All right, so welcome to this next fireside chat with UroGen Pharma. It is my great pleasure to welcome Liz Barrett, President and CEO, as well as Chris Degnan, Chief Financial Officer. Welcome. Thanks for joining us today.
Thanks. Thanks for having us.
Thanks, Michael.
Liz, UroGen is in a very important phase of a company's life cycle, completing the early stages of the ZUSDURI launch. You are expanding your pipeline. Why don't we start with just a big picture question, and how do you think UroGen is positioned heading into 2027?
Yeah. Great question. Obviously, happy to be here and sharing our story, and it has been a long storied past, getting to where we are today, but what an exciting time for us as a company, to your point. We launched our bladder cancer drug about a year ago, but got our permanent J-code the beginning of this year, so we really see this as our first year launch. It has just been an exciting time for us. It has been a great year in the launch of ZUSDURI. We have a smaller drug called JELMYTO that is on the market, so we have two commercial products. To your point, we also have a pipeline, and we are excited about where we are going, both as leaders in urothelial cancers, but also developing a long-term sustainable growth company.
We have settled on our strategic plan with our board, excited about the fact that we not only see great growth in the near term, but we also see a path to continued leadership and growth for the long term. That is what we are here to do. We are here to build a long-term sustainable growth company, both for patients, impacting patients, and for our shareholders to be able to see that we can continue to grow for the long haul. Again, exciting time for our company as we shift from a really a clinical stage to a commercial and clinical stage company. That is sort of how we are looking as we get into 2027 and beyond.
Yeah. Maybe a few questions on ZUSDURI. The permanent J-code has had a real impact on uptake and growth trajectory, early this year. As you stand today, and you just reported third quarter earnings, recently, maybe comment a bit about how ZUSDURI is being adopted, what types of patients are using the drug in the life cycle of a NMIBC patient, and what are the main drivers of additional growth?
Yeah, sure. I will ask Chris to start, and I will comment, add commentary.
Yeah. You mentioned the J-code. The J-code is certainly important here, and I think what is also important with ZUSDURI is we are the first FDA-approved product in the space, right? We are changing the treatment paradigm, where urologists for these patients and what they are dealing with in their intermediate risk space is multiple recurrences. Patients will come in, they will have a surgery, and then unfortunately, a lot of these patients will constantly recur. For us, it is, one, getting urologists to understand the value proposition that we have in terms of the clinical profile of the drug, but then also for them to understand how to change their practice in terms of getting them to use it from an operational workflow perspective, and then also confidence for them in terms of the reimbursement profile.
The good news for us is we have really strong reimbursement, with over 95% of covered lives having access to the drug. Urologists tend to be slower to adopt. They do not have a whole lot of familiarity with buy and bill, and for us, it is getting them to first try the product. What they are typically doing is they are trying it on one or two patients. They will see how it works from an operational perspective, they will make sure they have the reimbursement, and then they start to expand their adoption. We think about where we are for the launch. We have 6,500 core targets that we are focused on. We are still in the early stages of getting them first to try the product. Through September this year, we have over 650 physicians that have now tried ZUSDURI.
We are making good progress, but we are still early in terms of getting physicians to try the drug. The other thing that we are really focused on is how many of these physicians become adopters or repeat writers. Once they get confidence in the profile of the drug, once they get confidence that they are getting reimbursed as they would expect, starting then to treat multiple patients. We are also really pleased to see how many writers are becoming repeat writers. We are making good steady progress on both fronts.
What are you seeing so far on repeat usage? It seems like a lot of growth is driven by adding new prescribers to your funnel, but what are you seeing in terms of reusing and the same docs prescribing?
Yeah. Actually, I know you guys don't see this level of data, but the depth is what's been driving our revenue so far, and that is, you do have this group of champions and real adopters who have adopted it for the majority of their patients. It's your typical curve, right? You have those that are early adopters. They really buy into it. They say, "This is the way I'm going to treat my patients," and they adopt it for the majority of their patients. Then you have others on the other end that Chris was talking about that either haven't tried it yet or, "Oh, I'm going to try it on one patient and make sure that all of the things go right before I do." The good news is that the early adopters are driving depth.
Our revenue so far has come from a lot of these big adopters. As we go forward, we'll continue to do that, but we need to continue to get the breadth of users because as Chris said, we only have 660 out of the 6,000, so still a long way to go, there. Look, as we drive into 2027, not only are we engaging the patients, ensuring that physicians try the medicine, because 100% of the docs in our ATU that tried it said they will use it again. We have to make sure that they're helping them to identify these patients and really going from trialist to true adopters.
Right. In the third quarter, you reported $68 million sales on 35% growth. Can you comment on how much of that was driven by new prescriptions versus repeat use?
