Q4 2021 Urogen Pharma Ltd Earnings Call
Good morning, ladies and gentlemen, and thank you for standing by and welcome to your Gen farmers fourth quarter and full year 2021 financial results and business update conference call. It is now my pleasure to turn the call over to Vincent Perone Senior director of Investor Relations for your Gen. Farmer. Please go ahead.
Thank you operator, good morning, everyone and welcome to your Gen. Pharm is fourth quarter and full year 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 and year ended December 31 2021.
Press release is available on the investors portion of our website at investors that euro debt and dotcom.
Joining me on the call today are Liz Barrett, President and Chief Executive Officer, Dr. Mark Schoenberg, Chief Medical Officer, Jeffrey BOVA, Chief Commercial Officer, and Molly Henderson, Chief Financial Officer.
During today's call, we will be making certain forward looking statements ebay.
These may include statements regarding the success and timing of our ongoing commercialization of gel Mitel planned clinical trials data presentations regulatory filings future research research and development efforts manufacturing capabilities and 2022 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 on our earnings press release and latest SEC disclosure documents.
You are cautioned not to place undue reliance on these forward looking statements and European disclaims any obligation to update these statements.
I'll now turn the call over to Lynn Lewis.
Thank you Vincent and thank you to everyone. Joining us today, we remain focused on developing novel solutions for your old failure and specialty cancers with a goal of fundamentally transforming the treatment paradigm, but what is largely an underserved patient population.
In this pursuit I am proud of the progress we made throughout 2021 and in early 2020 to further solidify <unk> place in the market as the only FDA approved nonsurgical treatment for low grade Tuc and setting the stage for several important commercial and clinical milestones in the year ahead.
Despite challenges on our commercial efforts stemming from the global COVID-19 pandemic, we continue to help new patients gain access to <unk>, which is a testament to the resilience and perseverance of our commercial team.
Growing patient access and awareness continued to drive adoption of <unk> as we set new records for revenue new patient enrollment and site <unk>.
<unk> in the fourth quarter.
Setting us up for strong growth in 2022.
Jeff will provide more detail on our commercialization efforts, but at a high level. Our commercial team did an excellent job adapting to added challenges placed on the healthcare system by rising cases, the omicron variant as well as staff shortages in Q4.
This led to an all time quarterly high in new product revenue of $16 $2 million in Q4, a 42% increase over Q3.
Total net product revenue for 2021, our first full year of products, thousands Yamato with $48 million, which was in line with guidance.
Molly will review, our financial results and provide guidance for 2022 shortly.
However, we remain confident in the outlook for the business as we expect continuing and accelerating adoption of <unk> in our second full year post launch.
Late last year, we announced the launch of a pilot named patient supply program for Jamba items, which included five European countries, France, Germany, Switzerland, Austria, and the U K during the fourth quarter 2021, we continue to expand this program with the addition of Australia to the pilot.
The NPS program in partnership with near Farm in Israel saw the identification of the first four patients with product for two of those patients delivered to near form in Q4 I'm pleased to report that as a result of these efforts to have these Israeli patients received Yamato representing the first time patients outside of the U S.
Been treated with <unk> in a commercial setting.
Beyond you Might've, we made important progress in the clinic advancing our lead development program, New G M why not choose and positioning UGG in 301, our immuno oncology program for human trials.
Turning first to U G M, one or two which is in development to treat low grade intermediate risk non muscle invasive bladder cancer, an indication impacting approximately 80000 underserved patients in the United States annually.
Last month, we initiated the phase three envision trial, a single arm open label label pivotal trial, which replaced our previously announced phase III Atlas trial envision is similar in design to the phase II Optima II trial and as a result, we believe carries a very high probability of success.
I'm pleased to report that earlier in the first quarter, we completed the shift to envision opening the first clinical site and recently dosing the first patient.
We expect envisioned to complete enrollment by the end of 2022 and assuming positive findings, we anticipate submitting an NDA in 2024.
Importantly, you Jan one O two if approved with share a prescriber base with Yamato, which would ensure inefficient and expedia product launch.
We continue to believe Yamato and Eugene and one O two together represent well over a billion dollar revenue opportunity for your origin and the start of the envision trial moves us closer to realizing the full potential of these two high promising innovative therapies.
For UGI and 301, we announced results from a toxicology study, which formed the foundation of an I N D application, we submitted to the FDA last month, putting our first Archie gel based immuno oncology candidates on track to initiate a first in human study in the first half of 2022.
Mark will discuss plans for a multi arm combination study it represents a unique approach to treating high grade bladder cancer.
