Q4 2023 UroGen Pharma Ltd Earnings Call
Yes.
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Yeah.
Speaker Change: Good morning, ladies and gentlemen, thank you for standing by and welcome to the origin pharma full year 2023 earnings call.
Speaker Change: Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your speaker today, you've been Super I'm head of Investor Relations you may begin.
Super: Thank you operator, good morning, everyone and welcome to European Farmers full year 2023 financial results and business update conference call.
Super: 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 2020.
Super: The press release can be accessed on the investors portion of our website at investors <unk> Dot com.
Super: Joining me on the call today are Liz Barrett, President and Chief Executive Officer, Dr. Mark Schoenberg, Chief Medical Officer, Jeff BOVA, Chief Commercial officer, and Don <unk>, Chief Financial Officer.
Speaker Change: During today's call, we will be making certain forward looking statements.
Speaker Change: These may include statements regarding our ongoing commercialization activities related to our ongoing and planned clinical trials commercial and clinical milestones market and revenue projections and opportunities, our commercialization strategy and expectation as well as potential future commercialization activities for <unk>.
Speaker Change: One or two approved anticipated data regulatory filings and decisions, including UGI, one or two potentially receiving priority review UGI and one or two of being transformative and the major growth driver for your kind of recruit future research and development efforts for <unk> <unk> or <unk>.
Speaker Change: Our corporate goals in 2024 financial guidance.
Speaker Change: Hey.
Speaker Change: These forward looking statements are based on current information assumptions and expectations that are subject to change.
Speaker Change: Ascription of potential risks can be found in our earnings press release, our latest SEC disclosure documents.
Speaker Change: You are cautioned not to place undue reliance on these forward looking statements and European disclaims any obligation to update these statements.
Speaker Change: I'll now turn the call over to others.
Speaker Change: Thanks, Vince and thank you to everyone. Joining us this morning, 2023, with a very successful year for euro and yen laying the groundwork for progress and growth in the years ahead.
Speaker Change: <unk> III Atlas and envision trials evaluating our lead development candidate <unk> two both met their primary endpoint.
Speaker Change: The data underscore the potential of <unk> to be a transformational product and to advance the standard of care and low grade intermediate risk non muscle invasive bladder cancer we.
Speaker Change: We have started the regulatory submission process and believe that if approved <unk> will be the major growth driver for our company we.
Speaker Change: We see a great opportunity to improve the lives of patients and create value for our stakeholders.
Speaker Change: Meanwhile, our existing commercial product <unk> continues to enjoy double digit growth and positive adoption trends.
Speaker Change: The current clinical development plan for <unk>, two was agreed with the FDA in a pre NDA meeting that was held in late 2023.
Speaker Change: The FDA confirmed that the current clinical development plan for Eugene wanted to which includes evaluation of duration of complete response data at 12 months from the pivotal envision trial with support submission of an NDA for the treatment of low grade intermediate risk non muscle invasive bladder cancer.
Speaker Change: We announced in January of this year that we had submitted the chemistry manufacturing and controls or CMC module of this application the.
Speaker Change: The objective of a rolling NDA is to facilitate early engagement with the agency and potentially allow for more efficient and timely review of the application.
Speaker Change: We plan to share the data on the duration of response endpoint from envision in June of this year.
Speaker Change: Assuming the data is that as expected we will complete submission of the NDA late in the third quarter.
Speaker Change: If granted priority review, we anticipate approval and launch of <unk> in one or two as early as the first quarter of 2025.
Speaker Change: The commercial opportunity in low grade intermediate risk non muscle invasive bladder cancer is significant we estimate that approximately 82000 patients are eligible each year in the U S. So the overall market is around 10 times the size of the Urothelium carcinoma market <unk> currently address it.
Speaker Change: This translates into a total market in excess of $3 billion and over a 1 billion dollar revenue opportunity for <unk> in one or two when using conservative assumptions.
Speaker Change: We also announced in January that we entered into a strategic license and supply agreement with meta to develop next generation novel <unk> based Archie gel formulations of <unk> and <unk> and 102 three.
Speaker Change: Through this agreement we are combining our proprietary RT gel with med <unk> proprietary formulation of <unk>.
Speaker Change: Our next generation products are anticipated to provide advantages in terms of production manufacturing efficiency supply and product convenience.
Speaker Change: Importantly, the program could provide additional patent protection for our IOL failure cancer franchise med.
Speaker Change: <unk> has issued IP with protection expected to last until 2035.
Speaker Change: And your Gen has separate pending U S patent applications that if granted would provide protection until December of 2041.
Speaker Change: We will need to conduct clinical endpoint studies to support NDA for <unk> in one of three and for UC and went out for our next generation formulation of <unk> <unk>.
Speaker Change: Importantly, this will be a smaller development program and we intend to move directly into phase III for both products beginning in 2024.
Turning to John Mitre revenue the product achieved sales of $23 5 million in Q4, and $82 7 million for the full year 2023 reflected in this number are some non patient cells.
Speaker Change: We have also seen an increase in gross to net deductions, but most importantly patient demand drivers remain strong with patient enrollment forms new patient starts and doses all achieving approximately 25% growth for the year.
Speaker Change: Jeff will provide additional details in a few minutes.
Speaker Change: As we look toward long term growth. It is critical that we maintain a strong balance sheet and the ability to expand our patient impact through lifecycle management and development of new medicines to treat <unk> and specialty cancers.
Speaker Change: We are pleased to announce our expanded partnership with farmer Khan advisors, providing us with additional funding of up to $100 million.
Speaker Change: As part of the agreement we are required to draw down on the first tranche of $25 million by September 30th with the option to draw up to an additional $75 million following <unk> approval if needed the.
Speaker Change: The benefits of this agreement are that we now have an additional source of capital with flexibility on the amount we utilized.
Speaker Change: We have enjoyed a productive and collaborative partnership with pharma kind of advisors and look forward to closely working with them in the future.
Speaker Change: With our current cash balance and approximately $25 million recently sourced from the ATM, we expect to have the capital to execute a comprehensive launch for <unk> in one or two if approved and funded new potential clinical studies.
Speaker Change: I'll now turn the call over to Mark Schoenberg, Chief Commercial Officer Mark.
Mark P. Schoenberg: Thank you Liz.
Mark P. Schoenberg: You had the opportunity to share the phase III wasn't ambition data with the physician community at the society of Urologic oncology annual meeting, which took place in November we were especially pleased that the suo selected the ambition data as one of only two late breaking trials that were designated for oral presentation at this meeting.
Mark P. Schoenberg: Looking at the body of clinical data, we have generated Eugene on one or two has demonstrated consistency in the three month complete response rate across Atlas envision as well as our prior phase <unk> Optima II study.
Mark P. Schoenberg: The complete response rates observed in these three studies were 65%, 79% and 65% respectively. Moreover, Atlas data suggest you'd hear in one or two appears to be superior to surgery. Once we complete response has been achieved.
Mark P. Schoenberg: EMEA Atlas study, 80% of patients who received <unk> in one or two experienced the duration of response of 12 months compared to only 68% of those patients who had a <unk> alone.
Mark P. Schoenberg: We believe that the ability of UGI and one or two to achieve currently complete response rates non surgically and to potentially extend disease free living will ultimately minimize the need for multiple surgeries in this patient population.
Mark P. Schoenberg: The average age for diagnosis of bladder cancer was in the mid seventies. Many of these patients have comorbidities that highlight the need for non surgical treatment alternatives to the contemporary standard of care <unk>.
Mark P. Schoenberg: You have here in one or two has the unique advantage of being easy to administer patients can be treated in their urologist office without the need of an or and all the disruption to daily life associated with surgery.
Mark P. Schoenberg: Liz mentioned the next milestone in this program will be the secondary endpoint of 12 month duration of response data from envision different from the analyst day that envision consisted solely of recruit patients that had received at least one <unk>.
Mark P. Schoenberg: We look at the comparable subgroup of recurrent patients Atlas the 12 month duration of response of 66%.
Mark P. Schoenberg: The phase <unk> Optima study projected a 12 month duration of response in the high Fifty's as.