Yeah, you want to talk about that?
Yeah. I think it's both, and that's where we are in this stage of the launch, right? We talk about the fact, again, that we think, just given the urologists are a little bit slower to adopt, that we expect this to kind of be a steady growth trend over the launch of the drug. We think about this as a four- to five-year time to peak, as opposed to maybe a more accelerated growth curve that you would see in the oncology space, two to three years to peak. Part of that is just steadily adding, and I think you're seeing that in the KPIs, steadily adding new writers. We went from just over 450 unique prescribers through Q2 to over 650 in Q3.
We've done a nice job of continuing to add, but again, plenty more prescribers to add as we think about growth. But then also, as we think about how many of those writers were repeat writers, 45% of our prescriber base through Q2 were repeat writers. That's grown to 50%. We think importantly as we grow this brand over time, we need to continue to add breadth of writers and then continue to drive further depth of penetration within those writers.
Great. In terms of what you're hearing back in clinical practice right now, how many patients or docs complete all six instillations?
The majority, almost all of them do.
Okay. Any read on what real-world durability looks like relative to the study experience?
Still early, right, for durability, but I will tell you that we have seen and heard, and this is anecdotal information, but the ATU that we did, like I said, where 100% of the doctors said that they would use it again, I will say you have had doctors pleasantly surprised that even in these heavily pre-treated patients, they are seeing good responses, either complete responses or near-complete responses. That is actually what helps, right? They see that it is actually working, and that is making a big difference. So their real-world usage is mirroring what we showed in the clinical study.
Okay, great. Then in the past, you talked about this sort of $1 billion peak sales opportunity with a 20% market penetration.
Yeah.
Are you still confident in that estimate? I think you mentioned the four to five years to peak.
Yeah.
I guess what has to happen to get there?
Yeah, the four to five years is really since the J-code, right? Going back to January. We absolutely still believe in the billion-plus peak. As I said, when you think about it from a penetration perspective, we absolutely believe that there's an opportunity. Is there an opportunity to do better? Yes. We've talked about a billion-plus, and what we're trying to do is to help everybody understand that even though we are changing the way doctors practice medicine, we do think this is a better way to treat patients. As urologists start to adopt, we think that billion dollars. I think, frankly, our trend to date is already showing that, right?
Yeah. Then obviously, you guys were the first product.
Yes.
The first systemic product on the market for intermediate-risk NMIBC. There's obviously other people.
Yeah, sure.
working on products, enGene, CG Oncology, for example, have data readouts soon. How do you envision the landscape evolving longer term and the use case for ZUSDURI?
Yeah. Unfortunately, I've been around for a really long time, so I've spent the last 30 years in oncology. What sort of surprises me in the bladder cancer space is you hear it's highly competitive, it's highly competitive. Actually, it isn't. You look at lung cancer, look at prostate cancer, look at how many in kidney cancer drugs that there are. What you see when you have multiple entrants is a few things. One, it grows the market. I don't think you could show me an analog that shows that it doesn't grow the market when you have multiple players. The second thing is we're trying to get surgeons either to not do surgery in our case and use our drug instead, or to use drugs in addition to surgery.
Having multiple companies out there talking to physicians about changing the way they practice is actually going to help us all. I think one of my biggest frustrations is this idea of a zero-sum game. It's not a zero-sum game. We've talked about, like you said, our $1 billion. It's not a huge market share that you have to get to get to that billion-plus. There's plenty of room for multiple players in this space. Somebody coming in, I think, actually helps. I've said that, been saying that for the last couple of years, actually grows the market, and you see more and more physicians change the way they practice. I'm excited about the fact, frankly, that there's more drugs coming in. I'm also happy for patients because unfortunately, none of these are cures.
Patients, while we are getting great durability with our drug, others coming in, you are going to cycle through multiple therapies. That is what happens in other cancers as well, right? You cycle through therapies, and that is a good thing for patients. We believe that ZUSDURI and UGN-103 has a very compelling value proposition, even in comparison to the competition. We are the only ones that are non-surgical. We are the only ones that we have an approval, and frankly, no one else is coming for a while. So we are still the only ones out there for quite a way in the future. But when they do, we are the only ones that offer a non-surgical option. So when you look at our data, 80% complete response rate, 80% of those patients still in response at a year, and 36 months, we still have not reached the median.
When you think about that type of data, and you are treating a patient for six weeks, and they are done. No surgery, six weeks. So the idea of being able to offer a patient not only recurrence-free living, but treatment-free living. Everybody else coming into this space, the low-grade space, you are treating them for a longer period of time. By the way, you are doing surgery first. So when you think about even the efficacy that you are seeing as they share their data, remember that it is in addition to surgery, whereas ours is just us alone.
