UroGen Pharma - Q4 2023

Transcript

Operator (participant)

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the UroGen Pharma full-year 2023 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Vincent Perrone, Head of Investor Relations. You may begin.

Vincent Perrone (Head of Investor Relations)

Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's full-year 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.urogen.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 Jelmyto, 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 UGN-102, if approved. Anticipated data, regulatory filings and decisions, including UGN-102, potentially receiving priority review, UGN-102 being transformative and the major growth driver for UroGen, if approved. Future research and development efforts for UGN-103, UGN-104, and UGN-301, our corporate goals and 2024 financial guidance, among other things. These forward-looking statements are based on current information, assumptions and expectations that are subject to change. A description of potential risks can be found in our earnings press release and latest SEC disclosure documents. You are cautioned not to place undue reliance on these forward-looking statements, and UroGen disclaims any obligation to update these statements.

I'll now turn the call over to Liz. Liz?

Liz Barrett (CEO)

Thanks, Vincent, and thank you to everyone joining us this morning. 2023 was a very successful year for UroGen, laying the groundwork for progress and growth in the years ahead. Phase III ATLAS and ENVISION trials, evaluating our lead development candidate, UGN-102, both met their primary endpoints. The data underscore the potential of UGN-102 to be a transformational product and to advance the standard of care in low-grade, intermediate risk, non-muscle invasive bladder cancer. We have started the regulatory submission process and believe that, if approved, UGN-102 will be the major growth driver for our company. We see a great opportunity to improve the lives of patients and create value for our stakeholders. Meanwhile, our existing commercial product, Jelmyto, continues to enjoy double-digit growth and positive adoption trends.

The current clinical development plan for UGN-102 was agreed with the FDA in a pre-NDA meeting that was held in late 2023. The FDA confirmed that the current clinical development plan for UGN-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. We announced in January this year that we had submitted the Chemistry, Manufacturing and Controls, or CMC modules, of this application. 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. We plan to share the data on the duration of response endpoint from ENVISION in June of this year.

Assuming the data is as expected, we will complete submission of the NDA late in the third quarter. If granted priority review, we anticipate approval and launch of UGN-102 as early as the first quarter of 2025. The commercial opportunity in low-grade, intermediate risk non-muscle invasive bladder cancer is significant. We estimate that approximately 82,000 patients are eligible each year in the U.S., so the overall market is around 10 times the size of the urothelial carcinoma market that Jelmyto currently addresses. This translates into a total market in excess of $3 billion and over a $1 billion revenue opportunity for UGN-102 when using conservative assumptions. We also announced in January that we entered into a strategic license and supply agreement with medac to develop next-generation novel mitomycin-based RTGel formulations of Jelmyto and UGN-102.

Through this agreement, we are combining our proprietary RTGel with medac's proprietary formulation of mitomycin. Our next-generation products are anticipated to provide advantages in terms of production, manufacturing efficiency, supply, and product convenience. Importantly, the program could provide additional patent protection for our urothelial cancer franchise. medac has issued IP, with protection expected to last until 2035, and UroGen has separate pending U.S. patent applications that, if granted, could provide protection until December of 2041. We will need to conduct clinical endpoint studies to support NDAs for UGN-103 and for UGN-104, our next-generation formulation of Jelmyto. Importantly, this will be a smaller development program and we intend to move directly Phase III for both products beginning in 2024. Turning to Jelmyto 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 sales. 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. Jeff will provide additional details in a few minutes. 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 life cycle management and development of new medicines to treat urothelial and specialty cancers. We are pleased to announce our expanded partnership with Pharmakon Advisors, providing us with additional funding of up to $100 million.

As part of the agreement, we are required to draw down on the first tranche of $25 million by September 30, with the option to draw up to an additional $75 million following UGN-102 approval, if needed. The benefits of this agreement are that we now have an additional source of capital with flexibility on the amount we utilize. We have enjoyed a productive and collaborative partnership with Pharmakon Advisors and look forward to closely working with them in the future. 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 UGN-102, if approved, and fund new potential clinical studies. I will now turn the call over to Mark Schoenberg, our Chief Medical Officer. Mark?