We recently closed an up to $100 million senior secured term loan facility with funds managed by Pharmacon advisors. This non dilutive capital gives us the financial flexibility to continue expanding our commercial and development efforts and based upon our current financial projections provides us.
With what we believe to be the necessary runway to reach cash flow breakeven by 2025.
Pharmacon advisors had been great partners and this facility demonstrates their belief in the impact our company can have on patients and I want to thank them for their partnership.
Finally, I want to address the disclosure made earlier today announcing a transition in our financial leadership team as Mali has decided to leave her role as CFO of your just to assume a broader role with another company.
All he led our efforts in successfully strengthened our balance sheet, leaving us well positioned to continue advancing our strategic vision.
Ali will be missed as a good time to transition her finance responsibilities to her successor, Don Kim currently Vice President of Finance, who will assume the CFO role effective March 25th.
Don is a seasoned financial professional with extensive biopharma industry experience prior to joining your origin.
Don held leadership position was the wettest Sun pharma and most recently with stride pharma, where he served as head of finance and as a member of the board of directors.
Lastly, given the critical role Investor Relations continues to play in our success. This function will now report directly to me.
At your Gen. One of our primary goals is to give patients better options by continuing to shift the treatment paradigm in euro and specialty oncology away from repeated surgeries and disease management to minimally invasive therapeutic ablation of tumors and locally administered immunotherapy approaches we.
Expect 2022 to be a pivotal year for your origin as we expect a more normal environment job Midas launch to fully enroll our pivotal study for UGI and one or two which represents a major advancement in care for patients and a billion dollar revenue potential for our company.
And to expand our development efforts into immuno therapy with a unique communist tutorial approach for high grade disease.
I'm extremely proud of the progress we continue to make toward our goal of bringing novel solutions to patients that deserve better.
With that I'll turn the call over to Mark to discuss our recent clinical and development update Mark.
Thank you Liz.
Before providing an update on our recent progress advancing our clinical development programs.
One or two in Eugene and 301, there was a comment on our recently published a retrospective analysis in the journal of Urology, which reported real world experience utilizing and agreed the administration of Joe myself.
The study was conducted by Dr. Katy Murray of the University of Missouri School of Medicine, and provided a stepwise treatment approach to integrated administration of Jo Mira.
Thank you Murray and colleagues showed good they integrate installation provided a well tolerated effective.
Method to administer Jo Mira, which did not negatively impact patient comfort importantly, Dr. Murray's analysis suggest that integrate administration, which minimizes manipulation of the yard or during installation.
It will protect against Stricture formation that had been reported following repetitive instrumentation of the upper urinary tract.
Previously stated Joe Mundo as approved for both retrograde and integrate administration and both methods can be performed as an outpatient procedure in the clinic. However installations. The retrograde administration requires administration by a physician.
Your reader all catheter utilizing fluoroscopic guidance, whereas integrated administration may be performed by a trained nursing professional and does not require fluoroscopy prior to Joe Mundo installation once nephrostomy tube position is confirmed Dr.
Dr. Marie and her colleagues offer practical guidance Reintegrate administration, which may simplify Jo Mira administration for both patients and physicians.
Switching to you Jan one O two I'm pleased to report that since our last update we have completed the transition from the Atlas study through the recently initiated phase III envision pivotal trial envision is designed as a single arm multinational multicenter study.
The efficacy and safety of <unk>, one or two primary chemo ablative therapy.
With low grade intermediate risk and M D C.
Importantly, we believe envision carries a higher probability of success given it does not require a control arm comparing <unk> 102 to surgery and <unk>.
The design of innovation is similar to our phase <unk> Optima II study of <unk> in one or two which showed a complete response rate of 65% and durability of 12 months of 72, 5%.
As was noted we recently began dosing patients in addition to.
The study, which is being conducted at over 90 sites is expected to enroll approximately 220 patients who will receive six one once weekly interim ethical installations with usually a one or two.
In terms of the Evaluable patient population envision more enrolled patients with low grade recurrence intermediate risks <unk>. The primary endpoint will evaluate the complete response rate at three months after the first installation.
And the key secondary endpoint will evaluate durability over time in patients who achieve a complete response at the three month assessment based on our estimations, which include feedback from the FDA, we expect full enrollment by the end of 2022 and assuming positive findings.
Anticipate submitting a new drug application in 2024.
In addition to the envision study we are conducting a single arm at home installation study of Eugene on one or two with a goal of demonstrating the feasibility of home installation, we believe offering an at home solution for low grade intermediate risk non muscle invasive bladder cancer patients is an important step in solving access.
Secure and quality of life issues that many elderly patients may face with the current standard of care trends reap resection of a bladder tumor or <unk>, we expect to enroll up to 10 patients in the next six months.
