URGN - NASDAQ

Hello and welcome to UroGen Pharma First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Vincent Perrone. You may begin.

Thank you, operator. Good morning, everyone, and welcome to UroGen Pharma's first quarter 2025 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 ended March 31st, 2025. 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; David Lin, Chief Commercial Officer; and Chris Degnan, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These may include statements regarding our ongoing pre-commercialization activities related to UGN-102, regulatory meetings and decisions, our commercialization strategy and expectations, as well as potential future commercialization activities for UGN-102 if approved, market and revenue opportunities, commercialization activities related to JELMYTO, our ongoing and planned clinical trials, commercial and clinical milestones, UGN-102 being the primary growth driver for UroGen, future R&D efforts and our goals and 2025 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 Barrett, Chief Executive Officer. Liz?

Thank you, Vincent, and thank you all for joining us this morning. The new drug application for our lead development stage candidate, UGN-102 is now in the final stages of FDA review with a PDUFA target date of June 13th. We designed UGN-102 as a novel and innovative treatment for patients with low-grade intermediate risk non-muscle invasive bladder cancer. We believe UGN-102 has the potential to change the treatment paradigm and meaningfully improve the standard-of-care in this patient population. If approved, UGN-102 will be the primary growth driver for our company and alongside JELMYTO could solidify our leadership in the urothelial cancer space, advancing our mission to bring innovative patient- centered solutions to urologic cancers. We have been informed by the FDA that an Oncologic Drugs Advisory Committee or ODAC meeting has been scheduled for UGN-102 on May 21st. This is consistent with our expectations and we look forward to the opportunity to showcase the strength and consistency of our clinical data to the members of the panel and the public. We have been preparing for the ODAC meeting and believe we are well prepared to present a clear compelling and scientifically robust case, supporting the approval of UGN-102. In parallel, our regulatory team continues to engage regularly with the agency and has been responding to their information request. To-date, we've encountered no resource or policy-related issues that concern us. The UGN-102 NDA is supported by a robust development program demonstrating meaningful complete response rate, durable responses and an acceptable safety profile across three late stage clinical trials. In March, we reported updated data from the pivotal ENVISION trial, demonstrating that 80.6% of patients who achieved a CR at three months remained in response at 18 months per Kaplan-Meier estimate. It's important to highlight that these robust results are with UGN-102 alone and not following a transurethral resection of bladder tumor. Additionally, there are six weekly installations, then patients are treatment-free until recurrence. As Mark will highlight, these results, along with a broader update on UGN-102 and JELMYTO were shared with the urology community at this year's AUA meeting, underscoring our clinical leadership and commitment to advancing innovation in uro-oncology. With the PDUFA date goal approximately one month away, our commercial team has been actively preparing for the potential launch of UGN-102. This launch would mark a pivotal moment in UroGen's evolution from a rare disease-focused company to a scaled multi-product team positioned to serve a significantly broader patient population. We're expanding our commercial footprint accordingly with plans to grow our sales force from approximately 50 reps today to over 80 at launch. Our medical affairs and market access teams are also deeply engaged in pre-launch planning. We are targeting commercial readiness by June and we will be ready to promote immediately following approval with product availability in July. UGN-102 represents a transformative growth opportunity for UroGen. We estimate an addressable population of approximately 60,000 patients annually with recurrent low-grade intermediate-risk non-muscle invasive bladder cancer, translating to a market opportunity of over $5 billion. This is nearly 10 times larger than the JELMYTO market. Critically, this market is highly accessible. Unlike the more fragmented UTUC setting, NMIBC patients are widely distributed and primarily managed by community urologists across the country. UGN-102 is well aligned with current clinical workflows. It's easy to administer, does not require specialized equipment and can be delivered by a nurse with minimal additional training. We believe these advantages position UGN-102 to become a foundational therapy in the management of low-grade intermediate-risk non-muscle invasive bladder cancer and a significant driver of long-term value creation for UroGen. Turning to JELMYTO, we reported $20.3 million in first quarter sales, an 8% year-over-year growth compared to the first quarter of 2024, driven by underlying demand growth of 12%. We continue to advance our pipeline across multiple fronts, including our next-generation programs for JELMYTO and UGN-102 as well as our emerging immuno-oncology initiatives. In February, we acquired product candidate ICVB-1042, a next-generation investigational oncolytic virus from IconOVir, which we have assigned an internal code name of UGN-501. This is an important step in expanding our presence in immune-based therapies for urologic cancers. In parallel, we also have multiple strategic research collaborations in place aimed at leveraging our proprietary RTGel technology to enhance the delivery and effectiveness of various existing drugs. UroGen is executing with focus and discipline. We remain committed to transforming the treatment landscape in uro-oncology and are supported by a strong balance sheet with just over $200 million in cash, cash equivalents and marketable securities as of March 31st. We are investing in innovation with purpose, driven by the opportunity to make a meaningful impact on patients while delivering value to our shareholders. I will turn the call over to Mark Schoenberg, who will provide a clinical update. Mark?

