UroGen Pharma Ltd. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter report. UroGen is an Israeli biotechnology company developing and commercializing treatments for urothelial cancers using its sustained-release RTGel technology. Jelmyto, for low-grade upper tract urothelial cancer (UTUC), was its only approved and marketed product.
Financial performance
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue, entirely Jelmyto sales | $48.0 million | $11.8 million |
| Gross profit | $42.9 million | $10.8 million |
| Gross margin | 89.3% | 91.4% |
| Operating expenses | $135.2 million | $137.5 million |
| Operating loss | $92.3 million | $126.7 million |
| Net loss | $110.8 million | $128.5 million |
| Basic and diluted loss per share | $4.96 | $5.90 |
| Cash used in operating activities | $84.9 million | $105.9 million |
Revenue increased by $36.2 million as Jelmyto sales grew following its 2020 launch. Gross margin declined 2.1 percentage points. Research and development expense was $47.6 million, broadly flat year over year; selling and marketing expense was $47.6 million, up modestly; general and administrative expense was $39.9 million, down from $43.7 million. The 2021 net loss included $17.3 million of financing expense on the RTW prepaid forward obligation.
At December 31, 2021, cash and cash equivalents were $44.4 million and marketable securities totaled $45.5 million, or $89.8 million combined. Current assets were $114.4 million and current liabilities $22.4 million. Total liabilities were $111.3 million, including an $85.7 million non-current RTW prepaid forward obligation; shareholders’ equity was $8.4 million. The obligation is repaid through tiered payments based on product sales, rather than conventional scheduled principal payments. Operating cash outflow improved by $21.0 million year over year. Financing cash flow included $72.4 million net proceeds from RTW; the company’s cash, cash equivalents and restricted cash decreased by $8.5 million during 2021.
Business developments, outlook and risks
- Jelmyto: U.S. commercial launch began in June 2020. FY2021 sales were $48.0 million. The company reported coverage policies from major commercial plans covering more than 150 million lives, and a permanent Medicare J-code took effect January 1, 2021. Jelmyto’s U.S. product exclusivity runs through April 2023, orphan-drug exclusivity through April 2027, and key U.S. patents are stated to run through January 2031.
- UGN-102: In October 2021, UroGen reported final Phase 2b OPTIMA II results: 41 of 63 patients (65%) achieved complete response at three months; 25 of those 41 remained disease-free at 12 months after treatment initiation. The company initiated the Phase 3 ENVISION single-arm trial in February 2022, planned for approximately 220 patients at 90 sites. Enrollment completion was expected by year-end 2022 and, assuming positive results, an NDA submission was anticipated in 2024. These are forward-looking targets, not reported outcomes. Enrollment in the Phase 3 ATLAS study was stopped following FDA discussions; enrolled patients continued follow-up.
- Other pipeline and collaboration: UGN-301, an anti-CTLA-4 antibody, and UGN-201 are being explored for high-grade bladder cancer, with early clinical work planned for 2022. The Allergan/AbbVie RTGel-BOTOX collaboration was terminated in November 2021 after its Phase 2 APOLLO trial failed to meet its primary endpoint and AbbVie showed limited interest in other combinations. UroGen’s Agenus license entails potential development milestones up to $115 million, commercial milestones up to $85 million, and royalties of 14%–20% on licensed-product net sales.
- Funding after year-end: On March 7, 2022, UroGen entered a senior secured loan agreement for up to $100 million. The first $75 million tranche was funded in March; the additional $25 million was optional and subject to conditions. The loan bears interest at three-month LIBOR (1.25% floor) plus 8.25%, is secured by substantially all credit-party assets, and includes restrictive covenants. This financing was not outstanding at December 31, 2021. Management stated that year-end cash and investments, together with the announced financing, were expected to fund planned operations for at least 12 months; further capital is expected to be needed to advance and commercialize the pipeline.
- Principal risks: Continued losses and negative operating cash flow; reliance on Jelmyto as the sole marketed product; uncertain adoption, reimbursement and market size; clinical, regulatory and manufacturing execution risks; reliance on single-source suppliers and one specialty distributor for product sales; the RTW sales-linked obligation and loan restrictions; competition and patent challenges; COVID-19 disruption; and geopolitical instability affecting Israeli operations and clinical sites in Eastern Europe. Jelmyto’s reported common adverse events include ureteric obstruction, flank pain, urinary tract infection and renal dysfunction. Management reported no legal proceedings it considered likely to have a material adverse effect.
Important facts for investors to verify
- Jelmyto sales trajectory, product demand, net pricing, reimbursement, and the company’s reliance on a single specialty distributor.
- Actual ENVISION enrollment and results against the stated 2022 enrollment and 2024 NDA targets; follow-up data from ATLAS and the small Phase 3b home-administration study.
- Cash runway and funding needs, including the conditions and availability of the optional loan tranche, loan covenants and interest cost, and the sales-linked payments due to RTW.
- Manufacturing capacity, supply continuity and single-source dependencies, including the March 2022 Cenexi capacity amendment and potential shortfall payments.
- Performance of Jelmyto’s post-marketing commitments, safety in broader use, and the durability of product coverage and market access.
The independent auditor issued an unqualified opinion on the financial statements. Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2021; the auditor did not express an opinion on internal control.