Mark P. Schoenberg: As we have consistently communicated we expect the envision data to show a duration of response of 12 months.
Mark P. Schoenberg: 50% or higher and we believe this is clinically meaningful and will be an improvement over the current standard of care.
Mark P. Schoenberg: Importantly, the patient interviews conducted during the conversion trial patients overwhelmingly preferred Eugene and one or two and said they would recommend it to other patients highlighting the lack of disruption to daily life and the <unk>.
Mark P. Schoenberg: 102 was less invasive less painful and less time consuming than the standard of care.
Mark P. Schoenberg: If approved <unk> 102 will be the first and only non surgical primary therapeutic to treat a subset of bladder cancer characterized by high recurrence rates and multiple surgeries.
Mark P. Schoenberg: And our lead programs, we continue to advance our immuno oncology candidate <unk> 301 into the clinic Eugene in 301 is comprised of an anti <unk> four antibody delivered using our proprietary Archie gel technology. We are conducting a phase one clinical study to evaluate the safety tolerability and establish a recommended.
Mark P. Schoenberg: These two dose for <unk> 301, as monotherapy and in combination with other agents safety and Tolerability data for the monotherapy arm are expected in mid 2024. We have also initiated combination therapy arms evaluating <unk> 301, plus gemcitabine and <unk> hundred one plus <unk>.
Mark P. Schoenberg: <unk> 201, our proprietary formulation of the nuclear mud CLR seven agonist and high grade <unk> patients. We believe we have a unique approach in this area and look forward to providing updates on this trial as it moves forward.
Mark P. Schoenberg: Finally, as Luis mentioned at the beginning of the call. We are pushing ahead with next generation formulations of our upper tract in bladder products were low grade Euro deal Youll cancers, we look forward to commencing phase III efforts for both drugs.
103 for the bladder and Eugene on 104 for the upper tract soon and we will keep you posted as those clinical programs events and with that I will turn the call over to Jeff BOVA to provide a commercial update Jeff.
Jeffrey Bova: 103 for the bladder and Eugene on 104 for the upper tract soon and we will keep you posted as those clinical programs events and with that I will turn the call over to Jeff BOVA to provide a commercial update Jeff.
Jeffrey Bova: Thank you Mark Joe motto sales as Liz mentioned were $23 5 million and $82 7 million for the fourth quarter and full year 2023, respectively.
Jeffrey Bova: <unk> remained strong in 2023, despite achieving our targeted unit sales the value of each unit was lower than anticipated primarily due to gross to net erosion driven by higher than forecasted 340, B Rebase and estimated Medicare refunds for discarded drug offset by non patient sales.
Jeffrey Bova: We are providing guidance for 2024 for the first time today and are forecasting full year, Joe might on net revenues to be in the range of $95 million to $102 million.
Jeffrey Bova: While slightly lower than consensus. This reflects continued growth to net erosion, despite anticipated continuing double digit patient growth.
Jeffrey Bova: Don will provide additional detail on our guidance in a few minutes.
Jeffrey Bova: Don will provide additional detail on our guidance in a few minutes.
Jeffrey Bova: It is important to note that the CMS discarded drug provision will not impact <unk> and 102 as the bladder allows for installation without weeks.
Jeffrey Bova: Additionally, using in one or two will be less sensitive to 340 b since it will primarily be administered in the doctor's office.
Jeffrey Bova: As mentioned in past calls we've added regional operational managers, which held every facet of the business, particularly operational rules intended to focus on opening new accounts and preparing them for Joe <unk>.
Jeffrey Bova: Our data show the territories with the most sites of care are the most successful in.
Jeffrey Bova: This rule is instrumental in growing sites of care.
Jeffrey Bova: There is a growing body of evidence from real World evidence studies that continue to strengthen and reinforce <unk> value proposition.
Jeffrey Bova: We have data from over three years in the market that reinforce and support the product's efficacy and safety in the real world setting.
Speaker Change: I am pleased to report <unk>, reviewing Joe might of real World evidence outcomes have been accepted at the upcoming <unk>.
Speaker Change: And our registry will provide additional insight into outcomes with Joe <unk> use in the real world setting.
Speaker Change: For UGI and 102, we are now executing our pre commercialization plan in preparation for prospective launch in early 2025.
Speaker Change: This includes engaging with urologists and patient advocacy groups.
Speaker Change: There is approximately 95% overlap in the prescriber base with Jo Mira, which allows us to leverage our existing commercial organization.
Speaker Change: Our research tells US physicians are concerned with the high rate of recurrence and many other patients who often experience limited intervals between <unk>.
Speaker Change: They're seeking strategies to prolong or extending interval between recurrences as these patients don't get much of a break between the <unk> RBC.
Speaker Change: The literature shows that complete response rates for surgery at three months or in the range of 40% to 70%.
Speaker Change: Our understanding of bladder cancer is that the underlying pathology of this disease is not always visible to the surgeon.
Speaker Change: Normal appearing sells in the bladder may contain genetic abnormalities that will give rise to disease recurrence Eugene <unk> treats the disease in a way that permits us to not only treat the visible lesion, but also that background path.
Speaker Change: And we believe that's why we achieve better long term disease control and longer disease free intervals than the current standard of care and our Atlas system.
Speaker Change: We are also considering the economics of how bladder cancers treated there is a misconception that surgeons generate a lot of income from to your RPT.
Speaker Change: The reality is that while overall costs of the surgery are quite high surgeons are only paid a few hundred dollars per operation.
Speaker Change: Given the potential for better outcomes with <unk> 102, we do not expect practice economics to be a barrier to adoption.
Speaker Change: Based on our market research, we believe the fastest adoption for <unk> 102 would initially occur in three groups of patients.
They are patients who have had multiple recurrences, those who would be considered surgical failures.
Speaker Change: Patients with early recurrence.
Speaker Change: And finally patients who are ineligible or unwilling to undergo surgery.
Speaker Change: We are confident that as physicians gain experience in these early groups Eugene <unk> 102 will quickly expand to all recurrent patients if approved.
Speaker Change: We look forward to providing additional insight into our plans as the year progresses I.
Speaker Change: I will now turn the call over to Don Kim to discuss our financials.
Dong Kim: Thank you Jeff revenues for the fourth quarter of 2023 were 23 5 million.
Dong Kim: Compared to $18 to $1 million in the comparable period in 2022.
Dong Kim: Revenues for the full year ended December 31, 2023 were $82 7 million.
Dong Kim: Compared to $64 to $4 million in 2022.
Dong Kim: Cost of revenues for the fourth quarter, and full year, 2023, or $2 3 million.
Dong Kim: And $9 4 million, respectively, compared to $2 3 million.
Dong Kim: And seven $7 million, respectively for the fourth quarter and full year 2022.
Dong Kim: The overall increase of $1 $7 million year over year was primarily due to the increased volume of Jeremiah at this stage.
Dong Kim: R&D expenses were $11 3 million and $45 6 million, respectively for the fourth quarter and full year 2023.
Dong Kim: Compared with 14.5.
Dong Kim: $5 million and $52 $9 million, respectively for the comparable periods in 2022.
Dong Kim: The decrease in R&D expenses year over year is primarily attributable to lower research and development expenses due to the conclusion of SLS Trier.
Dong Kim: Lower costs related to phase III envision prior for use in one or two and the ending of our collaboration with MD Anderson Harsha.
Dong Kim: Partially offset by higher R&D expenses related to our phase one study for <unk>.
Dong Kim: Cost incurred related to research into ingredient scale up and production for use in when the tool and clinical compensation expenses.
Dong Kim: SG&A expenses were $24 6 million and $93 $3 million, respectively for the fourth quarter and full year 2023, compared with $21 six and $82 8 million for the fourth quarter and full year 2022.
Dong Kim: The increase year over year was the result of an increase in brand marketing and general commercial expenses as well as increased incumbent station expenses third party adviser of the providers recruiting fees certain media and meeting expenses and ongoing managed services.
These were partially offset by lower commercial our back office services and support expenses.