Low grade intermediate risk and there might be C remains a significant unmet need.
An estimated 80000 patients from United States.
There are no FDA approved therapies for this disease, leaving repeated T Y D T. As the current standard of care.
We believe you'd be in one or two has the potential to transform how we treat these patients in particular those at risk for recurrence and those that are unwilling or unable to undergo surgery or general anesthesia.
Becoming the first viable nonsurgical alternative for low grade intermediate risk disease.
I'm also pleased to provide an update on our progress in our immunotherapy program, which includes the development of an anti <unk> four antibody, we are developing to treat high grade non muscle invasive bladder cancer.
And 301 is our in licensed anti <unk> four antibody that we are advancing alongside our clinical development partners at M. D. Anderson Hospital Eugene in 301 is in development for the use as monotherapy and in combination with immuno modulators and chemo therapies to treat high grade non muscle invasive bladder.
For cancer.
<unk> four has long been considered a good target for overcoming immune suppression produced by tumor cells. Unfortunately, the systemic administration of checkpoint inhibitor antibodies to this molecule is associated with dose limiting toxicity.
We believe that interim ethical delivery via our T gel may permit us to leverage the power of our highly potent if you feel like for monoclonal antibody Eugene 301, while avoiding the toxicity associated with systemic administration.
Last month, we announced the completion of an IMD, enabling toxicology program, which form the foundation of an IND submission supporting the initiation of a multi arm phase one clinical study of <unk> 301, which we expect to begin during the first half of this year.
Objective of this study is to establish safety and dose ranges for UPN 301, as monotherapy and in combination with other agents, including Aegean to a one hour <unk> seven agonist, which has demonstrated single agent activity in high risk non muscle invasive bladder cancer patients.
The first arm of the phase one study will evaluate <unk> in 301 as monotherapy and we will take approximately 12 months to complete.
We view <unk> and 301 is a fundamental checkpoint inhibitor and a cornerstone of a variety of potential combination therapies targeting hybrid cancers. We were excited to begin evaluating its potential in the clinic. This year and look forward to updating you on our progress Lastly, we plan to continue our research efforts to identify additional medicines.
It may work with our proprietary technology to advanced care across Euro filial and other specialty cancers. We are in the process of prioritizing the most promising targets and hope to share more about our plans later this year and with that I would 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 Joe model as Liz mentioned, we achieved a quarterly record of $16 2 million in net product sales in the fourth quarter, representing a 42% increase from quarter three.
Revenue for 2021, our first full year on the market was $48 million and despite volatility in certain regions throughout the year, which corresponded with the rise of COVID-19 cases, Joe might of full year revenue trends were favorable in 2021.
I'm pleased to report that the momentum, which we ended the third quarter continued through to Q4 and into 2022.
With our field force, primarily back to engaging with physicians in person we've observed a more consistent ramp up in new patient starts and patient enrollment forms on a week to week basis, thus far in 2022 compared to some of the variability we saw in the same period last year.
We're hopeful this is suggestive of a more normalized launch trajectory for Joe motto in 2022 as.
As we look ahead, we anticipate similarities to last year with respect to sequential quarterly variance heading into Q1, which is attributable for the most part to deductible resets typically seen in the first quarter How's.
However, we expect strong year over year revenue growth, despite seasonality, which is expected with the buy and bill product such as Joe model.
I'm, particularly pleased with the growing enthusiasm and adoption for Joe model, we are seeing from physicians as our data suggest steady growth in both new and repeat prescribers.
The number of activated sites as of March 1st was 832.
From 706 on November one of 2021.
And representing an increase of 17%.
Importantly, the number of repeat accounts or sites that have treated more than one patient increased to one O. Six from 86 on November one 2021. This represented an increase of 23%.
As the number of repeat accounts have grown we've seen a significant improvement in conversion times from new patient enrollment forms to the patients being treated from 40 days down to 20 days, which is expected as accounts identify more patients and having established treatment protocol in place.
Steady growth in both of these critical areas gives us confidence we will continue to see rising adoption of Joe Murdo and suggest a positive treatment experience from the perspective of both physicians and patients.
We are pleased to announce that the VA has created a criteria for us for Yamato the CFU establishes a streamlined pathway by which Hcp's can access Joe Murdo to treat low grade you too you see within the VA system, representing a significant milestone in another opportunity to continue to drive penetration.
Within the V a.
I remain highly encouraged by what we're seeing in adoption and engagement and remain optimistic that we'll continue to see favorable trends during the remainder of 2022.