Mark Schoenberg (CMO)

Thank you, Liz. We had the opportunity to share Phase III ATLAS and ENVISION 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 ENVISION data as one of only two late-breaking trials that were designated for oral presentation at this meeting. Looking at the body of clinical data we have generated, UGN-102 has demonstrated consistency in the three-month complete response rate across ATLAS, ENVISION, as well as our prior Phase IIb OPTIMA II study. The complete response rates observed in these three studies were 65%, 79%, and 65%, respectively. Moreover, ATLAS data suggest UGN-102 appears to be superior to surgery once a complete response has been achieved.

In the ATLAS study, 80% of patients who received UGN-102 experienced a duration of response of 12 months, compared to only 68% of those patients who had a TURBT alone. We believe that the ability of UGN-102 to achieve high complete response rates non-surgically and to potentially extend disease-free living will ultimately minimize the need for multiple surgeries in this patient population. The average age for diagnosis of bladder cancer is in the mid-70s. Many of these patients have comorbidities that highlight the need for non-surgical treatment alternatives to the contemporary standard of care, TURBT. UGN-102 has the unique advantage of being easy to administer. Patients can be treated in their urologist's office without the need of an OR and all the disruption to daily life associated with surgery.

As 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 ATLAS data, ENVISION consisted solely of recurrent patients that had received at least one TURBT. If we look at the comparable subgroup of recurrent patients in ATLAS, the 12-month duration of response is 66%. The Phase IIb OPTIMA study projected a 12-month duration of response in the high 50s. As we have consistently communicated, we expect the ENVISION data to show a duration of response at 12 months that is 50% or higher, and we believe this is clinically meaningful and will be an improvement over the current standard of care.

Importantly, in patient interviews conducted during the ENVISION trial, patients overwhelmingly preferred UGN-102 and said they would recommend it to other patients, highlighting the lack of disruption to daily life, and that UGN-102 was less invasive, less painful, and less time-consuming than the standard of care. If approved, UGN-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. Beyond our lead programs, we continue to advance our immuno-oncology candidate, UGN-301, into the clinic. UGN-301 is comprised of an anti-CTLA-4 antibody delivered using our proprietary RTGel technology. We are conducting a Phase I clinical study to evaluate the safety, tolerability, and establish a recommended Phase II dose for UGN-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 UGN-301 plus gemcitabine and UGN-301 plus UGN-201, our proprietary formulation of an imiquimod, a TLR7 agonist in high-grade NMIBC patients. We believe we have a unique approach in this area and look forward to providing updates on this trial as it moves forward. Finally, as Liz mentioned at the beginning of the call, we are pushing ahead with next-generation formulations of our upper tract and bladder products for low-grade urothelial cancers. We look forward to Phase III efforts for both drugs... UGN-103 for the bladder and UGN-104 for the upper tract soon, and we'll keep you posted as those clinical programs advance. With that, I will turn the call over to Jeff Bova to provide a commercial update. Jeff?

Jeff Bova (CCO)

Thank you, Mark. Jelmyto sales, as Liz mentioned, were $23.5 million and $82.7 million for the fourth quarter and full-year 2023, respectively. Demand 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 340B rebates and estimated Medicare refunds for discarded drug, offset by non-patient sales. We are providing guidance for 2024 for the first time today and are forecasting full-year Jelmyto net revenues to be in the range of $95 million-$102 million. While slightly lower than consensus, this reflects continued gross-to-net erosion, despite anticipated continuing double-digit patient growth. Don will provide additional detail on our guidance in a few minutes.

It is important to note that the CMS discarded drug provision will not impact UGN-102, as the bladder allows for instillation without waste. Additionally, UGN-102 will be less sensitive to 340B, since it will primarily be administered in the doctor's office. As mentioned in past calls, we've added regional operational managers, which help every facet of the business, particularly operational roles intended to focus on opening new accounts and preparing them for Jelmyto use. Our data show that territories with the most sites of care are the most successful, and 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 Jelmyto's value proposition. 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.

I am pleased to report three abstracts reviewing Jelmyto real-world evidence outcomes have been accepted at the upcoming AUA meeting, and our registry will provide additional insight into outcomes with Jelmyto use in the real-world setting. For UGN-102, we are now executing our pre-commercialization plan in preparation for prospective launch in early 2025. This includes engaging with urologists and patient advocacy groups. There is approximately 95% overlap in the prescriber base with Jelmyto, which allows us to leverage our existing commercial organization. Our research tells us physicians are concerned with the high rate of recurrence in many of their patients who often experience limited intervals between TURBTs. They're seeking strategies to prolong or extend the interval between recurrences, as these patients don't get much of a break between the TURBTs.