Thank you, Liz. I would like to echo what Liz shared regarding the strength of the clinical data supporting UGN-102. We've assembled a compelling and comprehensive clinical package that we believe demonstrates both the safety and efficacy of UGN-102. This gives us a high level of confidence as we approach the upcoming ODAC meeting and the PDUFA target date. This year's AUA was an important event for UroGen. It provided a valuable platform to present the latest data on UGN-102 and JELMYTO with the broader urologic community. We were proud of the six abstracts accepted, reflecting the growing body of evidence behind our programs and the continued momentum of our clinical efforts. The highlight was the updated 18 month duration of response data from the Phase 3 ENVISION trial, which as you know is the pivotal trial that is the foundation of our NDA for UGN-102. The data were featured in a podium presentation by Dr. Sandip Prasad, the principal investigator on the study. We are highly encouraged by the continued durability of response observed in the Phase 3 ENVISION trial. Among patients who achieved a complete response, the duration of response to 18 months remains strong at 80.6% by Kaplan-Meier estimate. Median follow-up time has now extended to 18.7 months post three months CR, up from 13.8 months at the previous data cut and the median duration of response has still not been reached. For reference, the 12 month duration of response was previously reported at 82.5%. These results continue to reinforce the potential of UGN-102 to offer a durable non-surgical treatment approach for patients with recurrent low-grade intermediate-risk NMIBC. We also presented a poster featuring patient reported outcomes from the three late stage UGN-102 studies, OPTIMA II, ATLAS and ENVISION. These assessments use the EORTC 24 item quality of life questionnaire specific to NMIBC to evaluate the symptom burden and overall health status and function. The findings were consistent across trials, showing the treatment with UGN-102 did not negatively impact symptom burden, patient function or quality of life, an important consideration for a novel therapy intended for use in routine clinical practice. At the AUA, we also shared data from the Phase 1 dose escalation study of UGN-301, our investigational anti-CTLA4 antibody delivered via RTGel. These results were previously presented at SUO in late 2024 and continue to support a favorable safety profile for UGN-301, both as monotherapy and in combination with UGN-201, our TLR7 agonist and with gemcitabine. We observe clinical responses in both the monotherapy and combination arms with follow-up on the combination arms ongoing to evaluate durability of response. We expect to share updated data from this program later this year. At that point, we anticipate being in a position to make a go-no-go decision on whether to advance UGN-301 into Phase 2 development. Our next-generation candidates are actively advancing through development. Enrollment is ongoing in the Phase 3 UTOPIA trial, which is evaluating UGN-103 in patients with recurrent low-grade intermediate-risk NMIBC. UTOPIA is a single-arm multicenter study modeled on the ENVISION trial. Efficacy will be measured by complete response of three months following treatment with follow-up focused on assessing durability. Enrollment is progressing ahead of plan and we expect to complete enrollment by the middle of this year with topline data anticipated in 2026. We are taking a similar approach with UGN-104, our next-generation formulation of JELMYTO and expect to commence the single-arm Phase 3 study by midyear this year. Now over to David Lin for a commercial update.