One thing I have heard from investors is, oh, if one of those products is being used in the adjuvant setting, including new patients upfront.
Right.
Does that reduce the flow through?
Does it shrink the pie for the market, essentially?
Yeah. Look, I call that cross-line reduction. It's like when you use it in first line, so newly diagnosed, it doesn't impact it for a really long time. I think what everybody needs to remember is there are 400,000 people living in the U.S. with low-grade bladder cancer. In any given year, about 15% of them will recur, and that's where we get our patient population. Anybody who gets used in the newly diagnosed space, you'd have to have 100% penetration in newly diagnosed for many years for that number to go down, because you're taking these 60,000 out of a 400,000-person prevalent pool. As they move from this newly diagnosed into the prevalent pool, you still have that. So it doesn't impact it.
Mark Schoenberg is our Chief Medical Officer, he's here, and what he'll tell you, and we've seen it as well, is not everybody who's newly diagnosed, the current standard of care is just surgery, right? Particularly for low grade, most of doctors will say, "Look, I'm going to do the surgery. I'll see how it goes. If they recur, then I'll use." You only have about 20% who do more than just surgery in the initial. That may grow, right, as others come in in the newly diagnosed space, but it's not going to impact the number of patients available to us in the recurrent setting. You'd have to do 10- 20 years for that to start to happen.
Right. Okay, super helpful. All right, then had a question on UGN-103, which is your next-gen product candidate, and just remind us how that will be used to manage the life cycle of ZUSDURI and how you will transition patients to the product.
Yeah, you want to talk about that?
Yeah. UGN-103 offers a couple of operational and then also manufacturing enhancements. It's a more soluble product. It's a different excipient. Our product needs to be mixed with our gel, so it allows the hospitals that buy the drug to be able to mix it more efficiently. The other thing is once it's been mixed, it's more stable. Right now, once it's been mixed, for community practices, we mix it for them and then ship it just in time. They have to instill within seven days. With the new product, it'll be several weeks shelf life once reconstituted, so it'll give the community practices some more operational flexibility. Also, the other important part is just as we think about supply efficiency and capacity, it can be manufactured much more quickly.
We can lyophilize this drug product in three days versus currently our formulation takes about three weeks. That will have some slight COGS benefit, but more importantly, just supply flexibility and efficiency. Those are some big components there. The other piece is 103 does have additional intellectual property associated with it. Both ZUSDURI and 103 have a newly issued method of use patent that goes all the way out to July of 2044. 103 also has a composition of matter for the proprietary mitomycin that goes to mid-2035, and it also has a separate patent with our RTGel that goes all the way through 2041. So, good strong protection around 103.
For all the operational enhancements we talked about as well as the IP, we're now taking 103 beyond intermediate risk, and we're, like we talk about it, but now moving that into a high-risk papillary study later this year.
Yeah, that's a good segue to my next question. Talk about that high-risk papillary opportunity and also the competitive landscape and how it might fit in.
Yeah. I have the same sort of perspective as when we talk about the multiple players in the low-grade space. High grade is obviously more critical for patients. These patients, unfortunately, a lot of them used to lose their bladder, because you had to take the bladder out to ensure that they did not progress to muscle invasion. With new therapies coming in, that allows these patients to have therapy and continue to keep their bladder intact, and that's very important, you can imagine, for the elderly patient, but even for younger patients to have to go through life without their bladder. It's a very important and critical time. We believe that there's an opportunity. There's about 20,000 patients in the papillary-only area. Again, as I mentioned before, because none of these are cures, they will cycle through multiple medicines.
I think that the data we have shown in IR and data that has been shown in the high-grade space with using traditional chemotherapies shows that they do work in this patient. That gives us high confidence, along with J&J's INLEXZO, also a very similar approach. We chose mitomycin, they chose gemcitabine. But the idea of being able to have this longer dwell time for a high-grade patient. We believe that there's a lot of room in that space for multiple therapies, and we also have not only UGN-103 in that space, and we will study it not just in papillary, but we look to study it across all the type of patients in high grade, because we believe that it will work in that space as well. We are excited about expanding beyond.
We talk about the $1 billion in IR, then you have to add the opportunity, which is a similar opportunity, frankly, in the high-grade space. That adds to our long-term growth strategy and positioning of UGN-103/ZUSDURI, right, where we are now. Again, think it's a great thing for patients. Physicians are excited about seeing multiple therapies, and we see an opportunity not only for UGN-103 in that space, but also for UGN-501, which is our own next-generation oncolytic virus that we just announced we dosed our first patient in our phase I study. So excited about that as well.
