UroGen Pharma(URGN) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION For the quarter ended March 31, 2023, UroGen Pharma Ltd. reported total revenues of $17.2 million, a net loss of $30.2 million, and held cash, cash equivalents, and marketable securities of $75.2 million Item 1. Financial Statements (Unaudited) For the quarter ended March 31, 2023, UroGen Pharma Ltd. reported total revenues of $17.2 million, a net loss of $30.2 million, and held cash, cash equivalents, and marketable securities of $75.2 million - The company has experienced net losses since inception, with an accumulated deficit of $607.3 million as of March 31, 2023, raising substantial doubt about its ability to continue as a going concern without raising additional capital[24][25][26] Condensed Consolidated Balance Sheets As of March 31, 2023, total assets were $113.0 million, down from $135.6 million at year-end 2022, primarily due to a decrease in cash and marketable securities, leading to a total shareholders' deficit of $116.6 million Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $36,540 | $55,408 | | Total current assets | $95,973 | $128,907 | | Total Assets | $112,954 | $135,619 | | Total current liabilities | $25,234 | $23,916 | | Prepaid forward obligation | $101,912 | $98,923 | | Long-term debt | $97,941 | $97,537 | | Total Liabilities | $229,508 | $224,980 | | Accumulated deficit | ($607,317) | ($577,104) | | Total Shareholders' Deficit | ($116,554) | ($89,361) | Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended March 31, 2023, revenue increased to $17.2 million from $13.6 million in the prior-year period, resulting in a net loss of $30.2 million, or ($1.30) per share, compared to a net loss of $28.4 million, or ($1.25) per share, for the same period in 2022 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenue | $17,192 | $13,564 | | Gross Profit | $14,927 | $12,039 | | Research and development expenses | $12,498 | $12,696 | | Selling, general and administrative expenses | $24,474 | $21,300 | | Operating loss | ($22,045) | ($21,957) | | Net Loss | ($30,213) | ($28,392) | | Net loss per ordinary share | ($1.30) | ($1.25) | Condensed Consolidated Statements of Cash Flows In the first quarter of 2023, net cash used in operating activities was $25.8 million, net cash provided by investing activities was $6.3 million, and net cash provided by financing activities was $0.7 million, resulting in a net decrease in cash and cash equivalents of $18.9 million Cash Flow Summary (in thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($25,807) | ($23,996) | | Net cash provided by investing activities | $6,270 | $13,596 | | Net cash provided by financing activities | $671 | $70,742 | | Increase (Decrease) in Cash | ($18,866) | $60,342 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on developing and commercializing treatments for urothelial cancers using its proprietary RTGel technology, with revenue from Jelmyto increasing to $17.2 million in Q1 2023, but continues to incur significant losses, raising substantial doubt about its ability to continue as a going concern without securing additional financing - The company is developing innovative solutions for urothelial cancers using its proprietary RTGel reverse-thermal hydrogel technology, including the FDA-approved Jelmyto, UGN-102, and UGN-301[111] - The Phase 3 ENVISION trial for UGN-102 completed its target enrollment of 220 patients in December 2022, with an anticipated NDA submission in 2024 assuming positive findings[132] - The company believes its existing cash and projected revenues will only fund operations until mid-way through the first quarter of 2024, necessitating significant additional financing and raising substantial doubt about its ability to continue as a going concern[176][177] Results of Operations Comparing Q1 2023 to Q1 2022, revenue increased by $3.6 million due to higher Jelmyto sales volume, while operating expenses and interest expense also rose, contributing to an increased net loss Comparison of Operations for the three months ended March 31 (in thousands) | Account | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue | $17,192 | $13,564 | $3,628 | | Cost of revenue | $2,265 | $1,525 | $740 | | Research and development | $12,498 | $12,696 | ($198) | | Selling and marketing | $14,143 | $13,351 | $792 | | General and administrative | $10,331 | $7,949 | $2,382 | | Net loss | ($30,213) | ($28,392) | ($1,821) | Liquidity and Capital Resources As of March 31, 2023, the company had $75.2 million in cash, cash equivalents, and marketable securities, but with an accumulated deficit of $607.3 million and anticipated continued losses, management concluded there is substantial doubt about the company's ability to continue as a going concern without securing additional financing - The company has an at-the-market (ATM) sales agreement with Cowen with approximately $83.4 million remaining capacity as of March 31, 2023[172] - The company entered into a loan agreement with Pharmakon for a senior secured term loan of up to $100 million, fully funded as of December 2022, requiring interest-only payments for the first 48 months[174][81] - Net cash used in operating activities increased to $25.8 million in Q1 2023 from $24.0 million in Q1 2022, primarily due to financing costs and timing of accruals, partially offset by increased Jelmyto sales[190] Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks, including interest rate fluctuations on its investment portfolio, inflation affecting labor and clinical trial costs, and foreign currency exchange risk, particularly with New Israeli Shekels (NIS) operating expenses - The company's primary market risks are interest rate fluctuations on its $75.2 million in cash and marketable securities, and foreign currency exchange risk[193] - A significant portion of operating expenses are in New Israeli Shekels (NIS), creating exposure to adverse movements in the NIS/USD exchange rate, though a 10% change in Q1 2023 would not have had a material effect on operating expenses[196] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2023, concluding they were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective at a reasonable assurance level[199] - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[200] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any legal proceedings that management believes are likely to have a material adverse effect on its business - UroGen is not currently a party to any legal proceedings that, in the opinion of management, are likely to have a material adverse effect on the business[202] Item 1A. Risk Factors The company outlines numerous risks to its business, including substantial doubt about its ability to continue as a going concern due to the need for significant additional financing, high dependence on Jelmyto's commercial success, and risks in clinical development, manufacturing, competition, intellectual property, regulatory landscapes, and operations in Israel - Financial Risk: The company will require additional financing to fund operations and achieve its goals, as existing resources are only expected to be sufficient until mid-way through Q1 2024, raising substantial doubt about its ability to continue as a going concern[204][213][214] - Commercial Risk: The company is highly dependent on the successful commercialization of Jelmyto and faces significant competition, with market opportunities potentially smaller than anticipated and achieving broad physician adoption as a key challenge[204][229][244] - Development and Regulatory Risk: The company is dependent on the success of its pipeline, particularly UGN-102, as clinical drug development is a lengthy, expensive, and uncertain process, and earlier trial results may not predict future success[204][252][273] - Operational and Supply Chain Risk: The company relies on third-party, single-source suppliers for key raw materials and components, increasing the risk of supply disruptions that could impair development and commercialization[206][297] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None[503] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the period - None[503] Item 4. Mine Safety Disclosures This item is not applicable to the company - None[504] Item 5. Other Information There was no other information to report for the period - None[505] Item 6. Exhibits This section lists the exhibits filed with the quarterly report, including the Articles of Association, certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act, and Inline XBRL data files