The literature shows that complete response rates for surgery at three months are in the range of 40%-70%. Our understanding of bladder cancer is that the underlying pathology of this disease is not always visible to the surgeon. Normal appearing cells in the bladder may contain genetic abnormalities that will give rise to disease recurrence. UGN-102 treats the disease in a way that permits us to not only treat the visible lesions, but also that background pathology. And we believe that's why we achieve better long-term disease control and longer disease-free intervals than the current standard of care in our ATLAS study. We are also considering the economics of how bladder cancer is treated. There's a misconception that surgeons generate a lot of income from TURBT.

The reality is that while overall costs of the surgery are quite high, surgeons are only paid a few hundred dollars per operation. Given the potential for better outcomes with UGN-102, we do not expect practice economics to be a barrier to adoption. Based on our market research, we believe the fastest adoption for UGN-102 would initially occur in three groups of patients. They are: patients who have had multiple recurrences, those who would be considered surgical failures, patients with early recurrence, and finally, patients who are ineligible or unwilling to undergo surgery. We are confident that as physicians gain experience in these early groups, UGN-102 will quickly expand to all recurrent patients if approved. We look forward to providing additional insight into our plans as the year progresses. I will now turn the call over to Don Kim to discuss our financials.

Don Kim (CFO)

Thank you, Jeff. Revenues for the fourth quarter of 2023 were $23.5 million, compared to $18.1 million in the comparable period in 2022. Revenues for the full-year ended December 31, 2023, were $82.7 million, compared to $64.4 million in 2022. Cost of revenues for the fourth quarter and full-year 2023 were $2.3 million and $9.4 million, respectively, compared to $2.3 million and $7.7 million, respectively, for the fourth quarter and full-year 2022. The overall increase of $1.7 million year-over-year was primarily due to the increased volume of Jelmyto sales.

R&D expenses were $11.3 million and $45.6 million, respectively, for the fourth quarter and full-year 2023, compared with $14.5 million and $52.9 million, respectively, for the comparable period in 2022. The decrease in R&D expenses year-over-year is primarily attributable to lower research and development expenses due to the conclusion of ATLAS trial, lower costs related Phase III ENVISION trial for UGN-102, and the ending of our collaboration with MD Anderson, partially offset by higher R&D expenses related to our Phase I study for UGN-301, costs incurred related to research into ingredient scale-up and production for UGN-102, and clinical compensation expenses. SG&A expenses were $24.6 million and $93.3 million, respectively, for the fourth quarter and full-year 2023, compared with $21.6 and $82.8 million for the fourth quarter and full-year 2022.

The increase year-over-year was a result of an increase in brand marketing and general commercial expenses, as well as increase in compensation expenses, third-party advisory providers, recruiting fees, certain media and meeting expenses, and ongoing managed services. These were partially offset by lower commercial back-office services and support expenses. 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 2022. The cost for the full-year 2023 relates to interest expense on the Pharmakon loan for the four full quarters versus the prior-year, given the funding of the first tranche and second tranche of the Pharmakon loan was in March 2022, and in December 2022, respectively. In addition, the increase year-over-year was attributable to increase in interest rates related to the Pharmakon loan.

Net loss was $26 million, or $0.72 per share, and $102.2 million, or $3.55 per share, for the fourth quarter and full-year 2023. This compares with the net losses of $28.9 million, or $1.25 per share, and $109.8 million, or $4.81 per share, for the fourth quarter and full-year 2022. UroGen had $141.5 million in cash and cash equivalents and marketable securities at December 31, 2023. Based on our latest financial forecast, we believe our current cash position and resources and projected revenue will support our commercial organization through the potential launch of UGN-102 in early 2025. Switching now to 2024 full-year guidance. We anticipate full-year 2024 Jelmyto net revenues to be in the range of $95-$102 million.

full-year operating expense is expected to be in the range of $175-$185 million, including non-cash share-based compensation expense of $6-$11 million, subject to market conditions. We'll continue to scrutinize all expenses in support of our efforts to prioritize cash preservation. Financing expense related to the prepaid forward obligation to RTW Investments is expected to be in the range of $21-$26 million, of which approximately $12.4-$13.3 million will be in cash. In addition to RTW financing expense, interest-only payments on the $100 million term loan facility with the funds managed by Pharmakon Advisors will continue to be made quarterly and accrue at a rate of adjusted Term SOFR +7.25% in 2024. For further details on our financials, please refer to our annual report on Form 10-K with the SEC. We are now ready to open the call for questions. Operator?