Lastly, we continue to make progress with the you tracked patient registry at this time, we are finalizing the build with feedback from the urology community and Onboarding of initial sites with an expected phase launch before the end of Q1.
Data collected in this study is expected to evaluate real world outcomes of U T UC patients treated with <unk> <unk>.
Provide insight into the long term treatment benefits and evaluate its use in clinical practice in the U S.
We look forward to providing additional updates on this program, including select findings later this year.
With that I'd like to turn the call over to Molly for a review of the financials Molly.
Thank you, Jeff and thank you to everyone for joining today's call.
Before reviewing our fourth quarter and year end 2021 financial results I'd like to touch upon.
200 million non dilutive term loan financing, we recently announced with funds managed by pharma kind of advisors.
Pleased to partner with pharma Con and experienced specialists investor with a strong track record of supporting innovative life science companies.
And farm economy, we have a partner who believes in the opportunity of tomato and its ability to positively impact the treatment landscape of low grade are you do you see as well as the broader potential for our pipeline of innovative therapies to address significant unmet needs in your failures and specialty cancers.
The up to 100 million senior secured term loan facility significantly strengthens our financial position and supports our operating needs with what we believe will be sufficient runway to achieve cash flow breakeven by 2025 based on your current revenue projections and financial model.
The first tranche of 75 million was received last week and will immediately begin Florida continued commercialization effort symptom, Idaho and our ongoing phase III single arm envision trial of use you in one or two.
And I was especially when they drop on an additional 25 million before the end of the year.
The loan will mature in five years from initial funding and we reserve the right to prepay the loan in its entirety at any time.
Subject to certain prepayment premiums and they call them home.
In return, we will make quarterly interest only payments to former con for the first 48 months of the repayment period, followed by a principal and interest payments.
Triste accruing using payments fiber with 125 basis point floor, plus eight an accordion for sun.
Once again, we're excited to partner with Amazon and experienced industry leader committed to supporting innovative biotech companies.
I'll now review our financial results for the fourth quarter and full year ended December 31 2021.
I've lived lives and just mentioned your Gen reported net product sales for the fourth quarter of 2021 of approximately $16 2 million aggregating to 48 million for the full year 2021.
This compares to 8 million and 11 8 million respectively. In the same periods in 2020, the increase driven by the launch of motto in June of 2020.
As Jeff mentioned, we anticipating somewhat lighter revenues in the first quarter 2022 as compared to Q4 of 2021 can you just for that potential seasonality and deductible resets.
Saying that we are anticipating Q1, 2022 revenues to be stronger than Q1, 2021 by at least 50% and in line with our expectations and forecast them.
Cost of revenues for the fourth quarter of 2021 were approximately $1 6 million, resulting in gross margin of 90%.
The gross margin of 92% in the fourth quarter of 2020.
Full year 2021 revenues cost of revenues were $5 $2 million, resulting in full year gross margin of 89% compared to 91% for 2020.
Research and development expense for the fourth quarter and full year ended December 31, 2021 were $13 1 million and $47 6 million compared to $12 4 million and $47 3 million respectively for the same periods in 2020.
Research and development expense included 900000, and $4 million in noncash share based compensation expense for the fourth quarter and year ended December 31, 2021, as compared to $1 4 million and $6 4 million respectively for the same periods in 2020.
The increase in R&D expense in 2021 was related to the phase III Atlas trial for <unk> in one or two which was initiated at the end of 2020.
Selling general and administrative expense for the fourth quarter and year ended December 31, 2021 were $21 4 million and 87 5 million, respectively compared to $22 2 million and 92 nine respectively for the same periods in 2027.
Selling general and administrative expense includes $4 5 million and $19 1 million of noncash share based compensation expense for the fourth quarter and year ended December 31st 2021.
$5 1 million and $21 6 million for the same periods in 2020.
Before moving on I'd like to take a moment to comment on our operating expenses.
Since the beginning of 2021, and we tripled in that product revenues, while at the same time exercise effective cost management and fiscal responsibility to allow us to invest in the areas of the business that support patients gaining access to our important therapies.
As a result, we were able to reduce SG&A in 2021 without adversely impacting our commercial and clinical activities.
As we look to the remainder of 2022, we expect consistency in SG&A and higher spend in R&D related to ongoing phase III envision trial and anticipate a huge en 301 phase one study.
In the fourth quarter ended for the fourth quarter ended December 31st 2021 reported financing expense related to the prepaid forward obligation of RTW.
<unk> was $7 3 million and $17 3 million for the full year.
As a transaction closed in May of 2000 2021, there were no similar expense in 2020.