Thank you, Mark. Our organization is now fully engaged in the final stages of pre-launch activities for UGN-102. The goal is to deliver a seamless and impactful launch that will ensure timely access for patients as soon as possible following approval. Our team is highly energized and we have the necessary experience, resources and talent to drive adoption. Our clinical data supports our conviction that UGN-102 can be a transformative product that will change the standard-of-care in recurrent low-grade intermediate-risk non-muscle invasive bladder cancer. There are three ongoing activities that I want to highlight. First, our medical affairs team is leading an educational effort, engaging directly with urologists to highlight the unmet need in recurrent low-grade intermediate-risk NMIBC and ensure strong awareness of the clinical evidence supporting UGN-102. Second, we are scaling the organization to capture the larger opportunity in low-grade intermediate-risk non-muscle invasive bladder cancer. This includes expanding our sales force from approximately 50 reps today to over 80 at launch. We are also building out the rest of the commercial infrastructure, including a robust patient support and distribution network. Third, we are executing a focused payer engagement strategy. Our market access and medical affairs teams are actively engaging with payers and formulary decision makers to communicate the clinical data supporting UGN-102. We recognize that timely access can make a meaningful difference for patients and our goal is to ensure coverage decisions are aligned closely with approval to support rapid adoption. If approved, UGN-102 will launch with a temporary miscellaneous J-code and we anticipate securing a permanent product-specific J-code by January 2026, which will be particularly important for broad adoption in the community setting. In the first six months to nine months, our strategy is to focus on a defined group of urologists who have demonstrated a willingness to adopt new therapies during the miscellaneous J-code period. We are also working to identify affiliate sites of care for these physicians to help facilitate access and to support product administration. Our experience with JELMYTO along with recent customer insights tells us that many providers prefer to initiate use of new therapies in the hospital outpatient setting where pharmacy budgets are often managed as separate cost centers. During this initial phase, our goal is to establish a strong foundation for UGN-102 adoption, positioning us for broader expansion once the permanent J-code is in place. As we enter the final phase of pre-launch execution, we do so with a confidence and momentum. The interest from the healthcare community in UGN-102 has been very encouraging and we are implementing a robust strategy to support its introduction. Now turning to JELMYTO. First quarter sales were $20.3 million with demand continuing to grow at a double-digit pace. We remain focused on high-frequency engagement with our top performing accounts. As we scale our commercial organization in preparation for the anticipated launch of UGN-102, our expanded sales force will also support continued promotion of JELMYTO. This integrated effort will allow us to deliver broader utilization across both products while maximizing the impact of our commercial infrastructure. I will now turn the call over to Chris Degnan to review our financial results.

Thank you, David. JELMYTO net product revenues were $20.3 million and $18.8 million for the three months ended March 31st, 2025 and 2024 respectively. Year-over-year revenue growth of 8% was driven by underlying demand growth of 12% partially offset by higher 340B chargebacks. The gross-to-net rate for JELMYTO has stabilized in recent quarters and we expect resulting headwinds on year-over-year growth to be less impactful going forward. R&D expenses for the first quarter of 2025 were $19.9 million, including non-cash share-based compensation expense of $0.6 million as compared to $15.5 million, including non-cash share-based compensation expense of $0.5 million for the same period in 2024. The year-over-year increase in R&D expenses was primarily driven by the equity consideration issued to IconOVir for the acquisition of UGN-501, which was expense in the quarter, higher manufacturing costs, and costs associated with the Phase 3 UTOPIA trial for UGN-103, partially offset by lower clinical trial costs and regulatory expenses in connection with UGN-102. Selling, general and administrative expenses for the first quarter of 2025 were $35 million, including non-cash share-based compensation expense of $2.5 million. This compares to $27.3 million, including non-cash share-based compensation expense of $2.2 million for the same period in 2024. The year-over-year increase was primarily a result of UGN-102 commercial preparation activities. We reported non-cash financing expense related to the prepaid forward obligation to RTW investments of $4.6 million in the first quarter of 2025 compared to $5.7 million in the same period in 2024. Interest expense related to the $125 million term-loan facility with funds managed by Pharmakon Advisors was $4.1 million in the first quarter of 2025 compared to $2.4 million in the same period in 2024. The increase was primarily driven by interest expense related to the $25 million third tranche of the loan that was funded in September 2024. Net loss was $43.8 million or $0.92 per basic and diluted share in the first quarter of 2025 compared with a net loss of $32.3 million or $0.87 per basic and diluted share in the same period in 2024. As of March 31st, 2025, cash, cash equivalents and marketable securities totaled $200.4 million. Turning now to guidance. We last provided financial guidance with our year end 2024 results in March and that guidance remains unchanged. We continue to expect full year 2025 net product revenues from JELMYTO to be in the range of $94 million to $98 million and this implies a year-over-year growth rate of approximately 8% to 12% over the $87.4 million in demand driven JELMYTO sales in 2024, which excludes the $3 million in CREATES Act sales reported in 2024. Guidance on full year 2025 operating expenses is also unchanged and is expected to be in the range of $215 million to $225 million, including non-cash share-based compensation expense of $11 million to $14 million. We're now ready to open the call for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Tara Bancroft with TD Cowen. Your line is open.