Operator (participant)

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, one again. Please stand by while we compile the Q&A roster. Our first question will come from the line of Tara Bancroft with TD Cowen.

Tara Bancroft (Director and Senior Analyst in Biotechnology Equity Research)

Hi, good morning. So I was hoping you could tell us more about what you envision for how the early launch of 102 can look like. You know, I understand there's significant overlap in practice across the two products with Jelmyto. So I was hoping to better understand how you're thinking about commercial synergy and how you expect that to play out in the coming years as 102 launches.

Liz Barrett (CEO)

Yep. Hi, Tara, it's Liz. Thanks for the message, and apologize for my voice. I'm kind of overcoming a really bad head cold right now. So, I'm gonna turn it over to Jeff, but just say, you know, to your point, lots of synergy here, but we also want to ensure early, significant uptake, and so because of that, we are adding resources. But Jeff, 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 Silvio Pacheco, our Vice President of Market Access, join the call as well, in case there were anyone wanted more details around the wastage provision or the gross-to-net. But Jeff, why don't you answer the question?

Jeff Bova (CCO)

Sure. Hi, Tara. So I have said in the past, we look to expand 1-2 regions. I feel comfortable now confirming we will expand a region and roughly go from 45-60 TBMs. Two main drivers there is obviously with 45 territories, you have some significant geography, so we would increase the efficiency there with those TBMs. And then the other is there are a lot of more physicians that really do specialize in bladder cancer. As opposed to upper tract, not a lot of urologists really do a significant number of upper tract, quite contrary with bladder. A lot of, there are more urologists that specialize in bladder, and we wanna make sure that we increase and have a significant reach and frequency on those key targets.

To me, you know, we talked about the operational difference between UGN-102 and Jelmyto. We're obviously looking at how to deliver the product. I've talked to the fact that we may go out with just a mixed product, which will allow for additional convenience. And then, obviously, the buy and bill portion of this, Silvio is on the call, but we'll prepare for everything ready to get a permanent J-code soon thereafter launch. Those three areas that I talked about earlier will be the areas we will certainly focus, position, and message on with the goal of obviously then growing into just really any patient that recurs would be a candidate for UGN-102.

Tara Bancroft (Director and Senior Analyst in Biotechnology Equity Research)

Okay, thanks so much.

Operator (participant)

Our next question will come from the line of Leland Gerschel with Oppenheimer.

Leland Gerschel (Managing Director and Senior Biopharma Analyst)

Hi, good morning. Thanks for taking my questions. Two from me. First, I guess, for Jeff, just wanted to ask a bit more on the 340B related discounting. Is that something which we would expect to see perhaps more of as we get through 2024 and beyond for Jelmyto? Or is that kind of a one-time dynamic that we do not have as much concern about in terms of its impact on what may be your 2024 guidance? And if you could also share to what extent is Jelmyto business exposed to 340B? And then I'll have a question for Mark. Thank you.

Jeff Bova (CCO)

Thanks, Leland. Why don't I ask Silvio to have comment on the 340B, and what we saw last year and what we think will continue?

Silvio Pacheco (VP of Market Access)

Leland, yeah, thanks for the question. So, you know, what I would say is similar to other companies, the impact of 340B is a macro event. As we all know that the program, the 340B program, continues to expand in the marketplace and continues to be, you know, a challenge for manufacturers. It is, you know, at this point, we closely monitor what potentially the impact may be, and we, you know, we'll certainly continue to see how we forecast for that in the future.

What I would like to say, though, is as we start thinking about UGN 102, as Jeff mentioned, we anticipate that the adoption of UGN 102 will be primarily in the community space of private practice, and therefore will not have as much of an impact or be impacted as much by the 340B program.