Dong Kim: Interest expense was $3 6 million and $14 7 million, respectively for the fourth quarter and full year 2023, compared with $3 2 million and $8 4 million, respectively for the fourth quarter and full year of 2022.
Dong Kim: The cost for the full year of 2023.
Dong Kim: Q2 interest expense on the farmer corn loan for the fall.
Third quarter versus the prior year, given the funding of the first tranche and second tranche of the pharma Cologne was in March 2022, and in December 'twenty to 'twenty two respectively.
Dong Kim: In addition, the.
Dong Kim: The increase year over year was attributable to increases in interest rates related to the AMA crinone.
Dong Kim: Net loss was $26 million or <unk> 72.
Dong Kim: Sure and $102 2 million or $3 55.
Dong Kim: Sure for the <unk>.
Dong Kim: Fourth quarter and full year 2023.
Dong Kim: This compares with a net losses of $28 9 million or $1.25 per share.
Dong Kim: $109 8 million or $4 81 per share for the fourth quarter and full year 2022.
Dong Kim: Eurozone had 141 $5 million in cash and cash equivalence and marketable securities at December 31, 2023.
Dong Kim: Based on our latest financial forecast, we believe our current cash position and resources and projected revenue we support our commercial organization through the potential launch of <unk> in early 2025.
Dong Kim: Switching now to 2020 for full year guidance.
Dong Kim: We anticipate full year 2020 full chair, Michael net revenues to be in the range of $95 million to $102 million.
Dong Kim: Full year operating expense is expected to be in the range of a $175 million to $185 million <unk>.
Dong Kim: Including noncash share based compensation expense of $6 million to $11 million.
Dong Kim: Subject to market conditions.
Dong Kim: We will continue to scrub highs or expenses in support of our efforts.
Dong Kim: Europe has hedged for information.
Dong Kim: Financing expense related to the prepaid forward obligation to RTW investment is expected to be in the range of 21% to $26 million.
Dong Kim: Of which approximately 12 four to $13 3 million in cash.
Dong Kim: In addition to RTW financing expense in.
Dong Kim: Interest only payments on the $100 million.
Dong Kim: Tom loan facility with the funds managed by pharma couldn't advisors.
Dong Kim: We continue to be made quarterly and accrue at a rate of.
Dong Kim: Adjusted Tom software across seven point to two 5% in 2024.
Dong Kim: For further details on our financials. Please refer to our annual report on Form 10-K with the SEC.
Speaker Change: We are now ready to open the call for questions operator.
Speaker Change: As a reminder to ask a question at this time. Please press star one one on your Touchtone telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Yeah.
Speaker Change: Our first question will come from the line of Tara Bancroft with TD Cowen.
Tara Bancroft: Hi, good morning.
Tara Bancroft: Hoping you could tell us more about what you envision for how the early launch of one or two look like.
Tara Bancroft: I understand there could be overlap in practice across the two products with <unk>. So I was hoping to better understand how how youre thinking about commercial synergy and how you expect that to play out in the coming years wanted to launch it.
Speaker Change: Yeah, Hi, <unk>, thanks for the message and apologize for my voice I'm kind of overcoming that head cold right now.
Speaker Change: So.
Speaker Change: Then I'll turn it over to Jeff, but just say.
Jeffrey Bova: To your point lot lots of synergy here, but we also want to ensure.
Jeff BOVA: Early.
Significant uptake and so because of that we are adding resources, but Jack can you put more color around exactly what that's going to look like and I also want to.
Let everybody know that we have but Silvio pacheco as our vice president of market access join the call as well in case salary and many of my money more details around the wastage.
Speaker Change: Provision are the gross to net but Jeff why don't you.
Jeff: Answer the question.
Jack: Sure Hi, Kara.
Jeff: So I have said in the past, we look to expand one to two regions I feel comfortable now confirming we will expand our region and roughly go from 45 to 60 TBS. Two main drivers. There is obviously with 45 territories you have some significant geography.
Jeff: So we would increase the efficiency there with the with those TBM.
Jeff: The other is there are a lot of more physicians that really do specialized in bladder cancer.
Jeff: As opposed to the upper tract not a lot of urologists really do a significant number of upper tract quite contrary with bladder Lauder or there are more urologists specialize in bladder and we want to make sure that we increase and have a significant reach and frequency on those key targets.
Jeff: We've talked about the operational difference between 102 and Joe Mandato, We're obviously looking at how to deliver the product that talk to the fact that we may go out with just a mixed product, which will allow for additional convenience and then obviously.
Jeff: Obviously, the buy and bill portion of this <unk> on the call, but we will prepare for everything ready to get a permanent J code.
Jeff: Thereafter launch those three areas that I talked about earlier will be the areas, we will certainly focus position and message with.
Jeff: With the goal of obviously in growing and just really any patient that recurs.
Jeff: Be a candidate for UGI unwanted too.
Jeff: Okay.
Speaker Change: Okay. Thanks, so much.
Speaker Change: Our next question will come from the line of Leland <unk> with Oppenheimer.
Leland: Hi, Good morning, Thanks for taking my questions two from me first.
Leland: I guess for Jeff just wanted to ask a bit more on the <unk>.
Leland: 340, <unk> related discounting is that something which.
Leland: We would expect to see perhaps more of as we get through 'twenty, four and beyond encourage them, Idaho or is that kind of a one one time dynamic.
Leland: We do not have as much concerned about in terms of its impact on what may be your 'twenty guidance and if you could also share to what extent does as you all might have business exposed to <unk> and then I have a question from Mark. Thank you.
Thanks, Lew why don't I ask Silvio to have comment on the 340 B and.
Speaker Change: And what we saw last year and what we think will continue.
Silvio: Leland. Thanks for the question. So what I would say is similar to other companies the impact of 340, B as a macro event and as we all know that the.
Leland: The program the <unk> program continues to expand in the marketplace and continues to be.
Leland: The challenge for manufacturers.
Leland: At this point, we closely monitor what potentially the impact may be and we.
Leland: We'll certainly continue to see how we we.
Leland: We forecast for that in the future what I would like to say, though is as we start thinking about <unk> in one or two as Jeff mentioned, we anticipate that the adoption of <unk> will be primarily in the community space, a private practice and therefore will not have as much of an impact or be impacted as.
Leland: As much bye.
Leland: The 340 B program.
Speaker Change: And so just to answer his question I think.
Speaker Change: We feel like we don't expect it to continue to grow Leland significantly versus where we are.
Speaker Change: But I just want to make sure that that sort of obviously there may be some risk, but we.
Speaker Change: Our objective for the year.
Speaker Change: Little bit of erosion, but but very minor compared to compared to the past.
Speaker Change: As Sylvia said.
Speaker Change: Every every company probably in my view, it's the biggest challenge we have as an industry history for a discount.
Speaker Change: And but I think we're I think we're in a stable more stable position now over the last couple of years.
Speaker Change: Thanks Liz.
Elizabeth A. Barrett: That's all very helpful. And then Mark just wanted to ask you, obviously and it might be see highly recurrent disease.
Mark P. Schoenberg: Given given the level of the currency could be.
Pretty strong use of one or two as our pencils to premier option than.
<unk> I wanted to ask about risk of progression.
Mark P. Schoenberg: Low grade to high grade and even to <unk>, how does that.
Mark P. Schoenberg: Kind of play into urologists.
Mark P. Schoenberg: Sort of interests and productivity I guess in terms of.
Mark P. Schoenberg: Treating patients who have recurrent disease is there a sort of a time.
Mark P. Schoenberg: Factor.
Mark P. Schoenberg: As patients recur that there is a increased transit they will progress and therefore those patients should come in sooner.
Mark P. Schoenberg: For procedures, maybe mark if you could kind of share rose from a medical perspective, but the risk of progression beyond low guidance. Thank you.
Mark P. Schoenberg: Leland Thanks ensure it can interesting clinical questions.
Mark P. Schoenberg: <unk>.
Leland: What we know about this population intermediate risk patients.
Speaker Change: The arithmetic progression.
Speaker Change: Great.
Speaker Change: Or even to muscle invasive disease.