Hi. Good morning and thanks for taking the questions. So I was hoping that in light of today's events, can you possibly give us the breakdown of Medicare and Medicaid exposure that you anticipate for UGN-102 and currently for JELMYTO? And really how you think pricing dynamics could play out? Thanks so much.

Yes. Hi, Tara. It's Liz, and I'll ask David to comment on that in a moment when -- thinking about the percent of our business. But keep in mind that we are only a US focused company, so we don't have any issues from a best price perspective, favored nation perspective outside. So we don't have any risk associated with that. But David can you just talk about the Medicare.

Yes. Hi, Tara. It's David. We anticipate that the Medicare population will comprise about 70% of our business, very consistent with the overall patient demographic in low-grade intermediate-risk NMIBC. And as we think about a launch, our principal priority will also be to drive reimbursement confidence with the providers who treat these patients. Thanks very much for the question. Appreciate it.

Yes, thank you.

Please standby for our next question. Our next question comes from the line of Kelsey Goodwin with Guggenheim. Your line is open.

Oh, hey, good morning. Thanks for taking my question. Congrats on getting one step closer to this exciting approval. In terms of preparing for the ODAC, I guess, how are you preparing and where do you expect the most pushback from the panel and what do you think are your strongest arguments there? Thank you.

Yes. Hi, Kelsey, it's Liz. Thanks for the question. We have been preparing for quite a few months, frankly since last fall. We have had our mock ODAC panels. We've had several now. We've had them with a distinguished guest that with our medical oncologists that have been on ODAC that statisticians. So what we've tried to do is really have a situation where we are, it's just like if we were at the ODAC. So a lot of the members have been ODAC members in the past, some have even been leaders of the ODAC. So we felt like we've really put ourselves through the paces and we will continue to do so up until the day of the ODAC. I'm going to give my perspective and then I'm going to turn it over to Mark and ask him to comment as well. So my perspective is that the biggest question is around the fact that ENVISION is a single-arm study, it's the basis for an approval, for our approval and how did the results, how do you compare those results, how do you put them in context? So in other words, it sounds great, right? Your 80% sounds great and your 80% it sounds great, but I don't have anything to compare it to. And unfortunately with the exception of our own study ATLAS and we can talk about sort of the challenges with ATLAS, but except for our own study ATLAS there hasn't been a lot of peer reviewed studies or data published in this specific patient population, the low-grade intermediate-risk non-muscle invasive bladder cancer. So it's really about putting it in context and how do you take a single-arm study and put the data in context. Having said that we obviously feel really good about it. And I can tell you that in our mock ODACs we've gotten a positive vote. That's where it comes down to and we are not dealing with people who are being easy on us trust me. And we give our presentation, we give an FDA presentation, we give them a briefing book. So again we try to simulate an ODAC meeting and ultimately in those situations we have come out with a positive vote. But Mark do you -- will you comment one -- the second part of Kelsey's question, which is why we feel good about where we are and what our arguments are and any other comments you have around you think potential challenges?

