UroGen Pharma(URGN) - 2020 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This part details the company's unaudited financial statements, management's analysis, and market risk disclosures Item 1. Financial Statements (Unaudited) Presents unaudited financial statements reflecting the initial commercialization of Jelmyto Condensed Consolidated Balance Sheets Total assets decreased to $139.9 million due to lower cash, while liabilities and equity also declined Condensed Consolidated Balance Sheets (in thousands) | | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $24,565 | $49,688 | | Marketable securities | $100,958 | $145,944 | | Accounts receivable | $2,810 | $— | | Inventory | $1,346 | $— | | Total current assets | $129,338 | $148,634 | | TOTAL ASSETS | $139,893 | $202,388 | | Liabilities and Shareholders' Equity | | | | Total current liabilities | $17,618 | $19,482 | | TOTAL LIABILITIES | $19,366 | $22,086 | | TOTAL SHAREHOLDERS' EQUITY | $120,527 | $180,302 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $139,893 | $202,388 | Condensed Consolidated Statements of Operations and Comprehensive Loss The company generated initial revenue of $3.5 million in Q3 but saw an increased net loss of $28.8 million Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | 2020 | 2019 | 2020 | 2019 | | Revenues | $3,461 | $— | $3,833 | $18 | | Gross profit | $3,152 | $— | $3,476 | $18 | | Research and development expenses | $10,211 | $9,481 | $34,905 | $29,203 | | Selling, general and administrative expenses | $22,065 | $13,972 | $68,056 | $40,454 | | Operating loss | ($29,124) | ($23,453) | ($99,485) | ($69,639) | | NET LOSS | ($28,816) | ($22,252) | ($97,958) | ($66,173) | | Net loss per ordinary share basic and diluted | ($1.31) | ($1.06) | ($4.52) | ($3.25) | Condensed Consolidated Statements of Cash Flows Net cash used in operations increased to $84.6 million, offset by cash from investing and financing activities Condensed Consolidated Statements of Cash Flow (in thousands) | | Nine Months Ended September 30, | | :--- | :--- | | | 2020 | 2019 | | Net cash used in operating activities | $(84,644) | $(45,017) | | Net cash provided by (used in) investing activities | $43,773 | $(154,889) | | Net cash provided by financing activities | $16,449 | $165,005 | | DECREASE IN CASH AND CASH EQUIVALENTS | $(24,422) | $(34,901) | Notes to Unaudited Condensed Consolidated Financial Statements Details key events including Jelmyto's FDA approval, an accumulated deficit, and financing activities - The FDA granted expedited approval for Jelmyto on April 15, 2020, for the treatment of adults with low-grade upper tract urothelial cancer (LG-UTUC)[22] - The company has experienced net losses since inception, with an accumulated deficit of $326.0 million as of September 30, 2020[25] - In January 2020, the company paid $6.6 million to the Israeli Innovation Authority (IIA) to unwind its obligations regarding past R&D grants[112] - In the second quarter of 2020, the company sold 700,000 ordinary shares under its ATM Sales Agreement, raising net proceeds of approximately $15.8 million[94] Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses the commercial launch of Jelmyto, pipeline progress, financial results, and liquidity position - On April 15, 2020, the FDA approved Jelmyto for adult patients with LG-UTUC, granting it new product exclusivity through April 2023 and Orphan Drug exclusivity through April 2027[121] - The commercial launch of Jelmyto in the U.S. began in June 2020, supported by a commercial team of 48 representatives[124] - Interim data from the Phase 2b OPTIMA II trial for UGN-102 showed a 65% complete response rate, and a Phase 3 study is expected to start by the end of 2020[128][129] Comparison of Results of Operations (in thousands) | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | 2020 | 2019 | 2020 | 2019 | | Revenues | $3,461 | $— | $3,833 | $18 | | R&D Expenses | $10,211 | $9,481 | $34,905 | $29,203 | | Selling & Marketing Expenses | $10,992 | $3,926 | $34,398 | $9,701 | | General & Admin Expenses | $11,073 | $10,046 | $33,658 | $30,753 | | Net Loss | $(28,816) | $(22,252) | $(97,958) | $(66,173) | - As of September 30, 2020, the company had $125.5 million in cash, cash equivalents, and marketable securities, which is deemed sufficient to fund operations for at least the next 12 months[178] Quantitative and Qualitative Disclosures About Market Risk Outlines primary market risks from interest rate fluctuations and foreign currency exchange - The company is exposed to interest rate risk on its portfolio of cash equivalents and marketable securities, which totaled $125.5 million as of September 30, 2020[189] - Significant foreign currency exchange risk exists due to operating expenses incurred in New Israeli Shekels (NIS), and the company does not currently engage in currency hedging[191][192] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2020 - The company's management concluded that disclosure controls and procedures were effective as of September 30, 2020[195] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[196] PART II. OTHER INFORMATION Covers legal proceedings, risk factors, and other required corporate disclosures Legal Proceedings The company is not currently party to any material legal proceedings - The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business[199] Risk Factors Outlines significant risks including dependence on Jelmyto, competition, and supply chain vulnerabilities - The company is highly dependent on the successful commercialization of its only approved product, Jelmyto, and has limited experience in marketing[201][204] - The business could be adversely affected by health pandemics, including the COVID-19 pandemic, which could disrupt trials, commercial launch, and the supply chain[201][297] - The company relies on third-party subcontractors and single-source suppliers for raw materials and manufacturing, posing supply chain risks[201][265] - The company has a limited operating history, a history of significant losses ($326.0 million accumulated deficit), and will require substantial additional financing[201][303] - Significant operations in Israel expose the company to risks from political, economic, and military instability in the region[201][427] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities for the period - None[446] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[446] Mine Safety Disclosures This item is not applicable to the company's business - None[447] Other Information The company reports no other information for this item - None[448] Exhibits Lists filed exhibits, including executive agreements and Sarbanes-Oxley certifications - Filed exhibits include a separation agreement with the former CFO and employment agreements with new executives[449] - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act are included as exhibits[449]