Total cash payments that wasn't made to argue Debbie for 2021 aircrafts in the $4 million lastly, as it relates to RTW the rate in which our payments will be made to them in 2022 increased from nine 5% to 13% based on the global net product sales into <unk> and 2021 .
For the fourth quarter and year ended December 31st 2021, we reported a loss of $28 $5 million or dollar 27 cents per share.
And $110 8 million and $4 96 per share respectively.
This compares to net losses of approximately $35 million 38 per share and $128 5 million or $5.90 per share.
For the same periods in 2020.
Net loss for the fourth quarter and year ended December 31st 2021 includes $5 4 million and $23 1 million, respectively, and noncash share based compensation expense.
Compared to $6 5 million and $28 million for the same periods in 2020.
We closed the year with $89 8 million in cash cash equivalents in marketable securities.
Not include the first tranche of 75 million, we received in both term loan facility was drawn upon.
Turning to our financial guidance for 2022, we anticipate full year 2022, net product revenues from Joe might have to be in the range of $70 million to $80 million, representing a 46% to 67% increase over 2021 revenues.
We anticipate our full year 2022 operating expenses to be in the range of $140 million to $160 million, including noncash share based compensation expense of $10 million to $16 million subject to market conditions.
Lastly, we anticipate full year 2022 financing expense related to the prepaid obligation of two RTW investments in the range of 22 to 26 million of which an estimated nine 1% to $10 4 million will be in cash.
Lastly, I'd like to take a moment and address blizzards earlier comments I'm proud to have played a role in bringing somebody go to market and the development of Eugene wanted to both programs have the potential to transform the treatment paradigm.
Low grade D to C and Bunkering intermediate risks and there might be some.
With our newly strengthened balance sheet and an exceptional team in place I remain confident in the team's ability to continue executing your strategic vision.
I'd like to thank lives and the board of directors of the company I'm excited to transition the CFO position to Dunkin'.
He capable and experienced leader who has demonstrated the highest level of professional content.
With that I'd like to turn the call over to questions operator.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then the one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key our first question comes from Boris Speaker with Cowen.
Good morning, and thank you for taking my question.
My first question and maybe on the envision studies can you comment what it is you need to show ultimately for approval and if there was any kind of meaningful valued four partial responders.
Mark do you want to take that and I'll add any commentary.
Yeah sure Boris Thanks for the question.
Whereas I think you know the current study is.
Almost identical to our phase two in design and in terms of the target population.
We are lucky to be able to rely on what we saw in phase II to guide us as to what we might expect in the phase III and just to remind all the listeners in the phase two the complete response rate was <unk>.
65% with a durability by Kaplan Meier at a year or approximately 72%.
So.
We think that's a good guide.
What we might see in this trial, obviously, we have to do the trial.
But we think those are compelling data and helpful. In terms of thinking about what to expect from this trial and I suspect this may want to comment as well.
Yeah, I mean, I think look we've we have said all along before we ever called it.
Results of our first study our phase II study was.
We felt like somewhere around 50% and 50 per cent durability would be meaningful the FDA hasn't given us guidance to say specifically you have to hit this number what they've said, it's got to be clinically meaningful, but what they will do and you know we will do them you know as well as they'll they'll they'll be in contact with.
The opinion leaders in the urology field to say do you believe that this is meaningful and as we've talked about before likely go to an OTA Act, so which we felt very good about it because we have physicians, who said if it worked for any patient you know to have the option you know we'd like to have the option. So while we can't comment when we actually don't have.
Specific number we feel confident that even if were anywhere in that 50% range in 50% range that that would be clinically meaningful.
And the second part of my question is there any kind of.
Thankfully meaningless meaningfulness.
Partial responder.
Yeah, sorry about that yeah.
Yeah, sorry, I didn't I'm, sorry, I didn't and Mark may want to comment as well, but yes. We believe there is an actually some of that what we're capturing is in this study, which we had not captured much before but we actually went back and looked at some data and.
To get a partial response actually.
Also allows you to avoid a T R. B T and can be managed more conservatively when you've gotten a partial response, that's what we've seen so far in the data and but you know we also believe that boat for Jim, Idaho, and Utah, and one or two that that's an area we need to study that way if they get a partial response, but if he gave.
Two more installations would that make a difference and we plan to study that but to your point, yes, we see a benefit even in the partial responders market was there anything else had.
No that's it thanks.
Great. Thank you very much for taking my question.
Thanks harsh.
Our next question comes from Chris Howerton with Jefferies.
Hi, good morning. Thank you so much for taking the questions.
A couple from me. This morning first of all I wanted to know maybe.
Maybe from a commercialization perspective on <unk> I know a lot of the efforts that you've made Jeff in the past has been focusing on clinics and physicians and kind of creating an opportunity for them to prescribe Joe Mundo when and if you tuc patient becomes available.