Speaker Change: <unk> low in our experienced progression of muscle invasion zero, so from our own clinical experience that uhm.
Speaker Change: Got it.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And the fact that in this population, which is carefully followed in any event. So the likelihood of progression muscle. This year in the near term scenario would be very very unlikely.
Speaker Change: Change in.
Speaker Change: Reserve.
Speaker Change: Got it.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: As you've heard us and others say on many occasions.
Speaker Change: Our experience and that of others is that this is a chronically relapses illness, which is why you June Q.
Speaker Change: Thanks, so much.
Speaker Change: Bruce issues under one.
Speaker Change: Two surgical resection every time they have a recurrence.
Speaker Change: Okay. Thanks, I think I got most of that little broken up on the connection but thank you for taking my questions.
Speaker Change: Thanks.
Speaker Change: Our next question will come from the line of Paul Choi with Goldman Sachs.
Paul Choi: Hi, Thanks, and good morning, Thank you for taking our questions.
Paul Choi: My first question is for Mark.
Paul Choi: I think there seems to be some persistent confusion in the market just with regard to follow up period for envision here and could you maybe just again clarify for us what the total follow up period will be.
Paul Choi: It's.
Mark P. Schoenberg: Three months for the installation period, followed by 12 months. If my understanding is correct. If you could just confirm that.
Paul Choi: Awesome.
Paul Choi: Okay.
Speaker Change: Thank you I hope you can hear me.
Speaker Change: You are absolutely correct.
Speaker Change: So when we say 12 months of follow up would mean 12 months after the initial load value accretion to Jim.
Speaker Change: <unk>.
Speaker Change: Which numbers.
Speaker Change: Three months.
Speaker Change: So it would be 15 months from the beginning of the study, but 12 months from the primary disease evaluation. So you are correct. Its 12 months after that initial three months old fault.
Speaker Change: Following the completion of here.
Speaker Change: Good question.
Speaker Change: So 15 months into the trial 12 months following CR.
Speaker Change: Great perfect. Thanks for clarifying the 15 months of total time.
Speaker Change: And then my second question is just for both maybe Liz and Don.
Speaker Change: Just with respect to the guidance on cash burn.
If we take the median of your midpoint of your revenue guidance and the midpoint of your Opex guidance, and we strip out the noncash items, including stock comp as well as the RTW financing expense, we get to a range of roughly 40% to $45 million in incremental cash burn versus 2023.
Speaker Change: And I was just wondering if you clarify how much of that.
Speaker Change: Two.
Speaker Change: The build out of your sales force that Jeff referenced earlier versus incremental R&D spend for EOG on 103, and 104 and just the timing of when that cash burn would potentially accelerated are we correct to assume that it will be primarily back end weighted towards the towards the end of 2024. Thanks. So much.
Speaker Change: So I'll, let Don give you details, but yes towards the euro.
Speaker Change: Right it will be more in the backend, but Don do you want to get more color around that.
Dong Kim: Thank you Paul so basically in the this $40 million increase in Opex you are correct.
Dong Kim: Yes.
Dong Kim: These points in like a 25% 30% of their 40 million that increase is actually one or two commercial products compete adult ethanol before we get the FDA approval, we cannot use this as a cost or arent also resulted in the user expense for inventory buildup and the other.
Dong Kim: Another person on 50% of this some incremental Opex is obviously the sales force to adult and brand marketing. So as you just mentioned that yes, it's more of a back end of the year, but it'll be incremental costs.
So when we see that the duration data the data right now is very compelling and I think that they that the FDA understands the unmet need out there that need to get these treatments out there so.
We believe we have a high probability of a priority review and that that's our expectation. So again, you can't say for sure because we won't know until we file and asked for a priority review, but we did get the rolling submission that we asked for we have we have started that as you know and so I think that we felt like we're in a good good position.
To do that.
Sure sure makes sense and then in terms of after approval what's your expected.
Ramp payer coverage for one or two and how should we think about that.
Yeah, Silvio Joris insurer joined US today, why don't you talk about the Payor.
102 perspective, I'm sure Matt. Thanks for the question so from a payer coverage perspective, I think there's a couple elements to consider one is the inclusion of one or two in the treatment guidelines with the national comprehensive cancer network.
And also the application of the J code.
The application for a J code happens on a quarterly basis and it is dependent on.
The FDA approval. So we will work expeditiously suggests.
The J code up and running and we will start engaging.
Payers in the next few months here provide.
Providing them with some preapproval information so they can become aware of Eugene on one or two in the clinical value proposition of each unit as well too.
Okay.
Can you just comment I mean, our expectation we have over 99% coverage on <unk>, we don't expect it to be different for Gucci and want them to we expect significant coverage out of the gate as you know about 70% of the population is Medicare.
And and that gets you know that gets cupboard, because if you get an FDA approval then Medicare covers it. So we don't really have an issue there and even with commercial initially well we won't have a problem and we don't we expect it to be pretty close to where we are which I might have which when I say over 99% coverage.
Yeah.
Speaker Change: Okay, great great. Thanks, and then just with <unk> 103, and 104, you said that you plan to start phase III development for both.
Speaker Change: But that it would be smaller and more focused studies can you can you give us a little bit more detail in terms of what the regulatory path looks like for both of those is it just one study needed for for each of them or how will it work do you think of it.
Speaker Change: Yeah, you know what we've.
Speaker Change: When we spoke to the FDA about it you know they they felt like they were.
Speaker Change: Different enough that we needed a clinical study and you know as we've said in the past we actually think that's good news because if we have to do it so well others right in that that's part of our strategy around any any other company trying to come in into our space. So we feel really good about that but what we have discussed with the FDA.
Super: And we will continue to align with them is that you know we need to show efficacy safety and efficacy and durability.
Super: But they they want to see results consistent but we don't have to have the same timeline. So.
Super: 102 study will be probably around 85 patient study.
Super: If you think about envision at 220 patients, where we ended up with 240 patients. We only have to do an 85 patient study and something smaller than that for Gucci and went up for the next generation <unk> formulation. So maybe in the 50 to 60 patient you know the fact that we're prioritizing.
Super: Jim one or two for obvious reasons from a start perspective, and and then the follow up as well so along as long as the you know the.
Speaker Change: <unk> results are consistent then the FDA is open to us filing.
Speaker Change: <unk> data, but I'm, just showing consistency and and so that's kind of where we are so our expectation at this point is that we would have approval for.
Speaker Change: For both of those and the 27 2027 time period. So we feel really good about kind of where we are and our ability to get those approved again get the J code proposed to them and doing appropriate switch to the new formulation before taking the old formulations off the market.
Speaker Change: Okay. That's really helpful. Thanks, Thanks, a lot.
Speaker Change: Okay.
Speaker Change: That concludes today's question and answer session I'd like to turn the call back to Liz Barrett for closing remarks.
Elizabeth A. Barrett: Yes, thanks, and thanks, everybody for joining I'm, you know I think everybody understands that this is a defining year for us.
Speaker Change: At your June we're excited about the prospects and about preparing for Eugene one or two while continuing to increase adoption of jump item. We're seeing a nice event, the nice data coming out of out of our registry and out of some investigator initiated.
Speaker Change: Areas. So you know thanks, we'll keep you guys posted on as we as things go along and I'm really always appreciate your interest in our company. Thank you operator, you can disconnect now.
Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Yeah.
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Speaker Change: Okay.
Speaker Change: [music].
Jeffrey Bova: Thank you.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: [music].
Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: No.
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: [music].
Speaker Change: Good day.
Speaker Change: Okay.
Right.
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Speaker Change: [music].
Mark P. Schoenberg: Yeah.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: Hi.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Yeah.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Okay.
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Mark P. Schoenberg: Thanks.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: No.
Mark P. Schoenberg: Yeah.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Thanks.
Mark P. Schoenberg: Okay.
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Mark P. Schoenberg: Okay.
Mark P. Schoenberg: Okay.
Mark P. Schoenberg: Thanks.
Mark P. Schoenberg: [music].
Mark P. Schoenberg: Sure.
Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your Speaker today, Vincent <unk> head of Investor Relations you may begin.
Thank you operator, good morning, everyone and welcome to European farmers full year of 2023 financial results and business update conference call.
Earlier. This morning, we issued a press release, providing an overview of our recent corporate highlights and financial results for the quarter and year ended December 31 2023.
The press release can be accessed on the investors portion of our website at investors <unk> Dot com.
Joining me on the call today are Liz Barrett, President and Chief Executive Officer, Dr. Mark Schoenberg, Chief Medical Officer, Jeff BOVA, Chief Commercial Officer, and Don Kim Chief Financial Officer.
During today's call, we will be making certain forward looking statements.
These may include statements regarding our ongoing commercialization activities related to gel mitel, our ongoing and planned clinical trials commercial and clinical milestones market and revenue projections and opportunities, our commercialization strategy and expectation as well as potential future commercialization activities for <unk>.
Again, one or two approved anticipated data regulatory filings and decisions, including <unk> 102, potentially receiving priority review UGI and one or two being transformative and the major growth driver for your agenda for future research and development efforts for <unk> 104, <unk> hundred one.
Our corporate goals in 2024 financial guidance among other things.
These forward looking statements are based on current information assumptions and expectations that are subject to change.
Ascription of potential risks can be found in our earnings press release, our 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 Liz.
Liz: Thanks, Vince and thank you to everyone. Joining us this morning, 2023, and with a very successful year for euro and yen laying the groundwork for progress and growth in the years ahead.
Liz: Phase III Atlas and envision trials evaluating our lead development candidate <unk> two both met their primary endpoint.
Liz: The data underscore the potential of <unk> could be a transformational product and to advance the standard of care and low grade intermediate risk non muscle invasive bladder cancer we.
Speaker Change: We have started the regulatory submission process and believe that if approved <unk> will be the major growth driver for our company we.
Speaker Change: We see a great opportunity to improve the lives of patients and create value for our stakeholders.
Speaker Change: Meanwhile, our existing commercial product <unk> continues to enjoy double digit growth and positive adoption trends.
Speaker Change: The current clinical development plan for <unk>, one or two was agreed with the FDA in a pre NDA meeting that was held in late 2023.
Speaker Change: The FDA confirmed that the current clinical development plan for Eugene 102, which includes evaluation of duration of complete response data at 12 months from the pivotal envision trial will support submission of an NDA for the treatment of low grade intermediate risk non muscle invasive bladder cancer.
Super: We announced in January this year that we had submitted the chemistry manufacturing and controls or CMC module of this application the.
Super: The objective of a rolling NDA is to facilitate early engagement with the agency and potentially allow for more efficient and timely review of the application.
Super: We plan to share the data on the duration of response endpoint from envision in June of this year.
Assuming the data is that the expected we will complete submission of the NDA late in the third quarter.
Super: If granted priority review, we anticipate approval and launch of <unk> in one or two as early as the first quarter of 2025.
Speaker Change: The commercial opportunity in low grade intermediate risk non muscle invasive bladder cancer is significant we estimate that approximately 82000 patients are eligible each year in the U S. So the overall market is around 10 times the size of the Urothelium carcinoma market that Yamato currently address it.
Speaker Change: This translates into a total market in excess of $3 billion and over a 1 billion dollar revenue opportunity for <unk> in one or two when using conservative assumptions.
Speaker Change: We also announced in January that we entered into a strategic license and supply agreement with Med Act to develop next generation novel <unk> based Archie gel formulations of <unk> and <unk> in one or two.
Speaker Change: Through this agreement we are combining our proprietary RT gel with med <unk> proprietary formulation of <unk>.
Elizabeth A. Barrett: Our next generation products are anticipated to provide advantages in terms of production manufacturing efficiency supply and product convenience.
Speaker Change: Importantly, the program could provide additional patent protection for our IOL fail Youll cancer franchise.
Speaker Change: <unk> has issued IP with protection expected to last until 2035.
Speaker Change: And your Gen has separate pending U S patent applications that if granted would provide protection until December of 'twenty 41.
Speaker Change: We will need to conduct clinical endpoint studies to support NDA for <unk>, three and for UGI and went out for our next generation formulation of <unk> <unk>.
Speaker Change: Importantly, this will be a smaller development program and we intend to move directly into phase III for both products beginning in 2024.
Speaker Change: Turning to <unk> revenue the product achieved sales of $23 5 million in Q4, and $82 7 million for the full year 2023 reflected in this number are some non patient cells.
Speaker Change: We have also seen an increase in gross to net deductions, but most importantly patient demand drivers remained strong with patient enrollment forms new patient starts and doses all achieving approximately 25% growth for the year.
Speaker Change: Jeff will provide additional details in a few minutes.
Speaker Change: As we look toward long term growth. It is critical that we maintain a strong balance sheet and the ability to expand our patient impact through lifecycle management and development of new medicines to treat <unk> and specialty cancers.
Speaker Change: We are pleased to announce our expanded partnership with Pharmacon advisors, providing us with additional funding of up to $100 million.
Speaker Change: As part of the agreement we are required to draw down on the first tranche of $25 million by September 30th with the option to draw up to an additional $75 million following <unk> approval if needed the.
Speaker Change: The benefits of this agreement are that we now have an additional source of capital with flexibility on the amount we utilized.
Speaker Change: We have enjoyed a productive and collaborative partnership with pharma kind of advisors and look forward to closely working with them in the future.
Speaker Change: With our current cash balance and approximately $25 million recently sourced from the ATM, we expect to have the capital to execute a comprehensive launch for Eugene and one or two if approved and funded new potential clinical studies.
Speaker Change: I'll now turn the call over to Mark Schoenberg, Chief Commercial Officer Mark.
Mark P. Schoenberg: Thank you Liz.
We had the opportunity to share the phase III was an ambition data with the physician community at the society of Urologic oncology annual meeting, which took place in November we were especially pleased that the suo selected the ambition data.
Speaker Change: One of only two late breaking trials that were designated for oral presentation at this meeting.
Speaker Change: Looking at the body of clinical data, we have generated Eugene on one or two has demonstrated consistency in the three month complete response rate across Atlas <unk>.
Speaker Change: <unk> as well as our prior phase <unk> Optima II study.
Speaker Change: The complete response rates observed in these three studies were 65%, 79% and 65% respectively.
Speaker Change: Moreover, Atlas data suggest UGI and one or two appears to be superior to surgery. Once we complete response has been achieved.
Speaker Change: You mean Atlas study, 80% of patients who received <unk> in one or two experienced the duration of response of 12 months compared to only 68% of those patients who had a <unk> alone.
Speaker Change: We believe that the ability of UGI and one or two to achieve complete response rates non surgically and to potentially extend disease free living will ultimately minimize the need for multiple surgeries in this patient population.
Speaker Change: Average age for diagnosis of bladder cancer was in the mid seventies. Many of these patients have comorbidities that highlight the need for non surgical treatment alternatives to the contemporary standard of care <unk>.
Speaker Change: You have here in one or two has the unique advantage of being easy to administer patients can be treated and their urologist office without the need of an or and all the disruption to daily life associated with surgery.
Speaker Change: Liz mentioned.
Speaker Change: Milestone in this program will be the secondary endpoint of 12 month duration of response data from envision different from the analyst day that envision consisted solely of recruit patients with it.
Speaker Change: Who received at least one <unk> if.
Speaker Change: If we look at the comparable subgroup of recurrent patients Atlas the 12 month duration of response of 66%. This.
Speaker Change: The phase <unk> Optima study projected a 12 month duration of response in the high Fifty's as.
Speaker Change: As we have consistently communicated we expect the envision data to show and duration of response of 12 months.
Speaker Change: 50% or higher and we believe this is clinically meaningful and will be an improvement over the current standard of care.
Speaker Change: Importantly, <unk>.
Speaker Change: <unk> interviews conducted during the envision trial patients overwhelmingly prefer Eugene and one or two and said they would recommend it to other patients highlighting the lack of disruption to daily life.
Speaker Change: 102 was less invasive less painful and less time consuming than the standard of care if.