Yeah, that's another good segue just on 501.
Yeah.
Yeah, maybe talk about the mechanism here, how valid is that, and what are the opportunities that you could pursue?
Yeah. When we purchased the UGN-501 from IconOVir, it's important to note that IconOVir had been studying it systemically in other tumors, not in bladder cancer, but they had done some preclinical work in bladder cancer, so we understood that it worked. What's interesting about UGN-501 is it has a dual mechanism. It has direct tumor lysis, so it kills tumors directly and elicits an immune response. You kind of get this one-two punch, and that's differentiated versus other oncolytic viruses that are out there. We believe that will be better, more potent. We have to prove that and demonstrate that out in clinical trials, which is what we've done. In addition to that, we're studying it in our gel.
The reason we're doing that is the same reason when we use it with our current drugs, is the ability to have them dwell longer, so kill more of the tumor cells and elicit more of a response, we believe can be a very positive thing. Because it's being delivered locally, you don't see the same systemic side effects that you see if you delivered it from a systemic standpoint. Lastly, I'll just say with UGN-501, it also gives our company a bridge outside of bladder cancer, because we know it works in other cancers. Some oncolytic viruses don't work across multiple cancers, but we know that this one does because of the work that IconOVir did. We're looking at doing an intratumorally in other cancers, so bridge our company outside of just being in urothelial cancers, also to other specialty cancers.
Okay. Very interesting. Then maybe just a commercial question. JELMYTO had a little bit of a weak quarter in the third. What happened then? What is going on in the market for JELMYTO, and how could that return back to growth?
Yeah, I will let Chris talk about where we are now, and then we will talk a little bit about our plan to bring that back to growth.
Yeah, just in the quarter, a couple dynamics. So one, we did have a one-off unexpected gross to net adjustment that we had in the quarter. CMS has a discarded drug provision, and JELMYTO, there is some waste is associated with the administration of that drug. We got an invoice that went all the way back to 2024, unexpected, that basically created a $1.5 million one-time charge that put some pressure in the quarter. The other thing we are seeing in the space, we talked about how big the bladder cancer opportunity is. JELMYTO is a smaller rare disease indication, right? I mean, you are talking about 6,000 patients in the U.S. And interestingly, there is a lot of recent competitive interest in this space in terms of new trials that have begun enrolling specifically in the U.S. in UTUC.
Beyond just our 104 program, which is the next-gen formulation of JELMYTO, and we are enrolling patients and expect to complete enrollment in either this quarter or early next, there are other companies that are also enrolling a lot of trials. When you are talking about a rare disease indication and these patients enrolling in a trial versus using JELMYTO, that has certainly put some additional pressure on our revenue profile.
Yeah, if you think about it, just from our UGN-104 study, where we're enrolling about 50% of our patients in the U.S., it's a hit of about $3.5 million-$4 million for the year against JELMYTO. That was a decision. We knew that that was a risk, but frankly, for the longer term, it was the right decision. So, if you just took just our own clinical study and then the $1.5 million, you're getting closer to where we had guided in the beginning of the year for JELMYTO. We believe that there's still that opportunity. What are we doing to ensure that we return back to growth is we're putting together what we call a strike team for JELMYTO. Because look, it is very similar to most drugs out there, promotionally sensitive.
We made the decision to prioritize ZUSDURI, and we still think that was the right decision. You can see just by what we've been able to deliver in ZUSDURI this year. We entered the year, the analyst consensus, it was $140 million, as I said, and we've hit $147 million in the three quarters with ZUSDURI. I think we've over-delivered in that area, but we lost some focus on JELMYTO. What we really have learned is you really do need some specific focus for JELMYTO, and so we're putting together a 15-person, what we're calling, again, strike team that's only going to be focused on JELMYTO. We'll hopefully in 2027 see that.
We'll continue to have some pressure from clinical studies, but hopefully continue to see that growth because 104 will be fully enrolled no later than the beginning of 2027, so we won't have that direct pressure.
Okay, great. Last question. With your OpEx guidance as it stands, how confident are you could potentially reach profitability without raising additional capital?
Yeah, so we are right on the cost. If you looked, our net loss was $1.5 million in Q3, and with the expected continued growth of ZUSDURI, as well as in Q3, we also had some one-time costs, for example, the $5 million PDUFA fee that we had for the 103 NDA filing. We expect to be profitable in the fourth quarter of this year, and importantly, we also expect to be cash flow positive in the fourth quarter of this year. So we have the resources we need to and through profitability.
Great. Well, that's a good time to wrap up. Liz, really appreciate the time today.
Of course. Thank you. Thanks. Appreciate it.
Thank you.
Appreciate it.