Sure. Thanks, Liz. The agreements we've got for starters and actually this came out of extensive conversations with the FDA in preparation for this meeting are the fact that as everybody listening, probably remembers, we are working in a recurrent population. So the population we're treating and talking about in this meeting are patients who've already had surgery and who have recurred. So the agency identified this as the greatest unmet medical need and we completely agree. These are patients who have failed the standard-of-care and then they received treatment, primary treatment, as Liz said, with UGN-102 and achieve an 80% complete response rate profile and 18 months later have an over 80% durability of that complete response. These are from a clinical perspective remarkable result. I think one of our strongest arguments is that we have great results in a population of patients who didn't do well with the standard-of-care. So that's number one. And I think our experience with the mock panels, as Liz has pointed out, has been favorable precisely because of the encouraging safety profile and the sort of remarkable results of the ENVISION trial and the support of data from ATLAS and OPTIMA. So I think Liz has articulated where we think the conversation is going to the, the importance of the -- how to interpret the single-arm trial. We have done, we've scoured the literature and we've got all the supporting data you can possibly have for the single-arm trial, the meaningfulness of ATLAS, the safety profile and then the unmet medical need and how to articulate that. And we believe those are going to be the areas of conversation. And as Liz pointed out, we have been preparing for months to answer those questions.

One thing I'll just add as well is we have two very strong KOLs that are joining us. They're part of our presentation. They'll be giving a presentation and they'll be also answering some of the questions. They have a lot of credibility. They're well known, again lot of credibility. So when the questions do get asked and they are the ones who are standing up answering it, it's very helpful for us. And so I'm really, really pleased with the two KOLs that are joining us for our presentation during the ODAC.

Great. Thank you so much for all the color and we're looking forward to watching it. Good luck.

Yes. Thanks, Kelsey.

Please standby for our next question. Our next question comes from the line of Leland Gershell with Oppenheimer. Your line is open.

Hey, good morning. Thanks for taking my questions. Two from us. First, just wanted to ask, in the FDA review process, we are about a month away from the PDUFA date. Just wondering, given the AdCom is still pending, just wanted to ask if you could share any color on your recent interactions. Presumably you've had your late cycle meeting. Have you had the chance to discuss proposed labeling? I just wanted to ask if you're able to share any details there. And then the second question, I guess for Mark or David. When I choose position to become, as you say a foundational therapy in low-grade intermediate-risk, at the same time urologist adoption may begin with a certain type of patient profile. Just wondering what you see as kind of that most likely patient profile for urologists to start using 102 out of the 60,000 patients what fraction might that be? Thank you.

Sure. So thanks, Leland, for the question. I would say we feel really good about kind of where we are with the FDA. We've had continuous interactions with them. All them asking questions. That's right. You can tell from where we are and the questions that they are asking where they are in the review. And so we have no concerns about the PDUFA date. And we don't want to get into a very specific conversation about our conversations with the FDA. But suffice it to say that it's very clear that they are at the end of their review, right? And we are in a position and we'll be in a really good position post ODAC for that to move very quickly. So again no concerns there. I think that as far as I think the conversation we had the mid cycle review around the label and switching it to the recurrent patient population has really made things, really simplify things, both from our presentation as well as any of the labeling or discussions with the FDA. And so I think that has helped a tremendous amount. We did not have a late cycle meeting and we're not going to have a late cycle meeting. So when we met with them, and I don't know if you recall, the mid cycle review meeting was really later than it was supposed to be. There hasn't been a need for a late cycle meeting and they informed us at that time that there would not be a late cycle review. So we won't have that. I'm going to ask David to talk to you about the populations in which we expect will be the kind of low hanging fruit in the first patients that physicians will use this on. So David?

Thanks, Liz, and thanks, Leland, for the question. Coming out of the gates, first I'll just share, we've done extensive market research with physicians and suffice it to say, they are really pleased with the clinical data we've shared on UGN-102. They find it very compelling and they see a need for it in their practices because of the multiple recurrences that their patients experience. Coming out of the gates, there's really three segments that we've teased out in talking to physicians. First, it's those patients who have multiple recurrences. As you know, 70% of the patients have multiple recurrences. The second group are patients who are early recurs. And then finally there is a small set of patients that are just not able to have surgery for one reason or the other. It could be because of polypharmacy or they can't handle anesthesia. But those are the primary patient populations that we think are very, very ripe for uptake when we launch UGN-102. Importantly though, one of the things around UGN-102 is that it fits into the workflow of the urologist office. So we're very pleased that with minimal training we can help onboard UGN-102 into practice and make it a seamless experience. Appreciate the question.