But I guess I'm curious if you've made any efforts on the patient demand side, if you could make any comments on that.
Secondarily I'd also like to know if you'd been able to observe any meaningful changes in practice procedures with relation to either surgical ablation.
Or radical nephrectomy or nephrectomy excuse me.
And then if I may the last question perhaps.
<unk> question for Molly.
Just curious if you could give us a little more color as to with respect to the cash flow breakeven thinking.
In 2025, thank you.
Jack you might take person and Molly can chime in.
Sure. Thanks, Chris Yeah, So we are increasing our.
Level of patient marketing for 'twenty, two and the end of 'twenty, one because yes as you pointed out of patients could be aware of Jo Mira with an option. That's ultimately what we want to see more of so we do have more in regards to social Media Act.
Activation patient awareness.
Much as we can do while being responsible from a resource perspective, obviously, we want everyone to know about this but given the patient population.
We're certainly doing.
A lot to activate the patient's I do know we have some you know some various things in the offices, where patients will go in in the waiting room there'll be able to scan a QR code learned more about.
<unk> and then we do a lot.
Both the website as well as recognition getting them to go to the web site for Joe Murdo and U T. U C. Dot com, which is an unbranded site that really does really are not to start patients. What are physicians use that as a resource to talk to their patients about their disease. So.
We are doing more and we'll continue to do more in 'twenty two.
Regarding your second question, Yes, obviously the good thing here is our end use what we've seen in market research are going down we continue to want a partner.
With endoscopic resection, so positions.
We will use <unk> in different ways.
With endoscopic resection in place of.
But the good things that we've seen in the past two to three years.
Article not necessary redirecting these are coming down for patients with low grade, which is which is obviously, what we set out to do so.
Hopefully I answered Molly do you want to take the second quarter.
Sure so as it relates to the cash flow breakeven projection by 2025, obviously, Chris that that's contingent upon our certain of our current models for our revenues and expenses, but based upon where we currently see the demand for Joe motto, we believe that with our current infrastructure and the support that we have from.
The commercial team that we can get to cash flow breakeven by 2025.
And that does obviously factor in a little bit from Eugene One O. Two in the event, we're successful with getting approval by the end of 2024, but as we've always said, we do believe that we can be a standalone business and Joe might overwhelm them. So so we feel comfortable that again with the funding that we have from Pharmacon and the cash we have on hand.
And that we have a path to get there.
Okay.
Awesome well, thank you very much and Jeff Yes that did address my question. So thanks again.
Sure. Thanks, Chris.
Our next question comes from Paul Choi with Goldman Sachs.
Good morning, everyone. This is Charlie on for Paul. Thank you so much for taking our questions.
Question for me is just looking for a little bit more color maybe on the 2022 revenue guidance and wondering what are the pushes and pulls that dictate the upper and lower bounds of that guidance and then my second question was just regarding the future <unk> three of one combinations and whether we should be expecting Eugene <unk> hundred one to kind of be the priority combination partner there.
Or maybe we should be expecting some other potential partners coming in.
The near future and then related to the combination trial with <unk> hundred one should we be expecting that any combination arm wouldnt be started until completion of the monotherapy arm with that monotherapy data in hand. Thank you.
So Jeff why don't you take the first one and I'll add any commentary and then and then turn it over and Mark can take the second question.
Sure.
Thanks, Charlie Yeah, so with regards to the guidance for this year I mean, obviously, one big factor is always a COVID-19 related.
Issues.
As I stated, we were starting to get back to a little bit of normal with face to face interaction with physicians that is key for any drug in this launch phase, but certainly for a rare disease and so anything there that could impact.
Elective surgeries.
You're going to have an impact on the on the number.
The biggest factor I think we're going to start to see some additional data from the registry that I've mentioned.
If you know hopefully obviously that data once we once we have that.
We will go out discuss it.
And depending on what it shows that could certainly give us an opportunity there.
And then continuing on that more data that we have on the proximity administration that continues to grow and as far as the main route of administering versus retro grade.
And as we start to generate out of there.
And published that and get that out there you could see that grow even further in 'twenty, two probably maybe even faster than expected. So those are sort of the.
Highs and lows, but Lindsey do you want to comment.
I guess my only thing Jack and you talked about it quite often is really the depth and breadth of accounts right. So we have to continue to do both of those.
We have to continue to get new accounts on board that you know I've said theyre going to use but you know that the thing and the other thing about what Jeff said, it's not only.
From a from a standpoint of having a rep go in but it's you know it's an installation. So it's a very high touch sells them being able to go in there and work the account is important.