Speaker Change: If approved <unk> 102 will be the first and only non surgical primary therapeutic to treat a subset of bladder cancer characterized by high recurrence rates and multiple surgeries.
Speaker Change: Beyond our lead programs, we continue to advance our immuno oncology candidate <unk> 301 into the clinic Eugene in 301 is comprised of an anti <unk> four antibody delivered using our proprietary <unk> technology. We are conducting a phase one clinical study to evaluate the safety tolerability and establish a recommended.
Mark P. Schoenberg: Phase two dose for <unk> 301, as monotherapy and in combination with other agents safety and Tolerability data for the monotherapy arm are expected in mid 2024. We have also initiated combination therapy arms evaluating <unk> 301, plus gemcitabine and <unk> 301, plus.
Mark P. Schoenberg: <unk> 201, our proprietary formulation of the nuclear mud a <unk> seven agonist and high grade <unk> patients. We believe we have a unique approach in this area and look forward to providing updates on this trial as it moves forward.
Mark P. Schoenberg: Finally, as Luis mentioned at the beginning of the call. We are pushing ahead with next generation formulations of our upper tract in bladder products were low grade you would feel youll cancers, we look forward to commencing phase III efforts for both drugs, new Gen, one or three for the bladder and Eugene on 104 for the upper tract soon and we will keep.
Jeffrey Bova: You posted as those clinical programs events and with that I will turn the call over to Jeff BOVA to provide a commercial update Jeff.
Jeffrey Bova: Thank you Mark Joe model sales as Liz mentioned were $23 5 million and $82 7 million for the fourth quarter and full year 2023, respectively.
Mark P. Schoenberg: <unk> remained strong in 2023, despite achieving our targeted unit sales the value of each unit was lower than anticipated primarily due to gross to net erosion driven by higher than forecasted 340, B Rebase and estimated Medicare refunds for discarded drug offset by non patient sales.
Mark P. Schoenberg: We are providing guidance for 2024 for the first time today and are forecasting full year, Joe might on net revenues to be in the range of $95 million to $102 million.
Speaker Change: While slightly lower than consensus. This reflects continued gross to net erosion, despite anticipated continuing double digit patient growth.
Mark P. Schoenberg: Don will provide additional detail on our guidance in a few minutes.
Mark P. Schoenberg: It is important to note that the CMS discarded drug provision will not impact <unk> in one or two as the bladder allows for installation without weeks.
Mark P. Schoenberg: Additionally, using in one or two will be less sensitive to $3 40, b since it will primarily be administered in the doctor's office.
As.
Mark P. Schoenberg: In past calls we've added regional operational managers, which held every facet of the business, particularly operational rules intended to focus on opening new accounts and preparing them for Joe <unk>.
Our data show the territories with the most sites of care are the most successful in this role is instrumental in growing sites of care.
There is a growing body of evidence from real World evidence studies that continues to strengthen and reinforce <unk> value proposition.
Mark P. Schoenberg: We have data from over three years in the market that reinforce and support the product's efficacy and safety in the real world setting.
Mark P. Schoenberg: I am pleased to report <unk> reviewing Joe might of real World evidence outcomes have been accepted at the upcoming <unk> meeting and.
Mark P. Schoenberg: And our registry will provide additional insight into outcomes with Joe <unk> use in the real world setting.
Mark P. Schoenberg: For UGI and 102, we are now executing our pre commercialization plan in preparation for prospective launch in early 2025.
Mark P. Schoenberg: This includes engaging with urologists and patient advocacy groups.
Mark P. Schoenberg: There is approximately 95% overlap in the prescriber base with Jo Mira, which allows us to leverage our existing commercial organization.
Mark P. Schoenberg: Our research tells US physicians are concerned with the high rate of recurrence and many other patients who often experience limited intervals between <unk> RBC.
Mark P. Schoenberg: They're seeking strategies to prolong or extending interval between recurrences as these patients don't get much of a break between the <unk> RBC.
Mark P. Schoenberg: The literature shows that complete response rates for surgery at three months or in the range of 40% to 70%.
Mark P. Schoenberg: Our understanding of bladder cancer is that the underlying pathology of this disease is not always visible to the surgeon nor.
Jeffrey Bova: Normal appearing sells in the bladder may contain genetic abnormalities that will give rise to disease recurrence.
Jeffrey Bova: <unk> 102 treats the disease in a way that permits us to not only treat the visible lesion, but also that background path.
Mark P. Schoenberg: And we believe that's why we achieve better long term disease control and longer disease free intervals than the current standard of care and our Atlas.
Jeffrey Bova: We are also considering the economics of how bladder cancers treated there is a misconception that surgeons generate a lot of income from to your RPT.
Jeffrey Bova: The reality is that while overall cost of the surgery are quite high surgeons are only paid a few hundred dollars per operation.
Jeffrey Bova: Given the potential for better outcomes with <unk> 102, we do not expect practice economics to be a barrier to adoption.
Based on our market research, we believe the fastest adoption for <unk> 102 would initially occur in three groups of patients.
Jeffrey Bova: They are patients who have had multiple recurrences, those who would be considered surgical failures.
Jeffrey Bova: Patients with early recurrence and finally patients who are ineligible or unwilling to undergo surgery.
Jeffrey Bova: We are confident that as physicians gain experience in these early groups <unk> 102 will quickly expand to all recurrent patients if approved.
Jeffrey Bova: We look forward to providing additional insight into our plans as the year progresses I.
Jeffrey Bova: I will now turn the call over to Don Kim to discuss our financials.
Dong Kim: Thank you Jeff revenues for the fourth quarter of 2023, or 23 5 million.
Dong Kim: Compared to $18 to $1 million in the comparable period in 2022.
Jeffrey Bova: Revenues for the full year ended December 31, 2023 were $82 7 million.
Jeffrey Bova: Compared to $64 to $4 million in 2022.
Jeffrey Bova: Cost of revenues for the fourth quarter, and full year, 2023, or $2 3 million and $9 4 million respectively.
Compared to $2 3 million and $7 million to $7 million, respectively for the fourth quarter and full year 2022.
Speaker Change: The overall increase of $1 $7 million year over year was primarily due to the increased volume of Gen <unk>.
Speaker Change: R&D expenses were $11 3 million and 45 6 million, respectively for the fourth quarter and full year 2023 <unk>.
Speaker Change: Compared with 14 point.
Speaker Change: $5 million.
Speaker Change: And $52 $9 million, respectively for the comparable periods in 2022.
Speaker Change: The decrease in R&D expenses year over year is primarily attributable to lower research and development expenses due to the conclusion of SLS trial year.
Speaker Change: Lower costs related to you took space, we envisioned prior for use in one or two and the ending of our collaboration with MD Anderson.
Speaker Change: Actually offset by higher R&D expenses related to our phase one study for <unk> hundred one.
Speaker Change: Cost incurred related to research into ingredient Taylor and production for use in when the tool and clinical compensation expenses.
Speaker Change: SG&A expenses were $24 6 million and $93 $3 million, respectively for the fourth quarter and full year 2023.
Speaker Change: With $21, six and $82 8 million for the fourth quarter and full year 2022.
Speaker Change: The increase year over year was the result of an increase in brand marketing and general commercial expenses.
Whereas increase in compensation expenses third party adviser to the providers recruiting fees certain media and meeting expenses and ongoing managed services.
Speaker Change: These were partially offset by lower commercial our back office services and support expenses.
Interest expense was $3 6 million and $14 7 million, respectively for the fourth quarter and full year of 2023, compared with $3 2 million and $8 4 million, respectively for the fourth quarter and full year 2020.
Cool.
Speaker Change: The cost for the full year of 2023 related to interest expense on the farmer corn loan for the for <unk>.
Dong Kim: Quarters versus the prior year, given the funding of the first tranche and the second tranche of the pharma Cologne was in March 2022, and in December 2022, respectively.
Dong Kim: There is some.
Dong Kim: The increase year over year was attributable to increases in interest rates related to the AMA alone.
Dong Kim: Net loss was $26 million or <unk> 72.