Okay. Thanks.

Thank you. Please standby for our next question. Our next question comes from the line of Raghuram Selvaraju with H.C. Wainwright. Your line is open.

Thanks so much for taking my questions. Just on furtherance of what has already been asked on this call regarding the ODAC meeting. I was wondering if you could comment on two aspects in particular. Firstly, to what extent there has been communication regarding the purpose of the ODAC that pertains specifically to the lack of specific precedent for products being approved in low-grade intermediate-risk NMIBC? If you expect that to be a meaningful topic of discussion at the ODAC meeting with regard to UGN-102? And then secondly to what extent do you expect the precedent case of JELMYTO to aid and facilitate the discussion around UGN-102 to effectively put the committee in a position to be familiar with how UGN-102 works, what its benefit level is and effectively facilitate potentially direction towards a favorable panel vote because of this precedent example that utilizes the same active ingredient and the same fundamental principle of delivery? Thank you.

Yes. Great, great points, Ram. And Mark why don't you comment and then I'll add some color as well.

Yes, sure. Thanks for the insightful comments. With respect to the first question, I think it's implicit in your observation that this is a sort of therapy that we're presenting to the agency that the FDA would like a public conversation about what the meaningfulness of this approach to this disease would be in the setting of an expert panel. So we've always thought that was part of the reason for the ODAC that the FDA has promised us for a very long time would be the case in the approval process for UGN-102 because it is a different way of treating patients because it is a primary therapy because it does treats with an option that does not involve surgery, we think a robust discussion about that is going to take place within the context of what Liz was referring to earlier namely the implementation trial. That said, we believe we have ample data to support the meaningfulness of the clinical outcome we've observed in our trials as well as the benefit to patients of having an option. It is interesting to remember that this would be the only urologic cancer to my knowledge where patients really don't have a choice of therapies, they only have one therapy. So UGN-102 would present this population with the type of option that many patients with urologic cancers have in other settings, whether they'd be prostate or kidney cancer or more advanced forms of bladder cancer. So we think we can address that and we think that is going to be a part of the conversation overall. And then sorry the second question is?

It was around the precedent case of JELMYTO.

Oh, I'm sorry, yes. And so we actually do as part of our presentation, we actually remind or acquaint to the committee with JELMYTO and its history and the fact that it has informative with respect to thinking about upper tract disease. So we have in fact put forward a segment of our presentation to specifically familiarize the advisory committee with JELMYTO and its history and the similarities with respect to approaching active ingredient to reassure them that this is in fact a follow-on conceptually to what we've already had approved by the FDA, but Liz may want to comment as well.

Yes. No, I think that's great. I think the only other comment I'll make is one of the reasons we want to do that is because the ODAC panel will be made up mostly of medical oncologists, right? So they will have ad-hoc members, urologists, but because medical oncologists are not familiar with either this disease or our treatments, we felt like it was important, and Mark put that into the presentation. So but great, great questions because those are exactly why we are actually going to the ODAC and exactly the right questions to ask. So thank you, Ram.

Just one quick follow-up if I may. Can you give us an update on the current status of the UGN-103 clinical development program and when you expect to report the next material update on the progress of that trial? Thank you.

Yes. We're almost fully enrolled and so we'll be able to share that soon. So as soon as over the next couple of months, as soon as we're finished enrollment we'll be able to provide. The fact that we've finished enrollment will be by the end of the summer and then we'll go from there as far as the timing for the CR, all patients at CR and then all patients in durability. So those would be the next steps. You'll start to see data in '26.

Thank you.

Please standby for our next question. Our next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Hi. Thank you and good morning, everyone. I had a question about how maybe you're thinking about the market for 102 here. David provided some nice color on the population size and opportunity as well as expected greater patient population in the community setting. But I was just curious given the trend you're seeing with 340B utilization for JELMYTO. Is that something structural you also expect for the 102 market? Just some color there would be helpful and just thinking about hospital pharmacy pricing. And then my second question is for Mark just in terms of your earlier comments on thinking about advancing 301. Sort of maybe can you provide us how you're thinking about maybe the bar for the go or no-go decision for that program for the CTLA4? Thank you very much.

