy data in from the Atlas study. So you won't have complete response rate.
We haven't yet decided how long we will follow those patients. So obviously durability, yeah, but absolutely will have come from the response, our numbers and you know we will be following those.
The the treatment arm as well as the T. R. B T arm. So we hope to be able to gather some information from that arm as well again, a lot around the safety, but we won't be able to do comparison, because obviously, we won't have the numbers that we've talked about it you know won't be powered at that point, but anything that we can.
Can we we can get from there we expect them one include that in our filing.
And two more absolutely share it so regardless of what it is we just wont be doing comparison, there our ability to share complete response rate and we'll share the durability as it plays out you know because as these patients and well share obviously more in 2022 around the number of patients that we actually still have some.
Since that are in screening. So you know once those patients are through so we'll make sure that it will be robots right well have a you know will have.
Some patients you know quite a few patients won't be able to share even in 2022 data from the Atlas study because obviously now it's no longer.
And no longer be a be a study where we're happy to keep that blinded. So we'll be able to share that in 2022, unless we enrolled under study. So hopefully that helps but we will share all of the information that.
That we can and will start to share that as quickly as.
We have robust data to share.
Okay that sounds great and then just a question on <unk> 301, and the planned phase one study of that that you have kind of starting first half of the year.
What's your sense in terms of how that they couldn't go for progressing when you expect to see some initial safety and dose ranging data from that.
Yes.
So the that said, we expect to as we talked about before to go with person man with actually tell if were at <unk> 301, and then the idea is to shift to the combination with the T L or seven and then also.
To shift to a multi arm study with other combination. So there's a lot that we've got planned and using 301 is the backbone of our combination therapy for high grade disease.
I think that by the end of 'twenty, two will at least be able to share. The initial data that we have you know obviously you know you don't look at phase one for efficacy, but well well yeah there'll be some potentially some advocacy to share, but you know the purpose of the of a bomb the phase one is to one ensure safety and then moved to the approach.
Bring it off chemo combination.
Well, we'll be able to share some of that at least the initial data on the <unk> four in 2022 as well.
Great. Thanks, a lot.
Thank you. Our next question comes from the line of the Lakers from Oppenheimer. Your question. Please.
Hey, good morning, Thanks for taking my question just wanted to.
Clarify that so the data from Atlas that we eventually will see and will be included as part of the.
Submission.
That will not have any role in terms of supporting the efficacy for registrational purposes. In other words do you have to go.
It can rely entirely presumably on the on the new phase III.
Just wanted to clarify that mark.
That's correct absolutely that's correct.
Great and I have been asked before but is there any expectation on when we might see that.
Initial cuts from Atlas could that be sometime in 'twenty two.
Oh, yes, we will absolutely be able to share CR rate because we'll have all of the patients you know through through at least the three month, Mark So we'll be able to share at least a complete response data in 2022.
Alright terrific. Thanks for taking my questions.
Thank you.
Thank you ladies and gentlemen, this does conclude the question and answer session of today's program I'd now like to hand, the program back to Liz Barrett for any further remarks.
Thank you thankfully and say thanks to everybody for the questions I hope that you see that what we what we see and and the potential of where we're headed with your Jim. We're excited about you know 2020 to getting over the hump you know, we're very bullish on the rest of the the remainder of.
2021, and and having that great momentum going into 2022, we continue to get very positive feedback.
Working through the logistics and you know hopefully with the pandemic behind US we can see the continued momentum and and you know not only from a commercial standpoint, but you know as you've heard the the simplification of the one on one arm study for UGI and went up to you know.
Being able to talk to the FDA and worked closely with the F. D. A gain agreement on that and be able to share the data as we continue to generate data for Atlas and then you know one or two and then launch our yeah first in man study with the combination in 2022 as well so an exciting time for us as we continue to.
Progress both from a commercial standpoint, and also from a clinical development standpoint. So I appreciate all of your support and time and then we'll talk to you guys to.
Take care bye.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Okay.
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