Dong Kim: Sure and $102 2 million or $3 55.
Dong Kim: Our share for the fourth quarter and full year 2023.
Dong Kim: This compares with a net losses of $28 9 million.
Dong Kim: Or $1.25 per share.
Dong Kim: And $109 8 million.
Dong Kim: Or $4 81 per share for the fourth quarter and full year 2022.
Dong Kim: Eurozone had 141 5 million in cash and cash equivalence and marketable securities at December 31, 2023.
Dong Kim: Based on our latest financial forecast, we believe our current cash position and resources and projected revenue we support our commercial organization through the potential launch of <unk> in early 2025.
Dong Kim: Switching now to 2020 for full year guidance.
Dong Kim: We anticipate full year 2020 full chair, Michael net revenues to be in the range of $95 million to $102 million.
Dong Kim: Full year operating expense is expected to be in the range of $175 million to $185 million.
Dong Kim: Including noncash share based compensation expense of $6 million to $11 million.
Dong Kim: Object to market conditions.
Dong Kim: We will continue to scrutinize all expenses in support of our efforts.
Dong Kim: Europe has hedged for the nation.
Dong Kim: Financing expense related to the prepaid forward obligation to RTW investment is expected to be in the range of 21% to $26 million.
Dong Kim: Of which approximately 12 four to $13 3 million in cash.
Dong Kim: In addition to RTW financing expense in.
Dong Kim: Interest only payments on the $100 million.
Dong Kim: Tom loan facility with funds managed by pharma couldn't advisors.
Dong Kim: <unk> continues to be made to quarterly and accrue at a rate of adjusted Tom software across seven point to two 5% in 2024.
For further details on our financials. Please refer to our annual report on Form 10-K with the SEC.
Speaker Change: We are now ready to open the call for questions operator.
Dong Kim: As a reminder to ask a question at this time. Please press star one one on your Touchtone telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Dong Kim: Please standby, while we compile the Q&A roster.
Dong Kim: Our first question will come from the line of Tara Bancroft with TD Cowen.
Tara A. Bancroft: Hi, Good morning, So I was hoping you could tell us more about what you envision for how the early launch of one or two look like.
Tara A. Bancroft: I understand there's significant overlap in practice across the two products with them I know them. So I was hoping to better understand how how youre thinking about commercial synergy and how you expect that to play out in the coming years wanted to launch it.
Speaker Change: Yeah, Hi, <unk>, thanks for the message and apologize for my voice I'm kind of overcoming that head cold right now.
Dong Kim: So I'm going to turn it over to Jeff, but just say.
Jeffrey Bova: To your point lot lots of synergy here, but we also want to ensure early cigna.
Jeffrey Bova: Significant uptake and so because of that we are adding resources, but Jack can you put more color around exactly what that's going to look like and I also want to.
Dong Kim: Let everybody know that we have but Silvio Pacheco, who is our vice president of market access join the call as well in case that were and many many more details around the wastage provision.
Dong Kim: Provision are the gross to net but Jeff why don't you.
Dong Kim: Answer the question.
Jeffrey Bova: Sure Hi, Tera, So I have said in the past, we look to expand one to two regions I feel comfortable now confirming we will expand our region and roughly go from 45% to 60 Tbms. Two main drivers. There is obviously with 45 territories you have some significant geography.
Dong Kim: So we would increase the efficiency there with the with those TBM.
Dong Kim: The other is there are a lot of more physicians that really do specialized in bladder cancer.
Dong Kim: As opposed to the upper tract not a lot of urologists really do a significant number of upper tract quite contrary with bladder Lauder there are more urologists specialize in bladder and we want to make sure that we increase and have a significant reach and frequency on those key targets.
Dong Kim: We've talked about the operational difference between one or two and Joe Idaho, We're obviously looking at how to deliver the product I've talked to the fact that we may go out with just the mix product, which will allow for additional convenience and then obviously.
Dong Kim: Obviously, the buy and bill portion of this <unk> on the call, but we will prepare for everything ready to get a permanent J code.
Dong Kim: Thereafter launch those three areas that I talked about earlier will be the areas, we will certainly focus position and message Don with the goal of obviously, we've been growing it just really any patient that recurs it would be a candidate for <unk>.
Dong Kim: Okay.
Speaker Change: Okay. Thanks, so much.
Dong Kim: Our next question will come from the line of Leland <unk> with Oppenheimer.
Leland: Hi, Good morning, Thanks for taking my questions two from me first.
Speaker Change: I guess for Jeff just wanted to ask a bit more on the.
Speaker Change: 340, <unk> related discounting is that something which we would expect to see perhaps more of as we got through 'twenty four and beyond encourage them, Idaho or is that kind of thing.
Speaker Change: One time dynamic.
Speaker Change: We do not have as much concerned about in terms of its impact on what may be your 24 guidance and if you could also share to what extent does as you all might have business.
Tara A. Bancroft: <unk> two <unk> and then other question. Thank.
Tara A. Bancroft: Thank you.
Tara A. Bancroft: Thanks, Lew why don't I ask Silvio to have comment on the 340 B and.
Speaker Change: And what we saw last year and what we think will continue.
Speaker Change: Yes. Thanks for the question. So what I would say is similar to other companies the impact of $3 40 would be as a macro event.
Speaker Change: We all know that the.
Speaker Change: The program. The <unk> program continues to expand in the marketplace and continues to be a.
Jeffrey Bova: The challenge for manufacturers.
Jeffrey Bova: At this point, we closely monitor what potentially the impact may be and we.
Jack: We will certainly continue to see how we we forecast for that in the future what I would like to say, though is as we start thinking about <unk> in one or two as Jeff mentioned, we anticipate that the adoption of <unk> two will be primarily in the community space, a private practice and therefore will not have as much.
Speaker Change: You have an impact or be impacted as.
Jeff: As much bye.
Jack: By the 340 B program.
And so just to answer his question I think.
Jeff: We feel like we don't expect it to continue to grow Leland significantly versus where we are.
Jeff: But I just want to make sure that that sort of obviously there may be some risk, but we.
Jeff: Our objective for the year.
Jeff: <unk> erosion, but but very minor compared to compared to the past though.
Jeff: As <unk> said.
Jeff: Every every company probably in my view, it's the biggest challenge we have as an industry is three <unk> discounts.
Jeff: But I think we're I think we're in a stable more stable position now over the last couple of years.
Speaker Change: Thanks, Thanks Lou.
Lou: That's all very helpful. And then Mark just wanted to ask you, obviously and it might be see highly recurrent disease.
Mark P. Schoenberg: Given given the level of the currency could be.
Speaker Change: Pretty strong user of one or two as a premier option than.
Mark P. Schoenberg: <unk> I wanted to ask about risk of progression.
Mark P. Schoenberg: Low grade to high grade and even to M. D C. How does that.
Jeff: Kind of play into urologists.
Jeff: Sort of interests and productivity I guess in terms of <unk>.
Jeff: Treating patients who have recurrent disease is there a sort of a time.
Jeff:
Jeff: Sector.
Speaker Change: As patients recur that there is a increased chance that they will progress and therefore those patients should come in sooner.
Leland: For procedures, maybe mark if you could kind of share us from a medical perspective, but the risk of progression beyond our guidance. Thank you.
Speaker Change: Leland Thanks ensure it's an interesting clinical questions.
Leland: <unk>.
Leland: What we know about this population of intermediate risk patients.
We have recently provided.
Leland: Great.
Leland: Or even the muscle invasive disease is exceedingly low and our experienced progression of muscle invasion zero, so from our own clinical experience in your region.
Speaker Change: That's not something we built into it.
Speaker Change: Okay.
Speaker Change: We expect that in this population, which is careful we followed in any event. So the likelihood of progression muscle invasion in the near term scenario would be very very unlikely.
Silvio Pacheco: Change in reserve.
Silvio: Okay.
Silvio: Vendor.
Silvio: Yes.
Silvio: As you've heard Liz and others say on many occasions.
Silvio: Our experience and that of others is that this is a chronically relapses illness, which is why you June Q.