Yes. The good news for UGM-102 is the 340B we expect not -- the discounts not to be as great as they are for JELMYTO, because to your point, we do expect that ultimately not at the beginning, but ultimately that it will be a sort of 70% of the business will be in the community based off of the comments that David made around that. So we are really hopeful and expecting that the 340B will be much less in UGN-102 than it is for -- but we have been more conservative with our assumptions also as we go into UGN-102 because as you know JELMYTO that's been one of the headwinds we've shared because our data -- our actual patient demand has been much greater but we've seen some real challenges with the 340B. Mark, do you want to talk about to Paul's second question?

Sure. Thanks, Paul. So as the audience will undoubtedly remember, 301 is our intravesical immunotherapy approach to high-grade disease and it's a Phase 1 study, both as Liz said earlier, a monotherapy study and in combination with our TLR7 agonist, UGN-201 as well as with gemcitabine. So as a Phase 1 study, it's primarily focused on tolerability and safety and not on efficacy. That said, we have said publicly that we've seen a few responses and we are very interested in these responses for obvious reasons. But in a Phase 1 study it would be a little bit difficult to give you a numeric bar that we are expecting to be meaningful. What we are doing now is following patients to look for the durability of these responses. And later this year we anticipate presenting those data probably at the SUO at the end of the year, at which time we'll had a chance to assess both the durability and quality of those responses in the combination arms. And at that point, we'll probably be in a position to make a go-no-go decision about a trial that would be able to answer the question that you're asking, namely what numeric bar would be meaningful for us in comparison to the other assets out there currently addressing this population. So I guess my short answer is, it's probably premature for me to give you a number, but we are encouraged that we're seeing responses. We're tracking those and we'll be able to talk later this year about what would constitute a signal to us for go-no-go for Phase 2 and Liz may want to comment as well.

Yes. My comments are really around, it's very clear that the bar for efficacy and safety, but particularly for efficacy is definitely higher than it was when we started the program, given the results that you've seen. I do think there's still a lot of opportunity in high-grade disease for several reasons. One, these patients are not cured unfortunately, so they continue to see recurrences. And so they need more treatments because it's not -- these aren't cures. Two, I think all of the current programs that are out there that are seeing the higher complete response rates and durability are because you're seeing continuous dosing. So almost all of them are requiring reinductions, continuous dosing. And so I still think that there's opportunity if you can have a situation like we have with UGN-102 in intermediate-risk, where actually we're given six weeks and then the patients don't have treatment. And I think that's very important for patients to not only be recurrence free, but also treatment free. And so being able to have a more simple administration and administration schedule, although I do believe that in high-grade you're more likely to need to have some sort of maintenance or retreatment. I do think that there's still a lot of opportunity, but we will be very diligent and will be very critical before we launch into a very expensive Phase 2 or Phase 3 study with UGN-301. And also I just want to mention 501, right? We're very excited about that. So we will have to make a determination for 301 and 501 about where we move and when we move and how we move. And so those are all things that we're working on right now. And so as Mark said a little too early to comment except to understand that the bar is definitely higher. And we believe that both of those approaches actually can easily reach that bar and potentially simplify the administration.

Great. Thank you for the color.

Thanks, Paul.

Thank you. Please standby for our next question. Our next question comes from the line of George Farmer with Scotiabank. Your line is open.

Hi. Good morning. Thanks for taking my questions. A few from me. Can you confirm that the FDA representatives you've been speaking with are still employed with the agency? That's number one. Number two, this 18 month data that you presented at AUA, is that going to be included during the discussion at ODAC? And number three, do you see a need or are you planning for any sort of direct-to-consumer advertising campaign? Thanks.

Yes, look, great question, George. Thank you very much. The FDA team and knock on wood is still in place, the same team that have been there since JELMYTO frankly. So hopefully over the next few weeks that team stays in place, but there's still the same people that we've been working with all long and we are -- we can confirm that they're still employed in there. The 18 month data has already been incorporated. The FDA received that before it was even public. So all that data is with the FDA and has been and is part of all of our discussions and presentation with them. And I'm sorry, I forgot the last question.

Direct-to-consumer.