Liz Barrett (CEO)

And Silvio, just to answer his question, I think, we feel like we don't expect it to continue to grow, Leland, significantly versus where we are. But I, so I just wanna make sure that that's sort of. You know, obviously, there may be some risk, but, you know, we've projected for the year, you know, a little bit of erosion, but, but very minor compared to, compared to the past. So, you know, as, as Silvio said, it's, you know, every, every company, it's, it's probably, in my view, it's the biggest challenge we have as an industry, is 340B discounts. And, but I think we're, we're- I think we're in a stable posi- a more stable position now over the last, couple of years.

Leland Gerschel (Managing Director and Senior Biopharma Analyst)

Thanks. Thanks, Liz. That's all very helpful. And then, Mark, just wanted to ask, you know, obviously, NMIBC, highly recurrent disease, and, you know, given the level of recurrence, you know, could be pretty strong use of 102 as a friendlier option than TURBT. But wanted to ask about risk of progression from, you know, low grade to high grade and even to MIBC. How does that kind of play into urologists' sort of interest and proactivity, I guess, in terms of treating patients who have recurrent disease? Is there sort of a time factor as patients recur, that there's a increased chance that they will progress, and therefore, those patients should come in sooner for procedures?

Maybe Mark, if you could kind of share with us from a medical perspective what the risk of progression, you know, beyond low-grade, is? Thank you.

Mark Schoenberg (CMO)

Leland, thanks, and sure. It's an interesting clinical question. The, you know, what we know about this population, intermediate risk, low-grade patient, is that the fact that the risk of progression under the high-grade disease-

... or even the muscle invasive disease is exceedingly low. In our experience, progression to muscle invasion is zero. So from our own clinical experience at UroGen, that's not something we've observed. And if you look at the peer-reviewed literature, one would expect that in this population, which is carefully followed in any event. So the likelihood of progression to muscle invasion in a near-term scenario would be very, very unlikely. Change in grade has observed, again, it was a very narrow in this population. As you've heard, Liz and others say on many occasions, our experience and that of others is that this is a chronically relapsing illness, which is why UGN-102 makes so much sense for the group of patients who otherwise default to surgical resection every time they have a recurrence.

Leland Gerschel (Managing Director and Senior Biopharma Analyst)

Okay, thanks. I think I got most of that, a little, broken up on the connection, but thank you for taking the questions.

Mark Schoenberg (CMO)

Thanks.

Operator (participant)

Our next question will come from the line of Paul Choi with Goldman Sachs.

Paul Choi (Senior Equity Research Analyst)

Hi, thanks, and good morning. Thank you for taking our questions. My first question is for Mark. 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, you know, period will be? It's three months, you know, for the installation period, followed by 12 months, if my understanding is correct, if you could just confirm that for us.

Mark Schoenberg (CMO)

Paul, thank you. I hope you can hear me. You are absolutely correct. So, when we say 12 months of follow-up, we mean 12 months after the initial evaluation to demonstrate complete response, which was three months in 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. It's 12 months after that initial three-month follow-up to complete the therapy, that initial evaluation. So 15 months into the trial, 12 months following CR.

Paul Choi (Senior Equity Research Analyst)

Great, perfect. Thanks, thanks for clarifying the 15 months of total time. And then my second question is, just for both maybe Liz and Don, just with respect to the guidance and cash burn. If we take the midpoint of your revenue guidance and the midpoint of your OpEx guidance, and we strip out the non-cash items, including stock comp as well as the RTW financing expense, we get to a range of roughly, you know, $40 million-$45 million in incremental cash burn versus 2023.

I was just wondering if you could clarify, you know, how much of that is related to, you know, to the build-out of your sales force that Jeff referenced earlier, versus incremental R&D spend for UGN-103 and UGN-104, and just the timing of when that cash burn would potentially accelerate. Are we correct to assume that it'll be primarily back-end weighted towards the end of 2024? Thanks so much.

Liz Barrett (CEO)

So I'll let Don give you details, but yes, toward the... You're, you're all right. It will be more in the back end. But Don, do you want to give more color around that?

Don Kim (CFO)

Yeah, absolutely. So thank you, Paul. So basically, you know, this $40 million increase in OpEx, you are correct. And this big portion, like 25%-30% of the $40 million increase, is actually 102 commercial, the product build-up. Because, you know, before we get the FDA approval, we cannot use this as a, you know, cost or R&D cost. So we just, you know, use it as expense for inventory build-up. And the other, another portion, like 50% of this incremental OpEx is, you know, obviously the sales force build-up and brand marketing. So as you just mentioned, that yes, it's more at the back end of the year, but it will be incremental cost.