Have to hold their hand, you know until there you know until they're used to I'm used to the account so doing both from.
On adoption perspective, both breadth and depth. So go go ahead.
Jeff talked about often.
Mark do you want to just talk about that combination study.
Sure. Thanks.
Yes, we will be starting with 301 phase one dose escalation study and we need to acquire some information.
From a <unk>.
First in human use from that experience. However, our team has developed.
Very elegant overlapping combination protocol that will permit us to start combinations.
Before the complete conclusion of the phase one with 301, so we will start that before the completion and as to whether or not we would use to one first as opposed to another agent.
So as we are actively exploring that.
Would you plan to use 201 currently and we're doing some preliminary human work to verify that that's the best thing for us to do but we're also actively looking at other.
Potential combination partners for 301, so there's going to be more to tell about that within the next year or so.
You may want to comment as well.
Yeah, I was just going to say, we'll follow the science. So whether it's 201 will be the primary will depend on the work the work that we do but the intention is to have several so its intention is not just to do combination with E. G. In two O one, but potentially chemotherapy and other targeted agents both targeted agents as well.
Other immuno oncology agents. So you know we think that that's what the team is working through now and the work that we're doing at M. D. Anderson, well will help help to identify which combinations are our best appropriate and again. The idea is to test you know test yeah.
A few of them. So we can see what works best and then move forward with those combinations.
Great. That's very helpful. Thank you all very much.
Alright, thanks, Thank you.
Our next question comes from room solve Roger with H C. Wainwright.
Okay.
Thanks, very much for taking my questions a couple of quick financial ones for I.
I was wondering if you could comment on the specific revenue level that you expect to be commensurate with our achievement of cash flow breakeven in 2025, and if you expect this revenue level to necessarily be above $200 million.
Secondly, I also wanted to confirm whether that guidance.
Effectively assumed that you would be able to discharge your debt repayment obligations to pharma con.
Even as a stand alone business solely focused on some idle if that pie.
Hypothetically a scenario that would also be possible.
Sure.
I'll take that it's Ron so the first.
Question on the revenue level. So what we've always said is that we believe we can achieve peak.
<unk> market share of around 25% to 35% from fringe Yamato any have you assumed that based upon what we believe and what we've always indicated that the total potential opportunity of about $700 million you can get to where we see that peak opportunity to be which is probably right around the range that you're referring to.
And that 2025 mm year, and then as it relates to the Pharmacon prepayment. We do believe that the success of one or two would be important for us to be able to make sure that we can make that pay off in at that five year Mark.
In saying that you know pharma kind of is obviously, a great partner and if we feel like we need a little bit more extension I'm sure. We can have discussion with them at the time, but right now we feel very comfortable that we can achieve that payment in five years, but to your point, we do need to have some movement from the one or two side in order to make sure. We can we can fully pay that back.
Okay, and then they went on to cash flow breakeven.
Got it and then just on 301 I was wondering if you could comment on well actually before I have to say Oh, one question because I forgot one other thing can.
Can you comment on potential ex U S opportunities for gel <unk> not necessarily in Europe , which I know is a subject that you've touched upon before but in other countries simply based on now the knowledge base has been gathered in the United States. It appears to be a more and more accepted product.
What could we potentially realistically expect from an ex U S perspective from a partnership from a distribution standpoint for the products.
The quarters and years.
Yeah.
I think the priority for us is gonna be Japan, because we know two things about Japan, when we know exactly what needs to be done.
And we know that we can't get good reimbursement so that will be our priority I mean, we have to be honest, we've had a lot of interest in China and some other smaller you know you know the middle East and and frankly, we have to balance you know sort of the price.
The revenue we can get the price that we can get in those markets you know with the effort and and you know we're still working through that but we don't you know we haven't found yet.
Good a good analog that gives us the opportunity to be able to get a decent reimbursement. So we really focused and which is the reason for the named patient program right. We did that because what happens is in these markets and I've experienced it in my past is you need champions, you need to physicians and patients to be going to the payers and saying.
We want access to this medicine, then they'll consider I'm, giving you a more innovative price. So we'll continue to work through that I would say the priority is Japan. Obviously, you know if we find an opportunity that we you know we think it's worth it more absolutely partner, but you know most most markets around the world we have to be careful.
Because there still comparing to a generic so I think we need to have a little bit more under our belt in the U S and get some experience and some of these named patient a country and then I think we'll go for go forward in those areas and we've been talking to a lot of partners and I think everybody sort of agrees we're on the right track.
Great and then lastly on 301, just wondering if you could comment on let's assume that the phase one study reads out positively what implications might this have for future broader utilization of our T gel not just with molecules like valor, <unk> mab, what but with potential other <unk>.