Direct-to-consumer. Well, I wouldn't expect broad-based direct-to-consumer, but we will absolutely have programs that engage the patient. It's really important. I think you've heard several times, we talk about the fact that 90% of patients prefer UGN-102 to a TURBT. These are patients that have had a TURBT and they've had UGN-102 and 90% of them prefer UGN-102. So we really need to ensure that we engage the patient because we want that physician. We want them to be part of the discussion and part of the treatment decision. So when a physician gives them the option that they understand and know. So we will, again, engage the patient, but not expected initially to be in broad-based DTC.

Okay. Thanks, Liz.

Thank you.

Thank you. Please standby for our next question. Our next question comes Aydin Huseynov with Ladenburg. Your line is open.

Hi. Good morning, everyone. Thank you for taking our questions. I got a couple. Maybe this is a little bit unusual question, but curious what would happen to patients who progress on UGN-102 like 20% or 25% whatever percentage. So would they switch back to TURBT or would you redose them with UGN-102?

Yes, Mark, do you want to take that?

Sure. So let me start out by saying that thankfully very few patients did what's called progress during treatment [Technical Difficulty] program. And when we say progression, what we're talking about is a patient with low-grade disease turning into someone with high-grade disease or even more unusually turning into someone with invasive disease. So that eventuality, that rarely occurred in our program. That said, in patient who responded and then recurred or didn't respond completely, after treatment with UGN-102, the use of transurethral resection to remove any residual or recurrent tumor was not associated with complications or problems that were exceptional or unusual. The standard-of-care currently which is our experience in our clinical trials program is that it's not complicated by prior use with -- treatment with UGN-102. As for what you're anticipating, which is, if approved and patients are successfully treated initially with UGN-102 and would they subsequently be treated assuming they have the same disease, I think, I'm going to defer to Liz as to how she thinks that would happen. We don't currently have clinical trials data to tell us specifically about what retreatment would mean or look like. But Liz I don't know if you want to postulate what you think would happen once approved.

Yes. I mean I think it's very similar to what you would see in other cancers. If a patient gets a good response, a durable response and then they recur, physicians are likely to retreat with what they use the first time. And so we expect that to happen. We will absolutely either launch a Phase 4 study or have a registry or some way to generate data that shows what happens when patients recur and get retreated. And then the other patient population that we'll want to study as well are partial responders. So I don't know if you remember, but when we did the announcement of the durability, one of the doctors talked about the fact that they had, one patient had so much tumor and UGN-102 got 90% of the tumor, but they couldn't be considered a complete responder. So what would happen if you gave that patient a couple of additional treatments, could you take these partial responders and put them into complete response? So we will be looking at all of those questions through either IRRs, Phase 4, registry, but we will have a way to generate data that will support the use of UGN-102 once a patient has recurred either on our drug or after a TURBT. So very much expect that you would be able to retreat very much like you do, like I said in other cancers.

Thank you. I appreciate that. And another question is commercial question. Could you clarify the GTN gross-to-net for JELMYTO? And what should be the expectation of GTN for UGN-102?

Yes, Chris?

So Aydin we've been kind of in the mid-70s percent net of growth for JELMYTO. And the one thing we said on the call is we do expect that the headwinds we've been experiencing for 340B, some of those headwinds are starting to annualize a bit. So from a year-over-year growth perspective, as we think about the rest of this year, we would expect that impact to be less impactful in terms of our growth rate. In terms of UGN-102, as Liz mentioned, over time we do expect the gross-to-net profile to be more favorable for UGN-102 as compared to JELMYTO, namely because mix of business to be more heavily weighted towards community. Initially at launch we do expect more utilization in the hospital setting, but over-time that, that should shift over to the community.

Okay. Thanks so much for taking the questions.

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back to Liz for closing remarks.

Well, thanks, everybody. As you can imagine, a lot of excitement over here as we prepare and get ready for the ODAC next week. We appreciate all of your support. It's been a long-time coming. We're excited about it though. We feel really good about it. And most importantly these patients need new options and so we're very much looking forward to next week and then following that the PDUFA. So thanks and we'll keep you guys informed of any happening. So thanks a lot. We'll talk to you guys soon. Bye-bye.