Liz Barrett (CEO)

And there's just minor incremental in R&D because of the 103 and 104, you know, trial starting this year.

Paul Choi (Senior Equity Research Analyst)

Okay, great. That's a lot of helpful detail. Thanks so much for clarifying.

Liz Barrett (CEO)

Thanks, Paul.

Operator (participant)

Our next question will come from the line of Matt Kaplan with Ladenburg Thalmann.

Matt Kaplan (Managing Director and Head of Healthcare Equity Research)

Hey, good morning, guys. Thanks for taking the questions. I guess just staying on 102 initially, what's your expected chance for the FDA to award a priority review once the filing is complete in September?

Liz Barrett (CEO)

Look, you never know, Matt, so we can't guarantee it. But I think there's a lot of things going in our favor. One, we had a priority review for Jelmyto. Two, assuming the data is consistent, you know, when we see the duration data, the data right now is very compelling. And I think that the FDA understands the unmet need out there and the need to get these treatments out there. So 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 ask for 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, we feel like we're in a good, good position to do that.

Matt Kaplan (Managing Director and Head of Healthcare Equity Research)

For sure. Makes sense. And then in terms of, after approval, what's your expected, ramp of payer coverage for 102, and how should we think about that?

Liz Barrett (CEO)

Yeah, Silvio, since you've joined us today, why don't you talk about the payer from a 102 perspective?

Silvio Pacheco (VP of Market Access)

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 102 in the treatment guidelines, with 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 expeditiously to get, you know, the J-code up and running, and we'll start engaging payers in the next few months here, providing them with some pre-approval information so they can become aware of UGN-102 and the clinical value proposition of UGN-102. Okay.

Liz Barrett (CEO)

But Sylvia, to just comment, we—I mean, our expectation, we have over 99% coverage on Jelmyto. We don't expect it to be different for UGN-102. We expect, you know, significant coverage out of the gates. As you know, about 70% of the population is Medicare, and, and, you know, that gets, you know, that gets covered because if you get an FDA approval, then, you know, Medicare covers it. So we don't really have an issue there. And even with commercial, initially, you know, we'll, we won't have a problem, and we expect it to be pretty close to where we are with Jelmyto, which when I say over 99%, you know, coverage.

Matt Kaplan (Managing Director and Head of Healthcare Equity Research)

Okay, great. Great, thanks. And then just with UGN-103 and 104, you stated that you plan to Phase III development for both, but that it would be smaller and more focused studies. 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 each of them or how will it work, do you think?

Liz Barrett (CEO)

You know, when we spoke to the FDA about it, you know, they, they felt like they were 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 will others, right? And that's, that's part of our strategy around any, you know, any other company trying to come into our space. So we feel really good about that. But what we have discussed with the FDA, and we'll continue to align with them, is that, you know, it needs to show efficacy, safety and efficacy and durability, but they, they wanna see results consistent, but we don't have to have the same timeline. So the 102 study will be probably around 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 UGN-104 for the next generation Jelmyto formulation, so maybe in the 50-60 patient, you know, perspective. We're prioritizing UGN-102 for obvious reasons from a start perspective, and then the follow-up as well. So along-

Silvio Pacheco (VP of Market Access)

Mm-hmm.

Liz Barrett (CEO)

... as long as the, you know, the results are consistent, then the FDA is open to us filing, you know, less data, but 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 both of those in the 2027 time period. So we feel really good about kind of, kind of where we are and our ability to get those approved, get the J-code for both of them, and do an appropriate switch to the new formulation before taking the old formulations off the market.

Matt Kaplan (Managing Director and Head of Healthcare Equity Research)

Okay, that's, that's really helpful. Thanks. Thanks, Liz.

Operator (participant)

That concludes today's question and answer session. I'd like to turn the call back to Liz Barrett for closing remarks.

Liz Barrett (CEO)

Yeah, thanks, and, thanks, everybody, for joining. You know, I think everybody understands that this is a defining year for us, at, at UroGen. We're excited about the prospects and about preparing for UGN-102 while continuing to, increase adoption of Jelmyto. And we're seeing nice events and nice data coming out of, out of our registry and out of some, investigator-initiated, areas. So you know, thanks. We'll 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.