Monoclonal antibodies and if theres any possible read through that you could get from this context to not only the utilization of our T gel with molecules beyond zeller throw in that in the context of <unk>.
The genital urinary context, but also in potentially other areas of the body, where our T gels unique characteristics might be advantageous.
Yep Yep, absolutely I, Couldnt say, it better myself, the but you're right. They the work that we do in Eugene and 301 in combination will be a testament to the ability to.
To give local delivery right of medicines and I think that you know we do have many companies sort of watching to see what happens here urologists treat locally and particularly these Kansas, we're learning more about it I'd like mark to sort of comment about some of the recent recent you know.
Work that we've done that we've started of uncovered that local delivery, especially you know in the in the bladder.
Is you know definitely available I mean, there's definitely benefits to doing that and so we believe to your point, specifically and urologic cancers, but even beyond that and as you know we've we've now announced some work with some of the academia and other other areas like head and neck and colon colorectal cancer. So we do.
Believe esophageal cancer there are many other areas of the body in which the or RT gel you know can technology could work very nicely, but Marc you just want to comment on what were sort of finding out about local.
Clifford, particularly of immunotherapy.
Yes, Thanks, Liz and Ron This is a very interesting question and a hot topic for us I'll, just say that we have.
Lately appreciated through our own work and also understanding the work of some others in the area.
There will be a.
Accessible.
Local immune system at the level of the epithelium, which would be very generalizable. When you think about locally applied immunotherapy, which of course would be.
To be absolutely accessible to our platform.
It could be clinically exceedingly meaningful for a variety of epithelium neoplasm.
Not to gild, the Lily here, but everybody Im sure appreciates that cancer was in epithelioid disease for the most part so the ability to interact with the immune system at the literally the epithelium in the context of cancer may be profound and we are very interested in this topic and working on it hard right now.
Yes.
Thank you very much.
Our next question comes from Matt Kaplan with Ladenburg Thalmann.
Hi, good morning, and thanks for taking the questions.
Just wanted to follow up on on the NEF prosperity in the phosphate tube administration antiquated administration of Yamato.
Currently I guess can you give us a sense in terms of what what percentage of procedures use that and then help.
Help us think about the adoption of that rather administration and how that impacts potential growth.
Growth of Joe might have going forward.
Sure.
Yeah, No we haven't really.
Comment on the number but I will say this is that it's it's higher than we expected given that yes. It's in the label, but we really didnt have until Katie Murray's.
Paper, we didn't have a lot of good data as we continue to get more data and go out and put it unable to talk about that publish it.
The reps are equipped with <unk>.
Resources that guide practices that are interested in this and I would just say that as there's more and more questions come in more and more folks are administering the first dose retrograde and then the following five are in the clinic.
Through an approximate tube so.
I do as I said in the past.
This is to continue to grow.
And it will grow even faster as we can get out there with more and more data, but there is a significant interest.
Even physicians, who said you know at launch two years ago, a year and a half ago.
They wouldn't consider this route of administration has sort of changed there changed their marching are tuned in and they are open to it. So the more discussions that are going on in the the real advantages to the patient that convenience for the patient.
And the practice they can do this in their clinics. They don't have to schedule. Our time. So yeah. So there's certainly a lot of buzz and a lot of interest and it's our goal to get more data out there and I do see that growing growing significantly in 'twenty two as we do that.
Okay. That's helpful. Thank you.
And then.
I guess a question for Mark can you talk a little bit about the differences between envision and the Optima study.
That you think will.
The increased probability of success there.
Thanks, Matt the studies is really the same we're targeting a relapsing.
Low grade intermediate risk population, which is exactly what we did.
In the phase two trial, so I think as I said earlier I think that because of the trials are except for the size of essentially the number of sites involved essentially identical I think the phase two does give very good preliminary guidance as to what we might expect.
In the envision trial.
It is the same group of people being treated the same type of patients being treated with an identical manner.
So I think we'll have to see what the results look like obviously, but we are optimistic that the phase two just give us a sense of what we would expect in phase III.
Alright, alright, thank you for that color.
And I'm not showing any further questions at this time I'd like to turn the call back to your Jones, President and CEO , Liz Barrett for any closing remarks.
Great. Thank you as always we appreciate your interest and your origin and you know we're building a very unique company and we're really proud of the progress that we've made so 22 promises to be yet another eventful year and we look forward to partnering with all of you to bring these are these patients better option. So operator, you can disconnect. Thanks again everybody.
Ladies and gentlemen.
You may now disconnect and have a wonderful day.
Okay.
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