So much.
Leland: Bruce issues under one.
Leland: Two surgical resection and every time they have a recurrence.
Speaker Change: Okay. Thanks, I think I got most of that little broken up on the connection but thank you for taking the questions.
Leland: Thanks.
Leland: Our next question will come from the line of Paul Choi with Goldman Sachs.
Paul Choi: Hi, Thanks, and good morning, Thank you for taking our questions.
Paul Choi: My first question is for Mark.
Paul Choi: I think there seems to be some persistent confusion in the market just with regard to follow up period for envision here and could you maybe just again clarify for us what the total follow up period will be.
Speaker Change: It's three months for the installation period, followed by 12 months. If my understanding is correct. If you could just confirm that for us.
Speaker Change: Awesome.
Speaker Change: Okay.
Speaker Change: I Hope you can hear me.
Speaker Change: You are absolutely correct.
Speaker Change: When we say 12 months of follow up would mean 12 months after the initial with value accretion to Jim.
Speaker Change: <unk>.
Which regions.
The reasons to begin trial. So it would be 15 months from the beginning of the study, but 12 months from the primary disease evaluation. So you are correct. Its 12 months after that initial three months old fault.
That's completely clear.
Elizabeth A. Barrett: Sure.
Mark P. Schoenberg: So 15 months into the trial 12 months following CR.
Speaker Change: Great perfect. Thanks, Thanks for clarifying the 15 months of total time.
Speaker Change: And then my second question is just for both maybe Liz and Dawn.
Speaker Change: With respect to the guidance on cash burn.
Speaker Change: If we take the median of your midpoint of your revenue guidance and the midpoint of your Opex guidance, and we strip out the noncash items, including stock comp as well as the RTW financing expense, we get to a range of roughly 40% to $45 million in incremental cash burn versus 2023.
Mark P. Schoenberg: And I was just wondering if you clarify how much of that.
Mark P. Schoenberg: Two.
Mark P. Schoenberg: The build out of your sales force that Jeff referenced earlier versus incremental R&D spend for EOG on 103, and 104 and just the timing of when that cash burn with potentially accelerated are we correct to assume that it will be primarily back end weighted towards the towards the end of 2024. Thanks. So much.
Speaker Change: So I'll, let Don give you details, but yes towards the you are.
Speaker Change: Right it will be more in the backend, but Don do you want to get more color around that.
Dong Kim: Thank you Paul.
Dong Kim: So basically this $40 million increase in Opex you are correct.
Speaker Change: Yes.
Speaker Change: These points in like a 25% 30% of their $40 million increase is actually one or two commercial products continued though before.
Speaker Change: Before we get the FDA approval, we cannot use this as a <unk>.
Speaker Change: Cost or orange wholesale results.
Speaker Change: This is Pat for inventory buildup and the other another approximately 50% of this incremental Opex is obviously, though the sales force to adult and brand marketing. So as you just mentioned that yes, it's more of a back end of the year, but the incremental cost.
Speaker Change: And there was just minor incremental in R&D because of the.
103 and four.
Speaker Change: Sure.
Trials, starting this year.
Speaker Change: Okay great.
Speaker Change: A lot of helpful detail. Thanks, so much for clarifying.
Speaker Change: Thanks, Paul.
Speaker Change: Our next question will come from the line of Matt Kaplan with Ladenburg Thalmann.
Matthew Lee Kaplan: Hey, good morning, guys. Thanks.
Speaker Change: Thanks for taking my questions I guess.
Paul Choi: Staying on 102 initially.
Paul Choi: What's your expected chance for the FDA toward a priority review to the once the final compete complete in September.
Speaker Change: Look you never know, Matt So we can't guarantee it but I think theres a lot of things going in our favor. One we had a priority review for <unk> I might add to assuming the data is consistent.
Speaker Change: When we see the.
Speaker Change: Duration data the data right now is very compelling and I think that they do.
Speaker Change: The FDA understands the unmet need out there and they need to get these treatments out there so.
Speaker Change: We believe we have a high probability of a priority review and that's our expectation. So again, you can't say for sure because we won't know until we file and asked for a priority review, but we did get that rolling submission that we asked for we have.
Speaker Change: We have started that as you know and so I think that we felt like were any good position to do that.
Sure sure makes sense and then in terms of.
Speaker Change: After approval, what's your expected.
Speaker Change: Ramp payer coverage for 102, and how should we think about that.
Speaker Change: Yeah. So we I was just curious insurer joined US today why don't you talk about.
Payer.
Speaker Change: 102 perspective, we're sure Matt. Thanks for the question so from a payer coverage perspective, I think there's a couple of elements to consider one is the inclusion of <unk> in the treatment guidelines.
Speaker Change: The national comprehensive cancer network.
And also the application of the J code. So the application for a J code happens on a quarterly basis and it is dependent on the FDA approval. So we will work.
Speaker Change: Additionally to get.
Speaker Change: The J code up and running and we will start engaging.
Speaker Change: Payers in the next few months here.
Speaker Change: Providing them with some preapproval information so they can become aware of Eugene on one or two in the clinical value proposition of <unk>.
Speaker Change: Wow.
Dong Kim: Okay.
Dong Kim: Yes.
Dong Kim: I mean, our expectation we have over 99% coverage on <unk>.
Dong Kim: Don't expect it to be different for Aegean went into we expect significant coverage out of the gate as you know about 70% of the population.
Dong Kim: Medicare.
Dong Kim: And.
Dong Kim: That gets that can cupboard, because if you get an FDA approval then Medicare covers it. So we don't really have an issue there and even with commercial initially.
Dong Kim: We won't have a problem and we don't expect it to be pretty close to where we are which I might have which when I say over 99% coverage.
Speaker Change: Okay, great great. Thanks, and then just with <unk> 103, and 104, you said that you plan to start phase III development for both but that it would be smaller.
Speaker Change: More focused studies can you can you give us a little bit more detail in terms of what the regulatory path looks like for both of those is it just one study needed for for each of them or how will it work do you think.
Speaker Change: Yeah.
Speaker Change: What we.
Speaker Change: When we spoke to the FDA about it they they felt like they were.
Speaker Change: Different enough that we needed a clinical study and as we said in the past we actually think that's good news because if we have to do it so well others right and that's part of our strategy around any.
Speaker Change: Any other company trying to come in into our space. So we feel really good about that but what we have discussed with the FDA and we will continue to align with them is that it.
Need to show efficacy safety and efficacy and durability.
Speaker Change: They want to see results.
Speaker Change: But we don't have to have the same timeline so.
Speaker Change: 102 study will be probably.
Speaker Change: <unk> 85 patients. So if you think about envision at 220 patients where we ended up with 240 patients. We only have to do an 85 patient study and something smaller than that for Aegean went up for the next generation.
Speaker Change: <unk> formulation, so maybe in the 50% to 60 patient.
Speaker Change: We're prioritizing Eugene one or two for obvious reasons from a start perspective and.
Speaker Change: And then the follow up as well so along as long as that.
Speaker Change: Results are consistent then the FDA is open to us filing.
Speaker Change: Less data, but just showing consistency and and so that's kind of where we are so our expectation at this point and that we would have approval.
For both of those.
Speaker Change: In the 27 2027 time period. So we felt really good about kind of kind of where we are and our ability to get those approved and get get the J code for both of them and doing the appropriate switch to the new formulation before taking the old formulations off the market.
Speaker Change: Okay. That's really helpful. Thanks, Thanks, a lot.
Speaker Change: That concludes today's question and answer session I would like to turn the call back to Liz Barrett for closing remarks, yes.
Elizabeth A. Barrett: Yes, thanks, and thanks, everybody for joining.
Elizabeth A. Barrett: I think everybody understands that this is a defining year for us.
At your Gen. We're excited about the prospects and about preparing for AGM, one or two while continuing to increase adoption of jump item. We're seeing a nice event, the nice data coming out of out of our registry and out of some investigator initiated.
Areas so.
Speaker Change: We will keep you guys posted as we as things go along and really always appreciate your interest in our company. Thank you operator, you can disconnect now.